Investors seem to have forgotten about worries pertaining to global growth
US equity futures are trading at the highs ahead of the European morning session, up by close to 0.4%, while Asian stocks are surging forward following gains seen in Wall Street overnight as hopes of a US government shutdown being averted and optimism surrounding trade talks this week helped to buoy equities.
Although Trump may sound like a broken record by repeating statements like this overnight, it has served its purpose as psychologically the statement is distracting markets and diverting attention away from the major theme that the world economy is slowing down.
Chinese stocks are posting gains of more than 1% today and the optimism that a trade deal will eventually be struck, despite the fact that the Trump-Xi meet isn't even settled yet, is enough to keep risk sentiment underpinned this week.
A trade deal between US and China may sound good on paper, but it isn't going to significantly reverse the declining outlook for the global economy. Hence, although the risk rally here may just be beginning (as it is still riding off the euphoria on trade talks), I wouldn't expect it to continue throughout the year.
