In This Week’s Issue…

by Alexander Kalis | Managing Partner & Head of Investments at Milltrust International 

Investors are grappling with geopolitical risks, trade tensions and a hawkish Fed as U.S. stock volatility proves relentless.

China Trade

Beijing will “unquestionably” retaliate if the U.S. ups trade tensions, with a detailed, comprehensive counter-punch plan on stand-by, according to a Commerce Ministry spokesperson. He added that the government hasn’t conducted any negotiations at any level with American counterparts recently. Even as protectionist counter-threats intensify, China on Wednesday unveiled plans to open parts of its financial sector by June 30, stressing they have nothing to do with pressure from the White House. The country is also considering a relaxation of curbs on stock-futures trading, introduced in the aftermath of the 2015 crash, people familiar with the matter said.

World Cup Now 10% Cheaper

There’s a silver lining to the geopolitical tensions threatening to wreak havoc when Russia hosts the World Cup in June and July. They’re cutting costs for visiting soccer fans. Everything travelers buy will be about 10 percent cheaper in dollar termsafter a fresh batch of U.S. sanctions sank the ruble this week. In the meantime, Trump’s Tweets have make Russia’s top export more valuable than ever.

Brazil Back on the Ropes

Brazil investors hoping the jailing of former President Luiz Inacio Lula da Silva would add fuel to a rally have been sorely disappointed. The arrest of the front-runner in election polls all but eliminated the possibility Lula returns to the presidency in the October general elections, easing concern he would upend efforts to overhaul the economy. But the celebration in markets lasted less than a day. Since Lula’s arrest warrant was issued on Thursday afternoon, the real and stocks have lagged behind global peers.

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