US considers dropping some tariffs on China
US considers dropping some tariffs on China Renminbi rallies as officials debate rolling back levies on $112bn of goods to secure broader ceasefire deal Washington has already suspended a planned increase in tariffs on $250bn of goods from 25 per cent to 30 per cent that was due to take effect on October 15. […]
Beijing, Washington expected to complete first phase of trade deal soon
China and the United States are expected to wrap up their phase-one trade agreement soon, a step toward ending the yearlong trade dispute and stimulating the global economy, experts and business leaders said.
The comments came after China and the US held what was characterized as “serious and constructive” discussions on Friday to address their core concerns and reach consensus on principles. The two sides also discussed arrangements for the next step in consultations, the Ministry of Commerce said on Saturday. […]
The Fed thinks the US-China trade war and Brexit risks have receded. Investors should avoid making the same mistake
Investors have shown a tendency to swing between extremes, reacting to news with excessive bearishness or bullishness. It’s jarring to see the Fed do the same, ruling out more rate cuts because of fleeting progress in Brexit and the trade deal […]
NFP Preview: Did Powell Just Steal the Jobs Report’s Thunder?
Every month, we remind traders that the Non-Farm Payrolls report is significant because of how it impacts monetary policy. In other words, the Fed is the “transmission mechanism” between US economic reports and market prices, so any discussion about NFP should start with a look at the state of the US central bank.
Like a bridesmaid announcing she’s pregnant at the wedding, Fed Chairman Powell may have upstaged the NFP report by stating that it would take a “material reassessment” of the central bank’s outlook for the economy to cut interest rates again…and that it would take a “significant rise” in inflation to start raising interest rates. In other words, there’s a high bar to changing Fed policy from neutral any time soon, and with that transmission mechanism busted, the NFP report may lead to less volatility than normal.
NFP Forecast
In addition to the potential for a quieter market reaction than normal, two of our four most reliable “leading” indicators for the jobs report (the ISM Manufacturing and Non-Manufacturing Surveys) will be released after tomorrow’s jobs report. The two other leading indicators printed as follows:
The ADP Employment report dropped to 125k, meeting estimates, though the previous month’s report was revised down to just 93k.
The 4-week moving average of initial unemployment claims rose to 214,750 from last month’s reading of 212,500.
Both of these leading indicators have taken a turn for the worse, and there’s one more big bearish factor at play in this month’s reading: the United Auto Workers strike at General Motors. The strike (which was just resolved last week) impacted 46,000 workers across 55 facilities in 10 states, raising the likelihood of a sub-100k reading in Non-Farm Payrolls for only the third time in the last two years.
Regardless, the month-to-month fluctuations in this report are notoriously difficult to predict, so we wouldn’t put too much stock into any forecasts (including ours). Most importantly, readers should note that the unemployment rate and (especially) the wages component of the report will also influence how traders interpret the strength of the reading. […]