In this briefing:
- UK Politics: Showdown Postponed Again
- Flash During Trade Talks
- China’s Coal Conundrum
- Asia’s External Balances Signal Safety for Investors
- Trade Talks/Huawei/ Stock Surprise/Monetary Policy /Greater Bay Area
1. UK Politics: Showdown Postponed Again
- The 27 February sitting of UK political theatre now looks set to be a damp squib, with the main parliamentary clashes postponed to March.
- The “meaningful vote” on the government’s tweaked Brexit deal is scheduled for 12 March. If a proper state-dependent break clause is contained in a codicil, it may pass. Otherwise, an extension request is likely to be approved on 14 March.
- A short delay might become a long one and no Brexit. New government scheduling and Labour positioning slightly shift my probabilities of a deal, no deal, and no Brexit from 55:30:15 to 55:25:20. No deal remains the default even if delayed.
2. Flash During Trade Talks
So we hear that President Trump may be doing something in Vietnam prior to the March 1 trade deadline. Even though Trump tweeted the tariffs will not be implemented on March 1, you can be sure that negotiations are still going at full speed. However, in the shadow of trade talks we are looking at China’s Flash numbers as an indicator of economic health.
3. China’s Coal Conundrum
Last Friday China torpedoed Australia’s coal imports after announcing that the middle kingdom would no longer accept coal imports from Australia. This leads us to consider some of the energy issues related to China. We write often about coal and the importance it has on China’s energy consumption.
4. Asia’s External Balances Signal Safety for Investors
Asian currencies are, in general, well supported by economic fundamentals in the form of external surpluses and interest rate differentials. Indeed, most Asian currencies display an appreciating bias, contrary to perceptions in 2018 when all of them lost ground to the US dollar. Over the last year the underlying external strength has been reflected in Asian currency appreciation against the US dollar.
5. Trade Talks/Huawei/ Stock Surprise/Monetary Policy /Greater Bay Area
China News That Matters
- Nearing an agreement?
- Can´t live with ´em, can´t live without ´em.
- Just a trillion greenbacks up since January.
- Prudence please, no “flood-style” irrigation.
- Wear flowers in your hair.
In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.
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