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.
While the euro area managed to sustain its upbeat momentum over the summer months , market doubt s about the trajectory of the US recovery have started to deepen. As economic growth becomes less dependent on accommodative monetary policy, markets are increasingly focusing on politics and the ability of governments to implement fiscal and structural reforms.
AXA IM | Mexico, together with China, appears to be the country most exposed to Trump’s economic policy given its vicinity and close trade relations with the US. The Mexican peso has depreciated by 10% relative to its pre-election day closing level, the stock market is down 6% and the local currency sovereign 10-year rate has shot up by 112bps.
Andrew Sheng via Caixin | Most studies on yuan internationalization focus on how it affects trade and investment flows and GDP growth. They typically neglect the balance sheet aspects, as well as the profits, or return on equity, issue.
It’s not the slowdown or the devaluation of the yuan which is really worrying, but China’s reforms. Economic reform, which should lead to a free market. And political reform which, unfortunately for the Chinese people, will be some time coming.
W. Shuo, Z. Jiwei and H. Kan | Recently Governor Zhou Xiaochuan had an interview with Caixin and talked about the yuan exchange rate regime reform, macro-prudential policy framework, and other topics. The following is an edited transcript of the interview. Caixin: The central bank convened its system-wide annual work conference in January. We learned that before the Spring Festival, the branch offices were studying the decisions adopted at the…
UBS | 2015 saw China’s growth slowing further but the government’s intensified policy support helped to prevent a hard landing. The equity market was very volatile and the world was surprised by China’s modest but perhaps ill – timed currency move. For 2016, we expect growth to grind lower with further policy easing, corporate restructuring to accelerate, and RMB to depreciate by another 5%. However, there could be some big surprises too on property destocking, SOE reform, RMB exchange rate and financial markets.
The euro started off the week trading momentarily below 1,06 dollars, its lowest exchange rate since mid-April and bringing it ever nearer to parity with the “green back.” The question being asked by many investors now is whether the euro will achieve parity with the dollar in 2016. There are all sorts of forecasts, but the current majority opinion is that the euro has very little downside left.
Flash manufacturing PMI for August and IMF decision bring more negative news for China.
Some experts explain what to expect from CNY in the months ahead.