Asian share markets fought to keep a global rebound alive on Tuesday after U.S. President Donald Trump seemed to quash hopes of a trade truce with China, clouding what had been a bright start to the week.
Moves were generally muted but Japan’s Nikkei .N225 managed to add 0.8 percent and Chinese blue-chips .CSI300 rose 0.4 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dithered either side of flat and was last up 0.2 percent. E-Mini futures for the S&P 500 ESc1 dipped 0.1 percent and spreadbetters pointed to a subdued start for the major European Bourses.
In an interview with the Wall Street Journal, Trump said he expects to move ahead with raising tariffs on $200 billion in Chinese imports to 25 percent from 10 percent currently.
Trump said it was “highly unlikely” he would accept China’s request to hold off on the increase, planned for Jan. 1.
The comments ran counter to recent speculation about a possible deal when Trump meets Chinese President Xi Jinping at the G20 summit in Buenos Aires later this week.
“Trump’s pessimistic view on the chances of a game-changing China trade deal may puncture global equity markets’ optimistic start to the week,” said Sean Callow, a senior FX analyst at Westpac in Sydney.
“Combined with last week’s harsh report from the U.S. trade representative, investors have only the flimsiest hope that the Trump-Xi meeting in Argentina will amount to more than a hill of soybeans.”
That put trade-sensitive currencies, including the Australian dollar AUD=D3, on the defensive, while the dollar lost some ground on the safe haven yen to 113.46 JPY=D3.
The euro edged up a shade to $1.1334 EUR= and the dollar dipped to 97.027 .DXY against a basket of currencies.
OIL SHIFTS RISKS ON INFLATION, FED
Shares in Apple Inc (AAPL.O) fell after-hours in reaction to Trump’s comments that tariffs could also be placed on laptops and iPhones imported from China.
Trump’s remarks came just as the mood among investors had shown signs of brightening and Wall Street took heart from an upbeat holiday shopping period. [.N]
The Dow .DJI had ended Monday up 1.46 percent, while the S&P 500 .SPX gained 1.55 percent and the Nasdaq .IXIC 2.06 percent.
The rally came after the S&P 500 on Friday recorded its lowest close in six months, down more than 10 percent from September’s peaks and back in “correction” territory.
In commodity markets, oil prices laboured with record production by Saudi Arabia. Oil had climbed nearly 3 percent on Monday but that was seen as largely a technical correction after weeks of heavy losses, driven both by oversupply and demand worries.
U.S. crude CLc1 was off 9 cents at $51.54 a barrel, while Brent LCOc1 futures inched up 3 cents to $60.51.
Analysts at National Australia Bank noted the 30 percent drop in oil since early October would drag on U.S. inflation in coming months, perhaps offering further reason for the Federal Reserve to go slower on tightening.
“This is a starkly different picture to just a few months ago,” said NAB’s market strategist Tapas Strickland.
Markets cheer at hints of Italian budget breakthrough
“A stable to lower inflation outlook means there is no urgency for the Fed to hike rates,” he added. “An early 2019 pause is thus becoming more probable.”
The futures market <0#FF:> has already shifted to imply two more hikes at most next year, while the Fed itself is predicting three and more in 2020.
Ears will thus be pricked for a speech by Fed Vice Chairman Richard Clarida later on Tuesday, ahead of an appearance by Chair Jerome Powell the day after.
Reporting by Wayne Cole; Editing by Richard Borsuk & Shri Navaratnam
Critics claims Trump’s ‘confession’ on permanent payroll tax cut is ‘an excuse to destroy our Social Security system’
President Donald Trump on Tuesday once again voiced his support for slashing the payroll tax—the primary funding mechanism for Social Security and Medicare—and said he would be calling for such a cut even if the U.S. were not currently in the midst of a nationwide public health and economic emergency.
"I would love to see a payroll tax cut," Trump, who has repeatedly vowed to "save" Social Security, said at the end of the Coronavirus Task Force briefing Tuesday evening. "I think on behalf of the people it would be quick... There are many people who would like to see it as a permanent tax cut."
MSNBC’s Morning Joe angrily blasts his own network for helping Trump spread coronavirus lies
MSNBC's Joe Scarborough bashed his own network for carrying President Donald Trump's daily coronavirus briefings without real-time fact checks.
The "Morning Joe" host worked himself into a shouting rant against MSNBC and other cable news networks that broadcast the president's news conferences without correcting the false claims until the briefings are over.
"The president lies so much in these press conferences, I still for the life of me don't understand why the networks, including our own, allow Donald Trump to lie for two hours to the American people," Scarborough said. "If he were giving good information, that would be one thing, but it is a lie. So if this network or CNN or Fox is going to run him lying for two hours a night, they need a real-time fact checker."
Trump is staging ‘an authoritarian coup’ with his war on inspectors general: Ex-White House ethics chief
President Donald Trump is raising major alarms with his reported plan to fire seven inspectors general whom he has deemed insufficiently loyal to him.
Former Office of Government Ethics Director Walter Shaub this week called Trump's latest move against government IGs as "late-stage corruption" and said it was just the latest escalation in his systematic effort to remove anyone who could possibly hold him accountable for his misdeeds.