The non-farm payrolls numbers released on Friday night upset the market applecart. A key factor in recent market moves is the belief that weaker growth will bring further stimulus. The 224,000 US jobs created in June directly contradicts that belief. While one number is not enough to reverse the thinking, it raised doubts. The US dollar rose with bond yields, shares fell, and gold slipped below US $1,400.

Interest rate markets now reflect a consensus closer to two US rate cuts this year, rather than three.

The bad good news came as trade relations between China and the US extended their thaw. The White House indicated a face-to-face meeting will occur shortly, although the spokesperson stressed quality over timeliness. A semi-official WeChat account emphasised the “importance” of the US removing existing tariffs, and this may prove an initial sticking point.

These shifting currents could see a cautious opening for Asia Pacific markets. The Singapore, New Zealand and Australian dollars are all edging higher this morning, and the safe haven Yen is under pressure. Futures markets indicate modest falls for shares. Oil is trading higher, adding to Friday night gains and reflecting the shift in sentiment towards growth.

A data packed week may also encourage a wait and see approach today. European inflation and economic activity, China trade numbers and the minutes from the most recent US Federal Reserve meeting all have potential to change the game.