Global equity markets surged overnight, following confirmation of a trade deal between the USA and Japan. The deal confirms 15% tariffs and over $550 Billion of Japanese investment into the USA. It is a big deal, labelled massive by President Trump, as Japan is one of the biggest economies in the world. The rumours are swirling that the EU is on the verge of also confirming a deal, with a similar 15% tariff, bolstering EU markets. The US Dollar continues to lose ground, with the EUR trading 1.1750, while the GBP rallied to 1.3560.The weaker reserve allowed further gains for commodity currencies, with the AUD pushing back towards 0.6600, while the NZD consolidates above 0.6000. Trade agreements with these trade exposed Countries, remain elusive and this remains a vulnerability. The RBA minutes confirmed that the lack of a rate cut at the last meeting, was because of worries surrounding trade uncertainties, but further rate cuts are likely, once trade issues are resolved
