US-China trade war update: No turning back - Rabobank

"The developments since last Friday, which include retaliatory steps by China – in particular on the currency front – and the US’s decision to brand China as a ‘currency manipulator’ only underscore that it will be very hard for both sides to row back now," argue Rabobank analysts.

Key quotes

"Whilst we can be sure that global central banks will step up to the plate to alleviate the impact of the trade war – most likely implying even lower interest rates across the board - the bottom line impact is likely to be negative for both growth and inflation."

"Given the potentially significant ramifications the trade war may have for financial markets, confidence and, hence, the global economy we have further reduced our growth projections."

"Indeed, going by the unofficial IMF definition, our projections now imply a ‘shallow’ global recession (growth below 3%) in 2020/2021."