🌎 It's time to start a new tweetstorm to monitor global trade rebound, which should be larger than exp. in 2021.
*The drag from #Covid_19 restrictions in 🇺🇸 🇪🇺 will ease.
*Uncertainty linked to trade tensions ⬇.
*Leading sectors (semis and autos) already point to a sharp ⬆.
🇯🇵 #Japan | In January, the value of overseas shipments climbed 6.4% YoY (fastest since Oct. 2018), rising for a second month and picking up from December’s 2% pace.
🇺🇸 U.S. High Frequency Data Suggest That Economic Recovery Has Stalled Amid #Virus Resurgence
*Link: ⚠ bit.ly/2O9mnT4 ⚠
🇺🇸 As Businesses Reopen, Many Americans Plan to Spend Less - Bloomberg
*More than 40% of adults say they’ll cut back on some of the very discretionary spending needed by struggling retailers.
🇺🇸 #SPX | Since the beginning of March, the S&P 500 Index’s 12-month forward earnings per share estimate has slumped 19% and is bound to deteriorate further as business and economic activity have slowed amid the coronavirus outbreak - Bloomberg
#OOTT | 🇸🇦🇷🇺🇺🇸🌎 The end of the diplomatic alliance between #Saudi Arabia and #Russia will have significant consequences:
➡ #Oil prices are likely to remain low longer than expected which would be positive for advanced economies mainly net importers such as Eurozone countries.
➡ Meanwhile, #oil exporting countries will be forced to cut public spending in order to balance budgets.
➡ Latest indications suggest that #Saudi is now ready to cut prices dramatically and fight both #Russia and U.S. exporters in terms of market share, which implies that U.S. exports should decline soon.
🇸🇬 🇨🇳 #SINGAPORE PLANS 2 PACKAGES, TOTALING S$5.6B, TO SUPPORT ECONOMY - BBG
*SINGAPORE PLANS S$800M FROM BUDGET TO COUNTER VIRUS EFFECTS
*SINGAPORE TO GRANT CORPORATE INCOME TAX REBATE OF 25% FOR 2020
🇨🇳 #China (1) | The question is no longer if, but how hard, the #coronavirus will damage Chinese economy (and its trading partners) in 1Q20.
🇨🇳 #China (2) | A blockage of 16 cities (~50 million people) coupled with the extension of the Lunar New Year holiday and prohibition for Cos to return to work soon implies that 1Q will fall below 6% for the first time since QoQ figures are recorded.
🇨🇳 #China (3) | The impact will probably broaden from retail sales, tourism/transportation...
★ A detailed analysis of the 🇺🇸 🇨🇳 #PhaseOne Deal ★
➡ For goods, I used Census Bureau trade data (goods) (bit.ly/2RAtaqd) on U.S. exports to #China and matched them to the list provided in Annex 6.1 (from p.57: bit.ly/3axsY3B).
Categories mentioned in Annex 6.1 point to a relatively limited ❗ set of goods to produce the jump in U.S. (goods) exports (+$63.9B for 2020 and +$98.2B for 2021 compared to 2017 baseline).
In 2017, U.S. exports to #China in the selected categories totalled $78.8B, far less than the $129.8B for total U.S. exports to China, implying that it will be harder for #Beijing to fulfill its promises.
🌎 The drag from global trade of goods (in volume) will be weaker in 2020.
➡ Based on CPB data, after (probably) contracting in 2019, global trade of goods (in volume) will grow again in 2020 ❗ (but at a slower pace than Global GDP)
🌎 Signs coming from the two leading sectors namely #semiconductors and #autos suggest that downward pressures will keep easing in the coming months.
🌎 It can be explained by several factors:
*Positive base effects
*Combined easing of monetary policy and trade tensions (especially U.S./China) for the first time in 7 quarters.
*Fiscal stimulus (China, Japan, South Korea, Germany, France, etc)
🇺🇸 #Fed (1) | Given that recent data surprised to the upside and didn’t point to an immediate recession, it would be difficult for the Fed to start an "easing cycle" (necessary to cut rates by 50bps).
🇺🇸 #Fed (2) | However, global economic policy uncertainty (especially trade) and geopolitical tensions are still supporting the “risk-management” approach, synonym of a 25bps cut.
🇺🇸 #Fed (3) | Latest inflation figures and indicators linked to wage pressures also remained somehow robust, which likely implies another wave of hawkish dissents (Rosengren & George).
🇺🇸 🇨🇳 #G20 (1) | After Trump and Xi met on Saturday, the two countries plan to restart trade talks. Following his request to hold a conversation with Xi, Trump had to make 3 concessions ❗ to restart discussions and get a vague Chinese commitment to buy US agricultural products.
🇺🇸 🇨🇳 #G20 (2) | The US compromises came despite, ahead of the meeting, Xi Jinping spared no opportunity to paint the U.S. as the bad guy in #China’s spiraling trade conflict, while avoiding the provocative step of naming Trump personally - Bloomberg bloomberg.com/news/articles/…
🇺🇸 🇨🇳 #G20 (3) | Looking at the details, #Trump told reporters 1/ he wouldn’t put additional tariffs on #China for the “time being” (until there is progress in negotiations)…
🇨🇳 As of June 21st, monthly local government bond issuance in #China exceeded CNY594B, total issuance for the month may hit CNY800B (a record high of the year in June) - China Daily chinadaily.com.cn/a/201906/25/WS…