Risk on flows dominate as markets hope for advancement in US/China relations
The road seems familiar but it tends to end in a dead end. China has expressed desires to buy US agricultural goods in return for no more tariffs including two rounds to take effect this month and in December. The news has led to the traditional risk on flows, that includes rises in the NZD and AUD, declines in the safe haven JPY and CHF. The USD is mixed /a little lower with declines vs the NZD, AUD, CAD, EUR, unchanged vs the GBP and up vs the JPY and CHF.
Looking at the ranges and changes vs the USD today, the GBPUSD has a spike high and move back down. The run to up around 70 pips on the day, was due to seemingly false reports that the EU would have a major concession on the Irish border puzzle. That was denied and the price came tumbling back down. The Brexit obviously remains a wild card for that currency day in and day out. The USDJPY is near highs as is the AUDJPY, NZDJPY and CADJPY. The GBPJPY pair is higher but off the highs as per the aforementioned GBP problems.
In other markets:
- Gold is back to unchanged at $1505. It did fall to a low of $1499.80 as flight to safety flows eased
- WTI crude oil is being supported by the positive tone with the price up $0.47 or 0.89% at $53.09
In the premarket for US stocks, the futures are implying a higher opening:
- Dow, up 212 points
- S&P, up 26 points
- NASDAQ, up 81 points
In the European markets the major stock indices are also running higher:
- German DAX, +1.2%
- France's CAC, +0.8%
- UK's FTSE, +0.7%
- Spain's Ibex, +0.5%
- Italy's FTSE MIB, +0.7%
In the US debt market yields are higher with a steeper curve measured by the twos – 10 spread:
European yields as measured by the benchmark 10 year yields, are also tracking more to the upside:
