· The U.S. dollar rose in early trading on Friday, swinging back into positive territory after the New York Federal Reserve walked back dovish comments from its president the prior day, which had bolstered expectations of an aggressive interest rate cut this month.
At a conference on Thursday, New York Fed President John Williams argued for pre-emptive measures to avoid having to deal with too-low inflation and interest rates.
Investors are now pricing in a 43.1% chance of a 50-basis point cut in U.S. rates later this month, according to CME Group’s FedWatch tool, easing off the 60.2% probability hit on Thursday. The dollar has held up reasonably well as investors bet other central banks also will ease policy.
The dollar index, which hit a two-week low of 96.648 on Thursday, was 0.45% higher at 97.24.
· The euro fell against the rebounding U.S. dollar on Friday and hit a 2-year low versus the Swiss franc, as investors ramped up bets for a European Central Bank interest rate cut as early as next week.
Money markets are now pricing in a roughly 60% chance of a 10-basis point rate cut next week, versus a 40% chance earlier in the week.
The euro was 0.59% lower at $1.1208.
· Some Chinese companies are seeking new purchases of U.S. agricultural products, China’s official Xinhua news agency said on Sunday, citing authorities, as Beijing and Washington look for ways to end a protracted trade war.
U.S. President Donald Trump and Chinese President Xi Jinping agreed at last month’s G20 summit in Osaka to restart trade talks that stalled in May.
Trump said at the time he would not impose new tariffs and U.S. officials said China agreed to make agricultural purchases. But Trump said on July 11 that China was not living up to promises to buy U.S. farm goods.
Hu Xijin, the editor in chief of China’s nationalist Global Times newspaper, tweeted in English earlier on Sunday that Chinese importers have started arrangements for purchasing U.S. agricultural products, and suggested that the United States and China could soon resume in-person trade talks.
“This is a prominent part from [the] Chinese side as the two countries have signaled goodwill to each other recently. It also indicates China-U.S. trade consultations will restart soon,” Hu said.
Trump said on Friday that Treasury Secretary Steve Mnuchin had a very good talk with his Chinese counterpart the day before. He has also touted U.S. economic performance, and said China is “not doing very well”.
China has confirmed that Vice Premier Liu He and Commerce Minister Zhong Shan spoke by phone on Thursday with Mnuchin and Trade Representative Robert Lighthizer regarding “further consultations, as well as the implementation of presidential consensus reached in Osaka”.
· Boris Johnson, favored to become Britain’s new prime minister, said on Sunday the country could agree a free trade deal to leave the European Union that would remove the need for one of the more problematic parts of a previous agreement.
In his weekly column in The Telegraph newspaper, Johnson said technology could avoid having to stick to the so-called Northern Irish backstop, a part of an agreement with the EU that many lawmakers in Britain’s parliament reject.
Johnson and his rival to become prime minister, Foreign Minister Jeremy Hunt, have said the backstop needs to be removed from an agreement Prime Minister Theresa May secured with the EU - something, so far, neither side has agreed on a way to do.
· Finance minister Philip Hammond said on Sunday he would resign if Boris Johnson became Britain’s new prime minister because he could not support a leader happy to take the country out of the European Union without a deal.
Hammond’s decision underlines the strength of feeling in parliament against a no-deal Brexit, which some lawmakers and many businesses say would be catastrophic for the economy.
· Japanese Prime Minister Shinzo Abe’s ruling bloc won a solid majority in an upper house election on Sunday but his coalition and allies fell short of a two-thirds majority needed to begin revising the pacifist constitution, public broadcaster NHK said.
· South Korea’s exports for the first 20 days of this month fell a sharp 13.6% from a year earlier, customs data showed on Monday, led by poor semiconductor shipments and underscoring continued weakness in global demand.
Semiconductor products, which make up for about one-fifth of the country’s total exports, suffered a 30.2% drop in overseas shipments, the Korea Customs Service data showed.
Imports during the 20-day period dropped 10.3% on year as purchases from Japan fell 14.5%, similar to a 13.9% loss for the June 1-20 period and showing little effect so far from Tokyo’s curbs on exports of key materials for chip and display production.
· Crude rose on Friday after Iranian state media said the Iran Revolutionary Guard had captured a British-flagged oil tanker in the Strait of Hormuz in what was viewed by traders as the latest escalation in the region.
The Iranian Revolutionary Guard issued a statement, saying “On Friday a British tanker by the name of Stena Impero while passing through the strait of Hormuz was seized by the IRGC due to violating international regulations. After it was seized it was transferred to Iranian shores to undergo legal procedure.”
A spokesperson for the UK Ministry of Defence said on Friday that the government was urgently seeking further information and assessing the situation following reports of an incident in the Gulf.
Oil prices jumped on the reports, with Brent crude futures up 66 cents to $62.59 a barrel.
West Texas Intermediate crude settled up 33 cents, or 0.6% to $55.63 per barrel, though U.S. oil clinched its worst week since May thanks to weaker demand and larger surpluses.
· Britain was weighing its next moves in the Gulf tanker crisis on Sunday, with few good options apparent as a recording emerged showing that the Iranian military defied a British warship when it boarded and seized a ship three days ago.
The British government is expected to announce its next steps in a speech to parliament on Monday. But experts on the region say there are few obvious steps London can take at a time when the United States has already imposed the maximum possible economic sanctions, banning all Iranian oil exports worldwide.
· Hong Kong police fired rubber bullets and tear gas in running clashes with protesters late on Sunday amid chaotic scenes as anger over an extradition bill morphs into a fresh front against what many see as a broader erosion of freedoms by Beijing.
Protest organisers said 430,000 attended Sunday’s rally. Police put the number at 138,000 at its peak.
The latest protest comes a day after tens of thousands gathered to voice support for the police, whom some have accused of using excessive force against activists, and demand an end to the violence.
Reference: CNBC, Reuters
Thai
Eng