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Labour’s Corbyn: Johnson’s deal is worse than May’s

  
Analysis, Economy
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Comments by Labour leader, Jeremy Corbyn

Corbyn
  • Best way to sort Brexit is to have a second referendum
  • Johnson’s “sell out” deal should be rejected
Earlier in the day, it is said that Labour lawmakers have been whipped to vote for a second referendum on Saturday. If that is the case, it means that Johnson will find any further support for his deal to be lacking.

China commerce ministry: The goal is to stop the trade war, remove all tariffs

  
Analysis, Economy

Is that a hint on the stance that they are about to take moving forward?

US-China
  • Hopes that China can make progress with the US in removing tariffs
  • Currently working on text with the US
  • Wishes both sides can reach an agreement as early as possible and make progress on cancelling tariffs
Just in case you forgot about this “little” report here from earlier in the week.
It could be a subtle hint about what will be discussed in the next round of talks but I may be reading too much between the lines here.
I mean that’s quite a bit of mention about removing/cancelling tariffs, no? ¯\_(ツ)_/¯

China says will remove business restrictions for foreign financial institutions

  
Analysis, Economy

Comments via Chinese state media

China
  • Will remove business restrictions for foreign banks, securities companies and fund management firms
Adds that they will not allow forced technology transfers by foreign firms as well. The state media also notes that the above move is to offer a more attractive environment for foreign firms to invest into China.
The timing of the message here is no doubt a little “convenient” as they want to make sure that the US is aware that they are making efforts to keep up their end of the bargain in the trade truce. Or at least to give out the perception that they are.

IMF lowers global growth forecast to 3.0% from 3.2% in July

  
Analysis, Economy
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The latest growth estimates

The latest growth estimates
The prior estimates were in July and at that time they were downgraded from April.
  • Prior was 3.2%
  • 2020 growth to 3.4% from 3.5%
  • US growth to 2.4% from 2.6%
  • US 2020 to 2.1% from 1.9%
  • Cuts 2019 China forecast to 6.1% from 6.2%
  • Cuts 2020 China to 5.8% from 6.0%
  • US-China trade tensions will cumulatively reduce global growth by 0.8% by 2020
  • Risks skewed to the downside due to uncertainty over trade tensions, Brexit, declines in risk appetite and manufacturing weakness
  • Eurozone 2019 1.2% vs 1.3%
  • Eurozone 2020 1.4% vs 1.6%
  • Germany 2019 1.2% vs 1.7%
  • India 2019 6.1% vs 7.0%
  • LatAm 2019 0.2% vs 0.6%
  • LatAm 2020 1.8% vs 2.3%
  • World trade volume 1.1% vs 2.5%
The IMF warned last week that it was going to cut global growth so this isn’t a surprise but we might have expected to see 3.1%.
They estimate that the trade war could cause China’s GDP to fall by 2.0% in the short term and cut 0.6% from US GDP.
If anything, the 2020 numbers look optimistic.

China Sept. CPI: 3.0% y/y (expected 2.9%) & PPI -1.2% y/y (expected -1.2%)

  
Analysis, Economy

Inflation data out of China, pork prices a big factor in the CPI

CPI expected 2.9% y/y, prior 2.8%

  • fastest rise since October of 2013

PPI expected -1.2% y/y, prior -0.8%

  • fastest rate of decline since July 2016
more to come
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Background to the rising price of pork ( swine flu outbreak ):
  • supply issues worsened over the summer
  • pig inventories fell at a sharp rate
  • live pig prices hit a record high last month
  • the Chinese government to announced price caps, quotas, subsidies to pig farmers

Singapore loosens monetary policy for first time in 3.5 years

  
Analysis, Economy
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Singapore has moved to loosen its monetary policy for the first time in three-and-a-half years to help offset slowing economic momentum due to prolonged U.S.-China trade tensions.

As a small, heavily trade-dependent economy, the country has been heavily exposed to the tariff battle between two of its largest trading partners. Exports have been falling at a double-digit pace from last year’s levels.

The Monetary Authority of Singapore, the central bank, said in its semiannual policy statement Monday that it would slightly decrease the slope of the Singapore dollar’s exchange policy band, a move to guide a weaker appreciation of the local currency.

The nation’s monetary policy is based on its exchange rate whereby the Singapore dollar is managed against a basket of currencies representing the country’s major trading partners.

With this move, Singapore follows regional peers such as Indonesia, the Philippines and India, all of which have eased monetary policy by cutting interest rates in recent months.

Singapore’s adjustment comes as trade-related industries stagnate under pressure from the U.S.-China standoff, though economists say domestically focused sectors have held up better. (more…)

‘Phase 1’ of US-China deal was easy, now comes the hard part

  
Analysis, Economy
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 Even as the “phase one” trade deal between the U.S. and China averted an escalation of the trade war, the agreement is widely seen as a small-bore pact that focused on relatively easy issues, such as agricultural and currency.

The deal was a product of compromise by two countries eager for a respite amid growing concerns about economic slowdowns. The two nations must tackle structural issues, such as China’s government subsidies, in the next phase of talks, and a real end to the trade war that would eliminate punitive tariffs imposed on each other still remains elusive. 

U.S. President Donald Trump was exuberant in announcing the agreement that would ease the pain of the Midwestern farmers that make up the core of his support base.

“The deal I just made with China is, by far, the greatest and biggest ever made for our Great Patriot Farmers in the history of our Country,” Trump tweeted Saturday morning. “In fact, there is a question as to whether or not this much product can be produced? Our farmers will figure it out. Thank you China!” 

In contrast, the Chinese side remained subdued. Beijing issued a statement reporting progress in agriculture but did not mention an “agreement.” State television reported the deal, although it downplayed the story. Trump’s about-face in May last year after an agreement to avoid tariffs was not lost on top Chinese officials.  (more…)

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