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China plans to tie Hong Kong and Macau more closely to the mainland, European and U.K. officials are working on a new Brexit text, and Trump turns up the pressure on Venezuela’s Maduro. Here are some of the things people in markets are talking about.
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China’s State Council unveiled a sweeping plan to link Hong Kong and Macau with cities in southern China to create a so-called Greater Bay Area, aiming to make it a high-tech megalopolis to rival California’s Silicon Valley. The plan, issued by Xinhua News Agency late Monday, said the government will seek to turn the area into a leading global innovation hub, boost infrastructure connectivity between cities, strengthen Hong Kong’s role as an international center of finance, shipping and trade as well as the center for the offshore yuan business. The long-awaited plan has led to some unease in Hong Kong that further integration will erode the autonomy that allows the city to maintain separate legal, monetary and political systems from communist China.
Singapore unveiled its 2019 budget on Monday, announcing tighter restrictions on foreign workers, a boost in spending on health care for its aging population and a tax rebate for some citizens ahead of an election that could come as early as this year. Authorities are trying to strike a careful balance: bolstering an economy that’s been hit by weaker global demand, providing more support for elderly citizens, while still sticking to a tradition of fiscal prudence. The budget comes against the backdrop of a weakening economy, with growth being hit by global trade worries. Here are this year’s budget winners and losers.
Stocks in Asia looked set to drift Tuesday with little direction from the U.S. with markets on holiday and a mixed session in Europe. The dollar steadied while the yen ticked lower. Futures in the region were little changed with global trade remaining foremost in investors minds. European shares edged higher. A gauge of commodities climbed the most since December, with WTI oil futures rising to around $56 a barrel. The euro strengthened despite dovish comments from a European Central Bank governing council member, while the pound strengthened after seven members of the U.K. Parliament said they’ll stand as independents after quitting the main opposition Labour Party over issues including Brexit and antisemitism.
U.K. and European officials are working on a new legal text for the most contentious part of the Brexit deal, but time is running out for Prime Minister Theresa May to persuade a fracturing Parliament to unite behind her plan. In Brussels on Monday, May’s Brexit Secretary Stephen Barclay and Attorney General Geoffrey Cox met EU officials in an effort to reach a compromise. May’s aides believe she has until Feb. 27 to get a better deal before Parliament runs out of patience and votes to take control of the process. Barclay and Cox will return to Brussels on Wednesday, according to people familiar with the matter. They will discuss the precise legal wording and form of a new assurance on the most difficult part of the deal: the so-called backstop plan for avoiding a hard border between the U.K. and Ireland.
The European Union vowed prompt retaliation if the U.S. imposes tariffs on imported vehicles, as trans-Atlantic trade tensions showed no signs of easing. EC President Jean-Claude Juncker said the region won't buy American soy and LNG, should President Trump "break his word" and inflict penalties. He spoke after the White House received a Commerce Department report on the national security implications posed by auto imports. Elsewhere, Honda plans to close its factory in the U.K. in the latest blow to the country's embattled auto industry. Production for Europe will consolidate in Japan in 2021, Justin Tomlinson, MP for North Swindon where the factory is based, said on Twitter.
What we've been reading:
- What to watch at China’s biggest meeting of the year.
- Trump is considering four people to be his next UN ambassador, sources say.
- A split and a death that could shift Labour's approach to Brexit.
- The hot new market for luxury property is Vietnam.
- Trump's border wall faces Texas-size backlash from landowners.
- Reykjavik is being swamped by empty luxury flats.
- China wants to build the first power station in space.
©2019 Bloomberg L.P.