With post-G-20 all but cut and dried, the market has pivoted to the other important issue at hand. Most of all: will central banks deliver the easing that investors are counting on.
With the S&P 500 higher on a much better G20 outcome than anyone had expected, especially around the Huawei concern. the market is starting to second guess that a 50bp Fed cut may be too excessive
So, while the positive outcome for G-20 will anchor sentiment, the great Fed debate could certainly cap risk market euphoria. Indeed, with trade tension easing, one could argue that central banks will be under much less pressure to reduce interest rates.
G-10
In G-10 currency markets, the knock-on effect is that traders are getting a bit more jittery about the length of USD short positions, and they are gradually covering some of this risk today which is strengthening the USD
But more importantly, from lower expectations of policy easing to flatter yield curves; from stocks into to carry, this could trigger a broader G-20 rotation.
China PMI
China's Caixin manufacturing PMI was 49.4 in June, the second lowest reading since June 2016, indicating a definite contraction in the manufacturing sector, which does suggest the PBoC will soon be riding to the rescue.
Yuan
The yuan fix at 6.8454 took a bit of wind out of the Yuan sails after a long USD flush at the open. Suggesting it will be a long and winding road to 6.75 if today's PBoC setting is any indication which sends an unambiguous signal that the PBoC's not so the invisible hand will continue to steer the currency ship.
Oil markets
With G-20 done and dusted, we are focusing on a couple of essential issues.
Because weak global oil demand growth has been a significant concern, we think the Saudi-Russia deal will continue to resonate as will the back to the backdrop in weekly US inventories.
Even with some long term uncertainty on US-China trade leaking into the equation, I think medium-term risks to oil prices remained skewed to the upside, as middle east tension continues to percolate, and we anticipate more easing from the PBoC to lessen the noticeably economic drag from the existing US tariffs that remain in place. Both positives for oil prices
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While markets are trading very fluid today, but price action remains skewed to the upside.
Gold Markets
Gold is clearly under pressure this morning as risk sentiment is trading favourably, but gold bulls are getting especially concerned with the markets now thinking a 50bp Fed cut may be too excessive, and US yields moving higher.