Safe haven theme continues as trade talks enter an important section part 1

Market summary

A degree of consolidation has beset forex markets though there's still a secure have bias because the trade talks between the America and China resume in Washington. Traders ar apparently waiting with baited breath on however China ar aiming to answer command Trump’s revived threat of tariffs. “They bust the deal”. Love him or hate him, President Trump likes to play exhausting ball. Revelations that China has apparently backtracked on swathes of agreements within the negotiations have evoked this response from Trump. however the Chinese delegation, diode by Vice Premier Liu He, reacts in Washington might be crucial for market sentiment within the months to return. If the 2 sides still underestimate one another, then strap yourselves in people, the half of 2019 might be a jolty ride. we have a tendency to see markets retain their shelter bias, with the yen classically outperforming. With volatility spiking higher, equities additionally stay harassed. Technically, 2860 may be a key pivot to look at on the S&P five hundred. The flip facet of this can be that if the Chinese play innocent and somehow rescue the trade agreement, there would be a major relief rally. this may forestall the imposition on bad tariffs and isolationist policies between the world’s 2 largest economies. These next 2 days might be crucial. apart from trade, overnight, China inflation showed signs of a pick-up. though the China CPI was in line at +2.5% (+2.5% exp, +2.3% last), there was a better than expected China PPI at +0.9% (+0.6% exp, +0.4% last), that reflects a much better outlook for the producers and another reflection that stimulation measures ar having a sway.

Wall Street closed mixed, with the Dow about flat, while the S&P five hundred was barely lower by -0.2% at 2879. However, America futures have a negative look to them this morning, around -0.5% lower. Asian markets stay harassed with the Nikkei -0.9% and Shanghai Composite -0.8%. In Europe, the outlook is equally cautious, with FTSE futures -0.3% and DAX futures -0.3%. In forex, there's a mixed look out over the majors, with a small move against USD, however yet again JPY is that the main outperformer. In commodities, gold remains stuck in consolidation, while oil has born back once more following yesterday’s EIA inventory driven bounce.