Last week, the Chinese Central Bank announced benchmark interest reforms to help lower the borrowing costs for companies and support the slowing economy due to the trade war with the US, and the German government’s statement that the government could spend 50 billion euros in a possible economic crisis brought purchases.
Risky assets were boosted by demand from safe havens such as bonds and gold. On Tuesday, US President Trump and Secretary of State Pompeo announced a series of trade talks with China in succession, boosting markets. Pompeo, Chinese companies outside Huawei also poses a risk of National Security stating that the next 10 days to continue the trade talks, Trump said that the trade negotiations are not ready for an agreement, but said that China wants to deal.
On Thursday, White House economic adviser Larry Kudlow announced that US and Chinese negotiators held a “very constructive tel teleconference and that the Trump administration plans to meet again in September. Fed President Jerome Powell’s speech at Jackson Hole on Friday said the US economy was “in a good position”, saying that the central bank would take steps “appropriately” to maintain the economy’s growth line and did not give any hint as to whether to lower interest rates at the next meeting. In addition, on the last day of the week, China announced that it would charge between 5% and 10% additional customs duty on US $ 75 billion products imported from the US.
During the week, the US’s 3 major indices, which remained positive compared to the previous week’s closure, closed the week negatively due to rising tension on Friday. On the other hand, LME copper ended the week with a negative minus value of more than 1% on Friday, at $ 5635. New week China’s announcement on Friday that it will bring additional US $ 75 billion in customs duties, and Trump’s 5% surcharge on the US $ 550 billion worth of products imported from China has shaken confidence in the global economy and It started with a tendency to escape from global risk.
Gold prices saw a new six-year high as US and Chinese retaliation tariffs on imported goods pulled global stocks down and revived demand for safe haven assets. Yesterday, the price of ounce of gold in the spot market has reached its highest level since April 2013 with $ 1,554.56 and is now at $ 1,530.40. On Monday, Donald Trump voiced the possibility of a trade agreement with China and said that he believes Beijing is sincere in its willingness to reach an agreement, creating an optimistic mood in the markets.
Trump also said that the G7 summit was fruitful and discussed the EU trade agreement with German Chancellor Angela Merkel. Shanghai Composite Index, which started the week with losses, lost 1.17% in the first trading day and CSI300 lost 1.44%. On Tuesday, Trump recovered his losses with moderate remarks. After closing the dollar index with 0.45% premium yesterday, it is at 97.895 level with 0.19% loss; The euro is flat against the Dollar at 1.11. Supported by Trump’s statements, LME copper started the week at 0.22% premium after the LME holiday on Monday. Later, China continued to trade at 0.83% premium at $ 5681, with the announcement of measures to support consumption. This week, on the macro data side, the GDP growth rate in the US, personal income and expenditure data and Chicago PMI; CPI and unemployment data in the euro area and NBS manufacturing PMI data on the Chinese side (Saturday) will be followed.