Macro Digest : False Stabilisation & Trade war

steen jakobsen
  • The G-20 meeting in Japan is a very bad place to go looking for a trade deal between China and US (WTO is one of the main agenda points)
  • The rhetoric change in China this week takes down our 75/25 for a deal odds to 50/50 – Remember: Nothing happens in vacuum in China
  • Risk is our next “infliction point” expected in July/August could move forward to just past G-20 meeting on June 28/29th
  • Policy response is likely to be lower Fed policy rates in the US, infrastructure spending in China combined with much lower RRR overall. China needs jobs, US needs growth
  • XAU/CNY is the trade to watch on RISK ON/OFF – we are now long XAU/CNY


Apart from the more overall negative tone coming from trade talks we also have a keen eye on the Iran vs. US escalation we are seeing – The mobilization in the US forces is significant and I for one fail to see end game from this except of course from the obvious “deterrent » Cold War script.


macro digest steen jakobsen - false stabilisation trade war



Important links:


On the 28th and 29th of June 2019, the leaders of the G20 will gather in Osaka as Japan hosts its first ever G20 Summit. Concurrent with the Summit meeting, the Finance Ministers and Central Bank Governors’ Meeting, the Foreign Ministers’ Meeting, and other ministerial meetings will also be held at eight different locations throughout Japan.



Toward the end of the G20 Buenos Aires Summit on December 1, 2018, Japanese prime minister Shinzo Abe outlined to his fellow leaders, in Japanese and the watching media and public, his priorities for the Osaka Summit he will host on June 28-29, 2019.

The first was promoting free trade.

The second was science and technology innovation to solve social problems and foster a human-centred society, with an emphasis on women, youth and people with disabilities. This would produce a « post-industrial 4.0 society. » This meant promoting free and open cooperation for a future society that harnessed the full potential of science and technology and the digital world.

The third was infrastructure for development.



The United States, a WTO member, has blocked the appointment of appellate body. The minimum quorum (3) for functioning of this body will end on December 10, after which it will become dysfunctional.


My Tweets on changing China rhetoric:




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