David M. Lampton via Caixin | The U.S.–China relationship is fraught with problems and will be for the foreseeable future. The U.S. is no longer positioned to compel cooperation from China. Any policy changes from Beijing must be negotiated, and within this negotiation Washington must seek a balance of power and interests.
Both the Fed and the ECB remained gradual and predictable in their last week meetings as far as monetary policy is concerned. In opinion of Julius Baer, this prevented EUR/USD from taking a specific direction, “but monetary policy in the US and the eurozone are still diverging and justify a slightly stronger US dollar in the next month.”
Disney has recently announced that it will buy Fox’s film, television and international businesses in a deal worth $52.4 billion. The resulting new Fox will spin out its broadcast net work, sports cable nets, and news cable net. Being two of the biggest media and entertainment companies in the world their merger will create a sector giant capable of facing rivals such as Netflix or Amazon.
In her last press conference as Fed Chair, Janet Yellen showed no visible signs of emotion or resentfulness, taking her wholly unjustified dismissal with notable fortitude and good spirits. For all her weaknesses, both observers and markets will miss her unbiased attitude, conscientious dedication and economic mastery.
The US dollar was broadly stable over the past month, up against the euro and Japan’s yen but down against the New Zealand dollar and sterling. Elsewhere the Norwegian krone depreciated further, hitting new lows. The market appears to lack conviction in terms of the direction of the greenback.
By Guntram Wolff | Jamaica has failed: the negotiations to form a new government in Germany were ended by the liberals. The breakdown was certainly a shock to the Berlin political establishment. It is quite unusual for Germany to take such a long time to negotiate the formation of a new government.
Another Thanksgiving weekend, which traditionally kicks off the shopping season, is history and has made history as well. More than 174 million Americans shopped in stores and online from 23-27 November, i.e. the weekend from Thanksgiving to Cyber Monday with an average spending of USD 355.47 per person.
After China’s 19th Party Congress now behind us, the primary takeaway is that President Xi Jinping has cemented his role as the most powerful leader in China since Mao Zedong. The financial reforms should lead to tripling in the size of US bond market to $37.5 Tr, stock market capitalization rising to $31 Tr and banking assets of $68 Tr.
In the fifth round of renegotiations regarding the modernisation of the North Atlantic Free Trade Agreement, no progress was made on the major points of contention. Now the sixth round will take place in Washington in December 2017. While this is not AXA IM’s central scenario, there is still a risk that the negotiations break down.