World Events Summary: 27th June – 3rd July 2017

Trump and China: the unlikely supposed positive chemistry between Xi and Trump was punctured by the Chinese reaction to US$1.4bn of arms sales to Taiwan. The US also sanctioned the Bank of Dandong for alleged dealings with North Korea. There were always plenty of tensions in the relationship but a perceived lack of enough pressure applied to North Korea has been a deal-breaker.

Japan and sentiment: business sentiment reached new highs under Abe, in the midst of historic labour shortages (not seen for 43 years) and scandals dragging down support for the government. The defeat in Tokyo’s elections by a new party reinforced the market’s belief Abe will do ‘whatever it takes’ to get growth and public support for constitutional changes. An EU trade deal seems near.

Qatar Crisis: the government did not bow to the 13 GCC demands. The deadline was extended by two days. Additional GCC sanctions were, according to reports, being readied. US Secretary of State Tillerson was pushing for negotiations but the Saudis said no. Reports (vehemently denied) alleged that the former Saudi Crown prince was being prevented from travelling while the dust settles.