· The Japanese yen hit a six-month low on Monday as investors cheered an unexpected rebound in Chinese manufacturing, while a tightening British election race knocked the pound.
The safe-haven yen fell 0.2% to 109.72 per dollar, its lowest since May, and riskier currencies rallied after two surveys showed Chinese factory activity expanding.
Sterling was down a quarter of a percentage point at $1.2913 as a clutch of polls pointed to a sharply narrowing lead for the Conservative Party ahead of the Dec. 12 election.
“The market is taking it with a degree of salt, waiting for clarity,” said Rodrigo Catril, senior FX strategist at National Australia Bank in Sydney.
“We keep on getting these unofficial statements,” he said. “No-one is going to be taking major positions until we get more clarity on the trade front.”
The greenback held steady against the euro at $1.1017 and against a basket of currencies at 98.319.
· After Seoul announced that Japan and South Korea will be holding senior-level talks in December, some analysts said the development suggests relations may be thawing for now.
Waqas Adenwala, Asia analyst at The Economist Intelligence Unit, said that he believes tensions “have de-escalated compared to what the situation was in summer.” He told CNBC on Friday that the “slight positive sign” in the situation is that South Korean President Moon Jae-in and Japanese Prime Minister Shinzo Abe are now “trying to” meet on the sidelines at the China-Japan-South Korea summit in Chengdu, China.
· A private survey on Monday showed China’s manufacturing activity expanded more than expected in November as the Caixin/Markit manufacturing Purchasing Managers’ Index (PMI) came in at 51.8.
The index was expected to have fallen to 51.4 in November from 51.7 in October, according to economists polled by Reuters.
Caixin and IHS Markit said the PMI data signaled a “further modest improvement” in the health of China’s manufacturing sector attributed to “solid increases” in output and new business. Employment in the sector also remained broadly stable, they added.
· As the U.S.-China trade war drags into its 16th month and continues to disrupt supply chains, more than one-quarter of multinational firms have not made contingency plans, showed a survey from a subsidiary of courier giant DHL.
Over half of respondents were from companies with annual revenue of over 1 billion yuan ($142 million) and most were from the United States and European Union, the survey showed.
Of respondents, 48% from the engineering and manufacturing industry and 40% from the automotive mobility sector reported that they had no contingency plans at all, even though both fields have been heavily targeted by both countries in the trade war.
“We’re now dealing with such a new frontier that most supply chain professionals have not encountered this before and its so new that I think a lot of people are struggling to even understand what they can do to deal with it,” said Shehrina Kamal, product director for risk monitoring at DHL Resilience360.
Of those that had decided against relocating or shifting production out of China, some said they were unaffected by the trade war. However, 43% said long-established connections with Chinese factories and suppliers as well cost and time were among reasons for staying put. Just 8% of respondents said they expected tariffs to eventually be removed.
· The White House told Democratic lawmakers on Sunday that U.S. President Donald Trump and his lawyers would not participate in a congressional impeachment hearing this week, citing a lack of “fundamental fairness.”
“We cannot fairly be expected to participate in a hearing while the witnesses are yet to be named and while it remains unclear whether the Judiciary Committee will afford the President a fair process through additional hearings,” White House counsel Pat Cipollone wrote to Judiciary Committee Chairman Jerrold Nadler, according to a copy of a letter seen by Reuters.
· As the U.S.-China trade war drags into its 16th month and continues to disrupt supply chains, more than one-quarter of multinational firms have not made contingency plans, showed a survey from a subsidiary of courier giant DHL.
Over half of respondents were from companies with annual revenue of over 1 billion yuan ($142 million) and most were from the United States and European Union, the survey showed.
Of respondents, 48% from the engineering and manufacturing industry and 40% from the automotive mobility sector reported that they had no contingency plans at all, even though both fields have been heavily targeted by both countries in the trade war.
· The White House told Democratic lawmakers on Sunday that U.S. President Donald Trump and his lawyers would not participate in a congressional impeachment hearing this week, citing a lack of “fundamental fairness.”
“We cannot fairly be expected to participate in a hearing while the witnesses are yet to be named and while it remains unclear whether the Judiciary Committee will afford the President a fair process through additional hearings,” White House counsel Pat Cipollone wrote to Judiciary Committee Chairman Jerrold Nadler, according to a copy of a letter seen by Reuters.
· U.S. President Donald Trump leaves on Monday for a NATO summit in London and he is under pressure from British Prime Minister Boris Johnson to resist the temptation to wade into the British election campaign coming up later in December.
As a presidential candidate in 2016 and then as president since early 2017, Trump has shown no restraint in showing support for Britain’s exit from the European Union and critiquing the politicians involved in the country’s long-running Brexit debate.
But with Johnson leading polls as he faces Dec. 12 elections, the prime minister who is hosting the London NATO summit wants Trump to mind the guard-rails, putting Trump in the unusual position of trying to avoid his normal impulse to comment on whatever he wishes
· A trade deal between United States and China was now “stalled because of Hong Kong legislation”, news website Axios reported on Sunday, citing a source close to U.S. President Donald Trump’s negotiating team.
The deal was stalled also because time was needed to allow Chinese President Xi Jinping’s domestic politics to calm, the report added, citing the unnamed source.
· Oil prices rose more than 1% on Monday as signs of rising manufacturing activity in China pointed to increasing fuel demand, and hints that OPEC may deepen output cuts at its meeting this week indicated supply may tighten next year.
Brent crude futures rose 66 cents, or 1.1%, to $61.15 a barrel by 0727 GMT. West Texas Intermediate (WTI) futures rose 75 cents, or 1.4%, to $55.92 a barrel, having risen by more than $1 earlier.
Reference: Reuters, CNBC
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