Stocks get a bit of a reality check on the session
The market was cheering on the relief as Trump went easy on China at the end of last week, but the report above has offered a bit of a reality check for that optimism now.
S&P 500 futures have erased gains to fall by as much as 0.6% while the dollar has pared some losses, but is still keeping significantly weaker on the day.
EUR/USD fell from a high of 1.1154 to 1.1120 but is now trading back up to 1.1130 levels. AUD/USD has pared gains from 0.6770 to 0.6730 but is still 1% higher today.
I would argue that the timing of it all, being with the ongoing riots and protests across the US, isn't helping for risk in general and it does stoke fears of more deliberate action being taken up by both parties that may escalate tensions even more.
That said, the report does keep the focus on soybean imports from the US and the fact is, even with pressures from the Phase One trade deal, China hasn't been really stepping up their soybean purchases from the US anyway.
They may have shown some intention on delivering on the trade deal but so far the figures have said otherwise, and this has gotten lost in the shuffle amid the coronavirus crisis.
In the big picture and longer-term, unless this threatens to lead to a breakdown in the Phase One trade deal, this is arguably a bump in the road at the moment.
But as mentioned above, couple that with some concerns from the civil unrest in the US and potential retaliation by Trump, it does stir the pot a little in the near-term as we kick start the new week.
