RIYADH -- The G20 on Thursday pledged to avoid "unnecessary" trade barriers on essential goods including food during the coronavirus pandemic, after the WTO and IMF warned over the growing use of export restrictions.
The pandemic has pushed the global economy and international trade into turmoil as they face downturns not seen since the Great Depression.
Global trade is expected to register "double-digit declines" in volumes in nearly all regions this year, the World Trade Organization has said.
G20 trade and investment ministers said export restrictions on vital medical supplies and other essential goods, if necessary, must be "proportionate, transparent, temporary" and must not create "unnecessary barriers to trade or disruption to global supply chains".
Following a virtual meeting hosted by Saudi Arabia, the ministers also pledged to "refrain from introducing export restrictions on agricultural products" and avoid "unnecessary food-stockpiling".
Last month, the International Monetary Fund and WTO expressed concern over possible "supply disruptions" from the growing use of export restrictions that limit trade of key medical supplies and food.
They called on global leaders to refrain from imposing such restrictions.
Disruptions to supply chains could "prolong and exacerbate the health and economic crisis", the two institutions warned.
Agence France-Presse
BEIJING - China on Thursday announced it would cut interest rates in a bid to boost the economy, as it battles the economic fallout of the new coronavirus outbreak.
The reduction in the loan prime rate (LPR) -- one of the preferential rates commercial banks impose on their best customers and which serves as a reference for other lending rates -- is the latest measure to help companies struggling through the epidemic.
The one-year LPR was lowered to 4.05 percent from 4.15 percent, the People's Bank of China (PBoC) said in a statement.
The five-year LPR -- on which many lenders base their mortgage rates -- was also lowered to 4.75 percent from 4.8 percent.
The LPR, released on the 20th day of every month, is based on rates of the central bank's open market operations, especially medium-term lending facility rates.
The rate reduction comes as Beijing battles to control a virus epidemic that has infected over 74,500 people in the country.
The outbreak is threatening to put a dent in the global economy, with China paralyzed by vast quarantine measures and major firms such as iPhone maker Apple and mining giant BHP warning it could damage bottom lines.
The central bank said earlier this month it would offer a 300-billion-yuan ($43-billion) boost to help businesses involved in fighting the epidemic.
Julian Evans-Pritchard of Capital Economics said the rate cut would "help companies weather the damage from the coronavirus at the margins".
But he said the ability of firms to postpone loan repayments and access loans on preferential terms would be more important in the short-term.
"We expect the People's Bank to continue loosening monetary conditions in the coming weeks, especially given signs that the coronavirus disruptions have started to weigh on employment," he said.
"But rate cuts alone will provide limited relief to the millions of small private firms that are suffering the most from the epidemic and are poorly served by the formal banking (sector)."
source: news.abs-cbn.com
NEW YORK -- World equity markets rallied for a fourth day on Thursday, with key stock indexes touching fresh peaks, as news that China plans to cut tariffs in half on some US goods buoyed risk sentiment and pushed safe-haven currencies lower.
The yield on Germany's benchmark 10-year Bund touched its highest in almost 2 weeks and US Treasury yields rose as investors bet China's efforts to contain the deadly coronavirus would mitigate its impact on the global economy.
The death toll in mainland China jumped by 73 to 563, with more than 28,000 infections confirmed.
US Treasury Secretary Steven Mnuchin, in an interview with Fox Business Network, downplayed concerns that the outbreak could affect global supply chains, but acknowledged "this is something we're monitoring very carefully."
Major stock indexes, including the STOXX Europe 600 of small-, mid- and large-cap stocks, the benchmark S&P 500 and Dow industrials on Wall Street, and the S&P/TSX composite in Toronto, set records.
The yen slid to a two-week low against the dollar and the franc fell to its weakest in more than a week as investors hailed news China would halve tariffs on 1,717 US goods.
Many risk-off moves taken over the past two weeks are being unwound, said Simon Harvey, an FX market analyst at Monex Europe in London.
"We're seeing credible responses from monetary authorities in China and it looks like it's soothing market fears of a more entrenched slowdown in the Chinese economy," Harvey said.
MSCI's gauge of stocks across the globe gained 0.53 percent and its emerging market stocks rose 1.03 percent.
The pan-European STOXX 600 index rose 0.44 percent, helped by a swathe of strong earnings reports, with the euro zone banks index posting its biggest daily gain in a month.
Indexes in Frankfurt, Paris and London all gained, rising between 0.3 percent and 0.9 percent.
The Dow Jones Industrial Average rose 95.16 points, or 0.32 percent, to 29,386.01. The S&P 500 gained 10.74 points, or 0.32 percent, to 3,345.43 and the Nasdaq Composite added 52.71 points, or 0.55 percent, to 9,561.39.
Rebounding worker productivity in the fourth quarter and other U.S. economic data also lifted sentiment on Wall Street.
The number of Americans filing for unemployment benefits dropped to a nine-month low last week.
Despite optimism about containing economic fallout, the impact of the health emergency in China was showing up in corporate reports. Chipmaker Qualcomm Inc flagged a potential threat to the mobile phone industry from the outbreak, and its shares fell 1.7 percent.
The dollar index rose 0.21 percent, with the euro down 0.2 percent to $1.0975. The yen weakened 0.15 percent versus the greenback at 110.00 per dollar.
Gold rose on expectations central banks will keep interest rates low. US gold futures settled up 0.5 percent at $1,570 an ounce.
Bond yields in Europe were pressured upward by remarks from European Central Bank President Christine Lagarde that euro zone growth remains modest but there are signs of stabilization.
Germany's Bund yield rose as much as 3 basis points to -0.339 percent, its highest in almost two weeks, before pulling back to around -0.39 percent.
Benchmark 10-year US Treasury notes fell 1/32 in price to yield 1.6508 percent.
Brent crude gave up early gains as the Organization of the Petroleum Exporting Countries and Russia gave mixed signals about possible further output cuts to counter concerns about weak demand due to the coronavirus.
Brent fell by 35 cents to settle at $54.93 a barrel while West Texas Intermediate rose 20 cents to settle at $51.07 a barrel.
source: news.abs-cbn.com
NEW YORK -- Key world equity indexes climbed to new records on Wednesday on hopes a US-China trade deal will reduce harmful tensions, but oil prices slid on doubts the pact will spur world growth and boost crude demand.
US President Donald Trump and Chinese Vice Premier Liu He signed a Phase 1 deal that will roll back some tariffs and see China boost purchases of US goods and services, defusing a prolonged conflict between the world's two largest economies.
Liu said in remarks at the White House that the United States and China need to step up cooperation, and that the deal benefits both countries and the world. The deal capped an 18-month dispute that had roiled markets.
The centerpiece of the deal is a pledge by China to purchase at least an additional $200 billion worth of US farm products and other goods and services over two years, over a baseline of $186 billion in purchases in 2017.
MSCI's all-world stock index and the three major indexes on Wall Street set record intra-day highs. The MSCI benchmark, along with the Dow and S&P 500, also posted record closing highs, while the Dow closed above the 29,000 mark for the first time.
The deal is unlikely to significantly change the growth outlook, but it should allow companies to make the capital investments they have not, which is positive, said Marvin Loh, senior global macro strategist at State Street Global Markets.
"What's most important to investors is a potential de-escalation and signs that de-escalation will continue this year, which is the outlook period for a lot of investors," he said.
"If we can somehow take this out as one of the bigger risks that we had all last year, it does give some confidence to the market. Not necessarily from an economic but from a risk parameter perspective," Loh said.
MSCI's gauge of stocks across the globe gained 0.07 percent. Earlier in Europe, the pan-regional STOXX 600 index closed up 0.1 percent while MSCI's broadest measure of Asia-Pacific markets outside Japan closed down 0.35 percent. Japan's Nikkei lost 0.45 percent.
On Wall Street, the Dow Jones Industrial Average rose 90.55 points, or 0.31 percent, to 29,030.22. The S&P 500 gained 6.14 points, or 0.19 percent, to 3,289.29 and the Nasdaq Composite added 7.37 points, or 0.08 percent, to 9,258.70.
Emerging market stocks lost 0.53 percent.
Oil prices slipped on concerns the trade agreement may not provide much of a demand boost because the United States intends to keep tariffs on Chinese goods until a Phase 2 deal is reached.
Prices were also under pressure from a report by the Organization of Petroleum Exporting Countries. OPEC expects lower demand for its oil in 2020 even as global demand rises, as rival producers grab market share and the United States looks set for another output record.
Brent crude fell 49 cents to settle at $64 a barrel. U.S. West Texas Intermediate crude futures settled down 42 cents at $57.81 a barrel.
The dollar pared losses but remained lower against the euro and the yen after the signing of a trade deal that may prove a mild negative for the greenback as it removes uncertainty.
The dollar index, tracking the unit against six major peers, fell 0.14 percent, with the euro up 0.18 percent to $1.1147.
US Treasury yields declined as investors repositioned around new data showing producer prices barely rose in December.
A rise in the cost of goods was offset by weakness in services, the latest indication of tame inflation pressures that could allow the Federal Reserve to stand pat on interest rates this year.
Benchmark 10-year notes last rose 9/32 in price to push its yield lower to 1.7864 percent.
In Europe, investors flocked to new fund raisings by Italy and Belgium a day after Spain saw record demand.
The 10-year German bond yield fell 3 basis points to -0.201 percent, not too far from the more than six-month highs of -0.157 percent touched at the start of January.
US gold futures settled up 0.6 percent at $1,554 an ounce.
source: news.abs-cbn.com
NEW YORK -- Global stocks were range-bound on Tuesday while the yuan advanced against the dollar after Washington said it no longer considered China a currency manipulator and tensions eased between the economic titans.
New York was also rattled by news reports on Tuesday that US President Donald Trump intended to keep most punitive US tariffs on Chinese imports until after the 2020 presidential election.
US stocks finished lower, pulling back from Monday's records, while London rose and Europe edged downward.
The US Treasury announcement on the Chinese currency late Monday came as the two countries prepare to sign the first part of a wider trade agreement that has helped fan a rally in world equity markets.
Washington's decision triggered a sell-off in haven assets, including the yen and gold.
In August, Trump accused Beijing of weakening its currency "to steal our business and factories," re-stating a long-standing grievance.
The dollar slumped to 6.8670 yuan at one point, the lowest level since July, before rebounding somewhat.
"The yuan is the purest and best barometer to gauge the market's view on US-China trade tension," said AxiTrader's Stephen Innes.
"With the yuan strengthening ahead of the 'phase one' deal signing, it's indicating the potential for further improvement in trade relations."
The US reversal of China's status as a manipulator "is a most precise and definitive de-escalation of trade tension to date and provides a less congested road as we pivot to phase two of the broader trade agreement," Innes added.
Still, equity markets were a bit edgy ahead of Wednesday's expected signing of the US-China agreement.
Some investors have been expecting a pullback following the surge in recent weeks that have left the market in what analysts have called an "overbought" condition.
Earlier, Tokyo's main stocks index rose 0.7 percent as the dollar advanced against the yen owing to a rush out of safety -- giving a boost to Japan's exporters.
However, profit-taking saw Hong Kong drop 0.2 percent and Shanghai slip 0.3 percent following recent advances.
KEY FIGURES AT 2145 GMT (5:45 a.m. in Manila)
New York - Dow: UP 0.1 percent at 28,939.67 (close)
New York - S&P 500: DOWN 0.2 percent at 3,283.15 (close)
New York - Nasdaq: DOWN 0.2 percent at 9.251.33 (close)
London - FTSE 100: UP 0.1 percent at 7,622.35 (close)
Frankfurt - DAX 30: FLAT at 13,456.49 (close)
Paris - CAC 40: UP 0.1 percent at 6,040.89 (close)
EURO STOXX 50: DOWN 0.1 percent at 3,774.88 (close)
Tokyo - Nikkei 225: UP 0.7 percent at 24,025.17 (close)
Hong Kong - Hang Seng: DOWN 0.2 percent at 28,885.14 (close)
Shanghai - Composite: DOWN 0.3 percent at 3,106.82 (close)
Dollar/yuan: DOWN at 6.8836 yuan from 6.8938 yuan
Pound/dollar: UP at $1.3019 from $1.2989
Euro/pound: DOWN at 85.46 pence from 85.72 pence
Euro/dollar: DOWN at $1.1126 from $1.1134
Dollar/yen: UP at 109.98 yen from 109.95
Brent Crude: UP 0.5 percent at $64.49 per barrel
West Texas Intermediate: UP 0.3 percent at $58.23 per barrel
Agence France-Presse
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
WASHINGTON -- US Secretary of State Mike Pompeo on Monday warned Silicon Valley not to bolster China's "Orwellian" state, two days before the world's two largest economies sign a partial trade deal.
Speaking to a tech-heavy crowd in San Francisco, Pompeo trumpeted the "phase one" deal to tame a two-year trade war but told businesses that they needed to do more.
"We need to make sure American technology doesn't power a truly Orwellian surveillance state. We need to make sure American principles aren't sacrificed for prosperity," Pompeo said at the Commonwealth Club.
He said he was not discouraging firms from heading to China, insisting that the Trump administration wants "American companies to get rich doing business there."
"At the same time, we need to make sure that our companies don't do deals that strengthen our competitor's military or tighten their regime's grip of repression in parts of that country," he said.
Rights advocates have voiced growing concern about China's use of technology to develop intrusive electronic surveillance.
In the tightly controlled western region of Xinjiang, where experts say more than one million mostly Muslim people are incarcerated, China is said to be fine-tuning technology that will allow security forces to quickly identify anyone and give details about their movements and background.
"Ask yourselves just a few questions -- who am I dealing with? What's the true risk/return calculus to doing business in China?" Pompeo said.
Trump is set to sign the partial deal on Wednesday after prolonged feuding, dropping new tariffs that were set to take effect on Chinese electronic products and cutting in half those imposed on September 1 on $120 billion worth of products.
The White House has said the agreement includes improvements on Beijing's requirements that foreign companies transfer technology -- which the United States say is a pretext for rampant intellectual theft.
The Trump administration says that the accord will also give US companies better access to the Chinese market for financial services and require China to buy more US products.
"We will do our part in the government. We will keep ramping up our enforcement," Pompeo said.
"But defending freedom and national security isn't just the government's job. It's one for each and every citizen," he told the tech companies.
Agence France-Presse
NEW YORK -- World stocks on Tuesday closed out a notably profitable year, with Wall Street recording its best annual performances since 2013, boosted by hopes for a US-China trade deal.
New York rallied into the close, turning positive for the day and leaving the broad-based S&P 500 and tech-heavy Nasdaq up 29 percent and 35 percent respectively for 2019, the best showings in 6 years.
Key European markets showed increases of 25 percent or more for the year, partly thanks to late surges on receding recession fears and easing China-US trade war tensions.
Brexit-hit London, however, trailed its peers with a 12 percent annual rise, less than half the percentage increase managed by Paris, Frankfurt and Milan.
Earlier on Tuesday as US markets were about to open, President Donald Trump tweeted that a partial trade deal with China would be signed in Washington on January 15, ending some of the uncertainty about efforts to cement the deal announced earlier this month.
Quincy Krosby of Prudential Financial told AFP the US-China detente could help decide the direction of the global economy next year.
"Much of the enthusiasm in the market is based on the idea that global growth is going to begin to accelerate, albeit slowly," she said. "The question will be, do we actually see positive growth, especially in China?"
Demand in China is crucial to chances for renewed growth in global trade, while the China trade agreement could see US corporations begin investing again after a year when corporate capital spending stagnated worryingly, according to Krosby.
'CAUTIONARY TONE'
Asian stock markets closed mainly lower on Tuesday, with Hong Kong ending a half-day of trading almost 0.5 percent down, although the bourse rallied more than seven percent in December. Tokyo was shut for a public holiday.
"While market volumes are predictably light, investors continue to strike a year-end cautionary tone as December optimism is gradually giving way to 2020's uncertainty," Stephen Innes, chief Asia market strategist at AxiTrader, said in a client note.
Asian investors were also watching for significant policy announcements early in the New Year.
In a New Year's speech on Wednesday, North Korean leader Kim Jong Un struck a decisively militaristic tone, warning of a new strategic weapon and "shocking" action.
Analysts said all eyes were on nuclear-armed Pyongyang's threat of a "new way" after its end-of-year deadline for sanctions relief from the United States.
An address by China's President Xi Jinping will be followed closely by the markets as well.
Elsewhere Tuesday, oil prices slid despite reports Iran had seized a vessel suspected of smuggling fuel near the Strait of Hormuz -- a chokepoint for a third of the world's seaborne oil.
Over the year, the price of Brent North Sea crude jumped by almost one quarter and the New York benchmark contract WTI soared more than one third in value, helped by tighter supply.
The pound finished a volatile year with gains Tuesday against the dollar and euro.
KEY FIGURES AROUND 2130 GMT (5:30 a.m. Wednesday in Manila)
New York - Dow: UP 0.3 percent at 28,538.24 (close)
New York - S&P 500: UP 0.3 percent at 3,230.76 (close)
New York - Nasdaq: UP 0.3 percent at 8,972.60 (close)
London - FTSE 100: DOWN 0.6 percent at 7,542.44 points (close)
Paris - CAC 40: DOWN 0.1 percent at 5,978.06 (close)
Hong Kong - Hang Seng: DOWN 0.5 percent at 28,189.75 (close)
Pound/dollar: UP at $1.3248 from $1.3113 at 2200 GMT
Euro/pound: DOWN at 84.65 pence from 85.40 pence
Euro/dollar: UP at $1.1214 from $1.1199
Dollar/yen: DOWN at 108.66 from 108.88 yen
Brent Crude: DOWN 1 percent at $66.0 per barrel
West Texas Intermediate: DOWN 1 percent at $61.06
Agence France-Presse
TOKYO - Japanese electronic device maker MinebeaMitsumi Inc. will shift part of its video game console production operation to Cambodia from China, a company spokesman told NNA on Tuesday, with the outcome of the United States-China trade row remaining uncertain.
The move by MinebeaMitsumi, a supplier to video game giant Nintendo Co., comes after the United States canceled last week its planned punitive tariffs on video game consoles, among other products, shipped from China.
MinebeaMitsumi will introduce upgrades to its plant located in a special economic zone in the Cambodian capital of Phnom Penh, planning to have the assembly of video game consoles for export at full capacity from 2020.
Production has partially started already, the spokesman said, while declining to disclose the amount of investment or planned output capacity.
He said they plan to beef up production in Cambodia overall, where they currently make products such as ball bearings and LED backlights under its local arm, Minebea (Cambodia) Co., and expand the number of workers to 20,000 from 7,000 in the next few years.
Nintendo, which made up 16.4 percent of MinebeaMitsumi's sales in the fiscal year through March 2019, revealed in July its plan to shift part of its Switch console production from China to Vietnam.
It said the decision to move production of the popular video game console was made to avoid future uncertainty, after opposing the U.S. tariffs in a joint statement released in June. (NNA/Kyodo)
source: news.abs-cbn.com
WASHINGTON -- The White House has agreed to suspend some tariffs on Chinese goods and reduce others in return for Beijing's pledge to hike purchases of US farm products in 2020, sources said on Thursday, taking a step towards deescalating the trade war between the world's two biggest economies.
A sourced briefed on the status of bilateral negotiations said the United States would suspend tariffs on $160 billion in Chinese goods expected to go into effect on Dec. 15 and roll back existing tariffs.
In return, Beijing would agree to buy $50 billion in US agricultural goods in 2020, double what it bought in 2017, before the trade conflict started, two US-based sources briefed on the talks said.
The White House didn't release any official statement, raising questions about whether the terms had been agreed by both sides.
Two people familiar with the negotiations had said earlier on Thursday that US negotiators were offering to cut existing tariffs on Chinese goods by as much as 50 percent as well as suspend the new tariffs scheduled to go into effect on Sunday in an attempt to secure a "Phase 1" deal first promised in October.
The US-China trade war has slowed global growth and dampened profits and investment for companies around the world. The United States has announced $28 billion in subsidies for American farmers affected by the dispute.
"If signed, this is an encouraging first phase that puts a floor under further deterioration of the bilateral relationship," said US-China Business Council President Craig Allen. "But this is just the beginning. The issues facing the US and China are complex and multi-faceted. They are unlikely to all be resolved quickly."
China bought $24 billion in US farm products in 2017, according to US Department of Agriculture figures.
AN AG BUY TURNAROUND
Trump said in a White House news conference on Oct. 11 with Chinese Vice Premier Liu He that the two countries had agreed to a "Phase 1" trade deal on "intellectual property, financial services" and a "purchase of from $40 (billion) to $50 billion worth of agricultural products."
A written agreement would be available in weeks, Trump said at the time, adding, "we’ve agreed in principle to just about everything I mentioned, all of the different points."
Beijing has since balked at committing to buy a specific amount of agricultural goods during a certain time frame, however. Chinese officials said they would like the discretion to buy based on market conditions.
After the October news conference, analysts questioned whether the $50 billion figure was realistic.
Soybeans made up half of China's agricultural purchases in 2017. Demand has since cratered because the pig herds that eat it have been decimated by African swine fever.
Chinese officials have demanded the United States roll back tariffs that Trump put in place as a condition of any "Phase 1" deal. The Trump administration has put tariffs on hundreds of billions of dollars in Chinese imports, starting in July 2018.
Although there appeared to be an agreement in principle, it was unclear whether it was a written, actionable deal, or whether Beijing had agreed to it, said one Washington-based source familiar with the talks.
"Until the full text is released, it's not particularly actionable. It's very unclear to me: Is this an agreement in principle or is it an agreement?" the source said.
LOOMING DEADLINE
If Trump does not suspend the tariffs scheduled to go into effect on Sunday, Beijing officials will apply more tariffs on US goods and may suspend talks until after the US presidential election in November 2020, trade experts believe.
The new tariffs would apply to almost $160 billion of Chinese imports such as video game consoles, computer monitors.
In August, China said it would impose 5 percent and 10 percent in additional tariffs on $75 billion of US goods in two batches. Tariffs on the first batch kicked in on Sept. 1, hitting US goods including soybeans, pork, beef, chemicals and crude oil.
The tariffs on the second batch of products are due to be activated on Dec. 15, affecting goods ranging from corn and wheat to small aircraft and rare earth magnets.
China also said it will reapply on Dec. 15 an additional 25 percent tariff on US-made vehicles and 5 percent tariffs on auto parts that had been suspended at the beginning of 2019.
source: news.abs-cbn.com
MANILA - As central banks around the world cut interest rates to boost their economies, the head of one of the world's largest financial companies said interest rates can only do so much and businesses want "clarity" more.
Citi CEO Mike Corbat said cutting rates won't necessarily stimulate economic activity, as businesses hold off on investing amid uncertainties over issues like the US-China trade war, the US-Mexico-Canada trade deal, and Brexit.
"We can have the conversation in terms of whether or not quantitive easing in some places has overstayed its functionality," Corbat said in an exclusive interview with ANC's The Boss.
He said the financial industry was particularly affected, as interest rates in Europe are already negative.
"Banks weren't really built around a business model of negative rates," Corbat said.
Besides not being able to charge fees for holding clients' money, businesses also don't necessarily borrow more because rates are low, he added.
"What businesses want is clarity and we can invest on the back of that," Corbat said.
Despite the uncertainties over trade issues, the global economy remains resilient, Corbat said, thanks to consumption.
Consumers powered the recovery of the world economy following the global financial crisis, and they are behind the resilience of the world economy today, the Citi chief said.
"The consumer has been phenomenally resilient and remains so today."
Corbat said he is also optimistic about the digitalization of finance, and Citi will continue to "invest heavily" in technology.
Citi recently partnered with Grab to launch a co-branded credit card in the Philippines, the first in Southeast Asia.
source: news.abs-cbn.com
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
SYDNEY/TOKYO -- Asian stocks gained on Friday as investors took heart from US President Donald Trump saying trade talks with China were "moving right along", and US oil prices sat near 2-1/2-month highs after OPEC and other producers agreed to cut output.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.5 percent and Japan's Nikkei added 0.3 percent.
Australian shares rose 0.2 percent and South Korea's Kospi climbed 0.8 percent, while China's Shanghai Composite and Hong Kong's Hang Seng indexes gaining 0.1 percent and 0.9 percent, respectively.
Trump's upbeat tone in comments on Thursday was enough to spark buying, despite a lack of agreement between Washington and Beijing over whether existing tariffs should be dropped as part of a preliminary deal to end their trade war.
"Many players have taken a wait-and-see attitude given a lack of fresh trading cues ahead of US payrolls data and the Federal Reserve's policy meeting. But clearly, the mood is quite positive," said Yasuo Sakuma, chief investment officer at Libra Investments.
Investors were hoping that the two sides will reach a compromise to at least avoid their worst fears - that the United States will go ahead with its final batch of tariffs on about $156 billion of Chinese exports.
Uncertainties over a deal have pushed some investors to the sidelines in recent sessions, while nervousness before the release of US non-farm payrolls data later in the day could also curb market liquidity.
Investors were also looking ahead to a Fed policy meeting on Dec. 1-11. A Reuters poll of economists and analysts showed the Fed would keep rates on hold at 1.50-1.75 percent.
Oil prices retreated but hovered near recent peaks after major oil exporting countries agreed on Thursday to cut output by an extra 500,000 barrels per day in the first quarter of 2020, after a nearly six-hour meeting on Thursday.
Details of the agreement and how the cuts will be distributed among producers still need to be ratified at a meeting in Vienna of OPEC and non-OPEC nations, otherwise known as OPEC+, on Friday.
"The cut of an extra 500,000 barrels a day was not priced into the market, so the cut will be positive for the market if it is carried out," said Tatsufumi Okoshi, senior commodity economist at Nomura.
"But since OPEC countries haven't fully complied with the existing cut, markets will probably have to wait to see how the cut will pan out," he added.
Brent crude futures dipped 0.3 percent to $63.20 a barrel, having struck its highest on Thursday since Nov. 28, while US West Texas Intermediate (WTI) crude eased 0.2 percent to $58.31 per barrel, but was not far off Thursday's 2-1/2-month high of $59.12.
The agreement coincided with the initial public offering (IPO) of state oil firm Saudi Aramco, which was priced at the top of its range, raising $25.6 billion in the world's biggest IPO.
In the currency market, the British pound soared on growing confidence that next week's election will give the Conservative Party the parliamentary majority it needs to deliver Brexit, ending near-term uncertainty.
Sterling spiked to a seven-month high of $1.3166 on Thursday and last stood at $1.316, up 1.6 percent so far this week. It hit 2-1/2-year highs versus the euro.
The euro stood at $1.1108, near a one-month high of $1.11165 set on Wednesday, lifted by firmer euro zone economic data.
That helped push the dollar index to a one-month low of 97.356 on Thursday. The index last stood at 97.369.
Against the yen, the dollar traded at 108.72 yen, having slipped slightly the previous day.
source: news.abs-cbn.com
TOKYO -- Asian stocks edged up on Thursday on signs the United States and China were on track for a preliminary trade deal, though optimism was tempered by the almost daily shifts in prospects for defusing the damaging tariff war now in its second year.
The fluid situation around Sino-US trade negotiations has cast a pall on financial markets heading into Christmas, with major economies grappling under the weight of weak exports, investments and corporate profits.
Investors were quick to latch on to a Bloomberg report on Wednesday that Washington and Beijing are closer to agreeing how many tariffs would be rolled back in a "phase one" trade deal.
US President Donald Trump later said that negotiations with China are going "very well," providing a boost to riskier assets and denting safe havens like the Japanese yen.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent. Australian shares were up 0.9 percent, while Japan's Nikkei stock index rose 0.81 percent.
Trump's comments marked a reversal from Tuesday when he roiled global markets by saying a trade deal may not come until after the 2020 US presidential election.
Analysts warn that more market turbulence is possible given Sino-US negotiations are very fluid.
"We could be in for a bit of a rally in risk assets and risk-on trades," said Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors in Sydney.
"My base case scenario is the two sides reach some deal. The pressure for a deal is immense simply because of the economic slowdown in both countries. However, we see increased volatility because policy uncertainty has become a constant."
US stock futures fell 0.03 percent on Thursday in Asia after the S&P 500 gained 0.63 percent on Wednesday.
The United States has imposed tariffs on Chinese goods in a 17-month long dispute over trade practices that the US government says are unfair. China has responded in kind with its own tariffs on US goods.
If both sides cannot reach an agreement soon, the next important date to watch is Dec. 15, when Washington is scheduled to impose even more tariffs on Chinese goods.
Traders are also bracing for the closely-watched US non-farm payrolls report due Friday to determine how well the US economy is holding up amid a global slowdown.
Some investors are betting that Trump will delay the additional duties as long as he gets close enough to a compromise because the tariff hike would hurt US consumers during the crucial year-end shopping season.
However, Trump has repeatedly sent mixed messages about the status of negotiations, sparking fits of optimism and despair in financial markets.
The yen traded at 108.81 per dollar, ceding some of the previous day's gains as positive signs about the trade dispute hurt demand for safe-haven currencies.
The yield on benchmark 10-year Treasury notes fell slightly to 1.7723 percent in Asia, retracing some of the gains it made in the previous session.
US crude edged 0.03 percent lower to $58.41 a barrel on Thursday as a 3 percent rally overnight showed signs of fading.
However, prices could be supported if the Organization of the Petroleum Exporting Countries, and allies including Russia, approve deeper crude output cuts when they meet in Vienna on Thursday and Friday.
source: news.abs-cbn.com
PARIS/LONDON -- France and the European Union said on Tuesday they were ready to retaliate if US President Donald Trump acted on a threat to impose duties of up to 100 percent on imports of champagne, handbags and other French products worth $2.4 billion.
The threat of punitive tariffs followed a US government investigation that found a new digital services tax in France would harm US technology companies, and will intensify a festering trade dispute between Europe and the United States.
In London for a NATO summit, Trump and French President Emmanuel Macron exchanged a tight-gripped handshake before both said they hoped they could smooth out their differences over the digital services tax.
"They're American companies. They're tech companies. They're not my favorite people, but that's OK, I don't care, they're American companies. And we want to tax American companies. It's not for somebody else to tax them," Trump said.
"So it's either gonna work out, or we'll work out some mutually beneficial tax," he said, referring to the levy threat. "And the tax will be substantial. I'm not sure it's gonna come to that, but it might."
The spat marks a new low in testy relations between Trump and Macron, who have been at odds over the American's unilateralist approach to trade, climate change and Iran.
On Tuesday, US Commerce Secretary Wilbur Ross said the French tax was a "very radical notion, putting a tax on revenues as opposed to a tax on earnings" and was aimed at raising French revenues to aid its budget deficits.
"Other countries would do better to try to develop their own technology, rather than to try to penalize American companies for their successes," he told Reuters in New York, adding it was a "strange and maybe dangerous" practice to tax revenue rather than income.
Earlier on Tuesday, Trump criticized European allies, singling out Macron for his "very nasty" comments portraying the NATO alliance as "experiencing brain death".
Macron's finance minister called the tariff threat unacceptable and said the EU was primed to respond if the United States imposed the new tariffs.
The European Commission, the EU executive, said the 28-nation EU would act as one and that the best place to settle disputes was at the World Trade Organization.
"I am determined to defend the interests of my country and of Europe," Macron said, seated next to Trump.
The United States has already imposed 25-percent duties on French wine and cheese as part of its WTO-sanctioned response to illegal EU aircraft subsidies, a move exporters said would penalize US consumers while severely hurting French producers.
INTERNATIONAL SOLUTION
France's 3-percent levy applies to revenue from digital services earned by companies with more than 25 million euros ($27.86 million) of revenues from France and 750 million euros worldwide.
An investigation by the US Trade Representative's office found the French tax was "inconsistent with prevailing principles of international tax policy".
It said the tax was "unusually burdensome" for US companies including Alphabet Inc's Google, Facebook Inc, Apple Inc and Amazon.com Inc.
France is not alone in targeting big digital companies; a growing number of other countries are preparing their own taxes.
Governments, including Washington, are frustrated that big digital companies can book earnings in low-tax countries such as Ireland regardless of where the end client is.
France says it will drop its digital tax as soon as an agreement is found at the Organisation for Economic Cooperation and Development to overhaul decades-old international tax rules.
FRENCH LUXURY STOCKS FALL
Shares in French luxury companies fell in response to the tariff threat against French champagne, handbags, cheeses and other products.
Hermes was around 2.8 percent lower, while LVMH and Kering fell 1.7 percent and 2.8 percent respectively. Champagne maker Vranken Pommery was down by 2.4 percent.
French products will not face tariffs immediately as the US Trade Representative still intends to gather public comments and hold a public hearing in January.
Based on past experience of Section 301 tariffs, primarily applied to Chinese goods, France would face punitive tariffs in two or three months.
Any retaliatory action from France would have to be taken at an EU-wide level because the bloc is a customs union which applies duties at its border.
source: news.abs-cbn.com
LONDON - Global equities mostly retreated Tuesday after US President Donald Trump warned there was no deadline for doing a trade deal with China.
Trade uncertainty also returned to the fore as the United States reimposed tariffs on Argentina and Brazil, threatened steep levies against France -- and warned China of possible new measures if ongoing talks fall through.
Trump, in Britain for a NATO summit to be held in Watford north of London, warned that efforts to resolve a trade dispute could wait until after next November's US election.
"I have no deadline," Trump told reporters upon his arrival.
"In some ways I like the idea of waiting until after the election for the China deal."
Trump's trade war with China and on-again off-again attempts to reach a deal have destabilized markets and stoked geopolitical tensions.
"Equity markets in Europe and US futures were hit as Donald Trump upped the ante again on trade," noted Markets.com analyst Neil Wilson.
"The chances of a (China) deal by December 15 just took another turn lower.
"After weeks of making generally positive noises on a deal being very close, there is a real sense now that a deal is not so very near at all and markets need to reprice," Wilson added.
As late as last week Trump boasted he was in the "final throes" of negotiating "one of the most important deals in trade ever".
But Washington has since courted Chinese anger by expressing support for Hong Kong protesters, calling progress into doubt.
Optimism that Beijing and Washington will eventually hammer out a partial agreement as part of a wider deal has supported equities for weeks, helping Wall Street to set numerous records.
But investor sentiment was dealt a blow on Monday when Donald Trump said he would reinstate steel and aluminum tariffs on the two South American countries, which he accused of manipulating their currencies and hurting US farmers.
Later, officials warned they would also hit France with up to 100 percent levies on $2.4 billion in goods, saying a French digital tax was discriminatory against US tech firms such as Google, Apple and Amazon.
Sparkling wine, yogurt and Roquefort cheese could be affected as soon as next month, while US Trade Representative Robert Lighthizer warned his office was also considering similar moves against Austria, Italy, and Turkey.
On Tuesday, France vowed a "strong" response to any tariffs.
Uncertainty over trade, combined with a disappointing US manufacturing report, sent all three main indices on Wall Street tumbling Monday.
On Tuesday, London equities slid also as mining companies retreated on worries over demand from Asian powerhouse China, which is a top consumer of many commodities.
Britain's banks also dropped after Moody's ratings agency changed the banking system's overall outlook from stable to negative, citing weak economic growth and "prolonged uncertainty" surrounding Brexit.
In commodities, oil prices extended gains ahead of a key meeting of OPEC and other major producers, which is expected to see them maintain output cuts into June, with speculation they could go on until the end of 2020.
source: news.abs-cbn.com
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
WASHINGTON - Prices for electronics sold online at top US retailers were up slightly heading into the critical US shopping season, but sites including Walmart Inc and Amazon.com Inc have held prices steady for many other popular holiday products despite the pressure from tariffs on Chinese imports.
The analysis is based on a pricing study conducted for Reuters by retail analytics firm Profitero, which examined online prices from seven large retailers for 21,000 products.
The firm compared product prices during October and November last year to those this year in key holiday categories including appliances, electronics, toys and video games across Walmart, Walmart-owned Jet.com, Amazon, Target Corp, Best Buy, GameStop and Staples.
On average, the prices the retailers charged for electronics were 2.3 percent higher than the year-ago period, while across all the categories, prices were 0.9 percent higher, said Keith Anderson, senior vice president for strategy and insights at Profitero.
That’s lower than the average rate of inflation during the same period, which stood at 2.4 percent in 2018 and about 1.8 percent in 2019 so far.
In categories such as toys, prices dipped 0.2 percent and video games fell 2 percent, according to Profitero, which has not looked at year-over-year changes in pricing across the sampling of retailers and categories in the past.
Walmart and Target did not comment on the study but pointed Reuters to past comments from executives about how they have managed tariffs by working with vendors and diversifying their supply chain. Amazon did not immediately comment on the study. Best Buy declined comment and GameStop did not respond to requests for comment. Staples asked to see the study but did not comment.
America’s trade war with China threatens to push up product prices, which could hurt consumer spending this holiday season, a period which makes up nearly 40 percent of annual revenue for many retailers. The two countries are currently struggling to strike a preliminary trade deal.
About $539 billion worth of goods came into the United States from China in 2018, making the country the largest supplier of imported goods, the US Trade Representative said. US President Donald Trump has imposed tariffs and threatened more as leverage in trade negotiations with Beijing.
But while tariffs have driven up costs of goods for many retailers, at least the large firms have so far refrained from passing that cost pressure to shoppers, according to interviews with researchers, consultants and retail companies.
EBIT margins for all retailers excluding Walmart have been declining since October 2018 and at 6.7 percent are at their lowest since 2010, according to an analysis by Oxford Economics.
CONSUMERS NOT SEEING FULL EFFECTS
“Right now, nobody wants to be grinchy and steal Christmas so they are passing on as little as possible,” said Jeff Unze, a president at BorderX Lab - an e-commerce platform, which connects American retailers with Chinese consumers, and tracks pricing changes in both markets.
On Sept. 1, the US imposed a 15 percent tariff on many consumer goods from China that increased the cost of goods sold for most retailers. For example, Dollar Tree said tariffs will increase its cost of goods sold by about $19 million in the fourth quarter if tariffs are fully implemented.
In the Profitero analysis, Walmart’s products were only 0.4 percent more expensive compared to a year ago on a sample of over 6,000 popular holiday products. Amazon was 0.6 percent pricier on 9,200 products. A sampling of 1,200 items sold online by Target were 0.9 percent less expensive than during the year earlier period.
By contrast, chains such as Staples were over 4.7 percent more expensive, and the goods sold by Best Buy were priced at 1.1 percent more.
The study did not include popular categories such as apparel and accessories, which have largely not been subject to the Trump administration’s latest tariffs but are likely to face a 15 percent tariff in a new round scheduled for Dec. 15.
Consumer price index data, through October, shows that televisions, phones, computer accessories, video and audio products accounted for four of the top five largest year-over-year price declines by category.
The data is based on sampling by the Bureau of Labor Statistics only through October, however. In contrast, Profitero looked only at online pricing at seven retailers during October and November.
source: news.abs-cbn.com
