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Julius Baer: Comentarios Guerra Comercial | Bancos Centrales | Petróleo | Oro
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    <strong>Artículo publicado en <a href="http://www.lacartadelbolsa.com">La Carta de la Bolsa</a> el Martes, 19 de Junio en la sección: Articulos</strong>
    <h3 class="titulo_articulo">Julius Baer: Comentarios Guerra Comercial | Bancos Centrales | Petróleo | Oro</h3>
    Redacción
    <p><strong><img alt="" class="ilustraciones" src="http://lacartadelabolsa.com/images/ilustraciones/united-states-of-america-2886966__480_4.jpg" style="border-style:solid; border-width:1px; height:90px; width:150px" />Trade tensions: More heat? More of the same! </strong>• Despite the perceived escalation of US-led trade quarrels being close to a trade war, they remain tit-for-tat trade disputes. • The quarrels boost President Trump’s popularity, but offer few economic and political incentives for an escalation to trade war.</p>
    <p>At first sight, the US-led trade quarrels seem to be escalating. After President Trump implemented import tariffs on steel and aluminium, the focus shifted back to measures targeting China. The implementation of the first part of tariffs on Chinese imports of more than 800 product groups will proceed as of 6 July. In the second part, these measures will target a further USD50bn. China retaliated in widening the list of targeted US goods, but kept the size at an equal USD50bn. Last Friday, Trump surprised markets by threatening a second, even larger programme, to target a fur-ther USD100bn of Chinese imports. Finally, a potential USD290bn of import tariffs on autos are up in the air, offering a further level of escalation. Evidently, the imposition of unilateral import tariffs from the US is accelerating, challenging the view of markets that disputes will eventually be settled through agreement. However, despite this perceived escalation and retaliation measures from China, the European Union or the North American Free Trade Agreement member states, we continue to regard the disputes as tit-for-tat trade quarrels only. The reason for this is the very doubtful economic benefit the measures will have in the sought reduction of the US trade deficit. In contrast, import tariffs on intermediary goods will raise selling prices, weakening US exporters. The missing economic rationale behind the tariffs supports our notion of a pure domestic motivation for the disputes. With the November mid-term elections coming closer, Trump is keeping foreign trade a playground for domestic politics, as it boosts his approval ratings. However, this may also be a limiting factor: potential economic hardship, in the case of a trade war, risks damaging Trump’s popularity. We expect trade quarrels to continue at least until November, with a sizeable probability of 20% for an escalation to trade war. Trump continues to play with fire, but has little incentive to ignite a trade war. Despite potentially spurring inflation and nominal gross domestic product, the effect on our set of economic forecasts remains negligible.</p>

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<p><strong>David A. Meier, Economist, Julius Baer</strong></p>

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<p><strong>Central banks: ECB and Fed maximal divergence</strong></p>

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<p>• The ECB surprised with the introduction of fairly strong guidance for the future path of interest rates by committing itself to leaving rates unchanged until at least summer 2019.</p>

<p>• The US Federal Reserve (Fed), in contrast, hiked rates as expected and shifted its guidance to four rate hikes this year which is fully in line with our expectations.</p>

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<p>The European Central Bank (ECB) surprised by giving much stronger-than-expected guidance for the planned path of interest rates, confirming that the first hike of interest rates is not to be expected before summer 2019. At the same time, the ECB guided markets for a further reduction of its quantitative easing (QE) programme in September 2018 (reduction of the monthly volume of sovereign bond purchases from EUR30bn to EUR 15bn), signalling that it would like to exit the QE programme before the end of 2018, barring any external shocks. The ECB took a courageous step in continuing the tapering process in spite of weaker-than-expected economic growth in the eurozone, mixed inflation data, and increasing volatility due to growing global macroeconomic and geopolitical risks. Financial markets reacted with a short-lived relief rally on Thursday afternoon due to greater clarity after Mario Draghi’s statements, but pared their gains on Friday, as macroeconomic worries and geopolitical risks, especially the increasing risk of a trade war between the USA and China, as well as a growing threat to political stability in Germany (major conflict between the conservative CDU and CSU parties of the ruling ‘grand coalition’ over a potential rejection of asylum seekers at the borders of Germany) caused a ‘flight to safety’.</p>

<p>The Fed increased rates by 25 basis points, as expected. The Fed had announced three interest hikes for 2018 at the beginning of the year. The dovish majority of the Fed stuck to three rate in-creases for 2018 during previous meetings, but this time, the mood turned clearly hawkish due to further strong gross domestic product growth and the lowest unemployment rate since 2000, with inflation very close to the Fed’s target of two per cent. The Fed signalled four hikes for 2018, thus the Fed rate could end 2018 most likely in the range of 2.25%–2.5%, corresponding to our forecast. The Fed opted for the seventh interest rate hike since late 2015, leaving the exact date of the next hike open, as usual. The Fed is increasingly worried that the very low unemployment rate makes it harder and harder to fill vacancies, thus increasing inflationary pressures.</p>

<p>The policy paths of the ECB and the Fed are diverging even more strongly after last week’s central bank meetings. Therefore, we would like to reaffirm our view that the EUR is going to weaken further against the USD over the next three months. We forecast a EUR/USD exchange rate of 1.10 in three months’ time.</p>

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<p><strong>David Kohl, Chief Currency Strategist, Julius Baer</strong></p>

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<p><strong>Oil: All eyes on OPEC</strong></p>

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<p>• The oil market will be focusing on this week’s OPEC meeting. Saudi Arabia and Russia are set to ease production restrictions.</p>

<p>• Political uncertainties continue to cloud oil’s near-term outlook. We maintain a Neutral view.</p>

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<p>Commodity markets took a big hit on Friday on concerns about the escalation of the trade dispute. The US government announced tariffs on various imported goods from China, which promptly retaliated with like-for-like measures. Commodities are in focus as the Chinese tariffs will not only cover most agricultural products such as soybeans, corn or wheat starting early July, but also crude oil and gasoline among other goods at a so far unknown later stage. However, there is more policy uncertainty in the cards for the oil market. The much-awaited meeting of the Organisation of Petroleum Exporting Countries (OPEC) will kick-off on Friday, or at least the part where the respective oil ministers meet. Oil prices have softened over the past weeks in expectation of the petronations easing their production restrictions.</p>

<p>Oil inventories are back at historic averages. The solid economy, strong demand growth and the supply deal arranged between OPEC and Russia removed the market’s supply surplus. However, Venezuela’s oil output collapse and the possibility of buyers in part shunning Iranian oil in fear of US sanctions puts the production restrictions into question. In fact, the supply deal artificially tightens the market as the cutbacks exceed initial levels. Oil consumers increasingly raise their voice and call for the petro-nations to contribute their bit to soften fuel inflation. There is opposition to ease the output restrictions within OPEC. Irrespective of the inner workings of the organisation, Saudi Arabia and Russia were the driving forces to sign the supply deal and most likely will decide in bilateral agreement to slowly lift oil output. Already at earlier occasions, for example in 2011, Saudi Arabia followed its own oil policy in opposition to other OPEC members. The near-term outlook for oil prices remains clouded in high uncertainty given the difficulty to predict political factors at play, including Europe’s and China’s reaction to US sanctions on Iran. China will make sure to keep its business with Iran, not least as an alternative for US crude oil imports, which only complicates the politics.</p>

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<p><strong>Norbert Rücker, Head Macro & Commodity Research, Julius Baer</strong></p>

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<p><strong>Gold: Investors stayed on the sidelines despite rising trade tensions</strong></p>

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<p>Judging by gold’s recent performance, it does not seems like trade tensions between the United States and China increased. Prices dropped to a fresh yearly low late last week, just when President Trump threatened further tariffs and China retaliated. We see this as a result of the sell-off in the oil market, which limits the risk of overshooting inflation. Oil tends to influence gold via the real interest rates, which fall when inflation is rising and vice versa. However, also yesterday’s threat of even more tariffs on Chinese imports failed to fuel prices, which still hover around the USD 1,280 per ounce level. Considering these elevated uncertainties and the non-negligible risk of a trade war, which we still see at 20%, it is very surprising that investment demand cooled again as of late. Holdings of physically backed products, our preferred gauge of investment demand, dropped more than 30 tonnes this month, i.e. about a quarter of this year’s increase. On a regional basis, all of the selling came from the United States while there was minor buying in continental Europe. As gold and the US dollar continue to trade in very close inverse relationship, there is little incentive for US investors to hold gold at a time when the dollar is rebounding. Our view on gold remains neutral and we maintain our short-term price target of USD 1,275 per ounce, as we believe a trade war will be avoided. Yet, a trade war is part of our bullish scenario as an escalation would eventually fuel investors’ demand for gold as a safe-haven and push prices towards USD 1,400 per ounce in the short term.</p>

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<p><strong>Rising trade tensions between the United States and China failed to fuel gold. Prices dropped to fresh yearly lows last week as investors stayed on the sidelines. We still see the US rate cycle and US dollar in the driving seat for gold, which keeps a lid on prices and justifies a neutral view. A trade war is part of our bullish scenario.</strong></p>

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<p><strong>Carsten Menke, Commodities Research Analyst, Julius Baer</strong></p>
    https://lacartadelabolsa.com/index.php/272920
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