Five Things You Need to Know to Start Your Day
Surging tech shares help U.S. stocks pad records. Trading volume in the offshore yuan is on the rise, and Argentina and Turkey return to drag on emerging markets. Here are some of the things people in markets are talking about.
Tech Boosts U.S. Stocks to Fresh Records
U.S. stocks plowed to new records amid a broad rally in technology shares, as investors speculated the Trump administration will make progress this week on trade spats. The S&P 500 Index rose a fourth day to close above 2,900 for the first time, as Amazon.com and Alphabet climbed following an upbeat report from Morgan Stanley. The Nasdaq indexes hit fresh highs. The dollar weakened versus major peers and Treasuries slipped. The pound rallied after the European Union revived hopes of a Brexit deal before the U.K. exits the common area in March, while the euro weakened after the Italian government was reported to be hoping for a new program of European Central Bank bond purchases.
Yuan Trading is Busier Than Ever
Turnover in the offshore yuan has reached unprecedented levels, spurred by U.S. President Donald Trump’s broadsides against Chinese currency practices and the protracted trade dispute between the world’s two biggest economies. On the FX trading platform of Cboe Global Markets, average daily volume in dollar-offshore yuan jumped to a record $1.7 billion in July, from $421 million a year earlier. EBS Market, NEX Group Plc’s FX trading system, also saw a new high in offshore yuan transactions last month, exceeding the previous peak by 17 percent. The volumes, which represent a portion of the offshore yuan market, surged as the yuan slid for a fourth straight month. The drop raised speculation that China was deliberately weakening the currency amid its intensifying tariff impasse with America.
Emerging Markets Under Pressure
Emerging-market assets took a hit Wednesday, weighed down by familiar culprits Turkey and Argentina. Argentina’s peso tumbled to a record low after President Mauricio Macri asked the International Monetary Fund to speed up disbursements from its $50 billion credit line to ease the nation’s financial crisis. The country’s yield spread over Treasuries has risen to the highest since 2014. Turkey’s central bank reintroduced borrowing limits for overnight transactions at its interbank money market, effectively tightening liquidity after a two-week period of unrestricted funding that aimed to contain stress from the nation’s currency crisis.
Trump Points Finger at China for N. Korea Difficulties
Trump said negotiations with North Korea over the nation’s nuclear weapons program are “doing well” but an ongoing trade dispute with China is getting in the way. “China makes it much more difficult,” the president told reporters Wednesday at the White House. “China probably has a great influence over North Korea.”
Last week Trump called off a trip to North Korea by Secretary of State Michael Pompeo, saying there hadn’t been enough progress in talks to denuclearize the Korean peninsula. In a series of tweets Friday, Trump said Pompeo would likely return to North Korea after U.S. trade disputes with China were resolved.
Nafta Deal Looks Likely
Trump said talks with Canada to overhaul the North American Free Trade Agreement are going well, expressing optimism the two countries could reach a deal this week. "We’re doing really well,” Trump told reporters at the White House on Wednesday, referring to negotiations between U.S. and Canadian officials in Washington. “They want to be part of the deal. And we gave till Friday and I think we’re probably on track.” Earlier, Canadian Prime Minister Justin Trudeau said his government is trying to reach agreement with the U.S. this week. But Trudeau added that Canada won’t sacrifice its goal of getting the “right deal.”
What we’ve been reading
This is what caught our eye over the last 24 hours.
- Asia’s top stock market is leading the global race to 40,000.
- Here’s a look at the Qantas Airways 20-hour flight from Sydney to London.
- This startup is building a market to help you sell your DNA data.
- Where do things stand with U.S.-North Korea nuclear talks?
- What’s eating China’s stock market? Everything.
- Don’t pop the Champagne corks for China’s big banks yet.
©2018 Bloomberg L.P.