(27 NOVEMBER 2018)DAILY MARKET BRIEF 1:US threatens tariffs, slows yuan
US President Donald Trump says he will impose USD 200 billion tariffs effective from 1 January 2019, if the Chinese government does not make concessions at the upcoming G20 summit in Buenos Aires. Trump said another 10-25% of duties on the remaining USD 267 billion of Chinese imports could be implemented thereafter. USD/CNY today’s fixing lies at 6.9463, suggesting that the pair’s rise (currently: +0.11%) should be limited.
The G20 summit kicks off in three days: markets have not yet reacted much. Either investors have either gotten used to the rhetoric or they think that it is too early to draw conclusions. Both CNY and CNH remain stable, suggesting limited pressure for now. Further tariffs on Chinese goods should weigh on consumer goods, including computer or Apple products that require electronic components manufactured in China.
