Morning 10-9

Today Good news regarding U.S. China trade talks so buy spoos Dax Etc. and Sell Bonds

From Reuters “The latest headline is that China is still open to a partial deal despite the US blacklist but this is on top of 1) the US adding to China entity list earlier in the week; and 2) White House still looking at limits to capital flows. China has not stayed silent, threatening to retaliate while still indicating that it will not budge over not having a subsidy policy and industrial policy in any final agreement.” Also from the Global, times Editor some reports said Chinese delegation would cut short its stay in Washington. However, based on what I know, the delegation plans to leave Fri night, which means they will complete the scheduled consultation agenda. From a working perspective, this is no different from leaving on Sat.

  Also China pledging to buy More US soybeans, Wheat, and US pork. The FT erroneously put out a story saying china to  buy about 10 Billion more tons of US “goods” ,this likely caused the latest spike in  Spoos,FT quickly acknowledged its mistake. Regardless China saying all the right things to make one believe that a partial trade deal is in the works, the big questions is will trump accept tithe president has been  quite active on twitter this morning talking about Californian gasoline, Witch hunt and impeachment

 It may look Like QE but it is not QE what we can take from Powell Comments yesterday. He went on to say Fed will start to expand balance sheet by buying shorter term Treasuries to help keep the Supply of reserves adequate in banking System. In Q&A portion of his appearance, he mentioned possibly using the Yield Curve to achieve monetary policy goals this sent the Algos into a tizzy and caused quite a lot of Volatility into yesterday’s Settle. Powell speaks today at Fed listens forum it will be disappointing.

 Today all eyes on twitter and news feed to see what trump response will be regarding a partial deal, will he or won’t he accept it. Other geopolitical issues such as Turkish Forces moving into Syria and Impeachment news could move markets a bit as well.

Fed Speak:

10 Powell

1:00 FOMC minutes – per Bloomberg Study the Minutes rarely move markets

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