something interesting

<  BACK TO Market Analysis

China: Ready for trade war

FOREX_china-ready-for-trade-war0307_FXPIG

After months of on-and-off negotiations, the long-dragged trade war between China and the US is about to kick off, points out the research team at Nordea Markets. 

Key Quotes

“The two countries are scheduled to impose 25% tariffs on USD 34bn of imports from each other on Friday 6 July, with an additional USD 16bn following soon after. Moreover, Trump threatens to levy 10% tariff on an additional USD 200bn of Chinese imports and yet another USD 200bn if China retaliates. That brings the total amount of Chinese goods potentially subject to higher tariffs to USD 450bn – about 90% of China’s total exports to the US and 3.2% of China’s GDP.”

The currently confirmed tariff of 25% on USD 34bn of goods implies a net export loss of less than 0.2% of GDP. Given the likelihood of Chinese companies directing their exports to other markets and the authorities stimulating domestic demand to replace the exports lost, the final impact on the Chinese economy is likely even smaller than estimated here.”

“The current tariff war between China and the US is really the beginning of a long-term rivalry about technological advance.

“Our baseline scenario is that the Chinese economy can absorb the negative impacts from a trade war with the US. The economy has become much less export dependent since 2008. Gross exports account for 20% of GDP, compared to 45% for investment and 39% for household consumption. If the trade blow becomes too large, the authorities will likely stimulate domestic demand to mitigate the net growth impact.”

“As we expected, 6.70 proved to be an important threshold for the PBoC when it comes to USD/CNY and triggered verbal intervention on Tuesday by several senior officials, including Governor Yi Gang. The PBoC pledged not to weaponise the currency in the trade war and to maintain currency stability. Both USD/CNY and USD/CNH came down after the statements.”

“There is a high chance that depreciation pressure on the CNY returns in the coming weeks if trade tensions between China and the US escalate into levying tariffs on more goods. However, we expect the PBoC to maintain a defence level of 6.70 for USD/CNY.

“We expect USD/CNY to trend down in 3-6 months as the trade war concern gradually recedes and the USD rally has run its course.”

Source: fxstreet.com

After months of on-and-off negotiations, the long-dragged trade war between China and the US is about to kick off, points out the research team at Nordea Markets. 

Key Quotes

“The two countries are scheduled to impose 25% tariffs on USD 34bn of imports from each other on Friday 6 July, with an additional USD 16bn following soon after. Moreover, Trump threatens to levy 10% tariff on an additional USD 200bn of Chinese imports and yet another USD 200bn if China retaliates. That brings the total amount of Chinese goods potentially subject to higher tariffs to USD 450bn – about 90% of China’s total exports to the US and 3.2% of China’s GDP.”

The currently confirmed tariff of 25% on USD 34bn of goods implies a net export loss of less than 0.2% of GDP. Given the likelihood of Chinese companies directing their exports to other markets and the authorities stimulating domestic demand to replace the exports lost, the final impact on the Chinese economy is likely even smaller than estimated here.”

“The current tariff war between China and the US is really the beginning of a long-term rivalry about technological advance.

“Our baseline scenario is that the Chinese economy can absorb the negative impacts from a trade war with the US. The economy has become much less export dependent since 2008. Gross exports account for 20% of GDP, compared to 45% for investment and 39% for household consumption. If the trade blow becomes too large, the authorities will likely stimulate domestic demand to mitigate the net growth impact.”

“As we expected, 6.70 proved to be an important threshold for the PBoC when it comes to USD/CNY and triggered verbal intervention on Tuesday by several senior officials, including Governor Yi Gang. The PBoC pledged not to weaponise the currency in the trade war and to maintain currency stability. Both USD/CNY and USD/CNH came down after the statements.”

“There is a high chance that depreciation pressure on the CNY returns in the coming weeks if trade tensions between China and the US escalate into levying tariffs on more goods. However, we expect the PBoC to maintain a defence level of 6.70 for USD/CNY.

“We expect USD/CNY to trend down in 3-6 months as the trade war concern gradually recedes and the USD rally has run its course.”

Source: fxstreet.com

lastest Articles

PAMM News
Managed Forex Accounts Weekly Results (16-20.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Forex Week Ahead: Dollar Rally Ends With Trump Monetary Policy and Currency War Comments
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (20.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
GBP futures: probable consolidation near term
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Canada: Inflation Hit Six-Year-Plus High
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
JPY: Upcoming BoJ meeting likely to have negative impact - Nomura
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
FOREX Trading Quote: The Trading Genius Was Previously an Idiot - PIG INSIDER
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
The Times: UK to warn public every week over 'no-deal Brexit' - Reuters
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
CNY: Taking a beating - Rabobank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (19.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
EUR/JPY Technical Analysis: stays downside corrective after failing at the 200-day SMA near 132.00.
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
USD/CAD – Canadian dollar slides on soft employment report
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold tumbles, poised for lowest close in more than year as dollar, rates rise
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
FOREX Trading Quote: Markets Can Remain Irrational - PIG INSIDER
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
AUD/USD hammered down mid-0.7300s, closer to over 2-week lows
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FTSE 100 holds steady as traders focus on retail sales data
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Dollar higher after Powell deflects trade concerns
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
FOREX Trading Quote: Never Depend on Single Income -Warren Buffett
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
China’s ForeignMin: Trade war is the biggest 'confidence killer' for the global economy
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Sterling extends its fall as Brexit worries mount
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (17.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Dollar index sputters ahead of Fed’s Powell testimony
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
UK: Latest data points to a rebound in Q2 GDP after a lacklustre Q1 - RBS
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Mr. Markets
OK, so what do you Really Think?
https://secure.gravatar.com/avatar/8b0332acc130dc650331fd558f82add2
Market Analysis
EUR/USD recedes from tops near 1.1750 ahead of Powell
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
FOREX Trading Quote: In your reciepe for success - ED SEYKOTA
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Opinion: Buying gold now would only weigh down your investment portfolio
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Dollar slips ahead of Fed testimony
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (16.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Canada: Housing sales figures to be little changed - TDS
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD Technical Analysis: Cable quietly gaining ground currently supported at 1.3250 level
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
The stock market is about to set a bearish record
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
European stocks slip on China growth concerns, but Deutsche Bank leaps
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
FOREX Trading Quote: Any Trader Can Take Risk - Pig Insider
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold clings to modest recovery gains, above $1240 level
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Dollar gains fade on China-EU summit, U.S. data eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Weekly Results (9-13.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
FOREX Week Ahead:Trade War and Trump European Trip Boost US Dollar
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (13.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
GBP/USD rebounds from near 2-week lows, back closer to 1.3200 handle
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
QE drove JPY from 2012 to 2016 - AmpGFX
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
NZD/USD scope to test 0.6675 – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
U.S. stock futures on pause with big bank earnings in focus
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
FOREX Trading Quote:Turnarounds seldom turn - Warren Buffett
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Euro falls as rate expectations, trade tensions boost dollar
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOREX Tech Targets 13.07.2018: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold eyes $1250 as USD weakness fuels recovery
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (12.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Sterling edges up ahead of UK Brexit blueprint
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Trump reaffirms commitment to NATO after strained emergency meeting
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold clings to modest recovery gains ahead of US CPI
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
FOREX Trading Quote: Most things will prove - Pig Insider
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
EUR futures: further downside not ruled out
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BoE Credit Conditions Survey Report: Default rates on unsecured lending rose in Q2
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (11.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Asian stocks slump after U.S. announces $200 billion in new tariffs on China
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
USD/CAD – Canadian dollar dips, BoC rate decision looms
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
China Govt to state media - keep calm, don't inflame trade row with US - Reuters
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
FOREX Trading Quote: Person who never made mistake - Pig Insider
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Gold holds weaker near one-week lows, around $1250 level
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Dollar strengthens against yen, EM rallies as trade fears wane
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOREX tech targets EUR/USD sidelined around 1.1730 amidst risk-off trade
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (10.07.2018)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold rebounds sharply from 1-week lows; will it sustain?
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Trump Today: President says ‘up to the people’ whether Theresa May should be replaced as he praises her rival
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
DAX gains ground as trade tensions ease
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOREX Tech Targets: 10.07.2018 EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Quote: It was never my thinking - Jesse Livermore
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Dow set to catch its breath after racking up 320-point rally
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Technical Analysis: The recent recovery move already seems to have run out of steam
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (09.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
EUR/USD: bulls tire and daily cloud base, (1.1737), under threat
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold tries for best levels in 2 weeks after the dollar’s recent retreat
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD plummets to lows near 1.3240 as B.Johnson resigns
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD heading back towards 1.3300 amid UK political woes
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
FOREX Trading Quote: The truth - Wisdom of the Pig
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Dollar sags after soft U.S. wages data, Brexit woes weigh on pound
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOREXTech Targets 09.07.2018: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Weekly Results(2-6.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Forex Week Ahead: Trade Uncertainty Hits Dollar’s Confidence
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (06.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
AUD/USD fades the NFP-led spike, returns to 0.7420 area
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
USD/JPY turns red near 110.50 as US Dollar slips on mixed employment data
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold lower but clings to weekly gain ahead of payrolls and wage snapshot
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Sterling braces for May's crunch Brexit meeting
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Quote: Success Has To Do - Ed Seykota
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
EUR/USD sticks to gains near 1.1715 ahead of US NFP
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOREX Tech Targets 26.07.2018: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (05.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Sterling lifted by BOE comments but Brexit meeting curbs gains
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
USD/JPY retreats from session highs, returns to mid-110s on weaker USD
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold tries to edge higher as dollar slips
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD eases from over 1-week high, back below mid-1.3200s after Carney
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Quote: Cut Your Losses - Livermore
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
EUR/USD consolidates gains near 1.1685 ahead of US ADP, Fed minutes
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOREX Tech Targets 05.07.2018: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (04.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
USD/CAD – Canadian dollar quiet, investors eye FOMC minutes
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
China: Ready for trade war and currency battle – Nordea Markets
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD flirting with lows, below mid-1.1600s
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613