Markets breathed a sigh of relief yesterday, having heard US trade tariffs may well be targeted rather than a blanket and this lifted both US and global indices. We saw a 1.5% return from the Hang Seng as energy, resources, financials and real estate sectors all helping to recover ground lost earlier in the week. The core Shanghai also added around +0.5% but then it didn’t retreat that much on the news anyway.

The Nikkei saw a 1%+ firmer market intraday but unfortunately hold that and closed +0.6% better. The Yen trades comfortably with a 106 handle and is ever increasingly bearish as the USD recover against a basket of currencies. On the data front, GDP released stronger than expected at 1.6%, but there were some revisions. BOJ policy meet awaited. The SENSEX finally rallied 1% today having seen losses for the past half-dozen trading days. The government aided the telecom sector via a relief package for debt, but also the confidence seen in peripheral markets certainly helped sentiment. Worth keeping an eye on the INR however, as the GMW is indicating a “New Pattern” is forming and that looks to be INR bearish. ASX rallied +0.7% but the currency lost the same so a zero-sum day for international money, not great with the A$ still looking bearish.

Even the DAX, which has been under pressure for a while now, rallied today as all core European indices closing up around 1% across the sphere. Having spent all morning in the red, it took the ECB to declare it plans to normalize monetary policy to see the DAX break higher and close +0.9% higher. Initially, this news helped the rise in the Euro but by the close of US trading had fallen on the day by over one big figure (-0.9%). This move will undoubtedly confuse the academics and will continue to puzzle them as the currency declines further. GBP was also heavy as it followed the Euro lower in favor of the US Dollar. Energy and Manufacturing were hit hard today as fears of possible US trade war starts to escalate – especially once President Trump referenced Germany in his address this afternoon.