Currency War Erupts, Threatening to Ripple Across Global Markets
The emerging market equity and debt space but I think everyone's is a set for the November elections in the US media relations on the assumption that, Trump is saying all these things the. Moment in order to kind of gone more votes for the Republicans in those. In those elections, and I think that's maybe the space as a Chinese authorities to, take a moment and, therefore I think the real kind of gearing up the negative sentiment concerns about this trade wolf really becoming. A true war. That extends over many many months would come, be on that so, maybe in the near some. People will hold onto them a risky assets? But I say if you really wants to take some defensive positions move into bone some move into cash John Gary of the Adamy. Metals zinc and, call six dollars you see a real shift that's for the first, time in a year Lose more painted calm in the commodity complex I too because I think. That's been really the focus of of these these kind of, tires that we've seen in having a mold dramatic impact and more companies that. Are getting, into a Titus spots, on profitability and, therefore as I said earlier Alcoa was one the first, come, out as amongst the majors to say yes all profits are now. Going, to be lower than what we'd expected clearly that's a huge shift from a very vibrant US equity. Market conditions where most companies have guided up, so it will be in the commodity space but then it could be soon in the consumer space as well as some of the, intermediate goods that go. Into US consumer goods, get tariffs on them, prices. Go up demand foles as does prophets Gary if you, look at a, chart of the Chinese UN it's getting very very close to levels against the dollar last. Seen at the start of the Obama administration and I can't imagine that Trump would be thrilled with that result as we morph. Into a currency war from a trade, war is there, a different set of economic Implications that comes with an x four versus trade tensions I also think the. Currency was seen as something quite deliberate More, about benign neglect, they're quite happy to see the currency drift. Many currencies have drifted low is seeing the tensions Indonesia Malaysia of late and we've seen it with. The Indian rupee so I don't think that's necessarily, governments are out to manipulate the currencies dramatically because. They, do that they forced them down then, speculators get behind it then it gets out of. Control out of control, indeed what we'll be watching that very closely Gary Dugan you are. Staying with us, still ahead, the g. twenty. Says emerging markets are better prepared than others for threats to global growth but market volatility of course remains a, concern we will get. The opinion of Emirates NBD later this hour on that outlook Next President Trump, sends a, message to the. About tightening we look at the reaction in just a moment this is Bloomberg.