10th December 2018
Although Donald Trump described last Saturday’s (1 December 2018) meeting with his Chinese counterpart, Xi Jinping, as a “BIG leap forward” after they agreed a 90 day truce, equity markets were disappointed by the lack of specific details.
Compounding this negativity was news that Wanzhou Meng (Huawei’s Chief Financial Officer) had been arrested in Canada (at the request of the US Department of Justice) over alleged violations of US sanctions on Iran. This provoked outrage from China and further highlighted that trade tensions between the world’s two largest economies are far from resolved.
Furthermore, Wanzhou Meng was arrested while Donald Trump and Xi Jinping were talking in Buenos Aires – so if the Chinese were really that upset, they wouldn’t have been sending all the positive noises that they have done over the past couple of days (China confirmed that it had reached deals in agriculture, autos and energy – and is restarting imports of US soybeans and LNG).
However, the Parliamentary vote does suggest that if Theresa May’s plan (even with plenty of tweaks to persuade MPs to back it), still doesn’t get passed this Tuesday (11 December 2018), it is more likely that we will have no Brexit rather than a no-deal Brexit, given the majority of MPs are opposed to a no-deal Brexit.
Additionally this coming week, we have an ECB monetary policy meeting; US and Chinese CPI inflation and retail sales data; and UK GDP and employment data.
Ian Copelin, Investment Management Expert*
*Ian Copelin is an Investment Director at Wealth at Work Limited which is a member of the Wealth at Work group of companies