Week 33 Review We saw a lot of negative sentiment

Transcript:Week 33 Review We saw a lot of negative sentiment:
Week 33 Review We saw a lot of negative sentiment last week – US/China trade war, possible Chinese intervention in Honk Kong; Italian elections and a possible show-down with EU; the risk of an Argentinian default; US 2- and 10- year yield inversion; US 30 year yield going below 2% for the first time ever; a GDP contraction in Germany and Chinese Industrial Production slowing to a level not seen in 17 years. Wow. Despite all this gloom, equities rallied on Thursday and Friday to end the week down but considerably higher than the lows seen earlier in the week. GOLD rose over the week and WTI did nothing. On the FX markets, the USD rose slightly; the JPY, amazingly, weakened slightly; the EUR was bashed by the German GDP number; the GBP moved up on decent economic news and a lot of political talk about preventing a no-deal Brexit; there was little movement in the commodity currencies. Week 34 Review It was a quiet week ahead of the G7 meeting in France over the weekend. Things kicked off on Friday when China announced retaliatory tariffs against the US to come into effect at the same time as the next tranche of US tariffs (1st Sept). Trump immediately increased current and proposed tariffs by 5%. Equities plunged. Trump also seemed to decree (without the power to do so) that US companies leave China. I’m not even going to discuss Trump’s suggestion to nuke hurricanes before they get to the US shore. Powell spoke at the Jackson Hole summit and said he was concerned about three things: slowing global growth; trade wars and muted US inflation. On Brexit, there were positive soundbites from Merkel and Macron on Brexit. Equities were doing OK until Friday, with all indices closing down on the week after Friday’s slew of sentiment-killing announcements. On FX, the star performer was the GBP; the USD took a step down; all three commodity currencies were down, as you would expect given the sentiment, JPY was up on negative sentiment and the EUR moved up ever so slightly. All-in-all, a very sour end to the week. Week 35 Review Week 35 started well with Trump being more emollient on China and further boosted on Thursday with the Chinese Mofcom making positive noises about US/China talks and also saying they would not immediately retaliate to new US sanctions scheduled to begin