US and China confirm details of trade framework
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CNA
4 minutes ago
- CNA
Asia shares sideswiped by US economic jitters, oil slips
SYDNEY :Asian share markets followed Wall Street lower on Monday as fears for the U.S. economy returned with a vengeance, spurring investors to price in an almost certain rate cut for September and undermining the dollar. Some early resilience in U.S. stock futures and a continued retreat in oil prices did help limit the losses, but the bleak message from the July payrolls report was hard to ignore. Not only had revisions meant payrolls were 290,000 below where investors had thought they would be, but the three-month average slowed to just 35,000 from 231,000 at the start of the year. "The report brings payroll growth closer in line with big data indicators of job gains and the broader growth dataset, both of which have slowed significantly in recent months," noted analysts at Goldman Sachs. "Taken together, the economic data confirm our view that the U.S. economy is growing at a below-potential pace." Neither did the reaction of President Donald Trump instil confidence, as the firing of the head of Labor Statistics threatened to undermine confidence in U.S. economic data. Likewise, news that Trump would get to fill a governorship position at the Federal Reserve early added to worries about the politicisation of interest rate policy. Analysts assume the appointee will be loyal to Trump alone, though the president did grudgingly concede that Fed Chair Jerome Powell would likely see out his term. "It opens the prospect of broader support on the Fed Board for lower rates sooner rather than later," said Ray Attrill, head of FX research at NAB. "Fed credibility, and the veracity of the statistics on which they base their policy decisions, are both now under the spotlight." Markets moved quickly to price in a lot more easing with the probability of a September rate cut swinging to 90 per cent, from 40 per cent before the jobs report. Futures extended the rally on Monday to imply 65 basis points of easing by year-end, compared to 33 basis points pre-data. Markets have essentially already eased for the Fed with two-year Treasury yields down another 4 basis points at 3.661 per cent. They tumbled almost 25 basis points on Friday in the biggest one-day drop since August last year. DOLLAR DENTED The prospect of lower borrowing costs offered some support for equities and S&P 500 futures inched up 0.1 per cent, while Nasdaq futures rose 0.2 per cent. Asian share markets, however, were still catching up with Friday's retreat and the Nikkei fell 2.1 per cent, while South Korea dipped 0.2 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan broke the mould and firmed 0.3 per cent. Wall Street has also taken comfort in an upbeat results season. Around two-thirds of the S&P 500 have reported and 63 per cent have beaten forecasts. Earnings growth is estimated at 9.8 per cent, up from 5.8 per cent at the start of July. Companies reporting this week include Disney, McDonald's, Caterpillar and some of the large pharmaceutical groups. The dismal U.S. jobs data did put a dent in the dollar's crown of exceptionalism, snuffing out what had been a promising rally for the currency. The dollar dipped 0.1 per cent to 147.24 yen, having shed an eye-watering 2.3 per cent on Friday, while the euro stood at $1.1585 after bouncing 1.5 per cent on Friday. The dollar index was pinned at 98.659, having been toppled from last week's top of 100.250. Sterling was more restrained at $1.3287 as markets are 87 per cent priced for the Bank of England to cut rates by a quarter point at a meeting on Thursday. The BoE board itself is expected to remain split on easing, while markets still favour two further cuts by the middle of next year. In commodity markets, gold was flat at $3,361 an ounce, having climbed more than 2 per cent on Friday. Oil prices extended their latest slide as OPEC+ agreed to another large rise in output for September, which completely reverses last year's cuts of 2.2 million barrels per day.
CNA
5 hours ago
- CNA
Trump, Carney to speak soon over tariffs, Canadian official says
WASHINGTON: President Donald Trump and Canadian Prime Minister Mark Carney will likely talk "over the next number of days" after the US imposed a 35 per cent tariff on goods not covered by the US-Mexico-Canada trade agreement, a Canadian official said on Sunday (Aug 3). Dominic LeBlanc, the federal cabinet minister in charge of US-Canada trade, told CBS News' "Face the Nation" that he believes there is an option of striking a deal that will bring down tariffs. "We're encouraged by the conversations with Secretary Lutnick and Ambassador Greer, but we're not yet where we need to go to get the deal that's in the best interest of the two economies," LeBlanc said, referring to US Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer. The trade minister said he expected Carney and Trump to speak "over the next number of days." "We think there is an option of striking a deal that will bring down some of these tariffs provide greater certainty to investment," LeBlanc said. Washington linked Friday's tariff announcement in part to what it said was Canada's failure to stop fentanyl smuggling. It was the latest blow in a months-long tariff war, which Trump initiated shortly after returning to power this year.
CNA
6 hours ago
- CNA
US trade advisor says Trump tariff rates unlikely to change
WASHINGTON: New US tariff rates are "pretty much set" with little immediate room for negotiation, US President Donald Trump's trade advisor said in remarks aired Sunday (Aug 3), also defending the president's politically driven levies against Brazil. Trump, who has wielded tariffs as a tool of American economic might, has set tariff rates for dozens of economies, including the European Union, at between 10 and 41 per cent, come August 7, his new hard deadline for the duties. In a pre-taped interview broadcast Sunday on CBS's "Face the Nation," US Trade Representative Jamieson Greer said "the coming days" are not likely to see changes in the tariff rates. "A lot of these are set rates pursuant to deals. Some of these deals are announced, some are not, others depend on the level of the trade deficit or surplus we may have with the country," Greer said. "These tariff rates are pretty much set." Undoubtedly, some trade ministers "want to talk more and see how they can work in a different way with the United States," he added. But "we're seeing truly the contours of the president's tariff plan right now with these rates." The US had announced hiked tariff rates on dozens of trade partners, which will kick in on August 7 instead of August 1, which had previously been touted as a hard deadline. Among the countries facing steep new levies is Brazil. South America's largest economy is being hit with 50 per cent tariffs on exports to the United States -- albeit with significant exemptions for key products such as aircraft and orange juice. Trump has openly admitted he is punishing Brazil for prosecuting his political ally Jair Bolsonaro, the ex-president accused of plotting a coup in a bid to cling to power. The US president has described the case as a "witch hunt." Greer said it was not unusual for Trump to use tariff tools for geopolitical purposes. "The president has seen in Brazil, like he's seen in other countries, a misuse of law, a misuse of democracy," Greer told CBS. "It is normal to use these tools for geopolitical issues." Trump was "elected to assess the foreign affairs situation... and take appropriate action," he added. Meanwhile, White House economic advisor Kevin Hassett said that while talks are expected to continue over the next week with some US trade partners, he concurred with Greer's tariffs assessment in that the bulk of the rates "are more or less locked in." Asked by the host of NBC's Sunday talk show "Meet the Press with Kristen Welker" if Trump could change tariff rates, should financial markets react negatively, Hassett said: "I would rule it out, because these are the final deals." Legal challenges have been filed against some of Trump's tariffs, arguing he overstepped his authority. An appeals court panel on Thursday appeared sceptical of the government's arguments, though the case may be ultimately decided at the Supreme Court.
