Highlights A unified push among central banks to drop their currencies inevitably leads to lower interest rates, which eventually sows the seeds of a recovery. However, with prospects of a full-blown trade war in front view,…
It is impossible to know whether the recent RMB depreciation was market-driven or engineered by the PBoC. Our best guess is that the latest RMB depreciation was driven by both market pressures as well as the authorities’…
Highlights So What? Tariffs and currency depreciation will likely lead to military saber-rattling in Asia Pacific. Why? President Trump is not immune to the market’s reaction to his trade war escalation. Yet China’s…
Analysis on India is available below. Highlights Moderate RMB depreciation is consistent with the economic as well as political objectives of Chinese authorities. Yet, this is bad news for EM currencies and risk assets. As EM…
Highlights Chinese economic growth slowed in June & July, but at a more moderate pace than had been the case earlier this year. The housing market is a notable exception, which appeared in June to slow in a broad-based fashion.…
The move is not unprecedented - the U.S. accused China of currency manipulation from 1992-94 - but our Geopolitical Team argues that the U.S. and China have experienced a structural break in relations that is the fundamental…
First, the Federal Reserve dashed investors’ hopes for an extended easing cycle. While the Fed did cut rates by 25 basis points and pledged to end its balance sheet runoff in August (two months earlier than previously…
Highlights The Federal Reserve’s 25-basis-point interest rate cut might have disappointed market participants, but Trump’s additional tariffs is a far bigger slap. Our bias is that this is not an escalation in trade…
Feature The global manufacturing cycle looks dire at the moment. Around the world, manufacturing PMIs have fallen, profit growth has slowed, and capex has been reined back (Chart 1). This is clearly a risky moment for the economic…