Risk gets a shot in the arm on report that US and China are getting closer to a deal
Risk-off turns to risk-on in the European morning
Stocks have jumped higher alongside bond yields as Bloomberg reports that the US and China are moving closer to a trade deal before the 15 December tariffs deadline.
As such, that has seen USD/JPY jump up from 108.45 to a high of 108.76 with gold easing back lower from $1,483 to $1,475 currently. It's a reverse of sentiment from the start of the morning as the risk-off mood now turns to risk-on instead.
Looking at the report, I'm still a little skeptical to be honest as essentially the same stumbling blocks still remain i.e. agricultural purchase commitment and tariffs rollback.
The report mentions they are getting close to resolving those differences, but close is not necessarily good enough. We've been "close" to a deal many times in the past and yet, look where we are now.
That said, markets are lapping it all up as US futures have also spiked higher on the session but I would caution against getting too carried away. Looking ahead, a "Phase One" deal is great but it doesn't mean much when you factor in the big picture.