The U.S.-China trade deal could be announced by early May according to reports; U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin should be heading to Beijing the week of April 29 with Chinese Vice Premier Liu He; going the opposite direction the following in a bid to close negotiations.
Parties to the negotiations are hoping the signing can be done in Japan, where Trump is due to travel in May to meet the country’s new emperor.
During his visit, officials want to announce the sides have struck a deal and details of a signing summit, probably set for late May.
In the US financial market; the yield on 10Y USTs lost 2bps and slipped to 2.57%, while stocks closed marginally lower with the DOW 0.01% down, the NASDAQ 0.05% lower and the S&P losing 0.23%.
The German economy is fast becoming Europe’s underperformer with government predictions that 2019 will record the weakest expansion in six years. As a result, the growth estimate has been slashed to 0.5% from a 2.1% forecast last year.
With manufacturing still in a slump, calls for Draghi and the ECB to employ monetary policies to boost spending is gaining traction. The Chancellor’s office has however not seen the need for a package of measures to boost growth.
The euro was just about flat against the dollar closing at $1.1296 while the yield on 10Y DBRs gained 1bps closing at 0.080%. The DAX and Stoxx600 both shed 0.13% and 0.09% respectively.
Wednesday’s Office for National Statistics data showed UK inflation unexpectedly remained stable in March with CPI at 1.9% against economists forecast of 2%.
With wages now outdoing price increases coupled with falling unemployment, analysts predict that the UK consumer will be well positioned to cope with Brexit-related uncertainties.
The British pound added less than 0.05 percent to hit $1.3045 against the greenback; while the yield on 10Y UKTs held at 1.224%. The FTSE slid by 0.06%.
Exciting yield, fatigue in Washington over pursuing new sanctions, and a global scramble for higher yield following leading central banks’ expansionary policies are driving interest in Russia’s papers.
Wednesday’s first of three bond sales totaled 85.1 billion rubles ($1.3 billion), more money than was raised in the whole month of January. Demand for the auction totaled 132 billion rubles, the most ever for a single offering from the country.
Turkey’s central bank has moved to support FCY reserves with billions of dollars of short-term borrowed money, stirring panic among analysts and investors of sharp-practices being employed to defend an inevitable slump of the lira.
Reports suggested that the reserve position was at US$28.1bn early this month; which already provided concern to global analysts and investors due to Turkey’s heavy reliance on the greenback for international trade.
The belief is that this position was reached by the use of swaps which are short-term funds and as such the real position less the short-term funds in US$16bn approximately which is more reason for concern.
Reports suggest that although the Chinese economy is showing signs of recovery, the recovery is all but wholistic. Economic growth is being driven by the state, while the private sector, which is accountable for the bulk of job creation is lagging.
Amazon has announced an imminent closure of their online store in China which allows Chinese customers buy from local Chinese merchants. This business arm has been losing a long-standing market share battle with the likes of Alibaba and JD and have no decided to focus on selling international goods to the Chinese marketplace as a consolidation strategy.
Asia stocks generally slid in early morning trading with the TOPIX dropping 0.7%, the CSI dipping 0.2% and the Hang Seng lower by 0.6%. On the other hand, the ASX 200 and the JSX Composite both gained 0.05% and 0.25% respectively.
The JPY, NZD and AUD all shed 0.22% 0.40% and 0.26% respectively while the CNY SGD gained 0.22% and 0.18% all benchmarked against the greenback
According to a report from Reuters, Petroleo Brasileiro (Petrobras) could expand its divestment plan by selling off three offshore natural gas pipelines in efforts to become a leaner organization. Investors continue to cheer the move to cut debt and refocus on oil exploration and production.
In continued efforts to ramp up pressure on Cuba to end its support for Venezuelan president Nicolas Maduro, the Trump administration imposed new sanctions on Cuba and Venezuela; targeting Cuba’s military and intelligence services for additional sanctions, in addition to tightening travel and imposing trade restrictions against the island.
The MXN and BRL both gained 0.30% and 0.02% against the dollar, while the MEX 10-YR and BRZ 10-YR remained unchanged.