- It is hard to be too optimistic on the outcome of trade talks given the narrow scope of the discussions
- The firm’s local-currency bond portfolio is “relatively defensive” at the moment, given the weak global growth backdrop. It is also positioned for further easing by EM policy makers and has increased exposure to the yen, given its anti-cyclical properties, and still attractive valuations
Robert Carnell, chief economist for Asia Pacific at ING Groep NV in Singapore, writes in a note:
- China may see it as advantageous to keep the trade war alive, but under control, pending political developments in the U.S.
- For the U.S., the benefits of fighting China on trade may now be outweighed by the short-term hit to the economy, in terms of popular support and potential votes for Trump at next year’s presidential election
Stephen Innes, an Asia-Pacific market strategist at AxiTrader, writes in a report:
- In the absence of a significant catalyst, Asian currencies will continue to track the yuan, which remains the best global barometer for trade war risk
- Headline risk will continue to influence trading flows in the Chinese currency
This article provided by Bloomberg News.