Janet Mui: weekly economic update 8 November 19

US-China trade development

• China and the US have agreed to roll back existing tariffs as they work toward a deal, according to reports on Thursday. Markets rallied in response.
• If this step results in the release of pent-up investment that has been hold back by trade uncertainty, we think the global economy will stabilise instead of further slowing down.

German industrial production

• German industrial production continued to contract in September on a year-on-year basis.
• There may be some evidence that the worst is over: the latest German factory orders are starting to improve.
• Positive developments in USChina trade would help the German economy stabilise.

Bank of England meeting

• Policy remained unchanged at the Bank's November meeting, as an upcoming general election and Brexit extension added more uncertainty for policymakers.
• Two members of the Monetary Policy Committee unexpectedly voted to cut rates by 25 basis points, citing Brexit and global risk as the rationale.
• If global growth fails to stabilise this could prompt policy easing, thre Bank indicated.