Markets Lift as Anticipation Builds Ahead of Trump–Xi Meeting

• News that President Trump and President Xi are expected to meet next week lifted confidence across markets, easing recent risk aversion and prompting a mild bond sell-off as investors rotated into risk assets.
• US Treasury yields firmed, with the 10 year rising 5 points to 4.00% and the 2 year also up 5 points to 3.49%, as traders positioned ahead of key inflation data.
• Australian government bonds mirrored the move, with 3 year futures up from 3.35% to 3.40% and 10 year yields climbing from 4.12% to 4.17%. The move reflects modest repricing of rate expectations ahead of next week’s CPI release.
• RBA Governor Bullock will speak at the Bradfield Oration in Sydney today, and the Q&A could offer insight into how the RBA is balancing inflation risks with a cooling labour market.
• Later tonight, attention turns to the US CPI report, which will proceed after confirmation the Bureau of Labor Statistics has secured the resources to finalise the release. The result will be closely watched for direction on the Fed’s next move.