Peace talks

The U.S. is willing to suspend the next round of tariffs on an additional $300 billion of Chinese imports as both sides prepare to resume trade negotiations, according to people familiar with the plan. Latest calculations from Bloomberg Economics show the cost from an escalating trade war could hit $1.2 trillion by the end of 2021. Treasury Secretary Steven Mnuchin, speaking on CNBC this morning, tried to sound upbeat on the prospects for a deal, saying that 90% of an agreement was already in place. Stock futures rose and Treasuries fell in the wake of his comments.

Huawei bypass

U.S. technology companies have resumed selling certain products to Huawei Technologies Co. after their lawyers found the ban on dealing with the company is less restrictive than originally thought. The loophole comes down to how “American” American tech companies are, with some having the majority of their operations outside the country. Pressure from Congress on the Chinese company is not easing up, with senators voting to cite Huawei as a security risk for the U.S. and its allies.

Bitcoin surge

The original virtual currency surged as much at 14% this morning, trading over $12,900 at one point before easing to $12,520 by 5:45 a.m. Eastern Time – still a $1,150 gain for the session. While the very rapid run-up in the value of the digital token has echoes of the surge and crash of 2017, bulls point to the renewed interest in cryptos from  major companies like Facebook Inc. and JPMorgan Chase & Co. as the catalyst. It’s probably worth noting that neither Facebook or JPMorgan are investing in Bitcoin, but instead are launching what will likely be Bitcoin’s biggest competitors.

Markets mixed

Overnight the MSCI Asia Pacific Index slipped 0.4% while Japan’s Topix index closed 0.6% lower as investors continue to worry about global growth risks. In Europe, the Stoxx 600 Index was 0.1% higher by 5:45 a.m. with stocks in the region reversing earlier losses in the wake of Steven Mnuchin’s comments. S&P 500 futures gained more than 0.5%, the 10-year Treasury yield was at 2.026% and gold dropped from its recent highs.

Coming up…

At 8:30 a.m. U.S. durable goods orders for May are published, with whole inventories data due at the same time. It’s only 16 months to the next U.S. presidential election, so it’s high time the debates kick off; today sees the first of them in Miami where  Elizabeth Warren will be the only one of the top-polling Democratic candidates taking the stage. In earnings today we hear from Blackberry Ltd. and Rite Aid Corp.