Markets are trading cautiously this morning as investors and traders await the outcome of trade negotiations between China and the US. Headline risk is higher following conflicting assessments of the progress of discussions from the White House. Support for the Japanese yen and US dollar Currency markets is dominating currency markets in a tilt to safety that is also underpinning gold and bond markets.

Asia Pacific share markets are mixed at their respective opening rotations. A lower Australian dollar is lifting the ASX 200, but the Shanghai Composite, Hang Seng and Nikkei are under modest pressure. China’s vice-premier Lui is due in Washington tomorrow, but a single headline or tweet could change the course of trading in the meantime. Trade data from China yesterday showed strengthening domestic demand, which may translate into buying of consumer exposed shares.

Telcos are in focus in Australia after the competition regulator inadvertently leaked the blocking of a proposed merger between the TPG and Vodaphone. Commentary this morning is scathing, pointing to the dominance of incumbents Telstra and Optus of the Australian mobile, fixed line and internet markets. TPG shares are 3% higher after yesterday’s rout, in expectation of a legal challenge to the ACCC ruling.

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