First Call - Hedge Fund Telemetry

S&P futures down 0.1% after US equities posted solid gains on Tuesday despite heightened trade tensions between US and China. Asian markets rallied overnight with Japan, China and Hong Kong all up over 1%. European markets mostly higher. Treasuries extending recent weakness. Dollar lagging euro and sterling and little changed on yen cross. Gold up 0.4%. WTI crude flat.
Very quiet session outside of the latest barrage of articles on trade. No surprise as press already discussing near-term likelihood White House shifts to next round of tariffs on China. Also some discussion about how China’s retaliatory options are dwindling. Reportedly won’t target US supply chains and reiterated no yuan devaluation. Another batch of articles focused on hit to US consumers and businesses.
A lot of US Housing economic data will be released over the next few days.
No surprise as BoJ left rates unchanged and there was nothing incremental from Kuroda during his press conference. Nothing new on Brexit or Italian budget. Korean leaders reiterated pledge to rid peninsula of nuclear weapons. A lot of the focus in Washington continues to revolve around the Kavanaugh nomination. His sexual assault accuser wants FBI to investigate before she testifies to Senate.
Trade seems to be overshadowing backup in bond yields. No great explanation for the move, though positive US macro narrative means Fed will tighten two more times this year. Still seems to be traction from hotter August inflation print. Momentum may be a factor with aggressive short positioning. EM, Brexit and Italian political/budget risks have also dissipated a bit. Deficit complacency back in the headlines lately, but that has not been flagged as a directional driver.

Please note there will not be a Daily Note published this Friday.

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