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Citi sees 'no chance' of a US-China trade deal before elections

By Alexander Bueso

Date: Friday 13 Sep 2019

Citi sees 'no chance' of a US-China trade deal before elections

(Sharecast News) - Analysts at Citi cautioned clients on Friday that the key global risks looming on the economic horizon were still very much present, with "no chance" of a US-China trade deal before the next elections in the States and the Federal Reserve being done with cutting rates.
"Improving economic data surprises and encouraging news do not change our global view [...] key global risks remain unresolved," they said.

Yes, the investment bank's widely-followed economic surprise indices were signalling a less negative growth outlook than had been the case towards the start of August.

However, that was chiefly because analysts' forecasts had grown more bearish despite "mildly stronger" data, they countered.

So too, while Washington and Beijing would relaunch their trade talks, Citi saw "no chance" of a trade deal before the 2020 US Presidential elections.

And what about Brexit?

"No-Deal Brexit looks to be averted but the Brexit saga is far from over," the investment bank said.

As for the fresh stimulus from the Europen Central Bank, Citi argued that it was not the "best antidote".

And don't hold your breath for more than one interest rate cut in the US in 2019.

"US nonfarm payroll growth slowed in August but firm wage growth will support incomes and keep GDP growing above potential," Citi said.

"Core CPI inflation is the strongest since 2008, supporting our US economists' view of only one Fed rate cut in 2019."

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