Will Trump do a deal (not the deal) and remove the overhang of uncertainty from the global economy?

June 21,  5:00 pm EST

As we end the week, any questions on whether or not the central banks have your back, have been answered.

Just as they have for the better part of a decade, they have no choice but to respond to any shocks that might knock the global economic recovery off path.  And as I said yesterday, the major central banks of the world have lined up, because they are unable to predict what Trump will do on trade.  To maintain market confidence, they have to posture as if they assume the trade war will go on indefinitely.

On that note, it seems to be priced into the global treasury markets and the gold market that China can’t accept Trump’s deal (or at least can’t deliver on the current demands of the deal).  It’s politically unpalatable and an existential threat to the Chinese Communist Party.  So, the question is, will Trump end the trade dispute with more bark than bite?  Will he do a deal (not the deal) and remove the overhang of uncertainty from the global economy, and an election coming next year.   Next week should be interesting, as we await the Trump/Xi meeting at the G20 (scheduled for Friday 6/28 and Saturday 6/29).

As we head into this weekend, markets hang around big levels: record highs in stocks, the big 1,400 level in gold, just above 2% on the 10-year, and closing in on 10k in Bitcoin (a haven for Chinese capital flight).