Today, a Chinese delegation led by Vice Premier Liu He is scheduled to travel to the US for a critical two-day round of trade talks, in an attempt to avert a tariff increase tomorrow. However, we see the case for the two nations reaching common ground in only two days as a hard task. Apart from the US-China talks, we also have a Norges Bank policy meeting on the agenda, with investors eager to find out whether the Bank will follow Riksbank’s footsteps and push back its hike timing.
Risk Appetite Stays Soft Ahead of US-China Talks
The dollar traded higher against all but one of the other G10 currencies yesterday and during the Asian morning today. The currency against which the greenback failed to eke out gains was the safe-haven JPY, with USD/JPY found virtually unchanged this morning. The main losers were AUD and GBP, with the latter staying under pressure for the third consecutive day, on reports that talks between the UK government and the Labour party may soon collapse, as well as on uncertainty surrounding Theresa May’s future as a PM.
Once again, the performance in the FX world suggests that risk appetite remained subdued. Some EU indices closed in positive territory, perhaps following Trump’s tweet saying that "China has just informed us that they (Vice-Premier) are now coming to the U.S. to make a deal. We'll see". The German DAX was the main gainer, also aided by...
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