Weekend News Out of Kuala Lumpur and Buenos Aires Propel the Risk-on Trade

Global risk sentiment ripped higher overnight on a wave of market-friendly political news, and fresh momentum in Japan’s “Takaichi Trade.”

Key Takeaways

• Cooling U.S.-China Tensions Fuel Risk Appetite: Investor hopes abound in the aftermath of yesterday’s soothing comments from Scott Bessent about a framework for a China-U.S. trade deal — adding that the threatened 100% tariffs from President Trump are now off the table, and in return, a delay in China’s sweeping export controls on critical minerals.

• Argentine Assets Set to Rally as Milei Consolidates Power: In addition to tamer trade tensions, we also had other risk-on news in hand from Latin America, where Argentina’s President Javier Milei’s party won the midterm vote with 41% of the low-turnout vote, and with enough backing from other parties to form a government and follow through with his pro-growth and austere economic reforms.

• Japan’s Political Shift Sends Equities to Record Highs: All this bullish news follows on the heels of last week’s political transformation in Japan. We will be publishing on the “Takaichi Trade” and the bullish implications later today. There is a reason why Japanese stocks just hit a new record high today, with all thirty-three equity subsectors closing in the green.

While We Were Sleeping