Five Things You Need to Know to Start Your Day

(Bloomberg) --

The U.S. and China agree to a truce in the trade war, markets are showing signs of relief, and it’s a busy week for economic data culminating in Chinese trade figures on Friday. Here are some of the things people in markets are talking about.

Truce 

U.S. President Donald Trump and Chinese President Xi Jinping agreed to keep their trade war from escalating with a promise to halt the imposition of new tariffs for 90 days as the world’s two largest economies negotiate a lasting agreement. The truce between the U.S. and China emerged after a highly anticipated dinner Saturday between Trump and Xi on the sidelines of the Group of 20 summit in Argentina. 

Market Relief

Risk appetite returned to markets early Monday, with the Australian dollar and China’s yuan climbing after the truce between the U.S. and China emerged. The New Zealand dollar also climbed and strategists predicted gains for equities and other emerging-market currencies on Monday. Havens such as the Japanese yen slipped and the greenback was lower against most of its large developed-market counterparts. “This is the best outcome that we had hoped for out of this meeting,” said Frances Cheung, head of Asia macro strategy at Westpac Banking Corp.

Oil Pact

Russia and Saudi Arabia agreed to extend into 2019 their deal to manage the oil market, known as OPEC+, although Moscow and Riyadh have yet to confirm any fresh output cuts. Russian President Vladimir Putin announced the extension after a meeting Saturday on the sidelines of the Group of 20 with Saudi Arabian Crown Prince Mohammed bin Salman. The comments open the door for a deal at the OPEC meeting next week in Vienna. OPEC delegates said the leaders have given their political blessing for an agreement, but plenty of work is left, including on the size of any potential output cut.

Japan’s `Abnormal’ Move 

In Japanese equities, a gauge of the country’s biggest shares is beating the general market by the most in two decades. The closing price of the blue-chip Nikkei 225 Stock Average was 13.4 times that of the broad Topix index on Nov. 29, the highest level for the measure known as the NT ratio since 1998. The outperformance is the result of an “abnormal” move in the Nikkei 225, according to Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. The Nikkei 225 ranks its companies by the arbitrary measure of the price of one share, unlike most stock indexes where market capitalization -- or size -- is key.

Coming Up 

Monday sees the release of Australian house-price data, while  Tuesday will feature the Reserve Bank of Australia’s last meeting of the year -- it won't decide rates again until February. South Korea reports CPI and GDP, Japan details monetary base growth, while Australia reports on current account and exports' contribution to GDP. Wednesday offers Australian GDP data for the third quarter, PMIs for Singapore and Hong Kong, unemployment and CPI for the Philippines, Malaysian trade, Taiwan CPI and an Indian central bank decision. Thursday may see some reactions to Powell's Congressional testimony overnight. On Friday, China details November trade figures, Japan has household spending and wages and Taiwan reports exports and imports.

What we’ve been reading

This is what’s caught our eye over the last 24 hours 

• The big lessons from a big week at the Fed. 
• Pot firms are importing workers. 
• U.K. lawmakers will start debating May’s plan. 
• China’s secret weapon in race to dominate electric cars. 
• Bush to lie in state in the U.S. Capitol. 
• Global supply chain disruption benefits this Thai developer. 
• Rich Americans rank financial security over love in relationships. 

To contact the editor responsible for this story: Cormac Mullen at cmullen9@bloomberg.net

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