Good morning 🌞(ironic v/c it is pretty cloudy/rainy in #HongKong 🇭🇰. Overnight, we got:
a) Markets jolted by high JOLTS 🧀, I know I know...
b) Mexico 🇲🇽 patrolling the southern borders & considering “third safe” country if won’t work
c) Trump said more tariffs on China ready...

https://twitter.com/USDOL/status/1138167540952313856

The Mexico tariff was likely used for 2020 & targeted to define Trump vs Democrats in the border issue, as in he cares about the borders. Re China & last tranche of tariffs, don’t think Trump’ll raise in 2019 b/c mostly consumer goods vs the existing ones (mostly intermediates).

Again, method of Mexico tariff was abrupt & Mexico believed it as he actually slapped tariffs on China & Mexico realised that some law & order needed on its side as well, esp w/ opps of investment re US China tariff arbitrage. Mexico took the rational choice. What about China?

Been re-reading (although to be fair mostly audio it) Spencer’s The Search for Modern China regarding this century of humiliation that The gov has been trying to erase. I highly recommend everyone read it. It gives a good overview of China economic, social & political development

The most interesting thing about this whole China-US conflict is actually how China has responded to this. How emotional everything has been (for China watchers/experts) given the moralistic tone. We must look back into its past to understand the choices it’ll make re the future.

The PBOC will sell bills in Hong Kong in late June, no size disclosed, which is otherwise known as, wait for it:
De-internationalization of the RMB👌🏻

CNH moved fast on that liquidity absorption news (otherwise known as #deinternationalization of the RMB); Continuing w/ the uplifting theme of LACK OF GROWTH OF EXPORTS:

a) Korea 10-days of June exports -16.6%YoY, yep, very L-shapy & maybe even I-shapy & defo no V-shapy 🥶

By product Korea's 1st 10-day:

Chips down -30.8%📉BUT SHIPS UP +169.7% 🚢🛳️📈; Oil down -20.1%YoY, Autos down too -0.7%; Home appliances up +68.1%;

By destination: China -26.7% (25% of Korea exports); Japan-20.3%; Middle East -17.6% EU -17%; US -7.6%

Better luck next 20 days🤗