Five Things You Need to Know to Start Your Day
Argentina taxing exporters, Chinese debt relief for Africa, looming trade tariffs. Here are some of the things people in markets are talking about.
EM Sets the Tone
Emerging markets will continue on shaky ground this week as Turkey and Argentina move to shore up their currencies after they took a battering last month. The Turkish central bank on Monday vowed to reshape its monetary policy stance next week after inflation accelerated in August to the fastest pace since 2003. Argentine President Mauricio Macri said his administration would raise taxes and cut spending, bringing forward its target of a balanced budget by one year. Brazil will also remain on tenterhooks after the country’s top electoral court banned imprisoned Luiz Inacio Lula da Silva -- who was leading in the polls -- from running in October’s presidential elections.
President Donald Trump abruptly canceled an outing on Monday to place calls on trade, his spokeswoman said, as he prepares to confront both China and Canada this week. Trump’s trade negotiators are in difficult talks with their Canadian counterparts over a revision of the North American Free Trade Agreement already agreed to by the U.S. and Mexico. As soon as Thursday, Trump may also implement tariffs on as much as $200 billion in additional Chinese products, escalating his trade war with the Asian powerhouse.
Monday’s U.S. Labor Day will provide little direction for Asia’s markets on Tuesday as they wait the potential start of fresh U.S. tariffs on China's imports. Instead, emerging markets are likely to set the tone. Asian equity-index futures were mixed, indicating a muted open. Currencies were steady. Argentine stocks led global equities lower and emerging currencies joined the decline, offering no reprieve for investors despite the U.S. holiday. U.S. equity futures climbed on Monday and stocks closed steady in Europe. The pound weakened as the U.K.’s flagship Brexit proposal came under attack at home and in Brussels. On Tuesday’s data docket, South Korea delivers its final second-quarter GDP print, and reports August CPI. Australia details its current-account balance and net exports, before the central bank meets amid overwhelming expectations it will hold interest rates at a record low.
JD.com CEO Probe
JD.com Inc.’s billionaire founder returned to China after his weekend arrest for alleged sexual misconduct in Minnesota, where local police are investigating the chief executive officer of one of the Asian country’s largest internet corporations. Liu Qiangdong, who uses the English name Richard, is a doctoral student at the University of Minnesota, and was in Minneapolis for his studies, the Minneapolis Star Tribune newspaper reported. The case involves a Chinese student at the school, according to the Financial Times and the Star-Tribune.
China Comes to Africa’s Aid
Chinese President Xi Jinping pledged debt relief to some poorer African nations, attempting to push back against a major criticism of his signature Belt and Road Initiative. Speaking to the Forum on China-Africa Cooperation on Monday in Beijing, Xi said China planned to exempt some African countries from interest-free loans due by the end of the year, adding that the relief would be granted to unspecified poor and heavily indebted countries. He also announced an additional $60 billion of loans and other financing to follow on a similar amount promised three years ago.
What we’ve been reading:
- Wealth managers are getting “crazy” pay hikes to defect in Asia.
- The top China stock fund loading up on tech stocks.
- Swine flu risk to China’s bond market.
- The stock foreigners love and Chinese hate.
- Argentina’s judgement day.
- Rebound after a $14 billion mobile stock sell-off in Japan.
- One of Latin America’s biggest cultural, scientific and historic treasures goes up in flames.
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