Market Bets Shift: Traders Lower Expectations for Central Bank Rate Cuts, Fed's 25 Basis Point Rate Cut in September Becomes Mainstream Pricing

High-level China-U.S. trade talks reached important consensus, sparking market excitement. U.S. stocks showed a 'V-shaped rebound' overnight — S&P 500 futures opened with a jump of nearly 4%, breaking through the April 2 high; the Nasdaq 100 index returned to bull market territory, as if the 'trade friction shocks' during Trump's era never happened.

With the rebound in risk sentiment, traders significantly reduced bets on the magnitude of global central bank rate cuts this year: swap contracts linked to Fed policy indicate that the market has pushed back the timing of the first rate cut from last week's expected July to September, with a magnitude set at 25 basis points.

However, some investors are skeptical about the lack of details in the agreement and the uncertainty after the 90-day cooling-off period — Treasury Secretary Scott Pruitt hinted that the subsequent postponement could be extended, but whether three months can resolve complex trade disputes remains uncertain.

The market's enthusiasm surged in the afternoon, but this is just the beginning; the outcome is still undecided. Yumi advises everyone to proceed with caution, as Trump's actions have always been unpredictable. Now that it's lowered, there is still a possibility of raising it again if negotiations falter, and the market is particularly sensitive at this stage. Any slight changes can cause the market to decline. Maintaining a calm and objective mindset is the best way to deal with any unexpected situations.