Baltic Dry Index. 1540 +16 Brent Crude 83.20
Politics have no relation to
morals.
Niccolo Machiavelli, DC Trade
Advisor.
To no one’s great
surprise, trade war midget Canada buckled under pressure from trade war giant
America, and Canada’s dairy farmers were sold down the St Lawrence River to
protect the jobs of Canada’s auto workers. A Trump Triumph to sell to US voters
in the November mid-term elections.
But at what
cost? While proving “divide and conquer”
still works, President Trump has turned America and American firms into dangerous
entities to “partner” with, as China’s
ZTE, Russia’s Rusal, and now Canada’s
auto workers know, whilst setting a precedent for future US populist presidents
to follow. And follow they will if it works at the November polls
Onwards now to hammer
the Chinese and threaten the EUSSR, in particular German auto workers. The
repercussions of 2018 will be with us for decades.
But will it be another
case of buy the rumour sell the fact, for US stocks? Has/is the trade war
damage already grinding away?
It is better to be feared than
loved, if you cannot be both.
Niccolo Machiavelli, DC Trade
Advisor.
U.S., Canada Agree to Nafta Replacement That Will Include Mexico
By Jenny Leonard, Josh Wingrove, Jennifer Jacobs, and Andrew Mayeda
1 October 2018, 04:35 GMT+1 Updated
on 1 October 2018, 05:40 GMT+1
The U.S. and Canada agreed to a trade deal with Mexico, setting the
stage for their leaders to sign the accord by late November in a region that
trades more than $1 trillion annually.
The three countries reached an agreement to replace the 24-year-old
North American Free Trade Agreement, according to a joint statement from U.S.
Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister
Chrystia Freeland on Sunday. The new deal will be called the U.S.-Mexico-Canada
Agreement, or USMCA.
The accord involves improved access to Canada’s dairy market for U.S.
farmers, stronger intellectual property provisions, and tighter rules of origin
for auto production, according to two senior Trump administration officials who
spoke to reporters on condition of anonymity.
Canadian auto exports up to a certain threshold will not be impacted by
any U.S. tariffs on foreign cars, according to three people familiar with the
matter. The agreement offers Canada some cover from the Trump administration’s
threat to impose duties on car imports for national security reasons.
The deal caps a turbulent period for relations between the U.S. and Canada, traditionally close allies on national security and trade. But the alliance was severely tested by President Donald Trump’s aggressive negotiating style and Prime Minister Justin Trudeau’s willingness to stand his ground on key issues such as dairy and dispute settlement.
Last-Minute Push
U.S. and Canadian negotiators worked around the clock this weekend to make a Sunday midnight deadline that would allow the countries to sign the deal with Mexico’s outgoing President Enrique Pena Nieto before he leaves office on Dec. 1.A revised Nafta would be a landmark for Trump, who has called the current deal a “disaster” and vowed to reduce America’s yawning trade deficit and revive manufacturing jobs.
The president had threatened repeatedly to pull out of the pact, a scenario that business leaders warn would wreak havoc on their supply chains. In force since 1994, Nafta eliminated tariffs on most goods. The Trump administration had already agreed last month to an updated pact with Mexico, which increased pressure on Canada to make concessions to join the deal.
Lawmakers from the three countries still need to approve the pact. The
new deal likely won’t be voted on by the U.S. Congress until 2019. The
Democrats may take control of the House in midterm elections in November, which
could undermine Trump’s ability to win approval.
Under U.S. trade law, the administration was required to publish the
text by the end of September.
---- The deal will include side letters on quota arrangements for Mexico and Canada that would shield their current auto exports as well as future production from tariffs that Trump has threatened to impose, one of the officials said, but declined to comment on specifics.
Under the car-tariff reprieve for Canada, current production levels of
roughly 1.8 million units would not be affected by any tariffs on foreign cars,
three people familiar with the talks said. Tariffs would not kick in until
Canadian auto exports to the U.S. topped 2.6 million units annually, two of the
people said.
Morehttps://www.bloomberg.com/news/articles/2018-10-01/u-s-canada-agree-to-nafta-replacement-that-will-include-mexico?srnd=premium-europe
Asia factory activity sputters as trade woes hit export orders
October 1, 2018 / 5:20 AM
TOKYO (Reuters) - Factory activity in Asia weakened in September, with many
trade- reliant economies seeing a slump in export orders in a sign that
escalating U.S.-China tensions are taking a toll on business confidence.
Rising raw material costs are also squeezing profit margins for Asian
manufacturers, raising questions over future investment and reinforcing views
that global economic growth is shifting into lower gear.
Manufacturing activity weakened in Vietnam and Indonesia last month,
while Taiwan’s factories grew at the slowest pace in more than two years on
sluggish export orders, according to business surveys released on Monday.
Major economies like Japan and South Korea saw headline activity
readings hold up, but also suffered declines in export orders, suggesting that
increasing protectionism and concerns of slowing Chinese demand were weighing
on Asia’s biggest economies.
Two manufacturing surveys in China on Sunday had pointed to rising
regional risks. A private poll showed Chinese factory growth stalled after 15
months of expansion, while an official gauge confirmed the sector was losing
steam under the weight of shrinking export orders.
The first major readings on China for September suggest the world’s
second-largest economy is continuing to lose momentum as domestic demand
weakens and U.S. tariffs bite, a combination that is likely to prompt Beijing
to roll out more growth-support measures in coming months.
“Global growth is now cooling, which we think is weighing on foreign
demand for Chinese goods irrespective of tariffs,” Capital Economics said in a
note to clients.
While rising trade protectionism is expected to deal the world economy a
relatively modest blow to this year, risks will intensify in 2019 as tougher
U.S. tariffs kick in and global borrowing costs rise.
As global firms have supply chains across Asia, many economies in the
region are vulnerable to disruptions in trade and any slowdown in China - one
of their biggest markets.
----
Similar surveys are expected from Europe and North America later in the day.
Preliminary “flash” surveys suggest euro zone business growth continued to ease
in September, leaving the United States as the lone strong spot in the global
economy.
Morehttps://uk.reuters.com/article/us-global-economy/asia-factory-activity-sputters-as-trade-woes-hit-export-orders-idUKKCN1MB1EH
China to cut import tariffs on wide range of products
September 30, 2018 / 2:10 PM
BEIJING (Reuters) - China will cut import tariffs on textile products and
metals, including steel products, to 8.4 percent from 11.5 percent, effective
Nov. 1, the finance ministry said on Sunday.Beijing has pledged to take steps to increase imports this year amid rising tension with some of its biggest trade partners, such as the United States.
Earlier in July, China reduced import tariffs on a range of consumer
items including apparel, cosmetics, home appliances, and fitness products to
fulfil pledges to further open China’s consumer market.
Import tariffs on wood and paper products, minerals and gemstones will
be cut to 5.4 percent from 6.6 percent, the ministry also said in its
statement.
Average import tariffs on over fifteen hundred products will be lowered
to 7.8 percent from 10.5 percent, the ministry said.
“Reducing tariffs is conducive to promoting the balanced development of
foreign trade and promoting a higher level of opening up to the outside world,”
the ministry said .
China’s cabinet has announced plans to cut tariffs on machinery, electrical
equipment and textile products beginning on Nov. 1, as the country braces for
an escalating trade war with the United States.
The overall tariff level will be reduced to 7.5 percent in 2018 from 9.8
percent in 2017 as a result, the cabinet has said.
https://uk.reuters.com/article/uk-china-economy-tariffs/china-to-cut-import-tariffs-on-wide-range-of-products-idUKKCN1MA0IS
The promise given was a
necessity of the past: the word broken is a necessity of the present.
Niccolo Machiavelli, DC Trade
Advisor.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, get ready for $100 oil again.
What Oil at $100 a Barrel Would Mean for the Global Economy
By Enda Curran and Michelle Jamrisko
30 September 2018, 07:30 GMT+1
Rising oil
prices are prompting forecasts of a return to $100 a barrel for the
first time since 2014, creating both winners and losers in the world economy.Exporters of the fuel would enjoy bumper returns, giving a fillip to companies and government coffers. By contrast, consuming nations would bear the cost at the pump, potentially fanning inflation and hurting demand.
The good news is that Bloomberg Economics found that oil at $100 would mean less for global growth in 2018 than it did after the 2011 spike. That’s partly because economies are less reliant on energy and because the shale revolution cushioning the U.S.
Ultimately, much depends on why prices are pushing higher. A shock amid constrained supply is a negative, but one due to robust demand just reflects solid growth. Both forces are now in play, driving Brent crude up about 22 percent this year.
1. What does it mean for global growth?
Higher oil prices would hurt household incomes and consumer spending, but the impact would vary. Europe is vulnerable given that many of the region’s countries are oil importers. China is the world’s biggest importer of oil and could expect an uptick in inflation.There are also seasonal effects to consider, with winter looming in the Northern hemisphere. Consumers can switch energy sources to keep costs down, such as biofuels or natural gas, although not quickly. Indonesia already has instituted measures to push more use of biofuels and limit the economy’s reliance on imported fuel.
For a sustained hit to global growth, economists say oil would need to hold above $100. The dollar’s gain of this year doesn’t help though given crude is priced in greenbacks.
2. How can the world economy absorb oil at $100?
Bloomberg Economics found that $100 oil will do more harm than good to global growth. Yet there are important differences in the condition of the world economy today compared with 2011.“The shale revolution, lower energy intensity, and higher general price levels mean the impact will be smaller than it once was,” economists led by Jamie Murray wrote in a recent report. “The price of a barrel will have to go much higher before global growth slips on an oil slick.”
3. How will Iran and Trump impact the market?
Geopolitics remains a wild card. Renewed U.S. sanctions on Iran are already crimping the Middle East nation’s oil exports. While President Donald Trump is pressuring the Organization of Petroleum Exporting Countries to pump more, there is limited spare production capacity. In addition, supply from nations including Venezuela, Libya and Nigeria is being buffeted by economic collapse or civil unrest. Still, Goldman Sachs analysts predict $100 will not be passed.
More
I'm not interested in
preserving the status quo; I want to overthrow it.
Niccolo Machiavelli, DC Trade
Advisor.
Technology Update.
With events happening fast in the
development of solar power and graphene, I’ve added this section. Updates as
they get reported. Is converting sunlight to usable cheap AC or DC energy
mankind’s future from the 21st century onwards?
World Bank Offers $1 Billion for Batteries in Emerging Markets
September 28, 2018
The World Bank Group committed $1 billion to finance battery-storage
systems in developing and middle-income countries, and expects its
participation to attract another $4 billion in backing from investors as well
as public and private funds.
The effort also includes a global think tank to study battery
technologies and deployment strategies, according to a statement from the One
Planet Summit in New York Wednesday. Most existing battery projects are
expensive and focused in developed countries.
Storage can retain electricity from wind and solar farms to use after
sundown or when the wind isn’t blowing, and is viewed at critical to expanding
the use of renewable energy.
“Battery storage can help countries leapfrog to the next generation
technology, expand energy access, and set the stage for much cleaner, more
stable, energy systems,” World Bank Group President Jim Yong Kim said in the
statement.
The first method for
estimating the intelligence of a ruler is to look at the men he has around him.
Niccolo Machiavelli, DC Trade
Advisor.
The monthly Coppock Indicators finished September.
DJIA: 26,458 +199 Down. NASDAQ:
8,046 +261 Down. SP500: 2,914 +166 Down.
All
three slow indicators moved down in March, but the S&P and NASDAQ turned up in August. September will be critical for confirmation
of this change. All 3 slow indicators failed to confirm August’s positive
change making October very vulnerable to a sell off.
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