Via the excellent Damien Boey at Credit Suisse:
Overnight, US equities rallied to new highs, bonds weakened and the yield curve steepened on positive trade headlines:
- US officials suggested that a deal with China is “almost there”.
- Chinese officials expressed doubt as to where phase I of the trade deal will be signed, questioned how much US agricultural product they were willing to buy, and suggested that they would not fully acquiesce to key US demands in areas such intellectual property. But nonetheless, they did not deny that a limited trade pact was in sight.
Also, we note reports from the weekend that licenses would be coming very shortly for US firms to sell components to Chinese tech giant Huawei, and the delayed reaction of markets to this headline.
