BRICS’ developments are believed to rival the industrial revolution. The anticipated summit will take place on August 22-24. On the one hand, it is not supposed to bring some earth-shaking announcements.
On the other hand, a few people realize how many new countries are involved in BRICS to move away from cooperating with the USA. In simpler words, more and more nations are eager to move away from using the greenback as the main reserve currency.
What’s more, the majority of investors do not pay much attention to other geopolitical activities. Market participants underestimate new alliances, like, for example, between Saudi Arabia and China. Such cooperation can have drastic consequences triggering huge changes in the global economy.
What we see now is BRICS countries in an effort to rival the industrial revolution. It can lead to the United States losing its dollar influence. The USD can lose its status as the main reserve currency. As a result, the USA can see a bigger domestic debt crisis.
Investors must have a closer look at China, as the country features some crucial developments that can be the dominating force in the macro environment within the next few years.
Despite a slowdown, the region uses some of its monetary policy instruments to stimulate the economy. For instance, the People’s Bank of China lowered the rate to 2.5% this week along with short-term policy rates cut by 10 basis points to oppose lowering economic indicators.
So, market participants should keep an eye on China's economic situation, as what happens in the next 90 days can have a dramatic impact on what will happen with the global economy by 2024. We should also take into account the growing amount of trade deals between the region and Saudi Arabia.
Experts believe this is where Wall Street is making a mistake after raising rates to 22-year highs. We may see the FED being unhelpful in the next 12 months.
May the trading luck be with you!