The US has the upper hand in US-China trade war, which allows it to decide when to end the trade war, but far from enough for it to decide how to end the trade war. The US side wants both, then it needs to change an adversary.
Citi discusses the Fed policy trajectory in light of yesterday’s FOMC minutes from the October meeting.
“Minutes from the October 30th FOMC released overnight are broadly consistent with Citi analysts expectations for disagreement regarding the need to cut, but agreement that on leaving policy rates on-hold. On USD supply to year end (the more interesting part of the Minutes), Fed officials continue to look for ways to make sure funding pressures in the overnight lending market don’t cause a problem again with a “standing repo” seen as the preferred option that would likely provide substantial assurance of control over the federal funds rate (and USD supply). However, Citi analysts do not expect a final decision until H1 2020. ,” Citi notes.
“The Citi analyst view remains for the Fed to stay on hold in December and through 2020 though muted inflation makes hikes in the next year very unlikely. Cuts are possible should domestic activity data indicate a slowdown,” Citi adds.
The signing of the bill could jeopardize US China negotiations. From the US perspective politician see the meddling of China in Hong Kong’s autonomy of significant concern.
The price of crude oil futures has moved up to a new session high at $58.28 and in the process is trading at the highest level since September 24 nearly 2 months ago.
Adding that OPEC+ is likely to extend the existing oil output cuts until June next year when they meet up in Vienna next month.
