In this video we talk through the highlights of a recent presentation on the macro outlook for China and the implications for global markets. Specifically we focus on the cyclical outlook for China as tailwinds turn to headwinds, the implications and issues with the exchange rate (USDCNY), and provide an update on copper.
The key points we discuss in this video are:
1. The slowing cyclical outlook for China’s economy (property market topped out, export growth rolling over, and stimulus tailwinds turning to headwinds).
2. The path of least resistance = devaluation for the USDCNY and it could go toward 7 if not higher (macro divergence, monetary policy, and politics).
3. Remain bearish on copper, but the market is quickly catching up to our bearish call.
Whether or not you invest directly in these markets, the rise of China means that the implications are far wider reaching than ever before, so it’s important to stay on top of what’s going on here.