A tentative US-China trade truce?

The dollar is a little firmer against the euro this morning on the back of reports in the Chinese press overnight that the US and China have reached a tentative trade truce. This comes after comments by the US Treasury Secretary that 90% of a trade deal between the two sides had been agreed before talks broke down and that the reaming 10% was doable, and ahead of a potential meeting between Trump and the Chinese President at the G20 this weekend (let’s see what comes out of that)

Bond yields in the core markets have also spiked on the back of these news reports, with US 10-year yields trading just north of 2.05% having been below 2% earlier in the week

Boris Johnson, in an apparent retreat from earlier comments, says there was a “million to one” chance he’d lead Britain into a chaotic – no deal – split from Europe, though he added that “it is vital that we prepare”. Sterling is a touch firmer on this this morning, trading just below 89.5p against the euro

Fed member Daly says she is “uncomfortable with not only the level of (US) inflation currently but also the direction” (it has fallen to 1.5% from around 2% since the start of this year), noting that policymakers “might have to do more to get inflation back up to our (2%) target”, which presumably means lowering interest rates

Data due today includes the Euro Area Economic Sentiment Indicator and German inflation, along with a third and final estimate of 1st quarter GDP growth in the US