IntaCapital Swiss, Author at IntaCapitalSwiss SA

The Debanking Crisis and How to Rebuild Financial Confidence

Written by IntaCapital Swiss on June 5, 2025. Posted in News & Reports. Leave a Comment

A new financial phenomenon has in recent years swept through the financial world and it is known as “DEBANKING”. Debanking occurs when a bank, at any time and in any place, closes a corporate, personal, or private account – or refuses to open one – without warning or providing any plausible or straightforward reason. Banking clients may have been with their bank for a short period of time or may have been with them for years, but the client can wake up one morning to find they have no banking facilities.

This means no cash or debit card, no visa card, any banking facilities will have been cancelled, they have been financially frozen out of the system, and there is nothing clients can do about it; there is no recourse. What many citizens and corporates across the globe don’t know is that debanking is not just an internal compliance issue when fraud, money laundering, terrorist funding or other criminal or illicit activity is discovered. Indeed, the innocent, law-abiding (never even has a parking ticket) individuals or entities can be kicked out without any due process; there is no appeal.

A question many in the financial industry have been asked is “When did debanking start”? The answers are somewhat fuzzy, but in essence the concept of debanking, particularly in a political or disruptive motivated context, never really had a fixed beginning date. It is a theme or phenomenon that has occurred throughout history evolving over time but has gained much traction and press awareness in recent years. Indeed, a high-profile debanking event took place in the United Kingdom when in 2021 NatWest Bank debanked a senior British political figure, Mr Nigel Farage MP* leader of the Reform Party.

*Nigel Farage – Nearly two years after NatWest Group closed his accounts at their wholly owned private wealth subsidiary Coutts & Co, the then CEO Dame Alison Rose resigned. Although the bank said the account was closed due to Mr Farage accounts falling below the required thresholds, Mr Farage obtained a document stating that the bank were at odds with his political views. The case was settled privately where the bank paid Mr Farage an out of court settlement, but political motivation in the case was never proved.

The Farage case highlighted the problems innocent individuals and entities face in today’s banking world. In the United Kingdom alone, in 2024 circa 408,000 were closed without appeal as opposed to 45,000 in 2016 – 2017. The same is happening in the United States, Europe and elsewhere in the world. The main focus on account closures by banks are se workers, (legal in the UK), migrants, refugees, those with poor financial histories, the homeless, PEP’s (Politically Exposed Persons), small business and those with links to crypto, (especially prevalent int the United States in recent years).

To this end, IntaCapital Swiss SA Geneva, will be pleased to hear from any high-net-worth individuals who have suffered the ignominy of having their banking facilities removed without any reasons given, with absolutely no chance of appeal or access to a recourse process.

The European Central Bank Cuts Interest Rates

Written by IntaCapital Swiss on June 5, 2025. Posted in News & Reports. Leave a Comment

Today the ECB (European Central Bank) for the eighth time in a year cut interest rates by 25 basis points leaving the deposit rate standing at 2%. The governing council were unanimous in their decision to cut three key interest rates with the President of the ECB Christine Lagarde saying that following the eighth reduction the ECB is coming to the end of the line with regard to interest rate reductions and their monetary policy cycle. The President told reporters “At the current level of interest rates, we believe that we are in a good position to navigate the uncertain conditions that will be coming up”.

Officials from the ECB describe inflation as “currently around” the 2% target. New quarterly projections issued by the ECB show inflation in 2026 at 1.6% which is below the current target, with the economy expected to expand by 1.1% in the same year. In another statement issued by the ECB it was said that trade uncertainty is likely to weigh on business investment and exports, however growth will be boosted later by government investment in infrastructure and defence.

President Lagarde also referred to growth skewed to the downside but was cheered by the fact that easier financing, a strong labour market and rising incomes should help firms and consumers withstand the fallout from a global environment suffering from severe volatility. She went on to say that despite a stronger euro weighing on inflation in the near term and decreasing emerging costs, inflation is expected to return to target in 2027.

There is of course the continuing problem of the Trump2 Presidency and tariffs. Currently most European exports are facing tariffs of 10% (except steel and aluminium which now has a global tariff of 50% except the United Kingdom who are paying 25%), however levies will rise to 50% should trade negotiations between the European Union and the United States remain deadlocked and no agreement is reached by July 9th 2025. However, the German Chancellor Friedrich Merz will shortly be meeting with President Trump and one of the main topics if not THE main topic will be trade, and Europe will hope something positive will come from this meeting.

The cut in interest rates had been largely priced in by traders with LSEG (London Stock Exchange Group) data showing the ¼ of 1% cut had a 90% chance of going through before the announcement was made. Financial markets have trimmed their bets on another ¼% reduction in rates as this move no longer seems certain. The economic policies of President Trump, his attacks on the Chairman of the Federal Reserve and his flip flopping on tariffs, has dented confidence in the U.S. economy, has strengthened the Euro, brought energy costs down and had a positive effect on European inflation. All eyes will be on July 9th, the set by Donald Trump for the EU and the U.S to agree a trade deal.

Trump’s Tariffs Hobble U.S. Markets Whilst European Stocks Forge Ahead

Written by IntaCapital Swiss on June 4, 2025. Posted in News & Reports. Leave a Comment

The week ending 30th May 2025 saw equities in Europe as a clear winner globally, whilst tariffs and trade wars initiated by President Trump have hampered and shackled the markets in the United States. Recent data released showed that out of the world’s ten best performing stock markets, eight can be found in Europe. Indeed, this year in US Dollar terms Germany’s DAX Index* has rallied in excess of 30% including such peripheral markets as Hungary. Poland, Greece, and Slovenia.

*The DAX Index – The DAX or its full name Deutsche Aktien index 40, is Germany’s benchmark stock market index, and reflects the performance of 40 of the largest and most liquid German companies trading on the Frankfurt Stock Exchange. It is a key indicator of the health of the German economy.

The European STOXX 600 Index* is currently beating the U.S. S&P 500 by 18% (reflected in dollar terms) which as data shows is a record, which experts advise is being powered by a stronger Euro and Germany’s strong fiscal spending plan both current and in the past. Market analysts with knowledge of this arena suggest there is more to come due to attractive valuations and resilient corporate earnings, which when compared to America’s which is being gripped by fiscal and trade debt, make Europe a safer bet.

*European STOXX 600 Index – This index is a broad measure of the European Equity Market. Based in Zug, Switzerland, it has a fixed number of components and provides extensive and diversified coverage across 17 countries and 11 industries within Europe’s developed economies, representing circa 90% of the underlying investible market.

Equity bull experts suggest that Europe is back on the investment map, with some investment managers saying that recently there has been more European interest from investors than there has been in the last decade. Bulls went on to say that this rally may well be self-feeding and if European stocks continue to rise, they will be likely to attract fresh investment from the rest of the world. Indeed, some analysts suggest that if the trend away from America continues over the next five years the European markets could expect an inflow of circa USD 1.4 Trillion (Euros 1.4 Trillion.) Analysts suggest the gains so far this year were the result of a proposal by the German government to spend hundreds of billions of Euros on defence and infrastructure with some economists suggesting that this will boost growth across the European bloc from Q2 2026.

Elsewhere, a slew of Europe’s peripheral markets have had performances that have made investors sit up. For example, Slovenia’s SBI TOP Index is, according to data released, the second-best performing stock market up 42% (in dollar terms) just behind Ghana’s benchmark the Ghana Stock Exchange GSE-CI, (tracks all the performance of all company’s trade on the Ghana Stock Exchange). Other peripheral stock exchanges that have done well are Poland’s WIG20) Index up 40% whilst the benchmarks in both Hungary and Greece are both up circa 34%.

Experts suggest that 2025 could be a good year for European Stock Markets as some professionals are already betting that European stocks will outperform their counterparts in America. President Trump’s tariffs, the loss of the country’s AAA status, looming trade wars, and the current fiscal deficit of USD 1.9 Trillion (and predicted to climb), are all factors as to why investors are turning their backs on the US markets. Whether this will last, we will have to wait and see if all of Donald Trump’s predictions come true. Meanwhile back in Europe data released show that corporate earnings are in the spotlight having risen 5.3% in Q1 2025 against predictions of a 1.5% decline, another reason to perhaps bet on Europe.

Has President Trump Triggered a Sell-Off of U.S. Dollar Assets by Asian Countries?

Written by IntaCapital Swiss on June 4, 2025. Posted in News & Reports. Leave a Comment

Analysts advise that many exporting Asian nations, especially those considered as powerhouses* are beginning to unwind their US Dollar holdings which today stands at circa USD 7.5 Trillion. President Trump’s economic policies have turned America from a safe haven to one of volatility and perhaps inevitably a certain amount of pain. These Asian exporting powerhouses have for many decades enjoyed a simple economic model – Sell their products to the United States and use the proceeds to invest in U.S. assets. However, experts advise that due to President Trump’s current strategies, this model, whilst not completely broken, is certainly creaking at the joints.

*Asian Exporting Powerhouses – China, Japan, South Korea, India, Vietnam, Singapore, Malaysia, Thailand, Bangladesh, Pakistan, Philippines, Taiwan, and Hong Kong.

This economic model is now facing its biggest challenge since the Global Financial Crisis of 2007 – 2009 with the underlying logic that created this model in disarray. Certain senior figures in this financial arena have already suggested that Asian countries due to a certain amount of pain have already begun to unwind their dollar positions. An example of such pain can be found in Taiwan where data shows that after President Trump announced tariffs on “Liberation Day” there was a big sell-off of the U.S. Dollar. As a result, Insurers in Taiwan announced just for April 2025 a loss of circa USD 620 Million, and when at the beginning of May the Taiwanese Dollar surged against its counterpart in America by circa 8.5% the same companies announced there were potential losses of circa USD 18 billion in unhedged American investments.

During the Biden presidency, data revealed that flows of capital from Asia to the United States had already receded from previous peaks. Analysts have announced that unwinding is accelerating with family offices freezing or cutting their investments, data from March 2025 confirmed that China had reduced their treasury holdings, and Japan’s largest life insurer announcing it is searching for alternatives to US treasuries. In Australia, UNISEP, one of the largest pension funds, announced it was declaring a cap on US investments, and so the list goes on. If the switch from holding US assets to doubting their reliability could experts advise, see circa USD 2.5 Trillion flow through global markets. Indeed, data released from the US Treasury confirmed that a combined net USD 172 Billion of U.S. bonds and equities were sold by Asian Nations in 2024 adding to the USD 64 Billion sold in 2023.

There are however a number of experts who disagree with the aforementioned, saying that in order for a decoupling from the United States investors need to know where to go suggesting that this is just a cyclical shift. These opinions appear to be in the minority and recent data shows that capital is already flowing into Japan. Experts now believe that policy volatility and tariffs under the Trump2 presidency is exacerbating the decoupling from the US Dollar. However, many investors still see US treasuries as a safe haven, especially as the dollar is still regarded as the world’s reserve currency. Only time will tell where the financial markets and the US Dollar stand by the end of the second Trump presidency. However, under the current circumstances the global mood towards President Trump, his tariffs, his flip-flops on economic policy, the loss of their AAA status remains cautious if not very negative.

Trump Reignites Trade War with EU as he Threatens 50% Tariffs on the Bloc

Written by IntaCapital Swiss on May 28, 2025. Posted in News & Reports. Leave a Comment

On Friday 23rd May, President Trump threatened to impose a 50% tariff on June 1st, 2025, on the EU (European Union) stating that current negotiations on trade between Washington and Brussels were going nowhere. President Trump has been complaining for a long time that the EU bloc has been unlawfully targeting U.S. companies with regulations and lawsuits, plus he feels that the Europeans have been deliberately taking their time over the current trade negotiations. Originally, on “Liberation Day” 2nd April 2025, the EU had been marked down for 20% tariffs, but were reduced to 10% until July 9th, to give enough time for trade talks to find common ground and a solution.

In response to the tariff threats by President Trump, the EU Trade Commissioner, Maroš Šefčovič, said “EU/US trade is unmatched and must be guided by mutual respect, not threats. We stand ready to defend our interests”. He went on to stress “the EU’s fully engaged, committed to securing a deal that works for both of us”. Many of the European governments reacted to the tariff threat warning that higher tariffs would indeed be damaging to both sides. Meanwhile, back in the Oval Office, President Trump also announced to reporters that new tariffs would be imposed unless EU companies moved their operations to the United States.

However, on Monday 27th May, following a phone call between the President of the European Commission Ursula von der Leyen and Donald Trump, where the EU signalled a more conciliatory approach by agreeing to accelerate trade talks, the President of the United States agreed to extend the 50% tariff deadline to July 9th, 2025. Experts suggest that one of the major roadblocks that face the EU is that they feel America is not making it clear exactly what they want, and they still do not know who is speaking for the President. EU Trade Commissioner Maros Sefcovic has spoken twice with U.S. Commerce Secretary with his statements adopting a more malleable tone, gone was the previous rhetoric of “we will defend our interest rates”.

After Trump’s announcement last Friday, the markets reacted with the usual predictability with the Nasdaq down 1%, the broader S%P 500 down 0.68%, the STOXX EUROPE 600 index down 0.68%, Germany’s Dax and France’s Cac 40 both ended the day down over 1.5%. The US Dollar took a beating again, down by as much as 0.8% on the Bloomberg Dollar Spot Index*, slumping to its lowest level since 2023. Experts suggest that the threat of punitive tariffs then removing that threat gives many investors and traders in the financial markets a lack of confidence in the Presidency translating to a lack of confidence in the greenback. Whilst many indexes recovered on Monday 26th May, the US Dollar continued its decline which not only included the slap happy way tariffs are doled out, but also Trump’s tax bill which is expected to add hundreds of billions to the federal deficit. Meanwhile data released from the Commodities Futures Trading Commission show hedge funds, asset managers and other speculative traders continued to bet against the US Dollar.

*Bloomberg Dollar Spot Index – This index is a benchmark that tracks the performance of the US Dollar against a basket of major global currencies. It’s designed to provide a

comprehensive view of the dollar’s strength by including currencies from both developed and emerging markets that are significant in international trade and liquidity.

A full-blown trade war between the EU and the United States is according to experts not in anyone’s interests. The repercussions to both protagonists’ economies would be negative and will undoubtedly have a downside effect on global trade as well. No matter what is currently being said, both the U.S. and the E.U. are miles apart in their negotiations, with President Trump having already rebuffed a trade deal from the E.U. last Thursday 22nd May. Despite improved rhetoric from both sides those close to the negotiations are fearful that come July 9th, 2025, a consensus may not have been reached.

Will the UK’s Inflation Figures Strengthen the Bank of England’s Hawkish Bias?

Written by IntaCapital Swiss on May 28, 2025. Posted in News & Reports. Leave a Comment

The latest data released by the ONS (Office for National Statistics), shows the United Kingdom’s inflation rate, the CPI (Consumer Price Index), jumped to 3.5% from 2.6% in April of this year, driven mainly by increases in water, energy and other price increases. Service inflation was seen accelerating from 4.7% to 5.4% and is an area the Bank of England watches closely for signs of underlying price pressure, and Bank officials had expected this figure to be 5%. Elsewhere Core Inflation (does not include food and energy) climbed to 3.8% which is the highest it has been since April 2024. Earlier this month, the Bank of England’s MPC (Monetary Policy Meeting) voted on yet another rate cut where two members voted to hold rate cuts, and the above figures bear out their cautiousness.

The Bank of England’s target inflation figure is 2%, and the current rate of inflation is well above that target and furthermore, the Bank of England expected this figure to rise and peak at 3.7% in September of this year. Other data shows consumer prices rising by 1.2%, the biggest rise for 24 months. Consumers in April were hit with a number of increases such as volatile air fares (up 16.2% year on year), water bills, local authority taxes, train fares and an across-the-board basic cost increase, which added to a pretty damning April for the government. However, analysts have noted that the Easter holidays were probably responsible for the jump in airfares (biggest month-on-month jump for April on record) and expect this figure to diminish before the summer holidays begin.

Experts suggest the financial markets are in favour of an end of year interest rate of 4% for the first time since the end of March/early April. This sentiment translates into one more rate cut this year suggesting that the Bank of England’s MPC will slam the door shut on an interest rate cut at its next interest rate meeting on Thursday 19th June 2025, with traders cutting an August interest rate cut from 60% to 40%. Markets also remember comments from the Bank of England’s Chief economist, Hugh Pill, who voiced in a hawkish speech that he feared interest rates were not high enough to keep the lid on inflation, and analysts suggest that it would not take too much for the swing voters on the MPC to move into the hawk’s camp especially after what the Consumer Price Index had recently shown.

Indeed, Mr Pill voted against a rate cut of ¼ of 1% earlier in May where he also said, “In my view, that withdrawal of policy restrictions has been running a little too fast of late, given the progress achieved thus far with returning inflation to target on a lasting basis. I remain concerned about upside risks to the achievement of the inflation target”. We will wait on the MPC’s meeting in June but the likelihood according to experts is a rate hold, plus we will also wait and see if Donald Trump’s economic policies impact further the global economy with any fall-out influencing decisions taken by bank officials. Elsewhere in April, it has been revealed that government borrowing for the month was £10 Billion, with data confirming this figure to be a new record. All in all, not the best 30 days with newspapers dubbing the month as “Awful April”.

United States and China Trading Update

Written by IntaCapital Swiss on May 21, 2025. Posted in News & Reports. Leave a Comment

Without a doubt, President Trump’s tariff war has severely disrupted trade between the two economic powerhouses, and nowhere else is this as dramatically highlighted as Apple’s iPhone and mobile devices, where shipments to the United States in April 2025 are down to levels not seen since 2011. Customs data revealed that Smartphone exports slid 72% or circa USD 700 Million in April, outpacing by a long way an overall drop in Chinese shipments to the U.S. of 21%.

Elsewhere in early May 2025, the busiest container hub in the United States, the Port of Los Angeles, saw a drop in shipments by circa 30% as the weight of Trump’s tariffs took their toll. Data released shows that retailers and importers were the most affected, especially those linked to China. Bilateral trade in 2024 between China and the U.S. was circa USD 690 Billion and investors feel that tariffs will significantly erode this figure.

Despite the temporary reprieve in tariffs between the two nations, data reveals that the trade war has left a deep unwelcome imprint on Chinese exporters with many looking to new markets away from the United States. Well known in the trade insurance arena, Allianz Trade having conducted a poll of Chinese exporters found 95% will or already are more determined than ever to double down on exporting their goods to non-U.S. markets.

China’s coastal city of Ningbo is host to China’s second largest port (Ningbo-Zhoushan Port) by cargo tonnage where local businesses, despite the de-escalation in tariffs still plan to reduce exports to the United States and “Go Global’. Senior experts and economists at the Economic Intelligence Unit confirmed this fact whilst also confirming Southeast Asia* remained the favoured destination among many businesses seeking to move production away from China.

*Southeast Asia – comprises eleven countries Brunei, Burma (Myanmar), Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, Timor-Leste, and Vietnam. Note that many Chinese companies are somewhat wary of Vietnam with concerns over rising cost weighed against an attractive labour market. Indonesia appears to be the favoured destination.

Experts in the Sino – U.S. arena suggest that decoupling in the medium term seems to be the favoured outcome as Chinese exporters move away from the United States and American companies look to increase efforts to move production out of China with Apple already accelerating a shift in production to India. Apple was railed against by President Trump for not moving production back to the United States, experts close to the situation have said that scenario is unfeasible. The deal struck in Geneva between China and the United States brought tariff rates down to levels before the tit-for-tat tariff skirmish. But with time eating into the 90-day de-escalation agreement, the world will hold their breath whilst these two economic giants try and come to a sensible agreement.

Moody’s Downgrades the United States’ Sovereign Credit Rating

Written by IntaCapital Swiss on May 21, 2025. Posted in News & Reports. Leave a Comment

On Friday May 16th, 2025, the credit rating agency Moody’s downgraded the Unites States’ sovereign credit rating from Aaa (equivalent to AAA at Standard & Poor’s and Fitch) by one notch to Aa1 due to growing concerns over the nation’s USD 36 Trillion debt pile. Moody’s is the last of the three most important and recognisable rating agencies to downgrade the sovereign credit rating of the United States, with Fitch downgrading in 2023 and Standard and Poor’s downgrading in 2011. The United States has held a perfect credit rating from Moody’s since 1917, however the rating agency back in November when 2023 advised it might lower the U.S. credit rating when it changed its outlook from stable to negative.

The reaction from the White House was predictable, with spokesman Kush Desai saying, “If Moody’s had any credibility, they would not have stayed silent as the fiscal disaster of the past four years unfolded.” In another statement the White House advised that the administration was focused on fixing Biden’s mess. The White House communications director Steven Cheung also laid into Moody’s singling out their chief, Mark Zandi, who he said was a political opponent of President Trump, and is a Clinton donor and advisor to Obama. He went on to say, “nobody takes his analysis seriously and he has been proven wrong time and time again”.

Moody’s pointed out that in 2024, the government spending was higher than receipts by circa USD 1.8 Trillion, being the fifth year in a row where fiscal deficits have been above USD 1 Trillion. Debt interest has been growing year on year and eating into sizeable chunks of government revenue, with Moody’s pointing out that federal interest payments in 2021 absorbed 9% of revenue in 2021, 18% in 2024, and predict circa 30% by 2035. The GAO (Government Accountability Office), which is seen as an investigation arm of Congress has called the current situation unsustainable and went on to say that unless there is a change of policy debt held by the public will be double the size of the national economy by 2047.

After the announcement on Friday 16th, markets were unnerved on the following Monday morning, with stock markets recovering by the end of the day with experts confirming that markets had shrugged off the news, but some were advising that investors should be wary of complacency. However, some analysts advise the downgrade is a warning sign and may be the catalyst for profit taking after a huge run in the past month for equities. At the end of the day, United States Treasury Bonds are currently viewed by global investors as the safest investment in the world, and a downgrade by Moody’s is unlikely to stifle appetite for treasuries.

For most money managers and other global investors and market participants experts advise that the downgrade was probably seen coming for some time and lands in a market already wary of risks from tariffs and fiscal dysfunction. However, currently President Trump is pushing the Republican controlled Congress to pass a bill extending the 2017 tax cuts, a move some analysts predict will add many trillions to an already highly inflated government debt. However, hardline Republicans blocked the bill denuding deeper spending cuts. There was volatility in US Treasuries on Monday after the Moody’s announcement with 30-year treasuries breaking through the symbolic barrier of 5% (first time since October 2023) but slipped back to 4.937% by close of business. Experts suggest that the bond market had already priced in risk premium for government economic policy already in disarray, meaning Monday’s upward move in yields was just a knee-jerk reaction.

Despite the Recent Rebound, Will Investors in the Long-Term Continue to Dump Dollar Assets?

Written by IntaCapital Swiss on May 14, 2025. Posted in News & Reports. Leave a Comment

Although recent losses in US stocks have almost been wiped out, market experts believe that institutions such as pension funds and institutional money managers could in the long-term cut back on their massive exposure to US Dollar investments. Some investment bankers close to the action of certain money managers with trillions of dollars in U.S. Dollar asset exposure have started to cut back on these positions, mainly due to the fall out on the tariff war, flip flopping on policy, and Donald Trump’s continued attacks on the Chairman of the Federal Reserve, Jerome Powell.

Expert analysts advise that logically Europe is the current destination for the flight of capital from the United States, due to growth in the European economy being led by German spending in the defence sector and mixture of relatively cheap equity markets. Recently released data shows that in March 2025, the largest cut in history to U.S. equity allocations* with the shift out of the economy of the United States and into Europe was the sharpest since 1999. Further data released showed that in April 2025, outflows from ETFs (Exchange Traded Funds) domiciled in Europe that invest in U.S. debt and equities reached Euros 2.5 Billion, a level not reached since 2023.

*US equity allocation – refers to the portion of an investment portfolio dedicated to stocks of companies listed on U.S. stock exchanges. It’s a key component of overall asset allocation, which involves distributing investments across different asset classes like stocks, bonds, and real estate.

Although there have been recent gains by the US Dollar, overall, it is down 7% in 2025, with some institutions reporting spot transactions where institutional investors have sold the US Dollar and bought Euros on a sustained basis. One highly qualified and senior macro strategist in Europe announced that “If European pension funds were to reduce their allocations to 2015 levels, that would be equivalent to selling Euros 300 Billion in U.S. denominated assets. Some European pension funds have already started to trim their U.S. holdings position with Danish pension funds in Q1 2025 selling U.S. equities for the first time since 2023 and in the quarter Finland’s Veritas Pension Insurance Co reduced their exposure to U.S. equities.

Investors, analysts, economists etc, all talk about the cyclical effects in the various financial and commodity markets. What goes up must come down and vice versa. Remember the Global Financial Crisis of 2007-9 where liquidity completely dried up, banks were not lending to each other, investment bank(s) going bankrupt, bail outs of some of the largest financial institutions? Several years later everything it seemed was back to normal with the longest run of low interest rates seen for decades.

The point is whilst the United States is seeing massive outflows of capital in a reversal of the long-term trend where inflows were the order of the day where capital was attracted liquidity, market performance and economic growth. Some analysts advise that the current trend will only go so far given the liquidity and depth of the U.S. stock market and the circa USD 30 Trillion US Government Bond/Treasury market. Analysts report that many investors are sitting on the side lines wary of betting against the economy of the United States and its prospects for long-term growth.

United States and China Agree 90-Day Trade Deal

Written by IntaCapital Swiss on May 14, 2025. Posted in News & Reports. Leave a Comment

On Monday 11th May 2025, both China and the United States agreed to de-escalate their trade war with each other by announcing a 90-day pause on tariffs. The United States agreed to cut tariffs on Chinese goods from 145% to 30% and China agreed to cut tariffs on American goods from 125% to 10%. After the agreement was announced in Geneva, the U.S. Treasury Secretary said, “neither side wanted a decoupling and we do want trade, we want more balanced trade, and I think that both sides are committed to achieving that”. In a joint statement it was announced it had been agreed “to establish a mechanism to continue discussions about economic and trade relations. These discussions may be conducted alternately in China and the United States or a third country upon agreement of the Parties”.

A spokesperson for the Chinese Commerce Ministry said of the joint statement, “it is an important step by both sides to resolve differences through equal-footing dialogue and consultation, laying the groundwork and creating conditions for further bridging gaps and deepening cooperation”. This is a surprising outcome and took markets by surprise as before the Chinese had taken a hard-nosed stance demanding that the United States remove ALL tariffs on China before agreeing to come to the negotiating table. However, several analysts have pointed to the fact that this is just a 90-day ceasefire and pointed out this may not be a lasting peace between the two countries.

Global stock markets rallied on news of the China/United States trade agreement, with the S&P 500 and Nasdaq futures rising 2.7% and 3.7% respectively, plus the US Dollar rose 1% against a basket of currencies. Elsewhere, gold retreated by 2.8% as investors negatively impacted safe haven assets and Brent crude oil futures gained 2.8% rising to $65.71pb. In Europe, both France’s CAC 40 and Germany’s DAX both up just under 1%, Europe’s STOXX 60 and STOXX 600 rose 1.9% and 1% respectively and London’s FTSE 100 only rose by circa 0.50%. In Asia, both China and Hong Kong’s benchmark indices rose, with China’s CSI 300 rising 0.6% and Hong Kong’s Hang Seng index rising 0.8%.

Sadly, there are no guarantees that come 90 days, talks will have progressed further with further positive steps being announced between the two countries. Experts advise that many investors remain wary of the United States due to the flip flop policies of the Trump2 administration, plus President Donald Trump’s continued attacks on the Chairman of the Federal Reserve, Jerome Powell. Analysts advise that some institutions are acting like the risks have disappeared. If this is true, they must have been asleep since inauguration day, as many of their peers seem to be adopting a wait and see attitude. Analysts advise that in the past four weeks investors pulled $24.8 billion from U.S. stocks and with huge U.S. conglomerates such as Mattel Inc, United Parcel Service Inc and the Ford Motor Co recently withdrawing earnings guidance due to supply chain and tariff uncertainty being now extremely hard to navigate, there may be more unwanted surprises around the corner.

Author: IntaCapital Swiss