By Lorcan Roche Kelly
China removed limits for overseas investment in the country’s stocks and bonds, the latest push by authorities to attract more foreign capital. With almost two-thirds of the current $300 billion allowance on non-Chinese asset purchases untapped, the move may be more about signalling than meeting current demand. Data released overnight showed the country’s economy remains under pressure, with factory deflation deepening while consumer prices quicken more than expected. In perhaps another sign of how the trade war is hurting China, a state-run paper took aim at Trump adviser Peter Navarro for his hawkish stance on the issue.
After failing to get enough votes to call an election, but succeeding in getting Parliament closed until Oct. 14, British Prime Minister Boris Johnson promised to work to make a new deal with the European Union at the Oct. 17 summit in Brussels. Despite all the shenanigans in Westminster, data this morning showed that the U.K. economy continues to motor on, with the jobless rate returning to 3.8% while basic pay rose 3.8% in the three months through July.
Apple Inc. will unveil the latest iPhones at an event in Cupertino, California later today. There will also be updates for the Apple Watch, with the products going on sale this month in a potential boost to fourth-quarter results. Analysts, however, are cautious on the new models: Consumers may wait for the introduction of 5G options in 2020, rather than plump for a new phone now.
Overnight the MSCI Asia Pacific Index was unchanged, while Japan’s Topix index closed 0.4% higher with banks providing the biggest boost to the market. In Europe, the Stoxx 600 Index was 0.5% lower by 5:45 a.m. Eastern Time, with defensive stocks leading losses while banks again were among the best performers. S&P 500 futures pointed to a lower open, the 10-year Treasury yield was at 1.628% and gold was trading below $1,500 an ounce.
Same old tune
Prince Abdulaziz bin Salman’s tenure as Saudi oil minister will begin in earnest on Thursday when OPEC and its allies meet in Abu Dhabi. Oil’s new boss faces the same problems as his predecessor, with demand-destruction still the biggest concern for the market as prices remain low, despite Saudi Arabia cutting production to the lowest level in five years. Crude is creeping higher as investors await developments from the gathering, with a West Texas Intermediate for October delivery trading above $58 a barrel this morning.