Trade / BOP
China missed the chance to change course on economic policy and now it faces rising social instability and western protectionism. This policy approach implies it is not afraid of escalating strategic conflicts in East Asia. Investors should continue to underweight Greater Chinese assets. Any US-China détente will come later rather than sooner.
The unwind of yen carry trades caused violent tremors across the globe. Was this shock a one-off event or the prelude to more troubles?
As Trump’s victory odds rise, the underperformance of European equities deepens. How negative would a global trade war be for European assets?
The real threat to European equities is growth, not political risk. How low will Eurozone earnings fall during the coming recession and how much will equities decline in response?
Does the incipient slowdown in European data herald a soft landing and a goldilocks period for equities? We have our doubts.