A renewed round of tariffs against China by president Trump dented bullish sentiment, but nothing appears able to stop the S&P which is just 14 points from making a new all time high, a goal it will likely achieve today.
"Don’t be surprised to see [China] cave on some tariff threats. Trump’s base will rejoice, thinking it’s some form of victory. But, at the same time... China will more aggressively devalue the Yuan to maintain the losses in purchasing power..."
With trade war between the US and China set to begin at midnight on Friday, the market is taking on a oddly relaxed attitude, with S&P futures rising back to where they were before the waterfall drop just before Tuesday's close.
After yesterday's surprisingly contained session, in which the priced-in Singapore summit made little impact on markets, so far in today's pre-FOMC session we have seen contained markets with little to note.
Chinese companies must repay 2.7 trillion yuan of bonds in the second half of this year, and together with another 3.3 trillion yuan of trust products set to mature in the second half, China's bond market may be facing its first real crisis.