Happy New Year, and we wish you all the very best in 2019. In the first Daily Macroeconomic Briefing for the year we highlight research looking at today’s RRR cut in China, which comes on the heels of some very soft manufacturing ISM and PMI readings, both in the US and China. Following today’s RRR cut, Capital Economics see this as just the beginning of easing measures in China this year, while Pantheon Macro see further softening of US ISM surveys, yet still believe the bar remains high for an easing move from the Fed, despite the market being very keen to start pricing this into the rates market. Looking more broadly at the prospects for markets, Gavekal says the key questions are whether the US and China can work out a trade deal, just how bad the current Chinese slowdown is, and how bold a stimulus Beijing will organize to restore growth, and how tight the Fed chooses to be. On balance the odds favor a recovery for both US and Chinese assets, Gavekal argue, but much hinges on the outcome of trade talks, which face a March 1 deadline. In other research, Ned Davis Research has updated its asset allocation model, just two weeks since the last update, increasing its allocation to bonds and raising its position in gold, while ECR Research assess the potential impact on markets if the US government shutdown – an event that has always created a lot of debate, yet little market disruption or volatility. Circumstances are sightly different from some recent shutdowns, say ECR, and this should be watched closely by investors.