The larger the stimulus used by china to offset the

•
"The larger the stimulus used by China to offset the trade war impact,
the bigger will its deficit likely be," Tao Wang, UBS's chief China
economist, said in a report on Tuesday
•
Markets are also worried about the ongoing Italian debt crisis, and
the rising price of oil.

Trouble is brewing in global
markets.
•
China's current account balance is down significantly from last year's
1.3% and will likely turn into a small deficit in 2019. If so that would
be the first time in 24 years.
•
"The larger the stimulus used by China to offset the trade war impact,
the bigger will its deficit likely be," UBS's Tao Wang, chief China
economist, said in a report on Tuesday.
•
That may hurt confidence and hasten outflows, putting pressure on
the nation's currency.

(3244.81 –
2606.91)/ 2606.91
= ↑24.5% since
October 2018

International Monetary Fund (IMF)
•
The International Monetary Fund (IMF) is an international organization
headquartered in Washington, D.C., consisting of "189 countries working to foster
global monetary cooperation, secure financial stability, facilitate international
trade, promote high employment and sustainable economic growth, and reduce
poverty around the world
•
Through the fund, and other activities such as the gathering of statistics and
analysis, surveillance of its members' economies and the demand for particular
policies, the IMF works to improve the economies of its member countries
•
The organization's objectives as stated in the Articles of Agreement are to
promote international monetary co-operation, international trade, high
employment, exchange-rate stability, sustainable economic growth, and making
resources available to member countries in financial difficulty

IMF Global Outlook
•
The IMF lowered its outlook for the global economy, saying it will
grow 3.7% this year, the same as in 2017 but down from the 3.9% it
was forecasting for 2018 in July.
•
Beijing is coming to terms with a lower rate of growth as the trade
war with the US escalates, Barclay's chief China economist, Jian
Chang, told CNBC
•
Tit-for-tat tariffs and reduction in Chinese export growth might trim
between 0.5% to 1% off the Chinese economy, she said

Italy is also troublesome
•
Away from China and the USA, issues in Europe are also partly to
blame for market jitters sweeping the globe. After a few months out
of the limelight, Italy has sprung back to the forefront of investor
concerns.

Trouble in Italy
•
Last week, Italy submitted its spending plans for the next year to the EU. The
budget came as a shock: The country said it planned to spend a whopping 2.4%
more than it makes over the next three years.
•
This target risked breaching EU rules. Investors balked, sending the country's
bond risk premium higher, and the euro tumbling.
•
Italy's longstanding high levels of debt are well-known, but previous governments
had all at least paid lip service to the idea that they would reduce that debt. The
current populist coalition is barely even doing that, and this is scaring people.