Noticias del mercado & perspectivas

Most political scientists believe that all problems in the world are related to politics, and most economists believe that all problems are rooted in economics. However, what’s happening in Turkey now seems to be a combination of both as I'll explain. Firstly, investors have always regarded Turkey as one of the Emerging Markets with good economic growth.

We can see from the statistics that the GDP has remained an average 7% to 8% growth in the past ten years, and it even exceeded 10% in 2015. It looks pretty, right? But this is just nominal GDP.

From Economics 101 we know that we should divide nominal GDP by inflation rate to get a real GDP figure. Here is the inflation rate of Turkey: It looks bad. In July 2018 this number soared to 15.8%, which begs the question: what caused such high inflation?

Let me give you the overall picture, and then we can discuss the detail. Firstly, the high inflation is boosted by food prices and household goods such as furniture. Secondly, Turkey relies heavily on importing foods and merchandises from foreign countries, which has created a consistently negative trade balance since the 1990's.

A constant trade deficit means you have to borrow debt to satisfy the consumption of that imported good. See how Turkey’s Government debt accumulated in the past decade: Today only one country, the US, appears to escape from this natural law, by borrowing infinite new debts to cover its old debts and prolong repaying these obligations until...well... the end of the world. On the surface, it would seem all other countries need to obey this rule and repay their debts, unlike the US.

Thus, when a country’s debt is accumulating to a relatively high number (we often use Debt to GDP ratios to monitor), this country’s economy become vulnerable and potentially easier to be attacked by other financial powers. You could argue that this is an unlevel playing field in some respects and the US could well be using its ability to take advantage of this situations as they arise. A perfect example of this was George Soros who famously attacked the currency of southeast Asia Countries in 1997.

Note the foreign debt-to-GDP ratios rose from 100% to 167% in the four economies within the Southeast Asia region during 1993–96. If Turkey can somehow avoid getting involved in any significant conflicts of the world and focus on developing its economy, this whole debt issue might sort itself out over time. But unfortunately, given Turkey’s geographic location, it appears destined to be pulled into most conflicts simply by proximity.

We all know how vital areas such as Istanbul and the Turkish Straits are throughout history. Internally, Turkey has a Kurdish ethnic issue and a high household debt issue; externally it has the downing of a warplane issue with Russia, and also an Armenian genocide conflict with Germany. The list goes on.

In short, this patch of land is no stranger to dealing with massive problems. Ultimately this latest crisis comes down to one thing. Does Turkey compromise with America’s arrogant request, or make a stand against Washington's tactics and attempt to go their own way?

That is the dilemma that President Erdogan is currently facing. Lanson Chen GO Markets Analyst This article is written by a GO Markets Analyst and is based on their independent analysis. They remain fully responsible for the views expressed as well as any remaining error or omissions.

Trading Forex and Derivatives carries a high level of risk. Sources: TradeEconomics.com

New sanctions imposed on North Korea by United Nations (UN) Security Council North Korea has been slapped with new sanctions after the detonation of a hydrogen bomb, an even more powerful nuclear weapon than the atomic bomb. The new resolutions widely adopted by the international community show the urgency of restricting North Korea’s ability to funds its weapons programs. Sanctions were imposed in the past but these fresh sanctions are much harsher.

The US submitted 2 drafts of sanctions whereby they proposed a complete ban on oil in the first draft. After a few negotiations and backing from China and Russia, the second draft was less drastic but unanimously adopted by the UN members. It includes the following new resolutions: China, being the main ally for supplying North Korea with oil for military purposes, has agreed to put a cap on crude oil and refined petroleum products after rejecting a full embargo proposal.

A complete textile ban which accounts around $760 million of North Korea’s exports revenue was maintained and combined with the previous sanctions on their exports such as iron, coal, seafood, and other minerals. The United States strongly believe that the combined measures will account for 90% of their exports reported in 2016. The new sanctions also prohibit countries from recruiting North Koreans and approving new and existing joint ventures.

Warning from North Korea following new sanctions North Korea immediately condemned the act and warned the United States of the “greatest pain and suffering” following the toughest-ever sanctions. Kim Jong-un’s foreign ministry also mentioned that they “will make absolutely sure that the United States pays due price if measures restricting its oil supply and textiles exports were passed”. North Korea accused the United States of manipulating the UN members and persuading them into adopting illegal and unlawful sanctions against them.

The following days will be crucial. Markets might revert to safer asset classes with these new escalated tensions. Stay with us for more live updates!!!!

By: Deepta Bolaky GO Markets

NAFTA - What Happens Next The North American Trade Agreement (NAFTA) came into effect on 1 st January 1994 and it formed one of the World’s largest free trade zones. It laid down the foundations for a strong economic growth for the United States, Canada and Mexico. While there is ample evidence of its shared positive economic impact, but how about its costs to the United States?

Over the last couple of months, the question has been raised as to how positive NAFTA is, especially to the United States. During the Presidential election campaign, Donald Trump repeatedly said that the Agreement is only beneficial to Canada and Mexico and has threatened to end it with the two nations. » Impact on the US economy Since NAFTA has been in place, the United States trade with Canada and Mexico has more than trebled, growing faster than trade with countries around the world. Most statistics suggest that NAFTA had positive impact on the US GDP of around 0.5 percent (total addition of up to $80 billion) to the US economy.

One of the reasons why NAFTA is criticised is for destroying around half a million jobs and lowering the wages. The US has also seen its trade deficit has widening during that period. An exodus of US manufacturers across the border saving on labour costs has resulted in thousands of US manufacturing jobs lost to their Mexican neighbours.

That is one of the reasons Donald Trump is pushing to renegotiate the agreements and bring back jobs to the US. US manufacturing jobs from 1993 to 2016 Source: BLS It is hard to say with certainty if NAFTA is directly responsible for the decline in the manufacturing jobs sector since the biggest drop we have seen was from around 2000 to 2002. It is worth pointing out that China joined the World Trade Organisation on 11 th December 2001 so that may have had an impact on the drop in the manufacturing jobs too.

It has been noted that the automotive industry was one of the most affected industries since the agreement came into place back in 1994. Forex - USDMXN and USDCAD since Trumps decision to renegotiate NAFTA Click to enlarge Click to enlarge Source: GO Markets MT4 » What happens next? It looked like the NAFTA agreement was on its way out but on 27 th April Donald Trump announced he received phone calls from both the Prime Minister of Canada and the President of Mexico to make him change is his mind.

President Trump decided to make a surprising U-turn and will instead renegotiate NAFTA but on only one condition – if the deal is a fair for all three countries as he is pushing to bring back jobs to the US. There is no timeframe of when renegotiations will begin between the three countries but it is worth keeping an eye for further development as it will most likely re-shape world trade in the years to come. -By Klavs Valters

It’s been one year since the trade renegotiations on the North American Free Trade Agreement (NAFTA) between Canada, the United States and Mexico began. Since then we have seen tough rhetoric on how the agreement should look like moving forward from each country, especially the United States. But are we finally getting closer to an agreement?

About NAFTA The North American Trade Agreement (NAFTA) came into effect on 1st January 1994 and it formed one of the World’s largest free trade zones and laid down the foundations for a strong economic growth for the United States, Canada, and Mexico. However, in recent years the agreement has come under a lot of scrutiny from the US, with President Trump calling it "the worst trade deal ever made", which has led to renegotiations between the three nations. Latest developments It appears that the negotiations between the US and Mexico have been going well, with both reportedly close to agreeing on a deal in their talks to revise the NAFTA deal.

However, Canada has not been part of the latest part of the discussions. “Right now, it appears they are getting incredibly close to finishing the discussions between the U.S. and Mexico,” said Inu Manak, who has monitored the talks for the Cato Institute, a libertarian think tank in Washington. Even though the talks between the US and Mexico are going well, there will be no final deal on NAFTA unless Canada agrees to re-join the renegotiations. In a recent tweet, Donald Trump praised the new President of Mexico, however, he had a dig at Canada’s tariffs and trade barriers, threatening to tax Canadian made cars if they cannot make a deal.

In response to the President Trumps tweet, Canada Foreign Affairs Minister Chrystia Freeland said that they will not change the course of the renegotiations. “Our focus is unchanged,” Adam Austen, a press secretary for Canada Foreign Affairs wrote in an email. “We’ll keep standing up for Canadian interests as we work toward a modernized trilateral NAFTA agreement.” Both US and Mexico are working hard to get a deal signed by the Mexican President Enrique Pena Nieto before he departs office on 1st December to give way to the President-elect Andres Manuel Lopez Obrador. The Canadian negotiating team have been on the sidelines in the recent part of discussions but are expected to join the negotiation table soon. However, the Mexican Economy Secretary Ildefonso Guajardo said that there are currently no timeframe for when the Canadian counterparts will join the discussions. “We have to make sure that the U.S.-Mexico bilaterals are done,” Guajardo said, adding that Canadian Foreign Minister Chrystia Freeland will “hopefully” be a part of the discussions soon.

Financial markets The US Dollar has strengthened by around 5% since the beginning of the year against the Canadian Dollar, currently trading at around 1.31 level. However, it has weakened by around 1.2% against the Mexican Peso. Currently trading at around 19.18 level.

Further developments in the talks will certainly have an impact on the financial markets moving forward. USDCAD - Daily Chart USDMXN - Daily Chart Klāvs Valters Market Analyst Sources: Go Markets MT4, Twitter

16 th August 2017 marked the beginning of renegotiations between the United States, Canada and Mexico on the North American Trade Agreement (NAFTA). The leaders from each country will meet up over the next few months to begin discussions on the agreement which has been in place since 1994. American view The United States have got a tough stance on the agreement believing it to be more beneficial for Canada and Mexico.

The United States trade representative, Robert Lighthizer reiterated Donald Trump’s critisisim of the agreement ‘‘We feel that NAFTA has fundamentally failed many, many Americans and needs major improvement’’ He said in the opening statement which reflected criticism that blames the NAFTA agreement for a direct loss of around 700,000 US manufacturing jobs since it was put in place. Some of the objectives the of US negotiators include: Improve the U.S. trade balance and reduce the trade deficit with the NAFTA countries Maintain existing reciprocal duty-free market access for industrial goods and strengthen disciplines to address non-tariff barriers that constrain U.S. exports to NAFTA countries Maintain existing duty-free access to NAFTA country markets for U.S. textile and apparel products and seek to improve competitive opportunities for exports of U.S. textile and apparel products while considering U.S. import sensitivities Promote greater regulatory compatibility with respect to key goods sectors to reduce burdens associated with unnecessary differences in regulation, including through regulatory cooperation where appropriate Increase transparency by ensuring that all customs laws, regulations, and procedures are published on the Internet as well as designating points of contact for questions from traders Canadian view Canadian Foreign Affairs Minister, Chrystia Freeland has said she hopes that all three countries can keep what is good about the current NAFTA agreement, while using the negotiation process to make the current agreement more modern At the start of the negotiations, Freeland said ‘‘We pursue trade, free and fair, knowing it is not a zero-sum game’’. She also added that Canada is the United States’ biggest client and that Canada buys more from United States than China, Japan and the United Kingdom combined.

Canada’s objectives include: A new chapter on labour standards A new chapter on environmental standards Expanding procurement Freer movement of professionals Protect Canada’s supply-management system for dairy and poultry Mexican View Mexico’s Economy Minister Ildefonso Guajardo said that the main challenge of the negotiation process will be to find any common ground between the three sides. ‘‘The process that begins today is not about going back to the past. For a deal to be successful it has to work for all parties. Otherwise it is not a deal’’.

Mexico’s top objectives include: Foster more inclusive regional trade Update energy, digital and telecommunications provisions Strengthen North American competitiveness Maintain agriculture access All three parties have their views on how the NAFTA agreement should look like moving forward, however there is currently no timeframe of when the negotiations will end.All parties will hope they can reach an agreement as soon as possible, especially with Mexico elections taking place in July 2018. By: Klavs Valters GO Markets

Upcoming News » 6:30pm Manufacturing Production – GBP Overnight we saw small drops on the DOW and S&P500, Gold settled around its lows still finding support around 1333.50. Oil rallied higher with hopes OPEC will stabilize supply. The USD was mixed as the AUDUSD tested highs.

The USDJPY rallied by 37 pips to test short a term high of 102.55. NAB Australia tips two more RBA rate cuts, despite solid business. Chinese inflation see’s new lows as PBOC signals need for “Innovative” monetary policy.

Asian and local equity markets have been a little stronger than I expected this morning with the Nikki increasing by 86.76 points. ASX200 up by 8.16 points at this point in the session. I expected flatter to slightly weaker sessions today.

The HSI has followed my original thoughts currently lower by 0.19%. The EUR/USD is putting in a stronger Asian session off its lows and holding firm above 1.1070 support. The CAD continues to see sellers as the USDCAD is currently testing its weekly high at 1.3180.

Gold has started to edge lower, I want to see 1333.50 holds on the short term to keep a trend continuation idea in play. I’m seeing some signs we could see some weakness creep into stock indices tonight. A few are sitting and struggling at highs, more on this below.

AUDUSD – Sell idea still forming for me at this point, I’m still looking for it to confirm. Divergence is still present. Buyers are still struggling to break through the upper resistance.

The current move up is in more of an ending diagonal now than a clean cut trend channel. A break out tonight to the upside changes the picture entirely. Until this happens I’m continuing my wait.

GER30 – Seeing a possible sell idea forming. We have seen price hit a previous high and find some selling pressure. The current candle can be seen as an evening star due to its gap.

Divergence is starting to form. A rally tonight through the yesterday’s high cancels this idea out. SPX500 – As with the above, price stalling at highs.

Divergence has formed. I looking for price to close lower tonight to confirm a sell idea. If we have a stronger session tonight and break above 2188 my sell idea will be canceled.

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Written by Joseph Jeffriess, GO Markets Market Strategist