Checking in with risk sentiment

Author: Giles Coghlan | Category: News

Don't get burned: Equity markets show us risk appetite

Don't get burned: Equity markets show us risk appetite

Asian equity markets were mostly higher this morning in the UK as momentum from Wall Street was sustained where US-China trade concessions pushed the S&P 500 past the 3000 key figure and the Dow rose back above 27000 as well. This was on US-China trade optimism as China announced a list of tariff exemptions on imports from the US while President Trump returned the gesture by delaying the next round of tariffs on China to October 15 from October 01.

At the moment the S&P500 is at 3007 (+0.22%) having had a quick run higher and then lower on conflicting reports of a possible interim deal between China and the US. The fact that the first report were by Trump's advisers and the second by a senior official leads me favour the second report over the first. It sounds like the advisers have played a card a bit too early and too publicly. Someone may be sitting on the naughty step today. 

Having said that, let's see. If positive risk sentiment remains (which it is broadly still positive), expect JPY and CHF weakness today. However, as I have often mentioned, sentiment can change quickly. Sometimes on a single tweet. So, be ready to change your outlook and ensure you don't get tunnel vision only seeing JPY weakness ahead and viewing the market from only one angle. 

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