The ripple effects of US/China trade hopes and UK/EU Brexit deals dominated overnight trading. The mood isn’t great as the splash of tweets last week didn’t follow with a rock from China. The Xi comments from the China International Import Expo suggest the path for a US/China deal isn’t so obvious. He noted China’s economy is “a sea, not a pond,” so it can weather storms.

China is willing to quicken the negotiations of investment agreement with the EU and free trade zone with Japan and South Korea. China will continue to be a source of global growth and an active contributor to global governance. So the edge is off the rally in Asia and that means the EU calm may not last as the US markets open and reconsider positions ahead of a heavy week with elections tomorrow, FOMC on Thursday and plenty more economic data to consider.While the playbook for the week was supposed to be the ripple effect of bond yields hampering equity bullishness, this isn’t the wave for today.Instead we are still mired in growth concerns.China Composite Caixin PMI is at 28-month lows, UK Services PMI worst since the March snow storms. The exception and perhaps the most interesting outcome was the bounce in Japan services.

The most interesting story from today’s price action is in safe-haven demand remaining modest in JPY, CHF and Gold despite the pull-back in Asian stocks and EM FX.Markets are looking for a bigger ripple of hope rather than a rogue wave in this pond of modest trading ahead of the ocean of news ahead.The JPY weakness today stands out and confirms the broader uptrend belief – with 112.80 the pivot to watch today.

Question for the Day: Is the weakness in Asia manufacturing more than just US/China trade wars? The weakness of the growth data in Asia remains a key problem and the hope of a quick unwinding of that maybe too sanguine a view. The October ASEAN Manufacturing PMI report fell into contraction to 49.8 from 50.5 – first time for 2018 – with new orders falling the most in 2-years but with input inflation at 20-month highs. That is the key point to take away here as markets want to blame geopolitics but have to live with the day-to-day costs of doing business and here is where oil, industrial metals and the like all matter as they need to be countered with pushing this onto the consumer to keep profit margins alive. Expect this theme to remain in the background as the US considers 4Q outlooks and more 3Q earnings today.