聚焦全球：貿(mào)易緊張~不滿之夏

1、Please refer to important information and HYPERLINK /docViewService/auth/getResearchMARSnapshotViewTradeIdeaIds?tokenString=4yLRBGoscZu8h0qgQUaA1DUenyN7QqpC2M2fSEoWipyPpPly54mAgu9y0BRQxMweVcVYggunFVlCtFR80OKm%2Bn5x9m6SJMRMdYo%2FX8dmw7TRRCo8WuvZ4i7aVGXDaCHfZxuRMB82UJF1yttTirL8sY7dG8Vec6IYWBuztHQsLUX4

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5、S6iywq9 disclosures at the end of this reportFOCUS | GLOBAL15 August 2019MARKET ECONOMICS | G10FX | G10 INTEREST RATES | EM ECONOMICS | EM STRATEGY | MACRO QUANT & DERIVATIVESTrade tensions Summer of discontentKEY MESSAGESThe announcement of new US tariffs makes a comprehensive trade deal with China

6、 even more difficult, in our view, and trade tensions are now more likely to escalate than to be resolved.Past and new tariffs and persistent policy uncertainty are likely to weigh on the global economic outlookOur forecasts are under review pending the upcoming quarterly Global Outlook. We are prep

7、aring to downgrade our already below- consensus growth forecasts across both developed and emerging economies.We expect the Fed to cut rates by an additional 50bp this year, rather than the 25bp we previously forecasted, and we see a possibility of as much as 100bp in cumulative cuts this year.We no

8、w expect at least 14 EM central banks to cut rates by year-end.TABLE OF CONTENTS HYPERLINK l _TOC_250006 Spectre of global recession2Escalation of USChina trade tensions3 HYPERLINK l _TOC_250005 Global growth: Slippery slope4 HYPERLINK l _TOC_250004 Emerging markets: Weaker GDP growth, lower rates6

9、HYPERLINK l _TOC_250003 Eurozone rates: Much is already priced in7 HYPERLINK l _TOC_250002 US rates: All-time lows possible in US 10y8 HYPERLINK l _TOC_250001 FX market outlook and key trades9 HYPERLINK l _TOC_250000 Macro quant: Factor analysis of asset prices10AUTHORS HYPERLINK mailto:luigi.speran

10、za Luigi Speranza, Chief Global Economist BNP Paribas London Branch HYPERLINK mailto:xd.chen Xingdon HYPERLINK mailto:xd.chen g HYPERLINK mailto:xd.chen Chen, Head of GM Economic Research China BNP Paribas (China) Limited HYPERLINK mailto:pyounghyun.ahn Daniel HYPERLINK mailto:pyounghyun.ahn Ahn, Ch

11、ief US Economist and Head of Markets 360 North AmericaBNP Paribas Securities Corp HYPERLINK mailto:ryutaro.kono Ryutaro Kono, Head of GM Economic Research, Japan BNP Paribas Securities (Japan) LimitedKEY MARKET VIEWSFX: Short USDJPY, target 104, stop trailed to 107, entered at 108.45 on 10 July 2019

12、. This trade has performed, but we continue to see some upside, especially in a more risk-off environment.US rates: Buy a receiver spread 9m1y atmf-25bp receiver vs sell 9m1y atmf-100bp receiver to benefit from the on-going easing cycle. Entry: 14.5bp. Target: 40bp. Stop:5. Carry: 1.4bp/month. Curre

13、nt: 21bp.EM: We have a high-conviction market call to receive rates, particularly in the long end of local yield curves. We think these trades are likely to perform with the easing pressure on EM central banks as HYPERLINK mailto:marcelo.carvalho Marcelo HYPERLINK mailto:marcelo.carvalho Carvalho, H

14、ead of Global Emerging Markets Research BNP Paribas London Branch HYPERLINK mailto:gabriel.gersztein Gabriel Gersztein, Head of Global Emerging Markets Strategy Banco BNP Paribas Brasil S.A. HYPERLINK mailto:pierre.g.mathieu Pierre Mathieu, Senior Cross Asset Strategist BNP Paribas London Branch HYP

15、ERLINK mailto:eric.oynoyan Eric HYPERLINK mailto:eric.oynoyan Oynoyan, G10 Rates Strategist, Europe BNP Paribas London Branch HYPERLINK mailto:timothy.high Timothy High, G10 Rates Strategist, US BNP Paribas Securities Corp HYPERLINK mailto:Parisha.SAIMBI Parisha HYPERLINK mailto:Parisha.SAIMBI Saimb

16、i, G10 FX Strategist BNP Paribas London Branch HYPERLINK mailto:Sam.LYNTON-BROWN Sam HYPERLINK mailto:Sam.LYNTON-BROWN Lynton HYPERLINK mailto:Sam.LYNTON-BROWN - HYPERLINK mailto:Sam.LYNTON-BROWN Brown CFA, Head of G10 FX Strategy, Europe BNP Paribas London Branch HYPERLINK mailto:michael.sneyd Mich

17、ael Sneyd CFA, Head of Macro Quantitative & Derivatives Strategy HYPERLINK / both global trade and GDP are slowing down.BNP Paribas London Branch | FOCUS15/08/20191Spectre of global recessionIn what seems to be becoming a statistical regularity, those returning from summer holidays have had a bit of

18、 a shock, with the global outlook left looking decisively gloomier by escalating USChina trade tensions, the Argentinian crisis, unrest in Hong Kong and renewed Italian political jitters.The forthcoming Q4 edition of our Global Outlook will set out detailed forecasts that reflect the latest developm

19、ents. But at this stage we can already draw two key conclusions:Not only are trade tensions here to stay, in our view, but we think a further escalation is now the most likely outcome.The tough negotiating tactics pursued by the US and the extent of its demands appear to have closed the door to a sh

20、ort-term deal. While both parties would probably still prefer a deal to no deal, the conditions required for that outcome look incompatible, even with the recent US announcement of a postponement of some tariffs until December. We expect this to hit trade and confidence further, with an additional d

21、rag on global growth.More generally, recent developments have bolstered our already sober view of the global outlook.We have long argued that markets and central banks were underestimating downside risks and that chances of a recession were higher than generally perceived. If anything, recent news f

22、low has been worse than we had anticipated and generally call for downward revisions to our already below-consensus growth forecasts.Global recession and deflation? Whether our updated forecasts will amount to a global recession is a question of definition. But we think the overall picture will feel

23、 like a recession, and we expect data in the short run to do little to assuage market concerns that thats where the global economy is heading.This raises important questions about inflationary trends. Inflation tends to lag the cycle, and we assume it will go up before going down, especially in the

24、US, where rent prices now seem to reflect past increases in real income.Our forecasts assume, however, that the output gap will deteriorate everywhere else. Combined with structural forces and a disinflationary impulse from China, this should soon lead inflation lower again. In the eurozone, in part

25、icular, this is likely to resurrect deflation fears.Although many central banks have scope to respond aggressively, we think markets will have several reasons to doubt the effectiveness of such stimulus, at least initially.Monetary policy might have diminishing marginal returns.If it didnt work the

26、first time, why should it work the second?Inflation is dominated by structural forces.Price expectations may well have unanchored.An improvement in growth in H2 2020 might well prove these concerns to be exaggerated; but until data rebound, we think markets will probably take a negative stance on in

27、flation. We expect more talks of Japanisation and not only in Europe.Figure 1: Rising global trade policy uncertaintySources: Economic Policy Uncertainty, Macrobond, BNP ParibasFigure 2: Falling global leading indicatorsSources: CPB, Federal Reserve Bank of San Francisco, Markit, South Korea MOTIE,

28、Macrobond, BNP Paribas HYPERLINK / Luigi Speranza Chief Global Economist | BNP Paribas London Branch | FOCUS15/08/20192Escalating USChina trade tensionsShort-term roller coasterGlobal equity indices and bond yields have whipsawed in response to events, falling significantly after the initial announc

29、ement of further tariffs and reversing somewhat after they were partly delayed.1 August: President Trump shook markets with a tweet that said the US would impose additional tariffs of 10% on the remaining USD300bn-odd of imports by 1 September. This was a wake-up call for anyone lulled by the USChin

30、a ceasefire at Junes G20 summit in Osaka. Mr Trump complained of China being slow to act on promises to buy more agricultural goods and mentioned alleged failures to stop the flow of fentanyl into the US.2 August: Chinese officials declared the government “wont accept any maximum pressure, threat, o

31、r blackmailing, and wont compromise at all on major principle matters.”5 August: As the Peoples Bank of China let the renminbi fall past the psychologically important threshold of USDCNY 7, the US labelled China a currency manipulator a symbolically important step, in our view, that reversed not onl

32、y decades of US policy but also its own state methodology for determination.13 August: The US Trade Representative announced that some of the tariffs due to come online in 1 September would be delayed to 15 December. Sectors affected include cell phones, laptops and other electronic goods; we calcul

33、ate they amount to 55% of the original list for September or about USD277bn of imported Chinese goods.The stated rationale was to provide US importers more adjustment time. President Trump said the delay aimed to help American consumers heading into the holiday shopping season “just in case”, insist

34、ing that China “would really like to make a deal” and that recently revealed phone conversations were productive, with more scheduled soon.Seeing the forest for the treesMarkets may be forced to react to a continued roller coaster of policy twists, but we think it is important not to get too distrac

35、ted by the high-frequency news cycle. In our view, the path towards a comprehensive agreementto resolve an escalating number of USChina tensions remains difficult.We now expect the trend of deepening tensions and mutual disappointment to persist, with the US likely to impose the threatened 25% tarif

36、f level by the end of 2020 (probably with some exemptions/waivers).We do not rule out a limited deal in the near term, possibly involving Chinese purchases of US farm products in return for more waivers for technology sales to Huawei; but on the basic non-negotiable red lines, the sides look to us t

37、o be as far apart as they were in May before the Osaka summit.Delay, not rethink: As the most recent announcement is simply a delay of the previously announced tariffs, not a suspension, we do not expect it to cheer Chinese negotiators if they hold negotiations with their US counterparts next month.

38、We think the US delay largely reflects efforts to mitigate short-term domestic impacts of further tariffs rather than a fundamental shift in thinking.In the absence of a more substantial about-face, about USD277bn of imported Chinese goods still face tariffs of 10% by the end of the year (with some

39、exemptions and waivers for reasons including health, safety and national security). The 10% tariff escalation to be implemented by year-end still raises overall ad valorem equivalent (AVE) tariffs on Chinese imports from an already high 28% to about 32%, approaching levels not seen since Chinas asce

40、nsion to the WTO in 2001 and the granting of permanent normal trading relations with the US.Not just tariffs: Measures affecting USChina economic relations have gone beyond tariffs. Various non-tariff barriers such as enhanced investment scrutiny, sanctions, more restrictive visa approvals and limit

41、s on research funding have sharply reduced Chinese FDI and visitor flows to the US (see HYPERLINK /SingletrackCMS_DownloadDocument?docRef=15a8f024-c454-4f21-a06f-670ac0842499 Dee HYPERLINK /SingletrackCMS_DownloadDocument?docRef=15a8f024-c454-4f21-a06f-670ac0842499 p HYPERLINK /SingletrackCMS_Downlo

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46、the eve of the 70th anniversary of the founding of the Peoples Republic and the US entering an election year, both governments would be likely to risk domestic political fallout from any significant concessions on trade. HYPERLINK / Daniel Ahn, Chief US Economist and Head of Markets 360 North A HYPE

47、RLINK / merica | BNP Paribas Securities Corp | FOCUS15/08/20193Global growth: Slippery slopeWe expect tariffs (both past and new) and persistent uncertainty to continue to put downward pressure on investment and trade. So far, these pressures have been evident in manufacturing, with services faring

48、better in most economies, thanks to resilient labour markets and, therefore, a brighter outlook for consumption. We have argued that this was an unstable equilibrium, with risks skewed to the downside (see HYPERLINK /SingletrackCMS_DownloadDocument?docRef=4a1b64e8-0934-459b-b947-cc58e6ac4be2 Globa H

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53、n trade (eg, Germany), as the extent and duration of the manufacturing slump have started to cloud the domestic picture. This, we think, points to more bad news to come.China: Sub-6% growth; long-term policy focus Under the label of “minding Chinas own business”, the authorities appear to remain fir

54、mly focused on the long term and, as such, intent on avoiding an overly aggressive short-term policy response that could lead to a build-up of imbalances and raise financial stability risks.A number of demand-boosting measures are in the pipeline, including an increase in fixed-asset investment. The

55、 government has restated the substance of its fiscal and monetary policy stance, with a focus on sufficient liquidity supply and implementation of tax and fees cuts, but no sign of heeding calls for wider budget deficits.Although we expect cuts to the SHIBOR or repo rate, we continue to doubt the PB

56、oC will cut the benchmarkrate. Such a cut would be likely to make the financial system more reliant on the benchmark rate at a time when authorities want to abolish it and switch to a central bank fund rate system.With downward pressure on growth set to intensify, we expect GDP growth to fall well b

57、elow the 6% mark in 2020.US: Slowing but no recession; two Fed cuts by year-endWe expect the US economy to slow to a below-potential pace in H2 2019, owing to the lagged effect of monetary tightening, fading fiscal stimulus, the deterioration of the global outlook and investment deterred and delayed

58、 by intensifying trade tensions. Business investment is likely to weaken further over the next few quarters; crucially, though, we assume in our central case that the slowdown will be shallower than in 201516.Combined with consumer resilience underpinned by continued wage growth (although downside r

59、isks to consumer confidence and sentiment loom large), this should be sufficient to avoid an actual downturn. And thanks to continued monetary easing, we expect the US economy to manage a soft landing and rebound in the second half of next year, resulting in an average growth rate of about 1.6% for

60、2020, somewhat below its potential pace.We now expect the Fed to cut rates by 25bp twice more this year (likely in September and again in December), rather than only once, as we previously forecast, with risks biased for more perhaps as much as 100bp in cumulative rate cuts this year.Fig. 1: Chinese