 Trade optimism was the main theme driving the financial markets last week. Investors seemed to be convinced that US and China are close to signing trade agreement phase one, even though it's unsure when and where yet after the APEC summit in Chile was cancelled. Additionally, there were increasing expectation of tariffs roll back of some sort. China should be pushing for cancelling the tariffs imposed in September, possibly more. Comments from US on the issue were mixed, but it's not ruled out. If such roll back is realized, this will be the first real trade war de-escalation, which is significant. US stocks surged to new record highs, taking global markets up too. US treasury yields also jumped notably at the long end. Together, the developments gave Dollar a strong boost, which ended as the best forming one. Strong risk appetite kept Canadian and Australian Dollar as second and third strongest. Though, New Zealand Dollar was the weakest after poor job data. Euro was the second weakest, followed by Sterling. The Pound suffered a bit after two BoE policymakers surprisingly voted for rate cut on Super Thursday. Nevertheless, loss was relatively limited as the UK politics and Brexit remain the real driving forces. |
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