From Marc Chandler at Bannockburn Global Forex:
Overview: The US and China struck an agreement that would lower tariffs for a 90-day cooling off period. The US tariff on China falls to 30% from 145%, while China's tariff on the US falls to 10% from 125%. A new forum was established to allow recurring discussions on economics and trade. The dollar spiked sharply higher on the news but was quickly sold into the rally, and while it remains sharply higher on the day, it is well off its peak. The Japanese yen is weakest of the G10 currencies, and it is off about in late European morning turnover. The Australian dollar, sometimes treated as a G10 proxy for China, is down the least, less than 0.15%. Most emerging markets in Asia and Europe are weaker. The China yuan and Russian ruble are notable exceptions.
Equity markets have rallied on the news, but some markets in the Asia Pacific region closed, like Japan and Taiwan closed before the news was announced. The index of mainland shares that trade in Hong Kong rose by 3%. The calming of hostilities between India and Pakistan lifted local markets by around 3.7% and nearly 9%, respectively. Europe's Stoxx 600 is up around 1%, It is the 13th rising session in the past 15 sessions. US index futures are up sharply, with the Nasdaq up near 3.8% and the S&P 500 up around 2.8%. Bonds have been sold. Benchmark 10-year yields jumped seven basis points int Japan and Australia and are up 6-7 bp in Europe. The 10-year US Treasury yield is up five basis points to 4.43%. Before the weekend, the Fed funds futures were discounting nearly 66 bp of easing this year and are now pricing in 57 bp. The rising dollar and yields have sapped demand for gold. The yellow metal is off more than $100 and is approaching last week; slow near $3200. A break targets $3164. June WTI is extending last week's recovery. A week ago, it approached $55 and today it has pushed above $63.00. Resistance is seen near $65. ...
....MICH MORE
