Stocks in Asia Pacific were set to trade mixed on Wednesday as the U.S. announced a delay in the implementation of tariffs on some Chinese goods.
Futures pointed to a higher open for Japanese stocks, with the Nikkei futures contract in Chicago at 20,760 and its counterpart in Osaka at 20,730. The Nikkei 225 last closed at 20,455.44.
Shares in Australia, on the other hand, were set to trade lower. The SPI futures contract was at 6,540.0, as compared to the S&P/ASX 200’s last close at 6,568.50.
The United States Trade Representative announced Tuesday certain products including clothing and cellphones are being removed from the tariff list based on “health, safety, national security and other factors” and will not face additional tariffs of 10%. Other tariffs will be delayed to Dec. 15 from Sep. 1 for certain goods, it said.
Investors will be watching for the reaction from the People’s Bank of China when it announces its official midpoint reference rate for the yuan around 9:15 a.m. HK/SIN. It had last fixed the midpoint at 7.0326 per dollar on Tuesday — stronger than analysts’ expectations — and the fourth consecutive session where the central bank set the figure weaker than the psychologically important 7-yuan-per-dollar level.
Meanwhile, tensions in Hong Kong remained high after the city’s airport saw disruptions for a second day on Tuesday as a result of protests.
Chinese industrial production data is also set to be released at 10:00 a.m. HK/SIN today, as investors watch for the economic impact of the ongoing trade war between Beijing and Washington.
Shares of Apple suppliers in Asia will be also be under scrutiny today, with the Cupertino-based tech giant seeing its stock surge more than 4% on Tuesday.
Overnight stateside, the Dow Jones Industrial Average finished the day 372.54 points higher at 26,279.91, while the S&P 500 added 1.48% to close at 2,926.32. The Nasdaq Composite ended its trading day 1.95% higher at 8,016.36.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.812 after surging from levels below 97.5 yesterday.
The Japanese yen, often seen as a safe-haven currency, traded at 106.63 against the dollar after weakening sharply from levels below 105.5 in the previous session. The Australian dollar changed hands at $0.6796 after jumping from levels below $0.676 yesterday.
Here’s a look at some of the data due today:
- China: Industrial production, fixed asset investment (year to date), retail sales data for July at 10:00 a.m. HK/SIN
- Hong Kong earnings: HKEX, Champion REIT, Lenovo, Tencent
— CNBC’s Yun Li contributed to this report.
Boris Johnson can turn his victory into history if he can save the UK from division
Prime Minister Boris Johnson leaves Downing Street for Buckingham Palace where he will seek permission to form the next government during an audience with Queen Elizabeth II at Downing Street on December 13, 2019 in London, England.
Dan Kitwood | Getty Images News | Getty Images
It is just the sort of script one might expect from Boris Johnson, one of the most enigmatically fascinating personalities of our times.
Prime Minister Johnson – who famously craves both public attention and a place in history – won the former and a shot at the latter through a British election victory this week that was the most convincing conservative victory since Margaret Thatcher in 1987. To save the United Kingdom itself, however, he must reverse course, or at least amend direction, on much of what he has said and done to win in the first place.
I opposed Brexit on economic and political grounds yet, at the same time, Johnson might have the political flexibility, the intellectual chops and the Churchillian ambition to confound his critics along the five lines of action he must simultaneously pursue to find his historic place.
- Most importantly, he’ll have to negotiate a “no-tariffs, no-quotas” trade deal by end-2020 with a European Union that he has disparaged, knowing that it by some distance is the U.K.’s major trade partner.
- Second, he will have to rapidly restore external economic confidence in a country that has been suffering disinvestment, an economic slowdown, and doubts about its continued role as a European and global financial hub.
- Third, he should still aspire to get a trade and investment deal with an impeachment-distracted President Trump. At the same time, he should share with voters how unlikely that will be and embrace what might be faster and easier opportunities in Asia, namely negotiating his way into the 11-country Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
- Fourth, he’ll have to abandon much of the populist rhetoric that got him elected and embrace his encouraging “One Nation” message of this week that could heal the country’s divisions – and perhaps also slow a European-wide and global populist trend.
- Finally, he’ll need save the United Kingdom from unraveling by convincing Scotland and Northern Ireland of their future place – while heading off another Scottish independence referendum. A successful EU negotiation will help that.
Media pundits in recent months have compared and associated the rise of Boris Johnson and Donald Trump as populists who have turned their countries’ politics upside down. Yet the comparisons only go so far, given Boris’ bookish, multilingual, multicultural background and intellectual passion.
He was born in Manhattan as Alexander, then raised in Brussels until age 11, before being shipped to British boarding a year after his mother’s breakdown, a life richly chronicled by Tom McTague in The Atlantic last July. Somewhere along the way the quiet child became the boisterous, eccentric British Boris. He developed a comic demeanor, a disheveled mean (and mane), a rapier intellect with a taste for the classics, and an insatiable desire to be liked.
From all of this grew his self-proclaimed ambition to be “world king.”
“I often thought that the idea of being world king,” said his mother of her illness’ impact on Boris, “was a wish to make him unhurtable, invincible somehow, safe from the pains of life, the pains of your mother disappearing for eight months, the pains of your parents splitting up.” The biographer Sonia Purnell says Johnson told girlfriends that his way of coping was to make himself invulnerable “so that he would never experience such pain again.”
The Brexit referendum and— three years later— his election vote are part psychological and part political drama for Boris Johnson, the stuff of a West End musical. His Friday speech on the steps of 10 Downing Street showed how quickly he can change his tune from that of the campaign to one of governance.
Speaking to those voters who opposed him and wished to remain in the EU, he said, “I want you to know that we in this One Nation Conservative government will never ignore your good and positive feelings – of warmth and sympathy toward the other nations of Europe.”
He went further.
“As we work together with the EU as friends and sovereign equals in tackling climate change and terrorism, in building academic and scientific cooperation, redoubling our trading relationship…,” he said, “I urge everyone to find closure and let the healing begin.”
That will be easier said than done as Johnson will now have to decide what kind of U.K. he wishes to build – one more akin to its neighbors in the EU or one more resembling a low-tax, deregulated Singapore-on-Thames.
“Brexit will formally happen next month, to much fanfare,” writes the Economist, “but the hardest arguments, about whether to forgo market access for the ability to deregulate, have not begun. Mr. Johnson will either have to face down his own Brexit ultras or hammer the economy with a minimal EU deal.”
French President Emmanuel Macron, enamored by his colleague’s intellect and linguistic skill, has called Boris Johnson “a leader with genuine strategic vision” who should be taken seriously. This week he extended an olive branch while in Brussels, telling “British friends and allies something very simple: by this general election, you confirmed the choice made more than three years ago, but you are not leaving Europe.”
On the other hand, he has warned, the best way to reach the most ambitious trade agreement with the EU would be if the U.K. essentially says “we don’t want to change very much.”
So, the drama will continue. If the U.K.’s economy emerges as robust and healthy, other European countries might wonder about the value of staying in. If Johnson defines his country as too close to the European Union, irrespective of economic logic, his base may well ask what the past three years’ drama has achieved other than serving Johnson’s own political ambitions.
It’s time to raise the curtain on the next act.
Frederick Kempe is a best-selling author, prize-winning journalist and president & CEO of the Atlantic Council, one of the United States’ most influential think tanks on global affairs. He worked at The Wall Street Journal for more than 25 years as a foreign correspondent, assistant managing editor and as the longest-serving editor of the paper’s European edition. His latest book – “Berlin 1961: Kennedy, Khrushchev, and the Most Dangerous Place on Earth” – was a New York Times best-seller and has been published in more than a dozen languages. Follow him on Twitter @FredKempe and subscribe here to Inflection Points, his look each Saturday at the past week’s top stories and trends.
For more insight from CNBC contributors, follow @CNBCopinion on Twitter.
Brexit deal will be a ‘good thing for the UK economy,’ US Treasury Secretary says
Secretary of the Treasury Steven Mnuchin
SAUL LOEB | AFP | Getty Images
Finally completing the Brexit divorce deal between the EU and the U.K. will provide much needed stability for the British economy, U.S. Treasury Secretary Steven Mnuchin told CNBC Saturday.
Prime Minister Boris Johnson won a general election with a thumping majority this week and looks set to complete the first stage of Brexit at the end of January. However, three-and-a-half years of wrangling means it’s begins schedule and that delay has hurt business sentiment and investments.
Speaking to CNBC’s Hadley Gamble at the Doha Forum, Mnuchin said he expects Johnson will now get his deal on Brexit done with his commanding majority in the House of Commons and said the two sides were “absolutely” moving toward trade discussions.
“My expectation is that the prime minister will now get his deal on Brexit done. Which I think is a good thing for the U.K. economy. The U.K. just needs stability on this issue,” he said.
“I’ve been hearing for too long ‘they’re in, they’re out, they’re in, they’re out’ and we’ll begin trading discussions with them. We’re very much looking forward that trading relationship,” he added.
Johnson’s Conservatives now have 365 parliamentary seats, a majority of 80 in the House of Commons. The result, which proved even more decisive than pollsters had forecast, follows a bitterly-fought and divisive election campaign.
In a tweet published Friday morning, President Donald Trump offered his congratulations to the newly-elected prime minister, describing the better-than-expected result for his friend as a “great win.”
“Britain and the United States will now be free to strike a massive new trade deal after Brexit,” Trump said. “This deal has the potential to be far bigger and more lucrative than any deal that could be made with the E.U. Celebrate Boris!”
—CNBC’s Sam Meredith contributed to this article.
‘Everybody’s suffering’ in the Gulf because of Qatar blockade: Eni CEO
Filippo Monteforte | AFP | Getty Images
The CEO of Italian oil and gas firm Eni has backed a return to diplomatic ties between Qatar and its powerful neighbors, telling CNBC that a removal of a blockade against the country would be “good for everybody.”
“I think it would make life easier to everybody. When there is communication, when there is good relationships it’s good,” Claudio Descalzi told CNBC’s Hadley Gamble during the Doha forum in Qatar.
“We have, already, a lot of issues, trouble in the world to look for … everybody’s suffering in the area because of this situation,” he said, adding that “peace would be good for everybody.”
Saudi Arabia, along with Bahrain, the United Arab Emirates and Egypt imposed an economic and diplomatic blockade on the small Arab state in June 2017, accusing it of supporting terrorism. Qatar vehemently denies the accusations.
The blockade has impacted air travel, shipping and trade routes and media, among other sectors. However, there are now early signs that relations might be improving. Speaking to Reuters on Saturday, Qatar Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani said there has been “small progress” in resolving the 2-1/2 year dispute.
—CNBC’s Holly Ellyatt contributed to his article.
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