Markets do what it does best when it comes to the trade rhetoric
And that is to fade it
It's all working out for risk assets on the day after the initial slump following the US tariffs announcement. The aussie and kiwi are leading gains in the currencies space while equities have turned things around to hit new highs for the day. Meanwhile, Treasury yields have also reversed sentiment and are trading higher now.
Markets had about two weeks to digest the news of the $200 billion worth of US tariffs on Chinese goods and it's been yet another case of fading the trade rhetoric - as has been the case for the whole year when an imminent trade escalation is set to kick in.
It's all setting up for a relatively risk on session in European trading now with equities and yields trading higher. S&P 500 futures have jumped back to positive territory and this could be a prelude for further gains in yen pairs in the session to come.