Weekly Market Recap

Asia Pacific

10/06/2019

Week in review

Week ahead

10/06 – CN – Trade data
14/06 – CN – Industrial Output
14/06 – U.S. – Industrial Production & Retail Sales

Thought of the week

If all currently proposed tariffs are implemented, the U.S. is set to surpass the average tariff rate of a number of emerging markets. Such a reversal in the stance of a major developed economy, which had historically championed free trade is detrimental to the current rules-based trading system. This change in attitude could lead to generally lower trade, supply chain disruptions, lower investments and rising inefficiencies, as comparative advantages are not fully exploited. We have already begun to observe some of these effects coming through. For example, EM Asia export growth has fallen from 10-15% year-over-year into negative territory over 2018. Growth in global capital goods imports have also slowed by 10 percentage points since the beginning of the trade disputes. Overall, we believe that the U.S. will likely reach a compromise with its counterparts in the current trade dispute, though continued skirmishes will pose challenges for the global economy.

Chart of the week

Source: International Monetary Fund, United States International Trade Commission, World Bank, J.P. Morgan Asset Management.
Historical rates are 2017 figures.
All returns in local currency unless stated otherwise.

*Currencies’ return are based on foreign currencies per U.S. dollar. An appreciation of the foreign currency against the U.S. dollar would be positive and a depreciation of the foreign currency against the U.S. dollar would be negative.

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