In a reflection of the current market bind the US dollar fell further overnight despite further support for risk assets. Expectations that the Fed will slow interest rate rises has fuelled higher growth estimates. Shares in Europe were mixed, but US indices added to Friday night’s strong gains. Industrial commodities continued their surge, and bonds remain under pressure.

The interplay of growth and interest rate forecasts could dominate market action over the course of the year, or until central banks regain neutral monetary policy levels. This complicates forecasts, as market reactions to economic data depend on which signal markets choose – the positive of higher growth or the negative of higher interest rates. Increased market volatility seems the safest call.

An absence of higher level data today means the market focus stays on Beijing. The trade discussions with the US are a key risk factor for the short term. No news or bad news could quickly stir concern and reverse the recent recovery in risk assets. On the other hand any positive signs, or even a continuation of the current truce, could support further gains for investors.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.