US employment data hit a sweet spot on Friday night. Jobs surged but wage growth moderated, indicating an ideal higher growth, lower inflation scenario. Shares leapt and industrial commodities tracked them higher despite a stronger US dollar. Futures markets point to strong opening gains in the Asia Pacific region today. Any initial enthusiasm may ease as investors digest further trade war rhetoric.

The goldilocks halo over markets may evaporate quickly. While the EU sought clarification on US tariff exemptions, China’s trade minister warned “a trade war will only bring disaster…..to the global economy.” The trade fight picked by the US President appears increasingly focused on these two largest trading blocs. The potential for rapid escalation could constrain buying today, although a steadily increasing camp of investors who believe tariff threats are merely a bargaining tool could overrun the ramparts.

Important macro data could shape the trading week. Lower inflation fears meant bonds remained steady on Friday night but the release of US CPI data on Tuesday night might stir waves. On Wednesday China industrial production and retail sales numbers will speak to the growth target released last week by the People’s Political Congress. In Australia home lending numbers due tomorrow will shine light on the prospects for the besieged banking sector. The Australian dollar was a major beneficiary of developments, lifted by stronger commodity prices.

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