· The U.S. dollar was modestly higher on Thursday as news Washington and Beijing were discussing negotiations in September eased anxieties about the ongoing trade war.
The world’s two largest economies are in talks about the next round of face-to-face meetings, but hopes for progress hinge on whether Washington can create favorable conditions, China’s commerce minister said on Thursday. He also expressed hope the United States would cancel the additional tariffs set to go into effect on Sept. 1.
Thursday saw a slight bid for riskier assets, sending safe-havens such as the Japanese yen and Swiss franc lower and Treasury bond yields higher. The dollar index , which measures the currency against a basket of six rivals, has held up despite a dramatic escalation in tariffs last week, and was last up 0.20% to 98.406.
Against the greenback, the yen was 0.31% weaker to 106.44, but was on track for a more than 2% rise against the dollar for the month of August.
The dollar was little moved by news Thursday the U.S. economy slowed slightly more than expected in the second quarter, despite the strongest growth in consumer spending in 4-1/2 years.
Sterling remained in the spotlight after Prime Minister Boris Johnson’s plan to suspend parliament raised the odds of a no-deal Brexit. The British currency edged 0.16% lower to $1.2189, approaching a January 2017 low below $1.2015.
· U.S. government debt yields paused their monthlong slide on Thursday after Chinese officials indicated that the country would be open to ending its trade war with the United States.
The yield on the benchmark 10-year Treasury note was trading higher at 1.513% albeit still under that of the 2-year yield of 1.522%. The yield on the 30-year Treasury bond was also higher at 1.992%, breaking above the 3-month bill rate. Yields fall as prices rise.
The uptick in Treasury yields came after China said it hoped to conclude its bitter trade war the U.S. with a “calm ” attitude.
Asked about its ongoing trade war with the U.S., China’s commerce ministry said Thursday that it was opposed to escalating trade tensions, hinting Chinese authorities will not retaliate against the latest round of U.S. tariffs. That appeared to spark a pivot back toward riskier assets as the S&P 500 jumped more than 1% in Thursday’s session and long-term debt yields rose faster than their shorter-termed peers.
· China is willing to calmly resolve the trade dispute with the United States and is against any further escalation in tensions, Gao Feng, spokesman for China’s Ministry of Commerce, said Thursday.
“We firmly reject an escalation of the trade war, and are willing to negotiate and collaborate in order to solve this problem with a calm attitude,” Gao said, according to a CNBC translation of his Mandarin-language remarks. He noted that the Chinese and U.S. trade delegations have maintained “effective” communication.
But he did not confirm a claim from President Donald Trump on Monday which said the Chinese team had called the U.S. over the weekend with the desire of reaching a deal soon. China’s Ministry of Foreign Affairs has previously said it is unaware of the call that Trump described.
· China is surveying its tech companies to gauge their exposure to U.S. suppliers, aiming to reduce reliance on American technology as the trade war between the two countries intensifies, The Wall Street Journal reported.
Over the past few months, officials from China’s National Development and Reform Commission, Ministry of Industry and Information Technology and Ministry of Commerce have been canvassing domestic tech firms including smartphone makers Xiaomi, Oppo and Vivo to learn about their supply chain structure, the Journal reported, citing people familiar with the matter.
In the meantime, China is accelerating efforts with other countries in order to reduce its reliance on the U.S. The official newspaper of the Chinese Communist Party, the People’s Daily, on Sunday published several articles about China’s improving cooperation with other countries and regions including Thailand, Japan, South Korea and Latin America.
· A new left-wing coalition in Rome signals a move away from populism for Italy, according to former Prime Minister Matteo Renzi, who is hopeful that the new pact could share power until the next scheduled election in 2023.
The opposition Democratic Party (PD) — which Renzi led until 2016 — set aside its differences with the anti-establishment Five-Star Movement (M5S) this week to create a new coalition, after a rocky agreement between M5S and the right-wing Lega party ended last week.
· A U.S. intelligence report says the mysterious explosion off Russia’s northern coast occurred during a recovery mission to salvage the Kremlin’s nuclear-powered missile from the ocean floor.
The mysterious explosion sparked fears that Russia had tested its nuclear-powered Burevestnik missile, also known as Skyfall.
CNBC learned last year of similar plans Moscow made to try to recover a nuclear-powered missile lost at sea.
· Brent oil rose on Thursday, withstanding pressure from concerns about economic growth, while a sharp fall in U.S. inventories boosted West Texas Intermediate (WTI) crude futures.
International benchmark Brent crude was up 51 cents at $61 a barrel. WTI was up 87 cents, or 1.7% to settle at $56.71 a barrel.
Reference: CNBC, Reuters
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