Five Things You Need to Know to Start Your Day
Markets seem to be shrugging off the much anticipated trade deal and there is some confusion about when phase two will go ahead, while Hong Kong protesters clash with police as the city’s chief executive heads to Beijing. Here are some of the things people in markets are talking about today.
No date has been set so far for the U.S. and China to kick off “phase two” trade talks, said U.S. Trade Representative Robert Lighthizer, contradicting a suggestion by President Donald Trump that negotiations would start right away. For now, the two sides are focused on implementing the agreement reached on Friday, which is expected to be signed in January, he said. The pact will see the U.S. reduce tariffs on imports from China. Beijing promises to significantly increase purchases of U.S. farm goods and adhere to new commitments on intellectual property, forced technology transfer and currency.
Asian stocks look set to start the week mixed after the partial U.S.-China trade deal, lacking concrete details, left analysts cold. The Australian dollar and the offshore yuan were firmer early Monday; yields on 10-year U.S. Treasuries initially spiked on Friday, but fell back as the deal didn’t live up to some analysts’ expectations. The U.S. delayed levies on Chinese goods that were due to be imposed on Sunday, and China said it will suspend additional tariffs on certain American imports. On the docket this week, China November industrial production and retail sales data will be parsed Monday. On Friday, U.S. GDP is expected to show growth expanded. There is a Bank of Japan interest-rate decision Thursday.
Hong Kong’s demonstrators clashed with police late Sunday as Chief Executive Carrie Lam began a visit to Beijing, where she’s expected to update Chinese President Xi Jinping and other senior officials on the violent protests that have gripped the city for the past six months. The clash late Sunday followed a more subdued weekend for the city’s demonstrations. “The purpose of the duty visit is to give a full account of what has happened in Hong Kong over the past year,” Lam said in a press briefing last week. “Particularly what has happened in Hong Kong in the last six months.”
China’s ambassador to Germany threatened Berlin with retaliation if it excludes Huawei Technologies as a supplier of 5G wireless equipment, citing the millions of vehicles German carmakers sell in China. Ambassador Wu Ken’s comments Saturday, at an event held by the Handelsblatt newspaper, come on the heels of growing resistance against Huawei among some lawmakers in German Chancellor Angela Merkel’s governing coalition. They have challenged her China policy with a bill that would impose a broad ban on “untrustworthy” 5G vendors.
Singapore’s hedge funds are trouncing global rivals in bigger cities like London and New York. The city-state is home to two of the top 10 in 2019, and a third is partly based in the island nation. In all of the U.S., there are only four, and zero in Europe or Hong Kong. Their individual successes come at a time when many investors are questioning the wisdom of pouring large amounts of money into hedge funds because of their high fees and mediocre returns. Hedge funds in Singapore are also shining as a group, generating an average return of 9.4% for clients in 2019, according to Eurekahedge. Read more about the three key theories behind the success of Singapore’s chart-toppers here.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- Caution abounds in emerging markets.
- The bull market almost no one saw coming.
- Hong Kong house prices are staying stubbornly high.
- What analysts are saying about Hong Kong stocks in 2020.
- China’s central bank warns speculators that homes are to live in.
- Shareholder activism engulfs Japan.
- Why Australia’s love for rooftop panels is a problem for Big Solar.
©2019 Bloomberg L.P.