US stocks  rallied and the S&P500 close with a gain of +0.8% with the rally pointing at an early morning newswire that China and the US were planning to renew talking about trade... “We’re talking to China, they very much want to talk,” Trump tweeted yesterday enabling CNY to recoup 0.4% and Chinese stocks to stop and reverse a further steep decline from the early hours on Thursday. The Stoxx Europe 600 also rose for the first time in seven days. TRY gained 3% and managed to keep them as international support lined up for Turkey. Turkish President Erdogan spoke with French President Macron, a day after talks with German Chancellor Angela Merkel. The dollar index closed marginally lower. EM currencies breathed a sigh of relief generally as a result and the USD ebbed back a little against DM and EM with only ZAR still plumbed by weakness in the metal complex and talks that a list has been circulated about farms susceptible to be expropriated. ZAR dropped 2% (fading an earlier rally of 1.5%) while RUB rallied and stayed firm throughout the day, gaining +1.5%. MXN also posted a modest recovery. 10Y US Treasuries were unchanged at 2.87% were unchanged and HY spreads recouped their 5bps widening from the previous day. Gold was unchanged yesterday but gold shares were further pummelled, shedding 3%.

Overnight...

The US administration said more sanctions would be imposed against Turkey if the US pastor is not freed. Nvidia missed expectations (as it reported a sharp decline is graphics cards sale used for mining cryptocurrencies) with the stock falling 4% overnight, possibly heralding a further consolidation in an already weak chip sector. 

Much of  yesterday’s enthusiasm is fading as a result this morning with the dollar generally heavier except against EM. Tesla is trading sharply lower (-6%) as E. Musk troubles with the SEC intensify and Gold is catching a bid... for a change.

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