Morning 11-5

News:

  • The Yuan Strengthened overnight, trading below 7 handle for first time in 2 + months
  • China reduced the Cost of 1-year money from 3.3% to 3.25%
  • FT reporting that U.S. Considering removing some tariffs ( China is almost demanding that U.S. remove almost all tariffs before a Phase 2 deal can be discussed)
  • -BOJ: cuts purchases of 10-25 y JGBs to 100b from 120b prev; keeps purchases in other maturities unch

Markets:

 We have all heard this before Right, Risk On !   Stocks Higher Spoos + 5 handles, Dow +100, Stoxx 50, Ftse and Cac +.3% Shaghai  closed higher +.75%. Fixed income Lower, Gold -.6%,Silver -.3% Bunds traded below last weeks lows this  helped accelerate losses .Oil trading higher,+.9% as OPEC chief said outlook for 2020 brightened. The probability for a  December rate cut stands at 7%,in fact July 2020 is the first month to have a +40% probability for  a cut, How quickly sentiment changes. Non- manufacturing ISM at 9:00 ,let us see if the Downtrend can be slowed or hopefully bottom out.NatGas higher once again, +2% as forecast turning even colder!

Links to Stories:

U.S., China Consider Rolling Back Tariffs as Part of Initial Trade DealThe two countries have agreed in principle to the first of several phases of an agreement to end the trade https://www.wsj.com/articles/u-s-china-consider-rolling-back-tariffs-as-part-of-initial-trade-deal-11572924715?mod=hp_lead_pos1

US considers dropping some tariffs on ChinaOfficials debate rolling back levies on $112bn of goods to secure broader ceasefire deal https://www.ft.com/content/4f6580dc-ff53-11e9-b7bc-f3fa4e77dd47

China pressing Trump to remove more tariffs ahead of trade deal signing– China is demanding that President Donald Trump not only eliminate a round of tariffs scheduled to go into effect in mid-December but also wants him to lift another substantial round of penalties imposed in September as Chinese President Xi Jinping considers  a visit to the United States to sign a “phase one” trade deal, said three people familiar with internal discussions  https://www.politico.com/news/2019/11/04/china-trade-tariffs-trump-065669

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