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Currency Market Analysis

Jul 23, 2019 | Currency Market Analysis

Global Themes

Trade War set to drag on as US closes in on more tariffs

Closely-watch CNBC analyst Jim Cramer believes the US are extremely close to slapping further tariffs on Chinese imports. Last week, President Donald Trump tweeted that China “is letting us down” by not buying the goods “that they said they would.” Trump’s intention is that the increased purchases would not only help cut the US trade deficit with China but assist farmers, as he seeks reelection in 2020. “We’re about to get tariffs any day now,” Cramer commented last night. “I don’t think people realize the president is hungry for tariffs.”

PIMCO sees 50/50 chance of a larger US rate cut

A leading economic adviser at PIMCO, the world’s largest fixed income manager, sees the chances of a 25 basis points or 50 basis points rate cut at next week’s Federal Reserve policy meeting as equally likely. Last night Joachim Fels, Pimco’s global economic advisor, said “the big question is now, do you do 25 (basis points) in July and then another 25 in September? Or should they go 50 (basis points) in one go? I think there’s at least a 50-50 chance that they decide to go a little bit more aggressive — they go 50 already in late July, and they leave the door open to maybe another cut before year-end”.

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