 Deal, deal, deals. They're the main themes in the markets last week. The cross-party Brexit talks in UK collapsed and a high profile Brexiteer is tipped to lead the Brexit process after current Prime Minister steps down. Tensions between US and China escalated further. A trade deal is now rather out of sight, not even a next meeting. While the decision on auto tariffs was postponed, US did confirm auto imports as national security threats. Major exporters like EU and Japan will have six months to make a deal with the US, or we'll see US-led trade wars escalating further. Nevertheless, the better news was that a deal was agreed between US, Canada and Mexico to eliminate steel and aluminum tariffs. In the currency markets, Sterling ended as the worst performing one on Brexit uncertainties, and probably increasing chance of a no-deal one. Australian and New Zealand Dollars were the weakest ones on risk aversion, and poor economic performance in China. Swiss Franc, Dollar and Yen were the strongest ones on risk aversion and falling global treasury yields. Also, it should be noted that Chinese Yuan tumbled sharply with USD/CNH eyeing the important psychological level of 7.0. |
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