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According to Rabobank analysts, there’s quite a busy week ahead of us as we will see how this new episode in the Sino-US trade war unfolds.

Key Quotes

“The first thing to watch for is whether China’s chief negotiator Liu He will formally announce to cancel his trip to DC. If so, the ball is back in Trump’s court.”

“This morning, China’s services PMI rose from 54.4 to 54.5 against expectations of a small decline to 54.2, but Chinese markets had something else to worry about this morning. The final services PMIs for the Eurozone will follow soon. There have been a number of hints that the slowdown in manufacturing has started to spread towards services, which once again raises doubts for the near-term growth outlook. After that, we’ll see the release of the Eurozone retail sales, seen up an okayish 2.3% year-on-year.”

“German factory orders and industrial production are up tomorrow and Wednesday, which could provide some more insight in the Eurozone’s sputtering growth engine. But this week’s news flow regarding the Sino-US trade war will probably tell us much more.”

“There are central bank decisions in Australia and New Zealand on Wednesday. There is speculation of a rate cut from both central banks, though the prospects of a move from the RBNZ would appear to be stronger. But the RBA remains a close call, especially since the revival of  – again – the Sino-US trade war.”