By Lorcan Roche Kelly
The editor of a state-run Chinese newspaper whose tweets in recent months have accurately presaged moves by Beijing wrote this morning that authorities would encourage the country’s firms to buy U.S. farm products. The editor said that China would add soybeans and pork to the list of items exempted from the tariff list. The move comes after U.S. administration officials discussed offering an interim trade deal to the Asian nation, according to people familiar with the matter, something which President Donald Trump said he would “consider.”
It’s Mostly Fiscal
The fallout from yesterday’s European Central Bank decision continues, with the stimulus package dividing governing council members along the old core versus periphery lines. While the package of measures announced was broad, President Mario Draghi strongly emphasized the need for fiscal policy to do its share to spur the region’s recovery. The introduction of tiered deposit rates, where some excess reserves will not be hit with the -0.5% rate, will benefit Deutsche Bank AG the most, according to JPMorgan Chase & Co. analysts. The Euro Stoxx Bank Index is more than 2% higher this morning.
In Houston last night, there was little to trouble poll-leader Joe Biden at the Democratic debate among presidential hopefuls. The former vice-president was quick to cite his experience serving Barack Obama who remains very popular among party voters. Beto O’Rourke drew cheers for declaring “Hell yes, we’re going to take your AR-15, your AK-47,” while Elizabeth Warren spoke about trade and abolishing the Senate filibuster. Trump, speaking at an event in Baltimore, roundly attacked the candidates and their policies.
Overnight the MSCI Asia Pacific Index climbed 0.7% while Japan’s Topix closed 0.9% higher for the gauge’s best week since 2016. In Europe the Stoxx 600 Index was 0.2% higher at 5:50 a.m. Eastern Time, with bank stocks the best performers as investors rotate out of defensive trades. S&P 500 futures pointed to a gain at the open, the 10-year Treasury yield was at 1.799% and gold was higher.
U.S. retail data for August is expected to show a drop in the rate of growth to 0.2% from July’s 0.7% when the data is published at 8:30 a.m. The import-price index for August is released at the same time. The University of Michigan’s latest consumer sentiment numbers come out at 10:00 a.m. The Baker-Hughes rig count at 1:00 p.m. rounds off what has been a busy week for the oil market.