Trump says he will take action against China
Strong comments to start, more to come. He brought Pompeo and Mnuchin, which is a hint of something big coming.
- Chinese government has continually violated its promises to us
- China unlawfully claimed territory in Pacific ocean
- China’s coverup of the Wuhan virus allowed it to spread all over the world
We’re still in the preamble but the tough talk has the market worried.
- We will be terminating our relationship with the WHO, redirect elsewhere
That’s not a factor for markets.
- Will issue proclamation on US university research
- Will ask for study to protect US investors (presumably from investing in Chinese stocks)
This was all rumored and isn’t a big deal.
- Have started the process of eliminated policy exemptions that give Hong Kong special treatment
- Directing his administration to “begin the process of eliminating policy exemptions that give Hong Kong different and special treatment” under a “full range” of agreements, from extradition to trade to technology. (Congress has much of this power)
- Will sanction directly or indirectly individuals involved in suppressing Hong Kong
All this was rumored or reported.
Stocks go positive.
Comments by the Chinese foreign ministry
- Says that China opposes US actions, calls it ‘pure nonsense’
- Urges US to stop frivolous political manoeuvres
China continues to repeat the same message as it has been doing when it comes to Hong Kong and the US, so there’s nothing new in this.
All eyes will now be on US president Trump and his announcement later today. As such, we can expect the market to be more defensive amid the stirred tensions for the time being.
A US media report that the Trump administration has discussed conducting a US nuclear test.
Citing a senior administration official and two former officials familiar with the deliberations for the info:
- The matter came up at a meeting of senior officials representing the top national security agencies May 15, following accusations from administration officials that Russia and China are conducting low-yield nuclear tests – an assertion that has not been substantiated by publicly available evidence and that both countries have denied.
- US has not decided to conduct a test, but a senior administration official said the proposal is “very much an ongoing conversation”
Another hint to issues between the US and China. Add this to the list of trade tensions, HK tensions, coronavirus blame game.
US media (NBC news) reporting on data undisclosed by the Trump administration
- Coronavirus infection rates are spiking to new highs in several metropolitan areas and smaller communities
- data in a May 7 coronavirus task force report, undisclosed by the adminstration
- The 10 top areas recorded surges of 72.4 percent or greater over a seven-day period compared to the previous week, according to a set of tables produced for the task force by its data and analytics unit. They include Nashville, Tennessee; Des Moines, Iowa; Amarillo, Texas; and – atop the list, with a 650 percent increase – Central City, Kentucky.
Trump’s said on Monday that “all throughout the country, the numbers are coming down rapidly.” Even without this disclosure of the secret data hoard that claim is obvious bullshit.
WH death toll projections are rapidly moving toward realisation:
Trump interview with Reuters
- says China “will do anything they can to have me lose” 2020 election
- says looking at different options in terms of consequences for China for its handling of coronavirus crisis, says I can do a lot
- says trade deal with China has been “upset very badly” by the coronavirus
- says South Korea has agreed to pay united states a lot of money for defense cooperation
- says he does not see 2020 election as a referendum on his handling of virus
- says does not believe polls showing Biden ahead
Main points summary via Reuters.
The comments on possible retaliation against China do not read as encouraging for further trade talks. AUD down a few tics.
Comments by Japan prime minister, Shinzo Abe, in parliament
- Economy is in an extremely severe state
- This will continue for some time
- Japan not seeing an explosive increase in virus cases now
The headline remark relates to the ¥100,000 cash handout to every citizen in the country. When launching these measures, timing and effectiveness are both equally key.
It sounds good to get money to every citizen to mitigate the fallout from the virus impact. But if it takes too long to reach them, the damage becomes more permanent.
So, while the market may respond favourably to these stimulus measures on the announcement, the true “value” depends on the execution. And that will show up in the medium-to-long term fundamentals in each country once this is all over and done with.
According to a Saudi energy ministry official
That will bring total crude oil exports by the kingdom to 10.6 mil bpd, as the official says the increase in exports is due to displacing crude with natural gas and drop in local demand.
A pre-recorded speech from UK Prime Minister Johnson being broadcast now
- coronavirus is the biggest threat UK has faced for decades
- “Without huge national effort to halt the growth of this virus, there’ll come a moment when no health service in the world could possibly cope; because there won’t be enough ventilators, enough intensive care beds, enough doctors, enough nurses”
Says people should remain at home, only go out for essentials, medical reasons
- critical thing is to stop the disease spreading between households
- people will only be allowed to shop for basic necessities
- people only allowed one form of exercise a day alone or with members of your household
- people allowed out for any medical need, or to provide care or to help a vulnerable person
- people can travel to and from work, but only where this is absolutely necessary and cannot be done from home
- people should not be meeting friends or family who live outside their home
- police will have the powers to enforce rules, including through fines and dispersing gatherings
Without a huge national effort, will come a moment when no health service in the world could possibly cope
- says if too many people become seriously unwell at one time, the health service will be unable to handle it
- closing immediately all shops selling non-essential goods,including clothing and electronic stores and other premises including libraries, playgrounds and outdoor gyms, and places of worship
- will stop all gathering of more than two people, except people you live with
- we’ll stop all social events, including weddings, baptisms and other ceremonies, but excluding funerals
- restrictions will be kept under constant review
- we will look again at restrictions in three weeks
- we will relax restrictions if the evidence shows we are able to
- says the way ahead is hard, and it is still true that many lives will sadly be lost
Continue reading »
Comments by the Kremlin
- There is no price war between Russia and Saudi Arabia
- Our relations are good and doesn’t think anyone should intervene
- Says Russia has safety buffer against unfavourable oil prices
I would argue that you have to read between the lines with this one. The fact that the OPEC+ joint technical committee meeting was cancelled goes to show that both sides aren’t exactly on speaking terms right now, so believe what you will.
In any case, their official stance still shows no backing down just yet.