Well, we expected US markets to pick up after the long weekend and boy did they deliver. A combination of pent-up demand following the break, some positive soft macroeconomic data, and an unusual quirk with Japanese bonds led to a strong day in the markets yesterday. However, this morning, things are a little quieter in Europe as Asian shares struggled overnight.

The FTSE 100 and Cac are flat this morning with shares in Frankfurt falling a little harder. The optimism around the delay to the 50 per cent tariffs (which aren’t a delay, but just a reset to the original day) may be fading, but there is still hope that a trade deal can be agreed. However, as it always has been, any trade deal will be worse than what we had before, so there’s very little reason for investors in global businesses to be buoyed by this.

Nonetheless, they were yesterday, as the S&P added 2 per cent and the Dow 1.75 per cent. The Nasdaq went a little harder and was just shy of 2.5 per cent, but some of this was front running to Nvidia’s earnings update tonight. Futures for the US markets are also a little weaker for the open later on today, so it seems whatever sentiment we did have is fading.

Long-dated yields fell back across regions yesterday following on from the sharp fall in long-dated Japanese bond yields on Monday. This was after the Bank of Japan issued a survey implying it was looking to cut back the supply of its 30-year notes, leading to a rally in the bonds, but also stocks. This trend has slightly reversed this morning with Japanese yields ticking back up, but they’re still lower than where we started, which should keep share prices somewhat in check. In addition, some consumer confidence data in the US showed confidence had risen for the first time in six months.

In London, Kingfisher is leading the fallers chart this morning after reporting that UK and Ireland sales were up, but it was struggling elsewhere on the continent. Rentokil Initial is up slightly after announcing it’s selling Initial for €410mn (£344mn). More on all that here

With positivity around trade deals picking up, it’s time traders thought sensibly about what they can do, and as ever, it isn’t going to be playing the news. It’s going to be an interesting (read volatile) month in June. As it stands, without a deal, the most punitive tariffs come into effect in July. So trade deals are good, but still worse than what we have had. No deals are even worse than that. And, on top, as we saw over Friday and the weekend, all of that can change in an instant, depending on what topping US President Donald Trump had on his breakfast that morning. So volatility, that’s it. There isn’t a ‘sensible’ way to play this. The only trade is to wait it out with the stocks nimble enough to take it on the chin, and take profits on the ones that struggle in the face of adversity. Analyse the impact of trade deals on the stocks you own as they happen, but we’re very much entering the ‘dust settling’ stage. Also, don’t rule out another delay. Why? Because.

By Taha Lokhandwala