Markets Finishing Week On Positive Note

Overview: Sentiment has improved since the volatility last month spooked investors and, perhaps, some policymakers. Global equities are rallying. The Shanghai Composite and the Nikkei are at their best levels in almost a month, while the Dow Jones Stoxx 600 is at its best level since early December, gapping above a downtrend in place since late last September. The S&P 500 is expected to open higher after yesterday's advance saw it reach the midpoint between last September's record high and the late December low. Core bond yields are firmer, with the US 10-year yield at its highest level of the year (~2.77%). European peripheral yields are lower, led by Italy, despite Fitch cutting Carige ratings to CCC yesterday and the government passed by decree its controversial measure to lower the pension age. The dollar is mixed but mostly a little firmer.  

Asia Pacific

The Wall Street Journal reported of a debate in the Trump Administration with Mnuchin proposing some concession on tariffs to enhance chances of structural concessions from China. Lighthizer, reportedly, pushed back. The Treasury denied Mnuchin made such recommendations and a senior Administration official who reportedly attended the meeting denied there was a discussion to lift tariffs. Earlier this week and via a Senator, reports indicated that recent talks did not produce much. It seems fair to assume that before China's Vice Premier visits the US at the end of the month, the Administration's strategy and position is discussed. While Trump says he wants a deal, he did reject a deal less than a year ago, before the tariffs, negotiated by Mnuchin that would have boosted Chinese purchases of US goods. Trump may have changed his mind, but it seems highly doubtful that tariffs will be lifted unilaterally. The kernel of truth may be that the small globalist wing and the America First wing in the Administration continue to be at odds.  

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Read more by Marc on his site Marc to Market.

Disclaimer: Opinions expressed are solely of the author’s, based on current ...

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