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Five Things to Know in World Business Today

These translations are done via Google Translate

July 3, 2018, by Natasha Doff


Challenged China

The yuan rebounded after two Chinese central bank officials vowed to keep it stable, stoking speculation policy makers are prepared to take tougher action to arrest the drop in Asia’s worst performing currency over the past three weeks. Meanwhile, the U.S. launched another salvo in its trade conflict by blocking China Mobile Ltd. from entering the telecommunications market on national security grounds. The move comes as the White House is set to impose tariffs on $34 billion of Chinese goods on Friday, with Beijing vowing to retaliate in kind. And in another sign of the toll trade tensions are taking on the world’s second-biggest economy, the country is headed for a record year of corporate-bond defaults, with the tally for the first half already exceeding more than three quarters of the previous full-year high, according to Bloomberg data.

Glencore subpoena

Shares of Glencore Plc plunged as much as 11 percent after the world’s biggest commodity trader said it’s been subpoenaed by the U.S. Department of Justice to produce documents relating to possible corruption and money laundering. The case relates to the company’s business in Nigeria, the Democratic Republic of Congo and Venezuela from 2007 onwards. Glencore is already facing the possibility of a bribery investigation by U.K. prosecutors over its work with Dan Gertler, an Israeli billionaire and close friend of DRC president Joseph Kabila, people familiar with the situation said in May.

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Korean comeback

North Korea returned to the headlines after the release of several reports suggesting Kim Jong Un continued to ramp up nuclear weapons production before his June 12 summit with President Donald Trump. The reports published by independent researchers and media organizations detail efforts to increase fuel production, build more missile launchers and expand a key rocket-engine manufacturing facility. The development underscores the challenge facing U.S. Secretary of  State Mike Pompeo when he returns to Pyongyang this week to seek a detailed disarmament plan.

Political wrangling

The euro rose after German Chancellor Angela Merkel and her Interior Minister Horst Seehofer ended a two-week standoff over immigration that had threatened to break up the government of Europe’s biggest economy. The truce was brokered after Merkel crafted a plan that tightens migration by setting up holding centers at the German border for refugees already registered in other European Union countries. Over in the U.K., the political wrangling is still in full force as Prime Minister Theresa May was said to be holding one-on-one talks with cabinet ministers in a bid to unite her top team ahead of a crucial meeting later in the week. It comes after she surprised ministers with a new proposal for a customs deal with the EU, people familiar with the matter said.

Markets stabilize

Overnight, the MSCI Asia Pacific Index retreated 0.2 percent, while Japan’s Topix index closed 0.2 percent lower as the yen was flat. China’s Shanghai Composite Index climbed 0.4 percent amid the yuan’s rebound. The turnaround in China boosted emerging-market currencies globally. In Europe, the Stoxx 600 Index was 0.8 percent higher at 5:50 a.m. S&P 500 futures pointed to a gain at the open, the 10-year Treasury yield was at 2.880 percent and gold was higher.

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