China blasted looming U.S. tariffs of 10% on a further $300 billion of Chinese imports as a violation of accords reached by Presidents Donald Trump and Xi Jinping. In a short statement the State Council Tariff Committee said China “has no choice but to take necessary measures to retaliate.” Meanwhile Trump said a phone call with Xi was on the cards to discuss the trade war. That could give him an opportunity to expand upon his advice on how China might resolve the protests that have rocked Hong Kong for two months. “If President Xi would meet directly and personally with the protesters, there would be a happy and enlightened ending to the Hong Kong problem,” he tweeted. China, however, isn’t too keen on “foreign forces” interfering in the issue.
The U.S. data pouring in supports Federal Reserve Chairman Jerome Powell’s forecast of solid economic growth and higher inflation. Still, economists remain confident that Powell will cut interest rates again next month as insurance against a global slowdown. Powell may give a hint of his thinking when he speaks on Aug. 23 at the annual central bankers retreat in Jackson Hole, Wyoming. On Wednesday talk of recession reared its ugly head when a key portion of the Treasury yield curve inverted — meaning short-term rates were higher than long-term rates — which has previously provided an early warning. Fed officials, however, have consistently said they don’t see any imminent risk of recession.
Stocks in Asia looked set to drop after another tumultuous session on Wall Street and further declines in Treasury yields, on heightened trade uncertainty and fears of a slowing global economy. Futures pointed lower in Japan, Hong Kong and Australia. Contracts on the S&P 500 Index edged higher after the U.S. gauge swung more than 1% for a 12th straight day in above-average volume before finally ending the day up. Ten-year Treasury yields slid below 1.5% to a three-year low and New Zealand’s 10-year yield dropped below 1% for the first time.
Alibaba’s first-quarter results rode a surge in internet shopping, which defied a slowing Chinese economy. Its horde of mobile monthly active users jumped to 755 million, topping the 721.5-million consensus, and net income was bolstered by its Ant Financial stake. The company’s riding a surge in internet shopping, as online sales in China have been accelerating thanks to sales promotions that unfolded across the country’s largest e-commerce platforms. Things are going less well for Baidu.
Thailand is set to announce a fiscal stimulus package to shore up growth as the U.S.-China trade war and currency strength sap its export-reliant economy. There’s potential for 60 billion baht ($1.9 billion) to 80 billion baht of stimulus steps, with every 30 billion baht able to lift economic growth by 0.1 percentage point, Siam Commercial Bank estimates. The government is expected to provide details of the package after a ministerial meeting Friday.
What we’ve been reading
This is what’s caught our eye over the last 24 hours.
- Hong Kong massive protests raise ominous questions about 2047
- Cathay had a week from hell caught between China and Hong Kong
- India’s payment apps battle to catch China in squeezing out cash
- Goldman’s star in Hong Kong turns into scandal’s mystery man
- China loses its status as the U.S.’s top foreign creditor to Japan
- Asia’s richest man grooms the heirs to his $46 billion fortune