Morning 9-5

Risk on! Due to China-U.S., trade optimism

 “China’s Ministry of Commerce announced that the US and China will resume trade negotiations at the beginning of next month in Washington. In a statement issued on Thursday the ministry said that the agreement came in a phone call conducted by China’s top negotiator on trade Liu He with US Trade Representative Lighthizer and Treasury Secretary Mnuchin (trading economics)

Positive Brexit news also helping “The British pound rose above $1.23 on Thursday, its highest value since end-July, as fears of a chaotic Brexit were reduced after British lawmakers approved a bill to force the PM to ask the EU to delay Britain’s departure date if there is no deal approved by October 19th and as an election is only expected if the Brexit delay pass into law first. (Trading economics) GBP +.6% vs USD

 2s10 yield curve showing that recession fears subsiding   commentary from (IFR) – 2s/10s US has bear steepened again and is up 4bp now. Looking to resistance at 5bp followed by 9bp that is 38.2% Fibo of the tightening move from June. A corner seems to have been turned here with six steepening sessions in succession from Aug 27. 10s/30s has also been on the move and is back to 50bp after basing out around 45bp. The recent highs come in at 56bp so we are almost exactly in the middle of it currently. It has been steeper every day since Aug 29

 Spoos +.8 Nasdaq +1.1% Stoxx 50 +.8% Dax +.8%   CSI 300 in China +1.18%   Copper  ~+4% over last 2 days Flight to safety assets  lower  gold -.8% and bonds  down a handle  Bunds -80  Dollar index down again today -.25% lower dollar=Risk On

Calendar:

7; 30 Jobless claims

9:00 ISM non-mfg and Factory orders

Powell speaks tomorrow at 11:00

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