It is fair to say that it has been a strange summer. Greek government bond yields have traded below those of the US. Sterling has strengthened on the hopes of a Corbyn government. President Trump labels his own central banker as an enemy. The Brexit negotiations have transcended farce - as they say, even Baldrick had a plan. The British government would collapse if only the opposition would allow it. China has been labelled a currency manipulator by the US on concerns that a weak yuan gives it a trade advantage, yet the PBoC has been intervening to support its currency! If you are finding all this a bit baffling, join the club.

Economic conditions have been steadily deteriorating throughout the year and global manufacturers clearly face difficulties. Forecasts of 2019 global GDP growth have been pared back from 3.6% at beginning of the year to 3.2%. The trade war is a cause of the slowdown, although not the only one. The malaise seems to be deeper than this and may be centred on Chinese attempts to regain control of their money supply as they clamp down on their shadow banking system. Rumours of a cash shortage are emerging. Note that Chinese growth is not dependent on exports, over 70% of GDP growth alone comes from domestic consumption. US exports constitute only 4% of the economy. Tariffs are unhelpful for the Chinese, but are not the root cause of the slowdown.