Risk markets are generally lifted by US decision to delay the sanctions of Huawei for 90 days. DOW future is currently up more than 100pts while major European indices are generally higher. China Shanghai SSE also reclaimed 2900 handle. However, it should be noted that the move was seen as for housekeeping purpose only. That is, it’s for preventing sudden disruptions on the US side. It’s by no means an end to US-China trade tension. More importantly, given the hard line rhetorics from both sides, we’re not seeing any chance of a deal in that 90 days window. Thus, current rebound in risk markets will soon prove to be temporary.

The currency markets are responding rather well to the news. Yen and Swiss Franc are just mixed, without any clear sign of receding risk aversion. As for today, Australian Dollar is the weakest one after RBA governor Philip Lowe indicated that they will think about cutting interest rates at June meeting. New Zealand Dollar, follows as second weakest. On the other hand, Canadian Dollar is the strongest one for now, followed by Sterling.

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In Europe, currently:

  • FTSE is up 0.60%.
  • DAX is up 0.98%.
  • CAC is up 0.52%.
  • German 10-year yield is up strongly by 0.0197 at -0.064.

Earlier in Asia:

  • Nikkei dropped -0.14%.
  • Hong Kong HSI dropped -0.47%.
  • China Shanghai SSE rose 1.23% to 2905.97.
  • Singapore Strait Times dropped -0.69%.
  • Japan 10-year JGB yield rose 0.0027 to -0.045.


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