Rolling coverage of the latest economic and financial news, as Mike Pence and Xi Jinping spar over trade policy again
- Pence tells Asia-Pacific leaders: China takes advantage of us
- Xi hits back: Confrontation is not the answer
The pound has risen in early trading, shaking off some of last week’s losses.
Sterling is up 0.25% at $1.287 against the US dollar, as Theresa May continues to show impressive sticking power.
“This is absolutely the day at which we stand at the bar of history on this…..
“It is quite clear to me that the captain is driving the ship at the rocks.
…and Theresa May will continue to present herself as the only grownup in the room, selling her deal to businesses while her MPs plot. https://t.co/mzYa3MFU66
Will we get to those 48 no confidence letters? ♀️ But if it doesn’t happen within a day or two, many at Westminster may conclude the ERG’s rebel leaders are all and no .
Despite the war of words between the US and China, European stock markets have opened higher.
In London, the FTSE 100 is up around 0.5%, with similar gains in other major markets:
U.S. Vice President Mike Pence didn’t give the bulls what they wanted over the weekend. At the Asia-Pacific Economic Cooperation Summit, Pence said there would be no end to U.S. tariffs on Chinese goods until China changes its ways. His comments suggest that a deal between President Trump and President Xi is unlikely to see the light when the leaders meet at the G20 Summit later this month.
Given that we are near the end of the earnings season and the U.S. economic calendar has only tier 2 data to release, expect markets to trade on thin volumes. Political headlines will likely dominate, and thus expect volatility to remain high.
China’s Global Times, the state-sponsored newspaper, is often a good guide to Beijing’s thinking.
And today’s editorial argues that it’s “not a big deal” that the APEC summit ended without a joint communique for the first time in a quarter of a century.
“It’s delusional of some US elites to think that China is the largest beneficiary of the international system since they mistakenly blame China for the US’ own problems. China has realized its development through hard work, not by taking advantage of the international system.”
Analysts at ING are also concerned that Mike Pence and Xi Jinpeng failed to mend any fences, saying:
The risk to global economies and markets from the Sino-US trade war is elevated after an impasse between two countries at the APEC summit
The discord between America and China over trade loomed over last weekend’s APEC gathering in Papua New Guinea, says Royal Bank of Canada’s Sue Trinh:
The Sino-US discord was palpable at the APEC Summit in PNG, so much so that the confab ended with members unable to agree on a communiqué, for the first time ever.
Aside from this being further evidence of a growing anti-China alliance in the APAC region (watch out for Taiwan’s referendum this Saturday to remove “China” from the Olympic team name), the rhetoric is sharpening between the key players.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The United States . . . will not change course until China changes its ways.
“We have great respect for President Xi and China, but as we all know, China has taken advantage of the United States for many, many years and those days are over.”
Unilateralism and protectionism will not solve problems but add uncertainty to the world economy.
History has shown that confrontation, whether in the form of a cold war, a hot war or a trade war, produces no winners.”
Mike Pence sounded far more aggressive on the trade issue over the weekend, where the differences between the US and China was laid bare at the Asia Pacific Economic Co-operation meeting, as Xi and Pence, sparred over trade and security.
It appears that #Trump and #China are pretty far apart on Trade issues based on speeches by China Xi and Vice President Pence over the weekend. #Index #futures open lower with the S&P in many downed 12 points. There’s probably no miracles coming out of the G 20. $ES_F $SPY pic.twitter.com/2LntWjq3Ow