While the earlier trial balloon from MNI that the Fed may end rate hikes in the spring did little to push futures higher, perhaps because even the algos quickly saw through its sheer market-moving propaganda which flies in the face of the Fed's dot plot which shows 3 hikes in 2019, futures did jump on a report from SCMP that Trump trade advisor and notorious China hawk, Peter Navarro, has been excluded from the guest list when US President Donald Trump meets his Chinese counterpart Xi Jinping in Buenos Aires on December 1. "Navarro will not attend the summit," an unnamed source told the South China Morning Post, adding that Beijing and Washington were still in the process of finalizing the list of advisers taking part in the key diplomatic event that is expected to influence trade and economic relations between the world’s two biggest economies. The Post reported earlier that Beijing and Washington are in intense preparatory talks for the summit – a dinner meeting at which each president is likely to be accompanied by six aides. While the report has yet to be confirmed or denied by the White House, the Trump administration’s decision to exclude Navarro – the key figure behind the trade war with China – from the Argentina dinner was instantly interpreted by the market as favorable to the potential outcome of next week's summit, and comes amid signs from both sides that they want to make progress on the dispute at the summit, with futures promptly hitting session highs on the report. In setting the stage for the upcoming meeting, White House chief economic adviser Larry Kudlow said in an interview with Fox Business News on Tuesday that Trump was trying to “inject a note of optimism” into trade talks with China. “He [Trump] believes that China would like to have a deal,” Kudlow said, adding there were “very detailed communications” between China and the US taking place at all levels of government. With Navarro excluded, the SCMP notes that other candidates to accompany Trump to the dinner include Kudlow, US National Security Adviser John Bolton, Secretary of State Mike Pompeo, Treasury Secretary Steve Mnuchin, Commerce Secretary Wilbur Ross, US Trade Representative Robert Lighthizer and US ambassador to China Terry Branstad. In recent weeks, Trump's administration is divided between hardline hawks like Navarro and Lighthizer seeking maximum concessions from China versus pragmatists like Kudlow and Mnuchin who are more willing to seek a compromise – and that will make it more difficult for Trump and Xi to reach any deal. As reported last night, Lighthizer, the US trade chief and a key architect of the tariff war, released a report on Tuesday saying China had so far failed to change the behavior that had prompted the US to impose tariffs on around US$250 billion worth of Chinese goods. He made the statement in conjunction with an update to the US investigation into China’s intellectual property theft under Section 301 of the 1974 Trade Act. That investigation and its initial report in March provided the legal basis for Trump to impose tariffs on nearly half of all US imports from China. “This update shows that China has not fundamentally altered its unfair, unreasonable and market-distorting practices that were the subject of the March 2018 report on our Section 301 investigation,” the trade chief said in a statement. Still, it is too early to call a truce in the ongoing trade war: Alan Wheatley, an associate fellow of international economics at British think tank Chatham House, said US-China relations would be bumpy with or without an agreement on a trade war ceasefire in Argentina. “The US has made it clear that it regards China as posing a much broader strategic challenge to US economic and military supremacy,” Wheatley said. “A truce would spell welcome short-term relief to nervous global markets but wouldn’t be a game-changer for relations between the two.”