The reason why the market spiked yesterday just before noon, if briefly, was a WSJ report that the Trump admin is reaching out to China for a new round of trade talks, in an effort “to give Beijing another opportunity to address Washington's concerns over trade issues before the Trump administration implements additional tariffs on Chinese imports.” Many took this with a grain of salt – after all this would be the third time in the past month that the US and China were supposedly trying to break the trade war deadlock – but more importantly, the person behind the outreach was noted globaliset Steven Mnuchin who as we said yesterday, “is well known to be for a resumption of better trade relations”, while trade hawk Navarro has been pushing for a far more hard line stance with China.

Our markets are surging, theirs are collapsing.

Well, pretty much where we were before the WSJ report, or as Trump put it, “If we meet, we meet?” The Wall Street Journal has it wrong, we are under no pressure to make a deal with China, they are under pressure to make a deal with us.

If we meet, we meet.

Trump (@realDonaldTrump) September 13, 2018 While any other day, the Trump tweet – which could be seen as a catalyst for further trade disputes – would be bullish for the dollar and bearish for the S&P, today the combination of the CPI miss and the hawkish ECB has led to virtually no response at all in the market, at least for now, and stocks remained strongly higher, with the S&P above 2,900 and just shy of new all time highs.

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