Investors shifted back towards growth in overnight trading. Oil and base metals rallied as stocks posted gains, and bonds sold off. Trade war fears were soothed by a White House pronouncement that a deal with China is likely, although news of a raid on the President’s lawyer’s office cruelled early US gains. Currency markets reacted in torpor.

A speech from President Xi Jinping at the Boao economic forum today may shift market thinking if the Chinese leader takes the opportunity to respond to White House rhetoric.

Investor sentiment is pin-balling between two key themes. Trade wars vs trade negotiations, and the broader improving growth vs rising interest rates. Current sentiment is positive, although Asia Pacific futures markets are flattish after anticipatory gains yesterday. With China and the US reporting inflation data tomorrow local volumes could remain lower. The gold market is also subdued, indicating little investor demand for either safe havens or inflation hedges.