Commodity currencies climb as Xi and Trump hold a phone call

Beijing has confirmed that the phone call with Trump is ongoing in a brief statement:

So far, we haven't heard from Trump, who is likely to be the first person to send a message when it's over. Keep an eye on Truth Social.

The Australian and New Zealand dollars are the top performing currencies today, up around 50 pips each. Both are at the highs of the day and the Australian dollar is challenging the May peak. If that breaks, it will take us to the best level since November and I'd expect some buy stops.

I fear we could get a 'sell-the-fact' trade on the readout. The market has been rallying on the Trump-Xi call since Monday and particularly since Tuesday after it was confirmed that diplomats spoke.

Of course, if we get a true climb-down on trade from both sides and the seeds of an actual deal then there is immense room to the upside for risk assets.