vqf-logo-gross-member.png

Staldenbachstrasse 11, 8808 Pfäffikon, Switzerland

+41 44 542 80 00

©2019 by Pure Value Metrics AG

  • PVM

PVM BITs | Escalating US-China trade tensions raising the stakes

Headlines

Very interesting reports on backdrop to Liu He going to DC to pick up trade talks under US threat to resume trade war: Beijing says Vice Premier Liu He will travel to Washington for negotiations starting Thursday, a day later than planned, now let's see how Mr Liu is going to play this and whether he can in fact offer anything of substance as Trump's tariffs loom over the talks this weekend


Mnuchin says he won't turn over Trump's tax returns to Congress, citing legal advice from the Justice Department. But neither Treasury nor the Justice Department would furnish the legal opinion, and it appears at this time a formal opinion doesn't exist.


Denmark: Prime Minister Lars Løkke Rasmussen (V-ALDE) announces the next parliamentary elections will be held on 5th June


Spain: courts override Spain's electoral commission ruling and will allow former Catalan government members Puigdemont, Ponsatí and Comín to run for the European Parliament elections for the list JxCAT


European Parliament Elections 2019 WILL Go Ahead In UK, Government Confirms


South Africa holds parliamentary elections. Despite growing anger at corruption within its ranks, the African National Congress is all but certain to win the most votes, securing another term for president Cyril Ramaphosa. Key issues include land reform, crime, and the provision of basic utilities such as water and electricity


EU Commission lowers Eurozone GDP forecast to 1.2% from 1.3% for 2019, EU commission figures project Italian deficit will balloon to 3.5 per cent next year - highest since 2011 and smashing through the 3 per cent ceiling…, Euro Zone Unemployment Seen At 7.7 Pct Of The Workforce This Year, Falling To 7.3 Pct In 2020, Euro Zone Inflation Seen At 1.4 Pct This Year, 1.4 Pct In 2020. A gain in industrial output in Europe's biggest economy is reviving hopes of a turnaround (chart)


A $400 Billion Wave of Japanese Cash May Be Heading Overseas - Japanese investors faced the first trading day of a new era on Tuesday with fresh eyes, but the same old problem -where to put their money given rock-bottom interest rates


JOLTS - Job openings in the U.S. jump to 7.49 million in March after surprisingly big dip in February. The ultra-strong labor market shows little sign of weakening.


BOJ board debated pros, cons of more easing at March meeting: minutes



Markets

USDCHF – 1.0250/1.0350 is the level everyone talks about (long-term chart below), RBNZ cut to 1.5%, GBP slowly drifting lower (after strong rally last Friday), TRY remains weak, JPY got bit stronger on risk-off/higher eq vol


Equities : all about trade talks, big picture markets peaked Jan 2018, didn’t quite get there late last year, and same last week – broadly speaking we haven’t done all that much net net last 18months (yet a lot happened..), while economies have been weakening globally (Global PMI 50.2 etc) – so the last thing anyone needs, is a no deal Brexit and a no deal between China/US..Short-term sell-off/hedging ahead of Thursday, followed by a very decent bounce into close SPX, not necessarily a sign of health, but more of a sign of higher volatility going forward, plenty of moving averages turned around pretty viciously, keep an eye on those (see below chart for SPX big picture). Clearly the decision Thursday night is pretty binary on tariffs, either way it’ll likely be a volatile few sessions ahead..


VIX…quite incredible, once again, as discussed few days/week ago, market got itself far too short vol near lows, massive squeeze in vol triggered this higher vol in equities before China/US deadline, which is tomorrow 24:00, they can put up tariffs by 00.01 Friday morning is they so wish..

2 views