Kristal Weekly Feed | 9th December 2019

In a hurry? Here’s a short summary of some major global headlines over the last week.

Positives

• Dollar gains on strong U.S. jobs data
• Trump-China talks help emerging market stocks climb to a one-week high

Negatives

• U.S. businesses face the brunt of the trade confusion
• China’s forex reserves ease to $3.096 trillion, all eyes on trade talks

Now, for more detail.

Positives

1. Dollar gains on strong U.S. jobs data

What You Should Know

On Friday, after the US government shared data showing an increase in job growth by the most in 10 months, the dollar and global equity markets saw an uptick. It was a good relief from the tensions surrounding the trade talks between China and the US and allayed recession fears among people.

What You Should Look Out For

While the December 15th deadline still in place and this news coming as a welcome respite from the trade tensions, the final outcome of sanctions might still determine the direction the global markets take. The market action in the month of December is expected to be driven by the US-China trade negotiations.

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2. Trump-China talks help emerging market stocks climb to a one-week high

What You Should Know

On Thursday, Trump’s comments about trade talks with China moving in the right direction led to a renewed optimism, and the emerging market stocks closing at a one-week high. The MSCI Index of emerging markets rose which ended a three-week row of declines.

What You Should Look Out For

Over the course of the next few weeks, stock markets are expected to remain volatile as the trade talks reach the deadline of December 15. China has maintained its position of wanting the removal of some existing tariffs as a part of the interim agreement. Keep a close eye on the trade negotiations.

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Negatives

1. U.S. businesses face the brunt of the trade confusion

What You Should Know

With setbacks and advances becoming a part of the US-China trade talks, businesses in the US are becoming increasingly pessimistic about reaching any meaningful trade soon. Earlier this week, Trump suggested that the trade talks might have to wait until after the 2020 elections. Later this week, he also said that the talks we moving along fine. This has led to a lot of confusion among traders.

What You Should Look Out For

According to the economic advisor of the White House, Larry Kudlow, the trade deal is coming to a close with a few delicate discussions still on the table. If the discussions are not favorable, then the Trump administration might slap tariffs on another $160 billion worth of Chinese goods. It will be important to see what the two countries decide on December 15th.

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2. China’s forex reserves ease to $3.096 trillion, all eyes on trade talks

What You Should Know

With the US and China still locked in negotiations over the trade agreement, China’s forex reserves plummeted $9 billion to reach $3.096 trillion. China holds the world’s largest reserves and these changes have been ascribed to changes in exchange rates and a drop in the value of bonds held by China.

What You Should Look Out For

While the Chinese Yuan has been through a lot of ups and down since the trade tensions escalated between the US and China, one an agreement is reached, these crests and troughs can be expected to smoothen out.

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