Asia

S&P500 futures have started the second half solidly in the green, up 0.3% to 2,429, tracking European markets broadly in the green, while Asian stocks fell slightly and crude oil is little changed. With US markets set to close at 1pm today trading volumes in many markets remain light before Tuesday’s July 4th holiday and as investors await Friday’s report on the American jobs market. Traders will be looking at key upcoming economic data for validation of the hawkish shift from central banks that roiled markets last week. 

On Sunday Japanese PM Shinzo Abe’s Liberal Democratic Party suffered what Reuters called a "historic defeat" in the Tokyo assembly election, and "plunged into a crisis" after losing to an upstart outfit in an vote that is seen as a harbinger for Japan's national elections, and signaling trouble ahead for the premier who has suffered from slumping support after a series of political scandals.

Trump's "up and down" relationship with China may be on the precipice of taking a sharp dive into the proverbial abyss.  After frequently threatening to label China a "currency manipulator" on the campaign trail last year, Trump's relationship with China's President Xi Jinping took a decided turn for the better after a meeting at Mar-a-Lago in which China vowed to help address the "menace of North Korea" .

S&P futures rebounded shortly after the stronger than expected European CPI print, rising 0.3% to 2,426, as markets try to forget all about yesterday's brief 50% VIX surge and tech rout, which trimmed the seventh consecutive quarterly gain for the S&P 500 Index to 2.4%. Europe shares rose 0.4%, led by tech stocks, after a drop in Asian markets, as oil and the dollar gained.

After allegedly pressuring the Chinese government to act first and adopt sanctions against nearly 10 local entities who the US claims provided North Korea with materials used in its nuclear program, the US has decided to act.  In an unprecedented step, the Treasury Department slapped financial sanctions on two Chinese nationals and a Chinese shipping company over their ties to North Korea stemming from its nuclear program, according to Reuters.