Analysts at Rabobank note that the Wall Street Journal reported for the umpteenth time that US President Trump and Chinese President Xi Jinping are planning a meeting around the G-20 in November to try to resolve the escalating trade and political tensions between the two.
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“That’s the same story that involves US Treasury Secretary Munchin and White House Economic Advisor Kudlow; the same story that usually boost US stocks; and the same story which keeps turning out not to have any substance to it.”
“The US has thrown China one small bone: reports are now that Mnuchin will on Monday declare that yet again China is NOT a currency manipulator. Obviously China isn’t. Yes, it’s aggressively mercantilist and has draconian capital controls in total defiance of IMF reserve currency norms: but it isn’t artificially lowering its currency – that lowering is going to be entirely natural when it comes, trust me. The response in CNY has been strong: it is currently back at around 6.90.”
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