This is a currency war the US can’t possibly win

President Donald Trump’s tweeted demands for a weaker dollar, and his subsequent designation of China as a “currency manipulator”, have sparked fears that his trade battles are morphing into a currency war. The last time we had a global competitive devaluation was in the 1930s, as the world descended into the Depression. But today, currency values are set in huge global markets rather than against gold. That leaves the US alone on the battlefield, armed with only the equivalent of a pea shooter.

The US will not succeed in unilaterally weakening the dollar and could spark a global recession, raise political tensions and upend financial markets in trying. Read about it in my latest column in the Financial Times.

State of the Eurozone (and the US)

“I think in the US if we look back and think ‘what a wasted recovery,’ the Europeans are going to do it doubly. And that’s partly because there’s just a whole bunch of institutional architecture that still needs to happen in the Eurozone in order for the Euro to really be a sustainable project.”

Here’s a clear-headed, non-sensationalist view of the state of the eurozone (and the US) in an Expert View I did with Real Vision (Click here for the full video, but that one is paywalled).

Is the trade war becoming a currency war?

I was invited onto BBC Radio 4’s Today Programme to discuss recent market volatility and where the US-China trade war is leading. Listen here:

Outlook for the US Economy

The US equity and bond markets are telling completely different stories about the outlook for the country’s economy. In the first seven months of 2019, the S&P 500 index rose by 10.2 per cent, suggesting firms could continue producing strong corporate earnings off the back of decent economic growth. Over the same time period, borrowing costs on 10-year Treasuries fell from 2.68 per cent to 1.89 per cent, sign-posting lower rates and inflation, and the likelihood of recession ahead. This economic recovery in the United States is the longest on record, and analysts are on the lookout for signs it is ending. Who has it right—equity or bond investors?

Here’s my overview for the US economy in Prospect Magazine:

US manufacturing and currency intervention

Here’s an interview I did this morning on Bloomberg Surveillance on whether the US is going into recession, what designating China a currency manipulator means and what the US’s options are going forward in the trade (currency?) war against China.

China’s options for trade war retaliation

Some thoughts on how much a 10% tariff on the remaining $300bn of imported goods from China will hit the Chinese economy, how Chinese authorities can counteract it to reflate growth and what tactics China can employ to retaliate:

Labor market chugging along

Here’s everything you need to know about the July jobs data, with analysis from Michael McKee, Subadra Rajappa and myself on Bloomberg TV: