Five Things You Need to Know to Start Your Day
The U.S. wants to sit down with North Korea for talks again, Asian markets set for a muted open despite fears abating over the impact of the trade war and the CEO of Denmark’s biggest lender steps down amid a money-laundering scandal. Here are some of the things people in markets are talking about today.
Let’s Talk Again
U.S. Secretary of State Michael Pompeo called Wednesday for a new round of talks with North Korea, with the goal of achieving denuclearization by the end of President Donald Trump’s first term, saying he was heartened by progress made at a summit this week between the two Koreas. Pompeo said the U.S. welcomed Kim Jong Un’s promise to dismantle a missile test site -- under the eye of international inspectors -- and move to shutter North Korea’s main Yongbyon nuclear-production site if the U.S. takes reciprocal actions. Kim and South Korean President Moon Jae-in held two days of talks in Pyongyang, the first visit by a South Korean leader to the North Korean capital in 11 years.
Asian markets look set for a pause after rallying mid-week, as traders get used to the prospect of a prolonged U.S.-China trade war. U.S. stocks were mixed Wednesday, with investors assessing the latest developments in the varied trade disputes. Tech slumped while banks rose, lifting the Dow Jones Industrial Average to its highest since late January. Rate-sensitive shares fell as 10-year Treasury yields neared their peak for the year. Despite the yield gain, the dollar slid against most G-10 peers, amid concerns over Nafta talks between the U.S. and Canada. Gold advanced. Any fresh spike in Treasury 10-year yields toward May's seven-year high of 3.11 percent would pose a fresh test of confidence in investors’ outlook for corporate earnings and share prices as borrowing costs climb.
Thursday kicked off with New Zealand's second-quarter GDP, which expanded 1 percent quarter on quarter, beating estimates. Taiwan export orders and the RBA's FX transactions are the only other scheduled data of significance during the Asia day. In the U.S., August data on existing-home sales will show whether purchases declined for a fifth straight month, the longest streak since 2013-14. Away from economic data, Japan’s Prime Minister Shinzo Abe is expected to win a third term as leader of the ruling Liberal Democratic Party, fending off a challenge from former Defense Minister Shigeru Ishiba.
X Financial rose 114 percent in its first trading day before paring gains to 24 percent, reinforcing signs that investors are embracing Chinese tech companies on U.S. exchanges. The peer-to-peer lending firm is the latest in a flood of U.S. listings by Chinese companies, as a trade war weighs on China’s own stock market and U.S.-based IPO candidates drag their feet. Thirteen Chinese tech firms have debuted on U.S. exchanges this year and eight are trading above their offering prices.
A “large” part of the $234 billion that flowed through a tiny Estonian unit at the center of a money-laundering scandal may need to be treated as suspicious transactions, according to the chairman of Danske Bank A/S. Denmark’s largest bank revealed the total figure in a report on Wednesday, in an effort to answer questions about Danske’s involvement in one of Europe’s biggest dirty-money sagas. Chief Executive Officer Thomas Borgen will step down for his role in the scandal and Chairman Ole Andersen hinted that he too may leave once the case has been brought to an end. The laundering case has shocked Denmark, a country generally associated with some of the world’s lowest levels of corruption and highest levels of transparency. Criminal complaints against Danske have so far suggested its Estonian unit was used to launder as much as $9.1 billion between 2007 and 2015, with the illicit funds stemming mostly from Russia.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Malaysia will lay more charges against former prime minister Najib in a case linked to troubled state fund 1MDB.
- Pot stocks are on a high.
- China unicorns are rushing to the public markets to cash in.
- Nintendo's finally getting into online gaming. Gamers aren't impressed.
- What is womenomics, and is it working for Japan?
- Amazon is considering opening 3,000 cashierless stores by 2021.
- Sony re-releases the PlayStation.
©2018 Bloomberg L.P.