LONDON: Stocks and the US dollar surged after the United States and China said they agreed on a 90-day pause on tariffs and reciprocal duties would drop sharply, giving investors some confidence that a full-scale trade war may have been averted.

One glance at BofA’s currency and rates sentiment survey would have indicated a sharp reversal was imminent in the event of any positive macro developments.

The dollar jumped and government bonds sold off as markets reacted to a de-escalation in the trade war between China and the US, which agreed to temporarily lower some tariffs for 90 days.