Was the optics of the Trump-Putin Peace Summit rather surprising? A red carpet was drawn up for President Putin in the American territory. No questions were taken after the press conference. No sanctions have been announced. Has this meeting placed the re-entry of Putin in the Western world? Did the US ultimately do too much for Putin?
Peter McGuire: Well, I don’t think they have given too much. There was the Russian leader there and he had to be shown from an etiquette position and he was welcomed to American soil. It is quite difficult to argue with his business. The reality of the case is that it will probably be a work in progress. I don’t think we will look a lot of volatility.
In the first phase, President Putin said that he is looking for another meeting possible in Russia in Moscow and we look for time lines and then President Trump say that he will call President Zenskyy and that should have happened in the following hours. It will be interesting to see if he has prepared to move forward and certainly the reaction of his European counterparts. So it’s a lot of work in progress and I don’t think we’ll get a deal like this in an afternoon. I expect it to drag for a while and we will have to wait and see if something concrete will be achieved and the Brinkmanship of both leaders and natural European counterparts and President Zenskyy.
How do you expect investors to move their money? How do you expect the markets to respond to this news? Do you expect more volatility in the coming days?
Peter McGuire: Well, first of all, we are facing a very big week with regard to the Jackson Hole meeting of the FED. We can’t say that at all. The US dollar has a little further pressure on the disadvantage in the sense that no deal has been closed. Gold can have a little bit of movement at the top. Shares were very flat. If you think of what happened in New York on Friday. Asia inhaled this on Monday morning and it could start as a relatively level. I don’t expect anything dramatic to really push the market, because nothing has come out dramatically.
If a deal was closed and suddenly there was a change in the entire footprint regarding the Ukrainian situation and Russia, which I think did not expect to happen; But if that happened, that would have changed the landscape, but that did not happen, so I am thinking of a slow start in Asia on Monday and I am keeping an eye on this week and Fed conversations.
A very important quote that President Putin said in that joint press conference is that today’s similarities will help us start the pragmatic relationships again. When he explains pragmatic relations between Russia and the United States, did he leave a possible economic cooperation and cooperation between Russia and the United States?
Peter McGuire: We have to look at it from many lenses. If we first look at it and appreciate it from an energy perspective, let’s look at Opec Plus and let ourselves look at the US. The US is the largest oil producer in the world, Saudi and then Russia. So they are the elephants in the room. So there is no doubt that President Trump wants to see from a cost perspective, cheaper energy prices for American consumers and this will flood as we see with regard to energy prices. We have seen wti approaching that $ 60 lever is now at the mid-$ 60s and that seems to be a downdraft that is very much embedded about this q3 time frame where we all say that is going to be a glut as oil-to-be-go-to-fashion is gosing to-go-to-fashion is gosing to-go-to-fashion in-go-to-to-go-to-to-to-go-to-fashion. Very good from a consumption stand, more money in the wallet and the purse of the consumer so that seems to be the first part of it and I am sure that they are in some ways work to achieve that. Regarding production, we all understand the situation with secondary rates and China and India that buy Russian crude oil. Only a few years ago the Russian crude oil was 2-3%. Now India is buying around 35-36%. It is therefore a dramatic increase. The jury is still out of how he should close a deal or the art of making deal, throw something that creates turbulence, which certainly did from a secondary position until any form of secondary rates or impact for the Indian consumer. So it is still early days and they will work together and this is a work in progress. How all these frames should be seen and in the coming weeks will be very fascinating.
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