Archives of “June 11, 2019” day

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Pres. Trump: We will not do a deal with China unless it is a great deal

  
  Analysis

Pres. Trump reiterates comments on China

Pres Trump is out saying:
  • China wants to make a trade deal very badly
  • We will not do it deal with China unless it is a great deal
  • He is the one holding up China trade deal
  • Trump expects to meet with China’s Xi at the G20

Interesting is the comment that “he is the one holding up the China trade deal”. Recall, when Trump announced the increased tariffs on the breakdown of the talks, the blame was put on China. He is now saying that he is holding up the deal.

Is the Trump squeeze on?
On North Korea, Trump says,
  • He received a beautiful letter from North Korea’s Kim. He received a letter on Monday
  • US has a great relationship with North Korea.
  • Expects something positive will happen with North Korea.
  • Kim has kept his word. There have been no nuclear testing of long range missiles.
Below is another letter that Pres. Trump received from Kim.
Letter from North Korea's Kim

China says if US insists on escalating trade tensions, China will respond with firm resolve

  
  Analysis

Comments by China’s foreign ministry

  • Doesn’t want a trade war with the US but is not afraid of one
  • Door is always open to talks with the US but only on an equal basis
  • Says that US should stop interfering in China’s internal affairs
The final comment is directed towards the latest extradition treaty with Hong Kong, which saw a massive protest by Hong Kong citizens over the weekend. The US has expressed ‘grave concern’ about the proposal, warning that Hong Kong could lose its special status if it decides to commit to the proposal with China.

Nikkei 225 closes higher by 0.33% at 21,204.28

  
Analysis, Global Indices

Tokyo’s main index closes in on the 100-day moving average again

Nikkei 11-06

Asian stocks are mainly still carrying the good mood from yesterday with the Nikkei posting mild gains amid 0.2% gains in US equity futures to start the day.

Chinese equities are the region’s best performers as the government signaled more support for infrastructure investments, helping to boost economic sentiment. The Shanghai Composite is up by more than 2% currently.
The more positive vibes are helping to keep the yen a little weaker with USD/JPY at 108.60 now but Treasury yields are more flat on the day so that will be an area to keep an eye on in case things start to unravel in the session ahead.

Federal Reserve: Is a rate cut now a foregone conclusion?

  
Analysis, Economy

Is the Fed to cut in July?

Is the Fed to cut in July? 

The US May non-farm payrolls figure disappointed on Friday with a headline figure of +75k jobs vs 175k expected. The prior +263k reading was revised down as well to +224k. The avg hourly earnings fell to +0.2%m/m vs +0.3%m/m expected and +3.1% y/y vs +3.2% y/y. Adam pointed out on Friday that this is the weakest four month period of jobs data since 2012. It is  no surprise to us  that the soft earnings and falling jobs is going to be a concern for the Fed.However, at the start of this week the probability of a rate hike for July was being priced at a 80.4% probability. Breaking that down that is a 66.6% chance of a 25bps point fo July and a 13.8% chance of a 50bps cut.

Federal Reserve

Pushing the date out further to September sees a 93.7% chance of a rate cut in September and just under 50% chance of a 50bps rate cut at that. So, the question is, ‘Is a rate cut now a foregone conclusion for the Federal Reserve at their July meeting?’ “If not then, then when?’  A penny for your thoughts please…

Greece to hold snap elections after Syriza’s EU defeat

  
  Analysis

Greece is facing a snap general election after prime minister Alexis Tsipras and his ruling Syriza party suffered a heavy defeat in voting for the European Parliament last month.

The vote will be held on July 7, almost four months before the leftwing Syriza government’s term was due to expire. Mr Tsipras tendered his resignation to President Prokopis Pavlopoulos on Monday, saying the country had “entered a prolonged pre-electoral period from the day after the European elections.”

“I believe this could presage risks for the smooth course of the economy . . . endangering the virtuous circle we have entered and the sacrifices the Greek people have made,” he said.

Mr Pavlopoulos approved the premier’s request immediately.

The European Commission warned last week that handouts legislated by the Syriza government ahead of the European vote could derail Greece’s target for a primary budget surplus — before debt servicing costs — of 3.5 per cent of gross domestic product for this year.

The centre-right New Democracy party topped the polls on May 27, finishing 9.5 percentage points ahead of Syriza. (more…)

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