Market comment | Risky assets get boost by easing trade tensions and Central banks actions

Market risk-on mood improved slightly during the week, led by easing trade tensions, the approval of a comprehensive easing package by the ECB and upward surprise in US core inflation figures

Key points

• Key points:
• Both China and the US have temporarily relaxed threats of tariff increases before resuming negotiations in early October
• The US Core CPI increased more than expected in August, lowering concerns on weak inflationary pressures, but elevated downward risks still support a cuts in interest rates at next week’s Fed meeting
• Safe-have bond yields in the US and Germany extended the rally
• Equity volatility fell (VIX 14), while equity increased led by the banking sector
• The restart of ECB QE favored some tightening of peripheral bonds spread

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