Archives of “reuters” tag

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Reports that China will not increase its annual import purchase quotas of farm goods from the US

  
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Reuters report on senior agriculture official Han Jun speaking with Caixin

  • China will not increase its annual import quotas for corn, wheat and rice to accommodate stepped-up purchases of farm goods from the United States,
There are no further details, Straits Times with the info
If so then there is no phase one trade deal. Weird report, but here we are ….
Reuters report on senior agriculture official Han Jun speaking with Caixin

The UN Security Council will meet this week to discuss North Korea

  
Analysis, Politics
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Reuters (citing diplomats and a request from the United States) report the council will meet on Wednesday

  • it will discuss North Korea’s recent missile launches
Over the weekend NK conducted an unspecified “very important test” at its Dongchang-ri satellite launch site
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I wonder if we’ll see a yen response? NK issues have, in the past, prompted yen buying (a flight to liquidity response, the USD also a beneficiary) but this has diminished.
North Korea kim yen

BREAKING : US-China trade deal may not be completed this year

  
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US-China ‘phase one’ talks are getting more complicated and could slide into next year, according to a breaking Reuters report that cites ‘people close to the White House’.
The problem is that top US trade officials fear that rolling back tariffs in a deal that doesn’t address IP and tech transfer issues would not be seen as a ‘win’ for the President.
Negotiations also are complicated by conflicts within the White House about the best approach to China, and by the fact that Trump could veto any agreed deal at the last minute.
The report is weighing on risk trades.
A short time ago, Bloomberg was a out with a report saying that talks are at a sensitive stage and could easily fall apart but that they’re ‘making progress in key areas’.
That report gave a small lift to USD/JPY.

The contents of the story weren’t particularly upbeat and didn’t advance the story much but the headline was: ‘Trump’s China Trade Deal Edges Ahead as Risk of Collapse Looms’, and the market ran with the positive take.

That story highlights how the deteriorating situation in Hong Kong and the bill that will require sanctions on any country that undermines its special status.
It also said that in the recent deputy-level meeting, they agreed to accelerate talks in order to avoid new tariffs. They also made progress on IP and enforcement but failed to make headway on agricultural purposes.

Japan – Reuters Tankan poll shows manufacturer outlook less pessimistic, service-sector sentiment three-month high

  
  Analysis
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The Reuters Tankan seeks to track the BOJ report. Reuters is monthly, BOJ Tankan is quarterly.

Japanese manufacturers’ business outlook was less pessimistic in October
service-sector sentiment rose to a three-month high
 manufacturers voiced worry about the protracted trade war and slowdown in China’s economy
some Japanese firms do not see the impact of the global slowdown immediately hurting the economy
Sentiment index for manufacturers minus 5,
  • up two points from the prior month’s 6-1/2-year low of minus 7
  • index is expected to minus 6 in January
service-sector index climbed to plus 25
  • from plus 19 in the previous month
  • led by retailers who have likely benefited from consumers rushing to beat the Oct. 1 sales tax which went up to 10% from 8%
Poll of 504 large- and mid-sized companies, in which 248 firms responded
  • conducted Sept. 26 to Oct. 7

Saudi Aramco lures sovereign funds to $2 trillion IPO valuation

  
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Reuters, exclusive

Reuters, exclusive
This just out from Reuters
‘State-owned Saudi Aramco has approached Abu Dhabi Investment Authority (ADIA), Singapore’s GIC and other sovereign wealth funds to invest in the domestic leg of the oil giant’s listing at it seeks to achieve a $2 trillion (1.6 trillion pounds) valuation, sources said’

IPO process still carrying on, despite the drone attacks mid-month.

Here are the rate cut steps expected from the PBOC, perhaps as soon as next month

  
Analysis, Economy
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A report from Reuters outlines the likely path for People’s Bank of China interest rate cuts, maybe as early as September.

  • expected to first reduce their funding costs by lowering the rate on its medium-term lending facility (MLF)
  • That will open the door for a cut in the PBOC’s new benchmark lending rate, the loan prime rate (LPR), the next time it is set on September 20
  • he MLF forms the basis for the new LPR rate, but banks can add a premium to reflect funding costs and credit risks
  • In what was seen as a symbolic move, the revamped one-year LPR was set at 4.25% last week, down 6 basis points (bps) from 4.31% previously and 10 bps lower than the existing benchmark one-year lending rate, which will still apply to older loans
Article was overnight, so an ICYMI, link here for more.
PBOC Gov Yi Gang:
A report from Reuters outlines the likely path for People's Bank of China interest rate cuts, maybe as early as September. 

Japan – Reuters Tankan report – manufacturing index hits lowest since 2013

  
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Reuters Tankan shows Japan manufacturers index -4 in August vs +3 in Jul.y

  • lowest reading since April 2013
  • and this is the first negative reading for the index in over 6 years

Non-manufacturers index +13 in August vs +25 in July

Manufacturers November index seen at +3, non-manufacturers seen unchanged

Commentary via Reuters …nails it:
  • Concerns about weakening global demand intensified
  • growing risk of a U.S. recession
  • Germany’s economy in contraction
  • China’s economy was worsening
  • further soured the outlook for export-reliant economies such as Japan’s
More:
  • “The U.S.-China trade war, Japan’s export curbs to South Korea and the recent yen rises have formed a bottleneck for sales” 
  • “The selling price remains in a downtrend due to expansion of e-commerce markets, while a scheduled sales tax hike keep shoppers on guard against price increases”
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The Reuters monthly poll, tracks the Bank of Japan’s (BOJ) tankan quarterly survey
  • conducted July 31-Aug 14
  • total of 258 firms responded

FOMC meeting next week – most expect a rate cut but there are still a couple of holdouts

  
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Reuters polling of 111 economist on what they expect from the fres Federal Reserve on July 31:

  • 95% predict a 25 basis point cut
  • Two of the 111 said it’d be 50bps
  • Two said Fed to remain on hold
Reuters add a good point from Capital Economics:
  • “The biggest reason for the Fed to cut rates is because it has been priced into the markets for a while now. If they didn’t follow through and cut, it would cause a bit of a shock” 
It would be bedlam in the stock market I reckon, yep
Anyway, more:
  • “I think the recent general message from the Fed seems to be that it’s more about downside risks to growth rather than the economy being already weak” 
Reuters polling of 111 economist on what they expect from the fres Federal Reserve on July 31:

U.S. proposes barring big tech companies from offering financial services, digital currencies

  
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A proposal to prevent big technology companies from functioning as financial institutions or issuing digital currencies has been circulated for discussion by the Democratic majority that leads the House Financial Services Committee, according to a copy of the draft legislation seen by Reuters.

In a sign of widening scrutiny after Facebook Inc’s (FB.O) proposed Libra digital coin aroused widespread objection, the bill proposes a fine of $1 million per day for violation of such rules.

Such a sweeping proposal would likely spark opposition from Republican members of the house who are keen on innovation, and would likely struggle to gather enough votes to pass the lower chamber.

Even if it were to pass the full house, it would still have to pass the senate which would also likely be an uphill struggle.

Nevertheless, the draft proposal sends a strong message to large tech firms increasingly eyeing the financial services space.

The draft legislation, “Keep Big Tech Out Of Finance Act”, describes a large technology firm as a company mainly offering an online platform service with at least $25 billion in annual revenue.

“A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System,” it proposes.

Facebook, which would qualify to be such an entity, said last month it would launch its global cryptocurrency in 2020.

US tariffs news – to impose levies on structural steel from China and Mexico, but not from Canada

  
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Update crossing news wires

via Reuters:

The U.S. Commerce Department said on Monday that domestic producers were being harmed by imports of fabricated structural steel from China and Mexico and it will instruct Customs and Border Protection to collect cash deposits from importers of such steel.

The Commerce Department said it had found that imports from Canada were not being unfairly subsidized.

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