European shares played catch up and risk assets generally rose as the global trade conversation took a conciliatory turn. The US dollar rose and “safer” investments came under pressure, forcing bond prices and gold lower. The lift in investor confidence defied poor data, confirming that the outlook for trade is central to current market thinking.

More balanced statements from the head of the House Ways and Means Committee and JP Morgan’s CEO among others helped. They emphasised the need to avoid damage to the economy while defending US businesses. Combined with longer consultation periods for the new measures they contributed to a rising perception of tariffs as a bargaining threat rather than a structural change. Ironically the shift in view co-incided with the release of a worse than forecast $57.6 billion US trade deficit in February.

Similarly European shares roared higher despite disappointing PMI reads in Germany and Italy. In an impressive rally major indices gained between 2% and 3%.

Opening gains are indicated for Asia Pacific markets. Futures markets suggest Japan will lead the region, possibly on the back of a weaker Yen. The commodity heavy Australian index will likely lag after pressure on gold, oil and iron ore. Volumes may reflect caution ahead of tonight’s US non-farm payrolls release.

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