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Week In Review


The PBOC allowed the yuan to weaken past 7 per USD, and this prompted the Trump administration to label China a currency manipulator and begin proceedings with the IMF. Several Asia-Pacific nations announced surprise rate cuts in an effort to keep their currencies from appreciating against the yuan. The Chinese government directed state owned enterprises to cease purchases of U.S. agricultural goods. The White House held off on issuing approval of waivers to allow U.S. companies to resume sales to Huawei. Trump stated that it would be “fine” if trade talks scheduled for next month are cancelled.

Our Take

The trade conflict between the U.S. and China continues to escalate. This trend and the accumulation of effects from the current tariffs are a negative for the global growth outlook.


Italian Deputy Prime Minister Matteo Salvini pulled the League out of the coalition government with Five Star and called for early elections. The process of dissolving the current parliament, having elections, and forming a new government which would most likely be led by the League could take several months, during which time Italy is due to submit a proposed 2020 budget to the EU. The Italian stock market sank and spreads on Italian government bonds relative to Bunds widened.

Our Take

The most likely outcome will be a government led by the League and other right-wing parties. Such a government will include many who would like to see Italy leave the euro, and this government will almost definitely come into conflict with the EU over immigration and fiscal policy.

All expressions of opinions are subject to change without notice in reaction to shifting market conditions. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice.