Olivia Blaszkowski from EPFR takes a recent BBC article to look into US investor sentiment towards China. Fund flows show that the tide is changing.
Trade talks between the world’s two dominant economies, China and the US, have proceeded inconclusively for the better part of three years. Going into December a firm agreement to resolve the numerous issues dividing the two countries remained elusive, leaving investors scratching their heads as they try to figure out how to extract meaningful signals from the oceans of data, tweets, diplomatic communiques, commentary, and news that the Sino-US trade war generates on a daily, weekly and monthly basis.
Trade issues, earnings and political risk reclaim center stage from central bankers in early October
After a quarter when both the US Federal Reserve and European Central Bank reversed course on the normalization of their monetary policies, the focus during the first week of October shifted from central bankers to the Sino-Chinese trade war, the latest corporate earnings season, and impending elections in Spain, Canada, and Argentina.
In 2Q18, ClearMacro released a paper, ‘Trade is the Lifeblood of the Global Economy’, in which we argued that the tariffs spawned by the current Sino-US trade tensions would only partially reverse the post-war reduction in barriers that accompanied a vast expansion in global trade.