Unofficial reports that the US Treasury secretary is considering dropping tariffs on China imports spurred further gains for risk assets in overnight trading. Share investors were the main beneficiaries, although copper, iron ore and steel all lifted on the news. The US dollar steadied at higher levels amid a calm currency trading session, and bond yields rose as markets moved back towards a modest but positive growth outlook. A lift in the British pound suggests more trader comfort around Brexit.

Once again the majority of reporting US SPX 500 companies beat analysts’ forecasts. However Morgan Stanley missed targets, driven by lower trading revenues.  This reversed previous investor enthusiasm for financial stocks after the previous session’s strong result for JP Morgan. Netflix and transport group JB Hunt stood out, lifting earnings by 20% - 25% over estimates, but it was Materials, Energy and Industrials that led the US market higher in the pro-growth moves.

Asia Pacific investors are looking at a higher finish to the week, with futures markets pointing to opening gains of around 0.5%. Inflation and industrial production data from Japan could have an impact, although global and China exposed investors will look to next week’s industrial production and retail sales numbers for evidence of economic impacts of the ongoing trade dispute.

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