Time vs trump Parliament – against Johnson
The tug of war between the two biggest economies in the world once again led the parties to the negotiating table: the government of China and the United States have already adopted the plan on holding of high-level meetings to be held in early October in Washington.
Regardless of the firepower of both sides, observers it is obvious that such irrational trade war – a thing out of today’s global economy. It doesn’t fit, it destroys the foundations and has a strong influence not only on the two countries but the whole world in General.
In light of this, Trump will have to make some concessions to China. Further delay in achieving beneficial agreements becomes extremely dangerous. Time in this case plays against the States, because America is not the only trading partner of China. Rate of the Chinese government on domestic consumption is justified and bearing fruit, because a large domestic market capable of sustain the national economy.
In response to trump-approved additional duties on Chinese goods worth $30 billion, the Beijing to set the yuan to a minimum of 11.5 years. China is a strong player, and to underestimate him is clearly not worth it. Realizing this, trump has imposed duties against imports of Chinese and Mexican construction steel. The Commerce Department said the tariffs will amount to 141% for Chinese products and 31% for Mexican.
Sources CNBC and did say that the American President was ready to double the existing duties after the response of China on August 23, but CEOS of the largest companies persuaded him not to do it, calling for the assessment of the possible consequences.
However, markets still only respond to positive news about future negotiations. So, the Asian stock market on Wednesday showed the biggest two-day advance since June. Index Asia Pacific MSCI rose sharply by 1.3%, the yen declined 0.2 percent to 106.56 per dollar while the offshore yuan has appreciated by 0.2%, reaching 7.1321. Futures on the S&P500 index rose more than 1%.
Key events of this week will be the performances of senior fed officials in particular, Powell’s on Friday. Then come out and report on non-farm employment (NFP) for August, which are expected against 164K 160K last month. The performances of the officials will be scrutinized by investors for any hints on future interest rates.
The British pound is experiencing the best moments against the U.S. dollar over the past 5 months, reaching $1.2242. It became possible thanks to the parliamentary defeat of Prime Minister of Britain, Boris Johnson.
Lawmakers have blocked the possibility of leaving the EU without a deal as the scenario with General elections. In case of failure to agree, after October 31, the Prime Minister will have to ask the EU for another 3 months delay. It seems that in Britain there is a very strong-willed position on the maximum delay of this process, whereas in the highest circles understand how large can be problems because a hard option Brexit.
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