Important news in the US. Belief is building in a new China/USA “phase 1” trade deal. According to media leaks a deal has been made between the US and China. According to mythical sources, the US has offered to cut tariffs by 50% on USD375m worth of Chinese imports. It is also expected that the US tariffs that were due to be added to USD160m of Chinese imports on Sunday 15th December will not go ahead.
A few weeks ago the Chinese officials made it known they won’t budge on the thorniest issues central to the trade war. That is currency manipulation, IP transfer etc. Even after a phase 1 agreement we are still only dealing with the aftershocks of the initial problems which started the whole mess. One must think now, is all the bluster there to cover the fact that none of the initial issues will be solved? Is this a smoke screen leading to saving face for the 2020 US election? We are lacking detail – particularly what the Chinese have offered. At the time of writing none of this was clear.
Let’s hope it’s not fake news! We have seen these deals in the past and they have amounted to not much. The economic pain of the fight has obviously caused the 2 nations to be more serious than ever before. But remember this is phase 1 – of 2 or 3. The angst between these 2 nations has not ended.
In
England, Prime Minister Boris Johnson has managed a win in the December
12 election. This convincing win should ensure the “right kind of
Brexit”! If he is true to his word and BREXIT occurs, the UK will go
through some tough times but will ultimately be better off.
Once the BREXIT is completed the EU will be on high alert for other defectors.
The ECB (European Central Bank) and FOMC (US Reserve) left rates unchanged. Tuesday sees the release of the RBA meeting minutes – yawn.
There appears to be an absence of bad and quite a lot of good priced in.
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