Investors are looking optimistic about progress in trade talks this week
There's a hint of risk-on in the equities space and that is lending a bit to USD/JPY on the day as well. E-minis have surged up to session highs with gains of 0.5% while European equities are pushing higher posting gains of more than 1.0% across the board.
US-China trade talks remain the key focus for investors this week but so far they are displaying hints of optimism despite the fact that there isn't much to show for at this point. Low-level trade talks begin today before we see Lighthizer, Mnuchin and Liu He meet later in the week.
I'm not liking the jump higher in risk assets here as I fear investors are getting too ahead of themselves. I reckon we could easily see a turnaround later in US trading but this could also be a case of markets starting to build a "buy the rumour, sell the fact" move on trade talks developments this week. If it is indeed the latter, be wary of a heavy selloff on any negative headlines/rumours over the next few days.
