Archives of “November 2019” month

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Emerging markets are starting to get some love

  
  Analysis

ETF inflow data shows that optimism has returned

If global growth is bottoming then the place to be will be emerging markets where currencies and asset prices are beaten down.
Investors have noticed.
Inflows into emerging market ETFs last week hit a nine-month high. In particular, Latin American EFTs were in style with the iShares Lain America 40 ETF netting $318m, a record since its inception in 2001.
More broadly, BlackRock’s broad iShares MSCI Emerging Markets ETF received $135m last week, the first net inflow since February. Bond funds were similarly loved.
Those are small numbers in the grand scheme of things but if investor perceptions are shifting, that’s the place to be.

Giuliani associate now says he will cooperate with impeachment after Trump denied knowing him

  
  Analysis

Trump is forgetting a lot of people lately

Trump is forgetting a lot of people lately
The New York Times reports that Rudy Giuliani associate Lev Parnas is now opening discussions with impeachment investigators.
Evidently, he had a change of heart after Trump denied knowing him and hired a new set of lawyers.
“Mr. Parnas was very upset by President Trump’s plainly false statement that he did not know him,” said his new lawyer Joseph Bondy.
Parnas is accused of funneling illegal campaign money to Trump and has maintained that he has had extensive dealings with the president. There are several pictures of him with Trump.

Xi says China needs to tighten protection of intellectual property

  
  Analysis
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Comments from Xi in keynote address at annual party meetings:

Comments from Xi in keynote address at annual party meetings:
  • Xi says China has honored promises made at 2018 CIIE
  • China has made achievements in adding imports, cutting tariffs
  • Nation is to implement foreign investment law from Jan 1, 2020
  • All countries must deepen economic cooperation
  • We need to bring down trade barriers
  • Would should stick with multi-lateral trading system
  • China’s door for opening up will be further widened
“We need to tear down walls, not erect walls. We need to stand firm against protectionism and unilateralism,” he said.

US considers rolling back tariffs Sept 1 Chinese tariffs to seal Phase One deal – report

  
  Analysis

FT report

Trump Xi
Earlier Politico reported that China was pushing to get the Sept 1 tariffs of 15% on $112B of goods removed. Now the FT reports that the administration is ‘debating’ it.
This headlines have lifted AUD, yen crosses and risk trades.
The story cites five sources and says the US wants something in return:
“Washington would likely expect something in return, including beefed up provisions on the protection of intellectual property for US companies, greater certainty on the scale of Chinese purchases of US farm products, and a signing ceremony for the agreement on American soil.”
The report says that there is a growing belief in the US that they will have to make this type of concession but that it was unclear if Trump would sign off.
Watching this story going forward, I’ll be listening for hints on where the signing ceremony is rumored. If it’s in the US, that will be a good sign that a deal along these lines gets done.
At the same time, I’m not sure the market has the right reaction here. I see a deal as 99% priced in and the talk in this story hints at some very big decisions still unmade and plenty of risk that this falls apart.

China wants 15% tariffs imposed on Sept 1 removed in trade deal

  
Analysis, Politics
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Politico report

China is in a ‘full court press’ to get the 15% tariff imposed by Trump on $112B of goods removed before it signs the Phase One trade deal, according to Politico.
U.S. officials are currently struggling over how to make sure China lives up to its side of the deal. The main enforcement mechanism being considered is that all the tariffs could be re-imposed, one of the people said.
They cited a White House official who said the deal is almost there but there are still hangups on forced technology transfers and IP protections.
China hasn’t decided yet on signing the deal in the US or a neutral location.
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