Risk Trades Roar

A softened tone from China sparked a complete reversal of Friday's worries in a massive rally for stock markets. The New Zealand dollar was the top performer while the yen lagged. The Asia-Pacific calendar is light but new RBNZ governor Adrian Orr may make comments has he takes up the role. Below is the weekly video for Premium subscribers, shedding light on the remaining 7 trades.

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What a difference a weekend makes. Chinese Premier Li Keqiang promised China would open up further and eliminate technology transfers along with balanced trade. Signs of a concession towards the US sparked a massive reversal in risk trades and the biggest one-day rally in US equities since 2015.

The S&P 500 gained 70 points, or 2.7%, to 2658 in a jump from the 200-day moving average. FX wasn't quite as euphoric as yen crosses climbed around 1% but they weren't as negative on the way down either. The drop and reversal underscores how sensitive the market is to trade at the moment. It's overshadowing nearly everything else.

Despite a diminished threat of a trade war, the US dollar still suffered on most fronts. Technically, the euro broke above the March high to the best since Feb 15. Cable climbed to the highest since Feb 1 and is approaching a cluster or resistance around the 2018 highs.