Conflicting China Trade Comments Whipsaw Nervous Markets
“The US side’s move seriously violated the consensus between the heads of state”.
“The US side’s move seriously violated the consensus between the heads of state”.
“Targeted measures are clearly insufficient to stabilize even credit growth, never mind the real economy”.
“We will Win”!
“…an easy way to curtail outflows”.
Crystal ball gazing via a trio of possible scenarios.
The bad vibes are proliferating.
Misses pretty much across the board.
The cross-asset reaction to the latest tariff news was quite dramatic.
“…the administration is essentially providing welfare checks to affected farmers”.
Bad news is just bad. And cross-asset returns since the latest tariff escalation reflect as much.
If it’s foreboding economic indicators you’re looking for…
This was always the risk.
Maybe later, but not now.
Or, at least, gray rhinos.
Despite the unwelcome turmoil and surging safe havens, stocks are resilient.
“…it is not clear to us that the labeling-exercise is consistent with the administration’s own craving for CNY strength”.
“If we don’t that’s fine, if we do that’s fine”.
Another mini-escalation, perhaps.
We are now squarely in the throes of a global currency war.
Deflect and blame the Fed. It’s so easy.
That said, risks come back into play starting in late August.
“What if – take a deep breath – the Chinese authorities are not as in control of events as investors assume”?
Paradoxically, this could serve as something of a pressure valve.
“Playing with fire”.
And that’s not all Hu “knows”.
This time around, Wonderland will be an even stranger place.
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