Donald Trump targeted China again. The president reiterated his threat of more tariffs on Chinese goods, after promising to hold off on additional duties in a trade-war truce he reached with Xi Jinping last month. He reasserted that China is supposed to buy more farm products, a pledge Beijing hasn’t confirmed or fulfilled. Still, he insisted he’s doing well with the Asian country.
Asian equity futures are lower after U.S. stocks retreated from record highs on Trump’s sabre-rattling on trade. The S&P 500 halted a five-day rally and Treasuries fell on strong U.S. data but pared losses as Jerome Powell kept up his dovish talk. The dollar rose against every G-10 peer, with the pound faring the worst. Gold dropped. Oil in New York extended losses below $58 after Mike Pompeo said Iran had signalled an openness to talks.
North Korea’s economy hasn’t been in such bad shape since Kim Jong Un’s father was battling floods, droughts and famine that some estimates say killed as much as 10% of the population. The South Korean central bank’s annual report on its northern neighbour—due for release later this month—will provide a fresh look at the impact of Trump’s pressure campaign just as the two sides prepare to restart talks.
China’s efforts to shore up its sagging economic growth are leading to a debt resurgence. The country’s total stock of corporate, household and government borrowing now exceeds 303% of GDP and makes up about 15% of global debt, according to the Institute of International Finance. That’s up from just under 297% in the first quarter of 2018. Meanwhile, China’s stash of U.S. Treasuries dipped in May to the lowest in two years amid the trade war, but the country remained the largest holder.
Trump took repeated aim at Google. The president called on Attorney General William Barr to look into Peter Thiel’s allegations that the company’s work with China is “seemingly treasonous.” Earlier, Trump tweeted that Thiel is “a great and brilliant guy who knows this subject better than anyone!” A spokesman for Google said the company doesn’t work with the Chinese military.
What we’ve been reading
This is what’s caught our eye over the last 24 hours.
EMI records refused to allow the Beatles' Here comes the Sun to be placed on the Voyager spacecraft's record.