Market Comment | Trade talks falter, boost bond demand

In what was a highly volatile week for financial markets, marred by the tit-for-tat US China trade dispute, equity volatility swung sharply.

Key points

• Key points:
• Chances of a total breakdown in trade deal still remain low, but tail risk has exacerbated further.
• Safe-haven bonds remained bid.
• Market’s implied probability of Fed rate cut in 2019 increased to above 70%.
• The RMB is heading toward the psychological CNY 7 per USD threshold.

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