Macro: Sandcastle economics
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Summary: Monthly update covering the US/China trade dispute, the US job report and the FED.
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The week has kickstarted with a risk-off tone after Non-farm payroll numbers on Friday set off renewed caution amidst repricing of an aggressive 50BP June rate cut.
The hype of the US/China resuming talks has faded quickly as market participants remain cognisant that the Trump/Xi meeting in Osaka and agreement to continue talks represents ongoing trade disputes that are delayed not resolved, providing merely a short-term sentiment boost. Uncertainty still reigns large as there is nothing predictable about the current US administration and trade deal with China, or not, trade and protectionism will be a persistent theme. Trump's recent attack on Vietnam, a supposed trade war winner, whom he dubbed “almost the single worst abuser” of trade is proof enough of this.
And just this morning newswires confirmed the US plan to impose duties on structural steel from China and Mexico, confirmation of omnipresent trade tensions. The US Trade Policy Uncertainty Index is surging.