In a rather odd development, President Trump’s remarks last evening that a ‘phase 1’ trade deal is really close has failed to boost risk sentiment in a meaningful way this morning. Asian equities are showing only marginal gains of around 0.2% for the Nikkei and Hang Seng while US Treasury yields are still trading around yesterday’s lows. In case of the 10y Treasury yield, at 1.74 it is trading at the lower end of the recently established 1.70-1.90 trading range. Furthermore, USD OIS forwards are comfortably pricing in another Fed rate cut. Still, S&P 500 futures are eking out further gains and setting a new record-high.



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