Show of strength in Beijing marginalises Trump
Putin, Modi and Xi gathered to show their commitment to each other, making a strong statement to the West, and particularly Trump. What we saw in Beijing was a real snub to the world order. India has always acted as a balance against China’s rise to prominence, but there they were, side by side. The New York Times headline was “India was the economic alternative to China. Trump just ended that”.
Interestingly, the number of drone attacks from Russia on Ukraine since the summit meeting between Trump and Putin in Anchorage has nearly doubled.
Markets haven’t responded adversely, and, in some quarters, the summit in China is seen as a positive sign as Trump clearly isn’t getting his own way, and this will likely weaken his hand.
Hopes are rising that interest rates may begin to fall in the US, but trade spats continue, inflation remains stubborn and political drama is unfolding in Europe. Stock indices remain near multi-year highs, yet classic safe-haven assets, like gold, have also hit record levels again this week. Long-dated yields have also risen globally, which is a response to deficits, debt issuance and inflation, highlighting the cross-threads unfolding.
On the whole, companies are performing far better than expected, but governments are caught between wrestling with mounting debt and trying to drive economic growth.
The date for the Autumn Budget has been announced for the 26th November, much later than normal, most probably because they are hoping for some better news to unfold.
This week’s content:
- World powers buddy up
- The key takeaways from Beijing’s push to change the global landscape
- China may attempt to slow down stock market momentum
- Worries continue over Fed impartiality
- Global yields rise
- The UK shows glimmers of hope
- Nothing like a Budget to dampen spirits, though!
- Summary
World powers buddy up
The two-day event, attended by more than 20 leaders of non-Western countries, was seen as showcasing Beijing’s ambition for a new global security and economic order, posing a challenge to the US.
In a clear swipe at Trump’s tariff campaign, Chinese President Xi Jinping stated “shadows of Cold War mentality and bullying have not dissipated, with new challenges mounting.”
The world has entered “a new phase of turbulence” with global governance at a “new crossroads,” Xi said, calling for joint efforts to build a “more just and balanced international governance framework.”
Continues…
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