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Week ending 3rd January 2020.

6th January 2020

Global equity markets started 2020 on a happy note after Donald Trump said he will sign the first phase of the US/China trade deal on Wednesday 15 January 2020, coupled with news that the Chinese central bank, the PBOC, was reducing the required reserve ratio (RRR) by 50 basis points (which underscores our view that the world’s major central banks remain easing-biased).

Unfortunately, this festive feel-good cheer came to an abrupt end today (Friday 3 January 2020), as geopolitical tensions escalated between the US and Iran after US airstrikes in Iraq killed Qassem Soleimani, a top Iranian military leader.

The death prompted Iran to warn of “severe retaliation”, causing equity markets to fall and oil prices to jump – and with the price of a barrel of Brent crude back to nearly $70, this could, if sustained, hurt the global consumer and as a result, impact global economic growth.

As for this coming week we have Eurozone retail sales, CPI and unemployment data; and Chinese CPI.

Investment Management Team

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