Aidan Yao (AXA) | A sudden rise in tensions has cast a dark shadow over Sino-US relations. While the trade war has been the most eye-catching instance, increased “decoupling” has also occurred in areas of technology, investment and social exchanges as the two countries have put up “walls” against one another. But every cloud has a silver lining.
Yves Bonzon (Julius Baer) | It is my long-held view that political noise is an exogenous factor that is hard to time. As long as we can remain sufficiently confident that the external shock is not triggering a systemic crisis or a recession, we must stay focused on the fundamentals and resist the temptations of exploiting the irrationality of a whipsawing market. And I still see a wealth of factors favouring a long-term uptrend of equities in a low-growth and low-inflation world.
J. P. Marín-Arrese | Once again, Jerome Powell played down the need for monetary easing in the press conference following the Fed’s rate cut decision. His unconvincing delivery led Mr Trump to heap scorn on his uninspiring performance. For once, his bitter recriminations were fully justified.
Experts at UBP believe that fiscal stimulus or, more effectively, fiscal- monetary coordination presents the most potent upside catalyst to risk-assets.
Shaun Riordan │Many of us are already enjoying our summer holidays. Others are packing now, looking forward to relaxing on the beach, or in the mountains. Wherever we are taking our holidays we should make the most of them. A perfect storm is brewing which could hit Europe hard in the autumn, with devasting economic and political consequences.
David F. Lafferty (Natixis) | Volatility has returned and the red hot stock market that began the year has now downshifted closer to neutral. While the macro data continues to be lackluster – consistent with our view that the global economy is decelerating towards potential – much of the recent malaise has been driven by the on-again, now off-again US/China trade negotiations.
Santander Corporate & Investment | The publication of results is nearing its end, and European company profits have shown resilience in face of a global environment dominated by uncertainty: the trade war, volatility in emerging markets and weakness in their currencies, Brexit, the growth of populism etc. Spanish companies are very exposed to international markets, given that only a third of their benefits come from the domestic market.
Alicia Garcia Herrero (Natixis/Bruegel) | Only a few days before Li Keqiang’s official visit to Brussels for the EU-China summit on April 2019, Xi Jinping has conducted his second trip to Southern Europe in only five months. Such a keen interest in Southern Europe is hard to understand, especially if one considers that Chinese high level officials are busy negotiating with the US to reach a deal to halt the trade war.
David Mahon via Caixin | There is an African proverb that states, “When elephants fight, it is the grass that suffers.” Small nations will suffer considerable economic losses if they take firm sides with either the United States or China in the current trade war.
Wang Tao via Caixin | The meeting between Xi and Trump on Dec. 1 turned out better than expected. According to both the White House statement and Chinese official reports, both sides agreed to enter into immediate negotiations on a broad range of structural issues in the next 90 days, and not impose additional tariffs in the meantime.