Asian markets rise again on recovery hope as inflation data looms

HONG KONG - Asian equities pushed higher Wednesday as investors were buoyed by China's reopening and optimism that key data due this week will signal a further slowdown in US inflation.

Traders tracked a Wall Street advance as they brushed off fresh warnings that Federal Reserve rates would continue to rise and a World Bank decision to slash its global growth forecast.

After a stumble Tuesday, regional markets resumed the upward push that has characterized the start of the year thanks to China's emergence from nearly three years of zero-COVID isolation.

The reopening, easing of Beijing's tech crackdown and moves to help the property sector have raised hopes for the world's number-two economy, a crucial driver of world growth.

SPI Asset Management's Stephen Innes said: "Despite a solid start to the year, there should be a lot more upside to China's stocks, with earnings upgrades to drive further outperformance.

"Although we are not pitching a tent in that camp just yet, many investors are starting to believe China's reopening could be faster than expected on pent-up demand, a robust economic rebound and fewer supply constraints."

In early trade, Hong Kong again led the gains by piling on more than one percent, having already added about eight percent in 2023. Shanghai, Tokyo, Sydney, Seoul and Singapore were also in the ascendancy, though there were small losses in Wellington, Taipei and Manila.

Focus this week is on Thursday's US consumer price index, which is expected to show that price gains eased further in December.

But while that could possibly allow the Federal Reserve to take a lighter approach to its monetary tightening campaign, policymakers continue to push back against any pivot away from rate hikes.

Markets were battered last year by fears that almost a year of hikes will tip the economy into recession.

Bank boss Jerome Powell said that "restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy".

Meanwhile, Fed governor Michelle Bowman said that while inflation was coming down, "we have a lot more work to do" and that once rates had peaked they would have to stay there for some time. 

She added that "unemployment has remained low as we have tightened monetary policy and made progress in lowering inflation".

"I take this as a hopeful sign that we can succeed in lowering inflation without a significant economic downturn," she said.

And JP Morgan Chase CEO Jamie Dimon said borrowing costs could actually go higher than the five percent priced in by markets, suggesting they could hit six percent.

There was little reaction to the World Bank slashing its 2023 global growth forecast by about half and a warning that the economy was "perilously close" to recession owing to high inflation, rising interest rates and Russia's invasion of Ukraine.

Economists have warned of a slump in the world economy as countries battle soaring costs and central banks simultaneously hike interest rates to cool demand amid ongoing disruptions from the war in Ukraine.

The World Bank's latest forecast points to a "sharp, long-lasting slowdown", with growth pegged at 1.7 percent this year, roughly half the pace it predicted in June, according to its Global Economic Prospects report.

Key figures around 10:30 a.m. in Manila 

Tokyo - Nikkei 225: UP 1.1 percent at 26,457.56 (break)

Hong Kong - Hang Seng Index: 1.5 percent at 21,642.27

Shanghai - Composite: UP 0.3 percent at 3,177.88

Dollar/yen: UP at 132.44 yen from 132.21 yen on Tuesday

Euro/dollar: DOWN at $1.0733 from $1.0739

Pound/dollar: UP at $1.2156 from $1.2153

Euro/pound: DOWN at 88.31 pence from 88.34 pence

West Texas Intermediate: DOWN 0.8 percent at $74.54 a barrel

Brent North Sea crude: DOWN 0.7 percent at $79.51 a barrel

New York - Dow: UP 0.6 percent at 33,704.10 (close)

London - FTSE 100: DOWN 0.4 percent at 7,694.49 (close)

Agence France-Presse

US eases Trump-era tariffs on Japanese steel

WASHINGTON - The United States will ease tariffs on steel imported from Japan, officials announced, in the latest move by President Joe Biden's administration to resolve trade disputes started under his predecessor Donald Trump.

Beginning in April, Japan will be allowed to pay lower duties on exports of up to 1.25 million tons of steel per year to the United States, ending the 25 percent levies Trump imposed in June 2018 on metal imports from the country and others, citing national security concerns.

The dispute with Japan was one of a number Trump initiated during his time in office that Biden has worked to resolve, and follows an agreement Washington reached last year to end the metal tariffs on the European Union.

"I'm pleased to announce the deal we reached will strengthen America's steel industry and ensure its workforce stays competitive, while also providing more access to cheaper steel and addressing a major irritant between the United States and Japan, one of our most important allies," Commerce Secretary Gina Raimondo said in a statement.

US Trade Representative Katherine Tai said the deal would "protect a vital American industry, our workers and their families," as well as level the playing field against China.

"This agreement, combined with last year's resolution with the European Union, will help us combat China's anti-competitive, non-market trade actions in the steel sector, while helping us reach President Biden's ambitious global climate agenda," she said.

However, the deal does not resolve all the outstanding trade issues between the two countries.

Levies of 10 percent on Japan's aluminum exports will remain for now, while the new tariff system covers less than the 1.8 million tons of steel the United States imported from Japan in 2017, the last year before the levies were imposed, according to Commerce Department data. 

'Melted and poured' 

The Alliance for American Manufacturing welcomed the agreement, particularly a provision ensuring imported steel must be "melted and poured" in Japan so that other nations don't transship their metals through the country.

"The arrangement announced between the United States and Japan today recognizes the value of steel production to America's economic and national security," the trade group's president Scott Paul said in a statement.

He added that the tariffs imposed under Trump brought "relief for America's vital steel industry," while Biden's move widened "the focus on global overcapacity, while maintaining appropriate tools to mitigate threats to our economic and national security."

Trump's Republican administration engaged in a number of trade spats with allies and adversaries alike, many of which were unresolved when Biden took office in January 2021.

Among those were the tariffs of 25 percent on steel and 10 percent on aluminum imported from several countries, including the European Union and Japan.

Japan and the United States are among the world's top steel producers, ranked behind China, the European Union and India, according to data from the World Steel Association.

At the time, critics rejected Trump's citing of national security grounds in his decision, while the levies poisoned relations with Brussels and other allies.

Smoothing things over 

The Biden administration worked out an agreement to lift the EU metals tariffs last October, and this month announced a deal to resume trade in mussels, clams, oysters and scallops after a decade-long halt.

Last June, Britain and the United States agreed to suspend retaliatory tariffs levied during a 17-year dispute over state aid for European planemaker Airbus and US rival Boeing, and also opened talks last month to resolve their differences over the metals tariffs.

Myron Brilliant, head of international affairs for the US Chamber of Commerce, spoke positively of the Japan deal, but said Washington must do more.

"The US should drop the unfounded charge that metal imports from the UK, Korea, and other close allies represent a threat to our national security -- and drop the tariffs and quotas as well," he said in a statement.

Agence France-Presse

China steps on protecting technology 'fall short': US trade rep

China has taken initial steps to improve protection of US know-how under the "Phase One" trade pact, but must go further and implement those measures, the top US trade negotiator said Friday.

China also was the source of most counterfeit goods used to combat the COVID-19 pandemic, including masks and sanitizers, the US Trade Representative said in an annual report on intellectual property protections among 100 US trading partners.

The world's two top economic powers signed a pact in January 2020 to end a damaging two-year trade war, that mandated increased enforcement of US technology and patents.

Beijing has approved a dozen of the many new measures proposed to improve protection of intellectual property under the deal, a senior USTR official told reporters.

"However, these steps toward reform require effective implementation and fall short of the full range of fundamental changes needed to improve the IP landscape in China," the official said.

China remains on the USTR's "priority watch list" which mandates more intensive scrutiny, the USTR said in its "Special 301" report, which also name eight others on that list, and names 23 to to its "watch list."

However, the official did not specify the timing for any consultations with Beijing.

US Trade Representative Katherine Tai on Monday said Washington is "scrutinizing all of the aspects" of China's performance under the trade pact, and would enforce the provisions. 

However, Tai said the meeting with her Chinese counterpart, which the agreement calls for every six months, has "not yet been scheduled."

Meanwhile the Covid-19 pandemic highlighted that IP protections are a global concern, as the report noted that China was the source of "significant quantities" of counterfeit coronavirus test kits, personal protective equipment (PPE) such as N-95 and equivalent masks, and sanitizers, detergents, and disinfectants.

And the mass movement during the pandemic to online sales exacerbated the "widespread counterfeiting in China's e-commerce markets," USTR said.

Protection of technology and patents is a key priority because IP-intensive industries generated more than 38 percent of US gross domestic product, the report said.

"Failing to adequately and effectively protect those rights in foreign markets hurts the U.S. economy, the dynamism of American innovators and the livelihoods of our workers," Tai said in a statement.

Agence France-Presse

HSBC profits hammered by pandemic, soaring US-China tensions

HONG KONG - HSBC on Monday said profits for the first half of 2020 plunged by 69 percent on year as the banking giant was hammered by the coronavirus pandemic and spiralling China-US tensions.

The lender reported post-tax profits of $3.1 billion while pre-tax profit was $4.3 billion, a 64 percent drop on the same period last year. Reported revenue was down nine percent at $26.7 billion.

Chief executive Noel Quinn described the first six months of the year as "some of the most challenging in living memory".

"Our first-half performance was impacted by the COVID-19 pandemic, falling interest rates, increased geopolitical risk and heightened levels of market volatility," he said in a statement to the Hong Kong stock exchange, 

Even by the standards of the current economic maelstrom engulfing global banks, HSBC has had a torrid year. 

Before the coronavirus crisis it was beset by disappointing profit growth, ground down by US-China trade war uncertainties and Britain's departure from the European Union.

The Asia-focused lender embarked on a huge cost-cutting initiative at the start of the year, including plans to slash some 35,000 jobs as well as trimming fat from less profitable divisions, primarily in the United States and Europe.

The coronavirus upended some of that cost-cutting drive with banks hammered by market volatility and the economic slowdown caused by the pandemic.

But HSBC has a further headache -- geopolitical tensions via its status as a major business conduit between China and the West.

HSBC makes 90 percent of its profit in Asia, with China and Hong Kong being the major drivers of growth.

Caught in crossfire

As a result it has found itself more vulnerable than most to the crossfire caused by the increasingly bellicose relationship between Beijing and Washington.

The bank has tried to stay in Beijing's good graces. 

It vocally backed a draconian national security law that Beijing imposed on Hong Kong in June to end a year of unrest and pro-democracy protests.

The move sparked criticism in Washington and London but analysts saw it as an attempt to protect its access to China, which has a track record of punishing businesses that do not toe Beijing's line.

But that has not shielded it from Beijing's wrath. 

Last month the bank was a subject of multiple reports in China's state-run media claiming that it had helped to provide the evidence that led to the arrest in Canada of Huawei executive Meng Wanzhou on a US arrest warrant.

HSBC released a statement on its Chinese Weibo accounts saying it had not "framed" telecom giant Huawei or "fabricated evidence" that led to the arrest of Meng.

China's internet censors blocked access to HSBC's statement within hours of publication, without offering an explanation.

Quinn referenced the bank's growing political vulnerability in Monday's statement.

"Current tensions between China and the US inevitably create challenging situations for an organization with HSBC's footprint," he said.

"However, the need for a bank capable of bridging the economies of East and West is acute, and we are well placed to fulfil this role," he added.

The bank's Asia operations continued to show "good resilience", Quinn said, with profit before tax of $7.4 billion.

Earlier this year Quinn put some of the job cuts on hold as the pandemic struck.

But in Monday's statement he vowed to press ahead with the cost-cutting.

"As we seek to accelerate our transformation in the second half of the year, I am mindful of the impact it will have for some of our people, particularly those leaving us," he said. 

Agence France-Presse

US faces unemployment crisis amid record trade drop

In further signs of the crisis facing the world's largest economy amid the coronavirus pandemic, new data Thursday showed US a record plunge in US exports as layoffs exceeded 42 million.

The two key reports on economic health indicate that even as Wall Street regains its strength and some industries show signs of recovery as virus lockdowns ease, the United States is not out of the woods yet.

The Labor Department said 1.87 million workers filed new jobless claims last week, 249,000 less than the week prior but still a grievous figure nearly three times higher than the weekly record in the pre-pandemic economy.

"This and other indicators suggest not that the job market is improving but that it's getting bad less quickly," Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities think tank, said on Twitter.

The decline in initial claims means the wave of layoffs caused by businesses closures ordered in mid-March to stop the spread of COVID-19 are slowing. 

More than 42 million workers lost their jobs, at least temporarily since mid-March, but the new data showed 21.5 million people were receiving benefits in the week ended May 23, an indication that millions either had their benefit claims rejected, or have since been rehired, or more likely a combination of the two.

After falling last week, the insured unemployment rate ticked up half a point to 14.8 percent -- a huge number of Americans not working, but that only reflects those with unemployment benefits.

That is a grim omen for Friday, when the Labor Department releases the all-important May jobs report and likely show national unemployment increasing to closer to 20 percent, from 14.7 percent in April, which was the highest unemployment rate in 90 years.

Despite the grim economic picture, Wall Street indices opened lower but were trending upwards by mid-morning, continuing a rally that had the tech-rich Nasdaq nearing its all-time high at the close of trading on Wednesday as investors are optimistic about the reopening of the economy.

But Bernstein warned high unemployment is here to stay.

"(The) National unemployment rate is likely at or above 20 percent, twice that of the Great Recession peak, and full employment years away," he said.

However, Labor Secretary Eugene Scalia said he remains confident the unemployment rate will fall below 10 percent by year end.

In an interview with Fox News, Scalia said "many of these jobs will come back quickly because they were still there."

Trade slammed 

Meanwhile, the Commerce Department reported that US exports and imports dropped by a record amount in April and the trade deficit jumped more than $7 billion to $49.5 billion and the coronavirus forced shuttered businesses and closed down transportation worldwide.

Compared to March, exports of US goods and services fell more than 20 percent or $39 billion to $151.3 billion, the lowest level in 10 years. 

Imports in the month dropped to $200.7 billion, a more modest 13.7 percent or $32 billion decrease.

"Trade activity slowed again, this time nearly to the worst of the contraction in the financial crisis," Oxford Economics said in an analysis.

"We think trade activity will see its worst year on record in 2020."

For the year to date, the US trade gap swelled by $26 billion, or more than 13 percent, compared to the same period of last year, according to the report.

The impact of the COVID-19 shutdowns were widespread throughout the data and in all industries and products, including aircrafts, air travel, oil, auto parts and clothing.

Travel alone fell nearly $3 billion in the month, the report said.

Although the collapse of trade in most cases meant the US deficit in goods alone narrowed with most countries, the deficit with China jumped to nearly $26 billion from $17 billion in March.

"Exports and imports will continue to be restrained by weaker global growth and falling demand at home and abroad in the aftermath of the virus outbreak," Rubeela Farooqi of High Frequency Economics said in an analysis.

Agence France-Presse

Brexit's new chapter: the 'impossible' trade deal

BRUSSELS — With just 2 weeks to go before Brexit, European diplomats are preparing for the next phase: intense negotiations to hammer out a future with Britain after its EU divorce.

Brussels is braced for new rounds of Brexit battles, aware that a bullish Prime Minister Boris Johnson is feeling reinvigorated after an electoral victory in December.

Here are the main battle lines revealed to AFP in interviews with 18 European officials and diplomats closely involved in the talks:

NO EXTENSION

Throughout his campaign, Johnson said he would seal a trade deal by December 31, the deadline set by the EU-UK divorce agreement, though London can request an extension of 1 or 2 more years.

This marked the EU's first reality check -- only reluctantly accepted. They no longer expect Johnson to ask for a delay.

That leaves only eight months, from March to October, to reach an agreement and allow time for ratification. "It's an impossible task," warned one European diplomat.

"At the end of the year, we could get the skeleton of a trade agreement plus something on internal and foreign security, but there is no guarantee," the diplomat added.

Talks can begin as soon as EU ministers agree their joint mandate on February 25.

JOHNSON IS NOT MAY

Johnson's campaign promised "to get Brexit done" and to do away with his predecessor's goal to keep close ties with Europe and disruption to the cross-Channel economy to a minimum.

Theresa May's government had proposed a "dynamic alignment", where London would match EU rules on the environment, state aid and other standards to allow UK companies easy access to Europe.

Johnson will instead pursue a far more minimal trade deal that will seek zero tariffs and quotas on goods.

"The prime minister has been clear that he wants a Canada-style free trade agreement with no alignment," a UK official told AFP.

This refers to the EU's trade deal with Canada that Europeans consider ambitious as a trade deal, but too narrow for an important neighbor like Britain.

THREAT TO UNITY

A mere trade deal would be an economic blow to Britain, but also to the UK's closest trading partners -- such as Ireland, France, Belgium and the Netherlands.

No alignment on EU standards means custom checks, paperwork and all sorts of new limits to trade.

"Our first choice is that nothing changes," lamented a diplomat.

"But that is not going to happen, so we must now be realistic."

Johnson's low-bar strategy could be the biggest challenge to European unity since the Brexit referendum in 2016, diplomats said.

Member states will be pulling in different directions with some like France, Belgium and Denmark concerned about fishing while land-locked eastern Europeans and Germany will want a deal on cars.

'ZERO-DUMPING'

Referred to as keeping a level playing field, member states with the most trade with Britain will be dead-set on ensuring that British companies gain no unfair advantage after Brexit.

When British goods and services come knocking on Europe's door, they will insist that UK goods are subject to checks like those from any other non-EU country.

"Zero tariffs, zero quotas, zero dumping," the EU's chief negotiator Michel Barnier said on recent visit to Sweden.

Diplomats warn there were not many ways to enforce the level playing field in a simple trade deal, except through threatening tariffs that can take months or even years to impose.

As a sign of London's good faith, Europeans will be keeping a close eye on British compliance with the withdrawal agreement, in particular the customs arrangements on the Irish border.

"If they play around with that, the impact on trade talks will be immediate," one diplomat warned.

BIG DEAL?

One question nagging Europeans, notably France, is the future structure of the EU's relationship with Britain.

Will it be something formal, with clearly set joint institutions, or a looser arrangement structured by separate deals on trade, security and other topics as necessary?

Many European capitals abhor the latter, spooked by the EU's confused ties with Switzerland, which are governed by over 100 deals.

"We would favor a more organised structure," an EU diplomat told AFP.

'NEGOTIATION TABLES'

Months of intense discussions, to alternate between London and Brussels, will be coordinated by EU chief negotiator Michel Barnier and his UK counterpart, probably David Frost.

The tight deadline allows "about 40 days of pure negotiation" in 8 to 10-week sessions, an official warned.

This is a far cry from the years devoted to trade deals with Canada, Japan or South Korea.

Another diplomat said negotiators would open about ten "negotiating tables" with some done in parallel.

"We will give each subject 2 or 3 weeks and see what is possible. If the divisions are too great, we move on. Some issues will be well advanced, others will go nowhere," he said.

Agence France-Presse

US says China trade deal has no agreement to reduce tariffs

WASHINGTON — The trade truce with China set to be signed on Wednesday does not include a deal to roll back tariffs imposed on most Chinese goods, US officials said in a statement Tuesday.

The joint statement from the Treasury and the US Trade Representative's office said "there is no agreement for future reduction in tariffs. Any rumors to the contrary are categorically false."

The statement came after a Bloomberg report said tariffs on billions of dollars in Chinese goods will stay in place until after the US presidential election in November, after which they might be removed.

After nearly 2 years of conflict and the exchange of punishing tariffs that have had a negative impact on business investment and global economic growth, President Donald Trump last month announced a "phase one" trade deal with Beijing.

As part of the deal he agreed to cancel a new tranche of painful import duties on consumer goods that had been scheduled to hit on December 15.

In addition the US agreed to slash in half the 15 percent tariffs on $120 billion imposed September 1 on consumer goods like clothing.

Officials have said the details of the trade pact will be made public Wednesday.

However, "There are no other oral or written agreements between the United States and China on these matters," the USTR and Treasury said.

Agence France-Presse 

US Treasury reverses currency manipulator label for China

WASHINGTON — The United States on Monday removed the currency manipulator label it imposed on China last summer, in a sign of easing tensions between the two economic powers after nearly 2 years of conflict.

Just 2 days before President Donald Trump is set to sign a "phase one" trade agreement with China, the US Treasury said in its semi-annual report to Congress that the yuan has strengthened and Beijing is no longer considered a currency manipulator.

Although Treasury refrained from slapping the label on China in its report last May, Trump in August angrily accused Beijing of weakening its currency "to steal our business and factories," re-stating a long-standing grievance.

Chinese authorities in August allowed the yuan to fall below 7 to the dollar for the first time in a decade, sending shudders through stock markets at the time and stoking Trump's ire.

"Over the summer, China took concrete steps to devalue its currency," the yuan or renminbi (RMB), and those moves "left the RMB at its weakest level against the dollar in over 11 years," Treasury said.

However, more recently was strengthened to 6.93 to the dollar and Treasury said the trade pact addresses currency issues.

"In this agreement, China has made enforceable commitments to refrain from competitive devaluation and not target its exchange rate for competitive purposes," Treasury Secretary Steven Mnuchin said in a statement.

However that commitment is identical to the one Beijing has long made as part of the Group of 20 major global economies.

SYMBOLIC MOVE 

Though the semi-annual currency report always gains attention as a key sign of relations between the powers, the currency manipulator designation was largely symbolic.

The label calls for the US Treasury committed to work with the International Monetary Fund to "eliminate the unfair competitive advantage" created by China's alleged actions and to consult with Beijing about the matter.

However, many economists questioned the decision to label China a manipulator.

"China shouldn't have been designated to start with. Small current account surplus/GDP; scant intervention," Mark Sobel, a former Treasury official, said on Twitter.

While he acknowledged the large trade surplus, he said "economists disregard those."

"RMB fell in response to Trump's tariffs. Designation was blatant/errant political act," Sobel tweeted.

As part of the trade deal "China has also agreed to publish relevant information related to exchange rates and external balances."

Mnuchin said the phase one deal is significant and "will lead to greater economic growth and opportunity for American workers and businesses."

However, Treasury said Beijing still needs to take steps "to stimulate domestic demand and reduce the Chinese economy’s reliance on investment and exports."

Top Chinese trade envoy Liu He arrived Monday in Washington on Monday ahead of Wednesday's expected signing of the agreement.

After multiple rounds of tariffs, the US trade deficit in goods through November 2019 was running at over $320 billion, which is about $62 billion below the same period of 2018.

"Treasury remains disturbed by the persistent and excessive trade and current account imbalances that mark the global economy," the report said.

The US Trade Representative's Office announced over the weekend that as part of the initial trade deal, Washington and Beijing will hold "at least bi-annual" meetings -- something that previous administrations did for years but that Trump scrapped in favor of a more aggressive approach.

Mnuchin and Federal Reserve Governor Jerome Powell are also will conduct macro-economic meetings with top Chinese officials "on a regular basis," USTR said.

The currency report had eight other countries on the "monitoring list" due to concerns about their currency practices: Germany, Ireland, Italy, Japan, South Korea, Malaysia, Singapore, Switzerland, and Vietnam.

Agence France-Presse

China deal lifts US stocks into record territory

NEW YORK - Wall Street on Monday set records for a third straight day as investors absorbed a new US-China trade deal and Beijing released upbeat economic data.

US and Chinese officials on Friday announced a partial trade deal, with Washington cancelling and reducing tariffs in exchange for Chinese pledges to increase purchases of US exports and reform its trade practices.

All three main US stock indexes finished at records, joining the upward drift in Europe where Paris, London and Frankfurt all posted strong gains. 

Chris Low of FTN Financial told AFP the markets' jubilance may not be entirely justified.

"The best you can say is that it eliminates some of the negative scenarios people were worried about," he said.

"I think the market is rallying simply because the worst case scenario of US-China trade plummeting is off the table."

Officials in Beijing released data showing China had had a better-than-expected pickup in the retail and industrial sectors in November, a spot of good news at the close of a difficult year for the world's second-largest economy.

London's FTSE 100 which benefitted from continued post-election optimism and a dip in the value of the pound.

In the eurozone, Frankfurt's DAX 30 index climbed 0.9 percent to close just shy of a record high.

And the Paris CAC 40 won 1.2 percent, briefly breaching the 6,000 points level for the first time in 12 years.

The eurozone's economy meanwhile remained at a near standstill in December, extending the worst quarterly performance since 2013, according to a closely-watched survey compiled by IHS Markit research group.

While the removal of uncertainty surrounding Brexit -- following the Conservatives' commanding victory in last week's British elections -- allowed markets to breathe a huge sigh of relief, analysts urged caution with the saga having some way to run.

"This is just the end of the beginning," noted Quentin Fitzsimmons at T. Rowe Price. 

"The real work of negotiating the UK's future trading relationship with the EU lies ahead and that has the potential to become very complicated."

- Key figures around 2300 GMT - 

New York - Dow: UP 0.4 percent at 28,235.89 (close)

New York - S&P 500: UP 0.7 percent at 3,191.45 (close)

New York - Nasdaq: UP 0.9 percent at 8,814.23 (close)

London - FTSE 100: UP 2.3 percent at 7,5519.05 points (close)

Frankfurt - DAX 30: UP 0.9 percent at 13,407.66 (close)

Paris - CAC 40: UP 1.2 percent at 5,991.66 (close)

EURO STOXX 50: UP 1.1 percent at 3,772.74 (close)

Tokyo - Nikkei 225: DOWN 0.3 percent at 23,952.35 (close)

Hong Kong - Hang Seng: DOWN 0.7 percent at 27,508.09 (close)

Shanghai - Composite: UP 0.6 percent at 2,984.39 (close)

Pound/dollar: DOWN at $1.3286 from $1.3331 at 2200 GMT on Friday

Euro/pound: UP at 83.82 pence from 83.42 pence

Euro/dollar: UP at $1.1139 from $1.1121

Dollar/yen: UP at 109.60 yen from 109.38 yen

Brent North Sea crude: UP 0.2 percent at $65.34 per barrel

West Texas Intermediate: UP 0.2 percent at $60.21 per barrel

source: news.abs-cbn.com

Asian shares adrift as tariff deadline looms

SINGAPORE -- Asian stocks flatlined on Wednesday as Sino-US trade talks approached a weekend deadline with little sign of progress, while a tightening of the UK election race knocked the pound.

Investors are beginning to suspect that even if US tariffs due to take effect on Sunday are delayed, it may be 2020 before Washington and Beijing can agree a broader rapprochement.

In the absence of detailed trade news, focus moves to the US Fed's outlook for the economy due at 2000 GMT (4 a.m. Thursday in Manila) - along with an expectation interest rates will be held steady - and Thursday's British election.

"The market is just so singularly focused on the trade thematic, it seems to push everything else aside," said James McGlew, executive director of corporate stockbroking at Perth broker Argonaut.

"These things never end well. Tariffs and artificial barriers in economies can never level the playing field the way proponents theorize it will ... no-one wins until this stops, its as simple as that."

MSCI's broadest index of Asia-Pacific shares outside Japan barely budged. Japan's Nikkei ticked lower after White House trade adviser Peter Navarro said a decision on the Dec. 15 tariffs would come soon, also knocking modest early gains off Australia's S&P/ASX 200.

The biggest mover of the morning was the British pound, which shed 0.3 percent to hit $1.3128 after a closely watched YouGov poll showed the ruling Conservatives tracking toward a much slimmer majority than forecast a fortnight ago.

The pound had climbed to an eight-month high overnight, before the survey, as investors priced in a comfortable Conservative victory and expected it could end years of uncertainty over Britain's exit from the European Union.

YouGov's research director, however, said the results showed a hung parliament was possible.

"Granted, this still portrays a Tory majority but given what is already priced ... the actual outcome has resulted in some of the heat coming out of a fairly frothy market," said Chris Weston, head of research at Melbourne brokerage Pepperstone.

TRADE STALEMATE

On the trade front, officials from Canada, Mexico and the United States signed a fresh overhaul of the quarter-century-old North American trade pact, but there were few hints of progress on a deal between the globe's two largest economies.

A Wall Street Journal report that said US and Chinese officials were preparing for a delay to the Dec. 15 round of tariffs knocked bonds but did not shift stocks since it suggested no resolution to the trade conflict.

"Assuming it is (delayed), then trade policy uncertainty is set to linger well into the next decade," said Ray Attrill, head of FX strategy at National Australia Bank.

"This has very much been the emerging consensus heading into the weekend deadline, hence the reports have failed to spark any market volatility."

White House economic adviser Larry Kudlow later said that no decision had been reached regarding the tariffs, which will automatically take effect unless they are reversed or suspended.

The Dow Jones Industrial Average and the S&P 500 each fell 0.1 percent, while the Nasdaq dropped by a little less.

The yield on benchmark 10-year Treasury notes, which moves inversely to price, last stood a little higher at 1.8399 percent.

US inflation data due at 1330 GMT, expected to hold steady, may further decrease the likelihood of 2020 rate cuts should it surprise on the upside.

The Fed is widely expected to hold rates steady at the conclusion of Wednesday's policy meeting, with investors instead focused on any change to the central bank's view of the economy and its 2 percent growth forecast for next year.

Elsewhere in currencies, the dollar slipped against the euro overnight as German economic sentiment sharply rose after an unexpected rebound in October exports.

US crude dipped 0.25 percent to $59.09 a barrel, while gold was slightly lower at $1463.526 per ounce.

source: news.abs-cbn.com

Mexico rejects US trade deal proposals on steel, aluminum

Mexico's foreign minister said Sunday the country would not accept a US proposal for steel and aluminum production under the new trade deal, saying it would leave Mexico at a disadvantage.

During a meeting with senators to discuss details of negotiations for the United States-Mexico-Canada treaty (USMCA), Foreign Minister Marcelo Ebrard said the US proposed that 70 percent of steel for automobile production come from the North American region.

The proposal would put Mexico "at a very great disadvantage," said Ebrard, because cars produced in Mexico also use components made in Brazil, Japan and Germany.

Ebrard said the Mexican delegation will ask at the next meeting of treaty representatives that the provision come into effect "more than 5 years" after the start of the trade pact, rather than immediately.

Mexico will also not accept "any term" for aluminum provisions, Ebrard said, because they do not have the resources to produce aluminum.

Mexico is one of the world's largest automobile exporters due to multiple brands -- including General Motors, Nissan, Fiat-Chrysler and Volkswagen -- building facilities in the country.

Ebrard's comments come just a few days after after Mexican President Andres Manuel Lopez Obrador said he would not accept a US proposal for supervisors to oversee the implementation of Mexico's labor reforms under the USMCA.

Mexico is the only country so far to ratify the new deal, negotiated at US President Donald Trump's behest to replace the 25-year-old North American Free Trade Agreement (NAFTA), which he considers "a disaster" for the United States.

In a bid to comply with its commitments under the new deal, which was signed in November 2018, Mexico has raised its minimum wage and passed labor reforms to give unions more power and workers more say in running them.

But US labor groups and opposition Democrats in the House of Representatives have voiced skepticism over the Mexican government's ability to enforce the new rules.

That has led to a drawn-out ratification process in the United States, where the trade deal now risks getting mixed up in Trump's ongoing impeachment drama and electoral politics heading into his 2020 re-election campaign.

Canada has said it will ratify the deal in tandem with the US.

Agence France-Presse

US re-imposes steel, aluminum tariffs on Brazil, Argentina

RIO DE JANEIRO — US President Donald Trump on Monday announced plans to reimpose tariffs on steel and aluminum from Brazil and Argentina, hitting back at what he called their "unfair" policies.

The move appeared to surprise his Brazilian counterpart, Jair Bolsonaro, who considers himself an ideological ally of the Republican leader. Industry leaders in both countries cried foul.

"Brazil and Argentina have been presiding over a massive devaluation of their currencies," which is hurting American farmers, Trump said on Twitter.

"Effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the US from those countries."

Trump last year announced global tariffs of 25 percent on steel and 10 percent on aluminum but later approved exemptions for some countries, including Argentina and Brazil -- after they agreed to quotas.

Bolsonaro sought to play down the issue, saying he would appeal to Trump for more understanding of Brazil's position and boasting he has an "open channel" with the US leader if needed.

Later, in a radio interview, Bolsonaro said: "I hope he understands and doesn't penalize us in this matter."

The Brazilian leader added he was confident he would receive a favorable hearing from the US president. 

"I am almost convinced that he will hear us," he said.

'PERPLEXING' DECISION 

Brazil's Steel Institute said it was perplexed by Trump's decision. 

"There is no initiative by the government to artificially devalue the Real and the decision to tax Brazilian steel as a way to compensate American farmers is a retaliation against Brazil, which is inconsistent with the partnership relationship between the 2 countries," it said.

The decision "ends up hurting the American steelmaking industry itself, which needs semi-finished products exported by Brazil in order to operate its mills," the institute added.

Brazil is the second-largest supplier of steel to the US market behind Canada.

And Brazil and Argentina have benefited from the US trade war with China, as they have stepped in to replace American exports of soybeans and other agricultural goods to the Asian giant.

Bolsonaro earlier this month met with China's President Xi Jinping in Brasilia and said the world's second-largest economy was "becoming more and more part of Brazil's future."

Speaking to reporters on the White House lawn before departing for the NATO summit in London, Trump said Brazil had "devalued their currency very substantially by 10 percent."

He said he had given Argentina "a big break" on tariffs, "but now I'm taking that break off. Because it is very unfair to our manufacturers and very unfair to our farmers." 

"Our steel companies will be very happy and our farmers will be very happy with what I did," Trump added.

ECONOMIC IMPACT 

Brazil has teetered on the brink of recession this year and Argentina is again enmeshed in an economic crisis, which has led to the currencies of both countries weakening against the US dollar.

A weaker currency tends to make exports more competitive, while a stronger US dollar makes foreign goods cheaper for American consumers.

But as the global economy slows, the US dollar tends to strengthen as it becomes a safe haven for nervous investors around the world.

Jose Urtubey, spokesman for Argentina's powerful UIA industrial lobby, said producers in the country will be harmed immediately by the tariffs.

With Argentina's "lack of competitiveness" as a producer, the fact that the United States had the lowest steel and aluminum tariffs was "beneficial," Urtubey said.

The head of Argentina's only aluminum producer, Javier Mandanes Quintanilla of the Aluar Group, viewed the tariff plan with trepidation.

"This is a measure that affects us very strongly," he told La Nacion.

The US imported nearly 169,000 tons of steel from Argentina last year, representing more than $220 million in trade.

Bolsonaro's right-wing government has promised to revive Brazil's flagging economy with a massive stimulus plan, as well as pension and tax reforms, and the central bank has cut the key interest rate more than a dozen times since late 2016.

Trump views those moves as an effort to gain at the expense of the United States.

In his tweets, Trump also called on the Federal Reserve to "likewise act" so other nations no longer "take advantage of our strong dollar by further devaluing their currencies." 

Amid a slowing global economy and the impact of Trump's wide ranging trade offensive, mostly directed against China, the Fed has cut the benchmark interest rates three times this year. 

But it has signaled it will stand back before deciding on any further moves.

Despite widespread complaints about the impact of the tariffs on US businesses and consumers, as well as the hit to farmers who have been the target of retaliation from trading partners, Trump claimed in his tweet on Monday that Washington has taken in "massive amounts of money" from the tariffs.

American steel has continued to suffer, with overall employment edging downward and production halted at blast furnaces last month.

Agence France-Presse 

World stocks stall as US-China tensions flare again

LONDON -- A 4-day rally that had lifted world stocks to near-record highs stalled on Thursday after China said it would retaliate for US legislation backing Hong Kong's protesters, leaving investors concerned as to the extent of the Chinese response.

Fading hopes of a rapprochement between the world's two biggest economies before additional, potentially damaging tariff hikes kick in has lowered risk appetite, pushing the benchmark German 10-year government yield to its lowest since Nov. 1.

The yen - perceived as a safe-haven currency - ticked up from 6-month lows against the US dollar.

A pan-European stocks index retreated from four-year peaks hit earlier in the week, ending 0.1 percent lower, led by the trade-sensitive auto sector, down 0.8 percent for its worst day in more than a week.

The US legislation, which threatens sanctions for human rights violations and seeks to safeguard Hong Kong's autonomy, prompted China to warn of "firm counter measures".

But fears as to the extent of Chinese retaliation eased during London trading.

"The market is reacting in a cautiously positive way to the fact that we don't have any details of (China's) retaliation," said Ken Odeluga, market analyst at City Index in London.

"I think we'll know more in the coming days and the market is keeping its powder dry for that."

Meanwhile, China's state council said that it would step up punishment for intellectual property violations - a key sticking point in the US-China conflict - and that it would lower non-tariff trade barriers.

Wall Street's main indexes closed at record levels for a third straight day on Wednesday, albeit in thin liquidity before the Thanksgiving holiday, after data showed U.S. economic growth had picked up in the third quarter and consumer spending had increased.

Elsewhere, though, the outlook for growth looks less rosy. Japanese retail figures slumped the most since 2015 as a sales tax hike dragged on the economy, exacerbating a slowdown caused by slowing exports and manufacturing.

That took Asian shares excluding Japan down 0.2 percent. Japan's Nikkei, Hong Kong's Hang Seng and Shanghai blue chips all closed weaker.

MSCI's world equity was index flat, after it approached the record reached in January 2018. However, the index is up almost 3 percent so far in November and is on track for the best month since June as investors flit in and out depending on trade war headlines.

"People don't want to be caught on the wrong side," said Geoff Yu, head of the UK investment office at UBS Wealth Management. "It does reflect there's cash on the sidelines. If you can stretch the positive narrative, if the trade issue is out of the way for the time being, we might actually see a demand pick up."

US markets are closed for Thanksgiving, but equity futures for all three major indexes were down around 0.1 percent, having clawed back some earlier losses .

EUROPE AND BRITAIN

Markets' mood improved also after data showed euro zone economic sentiment rebounded more than expected in November. Sentiment in industry, among consumers, and in industry all improved but remain below zero. The euro was little changed by the news.

Data released on Thursday also showed that bank lending to euro zone companies rebounded in October.

The British pound slipped however, after rising on Wednesday when a model for pollsters YouGov, which accurately predicted the 2017 election, said Prime Minister Boris Johnson was on course to win a majority in parliament at the Dec. 12 election.

The pound eased 0.1 percent to $1.2909 and against the euro it weakened 0.25 percent, retreating from a near 7-month high at 85 pence.

Implementing Brexit by the end of January, as Johnson promises, would leave him a "miniscule" 11 months to agree a trade deal with the European Union, analysts at Societe Generale told clients.

The Institute for Fiscal Studies - a British think tank - said that neither of the UK's major parties have credible plans to manage Britain's public finances.

source: news.abs-cbn.com

Global markets up on trade optimism, US stocks end at records

NEW YORK — Global stocks mostly rose Wednesday, with Wall Street again notching new records, as investors stayed upbeat that China and the United States would soon reach an interim trade deal.

Major US indices ended at records for the third straight day following better-than-expected reports on economic growth and durable goods orders.

Briefing.com analyst Patrick O'Hare said the latest reports "feed into the notion that the US economy is not on the cusp of a recession."

But a Federal Reserve survey showed businesses, farmers and bankers nationwide remained concerned about the impact of tariffs and trade conflict.

After more than a year of being lurched up and down by shifting trade headlines, most analysts still expect a deal soon, but concede there is lingering uncertainty.

"Trade optimism has lifted stocks," CMC Markets analyst David Madden. "Equity markets are posting gains, but the upside moves are not massive as dealers are mindful that things still could fall apart."

For Craig Erlam, senior market analyst at Oanda, "the sudden daily obsession with the trade war probably has a lot to do with the fact that there's very little else to talk about at the moment, which doesn't bode well for the rest of the year.

"The trade war has taken the place of the Fed in being what investors are hanging their hat on," Erlam added.

The broad-based S&P 500 gained 0.4 percent, but volumes were low in the final full day of trading before the Thanksgiving holiday on Thursday. 

US markets will reopen Friday with a half-day of trading.

Hong Kong rose 0.2 percent, with e-commerce titan Alibaba piling on more than three percent a day after its market debut that saw it gain more than six percent.

Tokyo ended 0.3 percent higher and Sydney jumped 0.9 percent.

However, Shanghai fell 0.1 percent after data showed that industrial company profits tumbled by 10 percent in October on an annual basis, highlighting continued problems in the world's number two economy.

The pound meanwhile diverged as opinion polls showed the main opposition Labour party closing the gap on Prime Minister Boris Johnson's Conservatives just over two weeks before the general election.

Sterling has been given a lift in recent weeks by expectations Johnson would win a workable parliamentary majority that would allow him to push through his Brexit plan.

Among individual companies, Boeing fell 1.5 percent after its 777X suffered significant problems during testing overseen by US aviation inspectors, raising new questions about a key aircraft under development.

Boeing remains under scrutiny over the 737 MAX, which remains grounded after two fatal crashes.

KEY FIGURES AROUND 5 A.M. THURSDAY 

New York - Dow: UP 0.2 percent at 28,164.00 (close)

New York - S&P 500: UP 0.4 percent at 3,153.63 (close)

New York - Nasdaq: UP 0.7 percent at 8,705.18 (close)

London - FTSE 100: UP 0.4 percent at 7,429.78 (close)

Frankfurt - DAX 30: UP 0.4 percent at 13,287.07 (close)

Paris - CAC 40: DOWN 0.1 percent at 5,926.84 (close)

EURO STOXX 50: UP 0.2 percent at 3,712.85 (close)

Tokyo - Nikkei 225: UP 0.3 percent at 23,437.77 (close)

Hong Kong - Hang Seng: UP 0.2 percent at 26,954.00 (close)

Shanghai - Composite: DOWN 0.1 percent at 2,903.19 (close)

Euro/dollar: DOWN at $1.0999 from $1.1021

Dollar/pound: UP at $1.2899 from $1.2866

Euro/pound: DOWN at 85.26 pence from 85.66 pence

Dollar/yen: UP at 109.55 yen from 109.05 yen

Brent North Sea crude: DOWN 0.3 percent at $64.06 per barrel

West Texas Intermediate: DOWN 0.5 percent at $58.11 per barrel

source: news.abs-cbn.com

Trump-Cook 'bromance' culminates with visit to Apple factory

WASHINGTON -- President Donald Trump's visit to Apple's Texas manufacturing plant represents a truce in the White House war on Silicon Valley and an unlikely "bromance" with chief executive Tim Cook.

The visit will give the US leader a chance to hail American manufacturing and step back, at least temporarily, from his tirade against big technology firms.

Apple announced in September it would keep making its Mac Pro computer in the United States, after obtaining tariff exemptions for some components in the high-end computers.

The developments show an unusual Trump-Cook relationship in sharp contrast with the president's attacks on other tech giants.

"On the face of it, it's an unlikely relationship," said Roger Kay, analyst at Endpoint Technologies Associates who follows the sector.

Cook, who supported Democrat Hillary Clinton in 2016, has been able to sidestep much of Trump's anger by being "very diplomatic," Kay said.

"He's not saying 'I love Trump,' but he's not saying 'I hate Trump,'" said Kay.

"He hasn't made any disparaging public comments. By not ruffling Trump's feathers he's gotten quite a lot out of it."

Cook and Trump remain far apart on a number of issues including trade and immigration, with Apple opposing the White House plan to end protection for so-called "dreamers" who came to the US as children.

While Apple has acknowledged it has paid some tariffs imposed by Trump on goods imported from China, the iPhone maker has so far avoided a major impact from the trade friction.

SIDESTEPPING TRUMP TIRADES

Trump, who has called Google and social media firms "biased" and been especially critical of Amazon CEO Jeff Bezos -- accusing him of using his personal investment in the Washington Post for politics -- has had mostly praise for the Apple CEO.

"Other companies hire very expensive consultants," Trump said in August. "But the only one who calls me is Tim Cook. He calls me whenever there's a problem."

Trump, who once referred to the CEO as "Tim Apple," appears to be forging a friendly relationship with Cook even when he offers criticism.

In one tweet, he seemed to fret over the design of the latest iPhones which no longer have a home button.

"To Tim: The Button on the IPhone was FAR better than the Swipe!" Trump wrote.

According to the Wall Street Journal, Cook has quietly cultivated his relationship with Trump through the president's daughter Ivanka and her husband Jared Kushner, both of whom advise the president.

Trump appears to have softened some of his positions on tariffs after hearing Cook's argument that punishing Apple would help foreign rivals such as Samsung.

"Tim Cook has gone out of his way it seems to develop a relationship with President Trump because he was concerned I'm sure of the potential impact on the business" from Trump's policies, said Bob O'Donnell of Technalysis Research.

Because most of Apple products are manufactured in China, "there was a potentially large impact on profitability," O'Donnell said.

"Tim Cook is trying to be pragmatic and trying to address the issue by tackling it head on."

Apple, which benefited from legislation signed by Trump that reduced taxes on repatriated profits from 35 to 15 percent, has responded to White House efforts by pledging to invest $350 billion in the US economy by 2023 through its own manufacturing and from suppliers.

O'Donnell said that Cook's efforts to forge a relationship with Trump has some risks as well in Silicon Valley, where the president is unpopular.

"I think some people who are Apple fans and don't like Trump find it a little disconcerting," O'Donnell said.

Kay said however that Apple employees and customers understand the needs of the business, and that Cook's efforts might even ease some of the tensions between the White House and the tech industry.

"Maybe Tim can create a rosier halo around Silicon Valley," Kay said.

"If he puts a human face on Silicon Valley, it could give Trump a slightly different view."

source: news.abs-cbn.com

China, US agree tariff rollback if phase one trade deal is completed

WASHINGTON/BEIJING -- China and the United States have agreed to roll back tariffs on each others' goods in a "phase one" trade deal if it is completed, officials from both sides said on Thursday, sparking division among some advisers to President Donald Trump.

The Chinese commerce ministry, without laying out a timetable, said the two countries had agreed to cancel the tariffs in phases.

A US official, speaking on condition of anonymity, confirmed the rollback would be part of the first phase of a trade agreement that is still being put to paper for Trump and President Xi Jinping to sign.

White House spokeswoman Stephanie Grisham told Fox News Channel the United States is "very, very optimistic" about completing a deal that would defuse a 16-month trade war between the world's two largest economies.

"I cannot get ahead of the talks with China, but we are very, very optimistic that we will reach a deal soon," she said.

Experts warn the pact could still fall apart. US officials said a lot of work remained to be done when Trump announced the outlines of an interim deal last month.

Trump has used tariffs on billions of dollars of Chinese goods as his primary weapon in the protracted trade war. The prospect of lifting them, even in phases, has drawn fierce opposition from advisers in and outside of the White House who remain wary of giving up a key aspect of US leverage.

US stocks pared gains after Reuters reported that the plan faced internal opposition.

"There is no specific agreement for a phased rollback of the tariffs," said Michael Pillsbury, an outside adviser to Trump.

"The American side has been ambiguous when and which tariffs will be lifted. The Chinese have some wishful thinking and are trying to soothe their domestic hardliners that the tariffs will someday come off."

If an interim deal is finished and signed, it is widely expected to include a US pledge to scrap tariffs scheduled for Dec. 15 on about $156 billion worth of Chinese imports, including cell phones, laptop computers and toys.

Tariff cancellation was an important condition for any agreement, Chinese Commerce Ministry spokesman Gao Feng said, adding that both must simultaneously cancel some tariffs on each other's goods to reach the phase one pact.

"Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations," Gao told a regular briefing.

A spokesman for the US Treasury department declined to comment and the US Trade Representative's office did not immediately respond to a request for comment.

Republican lawmakers are urging the Trump administration to tie any tariff rollbacks to Beijing's compliance with specific elements of the agreement.

"The tariffs should be phased out piece by piece as China complies," one congressional source said.

TRUMP-XI MEETING

In what could be another gesture to boost optimism, China's state news agency Xinhua reported late on Thursday that the Chinese customs and Ministry of Agriculture are considering removing restrictions on US poultry imports.

China has banned all US poultry and eggs since January 2015 due to an avian influenza outbreak.

The optimism over a phase one trade deal boosted stocks globally; bond yields shuffled higher.

A source previously told Reuters that Chinese negotiators wanted the United States to drop 15 percent tariffs on about $125 billion worth of Chinese goods that took effect on Sept. 1.

They also sought relief from earlier 25 percent tariffs on about $250 billion of imports, ranging from machinery and semiconductors to furniture.

A person familiar with China's negotiating position said it was pressing Washington to "remove all tariffs as soon as possible".

A deal may be signed before the end of the year by Trump and Xi at a yet-to-be determined location.

Dozens of venues have been suggested for a meeting, which had originally been set to take place on the sidelines of a now-cancelled mid-November summit of Asia-Pacific leaders in Chile, a senior Trump administration official told Reuters on Wednesday.

One possible location was London, where the leaders could meet after a NATO summit that Trump is due to attend from Dec. 3-4, the official said.

Gao declined to say when and where such a meeting could be.

Since Trump took office in 2017, his administration has been pressing China to curb massive subsidies to state-owned firms and end the forced transfer of American technology to Chinese firms as a price of doing business in China.

The president's tough stance on China has earned him praise from his political base, and he may be reluctant to appear conciliatory on the issue going into his 2020 re-election campaign. But Trump has also sought to portray stock market gains as a reflection of his stewardship of the economy, and the market has reacted positively to any hints of an end to the two countries' trade dispute.

source: news.abs-cbn.com