Aug 27, 2018, by Lorcan Roche Kelly
The failure of Chinese and U.S. officials to make any progress on trade between the world’s two largest economies last week means that China hawks within the Trump administration are likely to have the upper hand going into the fall. Given President Donald Trump’s threat to impose tariffs on a further $200 billion of Chinese imports,and Beijing’s already promised retaliation, an escalation of the trade war over the next few months looks increasingly likely. There was better news closer to home for U.S. trade negotiators, as talks with Mexico on resolving Nafta differences seem set to wrap up later today. That would provide an opening for Canada to rejoin discussions to save the decades-old trade agreement.
Please don’t do this
In a blog post on the company’s website published late on Friday night, Tesla Inc.’s Elon Musk said he was scrapping his plan to take the electric-car maker private. With shares in the company trading as high as $387 and as low as $288 since his Aug. 7 tweet about having “funding secured” to take the company private, further volatility looks likely following the withdrawal of the plan. Tesla dropped more than 5 percent in pre-market trading before paring some of those losses.
As European politicians get ready to go back to work after the summer break, German Chancellor Angela Merkel has called for the region to be more forceful in asserting its interests. Her call comes as the Trump administration leads a U.S. withdrawal from the world order that has dominated for decades, leaving something of a leadership vacuum to be filled. She is expected to meet French President Emmanuel Macron in Paris next month to discuss strengthening the euro area, while her own country’s economy looks poised to rebound from a slowdown in the first half of this year.
Overnight the MSCI Asia Pacific Index gained 1.1 percent while Japan’s Topix index closed 1.2 percent higher as China’s central bank signaled support for the yuan and Fed Chair Jerome Powell’s comments at Jackson Hole were seen as more dovish than expected. In Europe, the Stoxx 600 Index was 0.3 percent higher at 5:45 a.m. in a light trading session due to a U.K. holiday. S&P 500 futures pointed to a gain at the open, the 10-year U.S. Treasury yield was at 2.815 percent and gold held above $1,200 an ounce.
Back with a bang
Turkey’s lira was more than 3 percent lower by 5:45 a.m. in the first trading session for the currency since local markets opened after holidays last week. The continuing standoff with the U.S. and President Recep Tayyip Erdogan’s less than market-friendly policies have analysts expecting further volatility for the battered currency.