As often happens the case on up market days, the futures have managed to creep up higher in the overnight session, driven primarily by a rise in the EURUSD. This in turn has been pushed modestly up by the usual rhetoric BS: on one hand EU’s Rehn said there is a fairly good chance of averting a European calamity; on the other hopes for expanded EFSF remain intact as Slovakian leaders ready to meet to lay groundwork for another vote after rejecting bill first time (mind you nothing but hopes). Yet the biggest drive of futures being up is... the outbreak of trade war between China and the US! That's right, an event which in anything but the ultra-short term is disastrous for risk assets as it is nothing short of complete Nash Equilibrium collapse, is pushing ES double digits higher simply because it is forcing the USD lower. As Bloomberg's TJ Marta writes in a note, the USD is down 1 to 2+ standard deviation versus most major currencies overnight after U.S. Senate passed legislation aimed at punishing China for keeping its currency undervalued; GBP/USD +2.0 std. devs., 1.2% overnight; has broken to high since Sept. 19; slow stochastics are rising from oversold levels, supporting continued rally. Only significant correlation during the past 90 days, S&P500, has rallied and supports strength in cross; next technical resistance overnight high and support during July at 1.58, and then 1.59, which held as support during Feb., March, June. Yet the most important push has been seen in the EURUSD which has done one of ye olde 200 pip moves higher on nothing but hope (because it certainly isn't the third failed Bund auction in a month) and deterioration in the dollar's status, because apparently a collapse in China-US trade relations is beneficial for Europe... So sit back, wait for Barroso to address the parliament expressing his hope for hope for hope, and watch as the EURUSD melts up taking stocks higher with it as China and the US accuse each other of starting the Second Great Depression.