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A truce between the U.S. and China on trade looks possible, HNA cuts stake after saying it won’t, and Asian markets look set for a mixed open. Here are some of the things people in markets are talking about.
China Trade Truce
U.S. Treasury Secretary Steven Mnuchin said he’s considering a trip to China amid a trade dispute with Beijing and that he’s “cautiously optimistic” of reaching an agreement that bridges their differences over trade. Such a visit could signal a breakthrough in the spat between the world’s two-biggest economies, whose threats to slap tariffs on each other have rattled markets and raised fears of a trade war. Mnuchin’s remarks came as finance ministers and central bankers at the International Monetary Fund meetings in Washington gave their latest economic assessments, often citing trade as a threat looming over the strongest upswing in seven years.
HNA Cuts Deutsche Stake
HNA Group Co., one of Deutsche Bank AG’s biggest shareholders, cut its stake in the company two months after saying it wouldn’t as the Chinese conglomerate tries to raise $16 billion to deal with financing problems at home. The move follows a string of negative news stories about Deutsche Bank, including a tumultuous management revamp.
Investors will be focused on Japan this week with industrial output and jobs data due before the Bank of Japan’s policy decision at the end of the week. Economists don’t expect any policy change but will look for clues about the stance of two new deputy governors. A quarterly outlook is also expected from the bank. In China, industrial profits probably slowed, adding to policy makers’ deleveraging challenge. Australian inflation is also expected. In the U.S. , first-quarter GDP is the week’s highlight, with consensus predicting a 2 percent annualized rate on Friday, down from the prior period’s 2.9 percent. Corporate earnings dominate the week, with Alphabet the focus for tech on Monday. In bank earnings, UBS is up first.
U.S. futures caught a bid in early trading Sunday night. Stocks fell Friday in the U.S. as chipmakers remained under pressure from concerns that smartphone demand has slowed. Treasury 10-year yields reached the highest since 2014, while WTI was flat after U.S. explorers cranked the rig count up to a three-year high and President Trump said in a tweet crude prices are “artificially very high.” The yen slid early in Asian trading on optimism over North Korea, while equity futures across Asia pointed to a mixed start.
Not the ‘Jobs President’
“jobs president” is looking increasingly like a stretch, as joblessness rises despite his government’s efforts. Unemployment in March jumped to the highest level since 2010, and many are blaming Moon’s aggressive increase in the minimum wage, putting his economic agenda at risk less than a year after he took office. Now the government is pushing for its second extra budget to create jobs, at a cost of 3.9 trillion won ($3.7 billion), amid resistance from conservative opposition parties.
What we’ve been reading
This is what caught our eye over the last 24 hours.