Our monthly market analysis and positioning

DWS
By November 6, 2019 13:38

Our monthly market analysis and positioning

October has been dominated by big political misses. But central banks have once again set the tone for capital markets, pushing them to new highs.

October was all about talk of deals and crucial dead-lines. What happened? The deals got nowhere and the deadlines were missed. How did markets react? Equities went up still more and bonds hung around. It is remarkable how untroubled markets can be when central banks keep serving them monetary cocktails.

On one side of the Atlantic, the crucial deals and deadlines have to do with trade and the economic war between the United States and China. Time is press-ing, because on December 15 the next stage of American punitive tariffs will apply to goods imported from China. These are primarily consumer goods and if their prices go up before Christmas, or even after it, the electorate is not likely to be happy. You can there-fore see why it might pay President Donald Trump to reach a deal – or, more precisely, "phase-one deal" of a far-reaching trade agreement. What might, howev-er, be agreed beyond that phase one is becoming more and more questionable. In the United States, there is talk of 'decoupling' the U.S. and Chinese economies. In China, trade officials warned a long-term trade agreement with Trump might not be possi-ble. These doubts are only exacerbated by the im-peachment proceedings against Trump.

 

DWS
By November 6, 2019 13:38

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