Stocks rallied strongly today on the back or increased hopes that a trade war will be avoided. The rally was helps along by the comments from US Treasury Secretary Steven Mnuchin, who said in a TV interview that the US is having a “very productive conversation” with China. He added that he was “cautiously hopeful we can reach an agreement” to avert the tariffs on USD 50-60b announced last week and noted that both countries agreed on reducing the US trade deficit to China. The US$ is broadly lower, with both the Euro and Sterling making new minor-trend highs while the Yen is generally weaker all round given the improving risk sentiment. The commodity bloc currencies have also seen a decent rally, particularly the Kiwi, as trade-war fears recede. Elsewhere, Gold prices rallied to a more than six-week high with the fall in the dollar helping it hold onto its recent gains despite easing concerns about the prospect of U.S.-China trade war. WTI settled a little lower on profit taking, after some choppy trade, due to renewed focus on growing US output amid a rise in domestic oil rigs, but losses were limited as traders anticipated a disruption in Middle East oil supplies amid ongoing tensions in the region.
Tuesday will kick off with the Australian New Home Sales for March and a Speech from the RBA Asst. Director, Kent. The rest of the day is mostly pretty thin, with nothing to come from Asia, just the UK CBI Industrial Trends Survey and the Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate from the EU, and then from the US we get the Case Shiller House Price Index – Jan, Richmond Fed Mfg Index (March) and a speech from the Fed’s Bostic. The weekly API weekly Crude Oil Stock Inventory will be released late in the day. Have a good one.
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