China Fix
While we expect the brain-twisting onslaught of headlines to unfold at any minute, I still think the G-20 meeting will be a formality at best. And although Mnuchin suggested we are 90% there to a trade deal, yet that reaming 10% has always been the gap too far to bridge — especially that trust gap where the US wants to keep existing tariffs in place to ensure China compliance.
Yuan
Despite may ho-hum view going into G-20, judging from yuan price action in the past few days, the market appears to be trading more defensively, as buyers on dips have swarmed USD/CNH. Price action should remain choppy in the next two days due to the onslaught of teaser headlines.
Oil markets
Perhaps it’s a case of no boots on the ground in Iran, the bullish speculative length in the market, or oil traders suffering a case of the nervous Nellies ahead of the two most significant oil risk events of the year.
With many what if around the G-20 with Trump threatening plan B and even some jitters around Russian compliance heading into the OPEC meeting, and not to mention the delicate situation in Iran, there's cause to be nervous about at these lofty monthly levels.
Frankly, in the absence of a defining headline, I think someone just ran the market at a vulnerable low liquid time as demand has come back quickly.
But in these headline-driven markets and despite the humongous inventory draws, it's always wise to expect the unexpected and remain a vigilant two-fisted trader with the sell trigger in one hand and the buy in the other.