· The euro fell to more than two-year lows against the U.S. dollar on Friday as a weak growth outlook weighed on the single currency, though it rebounded after testing technical support levels.
Dismal business activity data from the euro area, especially powerhouse economy Germany, has pushed European bond yields lower across the board this week, with further pressure coming from concern over economic weakness in Britain.
The euro dropped as low as $1.0903, its lowest since May 2017, in overnight trading before rising back to $1.0938.
Sterling also fell weakened to a two-week low of $1.2269 after Bank of England policymaker Michael Saunders hinted at looser monetary policy if Brexit uncertainty remained prolonged against a backdrop of disappointing global growth.
The currency later rose back to $1.2291.
The Chinese yuan weakened after Bloomberg reported that White House officials are discussing ways to limit U.S. portfolio flows into China.
The greenback gained %0.31 on the day to 7.1451 yuan.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 99.10 after bouncing from levels below 98.4 last week.
· European Central Bank policymaker Ignazio Visco said on Saturday recent expansionary measures agreed by the bank were necessary to counter the risk of a return to deflation in the euro area.
Earlier this month the ECB, in Mario Draghi’s last policy meeting as the central bank’s chief, pledged new indefinite stimulus to revive an ailing euro zone economy, a decision opposed by a third of the policymakers.
· Philadelphia Federal Reserve Bank President Patrick Harker said in New York on Friday he opposed the central bank’s September rate cut and thinks the Fed should “hold firm” on interest rates.
The disclosure by Harker, who is not a voting member of the Fed’s policymaking committee this year, puts him in the same camp as Boston Fed President Eric Rosengren and Kansas City Fed President Esther George who voted against the rate decrease last week. Harker will have a vote on interest rates in 2020.
Harker painted the picture of an economy that is on track to grow by a little over 2% this year, powered by strong consumer spending and a robust labor market. He said that while inflation is currently below target, he expects it to reach the coveted 2% growth level over the next 18 months to two years.
· China’s top trade negotiator, Liu He, will lead the country’s delegation to the U.S. for the next round of discussions one week after China’s National Holiday, Commerce Ministry Vice Minister Wang Shouwen said Sunday.
The Chinese Communist Party celebrates the 70th anniversary of its rule on Oct. 1. The National Holiday is observed from Oct. 1 to 3.
CNBC previously reported, citing sources, that the next round of U.S-China trade talks would be held from Oct. 10 to 11.
· China on Monday released a closely watched indicator on its manufacturing activity.
The official Purchasing Managers’ Index (PMI) was 49.8 in September — exceeding the 49.5 analysts polled by Reuters had expected. The official PMI data came in at 49.5 in August.
PMI readings above 50 indicate expansion, while those below that level signal contraction.ฃ
China plans to step up economic adjustments to counter its slowing economy while providing adequate liquidity in the economy, the central bank said on Sunday.
· China will open up more sectors of the economy to foreign investors, and its policy of protecting foreign companies’ rights in the country will not change, Vice Commerce Minister Wang Shouwen said on Sunday.
· Reports on Friday said the White House is considering investment restrictions on China, such as delisting Chinese stocks in the U.S. and limiting government pension funds’ investments in the Chinese market.
If the U.S. does go through with such investment curbs, Ning Zhu, professor of finance at Tsinghua University in Beijing, told CNBC it would be difficult to implement, and negatively affect U.S. capital markets.
“While there may be other political reasons for restricting US capital flows to China, Washington should understand that the implications for the trade imbalance are the opposite of what they want,” Michael Pettis, finance professor at the Guanghua School of Management at Peking University, said in an email.
· U.S. House Speaker Nancy Pelosi said on Saturday that public opinion is now on the side of an impeachment inquiry against President Donald Trump following the release of new information about his conversations with Ukrainian President Volodymyr Zelenskiy.
She added that her resistance to holding an impeachment inquiry quickly evolved from urging that fellow Democrats remain cautious of the political fallout ahead of next year’s elections to full steam ahead as details emerged of Trump’s dealings with Ukraine’s leader.
· Britain will need to take negotiations with the EU on Brexit up to the deadline to force the changes needed to a get deal that will pass through parliament trade minister Liz Truss said on Sunday.
“The reason we didn’t get further concessions in advance of March 29 is that we didn’t get close enough to the deadline ... Deadlines work and we need to take it to that deadline to make the changes we all need,” Truss said. “That is what we are doing.”
· Oil prices fell on Friday and posted a weekly loss on a faster-than-expected recovery in Saudi output, while investors also worried about global crude demand amid slowing Chinese economic growth.
During a volatile session, Brent crude LCOc1 futures fell 83 cents, or 1.3%, to settle at $61.91 a barrel, after dropping to a session low of $60.76 a barrel.
U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 50 cents, or 0.9%, to settle at $55.91 a barrel. It hit a session low of $54.75 a barrel.
Brent fell 3.7% for the week, its biggest weekly loss since early August. WTI lost 3.6%, its steepest loss since mid-July.
Reference: CNBC, Reuters
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