S&P 500 futures gain by 0.2% now
Are equity investors getting a bit too complacent on the global trade situation or is the prospect of the Fed cutting rates just that overwhelming? This is a bit of a tough one to figure out.
What makes matters more confusing for traders is that the yen and Treasuries are sending conflicting signals to that of stocks today. USD/JPY is trading lower to 108.20 while Treasury yields are lower by more than 2 bps across the board currently.
This just adds to the divergence we're seeing this week between the yen and bonds (which suggests risk aversion) and equities (which moved higher despite that):
Eventually, one of these markets are going to be right but unless trade talks between US and Mexico succeed, the short-term bet would have to be on the yen and bonds.