World economy

Copper is still a useful indicator for forecasting the US economy

The Incredible Falling Copper Price

Justin Irving | Copper futures have been tanking of late, sinking from of $3.32 per pound on June 8th, to $2.7 per pound on July 19th, a 19% drop. This drop has largely undone the prices gains the commodity had accrued following the general rise in asset prices in November 2016. Predictably, the financial press have raised the alarm about “Dr.Copper” foretelling a slowing US economy.

China is already challenging the US as the dominant leader in e-commerce, fin-tech, robotics

China: From Tech “Follower” To Tech “Leader

China’ s rapid economic convergence is well-documented but a similar catch-up on innovation has often gone unnoticed. “This is partly because of China’s developing-country status, which is not usually associated with where cutting-edge technology is developed”, explain economists at AXA IM.

The rise of the sharing economy have created a new type of non-standard employment

The Sharing Economy Still Means A Small Percentage Of Global Labor Force

The new type of labour relations explains the the current high rate of part-time, temporary and self-employed workers (19.4%, 12.2% and 13.7%, respectively, in 2017). “Most of our parents and grandparents spent their whole lives working at the same company where they began their career –something which is unthinkable for young people joining the labour market today”, says analysts from CaixaBank Research.

The effects of a trade dispute can be devastating

Markets Already Fear Trade Dispute Will Impact Growth

Global GDP could contract given that reduced production translates into reduced demand for non commercial goods – for example US services which are not exported – which impacts in a contraction of demand. Idem in the other countries. In other words, the decline will be in global demand, not just in comercial but all.

The yuan rose above 6.8 to the dollar

The Market Risks That Can Spoil August (IV): The Yuan

Intermoney | The unanimous approval by the Senate of a law to reduce or eliminate the tariffs applied to around 1,660 products made outside the US, of which half are made in China, could be the perfect excuse for Trump to return to the charge on trade attacks on Chinese interests. However, as we have insisted over the last few weeks, the key to the summer from a Chinese perspective, could lie more in the yuan than trade issues.

China lowered its average tariff on imports after it joined the WTO

Why China Hasn’t Broken WTO Rules

Yu Yongding  via Caixin | Has China violated the rules of the World Trade Organization (WTO) as the U.S. has said? The most reliable answer should be from the WTO itself. On the 10th anniversary of China’s entry to the organization, former WTO Director-General Pascal Lamy said in an interview with the U.S. magazine China Business Review that “China has done really well in terms of implementing its long list of commitments, although no country is above criticism.”

The situation of emerging markets is concerning

August 2018 Risks (III): The Different Concerns Of Emerging Markets

Intermoney | Other risks to which we must pay attention are those arising from emerging markets. In this case, one should not focus only on one country, as there are numerous fronts open. For example, the latest update to the IMF forecasts cut the growth forecasts for Argentina and Brazil, stressing the more difficult finanacial conditions and the need for adjustments to the Argentinian economy while, in the case of Brazil, it stressed the effect of strikes and political instability.

Twitter and Facebook must grow up

Risks For August (II): Facebook And Twitter Recall Concerns About The Tech Sector

Facebook and Twitter have been significantly punished by investors following figures about users which created doubts about the performance of both companies in the future. In the first case, the number of users active per month increased 1.74% in 2018 to pass from 2.196 millions to 2.234 million, disappointing market expectations and delivering the smallest increase since Facebook provided figures.

The risks for the markets in August 2018

The Risks That Could Sour August (I): Less Liquidity In The Markets

Financial markets in developed countries have suffered several difficult months of August this century. Therefore we should never be confident about August and this year there are reasons to face it with caution. In a brief series which starts today, Intermoney identifies the key elements of these potential risks.


China and the US have long enjoyed a mutually beneficial relationship

China’s Trade Surplus Isn’t as Big as U.S. Says

Yu Yongding via Caixin | Washington launched its trade war against Beijing in part because of China’s long-running trade surplus with the U.S., but it turns out that the surplus isn’t as large as advertised. U.S. President Donald Trump has said that his country has an annual trade deficit of $500 billion with China. This is nonsense.