Markets were cheered by two developments overnight and this morning, with equities and Treasuries rebounding from earlier losses. Gold is rising along with crude oil, while the dollar is dipping.

Yes, the inflation data IS getting better – and that’s a plus! The Consumer Price Index (CPI) rose just 0.1% in May, below the average forecast for a gain of 0.2% The “core” index that strips out food and energy also rose 0.1%, compared with expectations for a 0.3% rise.

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From a year ago, inflation is running at 2.4% on the headline and 2.8% on the core. While many experts have worried that higher tariffs would feed through to broad goods prices, this data suggests we’re not seeing it yet. The Federal Reserve will be pleased, even as we still aren’t likely to see any rate cuts at the meeting that concludes next Wednesday. Ditto for the one after it that wraps on July 30...though September is in play.

Meanwhile, the latest round of US-China trade talks in London are over...and both sides have shared upbeat comments afterward. It looks like we’ll see an easing of slow-walked or newly restricted exports (rare earths in China’s case, tech gear in the US’s case).

See also: Silver: Taking Out Resistance...and Ready for its Next Big Move

President Trump and President Xi Jinping will have to review and sign off on what negotiators agreed to. Plus, based on what Trump shared in a social media post this morning, it looks like we’re mostly back to where we were after a previous round of talks in Geneva a month ago. But that appears to be good enough for markets.

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