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U.S. Says China Willing to Buy More American as Trade Talks End

The Trump administration wrapped up the latest round of trade talks in Beijing, noting a commitment by China to buy more U.S. agricultural goods, energy and manufactured items. China and the U.S. concluded three days of talks on Wednesday with a cautious sense of optimism that the world’s two biggest economies might be able to reach a deal that ends their bruising trade war. In a statement, the office of U.S. Trade Representative Robert Lighthizer said the two sides considered ways to “achieve fairness, reciprocity, and balance in trade relations.” Officials discussed the need for any deal to include “ongoing verification and effective enforcement,” USTR said. The U.S. will decide on the next steps after officials report back to Washington. President Donald Trump and President Xi Jinping have given their officials until March 1 to reach an accord on “structural changes” to China’s economy on issues such as the forced transfer of American technology, intellect...
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Pound Fortunes to Be Set by Brexit Talks as Parliament Returns

Brexit returns as the dominant driver for the pound this week as Parliament debates U.K. Prime Minister Theresa May’s divorce deal. Sterling lost over 5 percent in 2018 as fears of a hard exit from the European Union grew, and the currency’s direction this year will depend on whether lawmakers will be able to avoid the U.K. crashing out of the bloc on March 29. Lawmakers will vote on the Brexit deal on Jan. 15, BBC editor Norman Smith said in a Twitter post, citing unidentified people in the U.K. government. “Brexit headlines that have been largely absent over the Christmas period should stage a return and dominate the price action in the pound in coming days,” Credit Agricole SA strategists including Valentin Marinov wrote in a note. Though lawmakers may choose May’s “imperfect deal” rather than no deal, the chances of trying to reopen negotiations with the EU or even delaying the March 29 exit cannot be ruled out, they said. The pound largely held its ground ab...

Powell Says He Wouldn’t Resign at Trump’s Request

Federal Reserve Chairman Jerome Powell said he wouldn’t resign if President Donald Trump asked him to do so, addressing months of criticism from the White House about the central bank’s decisions to raise interest rates. Trump has repeatedly criticized the Federal Reserve interest rate increases under Powell and last month privately  discussed  firing Powell following the central bank’s most recent rate hike. Trump’s acting chief of staff, Mick Mulvaney, later said that the president knows “now” that he cannot fire the Fed chair unless it’s for cause. Powell, speaking Friday at an American Economic Association meeting in Atlanta, deflected a question about whether he would meet with Trump, something the White House said both Powell and Trump want to do. “Meetings between presidents and Fed chairs do happen,” Powell said. “Nothing has been scheduled, and I don’t really have anything to report on that.” Trump’s top economic adviser, Larry Kudlo...

China’s FX Reserves Rose Again in December Amid Yuan Rally

China’s foreign currency holdings rose for a second month, countering concerns over capital outflows amid a slowing economy and trade pressures. Reserves increased to $3.073 trillion in December from $3.062 trillion the previous month, the People’s Bank of China said Monday. That slightly exceeded the median estimate of $3.072 trillion. "The dollar weakened in December, boosting the valuation of yen and euro assets," said Wen Bin, a researcher at China Minsheng Banking Corp. in Beijing who was the most accurate forecaster. Without that valuation effect, reserves would have fallen $2.5 billion, according to Bloomberg Economics calculations. Depreciation pressure on the yuan has weakened slightly, with the market now expecting the Fed to slow its pace of rate hikes, Bloomberg economists  wrote  in a note on Jan 4. As a result, the People’s Bank of China may have slowed its intervention in the FX market, they wrote. China’s international balance of payments conti...

Trump trade war poses threat to eurozone economy, warns ECB boss Mario Draghi

Draghi flagged 'the threat of protectionism' but still ended the central bank's €2.6 trillion money printing stimulus programme. The boss of the European Central Bank, Mario Draghi, has warned that Donald Trump’s trade war is hurting the eurozone. Unveiling weaker growth forecasts in Frankfurt on Thursday, Mr Draghi flagged “the threat of protectionism”. “When we look at all these drivers of the recovery, yes, it is true, it is just weaker. It is just weaker and it’s not just one off, it has been weaker for a while,” he said. “The risks surrounding the euro area growth outlook can still be assessed as broadly balanced. However, the balance of risk is moving to the downside owing to the persistence of uncertainties related to geopolitical factors, the threat of protectionism, vulnerabilities in emerging markets and financial market volatility.” Nevertheless, the ECB also confirmed that this month will mark the end of its €2...

Apple warning shakes European shares as chipmakers tumble

Apple’s first revenue warning in nearly 12 years sent European shares sliding on Thursday with the tech sector particularly badly bruised as chipmakers which supply to the iPhone maker fell sharply. The pan-European STOXX 600 fell 0.7 percent as Europe joined a selloff in Asia with the Apple warning compounding fears of slowing global growth. Apple’s Frankfurt-listed shares fell 8.9 percent after the tech giant cut its revenue forecast, blaming weaker iPhone sales in China, whose economy has been hit by an ongoing trade war with the U.S. Chipmakers who supply parts to Apple were the worst-hit. Shares in AMS, which provides the facial recognition sensors used in the latest iPhones, fell 19.4 percent to the bottom of the STOXX. Dialog Semiconductor tumbled 7.8 percent, while Infineon, ASML, ASM International , Logitech, and STMicroelectronics fell 3.4 to 5.9 percent. The tech sector was the worst-performing, down 2.4 percent while only telecoms stayed in the black. Luxury go...

European shares post best day since June 2016

European shares posted their biggest daily gain since June 2016 as buoyant U.S. job data and hopes of better Sino/U.S. trade relations boosted shares after a gloomy week during which a rare revenue warning from Apple caused havoc. Federal Reserve Chairman Jerome Powell also reassured investors concerned about a U.S. economic slowdown, saying the central bank would be sensitive to the downside risks currently priced in the market. Europe’s STOXX 600 rose 2.8 percent, with strong gains across the region’s bourses. “A solid set of job numbers and some comfortable words from the chairman of the Federal Reserve have been just the ticket to get markets into bullish mode”, said IG analyst Chris Beauchamp. Stocks sensitive to trade tensions led the gains. Mining companies .SXPP jumped 5.4 percent, the top gainer as copper prices recovered on news of new trade talks between China and the United States. Autos .SXAP, which suffered in 2018 from the trade dispute, jumped 4.5 p...