Det overrasker ikke Nordea, at der er voksende spændinger mellem USA og Kina, for Nordea mener, at handelsaftalen mellem de to var stendød fra starten, og at Trump vil bruger en dyb modvilje mod Kina under valgkampen. China-bashing bliver et våben for Trump.
Uddrag fra Nordea:
The trade deal between US and China was stone dead from the outset, as e.g. the USD 32bn increase in agricultural purchases (from a base below USD 10bn pro anno) was almost practically impossible to implement due to low commodity prices. When Corona entered the lime-light (maybe China already knew about Corona by the time of the signing ceremony), it was essentially 100% certain that none of the thresholds in the trade deal would be met.
Trump on the other hand seems very influenced by polling and sentiment knowing that the election is fast approaching. The American sentiment towards China has reached a new all-time-low in surveys, with 66% of respondents answering that they hold an unfavorable view of China in April. China bashing will hence likely be the weapon of choice for Trump to win over workers again.
Chart 1: The trade deal was always “born to die”
We would be surprised if the PBoC didn’t allow USD/CNY to slowly but surely pave its way higher towards November, given the crystal-clear risk of a re-escalation of the tariffs war and continued issues of re-booting credit growth in China. More PBoC easing and more exported disinflation coming up.
We buy USD/CNH with a target of 7.3850, and a S/L at 6.9520.
Chart 2: PBoC could accept to slowly but surely let USD/CNY trend higher until November
Higher USD/CNY likely also goes hand in hand with a weaker risk appetite than what we have seen during March and parts of April. M2 has exploded recently in the US, likely as savings have gone up despite or even as an unintended consequence of huge so-called “stimulus packages” (how can you stimulate a closed economy?).
