Tag Archives: Trade war

China`s growth is the weakest since 1992 and the pace of global economic activity remains weak as well

The worlds fastest-growing region is slowing and show sign of a darkening global outlook. Just look at Chinas Q3 growth. It`s the weakest growth in 28 years. The Chinese economy advanced 6% YoY in Q3 2019 and that is the weakest since 1992.

China have a trade tension with the U.S, weakening global demand and alarming off-balance-sheet borrowings by local governments. IMF said on Friday that the growth can get worse, but Japanese Finance Minister Taro Aso said «All policy tools must e used to achieve sustainable growth.»

In its World Economic Outlook report on Tuesday, the IMF cut its economic growth forecast for the Asia-Pacific region to 5,0% for this year and 5,1% for 2020, and that is the slowest pace of expansion since the global financial crisis.

A faster-than-expected slowdown in Chinas economic growth could also generate negative spillovers in the region, as many Asian countries have supply chains closely tied to China, the IMFs Rhee said.

The IMF slashed China`s growth forecast to 6,1% for this year and 5,8% for 2020, pointing to the impact from the trade conflict and tighter regulation to address excess debt. But China is not alone.

The pace of global economic activity remains weak, and after slowing sharply in the last three quarters of 2018, momentum in manufacturing activity, in particular, has weakened substantially, to levels not seen since the global financial crisis.

Rising trade and geopolitical tensions have increased uncertainty about the future of the global trading system and international cooperation more generally, taking a toll on business confidence, investment decisions, and global trade.

A natable shift toward increased monetary policy accommodation, through both action and communication, has cushioned the impact of these tensions on financial market sentiment and activity, while a generally resilient service sector has supported employment growth.

To strengthen resilience, policymakers should address financial vulnerabilities that pose risks to growth in the medium term.

Making growth more inclusive, which is essential for securing better economic prospects for all, should remain an overarching goal.

A positive cheerleader like Trump is the right man to reach that goal. Not the Media-Mob-Clowns talking about recession ever day. What is Trump doing for his country? What about the Media Mob?

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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The ECB lowered the interest rate to -0,5% and Trump wants to do the same

What a day. A very important day for Europe and the rest of the world. The ECB left its main refinancing operations rate unchanged and lowered the deposit interest rate by 10bps to -0,5 percent. Not only that; policymakers also approved a new round of bond purchases at a monthly pace of €20 billion as from November 1st.

They do this because we have Brexit and trade war with China and the plan is to boost growth. At the same time, the ECB lowered its GDP forecasts to 1,1 percent this year. Inflation expectations were also slashed to 1,2 percent in 2019.

President Trump attacked the FED, calling Fed Chair Jerome Powell and other members «boneheads» for not driving the U.S interest rates down to zero, or less. Trump explained that he wanted negatie rates in order to refinance the outstanding $22 trillion in government debt and lengthen the term.

Right now, there is a $16 trillion in negative yielding debt around the globe. What a number! Historically, negative rates have been used as an anti-recession tool to boost growth when the economy is weak.

But negative interest rate have now become much more common. Just take a look at the value of the negative-yielding debt over the world. It has shot up to $16 trillion, according to BofA.

If you have your money in your bank, it means you have to pay your bank to lend them your money. Crazy right? Normally, you will get paid from the bank if you have your money there, but with negaive interest rate, it is turned up side down.

Similarly, with government-issued debt, global investors also pay money to hold a bond with negative yields because the premium that they initially paid for it exceeds the total interest they receive over the life of the bond.

Switzerland have negative interest rate at -0,75 percent. Denmark; -0,65 percent. Sweden; -0,25 percent and Japan; -0,10 percent.

Other countries in Europe are near negative interest rate. All these countries have zero interest rate; Spain, Slovakia, Slovenia, Portugal, Netherlands, Malta, Luxemburg, Latvia, Italy, Ireland, Greece, Germany, France, Finland, Euro Area, Estonia, Cyprus, Bulgaria, Belgium and Austria.

In comparison; the U.K have 0,75 percent interest rate and the U.S have 2,25 percent. The U.S lowered the rate for the first time in July for the first time since the financial crisis, as inflation remains subdued amid hightened concerns about the economic outlook and ongoing trade tensions with China.

The U.S economy is good, but the global economy is slowing, notably in Germany and China. There are also growing possibility of a hard Brexit, rising tension in Hong Kong, and dissolution of the Italian government. Fed Chair Jerome Powell have a great challenge.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Stocks plummet on China tariffs and Trump tweets

Trump escalates the trade fight between the U.S and China and rips Federal Reserve President Jay Powell. Trump tweeted earlier today that «Starting on October 1st, the 250 Billion dollars of goods and products from China, currently being taxed at 25%, will be taxed at 30%.

…..Additionally, the remaining 300 Billion dollars og goods and products from China, that was being taxed from September 1st at 10%, will now be taxed at 15%. And all that led to a Market chaos on Friday.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Xi Jinping has been elevated to the same level as Mao Zedong

The largest political event of the year in China is «two sessions.» The National Peoples Congress (NPC) is the national legislature of the Peoples Republic of China. The party have 2,980 members (2018) and it is the largest parliamentary body in the world.

As the NPC and the Peoples Political Consultative Conference (CPPCC) are the main deliberative bodies of China, they are often referred to as the Lianghui (two sessions). Its annual meetings provide an opportunity for the officers of state to review past policies and to present future plans to the nation.

 

In theory, the NPC is the highest organ of state power in China, and all four PRC constitutions have vested it with great lawmaking powers. In practice, however, it usually acts a rubber stamp for decisions already made by the state`s executive organs and the Communist Party of China.

One of its members, Hu Xiaoyan, told BBC in 2009 that she has no power to help he constituents. She was quoted as saying; «As a parliamentary representative, I don`t have any real power.» But the Chinese leader Xi Jinping have.

The parliament is expected to rubberstamp major constitutional changes that will elevate the power of President Xi Jinping which means Xi Jinping has been elevated to the same level as Mao Zedong.

It will also confirm dropping China`s two-term presidential limit which means Xi could stay in power for life, leading China according to his new ideological guidelines, known as «Xi Jinping Thought».

Lianghui last between one or two weeks and this year the CPPCC started on 3 March and the NPC started on 5 March. The Chinese premier Li Kequang said that people in China must be fully prepared for a tough struggle. He warned that there will be greater risks ahead for China.

«Two sessions» comes amid tariff tensions with the U.S which is Chinas largest trading partner. As you may know, the U.S have placed huge pressure on Chinas economy and financial markets. Therefore, Li said that the growth target for 2019 will be 6,0 to 6,5 percent.

This years growth is in line with economists’ expectations. Last year, the Chinese economy grew at its slowest pace since 1990, expanding by 6,6 percent in 2018.

Last year, President Trump announced additional tariffs on $250 billion worth of goods from China and Li warned that the trade war with the U.S has so far had a negative impact on business activities in China.

But the tariff battle could soon ease while the two largest economies in the world are in the final stages of the trade deal that could end this month. Li reiterated Beijing`s commitment to «safeguarding economic glabalization» and pledged to promote China-U.S trade negotiations while advancing negotiations on other trade agreements.

Retail sales in China have slumped and as a result of that they are doing what President Trump did; they will cut the taxes and boost the growth.

Li told the NPC that China would aim to deliver nearly 2 trillion yuan ($4298bn) of cuts in taxes and other company fees. It plans to boost spending and increase foreign firms’ access to its markets.

China will also increase its military budget by 7,5 percent to 1,2 trillion yuan. The country`s defence spending is closely watched for any signals as to its military intentions.

A slower growth in China is not good news for the West. A slower growth in China means that they will buy less from the West while it accounts for one-third of the global growth.

But take official growth figures from China with a pinch of salt. For all I know, I could be as low as 5 percent, but tax cuts could push the growth up again. In the longer run, the growth will continue to decline.

The richer China get, the slower the growth will be.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Wilbur Ross said China is running out of bullets in trade dispute

Wibur Ross said China is running out of bullets in trade dispute. The U.S made a great deal with Mexico and Canada have a few days left to make a new deal. In the meantime, the tariffs on China is now 10 percent, or $200 billion on Chinese exports.

The U.S exports less to China than China exports to the U.S. Therefore, this trade war will hurt China more than the U.S, and President Trump`s regulations and tax cuts is whats really driving the U.S economy right now.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

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