From Marc Chandler at Bannockburn Global Forex:
Overview: The market is optimistic a deal will be struck between the US and China tomorrow. A reduction in the fentanyl tariff is expected, and a one-year delay in the broad export licensing requirement for rare earths and related technology has been tipped. Reports suggest China purchased two cargoes of US soy for the first time in months. But it is not clear what concessions the US made. Separately, the US appears to have finalized an agreement with South Korea. Ahead of the outcome of the FOMC meeting later today, the US dollar is firm. Among the G10 currencies, the noted exception in the Australian dollar, where firmer than expected inflation has seen rates raise across the curve and the market has downgraded the chances of a rate cut next week. Among emerging market currencies, all but a handful of East Asian currencies are weaker. Of note, the Philippine peso, which has been under pressure, fell to a new record low before recovering. Officials have downplayed talk of intervention.
The Nikkei, China's CSI 300, and South Korea and Taiwan's main indices rallied more than 1% today. Europe's Stoxx 600 is little changed, while the US index futures are trading mostly firmer. European benchmark 10-year yields are narrowly mixed. The 10-year US Treasury yield is a little firmer but below 4.0%. Gold is firmer and has taken out the previous day's high for the first time since the record high was set on October 20. It settled the past two sessions below $4000 and is near $4030 in the European morning. December WTI extended its pullback to about $59.70 today, a four-day low to approach the 20-day moving average (`$59.60).....
....MUCH MORE
Mr. Chandler's comments on the Fed are interesting, wrapping up with:
"The market's habit of reacting one way to the statement and another to Powell's press conference also makes trading around the FOMC meeting treacherous."
