US Retails Sales stabilise in August printing 6th consecutive gains
China buys largest order of soybeans from US since June
US Trump considering interim deal with China
Major European and US bourses traded relatively range bound after the early morning appreciation due to the positive headline on US-China trade. The rest of the session saw mounting selling pressure mounting on the safe heaven space, with Treasuries and Gold particularly under pressure as Global tensions eases. Just think about few months ago with investors worried about Trade, Brexit, Italy, Germany leading investors to pile into safe heavens and safe debt. As the chances of escalation in the above risk decreases, than a healthy correction in the safe heaven space seems logic - especially in times of negative yields in the fixed income market. As we approach the Brexit deadline on 31st October, no-deal risk is declining (at least for now) amid reports that the EU could be poised to offer the UK another extension of Art.50, while the DUP shows signs of flexibility on the Irish border backstop. On Germany, the latest ECB bazooka is probability a desperate attempt to bring Germany out of a recession and bail out Deutsche Bank horrific financial situation - however should give some reliefs for now .On the Italian front, the new Government has won the confidence and it is now in charge of a EU-friendly coalition which should be able to accommodate Miss. Lagarde&co request as long as the government remains entitled. Therefore, everyone is happy, but this all new political-monetary equilibrium in Europe looks very fragile and vulnerable.
If you missed the morning briefing from the desk click HERE