Sep 20, 2018, by Lorcan Roche Kelly
Premier Li Keqiang said China would reduce tariffs on imports in a move seen as an effort to lower costs for consumers as the trade war with the U.S. heats up. Two people familiar with the plan said the cuts will target average tariff rates from the majority of China’s trading partners as soon as next month. The move follows a similar reduction in July. Meanwhile, hopes remain low of any resolution of the standoff, with many commentators expecting things to get worse in the short term.
Not there yet
There was no breakthrough in negotiations over the U.K.’s exit from the European Union at an informal summit in Austria, with the French and German leaders striking a downbeat tone in the wake of the meeting. British Prime Minister Theresa May told EU leaders there would be no second referendum, no extension to talks, and that the U.K. will leave the bloc next March. The lack of progress doesn’t seem to have hurt markets much, with the pound approaching a two-month high this morning.
The oil market continues to be pulled in two directions as U.S. production coupled with today’s announcement that Russian output has jumped to a new post-Soviet peak keeps pressure on prices. Sanctions crippling Iran exports and continuing problems in Venezuela mean global supply concerns persist. All this means that the Organization of Petroleum Exporting Countries, which is having a meeting in Algiers on Sunday, will have a lot to consider as it tries to extend production limits into 2019.
Overnight the MSCI Asia Pacific Index gained 0.2 percent while Japan’s Topix index closed little changed to round off the best week in two years for the country’s equities. In Europe, the Stoxx 600 Index was 0.5 percent higher at 5:45 a.m. Eastern Time, with banks among the best performers. S&P 500 futures pointed to a gain at the open, the 10-year Treasury yield was at 3.070 percent and gold was unchanged.
New face at the Fed
President Donald Trump plans to nominate Nellie Liang, a senior fellow at the Brookings Institute in Washington and a former Federal Reserve economist, to the central bank’s Board of Governors, the White House announced yesterday. The selection of Liang has been widely welcomed as she has a strong background in financial stability and has previously worked closely with Fed Chair Jerome Powell.