A temporary staying of trade hostilities between the US and China should be enough to spur a risk rally in global markets. In early Monday trading commodity currencies like the Australian and New Zealand dollars are rallying, and the safe haven Japanese Yen is under pressure. The pro-growth activity is likely to lift shares and industrial commodities in Asia Pacific trading today.

Both countries ceded ground in trade discussions on the sidelines of the G-20 meeting in Argentina over the weekend. The US has deferred a lift in tariff rates on Chinese goods that was scheduled to kick in on January 1. Both sides agreed a new 90 day truce to negotiate. While the details remain difficult, signs of willing from both parties will likely reverse the recent defensive trends in market trading.

Much of Friday night’s market action is obscured by the G-20 developments. However investors may take longer term heed of weaker European inflation and employment data, potentially a harbinger of weakness to come. The data flow continues with Australian building approvals this morning and a China Caixin manufacturing read mid-session. Activity is in focus with German, French and Italian PMIs tonight, leading into the monthly US ISM index. The numbers have potential to either spur or short circuit a likely positive start to the trading week.