Overseas Headlines-November 13, 2019

November 13, 2019

United States:

Trump Threatens Substantially More Tariffs If No China Deal

“President Donald Trump said the U.S. will increase tariffs on China in case the first step of a broader agreement isn’t reached. “If we don’t make a deal, we’re going to substantially raise those tariffs,” he said Tuesday in a speech to the Economic Club of New York. “They’re going to be raised very substantially. And that’s going to be true for other countries that mistreat us too.” China is “dying” to make a trade deal with the U.S., Trump said, adding that he’d only sign it if it’s good for American companies and workers. Still, “we’re close — a significant phase one deal could happen, could happen soon.” Trump and Chinese President Xi Jinping had planned to sign “phase one” of the deal at an international conference this month in Chile that was canceled because of social unrest in that country. Shanghai stocks opened lower and the yuan was weaker against the dollar on Wednesday. Other Asian markets also declined. Hong Kong’s benchmark declined 2% as the city faced heightened tensions. A new site for the signing hasn’t been announced. U.S. locations for the meeting that had been proposed by the White House have been ruled out, according to a person familiar with the matter. Locations in Asia and Europe are now being considered instead, the person said, asking not to be identified because the discussions aren’t public. Trump reiterated complaints about China’s ascendance in the global economy. “Nobody’s cheated better than China,” he said. “The theft of American jobs and American wealth is over.” U.S. stocks have rallied to records in recent days partly on optimism that tensions are cooling in an 18-month dispute involving tariffs on some $500 billion in trade between the world’s two largest economies. The S&P 500 Index was up about 0.3% as Trump delivered his remarks.”



U.K.’s Liberal Democrats See Opportunity in Brexit Party Retreat

“The U.K.’s Liberal Democrats are poised to cash in on Nigel Farage’s decision to ally himself to Boris Johnson’s Conservatives because it clarifies the choice for voters, according to party leader Jo Swinson. Farage’s announcement that his Brexit Party won’t run candidates in Tory-held seats means moderate supporters of the prime minister’s party will turn to the pro-EU Liberal Democrats to block a chaotic split from the European Union, Swinson said.  “It makes it easier for us to appeal to those one-nation Conservative voters who will be appalled that Boris Johnson has cooked up this deal with Farage,” Swinson said in an interview. “It makes it absolutely clear that the Conservative Party is a hard-Brexit party that’s prepared to risk a no-deal Brexit at the end of next year.” The Liberal Democrats are trying to rebound from elections in 2015 and 2017 when they won just 8 and 12 seats out of 650 in Parliament — down from a high of 62 in 2005. With an offer of canceling Brexit altogether, they’re appealing to disaffected Tories who reject the EU divorce deal struck by Johnson, and to Labour supporters frustrated by opposition leader Jeremy Corbyn’s pledge to renegotiate Brexit before a second referendum. It’s in Tory-held seats where the Liberal Democrats are most likely to challenge. In 2017, 29 of the 38 seats where they came second were won by Tories. Two years later, Swinson said, the Tories “have gone off to the extremes,” and the Liberal Democrats are looking to pick off their voters.”



India’s Headline Inflation Breaches Central Bank’s Threshold

“India’s retail inflation quickened for the third straight month in October, breaching the central bank’s 4% medium-term target and possibly slowing the pace of monetary policy easing. Consumer prices rose 4.62% last month from a year earlier, the Statistics Ministry said in a statement on Wednesday. That is higher than the 4.35% median estimate in a Bloomberg survey of 34 economists. Food and beverage inflation rate accelerated to 6.93%, fueled by a more than 26% surge in prices of vegetables, including onion that forms the base of the Indian gravy. Pulses and products gained 11.7%, while fuel and light prices fell 2.02%. While the Reserve Bank of India has cut interest rates five times this year, including an unconventional 35 basis point reduction in August, the above-4% inflation print may limit its room for making another deep cut. For now, RBI Governor Shaktikanta Das has said policy makers will “continue with the accommodative stance as long as it is necessary to revive growth” in an economy expanding at the weakest pace in six years. Gross domestic product data for the three months to September is due Nov. 29.”


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