News / Analysis
Finance Update – China: It’s War!May 26, 2020
Hong Kong governor Carrie Lam this morning tried to calm corporate fears that national A documented and tradeable asset -mainly stocks and bonds, but also documented derivatives. laws would not trample rights.
Her words lost all significance as China’s aviation regulator blocked a Cathay Pacific merger as punishment for the firm’s pro-democracy stance during last year’s protests and despite the company’s CEO resigning in ‘remorse’.
And in further indications of a deepening Chinese pro-war stance, the nation’s Commerce Minister today said that tariffs on Australian barley and meat were in retaliation, not for Australia’s call for a COVID-source investigation, but for “hundreds of trade investigations” Australia has launched against China.
Meanwhile, People’s Bank Governor Yi Gang told reporters this morning he was considering an The cost of accessing money not owned. rate decrease.
Finally, Reuters this morning reports that Russia has overtaken Saudi Arabia as China’s main source for crude oil.
Asian markets are all in the green this morning, led by the Nikkei’s 2.57% rise to a 10-week peak.
Japan’s all industry activity index for March showed a 3.8% contraction this morning.
European indexes were pulled higher yesterday, the DAX out front with 2.87% and Portugal’s PSI20 at the rear with a mere 0.84% rise.
The Euro added nearly a 1/3% after IFO published its climate and expectation markers for Germany, both much better than expected thanks to improved moods amongst exporters.
In addition, consumer confidence for June has improved somewhat – from -23 points in May to -18.9.
With US markets closed for the Memorial Day weekend, US S&P futures, however, broke through the 3K mark, hitting 2010 before settling back at 3004 this morning, while Brazil’s BOVESPA index marked an astonishing 4.25% increase.
Gold lost $5 on the troy ounce overnight. Oil continued to rise during the Asian session, capping at 34.40 before losing some cents as the sun set.
US Pres hopeful Joe Biden has promised to ban offshore drilling in the Gulf of Mexico, throwing an additional wrench into an already bleeding US oil industry.
Lufthansa shares jumped 7% yesterday after the German government approved a €9 bn bailout that gives the state veto rights in case of an attempted takeover. And tomorrow, prepare for Ralph Lauren’s quarterly earnings report.
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