Sino-U.S. Trade Tensions

Stocks rose on Monday as U.S. Treasury Secretary Steven Mnuchin declared the U.S. trade war with China “on hold” following an agreement to drop their tariff threats that had roiled global markets this year. The dollar opened the week rallying against the other major currencies in Asia, climbing to a fresh new high this year. Risk appetite revived as the trade war between the world’s two biggest economies is put “on hold. As safe-haven demand for debt fell, U.S. bond prices were under pressure, keeping their yields not far from last week’s peaks.

“Recent data suggests the U.S. economy is very strong, hardly slowing down in Jan-Mar. The world economy slowed in that quarter but it appears to be rebounding. And recent rises in oil prices are likely to lift inflation expectations further,” said Tomoaki Shishido, senior fixed income analyst at Nomura Securities.

In Currencies EURUSD dipped 0.1 percent to 1.1756 hovering above Friday’s five-month low of 1.1750, hit after two anti-establishment parties pledged to increase spending in a deal to form a new coalition government.

USD/JPY maintained the upside direction rising 0.2% to 111.00 reaching the Friday highs.

In Commodities Oil prices held firm near 3-1/2-year highs also on easing trade tensions between the world’s two biggest economies. The market is keeping an eye on Venezuela, where President Nicolas Maduro appeared to be set for re-election, an outcome that could trigger additional sanctions from the United States and more censure from the European Union and Latin America.

Oil prices have been supported by plummeting Venezuelan production, in addition to a solid global demand and supply concerns stemming from tensions in the Middle East.

U.S. crude futures rose 0.8 percent to 71.83 per barrel, near last week’s 3 1/2-year high of 72.30 while Brent crude futures notched up 0.8 percent to 79.10 per barrel. It had risen to $80.50 last week, its highest since November 2014.