Retaliatory trade tariffs between China and the United States passed off with little more than a whimper last week as positive jobs data out of the U.S. cajoled the markets into some positive thinking.
This has followed through into Asia where all of the markets are trading higher. The Nikkei225 added 264 points overnight whilst the Hang Seng is trading 400 points higher at the moment. Asian stocks are in line for their biggest two day upward movement since May. There is a feeling that valuations are low after Chinese stocks have fallen more than 15% since the beginning of the year and investors have started buying.
Favourable US jobs data on Friday has been the catalyst for much of the enthusiasm, increasing the risk appetite. A combination of rising employment and increased labour force participation suggests that the US is enjoying healthy labour market conditions and that the economy is set to continue to grow. Any FED rate rises will therefore be gradual in pace.
In the UK the resignations of the Brexit Secretary, David Davis and one of the committee, Steven Baker has reinforced the deep divisions within the Conservative party. As a result the FTSE is the one major European exchange succumbing to sellers.
Mario Draghi will provide testimony to the Economic and Monetary Affairs Committee in Brussels at lunchtime today.
The dollar has weakened across the board and GOLD has traded back above 1260.
We have SOLD GOLD at 1260.25 and SOLD GBP/USD at 1.3340 this morning, minimal risk