Black Swan - US-China Phase 1 Deal
Speculation for Macro:
- 2018: Trump began trade war with China, and the market had the worst year in a decade (at the time).
- 2020: US-China Phase 1 deal is signed, market crashes shortly after.
- 2021: Market immediately rebounds and has the greatest bull market in history.
IMO it was a run-up then sell the news by insiders, then BTD for the bull run to come.
That deal is to expire 2022, and will likely be assessed soon. Check out the behavior of SKEW/VVIX/PCR right before the Trade Deal... Does somebody know something?
Even if it is renewed, it is bullish long term but very likely a big flush for insiders to BTD. If China withdraws, it's recession - returning to a situation similar to 2018 with a tariff tit-for-tat except with current supply chain issues, pandemic, massive debt levels, and slowing global economy.
One part of the deal entails China refraining from competitive devaluation of their currency. However, US is devaluing their currency through inflation (speculated). That is bullish for US equities, but CNYUSD is now at the top of a range:
Should the deal expire, and China devalues their currency, the US will need to respond with more debt. Can the world handle more debt?
Phase 1 Deal:
reuters.com/business/us-trade-chief-expects-engage-china-near-term-phase-1-deal-2021-05-05/
Full text found here:
web.archive.org/web/20210512160221/https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china/phase-one-trade-agreement/text
GLHF
- DPT
- 2018: Trump began trade war with China, and the market had the worst year in a decade (at the time).
- 2020: US-China Phase 1 deal is signed, market crashes shortly after.
- 2021: Market immediately rebounds and has the greatest bull market in history.
IMO it was a run-up then sell the news by insiders, then BTD for the bull run to come.
That deal is to expire 2022, and will likely be assessed soon. Check out the behavior of SKEW/VVIX/PCR right before the Trade Deal... Does somebody know something?
Even if it is renewed, it is bullish long term but very likely a big flush for insiders to BTD. If China withdraws, it's recession - returning to a situation similar to 2018 with a tariff tit-for-tat except with current supply chain issues, pandemic, massive debt levels, and slowing global economy.
One part of the deal entails China refraining from competitive devaluation of their currency. However, US is devaluing their currency through inflation (speculated). That is bullish for US equities, but CNYUSD is now at the top of a range:
Should the deal expire, and China devalues their currency, the US will need to respond with more debt. Can the world handle more debt?
Phase 1 Deal:
reuters.com/business/us-trade-chief-expects-engage-china-near-term-phase-1-deal-2021-05-05/
Full text found here:
web.archive.org/web/20210512160221/https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china/phase-one-trade-agreement/text
GLHF
- DPT
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