· The yen rose on Friday on renewed concerns about the U.S.-China trade dispute after a report that the White House is delaying a decision on allowing U.S. companies to do business with China’s Huawei Technologies.
The dollar fell 0.2% to 105.84 yen, on course for its second weekly decline. If the dollar manages to break its Aug. 7 low of 105.50 yen, it would next target 105.00 yen, Ishikawa said.
· The offshore yuan was stable versus the dollar in early trade after an alarming early week slide, but it will be closely watched as traders eye Beijing’s response to escalating trade tensions.
The offshore yuan traded at 7.0816 per dollar, little changed in Asian trade.
· The pound traded near a two-year low versus the euro after a media report said new Prime Minister Boris Johnson is preparing to hold an election after the Oct. 31 deadline for Britain to leave the European Union.
Sterling traded at $1.2145, little changed on the day but on course for a fourth consecutive week of declines.
· The dollar index, which measures the greenback versus a basket of six major currencies, was little changed at 97.566.
· China’s factory gate prices shrank for the first time in three years in July, stoking deflation worries and adding pressure on Beijing to deliver more stimulus as the economy sputters amid an intensifying trade war with the United States.
With demand slowing at home and abroad, Chinese manufacturers are having to cut prices to keep market share, depressing profit margins and discouraging the fresh investment needed to get the economy back on its feet.
Falling prices for crude oil, iron ore and other raw materials are also playing a part.
China’s producer price index (PPI) fell 0.3% from year earlier in July, the National Bureau of Statistics (NBS) said on Friday.
· Huawei has launched its own operating system — the HongmengOS, known in English as the HarmonyOS, the CEO of the Chinese tech giant’s consumer division, Richard Yu, said Friday.
He said the operating system can be used across different devices from smartphones to smart speakers and even sensors. It’s part of Huawei’s play in the so-called Internet of Things, which refers to devices connected to the internet.
Huawei said the OS will initially launch in China with plans to expand it globally.
Yu reiterated that Huawei would prefer to use Android on its smartphones, but if it had to migrate to HarmonyOS, that would not be difficult. He said moving to the new OS would only take one or two days and it is “very convenient.”
· German imports rose more than expected while exports edged down, data showed on Friday, in a further sign that domestic demand helps Europe’s largest economy to slowly reduce its dependence on foreign demand.
The Federal Statistics Office said seasonally adjusted exports were down by 0.1 % on the month while imports increased by 0.5 %. The trade surplus stood at 18.1 billion euros after a downwardly revised 18.1 billion euros in the previous month.
· The Bank of Japan has “pretty limited” options if the trade friction between China and the U.S. becomes worse, said the chief Japan strategist at Goldman Sachs, Kathy Matsui.
The short-term interest rate in Japan has been kept unchanged at -0.1% since the BOJ adopted negative interest rates in January 2016, as the country’s central bank struggles to meet an elusive inflation target.
Matsui said Japan is likely to rely on fiscal policy rather than monetary policy in terms of its stimulus options going forward.
· Australia’s economy may have reached a “gentle turning point,” led by a tentative pick-up in home prices, tax cuts and a weaker Aussie dollar, the country’s central bank chief said on Friday, though more interest rate cuts were still on the table.
· Thousands of protesters plan to rally within a terminal at Hong Kong International Airport on Friday as they try to draw attention back to a set of specific demands “in front of an international audience,” according to social media posts from protesters.
Airport authorities said only departing passengers with travel documents will be allowed to enter Terminal 1 on Friday morning, as the airport braces for what protesters are describing as a three-day event. The terminal serves long-haul flights.
The demands were originally released in July, a day after a small group of protesters stormed the Hong Kong legislature:
1. a full withdrawal of a proposed bill that would allow Hong Kong people to be extradited to mainland China
2. a retraction of any characterization of the movement as a “riot”
3. a retraction of charges against anti-extradition protesters
4. an independent committee to investigate the Hong Kong police’s use of force
5. universal suffrage in elections for the city’s chief executive officer and legislature by 2020
· China is expected to dramatically reduce its intake of U.S. crude imports over the coming weeks, energy analysts have warned, following the latest flare-up in trade war tensions between the world’s two largest economies.
“I think it is a virtual shoo-in that volumes will slow to a trickle and may even grind to a complete halt,” Stephen Brennock, oil analyst at PVM Oil Associates, told CNBC via email.
Chinese buyers recently rekindled their interest in U.S. crude, as imports climbed to a nine-month high of 247,000 barrels per day in May, according to figures from the Energy Information Administration (EIA).
However, Brennock said the latest ramp-up in trade tensions would most likely reverse this trend.
· Oil prices inched higher on Friday as expectations of more OPEC production cuts provided some support, although concerns over the long-running U.S.-China trade dispute kept a lid on gains.
International benchmark Brent crude futures, were at $57.54 a barrel by 0646 GMT, up 16 cents, or 0.3%, from their previous settlement.
U.S. West Texas Intermediate (WTI) futures were at $52.68 per barrel, up 14 cents, or 0.3%, from their last close.
Both contracts jumped more than 2% on Thursday to recover from January lows, buoyed by reports that Saudi Arabia, the world’s biggest oil exporter, had called other producers to discuss the recent slide in crude prices.
Oil prices have still lost more than 20% from peaks reached in April, putting them in bear territory.
Reference: CNBC, Reuters
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