The euphoria is starting to fade
- Nikkei 225 -2.2%
- Shanghai Composite -0.2%
- Hang Seng -0.6%
- US 10-year yields down 3.1 bps to 2.939%
S&P 500 futures are down by 0.6% on the day now while Asian equities are fast giving back gains posted earlier in the day. The Nikkei in particular is being weighed down by reported profit taking but also as financial stocks are taking a beating. Meanwhile, Chinese stocks have returned from the lunch break and are greeted with session lows currently.
The overall dip in sentiment here is helping to fuel gains in the Japanese yen ahead of European trading and it's likely to at least stay the course as traders look to quickly move past the relief provided by the Trump-Xi meeting over the weekend.
The wheels are already starting to loosen at this point. It goes to show that any Santa Claus rally this month isn't a given despite the trade truce between US and China. It'd be a different story if both parties have some form of unilateral understanding/agreement but it seems like China isn't really promising anything still, and that's enough for market participants to still have doubts over the matter.
