While US president Donald Trump has paused action on most fronts in his trade war, he still seems fully engaged when it comes to China, having imposed tariffs of 145% on most products from the Middle Kingdom. Some products like consumer electronics have been temporarily exempted, while the US administration works on separate tariffs on semiconductors and other electronics, in a bid to coax semiconductor production onto US soil. China’s dependency on the US market has been gradually declining, but with 15% of Chinese exports going to the US the tariffs will undoubtedly have an impact on China’s economy. However,

Faced with uncertainty over the new administration’s tariff policy, US stock markets are weakening. As outlined in Fathom’s Global Outlook, Spring 2025, European economies could also be hit hard due to American tariffs. However, despite this lingering threat, mid-to-large cap German stocks have outperformed (as have small caps, albeit to a lesser extent). Most recently, discussions of loosening a long-held ‘debt brake’ to boost defence and infrastructure spending has further supported financial markets in Germany. Across the Atlantic, tariffs on Canada, Mexico and China have resulted in a sharp decline in US stocks, as threats of a trade war and

The global financial crisis of 2008 brought with it a structural shock to labour productivity across the world, but since the crisis, US and UK labour productivity have trended very differently. US labour productivity started to return to its pre-crisis (1991–2007) trend, whereas UK labour productivity growth has flat-lined and diverged strongly from its pre-crisis trend. There are many reasons for this, including the competitiveness of their respective domestic industries, the size of the market that these industries have access to, and electricity price differential; but one reason is certainly the more cautious approach to investment taken by the UK’s

After the approval for spot Bitcoin ETFs on January 10, 2024, the Securities and Exchange Commission (SEC) has approved a rule change that allows exchanges to list spot Ethereum ETFs in the U.S. on May 23, 2024. Nevertheless, the rule change will not lead to an immediate listing of Ethereum ETFs, since every single product needs its own approval from the SEC. This approval means that the U.S. is catching up with the European crypto ecosystem where Bitcoin, Ethereum, and other cryptocurrencies are available to all kind of investors via structured notes, so-called exchange traded notes (ETN). Obviously, there are

Oil prices continued to fall last week despite ongoing concerns that the conflict between Israel and Hamas could escalate, disrupting oil supplies. The continued decline in the price of crude is also surprising in light of Russia and Saudi Arabia recently confirming that they would maintain production cuts until the end of the year. Traders seem to be more focused the economic outlook and in particular a data release which revealed Chinese exports fell more than expected in October. The US jobs report for the same month also pointed to slowing in the world’s largest economy. The decline in oil

Is the end of policy hikes around the corner? Potentially, yes, after this week’s rate-setting meetings by two of the largest central banks, the Federal Reserve and the Bank of England. In its meeting on 20 September, the Fed’s Federal Open Market Committee agreed to keep the federal funds rate unchanged in the range of 5.25% to 5.5%. A day later, and following an inflation release that surprised to the downside, the Bank of England’s Monetary Policy Committee too decided to stall its key policy rate, at 5.25%. Refresh this chart in your browser | Edit the chart in Datastream The Fed’s

The uncertainty over the future of the US debt ceiling and the risk of a US default have caused the US sovereign one-year CDS spread, an indicator of sovereign credit risk, to soar in the last few months. The spread peaked at 152 on 2 May, the highest it has ever been. The spread remained high until it became clear that a deal would be struck, after which it dropped by 90 basis points between 30 May and 1 June. Standoffs are not new: the debt ceiling issue has been used both by the Republican and Democratic side in the

Recent data suggest the risk of recession is lower than previously thought, but it remains our central case for the UK and the EU. The UK posted zero growth in Q4, avoiding two consecutive quarters of negative growth, which is one way of defining a recession. However, this may be revised down, which would imply two consecutive quarters of negative growth in the UK in Q3 and Q4, thus a “technical recession”. The US hangs in the balance still, with equity markets and sentiment sending negative signals, but payrolls and activity data pointing the other way. Can the US avoid recession?

Strong January data mean the central scenario from Fathom’s Global Outlook, Winter 2022, which saw the US economy enter recession in Q1 of this year, now appears unlikely. In light of the overwhelming historical precedent, we are not yet ready to rule out a US recession entirely. Nevertheless, in our upcoming Global Outlook, Spring 2023, we are likely to push back the point at which the US enters recession, if it does at all, and reduce the weight we attach to those scenarios where it does. So why has Fathom’s view changed? On 3 February we learned that the US

The implementation of ESG criteria has put asset managers around the globe under pressure. On one hand, the industry is facing greenwashing allegations from regulators and market observers for not be strict enough with the implementation of ESG-criteria into their portfolio management processes. On the other hand, some states in the US have banned asset managers that have implement environmental, social, and governance (ESG) criteria (especially the exclusion of fossil fuel, gas, and fracking) in their portfolio management processes from managing pensions or other state-related assets. All this is happening while stakeholders from the asset management industry, governments, regulatory bodies,

The views expressed in this article are the views of the author, not necessarily those of Refinitiv Lipper or LSEG. As highlighted in Monday’s chart of the week, an unprecedented divergence has emerged between the rate of inflation expected in one year’s time between the EU and US. While this can largely be explained by the difference in natural gas prices, the policy divergence between the US and EU may offer an explanation too: investors may believe that the Fed is more willing to move rates and deal with inflation than its counterpart in the EU. Refresh this chart in

The views expressed in this article are the views of the author, not necessarily those of Refinitiv Lipper or LSEG. The massive hit to living standards from soaring energy and food prices, and the looming threat of recession as central banks try to rein in inflation, are dominating public debate at present. In this note, we seek to go beyond these immediate issues and examine the longer-run prospects for growth in the US and China. Here too, the outlook for both countries appears more pessimistic than it has for some years — particularly for China. China’s economy benefited hugely from