There is a risk-off mood among market participants. Asian indices were under pressure, as was the case with US futures.
We are again in the midst of trade rhetoric between the US and China, with the two countries getting closer to signing Phase 1. However, for this to happen, the US must remove tariffs that came into force on September 1. According to recent rumors, the White House has been cruelly divided over whether or not this should happen. The fact that China is demanding tariff reversals really shows the extent to which there is no loss of confidence between the two countries. For this, even if it comes to Phase 1 signature, it will be more of a commercial "truce" rather than a "deal"
What does this mean for us and cash flows? Simply put, headlines will be traded again. In such a situation, not forgetting that it is Friday, price action charts will have less effect, and movements can quickly be reversed when commented from the US or China. See the change, press the trigger, then exit the trade and try again.
With all the lack of confidence in the markets, positioning and valuation remain one of the main trading topics. I expect support from AUD, NOK, and CAD against EUR, JPY and CHF. It's a bit of a pro-risk approach, but it also captures the mini-reflationary topic that has begun to emerge recently.
This scenario also supports the basic view of downward movement at EURNOK and the retention of short exposures to EUR, CHF against AUD, NZD.
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