-
GBP: Temporary reduction in risk premia
While the decision from the Chinese government to exempt some US goods from tariffs may help risk sentiment today, we don’t see it as a game changer for the trade war outlook. We see these latest measures as tools to help to ease the pressure on the economy but expect the Chinese government's approach to the trade talks with the US to remain the same. Hence we don’t look for a resolution any time soon and in fact expect a further escalation of the US-China trade dispute in coming months, with more tariffs coming. This in turn means that after the current short-lived period of stability, emerging market FX should ... (full story)