Will a Chinese boycott really hurt the US?

As the US trade war with China accelerates, Beijing is preparing to use one of its most effective weapons – people power. There is likely to be boycotts ahead. The US trade dispute with China escalated this week, after Beijing deployed a powerful weapon in its armoury – people power. The Chinese government warned its … Continue reading “Will a Chinese boycott really hurt the US?”

Something has changed in the Trump administration

Donald Trump has put power back into his tweets. His recent announcements on technology exports and trade have sent markets lower. The tweets are backed by Executive Orders and by follow-up action from the relevant departments of government. It reminds us that something has changed in the Trump administration. The President has found a team … Continue reading “Something has changed in the Trump administration”

Who will pay as US-China trade wars intensify?

The latest developments suggest that trade tensions between the US and China will be more protracted than previously expected. The US recently announced it is raising tariffs on $200 billion of imports from China to 25% from 10%, and China has responded by increasing tariffs on $60 billion of imports from the US. The US … Continue reading “Who will pay as US-China trade wars intensify?”

Trump’s bid to take on the EU could crush the German economy

The EU’s Trade Commissioner held out an olive branch to Donald Trump last week as the bloc tries to prevent tariffs being put on the auto sector – but the move looks likely to fail. An escalating trade dispute between Brussels and Washington now appears inevitable – and Germany will feel most of the pain … Continue reading “Trump’s bid to take on the EU could crush the German economy”

Will the US-China trade deal live up to expectations?

President Trump usually encourages high expectations of what he and the US might achieve. A deal-maker by instinct and long business practice, he has made much of his ability to get the country a better deal. These claims are now on trial as we approach the end game of the US-China trade talks. The President … Continue reading “Will the US-China trade deal live up to expectations?”

Fed turns more dovish and signals an end to rate hikes

The Federal Reserve (Fed) has lowered its projections for US growth and inflation and reduced its expectations for interest rates. The “dot plot” published after last night’s meeting shows no rate hikes this year and only one in 2020.  Tighter financial conditions At his press conference, Fed chair Jerome Powell said growth was slowing by … Continue reading “Fed turns more dovish and signals an end to rate hikes”

Does the US have enough firepower to fight the next recession?

With interest rates already near record lows, what’s left in the Fed’s arsenal to fight the next recession? Low starting interest rates means that the Federal Reserve (Fed) may need to expand its policy toolkit to fight an economic downturn. But if this proves insufficient, fiscal policy need to pick up the slack. The go-to … Continue reading “Does the US have enough firepower to fight the next recession?”

Avoiding a corporate bond liquidity squeeze

Since the global financial crisis in 2008, aging developed-world populations, record low deposit interest rates and quantitative easing by the world’s major central banks have driven a global ‘search for yield’ by investors. For many years, this drove asset yields lower across the risk spectrum. However, since the start of 2018 the investment backdrop has … Continue reading “Avoiding a corporate bond liquidity squeeze”

2018: A year to forget

2018 will be a year that many investors would rather forget. A lucky few will still be looking for an overall gain for the year, but the past few months have proved extremely uncomfortable. What have been the highs and lows of the year?  Research by Willis Owen shows that eight sectors delivered a positive … Continue reading “2018: A year to forget”

Will Trump policy hasten the collapse of the dollar?

The world’s acceptance of the dollar as its reserve currency has been positive for Americans. But with Donald Trump’s America First policy, will the world move away from the greenback. When world leaders laughed at Donald Trump’s comments in his address to the United Nations last week, it was an insight into the new world … Continue reading “Will Trump policy hasten the collapse of the dollar?”

Trade wars should not derail growth

Markets worry about a trade war, and relax when they think it is about to be settled. Mr Trump’s attempts to negotiate new trading terms are often called a war but it’s actually a hard negotiation. The President threatens or imposes higher tariffs with a view to getting the other side to propose lower ones … Continue reading “Trade wars should not derail growth”

What can we learn from the shape of the yield curve?

Surveys of investors show a distinct degree of nervousness this summer. One reason may be President Trump’s propensity for off-the-cuff Twitter activity, taking aim at Turkey, NATO, and Iran, the global trading system or any of his other enemies. Another explanation is rather more technical – prosaic, even. But it also illustrates how caution about … Continue reading “What can we learn from the shape of the yield curve?”

Is the trade war really all about the mid-term elections?

US President Donald Trump’s trade war could damage the global economy, but is he just playing politics? Steve Mnuchin did not hold any formal meetings with China at this weekend’s meeting of G20 finance ministers in Buenos Aires. This is despite the US Treasury Secretary indicating recently in Congress that he was prepared to reopen … Continue reading “Is the trade war really all about the mid-term elections?”

Globalisation – Nothing new under the sun

There is nothing new about geopolitics. Geography – both physical and human – has influenced politics and international relations for centuries, even millennia. But the nature of geopolitical risk has changed over time. During the Cold War, geopolitical risks for Western governments and the corporate world were focused on Moscow’s motivations and behaviour, the possibility … Continue reading “Globalisation – Nothing new under the sun”