• MTS Economic News_20180327

    27 Mar 2018 | Economic News

• The U.S. dollar fell to a five-week low against a basket of major currencies on Monday, as optimism that the United States and China are set to begin negotiations on trade helped ease fears of a trade war and investors’ appetite for risk improved.

The dollar index, which measures the greenback against a basket of six other major currencies, was down 0.44 percent at 89.044, after slipping to a five-week low of 88.979

Against the safe-haven yen, however, the dollar firmed to trade at 105.47 at 6:55 a.m. HK/SIN, after slipping below the 105 handle on Friday.

Of note, the euro bounced following comments from European Central Bank member Jens Weidmann said that expectations for an interest rate hike toward the middle of 2019 were "not completely unrealistic," Reuters reported. The euro last traded at $1.2449.

• Bitcoin fell roughly 7 percent Monday to below $8,000 following weeks of regulatory uncertainty and advertising crackdowns by tech companies.

The cryptocurrency was trading near $7,886 as of 3:04 p.m. ET, more than $600 lower than a day earlier, according to data from Coinbase. It's down more than 42 percent year to date after starting this year above $13,000.

• Top Trump administration officials are asking China to cut tariffs on imported cars, allow foreign majority ownership of financial services firms and buy more U.S.-made semiconductors in negotiations to avoid plans to slap tariffs on a host of Chinese goods and a potential trade war.

• China asked the U.S. to provide compensation for lost trade due to President Donald Trump’s proposed tariffs on steel and aluminum, in a preliminary step that could lead to a dispute between the two nations at the World Trade Organization.

• Washington's trade imbalance with Beijing — the stated motivation behind President Donald Trump's punitive tariffs — will continue expanding in the years ahead, according to Yale University's Stephen Roach.

America's trade deficits with China and other countries fundamentally reflect "the fact that we don't save enough," said Roach, a former Morgan Stanley Asia chairman.

"When you don't save and you want to spend and grow, you import surplus savings from abroad and you run these massive balance of payments and trade deficits to attract the foreign capital," he told CNBC Monday at the annual China Development Forum. "That's the way it's always worked."

• The United States, European Union countries, Canada and Ukraine expelled more than 100 Russian diplomats on Monday in response to Russia's alleged use of a nerve agent to poison a former Russian spy living in the United Kingdom.

Banks need to stop rewarding the kind of bad behavior that led to the Wells Fargo fake accounts scandal and other banking misdeeds, New York Fed President William Dudley said Monday.

• With Congress pushing through rollbacks to the Dodd-Frank reforms passed following the financial crisis, Dudley said the lessons from the systemic failure of the banking system shouldn't be ignored.

• The Federal Reserve may change decades-old rules that require banks to lend to low-income borrowers as part of a broader effort to revise a range of banking regulations, the U.S. central bank’s head of regulation and supervision said on Monday.

• The Federal Reserve should continue raising interest rates this year and next so that it can avoid an overheating that cuts short the economic expansion that is already picking up steam, Cleveland Fed President Loretta Mester said on Monday.

• North Korea leader Kim Jong Un has visited China, Bloomberg reported on Monday citing three unnamed sources, in what would be his first known overseas trip since taking power in 2011 and ahead of a potential summit with U.S. President Donald Trump.

Details of his visit including its purpose and itinerary were not yet known, Bloomberg said. Japanese media reported earlier on Monday that a high-ranking Pyongyang official appeared to have arrived by train in Beijing.

Kyodo, citing sources close to the matter, said the visit of the official was intended to improve ties between Beijing and Pyongyang that have been frayed by North Korea’s pursuit of nuclear weapons and China’s backing of tough sanctions against North Korea at the United Nations Security Council.

• Crude oil futures slipped on Monday as investors cashed in some profits from last week’s rally but concerns about Saudi-Iran tensions kept losses in check.

Brent crude futures LCOc1 slipped 33 cents, or 0.5 percent, to settle at $70.12 a barrel. U.S. West Texas Intermediate (WTI) crude futures CLc1 also lost half a percent, or 33 cents, to end at $65.55.

Last week, Brent gained 6.4 percent and WTI rose 5.7 percent, the strongest weekly gains since July.


Reference: Reuters, CNBC, CNN, Bloomberg

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