The U.S. and China took an initial step toward cementing a trade agreement after long delays and disruptions of talks. Friday, Washington said it would shelve planned tariff increases while China claimed it would increase agriculture purchases; however, both sides left out many details that will be required for a long term agreement. The British Pound climbed to the highest level during Boris Johnson’s time as Prime Minister after meetings on a way to avoid a hard border between Northern Ireland (in the U.K.) and the Republic of Ireland (in the EU). Stress in the energy market and Middle East increased again after an Iranian oil tanker was apparently hit by missiles in the Red Sea near Saudi Arabia. Further, President Trump said the U.S. would let Turkey launch an offensive against Kurdish allies in Northeastern Syria.
On Friday we saw a rise in the large cap U.S. equity indices over 1% to bring returns for the week positive and break a three-week slump. Optimistic rhetoric coming out of the U.S. China trade meetings was a major catalyst for the advance. The 10-year Treasury yield had the largest single day climb since September after the Federal Reserve said it would start buying T-Bills (short term Treasuries) to boost its balance sheet and attempt to avoid any strains in money markets experienced this month. International and emerging markets advanced along with U.S. equities due to Brexit hopes and Trade War easing.
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