By Lorcan Roche Kelly
Officials from the Trump administration issued a partial — and qualified — denial to the revelation that there have been discussions about imposing limits on U.S. investments in Chinese companies and financial markets. A statement emailed to Bloomberg over the weekend said there were no current plans to stop companies from the world’s second-largest economy listing on American exchanges. The statement did not address nor rule out other possibilities. Authorities in Beijing, meanwhile, said they would continue to take measures to open the country’s financial markets to foreign investment.
Saudi Crown Prince Mohammed Bin Salman warned that a war between his country and Iran would lead to a “total collapse of the global economy.” Tensions between the countries separated by the Persian Gulf have come close to boiling point in the wake of the attack on Saudi Aramco facilities that the international community are blaming on Iran, despite Tehran’s denial of responsibility. Oil prices have almost completely retracted their spike following the attack, with the Saudi Prince issuing mollifying comments that a “political and peaceful solution is better than a military one.”
Another fine mess
In the United Kingdom, conference season is usually an excuse for members of the largest political parties to gather in order to celebrate how great they think they all are. That may not be the case today in Manchester, where the Conservative Party annual gathering is under way and its new leader is assailed by doubts over Brexit and his personal life. There were more signs of the damage uncertainty over the U.K.’s exit from the European Union is doing to the economy, with second-quarter GDP numbers this morning confirming that growth reversed as businesses unwound inventories built-up ahead of the original March leaving date. A Lloyds’ survey showed British companies are losing faith in the prospects for the economy.
Overnight, the MSCI Asia Pacific Index slipped 0.3% while Japan’s Topix index closed 1% lower. China’s Shanghai Composite Index closed down 0.9% in its last trading session ahead of a week-long national holiday. In Europe, the Stoxx 600 Index was broadly unchanged at 5:45 a.m. Eastern Time with banks among the best-performing stocks. S&P 500 futures rose, the 10-year Treasury yield was at 1.696% and gold dropped.
It’s a fairly quiet day on the economic-data front, with Chicago PMI at 9:45 a.m. and Dallas Fed manufacturing outlook at 10:30 a.m. The World Trade Organisation will publish the amount of damages the U.S. has suffered due to EU support for Airbus SE, allowing the White House to place tariffs on the region’s exports. The United Nations General Assembly ends in New York. While there are no Fed speakers today, European Central Bank Chief Economist Philip Lane is scheduled to address an event in Los Angeles.