MTS Economic News_20191017

MTS News

MTS Economic News_20191017

17 Oct 2019

· The dollar nursed losses on Thursday amid gathering doubts about a mooted U.S.-China trade deal, while the volatile pound was on edge as Britain and the European Union scrambled to secure a last-minute Brexit deal.

As the greenback steadied on most major currencies, the biggest gainer was the Australian dollar, which jumped 0.4% from the session’s low after jobs data showed buoyant hiring, lowering chances of monetary easing in November.

Sterling edged lower to $1.2818 after swinging about a five-month high overnight, knocked around by a series of mixed headlines on the likelihood of progress at an EU leaders summit in Brussels later on Thursday.

It has surged some 5% since last week as negotiations stepped up.

Failure could push it below $1.2200, Commonwealth Bank of Australia (CBA) analyst Richard Grace said in a note.

The U.S. dollar, which had dropped on Wednesday as U.S. retail sales fell for the first time in seven months, hung near its overnight lows as earlier optimism about an announced “phase 1” of a trade deal with China ebbed in the absence of details.

U.S. and Chinese trade negotiators are working on nailing down text for the first phase of the trade deal for their presidents to sign next month.

The dollar drifted lower against the euro to $1.1076 and was steady against the Japanese yen at 108.75. Against a basket of currencies it hit a month low of 97.898 overnight and was steady around that level on Thursday.

China’s yuan weakened slightly to 7.0975 per dollar, while the safe-haven Swiss franc rose almost 0.2% to 0.9934 per dollar.

· Ren Zhengfei, chief executive and founder of Huawei Technologies Co., on Wednesday expressed strong hope for cooperation with Japan, as the Chinese tech giant faces severe challenges amid a prolonged technology dispute with the United States.

If China and Japan leverage the strengths of each other, “We can create great products,” Ren said in an interview with Kyodo News in Shenzhen, southern China, where the firm’s headquarters is located. It was his first-ever one-on-one interview with Japanese media.

· Hong Kong’s legislature resumed a question and answer session with the city’s leader on Thursday after pro-democracy lawmakers repeatedly interrupted her.

As Carrie Lam tried to speak, pro-democracy legislators repeatedly shouted at her before they were ejected from the Legislative Council chambers. Some of the hecklers held up a poster which appears to show Lam with bloody hands.

Pro-democratic lawmakers again shouted “five demands, not one less” at Lam, referencing the protesters’ list of requests.

· President Moon Jae-in has convened a meeting with his economy team, Cheong Wa Dae said Thursday, amid growing concerns about the health of Asia's fourth-biggest economy.

It is rare for the president to have such a separate group session with ministers handling economy-related affairs. Moreover, Finance Minister Hong Nam-ki, who doubles as deputy prime minister for the economy, will be absent, as he is on a visit to the United States for Group of 20and International Monetary Fund (IMF) meetings.

· The Chinese commerce ministry said on Thursday that China hoped to reach a phased agreement with the United States over trade as early as possible, and make progress on cancelling tariffs on each others’ goods.

A phased agreement would help restore market confidence and reduce uncertainty, Gao Feng, spokesman at the ministry, told reporters, adding that both sides were maintaining close communication.

· China’s Foreign Ministry said on Thursday that it urges the United States to withdraw new meeting restrictions imposed against Chinese diplomats.

Chinese diplomats in the United States are now required to give advanced notice of any plans to meet with U.S. state, local and municipal officials, senior State Department officials said on Wednesday.

The United States on Wednesday ordered Chinese diplomats to notify the State Department before meeting with federal and local officials, calling it a “reciprocal” move.

A senior State Department official, speaking on condition of anonymity, said the new restrictions came in response to the inability of US diplomats to meet with a range of Chinese officials and academics.

· The U.S. State Department and Congress took aim at China on Wednesday, even as President Donald Trump hailed “goodwill” between Washington and Beijing and said he expected to sign the first phase of a trade deal with President Xi Jinping next month.

While Trump touted progress in his damaging trade war with Beijing, State Department officials said Chinese diplomats and officials in the United States would be required to give advance notice of meetings with state, local and municipal officials, as well as at educational and research institutions, calling it a response to how U.S. diplomats are treated in China.

· Solutions still need to be found for customs arrangements in Northern Ireland to clinch a Brexit deal and European Union leaders could yet meet again if they do not reach an agreement at this week’s summit, Germany’s Angela Merkel said on Thursday.

· Britain will leave the European Union on Oct. 31 if no Brexit deal is reached with the bloc, housing minister Robert Jenrick said on Thursday.

Jenrick said a Brexit deal could still be done despite Northern Ireland’s Democratic Unionist Party saying it cannot support current proposals from Prime Minister Boris Johnson and the European Union.

“As we are negotiating this arrangement in Brussels as we speak, at the same time we are continuing to take forward at pace preparations to leave without a deal if necessary on the 31st of October,” Jenrick told BBC radio .

· Oil prices eased on Thursday after industry data showed a larger-than-expected build-up in stocks in the United States, although losses were limited by comments by U.S. Treasury Secretary Steven Mnuchin on a U.S.-China trade deal.

Global benchmark Brent crude oil futures <LCOc1> was down by 47cents, or 0.8%, at $58.95 a barrel by 0330 GMT.

U.S. crude oil futures <CLc1> were down 48 cents, or 0.9%, at $52.88after earlier dropping more than 1% to a session low of $52.76 earlier.

Reference: Reuters, CNBC,EURONEWS

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