By Michael Ball, Bloomberg Markets Live report and strategist
Initial trade negotiations between the US and China this weekend are being hyped as a pivotal turning point in Trump’s trade war. However, with risk sentiment improved and significant grievances remaining between the two parties, recent declines in volatility indicate complacency heading into the meeting.
The Markets Live team has been debating which areas of the market may be most affected by Sunday’s US-China trade results, settling on the dollar and Treasuries. This is largely predicated on declines in rate and FX vol, as seen in the MOVE index as well as key FX crosses.
