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Macro Thoughts

Whether or not there will be negotiations, China won't yield to
Washington's hegemony. We're prepared for new US tariffs.

President Trump is highly tuned to the markets and in fact something
of a c21st artiste. His positive ‘’Trade War’’ tweets are timed around
the US Market hours and designed to soothe, massage and finesse US
asset prices and he turns more ne- gative in Chinese trading hours.

China allowing the yuan to slide below 7 to the dollar is a watershed
moment for currency markets that's symbolically equivalent to the U.S.
and other countries abandoning the gold standard in the interwar
period, or the collapse of the postwar Bretton Woods system of fixed
exchange rates four decades ago. The implications for the global
economy are equally significant.
The world’s major currencies aren’t tethered in the way they were in
those periods, but gold and Bretton Woods both served as anchors for
the world’s monetary system, and their demise reflected the economic
and political disarray of their times. Today, the yuan is semi-pegged
to the U.S. dollar. The arrangement serves as an anchor for China’s
financial system, now the world’s largest by assets; for many currency
systems in Asia and around the world; and for U.S.-China economic and
financial relations. If that mainstay ruptures, it’s liable to set off
chain reactions inside and outside China. That’s why the loosening in
currency policy by the People’s Bank of China this week, while it may
seem unremarkable for most people, is an important development.

But it is a curve each of them feels, unmistakably. It is the
parabola. They must have guessed, once or twice -guessed and refused
to believe -that everything, always, collectively, had been moving
toward that purified shape latent in the sky, that shape of no
surprise, no second chance, no return.’’
Bitcoin is trading at Fresh Highs of $9,270.00 and aside from Beyond
Meat and Zoom has posted the best returns in 2019 and is in triple
digit % gain territory.
Paul Virilio captured the essence of our c21st Zeitgeist with this quote

Home Thoughts

In my body you search the mountain
for the sun buried in its forest.
In your body I search for the boat
adrift in the middle of the night.

Here is a long and silent street.
I walk in blackness and I stumble and fall
and rise, and I walk blind, my feet
trampling the silent stones and the dry leaves.
Someone behind me also tramples, stones, leaves:
if I slow down, he slows;
if I run, he runs
I turn :
nobody.

Everything dark and doorless,
only my steps aware of me,
I turning and turning among these corners
which lead forever to the street
where nobody waits for, nobody follows me,
where I pursue a man who stumbles
and rises and says when he sees me:
nobody.

Political Reflections

China has had to respond to the riots in Hong Kong with a firm hand
and is being backed into a dangerous situation to quell the unrest.
Hong Kong is a key cog in the West’s ability to control China’s
growth, so destabilizing it now makes sense.
One can only hope that he’s right about this. Since Trump’s refusal to
go to war in June, he has stepped up his attacks on China in ways that
tell me Bolton isn’t done just yet and that Trump may not be fully
under their control, but he’s also not anywhere close to a free actor.

Taking the concept even further, protestors have even formulated four
principles: “Be strong as ice, be fluid like water, gather like dew,
scatter like mist.”
In public spaces, especially on subway trains, information about
actions and rallies aren’t just shared on social media, but AirDropped
from phone to phone, keeping the citizenry abreast of the latest
developments in a direct way.

International Markets

President Trump keeps talking about weakening the Dollar. I find it
curious that ''such a stable genius''  has yet to calculate that a
strong Dollar is infinitely better and if he is serious about his
warfare strategy he needs to add currency warfare to his Tariff,
sanction and linguistic warfare Arsenal. My Perspective about the
Dollar is this [and note well its just a fraction under its 2019 high
even after a rate cut]; There is very little President Trump can do.
In fact the risk is this that when the market sees he is powerless,
the Dollar might lift off like the proverbial Parabola.

Euro 1.2101
Dollar Index 97.592
Japan Yen 106.24
Swiss Franc 0.9762
Pound 1.2150
Aussie 0.6712
India Rupee 70.9465
South Korea Won 1215.85
Brazil Real 3.9603
Egypt Pound 16.5545
South Africa Rand 14.9633

Commodities

Emerging Markets

Frontier Markets

Sub Saharan Africa

With a handshake, Mozambique’s leaders hope to close the book on a
decades-long conflict on Tuesday. But an election in October and new
causes of violence mean lasting peace is far from assured.
After fighting on opposite sides of a civil war that erupted following
independence from Portugal and killed more than one million people
between 1977 and 1992, the ruling Frelimo party and former guerrilla
movement Renamo signed a ceasefire that ended the worst of the
bloodshed.
However, violence has flared periodically in the years since,
especially around elections.
Analysts say the new accord, encompassing a permanent end to
hostilities, constitutional changes and the disarming and
reintegration of Renamo fighters into the security forces or civilian
life, offers the best hope yet for a lasting solution to the conflict.
“All of us have to be optimistic, because if nobody believes in peace,
there will be no peace,” said Felipe Donoso, head of mission for the
International Committee of the Red Cross in Mozambique.
President Filipe Nyusi and Renamo leader Ossufo Momade, who will sign
the deal, both hope it would score them political points ahead of
presidential, parliamentary and provincial elections on Oct. 15.
The poll could make or break the agreement, experts said. It will be
the first time Renamo, now the country’s main opposition party, can
compete for provincial governorships, satisfying demands for political
inclusion and control over areas they dominate.
The governorships offer a chance for Renamo to demonstrate that it is
a functioning political party with the capacity to govern effectively,
said Edward Hobey-Hamsher, senior research analyst at British-based
risk consultancy Verisk Maplecroft.
He and other experts interviewed by Reuters cited this as a main
reason the agreement might succeed where its predecessors had failed.
However, if Renamo does not achieve its election goals of winning
governorships and feels cheated by Frelimo, the accord could quickly
come undone.
“Then the whole thing will collapse,” said Joseph Hanlon, a visiting
professor at the London School of Economics.

“African economies are small and fragmented,” Muchanga said.
“Bilateral agreements reinforce fragmentation of those markets.”
“To replace AGOA, we would like to see an agreement between the whole
of Africa and the U.S.,” Muchanga said in an interview at the forum in
Abidjan, the commercial capital of Ivory Coast. Africa should
negotiate with “one voice” for a new trade pact after 2025, he said.
The U.S. and AU signed a joint statement on Monday at the AGOA Forum
in Abidjan, saying they share a goal to enhance the AU’s effort to
increase continental trade and investment under the African
Continental Free Trade Area.
The continent-wide trade agreement, that’s being driven by the AU,
aims to create the world’s largest free-trade zone. It officially came
into force in May and should be fully in operation by 2030.
The AGOA accord provides 39 sub-Saharan African countries duty-free
access to the U.S. for about 6,500 products, ranging from textiles to
manufactured items. The act was first signed into law by former
President Bill Clinton in 2000 and extended for 10 years by former
President Barack Obama in 2015. Nagy has said previously the U.S.
intends to replace it.
The U.S. currently only has one free-trade agreement on the African
continent -- with Morocco -- and is pursuing a trade deal with an
unidentified country in sub-Saharan Africa. Nagy said that would be
used as a model for others when AGOA expires.
The AGOA preference scheme is underutilized and that’s why it’s going
to be very difficult to renew it in 2025, Muchanga said. The new
continent-wide free-trade agreement will help businesses gain
experience to supply to a bigger market and export more goods to the
rest of the world, he said.

The overarching and interestingly at a time when the Rest of the World
seems to be embarked on a process of Fragmentation and Globalisation
coming apart at the seams, Africa is proudly moving counter-trend with
the African Continental Free Trade Area (AfCTA). Of course, the Devil
is in the Details of the execution and such things can simply fall
apart in a deluge of Non-Tariff Barriers but it is a Silver Bullet
particularly if we allow the free circulation of our People who are
natural Entrepreneurs. Just look outside, there are markets just about
everywhere.

Jumia stock drops through IPO floor

Glencore Plc is planning to halt production at one of the world’s
biggest cobalt mines after prices for the battery metal collapsed and
costs at the project increased, according to a person familiar with
the situation.
The announcement that Glencore will close its Mutanda mine in the
Democratic Republic of Congo is expected to come as the company lays
out an overhaul of its key African copper and cobalt business when it
releases first-half results on Wednesday.
It would be another setback for Glencore, which has been dogged by
operational problems, legal challenges and a rift with Congo’s
government over a new mining code.
Mutanda will stop producing at the end of this year and be put on
so-called care and maintenance, according to the person who asked not
to be identified as the plans haven’t been made public.
It was already expected that the mine would produce half as much
copper this year after it mined more complicated ores that raised
costs.
The Financial Times earlier reported Glencore’s plans to shutter the mine.
“The mine is no longer economically viable over the long-term,”
Glencore said in a letter to employees at the mine.
Even though African copper and cobalt is a small part of Glencore’s
overall business, it’s considered a key source of future profits.
The company ranks as the world’s top producer of cobalt and investors
have hoped Glencore would ride the boom in electric cars and battery
demand. Mutanda produced 27,300 tons of cobalt last year, more than
half Glencore’s total output, and 199,000 tons of copper.
The decision to shutter the mine highlights how quickly cobalt has
shifted from a prized asset to a headache. After quadrupling in two
years, prices have collapsed to the lowest since 2016 as new supplies
pour into the market.
With few hedging tools available, the plunge has left Glencore
exposed. The company said last week that it’ll report a $350 million
non-cash hit to its trading business from cobalt that’s been mined,
but not yet sold.
Also on Tuesday, Glencore’s key Katanga Mining Ltd. unit in the Congo
lowered its guidance for 2019. Katanga said it’s now expecting to
produce about 235,000 tons of copper this year and about 14,400 tons
of cobalt. That compares with a previous forecast of 285,000 tons of
copper and 26,000 tons of cobalt.
Glencore’s billionaire CEO Ivan Glasenberg has said Canada-listed
Katanga hadn’t met expectations and a turnaround plan would be
announced soon.
Katanga struggled with a series of setbacks over the past year. Dozens
of illegal miners were killed in a landslide at the company’s vast
open-pit mine in July.
The company said in April it would likely miss output targets for
copper and cobalt. It had to halt cobalt sales in November after
detecting radiation in the ore.

Kenya

“The tax policy and design of taxes on retail electronic transactions
as well as bank transactions have the potential to reverse the gains
that technology has pushed Kenya to the frontier of electronic
payments and financial inclusion and back to cash preference and
financial exclusion for low-income earners,” he said