Funda/political wrap: risk-on as trade fears get shelved

An improved risk environment overnight saw a bounce in the greenback and US benchmarks making third-time lucky gains in a row on Thursday. The DJIA up around 220 points, or by 0.9%, the S&P 500 index SPX higher by 18 points, or by 0.7% and the Nasdaq Composite Index COMP, putting up a further 32 points, adding 0.5%.

The US Treasury 10-year yield was up 2bps to 2.83% while yields globally were up 1-5bps - All this on the back of trade fears taking a back seat as investors figure that US / Chinese trade negotiations will occur before tariffs are applied, all vs a much more positive NAFTA backdrop.

The US session came with a number of key trade-war/NAFTA headlines as follows: (source: LiveSquawk, RTRS,  CNBC, Fox)

• White house trade adviser Navarro: vision on trade is to erase unfair trade imbalances, move to free trade - CNBC
• US Pres. Advisor Kudlow: as part of China trade deal, expects barriers will come down on both sides - Fox
• US Pres. Advisor Kudlow: US & China trade negotiations 'could have a great ending' - RTRS
• US Pres. Advisor Kudlow: expects trade deal with China - Fox
• Canadian PM Trudeau: NAFTA talks are moving forward significantly.
• Canadian PM Trudeau: sees ‘very productive moment’ on NAFTA talks.
• Talks are moving forward productively.
• China-us talks indicate the desire to avert a trade war.
• North Korea's Kim told China of intent to rejoin six-party talks.

In other headlines:

• Fed's Bostic: sees inflation hitting 2pct in next quarter or two.
• US trade deficit rises to near 9-1/2-year high; jobs market tightens.
• EU's Barnier: want to have 'as close relations with the UK as possible' post-Brexit.
• Italy pres mattarella: will hold new consultations next wk; no sign of deal yet.
• Italy's 5-star pushes for German-style pact with league or pd.