A dip in the US dollar has catapulted the euro higher and flattened stocks on Thursday, while the first trade exchanges between the United States and China since July and a report that accused the head of the European Central Bank Mario Draghi of becoming a thief have attracted attention.
The markets have been bombarded on all sides by denials and counter-denials both on US-China trade talks and on the countdown to the Brexit, on Turkey's military push in Syria and on a storm of weak data extending from Japan to France.
Asia has enjoyed a largely positive ending, but European stocks have then spent their opening spell in decline while the worst stock took place in the currency markets, where the euro jumped suddenly at a maximum of two weeks above $ 1.10 USD against the US dollar.
The greenback was weaker across the board – partly due to market talk about a currency deal with China to stop the devaluation – but there was also much more.
The Financial Times reported that last month the ECB restarted the bond purchase program despite the objections of its officials, a further indication of how the move reopened the divisions within the institution.
"The vision of currency history could fluctuate here," said John Hardy, head of Saxo Bank's currency strategy, "And the market is warning that the euro-dollar is the pressure point."
Perhaps the main engine during the night was a rally in China's offshore yuan, which strengthened to its best levels in more than two weeks after a Bloomberg report that US and Chinese officials were re-launching a currency deal started for the first time at the beginning of this year that stops further rate increases in return for keeping the yuan stable.
In addition to the ECB's resistance to Draghi's latest moves, Hardy said he could also have a read-across for the euro, with the United States expected to see sanctions next week in retaliation for past aid to Europe 39; Airbus aircraft.
US S&P 500 mini futures traded 0.1 percent, with most of the initial losses cut after the New York Times reported that Washington would soon be issuing licenses that allowed some US companies to provide technology-sensitive goods Chinese Huawei.
MSCI's broader index of Asia-Pacific equities outside Japan gained 0.1 percent while the Japanese Nikkei rose 0.45 percent.
Shanghai shares also increased by 0.8 percent.
Major US and Chinese negotiators had to meet in Washington on Thursday and Friday to try to end a slow 15-month trade war.
Without significant progress, US President Donald Trump will increase the rate of $ 250 billion of Chinese goods to 30% from 25% next Tuesday.
"Excluding any surprises today, it seems that their talks are shrinking. The rate (rate) will be increased. The situation looks terrible," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
It is unlikely that China would be willing to compromise with a US president who seems to be increasingly vulnerable to domestic political pressure while the democratic opposition tries to accuse him, analysts also say.
US Democratic presidential contender Joe Biden first asked for Trump's impeachment in a profound partisan struggle on a Republican president's congressional investigation.
"The recent risk of Mr. Trump's impeachment reversed the calendar against him," wrote Chi Lo, senior economist at BNP Paribas Asset in Hong Kong, in a report to clients.
"While China is not anxious to reach a trade agreement, Trump is, however, under pressure to at least get a temporary agreement made to help his re-election offer before his risk of impeachment increases and the US economy weaken further, "he said.
The yield on US Treasury bonds turned back after rising to 1.594 percent on Wednesday due to the strong bond offering this week.
The yield on 10-year Treasury securities fell by a base point to 1.577 percent, although ECB talk contributed to pushing euro zone yields up slightly.
The price of Fed front-end interest rate futures funds has been gained by increasing bets on more rate cuts by the US Federal Reserve. The November contract provides for an almost total price with a cut of 0.25 percentage points compared to October 30th.
In commodities, oil prices also fell from distrust of US-China talks.
Brent crude oil futures fell 0.15% to $ 58.23 USD per barrel while US West Texas Intermediate (WTI) crude lost 0.11% to $ 52.53 USD per barrel.
However, copper rose 1.1% to $ 5.749 USD per tonne after falling 0.3%. It seemed destined to be his best day in a month.