Will they or won’t they – the guessing game on the U.S.-North Korean summit continues. Oil remains under pressure as Saudi Arabia and Russia flag boosting production, while Asian futures fall early Monday, with trading potentially muted by U.S. and U.K. holidays. Here are some of the things people in markets are talking about.
In the Balance
U.S. President Donald Trump appeared to confirm that his summit with Kim Jong Un was back on, three days after he abruptly called off the historic meeting in a sharply worded letter to the North Korean leader. The State Department earlier confirmed reports that a U.S. delegation is meeting with North Korean officials to prepare for the summit, which had been set for Singapore on June 12. South Korean President Moon Jae-in held a surprise two-hour meeting Saturday with Kim on the border in a bid to keep the Trump summit on track. Moon said on Sunday that Kim requested the meeting, only the fourth ever by leaders of the two countries since the Korean War.
Saudi Arabia and Russia announced a new policy to revive oil production last week. With oil supplies tightening and prices soaring, the two countries agreed to restore some of the output they halted as part of an accord with 22 other producers, drawn from the Organization of Petroleum Exporting Countries and beyond. Officials from several producers, both inside OPEC and outside, said they disapproved of the proposal to raise output and saw difficulties in reaching a consensus when they meet in Vienna next month. OPEC and its allies concluded in a meeting last week that the long-sought goal of eliminating the global glut was reached at the end of April. That may give support to the Saudi-Russian proposal to start boosting output.
Investors get their first look at Asian economic performance in May this week. China's PMIs were probably little changed this month from April, forecasts show. India's GDP growth is forecast to stay little changed, as rising oil prices and borrowing costs counter stronger rural expansion, Bloomberg Economics said. Also on the docket this week, Japan employment and retail sales, Hong Kong trade and Australian building permits, industrial output for South Korea and Thai trade figures. On Friday comes a slew of PMIs, as well as South Korean CPI, Japanese Capex and profits, and Thailand CPI. In the U.S., the May jobs report and a key inflation gauge stand out on the week's U.S. data docket. A flurry of inflation readings are due in the euro area.
Asian equity futures are pointing lower ahead of trading that may be muted by holidays in the U.K. and U.S. American equities fell Friday on lighter than normal volume as plunging oil prices rocked energy shares. Treasuries rose, with 10-year yields falling 5 basis points. The dollar rallied, with the euro dropping on political jitters in Italy and Spain.
On the IPO Bandwagon
China’s largest initial public offering since 2015 has gotten the attention of the nation’s top internet companies. Affiliates of Baidu Inc., Alibaba Group Holding Ltd. and Tencent Holdings Ltd., known collectively as BAT, are becoming strategic investors in Foxconn Industrial Internet Co. The companies are buying 21.8 million shares each in FII’s listing at 13.77 yuan apiece, the firm said in a statement to the Shanghai stock exchange Sunday. The smart factory unit of Hon Hai Precision Industry Co., Apple Inc.’s most important assembler, plans to raise 27.1 billion yuan ($4.3 billion) in the Shanghai listing.
What we’ve been reading
This is what caught our eye over the last 24 hours.
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