Risk trades get a slight boost to start the European morning
US futures have nudged higher a little alongside bond yields on the news that China is starting applications for tariff exemption on US soybeans, pork purchases.
Gold is also down by 0.2% now, touching a session low of $1,472.07. The reaction in USD/JPY is more modest though with the pair keeping near unchanged levels around 108.73.
The headline may be encouraging on the face of it but I want to hint at some caution when digesting the news in the bigger picture.
One of the key sticking points in the "Phase One" deal is that the US wants China to commit to some extravagant figures when it comes to agricultural purchases. That is something that China isn't willing to do at the moment.
As such, this could be a way for China to show some goodwill to try and achieve that, but if the US isn't willing to move its red lines or see it that way, it only pushes us further away from trying to get a deal done.
And in typical fashion, these tariff waivers are subject to individual applications with no exact quantities specified in relation to the relevant waivers. That's about as vague as you can get and I doubt that will appease US officials.
