· The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 99.037 after jumping from levels below 98.7 yesterday.
The Japanese yen traded at 107.69 against the dollar after weakening from levels below 107.5 in the previous session, while the Australian dollar changed hands at $0.6752 after declining from levels around $0.68 yesterday.
· U.S. President Donald Trump said on Wednesday a deal to end a nearly 15-month trade war with China could happen sooner than people think and that the Chinese were making big agricultural purchases from the United States, including of beef and pork.
Trump said later after signing a limited trade deal with Japanese Prime Minister Shinzo Abe there was a good chance of reaching an agreement with China.
· U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe signed a limited trade deal on Wednesday that cuts tariffs on U.S. farm goods, Japanese machine tools and other products while further staving off the threat of higher U.S. car duties.
Trump said the deal would open up Japanese markets to some $7 billion worth of American products annually, cutting Japanese tariffs on U.S. beef, pork wheat and cheese.
· The U.S. House of Representatives voted 421-0 on Wednesday for a resolution calling on President Donald Trump to release a whistleblower complaint to Congress, despite the administration letting them view the classified document at secure locations in the U.S. Capitol.
The document is central to the impeachment inquiry into the Republican president announced on Tuesday by the Democratic House Speaker, Nancy Pelosi, after reports that Trump had tried to put pressure on Ukraine’s president to help smear a political rival.
· For U.S. President Donald Trump, White House publication on Wednesday of a memo summarizing his call with Ukrainian President Volodymyr Zelenskiy fueled a domestic political crisis.
Zelenskiy’s comments to the Republican Trump, disclosed in the summary, will likely irk U.S. Democrats, risking the bipartisan U.S. support Kiev requires while irritating France and Germany whom Zelenskiy criticized in the same exchange.
· U.S. President Donald Trump warned on Wednesday that an impeachment inquiry against him could derail congressional approval of a North America trade pact, dragging down Mexico’s peso and stock market as investors fled riskier assets.
While U.S. Trade Representative Robert Lighthizer said he was confident the U.S-Mexico-Canada trade agreement (USMCA) would come up for a vote and pass, Trump told him in front of reporters that he knows “these people” better, referring to Democrats.
· St. Louis Federal Reserve Bank President James Bullard said on Wednesday he does not expect the impeachment inquiry into President Donald Trump to affect how the Fed conducts monetary policy.
Bullard said in an interview with CNBC that Fed officials are used to dealing with political uncertainty as a backdrop to policy deliberations. “This doesn’t sound all that different to me,” he said.
· The world economy is going through a “fragile” period, but odds of a U.S. recession over the next year remain “relatively low,” Dallas Federal Reserve President Robert Kaplan said on Wednesday.
“Global growth is decelerating ... We are in this tenuous period,” Kaplan said. But the United States “can skate through this” without a downturn, Kaplan said, noting that consumption remains strong and households are benefiting from low unemployment.
· Chicago Federal Reserve president Charles Evans said on Wednesday he backed the Fed’s two recent rate cuts but feels the central bank is now “well-positioned” to see how economic data evolves.
“A couple of rate cuts seemed useful,” to further the Fed’s 2 percent inflation goal and guard against risks of a slowdown, Evans said. Markets are betting the Fed will cut rates more this year, but after cutting rates twice this year officials have been reluctant to commit to further reductions.
· Bulgarian economist Kristalina Georgieva was confirmed on Wednesday as managing director of the International Monetary Fund, the IMF said, becoming the first person from an emerging economy to head the global lender.
A center-right politician who grew up in Bulgaria under communism, Georgieva has built a reputation during her time at the World Bank - where she has been on a leave of absence from her post as chief executive officer during the IMF nomination process - and the European Commission as a tenacious straight-shooter, champion of gender equality and leader in the global fight against climate change.
· British Prime Minister Boris Johnson taunted his rivals on his return to parliament on Wednesday, goading them to either bring down the government or get out of the way to allow him to deliver Brexit.
Waving his arms and yelling “come on, come on then” to a raucous House of Commons, Johnson told his opponents they could bring a vote of no-confidence in the government on Thursday and trigger an election to finally break the Brexit impasse.
· German export expectations in September fell to their lowest level since 2009, the Ifo institute said on Wednesday, in the latest sign that waning foreign demand and Brexit uncertainty are pushing Europe’s largest economy into recession.
The export-reliant economy is suffering from slower global growth and business uncertainty caused by U.S. President Donald Trump’s ‘America First’ trade policies and Britain’s planned exit from the European Union.
· China’s economic numbers in the last few months have disappointed expectations but the worst is not over — analysts are expecting third quarter data to come in even weaker than than before.
A quarterly survey by China Beige Book released Wednesday showed that growth slowed in the third quarter while debt levels soared.
“Nationally, revenue, profits, output, sales volumes, and job growth all slowed from a quarter ago, as did both domestic and export orders,” the report said, citing China Beige Book’s survey of more than 3,300 Chinese businesses.
· South Korean consumers’ inflation expectations fell to the lowest on record, a survey from the Bank of Korea (BOK) showed on Thursday, bolstering the chances for another rate cut in October.
Consumers’ median inflation expectations for the next 12 months fell to 1.8% in September, down from 2.0% in August and the lowest since the data was first released in February 2002.
The nation’s consumer price index was unchanged in August from a year earlier, the weakest pace since the country began releasing inflation data in 1965 and far below the central bank’s 2% target and annual forecast of 0.7%.
· Oil shed more than 1 per cent on Wednesday, logging a second straight day of losses after US crude stockpiles unexpectedly rose and as Saudi Arabia maintained a faster-than-expected recovery of its oil production.
A rally in the dollar index, which moves inversely with oil, also weighed on crude futures as a Democratic-led chamber was launching an official presidential impeachment inquiry.
Brent crude futures settled at US$62.39 a barrel, shedding 71 cents, or 1.1 per cent, while US West Texas Intermediate crude settled 80 cents, or 1.4 per cent, lower at US$56.49 a barrel.
US crude inventories unexpectedly rose 2.4 million barrels last week, the Energy Information Administration said, instead of declining 249,000 barrels as analysts forecast.
Reference: Reuters, CNBC, Business Times
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