Trade war: Markets rattled as US blacklists Huawei – business live

Rolling coverage of the latest economic and financial news, as America hits Huawei with a double-whammy

  • US companies blocked from selling kit to Huawei
  • Huawei also banned from US networks
  • Asian shares near four month low

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Huawei lands on the Commerce Department entity list

“prevent American technology from being used by foreign owned entities in ways that potentially undermine U.S. national security or foreign policy interests.”

Related: Huawei hits back after Trump declares national emergency on telecoms ‘threat’

Trump’s move to restrict Huawei’s access to US markets has further soured the US-China trade relationship. US companies will also require licenses to sell key technology to Huawei.

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Germany shrugs off recession fears by returning to growth – business live

Rolling coverage of the latest economic and financial news, including new GDP figures from Europe’s largest economy

Germany’s welcome return to growth in the last quarter suggests that any panic about the state of the eurozone’s largest economy was overdone, argues Carsten Brzeski of Dutch bank ING.

He writes:

Today’s GDP data is balm for the soul of the German economy.

It also confirms our long held view that not all is bad in the German economy. Some of last year’s one-off factors have turned around, the German automotive industry might have seen better times but should not be written off and private consumption remains solid. In fact, the ongoing dichotomy between struggling industry and strong domestic demand continues and at least this time around ended with a positive outcome.

Just as weak GDP data in the second half of 2018 was not purely a result of wrong policies and business decisions or a sign that the German economic business model should be discarded, so today’s strong data is no reason for complacency.

Domestic demand has helped Germany’s economy extract itself from its recent stagnation, points out Aila Mihr of Danske Bank:

But she also points out that recent surveys of manufacturers have been gloomy, so 2019 could still be tough.

After narrowly avoiding a recession in H2 18, #German #GDP #growth rebounded to 0.4% q/q in Q1. Domestic demand continues to underpin growth and temporary headwinds unwind. But many risks to outlook linger amid goomy #PMIs, declining factory orders and potential US car #tariffs

Germany’s economy ministry Peter Altmaier has hailed today’s growth figures, calling them a “first ray of hope”.

But Altmaier has also warned that the US-China trade war is still threatening the German economy.

“The international trade disputes are still unresolved. We must do everything possible to find acceptable solutions that enable free trade.”

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#Bruttoinlandsprodukt im 1. Quartal 2019 um 0,4 % gegenüber dem Vorquartal gestiegen. #BIP

When the time is right we will make a deal with China. My respect and friendship with President Xi is unlimited but, as I have told him many times before, this must be a great deal for the United States or it just doesn’t make any sense. We have to be allowed to make up some…..

….of the tremendous ground we have lost to China on Trade since the ridiculous one sided formation of the WTO. It will all happen, and much faster than people think!

Energy bosses hoping for a loophole in Corbyn’s nationalisation pledge will be disappointed: Labour is out to take it all in what could prove to be the biggest energy shakeup of a generation

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Trade war fears grip markets ahead of UK unemployment report – business live

Rolling coverage of the latest economic and financial news, including the latest developments in the US-China trade row

China’s foreign ministry is holding a briefing with journalists in Beijing now, and taking a tough line on trade.

Foreign ministry spokesman Geng Shuan says China hopes that the US doesn’t underestimate its determination to protect its interests. That’s the diplomatic equivalent of a sabre-rattle in the general direction of Washington.

Reuters: #China‘s foreign ministry says hopes #US does not underestimate Chinese determination to protect its interests

Reuters: #China‘s foreign ministry, asked about trade dispute with #US, says both countries have agreed to pursue talks process

Better news from Europe — shares are recovering in early trading, after hitting seven-week lows yesterday.

The trade tariff tit-for-tat is now being described as a “trade war” in China, a significant change in tone says @Steen_Jakobsen on @BloombergRadio

All the major Asian stock markets are in the red today, driven down by trade worries.

“In the short term, it looks like volatility is here to stay and we could see this risk-off, risk-on going on for a long time.”

Related: Global markets fall as China hits back at US with new import tariffs

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Wars, we’re told, are 99% boredom and 1% terror. But you simply can’t be bored by the US-China trade war, which has intensified dramatically this week.

Dow, S&P 500 set for worst May tumble in nearly 50 years amid U.S.-China trade clash

”Negotiate— we can!
Fight— bring it on!
Bully us— YOU WISH!”
-People’s Daily WeChat post entitled “This is #China’s attitude” on the escalating trade war with @realDonaldTrump

Further uncertainty on the back of China’s retaliation to the US levies is forcing investors to go on full defensive mode. Safe haven assets gain as the 10-year US yields drop below 2.4%, reflecting market participants’ worries about the potential knock on effect of this re-escalation.

Growth on a global scale seemed to be pulling higher in recent weeks but Trump’s decision to put more pressure on China is again dampening any early optimism. Granted, there is still about a month before the new tariffs come into effect but, with both sides now back in the trenches, the risk lies to the downside

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Trade war: Investors brace for China retaliation to US tariffs – business live

Rolling coverage of the latest economic and financial news, as fears of a deepening trade war hit shares in Asia

The stock market boards in China are a sea of green today – and that’s bad news for investors, as it means shares are falling.

“The lack of resolution in the latest U.S.-China trade talks coupled with continued provocative tweets from President Trump provides no relief for risk sentiment as we look to another weak start to the week for Asia markets.”

Donald Trump’s chief economic advisor, Larry Kudlow, revealed yesterday that the White House expects China to hit back soon.

He told Fox News:

“The expected countermeasures have not yet materialized. We may know more today or even this evening or tomorrow.”

Call it three months. I don’t know. That will take some time and then of course the president’s going to have to make the final decision on that.”

Related: China expected to retaliate over Trump tariff hike, economic adviser says

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“Earlier today, at the direction of the President, the United States increased the level of tariffs from 10 percent to 25 percent on approximately $200 billion worth of Chinese imports. The President also ordered us to begin the process of raising tariffs on essentially all remaining imports from China, which are valued at approximately $300 billion.”

We are right where we want to be with China. Remember, they broke the deal with us & tried to renegotiate. We will be taking in Tens of Billions of Dollars in Tariffs from China. Buyers of product can make it themselves in the USA (ideal), or buy it from non-Tariffed countries…

….We will then spend (match or better) the money that China may no longer be spending with our Great Patriot Farmers (Agriculture), which is a small percentage of total Tariffs received, and distribute the food to starving people in nations around the world! GREAT! #MAGA

Today, US Trade Representative will begin the process of “imposing tariffs on all remaining imports from China” per Robert Lighthizer’s statement on Friday. Markets are also waiting for China’s retaliation, as it has close to run out of US imports on which to impose tariffs.

China said the US had “severely disrupted” trade talks in a People’s Daily Commentary, though as we go to press, no retaliatory measures have been announced yet.

Emerging Market stocks pushed down further as risks of an escalation of the #trade dispute between China and the US increase. MSCI Emerging Markets Future down 7.5% from its April high.

“The sudden, unexpected collapse ahead of the final step to ink a 150-page long trade deal caught market by surprise”

“Markets will tread cautiously, with the market focus still be on any developing headlines about China’s possible retaliatory moves and next steps for trade talks from here until Trump and Xi meet at the G20 meeting in late June.

European Opening Calls:#FTSE 7215 +0.16%#DAX 12083 +0.19%#CAC 5344 +0.32%#MIB 20902 +0.13%#IBEX 9129 +0.12%

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Trade wars: Markets hit five-week low ahead of US-China talks – business live

Rolling coverage of the latest economic and financial news, as Chinese vice-premier Liu He travels to Washington for crunch trade talks

The Japanese yen has hit a three-month high, as traders pile into safe-haven assets.

The yen, traditionally popular when investors get the jitters, strengthened to ¥109.58 to the US dollar, a level last seen in February.

Plus haut de 3 mois pour le yen face au dollar #riskoff #USDJPY bien venu chercher le point bas de mars –>

European stock markets are dripping electronic red ink again this morning.

Newsflash: China’s commerce ministry has confirmed that vice-premier Liu He is on his way to Washington, with a delegation of officials, for another round of trade talks.

Spokesman Gao Feng also warned that China has the “determination and capacity” to defend its interests — confirmation that it plans to retaliate if the US hikes tariffs tomorrow.

– China’s Commerce Ministry: China Is Fully Prepared To Defend Its Interests, Has Determination And Capacity To Do So
– Trade Delegation Has Already Left Beijing For US
– Vice Premier Liu Visit To The US Shows China’s Sincerity

– China’s Commerce Ministry: China Opposes Unilaterally Imposed Tariffs
– There Is No Winner In A Trade War
– Hopes US Meets China Halfway
– Hopes US Can Resolve Problem Through Dialogue Instead Of Unilateral Steps

Financial stocks, miners, car makers and industrial companies are leading today’s sell-off in Europe.

The next few hours will be “absolutely crucial” for the markets, says , market analyst at FXTM.

The paramount question of the day is – can the US and China strike a trade deal by midnight Friday in Washington, or will heightened tariffs kick in by 12:01AM? [or 5.10am BST tomorrow].

Given the looming deadline, hope for a trade resolution appears to be waning. Asian currencies are falling against the US Dollar, while the Japanese Yen is gaining 0.1 percent at the time of writing. Risk-off mood is clearly taking a hold on equity markets across the region, as they are all trading in negative territory on Thursday morning, except for Australian and Thai stocks.

The Europe-wide Stoxx 600 index has shed 1% in early trading, hitting a five-week low.

There are losses in Germany (-0.7%), France (-1.2%) and Spain (-0.7%).

London’s stock market is also being dragged down by several shares going ‘ex-dividend’ (meaning it’s too late to qualify for the next payout to shareholders)

Ex-divs today;

Centrica 8%, Admiral 3.1%, BP 1.5%, Hiscox 1.4%, 9pts coming of #FTSE100; #FTSE250: Card Factory 3.3%, Polymetal 3%, Ibstock 2.5%, AG Baar 1.6%, Greencoat UK Wind 1.3%

European markets have opened in the red, dogged by trade war jitters.

In London, the FTSE 100 has tumbled by 51 points at the start of trading, down 0.6%, to 7219. That’s a new five-week low.

Asian stock markets have sunk to six-week lows today, amid anxiety over the trade talks.

Is Liu He really coming to do a deal? I think probably it’s case of gaining a reprieve in order to avert the rise in tariffs. It looks like we are yet a wee bit away from a comprehensive trade deal.

But the vice-premier’s visit and the prospect of tariffs being hiked is all a bit of an unknown right now and the market positioning is defensive as a result, but not yet into full selloff mode. Even if there it’s no go on trade, the dovish Fed will mean we shouldn’t see a selloff like we saw in Q4 2018.

Last night, president Trump accused China of ‘breaking the deal’ — a sign that today’s talks with Liu He’s delegation could be bruising.

“By the way, you see the tariffs we’re doing?

Because they broke the deal. They broke the deal. So they’re flying in, the vice premier tomorrow’s flying in – good man – but they broke the deal. They can’t do that, so they’ll be paying.”

Related: ‘They’ll be paying’: Trump blasts China as US prepares to raise trade tariffs

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Outside of the knowledge of the craziness of sport, the last 24-48 hours has taught us that markets have no greater insight as to whether this week’s trade developments are just hardball from Trump or the start of a very real threat to the global growth narrative.

If it’s the latter then you can’t help but feel that markets look extremely complacent at this point. However if it’s just hardball negotiation en route to a deal then we’ll likely resume the rally.

#VIX , which is a reflection of estimated future volatility, has broken higher through 18.33 (March highs) after closing above the falling trend line from early 2019. Stopped short of the late-January highs though. Anticipation of volatility is definitely picking up

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Markets volatile as US-China trade tensions intensify – business live

Rolling coverage of the latest economic and financial news, as crunch trade talks weigh on markets

Just in: The Chinese government has warned Washington that simply imposing more tariffs won’t fix their trade dispute.
Reuters has the details:

Tariffs won’t resolve any problems in the ongoing bilateral trade dispute between China and the United States, China’s foreign ministry said on Tuesday.

Foreign ministry spokesman Geng Shuang, speaking at a daily press briefing, said China hopes that the United States will work with China to resolve each other’s concerns.

Nickel has hit a three-month low this morning, on concerns that trade tensions will hit demand for commodities.

Nickel contracts at the London Metal Exchange fell 0.8% to $12,080 per tonne, the lowest since late January.

Deutsche Bank analysts reckon Beijing is unlikely to back down, despite Trump’s threat to impose steeper tariffs on their sales to America.

They points out that:

China says Vice Premier Liu He to visit U.S. from May 9 to May 10 for trade talks$SPY $SPX $ES_F

Chinese stocks stabilized on Tue after a massive sell-off on Mon.
Indexes were lifted by news that Chinese vice premier Liu He will visit the US for trade talks this week. #Shanghai Composite closed 0.7% higher at 2926, after falling below 2900 mark intraday.

The Chinese yuan is strengthening a little, on relief that vice-premier Liu He is still packing his bags for a trip to Washington this week.

After slumping to a three-month low of 6.8 yuan to the US dollar on Monday, the currency has recovered to 6.76 today.

Please tell me under what circumstances China sending Liu to Washington is a sign of strength after the Trump Tweets. This is China either admitting they screwed up or that they are desperate for a deal.

European stock markets are trying to revive themselves after Monday’s sell-off, but it’s slow going.

The Italian FTSE MIB has jumped 0.5%, Spain’s IBEX is up 0.3%, but Germany’s DAX is only 0.1% higher.

There is a sense that the US is working extremely hard to extract last-minute concessions from China ahead of a planned visit by vice-premier Liu He. That visit has been confirmed – he is to visit the US May 9th-10th.

Will that be enough to avert the tariffs being raised on Friday is unclear, but at least it means the two sides are continuing to talk and a deal is still possible. However, we don’t know if this is a last-ditch rescue mission to save talks or something that moves talks on in a more substantive way.

Britain’s FTSE 100 has shed 0.3%, or 24 points, at the start of trading.

After yesterday’s Bank Holiday, City traders are catching up with the latest trade war action.

China’s stock market is staging a late mini-rally, on relief that trade talks will resume in Washington on Thursday.

The CSI 300 index has jumped 1% today, clawing back some of its worst losses since February 2016 yesterday (when it lost 6%).

Newsflash: Beijing has announced that vice-president Liu He is planning to visit Washington later this week for trade talks.

China’s commerce ministry says Liu will hold trade negotiations on May 9th and 10th (Thursday and Friday).

NEW: Chinese Vice Premier Liu He will visit the U.S. for trade talks May 9-10, China’s MOFCOM says. The decision to send him comes after USTR Lighthizer and Treasury Sec. Mnuchin yesterday faulted Beijing’s negotiating tactics and said plans to raise tariffs on Friday are firm.

That VP Liu will visit the US for trade talks this week is a faintly moderately positive sign for US-China trade talks—tho his not attending would also have nixed any deal hopes. But risk of hardening of China’s position remains, esp if US tariff threat materialises. #tradewar

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Related: Trump escalates trade war with China with plan to raise tariffs

“Over the course of the last week or so we have seen an erosion in commitments by China. That in our view is unacceptable.”

Those two tweets from President Donald Trump that rocked markets on Monday weren’t just bluster: The top U.S. trade negotiator confirmed the U.S. plans to hike tariffs on Chinese goods this week, accusing China of backpedaling on commitments made during the talks.

Related: Markets slide after Trump threatens to dramatically increase China tariffs

We have long believed that the trade war is more than about trade, it is about technology. And during the last couple of months, the US has urged its Western allies not to use China’s 5G products as the US believes that there is a security concern.

The development of the trade negotiation process should be long as China learns about the US negotiation tactics, and has a back-up from a policy-stimulated economy. Technology should be the focus of the renegotiations.

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Eurozone GDP: French economy grows by 0.3% despite export woes – business live

Rolling coverage of new growth figures from across Europe, and other events in the financial markets

Although any growth is welcome, a 0.3% quarterly growth rate is rather mediocre.

And as Philippe Waechter, chief economist at Ostrum Asset Management points out, French GDP has now been subdued for over a year.

The French #GDP quarterly change was at 0.3% in the 1st quarter, marginally lower than in the 2 previous quarters.The French growth trend is close to 1.2%. Domestic demand (0.3 vs 0.2 in 4Q18)was up,inventories (0.3 vs -0.1)were stronger but net exports were negative(-0.3 vs 0.3)

Some snap reaction:

‘No turning point’ for the Eurozone economy on the horizon says Lorenzo Cordogno LC Macro Advisors. @SquawkBoxEurope Despite French Q1 GDP showing better consumer spending but flat Q/Q growth at 0.3%.

This chart illustrates how the halt in French export growth dragged its economy back in the last quarter (the green bar).

More encouragingly, French household spending grew by 0.4% in the last quarter (having flatlined in October-December). That suggests that consumer confidence might be picking up.

French businesses also kept investing in new equipment and facilities — this ‘gross fixed capital formation’ rose by 0.3% (down slightly on the previous quarter).

Digging into France’s GDP report a little, it’s clear that the slowdown in global trade has hurt companies.

Export growth almost ground to a halt in the first three months of 2019, rising by just 0.1% (from 2.2% growth in Q4 2018). Imports also slowed, to 0.9% from 1.2% in Q4 2018.

Newsflash: France has got GDP Day up and running by reporting another quarter of growth.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Today we learn whether Europe’s economy is still stuck in a rut, when new GDP figures from across the single currency region are released.

Related: Alphabet: Google parent company’s shares drop after latest earnings report

European Opening Calls:#FTSE 7449 +0.11%#DAX 12317 -0.09%#CAC 5577 -0.08%#MIB 21769 -0.09%#IBEX 9512 -0.06%

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Markets grind higher after Wall Street’s record close – business live

Rolling coverage of the latest economic and financial news

European stock markets have begun the new week cautiously, led by a bounce in Italy.

Italian bank shares have jumped 1%, after S&P affirmed Italy’s BBB credit rating on Friday night.

#Italy 10y risk spread over Germany plunges to in relief rally after S&P affirms Italy rating at BBB, 2 notches above junk, after mkts closed on Friday. The agency maintained outlook negative.

China’s factories have bolstered confidence in the markets today, by reporting a pick-up in earnings.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Related: US economic growth stronger than expected despite weak demand

For stock traders, it seems that the important catalysts are pointing higher: the US sees strong domestic growth, low inflation keeps the Fed at bay and could potentially trigger a rate cut so it seems that equities have nowhere to go but higher – at least in the short term.

Truth be told, we think that investors should employ a more cautious approach, with the US markets near record highs and 10-year yields dropping below 2.5%, suggesting that a selloff may be around the corner. In any case, market participants don’t seem to share our skepticism and equity futures in Europe and the US are pointing towards a positive opening bell.

Related: Spanish election: socialists win amid far-right gains

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