Nervous Goldilocks returns as PBoC eases & US-North Korea open talks - ING

In a welcome breather from the mercurial President, global markets have found solace in the PBoC’s surprise cut to its reserve requirement ratio (note Chinese banks may end up using most of the extra liquidity to pay off their more costly MLF loans), explains Viraj Patel, Research Analyst at ING.

Key Quotes

“Still, direct talk between US and North Korea – albeit at ‘extremely high-levels’ according to the President – may also be providing a buffer to some of the trade and geopolitical angst that has weighed on global risk appetite. It’s difficult to see these rosy conditions lasting given the number of Trumpian risks out there – but investors may look to make hay while the sun shines. GBP and CAD remain our preferred G10 FX picks in this Nervous Goldilocks environment.”