As a baseline expectation the weekend G20 meeting met fairly low expectations with the US and China adopting a standstill position on tariffs, while agreeing to continue talks over future relations.

Some concerns that President Trump might up the ante further by slapping tariffs on the remaining $300bn of Chinese goods proved wide of the mark, however that doesn’t mean we won’t see them adopted in the coming weeks, given how unpredictable the US President has shown he can be in recent weeks.

Despite the low expectations, and with equity markets coming off one of the best first half performance in some years, we’ve seen further exuberance at the beginning of this new quarter, and the second half of this year with strong gains in Asia markets.

These gains in Asia look set to translate into a record open for the S&P500 later today, while markets here in Europe have also opened higher, with the DAX hitting its highest levels since August last year, above the 12,500 level.

This exuberance, while welcome, masks a wider concern that the global economy continues to look weak, and for all today’s optimism the fact is nothing much has changed as regards the overall trade story. We’re exactly where we were last week, and the only thing that has changed in the last month has been an undertaking by central banks not to tighten monetary policy any further, with the next rate moves likely to be to the downside.

Weekend data out of China and Japan has once again pointed to weakness in the manufacturing sector, which remains mired in recession.

The latest manufacturing PMI’s from China and Japan slipped back in June, with both China surveys stuck below the 50 level at 49.4, while in Japan we saw further weakness back to 49.3.

This morning’s European PMI’s have reinforced this weak trend with Spain manufacturing posting its worst reading since April 2013 at 47.9, while Italian manufacturing fell to 48.4. France manufacturing was slightly better at 51.9, a nine month high, while Germany manufacturing improved only slightly to 45, from 44.3.

Oil prices have also jumped sharply to their highest levels since late May, after Saudi Arabia and Russia agreed a willingness to extend until the end of this year the 1.2m barrels a day output cut that has been in place for the last few months. This move should be confirmed by OPEC tomorrow. The danger of this move higher in prices, in a weakening global economy could be to weaken demand as higher prices crimp consumer incomes. The move higher in oil prices has seen BP and Royal Dutch Shell shares move higher.

The more positive tone for markets has also seen haven assets slip back with gold prices slipping back sharply below the $1,400 level to a one week low.

Trade sensitive stocks have been the biggest movers with autos and semiconductors moving higher. BMW, Volkswagen and Continental are higher on the autos front while STMicroelectronics and Dialog Semiconductor are higher in the chip space.

On the downside Fresnillo has slipped back as a result of a weaker gold price.

In company news the Deutsche Bank share price has jumped in early trade towards the €7 level on the news that the company is planning to axe between 15-20k jobs as management look to take additional measures to turn the ailing business around. The banks cost base has always been its Achilles heel, overlooked for far too long, with a headcount still over 90k in a sector that in Germany remains seriously overbanked. In contrast its European rivals are way ahead of them in terms of restructuring themselves, RBS, UBS and Credit Suisse being notable cases in point, in terms of being much leaner.

While all of these measures appear to be sending the right signals to investors with a renewed focus on wealth management, the big question is likely to be around whether Deutsche management have left it too late. The rise in the share price from the June lows at €5.80 is a notable rebound in the aftermath of announcements to set up a €50bn bad bank, and passing US bank stress tests.

Focussing the banks attention on specific targeted areas like wealth management is a good thing, however its peers like UBS and Credit Suisse have a head start measured in years and while CEO Christian Sewing is likely to flesh out the details later this month when the bank announces its half year results on 24th July the concern is that the horse may well have already bolted, and what we have.

Despite weaker than expected economic data the US S&P500 looks set to open at a new record high today, above 2.964. The Dow is also expected to open higher though still short of its own record high of 26,951.

We’ll also get a look at how the US manufacturing sector is faring against this weak macro-economic back drop with the latest ISM manufacturing indicators for June of key interest after last week’s weak Chicago PMI came in at 49.7.

US data this week will be of particular interest given the expectation that Fed could well cut rates later this month, with the payrolls report due on Friday an important signpost for a move at the end of this month. If the jobs report is a good one with a decent wages number then we could see investors start to pare back expectations of a big move in the rates market, which is even now still heavily geared to multiple rate cuts by the end of the year.

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