Traditionally, international relations were driven by what is called spheres of influence. European and Japanese governments divided Asia and Africa among them. The spheres were often political concessions or the result of direct force, War was often the price to be paid for increasing one’s sphere. Though simplistically expressed here to a fault, this the …
Overview: It is risky to read too much into the price action in holiday-thin markets, but inflation fears are beginning to surface. The price of January WTI is around $61, having tested $50 a barrel in Q3. The CRB Index made new highs for the year yesterday and is up almost 9% for the year. The …
Overview: Equities are trading lower, and bonds are mixed as the FOMC, UK election, and the US decision on the December 15 tariffs draw near. The MSCI Asia Pacific Index three-day rally ended today as only China and South Korea’s markets rose. Europe’s Dow Jones Stoxx 600 gapped slightly lower at the open. The upside momentum …
Capital Markets: Still Seems to be the Calm before the Storm Read More »
Liquidity will return to the foreign exchange market, and volatility may increase. The three-month implied volatility of the euro and yen fell to record lows last week (~4.35% and 5.06%, respectively), extending a multi-year trend. The dollar is threatening to break out of recent ranges that have been historically narrow. A breakout could underpin volatility. …
There have been plenty of developments warning of a global economic slowdown. Yet, seemingly to justify the continued advance in equity prices, there has begun to be talk of possible cyclical and global rebound. That is the new constellation, connecting the better than expected Japanese, South Korean, and Chinese September industrial output figures, a slightly …
Overview: The euphoria that greeted the resumption of US-China and US-North Korea talks has subsided. Global equities have turned mixed after yesterday’s surge. Hong Kong played catch-up, and despite ongoing demonstrations, the Hang Seng rallied over one percent, and the Hong Kong Dollar strengthened beyond its band midpoint for the first time in nine months. Europe’s Dow …
Post-G20 Euphoria Fades, Stuck with Same Reality Read More »
The predecessor of the World Trade Organization was the GATT, which did not really stand for the General Agreement to Talk and Talk, even though the negotiating rounds would last years. Facing rising trade tensions and a US that continues to threaten to withdraw, and in the meantime is preventing new appellate judges to be …
The Trump Administration argues that other countries have been taking unfair advantage of the US on trade for years, and what many are calling a trade war is really only the US finally saying enough. The US has taken many several countries, including China, to the WTO for trade violations and wins the vast majority of cases …
The two main legislative initiatives in the US this year, the repeal of the Affordable Care Act and the tax changes, are not particularly popular. However, the next items on the agenda appear to enjoy broader support. The infrastructure initiative is likely to be unveiled as early as next month. Before that, the US is poised …
US Commerce Secretary Ross promised to conclude the special investigation into US steel imports in the name of US national security by the end of the month. The outcome of the investigation is largely a foregone conclusion. Even before the investigation began, Ross said he would need less than a third of the allowable time. …
US Steel Investigation: The Challenge to World Trade Read More »