Listen to the market mood for the coming session in regards to the US-China phase 1 deal signing:

Today is the signing of the US-China phase 1 deal which is due to take place in the US around 16:30 GMT. The whole deal has been widely expected and all the optimism has been priced into the market ahead of today. In fact, the event is set up for a ‘buy the rumour, sell the fact’ response as the actual detail of the deal makes for rather poor reading. The US tariffs on China will stay in place until a phase 2 deal is signed by China. So, that makes this trade ‘deal’ more like a ‘dud deal’.

At this stage, there is still confusion about what has and has not been agreed by either side. So expect volatility today and watch out for risk-off flows coming back into the market. Here is what to expect on risk-on or risk-off flows depending on the details of the deal today:

• Risk-on flows = AUD, NZD, CAD buying and JPY, CHF selling
• Risk-off flows = JPY, CHF buying and AUD, NZD, CAD selling