Negotiators will tell you timing is everything, and it appears the Trump administration sees the run-up to Dec.
15's planned 15% tariffs on $156bln of Chinese imports as the optimal time to push China into a phase one trade deal.
If so, USD/JPY and assorted risk-sensitive assets may be in the lurch until then.
Indeed, until today, the assumption was that the U.S. would delay those tariffs as long as talks with China were continuing, and a phase one deal was a fair prospect, even if it didn't get inked until next year.
That view, however, is now in doubt after Commerce Secretary Ross's Fox interview today made it clear the Dec.
15 tariffs would be imposed unless a deal with China was struck before then nL1N28C0OU.
Ross said that because U.S. businesses already have the inventory they need for the holiday season, new tariffs from Dec.
15 wouldn't be too disruptive.
Add in President Trump’s decision to reinstate tariffs on steel imports from Brazil and Argentina and it suggests he's decided to take a hard line on trade nL1N28C0OH, sending stocks lower, the VIX spiking, USD/JPY vols surging off record lows and USD/JPY to 109 support.
If S&Ps close below their 21-DMA at 3,105, USD/JPY could be in trouble.