{"id":626610,"date":"2018-07-08T04:11:32","date_gmt":"2018-07-08T04:11:32","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2018\/07\/08\/what-were-tracking-on-07-july-2018\/"},"modified":"2018-07-08T04:11:32","modified_gmt":"2018-07-08T04:11:32","slug":"what-were-tracking-on-07-july-2018","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2018\/07\/08\/what-were-tracking-on-07-july-2018\/","title":{"rendered":"What we\u2019re tracking on 07 July 2018"},"content":{"rendered":"

It\u2019s going to be a big week for: <\/strong>Emerging markets. The pundits doing a rain dance in the hope that skies get cloudier for EM will get more to chew over this week if Reuters\u2019 Take five: World market themes for the week ahead<\/a><\/u> is anything to go by. Those clouds range from a trade war to further flattening of the yield curve, \u201cthe signal that recession is coming<\/a><\/u><\/strong>.\u201d<\/p>\n

Let\u2019s unpack some of that, shall we?<\/p>\n

A global trade war kicked off on Friday:<\/strong> US tariffs on USD 34 bn of Chinese goods came into effect on Friday, unleashing the global trade war everyone was afraid would come, the New York Times reports<\/a><\/u>. China retaliated by imposing a similar 25% tariff on 545 US products, including cars and soybeans worth a combined USD 34 bn. Russia also announced that it will introduce tariffs on a range of US products<\/a><\/u> including on road-building equipment, products for the oil and gas industry, and tools used in mining, the BBC reports. \u201cThe US tariffs imposed so far would affect the equivalent of 0.6% of global trade and account for 0.1% of global GDP,\u201d said Morgan Stanley. The WSJ argues the US can absorb China\u2019s retaliatory tariffs<\/a><\/u> for now, while the NYT says Chinese consumers are possibly the losers<\/a><\/u> in the first round.<\/p>\n

Last week marked the eleventh consecutive weeks of heavy outflows from emerging markets<\/strong>, the \u201clongest such streak since 2016,\u201dthe Financial Times<\/a><\/u> writes. \u201cNet outflows from EM bond funds clocked in at USD 1.52 bn in the week to July 4,\u201d data from Jefferies showed. \u201cOver the 11-week period, investors have pulled nearly USD 16 bn from the asset class, representing 3.4% of assets under management.\u201d EM and European markets have been weighed down<\/a><\/u> by rising US interest rates and a strengthening USD. That made June the \u201cquietest month in the [EM] bond market for nearly three years\u201d <\/strong>the salmon-colored paper<\/a><\/u> notes elsewhere.<\/p>\n

You can practically feel the FT aching for the EM Zombie Apocalypse <\/strong>to get worse, even in its choice of guest opinion columns: Financial crisis warning sign is flashing red<\/a><\/u>.<\/p>\n

Elsewhere this morning: The global business press is openly questioning whether the Aramco IPO will ever happen. <\/strong>Summer Said leads a Wall Street Journal<\/a><\/u> team in a solid take on the transaction\u2019s prospects. Bloomberg goes even further, musing about \u201cSaudi Aramco\u2019s USD 2 tn zombie IPO<\/a><\/u>.\u201d<\/p>\n

A record USD 2.5 tn in mergers were announced in the first half of 2018.<\/strong> The New York Times has an awesome drill-down<\/a><\/u> for the M&A geeks among you. It\u2019s the \u201cmost rewarding time in history to be a global M&A banker\u201d<\/strong> but the Financial Times<\/a><\/u> wonders \u201cwhat exactly do they do for the money? When asked this question, [bankers] turn sheepish and talk vaguely about the art of persuasion rather than the science of valuation.\u201d<\/p>\n

Closer to home: Foreign Minister Sameh Shoukry is in China today for a two-day visit<\/strong>, according to a ministry statement<\/a><\/u>. Shoukry is scheduled to meet with Chinese Vice President Wang Qishan and Foreign Minister Wang Yi, as well as participate in the eighth Arab-Chinese Cooperation forum.<\/p>\n

And in miscellany this morning:<\/p>\n

It\u2019s also a big week for: <\/strong>Football fans, as the 2018 World Cup draws to a close:<\/p>\n