Expert Views: Trump and Kim pledge to work towards denuclearisation at historic summit

13-Jun-2018 Intellasia | Reuters | 6:02 AM Print This Post

“We haven’t seen the details, what does denuclearisation mean to either of them. Do they actually understand what people think it means? Is it getting rid of everything or is it: ‘Oh well, we won’t go any further’?

“There’s awful lot of unknowns, if you like, attached to this. It’s a really useful first step, but let’s see what happens next…given President Trump’s repudiation of other forms of agreement, for instance the Iran deal, which was again supposed to bring at least a slowing of Iran’s nuclear programme, it seems kind of odd that here he is trumpeting this. Is he trying to achieve things that his predecessor didn’t?

“I’d just be wary of drawing too many conclusions from it, but at the end of the day the simple fact that they sat down and had some sort of discussion is a good thing. Because without the dialogue, well, there’s nothing.”

KEVIN LAI, CHIEF ECONOMIST ASIA EX-JAPAN, DAIWA CAPITAL MARKETS, HONG KONG

US President Donald Trump and North Korea’s leader Kim Jong Un sign documents that acknowledge the progress of the talks and pledge to keep momentum going, after their summit at the Capella Hotel on Sentosa island, in Singapore, on Tuesday, June 12, 2018. (Reuters)

US President Donald Trump and North Korea’s leader Kim Jong Un sign documents that acknowledge the progress of the talks and pledge to keep momentum going, after their summit at the Capella Hotel on Sentosa island, in Singapore, on Tuesday, June 12, 2018. (Reuters)

“It looks like the summit has gone well, at least… Trump was quite happy with the overall result. I would expect a few more meetings between both sides to work out the details on how to achieve verifiable denuclearisation.

“That will pave the way for full normalisation of relations. The conditions are positive. Then we can even talk about economic development for the North.

“We are no longer very concerned about the possibility of a military conflict. That probability has gone down a lot and potentially we may be talking about the possibility of economic advancement in the North and even unification.

“A united Korea… could be an important economic force in the future if a deal can be struck and if that deal works.

“I don’t expect a lot in terms of market reaction. The market didn’t really react to heightened geopolitical risk last year. It doesn’t seem to understand how to react because there are still many different possibilities, even now. The market is not really sure how to react until it sees something more concrete.”

KOTA HIRAYAMA, SENIOR EMERGING MARKETS ECONOMIST, SMBC NIKKO SECURITIES, TOKYO

“While impact on the broader emerging markets is likely to be limited, today’s outcome is positive for regional markets like those in China, South Korea and Taiwan.

“Now that Trump and Kim appear to have discussed denuclearisation, the next focal point is whether and when negotiations will continue. There was a significant amount of diplomatic symbolism today, but assessing the exact significance for the financial markets is rather difficult at this point.”

WANG PENG, ASSOCIATE RESEARCH FELLOW AT CHONGYANG INSTITUTE FOR FINANCIAL STUDIES, RENMIN UNIVERSITY OF CHINA

“In the future, North Korea will cautiously maintain a delicate balance between China and the United States but North Korea will still rely on China for major issues. At the same time, North Korea will use the strength of the United States to offset China’s impact on North Korea. Judging from the current state of China-US-North Korea relations, in the foreseeable future, China cannot be marginalised. Instead, it will play a more proactive, active and positive role in the affairs of the peninsula.”

SUE TRINH, HEAD OF ASIA FX STRATEGY, RBC CAPITAL MARKETS, HONG KONG

“Both sides stand far, far apart on what denuclearisation means. To the US, it means North Korea must deliver complete, verifiable and irreversible denuclearisation. To Kim, it means North Korea suspends nuclear and missile tests in exchange for major economic concessions and the US stepping back as torchbearer for the Asian region (basically dismantling its alliance with South Korea and ultimately the region as a whole). Kim has never announced the intention of abandoning his existing nuclear arsenal, which he calls a “treasured sword”.

“Per previous peace deals, the main issue will be the pace of implementation, which includes agreement on a verification protocol. South Korean President Moon suggested it could be the start of a process lasting up to two years or longer.

“So let’s get back to what really matters for markets for the time being next up, US CPI, voting on the EU Withdrawal Bill and the FOMC and ECB meetings.”

RAY ATTRILL, HEAD OF FX STRATEGY, NATIONAL AUSTRALIA BANK, SYDNEY

“It was a very stage-managed event and there was nothing really off-script, so that doesn’t give markets much to play with.

“You look at the event risks of this weekin terms of where we are on protectionism after the trainwreck that G7 wasI think that is going to be more significant than this summit.

“You wouldn’t want to go long US dollar ahead of the Fed meeting, protectionism risk and the brexit vote. These are some of the hard market events ahead now. Arguably if there wasn’t any other event risk this week, markets would have used this summit as an excuse to push risk assets higher.”

SOICHIRO MONJI, SENIOR ECONOMIST, DAIWA SB INVESTMENTS, TOKYO

“The outcome was roughly in line with market expectations. It is reassuring for markets although this alone may not be enough to lift global stock prices.

It’s not like market had deep geopolitical concerns going into this meeting. Nor the summit would not lead to immediate improvements in boost corporate profits.”

https://sg.news.yahoo.com/expert-views-trump-kim-pledge-towards-denuclearisation-historic-073219726–finance.html

 


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