The world is on the brink of a recession & the US back-pedaled
Financial markets faced a sharp surge in concern. The Fear Index (VIX) soared (+30%). The Argentine Peso lost the same amount of its value yesterday. It is all about the populists in Argentina. Well, it is quite interesting how many times you need to fail again and again to understand one thing - that is a bad idea. Tsipras and Greece again on the brink of default. Chavez and Venezuela. Johnson and the UK leave the EU. Trump and the USA wage war against the whole world.
Government of change in Italy and yellow vests in France, etc. - The list could be made even longer. But there is only one common denominator - the populists and the consequences that the country's economy pays for.
Therefore, the financial markets reaction to the news from Argentina is understandable. We know how this is going to end., preferring to discount in advance.
Not surprisingly, gold prices soared. Despite such a rapid asset value growth, we were waiting for a correction in gold this week, just needed a reason To.
Trump delays China duties. The duties delayed until Dec. 15. This is without a doubt a serious conciliatory step on the part of the United States. So, sales of gold today, in our opinion, are more than appropriate.
Returning to the world economy issue, triggered by a trade war. Singapore's GDP growth for 2019 to come in at 2% to 0.5%. The economy of Singapore, with its specifics, is almost ideally fit to be an early indicator of the world economy state. So the signal we have is alarming. Take for example yesterday’s data from the EU. The ZEW Institute's expectations index in August fell to minus 43.6 points. This is almost two times worse than the July value (minus 20.3) the lowest mark since 2011.
We continue to expect a decline in the dollar value. Logically, dollar devaluation is the only thing that could save the US economy from recessionary processes and keep Trump. So we recommend looking for points to sell the dollar.
First of all, we recommend selling it against the British pound, which yesterday unexpectedly received support from the UK labor market data: employment in June grew by + 115K (expected plus 60 K).
About the macroeconomic data, the block of inflation statistics from the UK will be published today. As well as GDP in the Eurozone.
Government of change in Italy and yellow vests in France, etc. - The list could be made even longer. But there is only one common denominator - the populists and the consequences that the country's economy pays for.
Therefore, the financial markets reaction to the news from Argentina is understandable. We know how this is going to end., preferring to discount in advance.
Not surprisingly, gold prices soared. Despite such a rapid asset value growth, we were waiting for a correction in gold this week, just needed a reason To.
Trump delays China duties. The duties delayed until Dec. 15. This is without a doubt a serious conciliatory step on the part of the United States. So, sales of gold today, in our opinion, are more than appropriate.
Returning to the world economy issue, triggered by a trade war. Singapore's GDP growth for 2019 to come in at 2% to 0.5%. The economy of Singapore, with its specifics, is almost ideally fit to be an early indicator of the world economy state. So the signal we have is alarming. Take for example yesterday’s data from the EU. The ZEW Institute's expectations index in August fell to minus 43.6 points. This is almost two times worse than the July value (minus 20.3) the lowest mark since 2011.
We continue to expect a decline in the dollar value. Logically, dollar devaluation is the only thing that could save the US economy from recessionary processes and keep Trump. So we recommend looking for points to sell the dollar.
First of all, we recommend selling it against the British pound, which yesterday unexpectedly received support from the UK labor market data: employment in June grew by + 115K (expected plus 60 K).
About the macroeconomic data, the block of inflation statistics from the UK will be published today. As well as GDP in the Eurozone.
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