US treasuries have had somewhat of a rollercoaster ride these past few weeks. A combination of political volatility in Britain, Italy and France, global growth concerns and a cooling China, falling oil prices, stretched positioning and poor December liquidity have led to a sell-off in risky assets.
Bricks-and-mortar retailers are in a fight for survival. Online shopping is transforming retail but at a time when consumption is struggling and the role of consumption in growth is waning.
Asian equity markets and US stock futures rallied following US President Donald Trump’s decision to hold off raising trade tariffs on $200 billion of Chinese goods. The temporary truce makes a deal more likely, which would ultimately benefit both countries.
At the upcoming G20 meeting in Buenos Aires, the stakes are high for Presidents Trump and Xi as they are expected to meet in a bid to break the trade deadlock. In terms of possible outcomes, we believe that while there is the possibility of a truce, the hawks on both sides may have outsize influence on the debate, and further entrench the leaders into a stalemate.
The softer tone from the Fed could provide some respite to beaten-up EM assets, but risks remain to the downside due to China’s slowing growth and toughening global conditions.