New Cold War Looms
As U.S. President Donald Trump continues to raise the stakes with threats to kneecap Huawei Technologies Co. and Chinese surveillance-equipment firms, officials in Beijing are weighing their options to respond. They are stoking up the anti-U.S. sentiment and drawing up contingency plans to bail out Huawei, while also still calling for dialogue to resolve the dispute. But there’s uncertainty over whether the U.S. is fundamentally looking to curb China’s rise as a global superpower, or just ramping up the rhetoric. Trump is still likely to meet Chinese President Xi Jinping in late June, Steven Mnuchin says.
India’s Votes Counted
India begins counting votes today for the largest democratic exercise in the world, with Prime Minister Narendra Modi widely expected to win following a gruelling contest that focused squarely on his leadership after a military clash with rival Pakistan. The Election Commission of India will start counting at 8:00 am local time, with clear trends expected to emerge mid-morning. More than 600 million people cast ballots over the six-week process, but thanks to electronic voting machines the counting should only take a few hours.
Stocks Sink, Asia, Follows
Asian stocks looked set for modest declines after U.S. equities slipped amid ongoing trade-war tension. Treasuries rose, with 10-year yields remaining down after the release of the Fed minutes. The dollar was mixed, gaining most against the pound and losing ground against the yen. Gold was little changed.
At the Mercy of Foreigners
While overseas traders are quickly souring on yuan assets, they’ve also never wielded this much influence over China’s onshore stock market. Index inclusions and expanded quotas mean they drive a record 10% of daily turnover, according to data compiled by Bloomberg. That proportion is even greater for favourites like Kweichow Moutai Co., at 34% on a monthly basis. They own 3.1% of the $6.5 trillion stock market, almost as much as the country’s mutual funds. That means the record pace of foreign selling matters now more than ever.
May Still Standing
U.K. Prime Minister Theresa May’s premiership is hanging by a thread as a high-profile Cabinet minister quit and a growing revolt over Brexit looked set to force the British leader from power, although rank-and-file Conservatives decided not to change leadership rules that would make it easier to oust her. In her letter of resignation, Andrea Leadsom said she no longer believed the government’s approach will honour the result of the 2016 referendum.
This is what’s caught our eye over the last 24 hours.
Huawei insists it’s the victim this time of stolen trade secrets. Post-election riots in Indonesia turn deadly. The world’s carmakers have cut 38,000 jobs over the past six months. An economic slowdown won’t stop the Chinese from buying in Bangkok. The tennis world’s next wave of superstars is being trained in China. The family offices serving crazy rich Asians are keen to dive into tech.