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The Week Ahead: Trade War Escalates

America wants to hit China with tariffs on an additional $200 billion of imports. It could come as early as next week. If it happens, then it would mean that around half of Chinese goods entering the US would be subject to import taxes. China has threatened to respond by slapping tariffs on $60 billion of US imports.

It’s time for those US non-farm payroll numbers again. It is reckoned that around 201,000 jobs were created in August. In July, more jobs were created in professional and business services, manufacturing and healthcare.

It is also time for those closely-watched Caixin Chinese purchasing-managers’ indices, too. The servicing sector is expected to have expanded in August. However, manufacturing could be sailing perilously close to the 50-points mark. Anything above 50 would still imply expansion.

China will report inflation numbers for August, which is expected to show that consumer prices edged up from 2.1% to 2.2%. This would be a six-month high, but still below the government’s target of around 3% for 2018.

Indonesia will also announce inflation figures for August. It is expected to show a slight increase to 3.3%, which would be fastest rate of prices increase for four months. In July, upward pressure on prices came from food, housing & utilities and education.

Bank Negara Malaysia is expected to leave its benchmark interest rate unchanged at 3.25%. In July, the central bank said growth should be sustained and inflationary pressures should weaken this year, especially after the government removed the 6% Goods & Services Tax (GST).

And finally, all eyes will be on Argentina after its central bank raised interest rates by 15 percentage points to 60% in a surprise move. The move was spurred by a slump in the peso to a record low against the US dollar after the country as the IMF to speed up a $50 billion bailout package.

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