Summary for the 13th of August


The IMF didn’t support the US’s accusation of China being a currency manipulator.  Last week the US had accused China for manipulating the yuan to achieve trade advantage over the US companies. The accusation came after the Chinese central bank let the yuan depreciate after recent tariffs hike on Chinese goods. On Friday, the IMF released the annual review of China’ economic policies. The report concluded that the level of the yuan was in line with China’s economic fundamentals. The report went on and said that China should keep its exchange rate flexible and market determined to help absorb the tariff shock.

Argentina’s primary elections on Sunday resulted in victory for country’s centre-left opposition leader. This led to uncertainty in the financial markets of the country to yet again to be in a difficult economic situation. Argentina had been in several economic recessions. The country had been in recession 16 of the last 50 years as well as 22 signed loan agreements with the IMF in the past 60 years.

The current president in Argentina, Mauricio Macri, had been perceived as market friendly, through agreements made with IMF, he had put the country under reform to get the country’s currency and inflation under control. The latest bailout agreement made with the IMF of 56 billion dollars , which was IMF’s biggest bailout deal, required the country to cut back on public spending. This had led Mauricio Macri to significantly lose the popularity among the people.

Indices for 13th of August
Dow: -1.5% (12th of August)
S&P 500: -1.2% (12th of August)
Nasdaq: -1.2% (12th of August)
Nikkei: -1.1%  (13th of August)
Chinese indices: -1.9% (13th of August)
STOXX Europe 600 Index: +0.54% (13th of August)

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