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But the culture on Wall Street is always going to be same, says Steve Blitz, chief US economist at TS Lombard.
Jon Harrison, managing director, EM at TS Lombard, discusses investment in Argentina and other emerging markets.
Both parties convinced themselves they will not lose out too much in this trade fight, says Bo Zhuang, chief China economist at TS Lombard.
Christopher Granville, director for EMEA and global political research at TS Lombard, discusses the potential economic impact of new U.S. sanctions being imposed against Russia. He speaks with Bloomberg's Francine Lacqua on "Bloomberg Surveillance." (Source: Bloomberg)
President Donald Trump said he expected Jerome Powell to be a cheap-money Fed chairman and lamented to Republican donors at a fundraiser his nominee instead had raised interest rates, according to three people present. Steve Blitz, chief U.S. economist at TS Lombard, weighs in on "Bloomberg Daybreak: Australia." (Source: Bloomberg)
This type of economic sanctions, using the power of U.S. treasury in global finance to try to throttle other economies is a powerful card to play, but with diminishing effects, says Christopher Granville, managing director, global political research at TS Lombard.
It might end up, in a long run, undermining the confidence of investors in Italian institutions, says Davide Oneglia, economist at TS Lombard.
Marcus Chenevix, MENA analyst at TS Lombard, discusses the U.S. sanctions on Iran and what it means for the future of Iranian oil.
“It’s going to be a shock of one type or another: either a policy shock or a macro shock or some combination of the two,” said Christopher Granville, managing director for EMEA and global political research at TS Lombard in London. “But the way to sugar that pill,” he said, would be a “political accommodation with the West. That would make the pain much less."
Jon Harrison, managing director for EM macro strategy at TS Lombard, speaks about trends in markets.
Steven Blitz, chief U.S. economist at TS Lombard, talks about the nation's economy, Federal Reserve policy, and Treasury yield curve. He speaks with Ramy Inocencio and Paul Allen on "Bloomberg Daybreak: Australia."
Christopher Granville, managing director for EMEA and global political research at TS Lombard, discusses the looming Trump-Putin bilateral.
Charles Dumas, chief economist at TS Lombard, discusses the rise of global populism and his new book Populism and Economics.
Marcus Chenevix, MENA and global political analyst at TS Lombard, speaks about U.S. foreign policy on Iran.
TS Lombard Chief U.S. Economist Steve Blitz speaks about the Federal Reserve's approach to raising interest rates.
TS Lombard Chief U.S. Economist Steven Blitz discusses the markets and weighs in on U.S. President Donald Trump announcing his intention to nominate Richard Clarida as vice chairman of the Federal Reserve. Blitz speaks on "Bloomberg Daybreak: Asia."
Larry Brainard, TS Lombard chief emerging markets economist, discusses the relationship between the U.S. and China. He speaks with Bloomberg's Mark Barton and Vonnie Quinn on "Bloomberg Markets."
There are more serious issues than tariffs that the U.S. and China will have to discuss in the long term, Jonathan Fenby, chairman of China team at TS Lombard, said.
Jonathan Fenby, TS Lombard China team chairman, and Steve Orlins, National Committee on U.S.-China Relations president, discuss the retaliatory tariff environment between the U.S. and China.
Andrea Cicione, head of macro strategy at TS Lombard, discusses the auto sector and potential market risks.
Markets took fright as President Trump aimed $60 billion of annual tariffs at China. TS Lombard’s Jon Harrison explains how we came to this point, and the prospects for an amicable settlement.
Christopher Granville, managing director of global political research at TS Lombard, discusses international relations after over 100 Russian envoys have been expelled globally. He speaks with Tom Keene on "Bloomberg Surveillance."
Christopher Granville of TS Lombard says economic development and US shale oil production will likely come up in today's meeting between President Trump and Saudi Crown Prince Mohammed bin Salman, in addition to national security issues.
Christopher Granville, managing director for EMEA and global political research at TS Lombard, discusses the spy poisoning spat between the U.K. and Russia.
Steve Blitz, chief U.S. economist at TS Lombard, reacts to new Federal Reserve Chairman Jerome Powell's debut testimony to Congress.
Steven Blitz, TS Lombard chief U.S. economist, discusses President Donald Trump's presidency with Ramy Inocencio on "Bloomberg Daybreak: Asia." (Source: Bloomberg)
Global liquidity will remain "substantially abundant" even as central banks tighten their policy, Shweta Singh, director of global macro at TS Lombard, said.
The rise of U.S. equities has coincided with increased household net worth and the “rise of the millennials,” Steve Blitz, chief U.S. economist at TS Lombard, said.
Steve Blitz, chief U.S. economist at TS Lombard, discusses the U.S. economy and government bonds.
The evident economic difficulties that have hit Turkey and Argentina this year have so far been viewed by markets as largely confined to those two countries, with limited spillover potential to other EMs. What has changed is Brazil, says Larry Brainard, chief EM economist. The likelihood of a market friendly outcome in the 7 October Brazilian election first-round has receded, which has the potential shock markets out of their complacency about the prospect for essential fiscal reform. At the same time, fallout from the steady exit from QE on the part of the Fed and ECB affects EMs via tighter liquidity, and Trump’s Trade War is about to enter what could be its most economically damaging stage yet.
As the trade war risks morphing into a currency war, we downgraded our CNY stance from 0 to -2 this month. Andrea Cicione, Head of Strategy, and Ollie Brennan, Senior Macro Strategist discuss the downgrade and its knock-on impact on USD and on US stocks and also highlight where they reckon trade-war risk is not in the price.
The currency crisis in Turkey keeps getting worse. The hard-landing that our EM team has been forecasting looks increasingly likely to morph into a crash-landing. With Europe’s large exposure to Turkey through banking sector flows, investors are increasingly worried about the fallout as the crisis unfolds. We explain through charts the direct and indirect exposure of European lenders. Some key conclusions by Shweta Singh, Managing Director Global Macro, are:
• European banks are some of the most vulnerable to Turkey’s currency crisis
• Direct financial linkages are large, but the indirect exposure is much bigger
• Spanish lenders are most vulnerable, followed by French and Italian lenders
• The exposure is concentrated in some banks with relatively thin capital buffers
• Yet, the fallout from Turkey does not appear systemic at this point
As the trade war situation has now escalated we now see this as a key political shock. We expect China to retaliate vigorously to any fresh US import tariffs and see the likely battle ground as Foreign Exchange. China’s probable response would be to slash the exchange rate putting enormous pressure on a wide variety of countries and resulting in a major hike in the dollar. An FX War would certainly be damaging for stocks, perhaps bonds too, says Charles Dumas, Chief Economist at TS Lombard.
Despite a nominal depreciation against the dollar, the renminbi has exceeded last year’s highs vs the basket, says Bo Zhuang, Chief China Economist. Xi’s approach of claiming the moral high ground by defending globalization and openness leaves little room for speculation about a major devaluation of RMB in the near term to boost exports. We expect RMB CFETS index to move down towards 95-96 before yearend.
PBoC is moving towards a new interest rate-based monetary policy framework, says Bo Zhuang, Chief China Economist. Banks will increasingly have to fund themselves in the more competitive deposit markets. We expect the PBoC to slash RRRs by another 150bps before yearend. Recent policy moves also suggest a relaxation of unwanted policy tightness along with a less aggressive stance on financial deleveraging. We believe total credit growth will stop falling in 2018H2.
From a calendar perspective, the cycle is certainly old enough. From the perspective of what makes a cycle old – borrowings to finance capital expenditure – the cycle is still relatively young. The current flattening of the yield curve is a sign the economy is finally moving to the middle stages of the business cycle not the end. There is the possibility that by late 2019 the Fed will have pushed rates high enough to begin slowing growth, as it chases rising inflation. If, however, capital spending grows a lot faster than anticipated by the markets and the Fed, this cycle has a lot further to run.
There are increasing concerns about whether disappointing euro-area data since the start of the year reflect a ‘soft patch’ or instead mark the start of a more serious period of economic weakness. We remain optimistic. We think that the underlying picture is of an economy that continues to grow at a healthy pace and still has significant cyclical upside. Some brief points from our quick take on euro area Q1 GDP data realised this morning –
The latest tit for tat measures do not amount to a Trade War, but are nonetheless warning shots, says Jon Harrison, Managing Director EM Macro Strategy. Even if there is no full on Trade War, investors should pay attention to supply chain risks. The US objective of preventing Chinese technological development is unrealistic, which leaves the trade deficit as the most likely way for the US to claim victory. A negotiated settlement remains likely, but in the meantime, the US has yet to formulate a coherent negotiating strategy – and its chaotic negotiating style will ensure that markets remain on edge.
Charles Dumas, Chief Economist comments on:
For market-moving geopolitical risk, Syria matters less than the “geo” element in the US-China ‘trade war’ saga, says Christopher Granville, Managing Director EMEA and Global Political Research. Tariff tit-for-tat is a sideshow compared to US anxieties about Chinese leadership in advanced technology. This will make expected deals tricky to finalise – and precarious. In short, here is a long-term geopolitically-based volatility driver.
Oliver Brennan, Senior Macro Strategist, discusses the US' maneuvering to reduce its trade deficit with major trading partners, and to weaken the dollar. But if the troubles go too far it could induce a risk-off move.
Martin Shenfield, Senior Macro Strategist at TS Lombard views the recent market selloff as a healthy correction. There are 4 fundamental reasons for this:
The short-term risks to the market as rising real bond yields and currency swap basis. The medium-term risk is a genuine bubble developing which central banks will have to clean up.
Steve Blitz, Chief US Economist at TS Lombard on the Fed: Financial Stability Not Inflation to Drive Fed Policy
Steve Blitz, Chief US Economist at TS Lombard talks on US Growth: Tailwind from tax cuts helps Capex lead a strong Growth Year.
Hear what our Chief US economist Steve Blitz and our Senior Macro Strategist Ollie Brennan have to say about currency markets, the impact of the Trump tax cuts, and offshore dollar liquidity.
Larry Brainard, Chief Emerging Markets Economist, highlights our best calls from 2017 as well as what to expect in 2018.
Charles Dumas, Chief Economist, on TS Lombard's outlook for 2018.
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