This AM is fairly light on the European data slate, so US-China trade negotiations will remain the market’s focus for the near term. In the last few weeks, the market has been shifting between risk ‘on’ and risk ‘off’ markets depending on the current state of relationships between China and the US. So, here is what to look for regarding changing risk sentiment:

  • Risk-on sentiment: AUD, NZD, CAD strength, and JPY, CHF weakness
  • Risk-off sentiment: JPY, CHF strength, and AUD, NZD, CAD weakness