Stocks are rallying to begin Wednesday’s trading session as the trade war narrative continues to steer asset allocations. China is planning to cut tariffs from 40% to 15% on vehicles produced in the U.S., leading many to believe that the gesture is a sign of things to come. Global equities rallied hard in response to the news, with European and Asian markets notching over 1% gains. The S&P500 is currently trading at 2,666.09, 1.11% higher.
Treasuries are trading marginally lower in the AM as ambiguity surrounding the U.S./China trade relationship wanes. Additionally, CPI for the month of November (ex food/energy) matched analyst expectations, coming in at a 0.2% MoM increase, and a 2.2% YoY rise. The 2/10 UST spread notched a new YTD low in yesterday’s trading session at 11.2bps as investors reassess growth prospects and interest rate hikes in 2019. The US 10-Yr Note is currently trading at 2.8951%, 0.0161 higher.