The ink has not dried on the US-China phase-one trade deal, and it already appears to be falling apart on multiple fronts. A multitude of experts warned over the past few months that this trade deal, hailed by US President Trump as a great success, is nothing more than a politically inspired act. It does nothing to alleviate global trade jitters, aside from calling for a truce in the mutual tariffs the two largest economies levied against one another. On the contrary, this trade deal may violate WTO rules and end up costing a lot more than it attempts to salvage.

Global trade optimism was slightly crushed as the US announced that existing tariffs on China will remain in place until after the US presidential election in November. President Trump will sign the phase-one trade deal in Washington today, together with senior Chinese political figures. Presidents usually don’t sign trade deals, but Trump has made it a habit of inking even marginal ones and then claiming a massive victory for the US economy. The Japanese and South Korean trade deals are the most recent examples.

Five minutes after stock markets opened today, US President Trump tweeted “Getting VERY close to a BIG DEAL with China. They want it, and so do we!” On Sunday, the trade deal deadline for a phase-one trade deal will pass, and if no deal has been signed, the US may add additional tariffs. US markets surged to fresh all-time highs amid hopes that a deal will be signed. As part of this deal, 50% of the existing tariffs are set for a rollback. This represents a change in attitude from just weeks ago when Trump stated that he would prefer a deal after the 2020 election.

Global markets continue to enjoy an overall boost in bullish sentiment as the final trading month of the year approaches. Trade negotiations between the US and China are in focus and the majority of market participants trade as markets as if the phase one trade deal is the solution to all global issues. This bullish confidence may be misplaced as other structural economic issues remain ignored.

A trade deal between the US and China is very unlikely as high-level trade talks will be held today in Washington. News that talks have stalled during yesterday’s mid-level talks and that the Chinese delegation led by Vice Premier Liu He may return back to China today, instead of staying until tomorrow which was the original plan. It remains unclear what will happen, bit both sides are aware that a deal cannot be reached. In order to safe face on the global stage and extend negotiations a mini-deal may be announced.

China may be changing its strategy in the trade war it was dragged into by the US. While speculations run high if Trump’s strategy worked and harmed the Chinese economy to the point they felt forced to change direction or if this is a tactical maneuver by China remains to be seen. US President Donald Trump is likely to tweet more messages of a victorious outcome. So far China retaliated to each tariff increase the Trump administration announced.

The three day G-7 summit it France is behind us. Prior to the start, many analysts wondered if it would be a G-7 summit or a G5+2, with the US and the UK forming the +2. It is still unclear as there have been conflicting messages, but French President Macron tried to end the summit on a positive note in what some now refer to as “Macron’s Iranian Drama”. After US President Trump pulled out of the Iran nuclear deal, tensions with Iran have increased.

US President Trump decided last week to escalate the trade he started with China by announcing a 10% tariff on $300 billion worth of Chinese imports starting September 1st 2019. This would essentially tariff all Chinese imports to the US and sources claim that he acted against the recommendation of his top advisors. After Trump announced his decision, market entered a risk-off mood as traders awaited the Chinese response. It was delivered yesterday and send US equity markets into their worst sell-off of 2019 with the Dow Jones at one point almost off by 1,000 points.

The trade war between the US and China is heating up with the People’s Daily, the official newspaper of China, stating “We advise the U.S. side not to underestimate the Chinese side’s ability to safeguard its development rights and interests. Don’t say we didn’t warn you! United States, don’t underestimate China’s ability to strike back.” At the same time, trade talks between the US and EU collapsed which added another layer of issues for the slowing global economy and distress for the US economy specifically.

The American currency shows stability, despite another exacerbation of the trade war with China. We can’t say the same about GBP. The prospects for the British pound do not look very optimistic. Today, for the British currency is expected to be quite a busy day in the economic calendar. The data on CBI industrial trends for May will be released in the second half of the day.

Just as traders and investors once again were motivated to hope that the trade war between the US and China will be resolved sooner rather then later, US President Trump steers the process in a different direction. After warning China against retaliating against his tariffs, which China did Monday morning before equity markets opened for trade in Asia, Trump increased tensions by signing an order which will restrict Huawei and ZTE from selling their 5G equipment to US carriers.

Just as the majority of economists, analysts, investors and traders got comfortable with the progress in trade talks between the US and China in order to resolve the issue, US President Trump reminded everyone that nothing is certain. He took to Twitter on Sunday and fired off two tweets which caught many by surprise. Mass media has lulled everyone into the misguided believe that a trade deal is imminent. Trump has vowed to increase tariffs on $200 billion worth of Chinese Goods if no trade deal has been reached and the original deadline was March 1st 2019.

With traders focused on discussion between the US and China in order to resolve the trade war which the US initiated, many tend to forget and ignore the third player on the scene, the EU, and its own trade practices. While efforts are being made to find a solution which will work for the US and China, the EU is creating its own trade problems with both sides.

According to the US as well as China, there has been plenty of progress made in the trade talks aimed at ending the trade war initiated by the US. Several reports suggested that both leaders may meet this month in order to officially end the trade war, but at least three officials with knowledge of talks have now come forward and stated that there won’t be any such meeting in March. President Trump and Xi may meet at Trump’s Mar-a-Lago golf resort, if they meet at all.

The Chinese leadership has lowered its GDP growth target range for 2019 to between 6.0% and 6.5%. This is down from the previous estimate of a growth figure of 6.6% annualized. The adoption of a target range instead of a fixed GDP figure gives Chinese policy makers more room to maneuver through difficult economic times. The Chinese economy is faced with a rising debt level at a time when the economy is slowing down and maturing from an emerging market to a developed one. The new growth range was presented by Chinese Premier Li Keqiang to the National People’s Congress.

President Xi addressed the Chinese political elite in an unusual meeting which was later described as a “seminar”. This event took place on the same day the country reported its weakest GDP expansion in almost ten years and offered a fresh sign that the ruling party is worried about the social impacts of a slowing Chinese economy. Some analysts have pointed out that annualized GDP growth below 7.0% would result in social problems, especially in rural communities. GDP growth slowed down to 6.4% annualized in the fourth-quarter of 2018.

Happy New Year! As traders will take a break from trading today due to the markets being closed, many will start to prepare their portfolios for the 2019 trading year which will kick off tomorrow. The following four themes are very likely to have an impact on price action across asset classes and every forex traders need to remain informed about them. One key area of focus will be the US-China trade war. Ripple effects have been felt around the global economy already and are likely to continue until it will be resolved.

As this past weekend’s G-20 summit concluded in Argentina, market participants were largely focused on the dinner between US President Trump and Chinese President Xi. The sideline show stole the spotlight which meant that something would be announced in an attempt to please the markets and shows that positive progress has been made in the trade war the US started with China. As expected Trump hailed progress and his negotiating tactics while US Treasury Secretary Steven Mnuchin stated that 142 items have been discussed between both leaders.

While some analysts remain hopeful that a sideline meeting between US President Trump and Chinese President Xi at the G-20 meeting in Buenos Aires will yield a truce in the trade war, it appears rather unlikely. The Wall Street Journal published an interview with Trump on Monday where he stated that he is very likely to move ahead with an increase in China tariffs on $200 billion worth of goods from the current 10% to 25%. This would mean that $250 billion worth of Chinese goods will be taxed by 25%.

US President Donald Trump loves to tweet, often at odd hours and to the surprise of his own cabinet. While the world has gotten used to it by now, and despite the Republicans losing the House of Representatives to the Democrats two week ago, the trade war with China shows no signs of easing. On the contrary it only intensifies. The US President doesn’t need Congress for trade policies which means that the Democrats have little power to stop President Trump from pushing through with his current approach in regards to China.

As the US-China trade war is set to intensify, forex traders should take a closer look at commodity currencies. US President Trump announced that tariffs on the remaining Chinese imports into the country may be announced if no progress is achieved on the sidelines of the G-20 meeting in Buenos Aires, Argentina between November 30th and December 1st. This would levy tariffs on all Chinese exports to the US, valued over $500 billion per year. This is expected to have a much bigger negative impact on the global economy than many are prepared for.

On September 24th the Trump administration will impose a 10% tariff on $200 billion worth of Chinese goods. This will be increased to 25% in 2019 and comes on-top of the $50 billion worth of goods which are already under a 25% tariff. President Trump vowed to impose a tariff on the remaining $267 billion worth of Chinese goods, if China decided to retaliate. China vowed to retaliate as it has when the Trump administration announced the initial tariff on $50 billion worth of Chinese goods.

The US may announce tariffs on as much as $200 billion worth of Chinese imports, on top of the $50 billion already in place, as soon as this week. On Thursday a public commenting period ends, and sources in the White House stated that President Trump would like to move soon after that. China has already vowed to retaliate in kind as the US-China trade war is set to deepen.

While low level Chinese and US delegations are meeting in Washington, round two of the trade war kicked off. The US decided to follow through on its initial $34 billions worth of tariffs with the announced second phase worth $16 billion. This completed the $50 billion worth of tariffs the US announced and further escalates trade tensions. China has retaliated as expected and applied the same 25% tariff on the same amount of imports from the US.

The trade war between the US and China is in its early stages and many compare it more than a conflict for the time being. The risks that it will turn into a longer lasting, full blown trade war are increasing daily as rhetoric is on the rise. US President Donald Trump now asked the United States Trade Representatives Office, tasked with identifying another $200 billion worth of Chinese imports for tariffs, to increase the proposed tariffs from 10% to 25%.

The ripple effects of the US-Sino Trade War of 2018 are already being felt across industry groups. The US officially fired the first shot last week on Friday by imposing 25% tariffs on $34 billion worth of Chinese goods which are imported to the US, with another $16 billion set to receive the same treatment on July 16th.

Will today be remembered as the Eve of the US-China trade war of 2018? Tomorrow, Friday 6th 2018 the US is supposed to impose a new set of tariffs on Chinese imports to the US. The 25% tariffs on $50 billion worth of Chinese imports is in response to what the Trump administration has labeled the theft of American intellectual property. $34 billion will be subject to the tariff starting tomorrow with the remaining $16 billion set to take effect on June 15th.

Up until a few days ago, many were wondering if a trade war between the US and China would be avoided or if it would commence. Now the battle lines have been drawn as the Trump administration targeted $50 billion worth of Chinese imports, primarily non-consumer related items such as machinery, which would be subject to a 25% tariff. US President Trump threatened more tariffs if China was to retaliate.

Developments in Asia are heating up and changes are on the horizon. Many of the Asian currencies are thinly traded or out of reach for the retail sector, but the Japanese Yen is the go-to currency when it comes to carry trade, hedging, risk management and Asian exposure. Many often overlook the Australian Dollar, a major currency, as well as its smaller neighbour the New Zealand Dollar.

The International Monetary Fund (IMF) will hold is bi-annual meeting in Washington this week. Today finance ministers as well as central bankers from the G20 will convene which will be followed by Saturday’s meeting which will include all member nations of the IMF. The US as well as China are on a path to gather allies for their trade war, especially within the G20 members.

The trade war between the US and China is not the only headwind facing Chinese economic worries. While the trade war, which is increasing in scope and size, will have a negative economic impact, it is not the biggest issue clouding economic and fiscal stability. As the economy is metamorphosing from an emerging one into a developed one, the same threat other developed countries struggle with is rearing its ugly head: debt.

Yesterday marked the first FOMC meeting chaired by Jerome Powell, the new US Federal Reserve Chief. As market participants and Fed watchers widely anticipated, he kicked of his first FOMC meeting with a 25 basis point interest rate increase to 1.75%. The Fed also confirmed that it wants to hike three times in 2018 while signalling that more interest rate hikes are expected in 2019 as well as 2020.

China continues to metamorphose from an emerging economy dotted with villages and farm communities into a fully developed economy. Urbanization, the move from farmers into cities, is one key aspect of this transformation. Another milestone was reached after China’s most rural province, Henan, announced that 50.2% of its 96 million residents now live in urban centers as of the end of 2017.

Bond investors around the globe have enjoyed a bull market which lasted for over 30 years, but as will all assets which go up they will eventually come down. While an overall long-term advance is normal, nothing can advance in a straight line. Usually, the longer a bull market lasts the steeper and more powerful the correction will be. In addition, if there is no corrective phase many forget how to act and react once one begins which results in panic.

Merry Christmas to everyone who observes and celebrates it! This period is a great time to reflect on a great year which is coming to an end, and smart forex traders are taking a closer look at their forex portfolios in order to conduct an annual overview of their performance, crunch numbers and determine where they need to improve to make the next year an even better one. Many global markets are closed for Christmas today which means very thin volumes will be encountered.

China has struggled through 2014 with weaker than expected economic performance. This has reduced demand for commodities and the Chinese slowdown added to the decline in commodity prices especially outside of the price of oil. This has further dragged down the Australian Dollar and the New Zealand Dollar as well as the Canadian Dollar.

The Chinese economy has been slowing down for an extended period of time and nobody argues about the impact it has on the global economy. China is now the world’s largest economy and if the world’s biggest exporter and consumer of raw materials slows down the rest of the world will feel a negative impact.