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As the Brexit deadline looms, investors and traders are looking for a possibility for the United Kingdom to dodge a possible recession. The recently released household savings rate showed that they have been net borrowers for the past 10 consecutive quarters. The report measures how much households save from their disposable income. The record low result could spell trouble for the UK economy, specifically if Britain crashes out of the EU without a deal. On the other hand, the rising real estate sales in Canada could help the Canadian Dollar to recover against the British Pound. The increase is most notable on Toronto, Montreal, Ottawa, and Winnipeg. In other news, the Green Party of Canada released a campaign platform promising to tackle climate change by transitioning Canada to a green economy. This announcement wasn’t new as the Western world transitions their economy to a greener one.
The recent attack on a Saudi Arabian oil facility is expected to benefit the U.S. economy in the long run. In September 14, an attack was made on the kingdom’s largest oil facility owned by Saudi Aramco. Aramco’s supply was disrupted, causing 50% of its production, or about 5% of the daily global oil production, to vanish. This resulted in a spike with crude oil prices. However, this also became an opportunity for the U.S. to justify its increased production to offset the price disruption. Aside from this, the recent speculation of a Danish deadlock on Nord Stream 2 could further pushed the U.S. Dollar higher. The Danish government is thinking of the possibility to replace Russia’s Gazprom with U.S.’ Exxon Mobil. Moreover, U.S. President Donald Trump received a green light from the U.S. Congress to impose sanctions against the European Union. This was after the EU government subsidizes Airbus during the fallout of Boeing.
The United Kingdom was able to secure one country in a post-Brexit Britain. New Zealand was the first country to express its willingness to enter a trading agreement with the UK once it officially leaves the European Union. Now, the UK is bringing back the favor after UK Trade Secretary Liz Truss said New Zealand was the country’s top priority for a free trade agreement (FTA). Aside from the post-Brexit trade agreement with the United Kingdom, New Zealand has also an existing trade agreement with the European Union. The country was also a member of the pacific-rim trade pact, the CPTPP (Comprehensive and Progressive Trans-Pacific Partnership). And once finalized, New Zealand will be a member on the soon-to-be largest regional trading bloc in the world, the RCEP (Regional Comprehensive Economic Partnership). The trading bloc includes other major economies, including China, Japan, India, and Australia.
China, as a sign of conceding, announced that its vice-ministerial delegation will be heading to the White House. The visit will revolve around a possible trading deal that will end the trade war between the two (2) largest economies in the world. As the trade war escalates, China saw its GDP growth slowing to decades low. In line with this, a recent report on the Chinese House Prices showed a figure of 7.8% from 8.4% from the previous year. Its Industrial Production report, on the other hand, only grew 4.4% in August, its lowest in 17 years. The same thing is happening for its retail sales growth where it showed a 7.5% growth compared to the 7.6% from the year ago result. America was also trying to tighten the export of sensitive components that are being used for spacecrafts as trade war escalated to intellectual properties. The U.S. federal agents were able to arrest a Chinese national possessing a bag of export-controlled electronics.
- Trading Instrument