Asian markets mostly up ahead of trade talks, Trump fears ease
Asian markets mostly rose Wednesday before keenly awaited trade talks between China and the United States, while early worries over a double whammy for Donald Trump also eased.
While not expecting a major deal when officials from Beijing and Washington meet, investors are hopeful they can find a way out of the months-long row that has seen tariffs imposed on billions of dollars of goods and stock markets tumble.
Recent comments from US Commerce Secretary Wilbur Ross, signaling plans to delay a final decision on whether to impose duties on auto imports, have also provided some cheer.
Tokyo and Hong Kong both ended 0.6 percent higher, while Seoul and Taipei each put on 0.1 percent and Wellington closed up 0.5 percent. Manila and Jakarta were also well up.
However, Shanghai finished 0.7 percent down while Sydney shed 0.3 percent, with political uncertainty in Canberra adding to selling pressure.
(read more: The Jakarta Post)
As emerging markets take a battering from Turkey’s turmoil, traders are positioning themselves to ride out the pain.
As emerging markets take a battering from Turkey’s turmoil, sending stocks and bonds toward their lowest this year, traders are positioning themselves to ride out the pain.
Traders pushed down the value of emerging market assets Monday as Turkish assets sank, before stabilizing on Tuesday. The carnage in Turkey added to an already fragile landscape amid tensions between the U.S. and other major economies such as Russia and China. While some investors say bargains are already emerging, others bet the best option is to sell stocks and bonds and put their money into cash.
Here’s what analysts and investors are saying:
Kevin Daly, a money manager at Aberdeen Standard Investments in London:
- The almost-$800 billion investment group sold some emerging-market holdings on Monday to increase its cash positions.
- Daly sees few signs the Turkish rout will end soon and says emerging markets as a whole could be in for further pain.
- “Playing a market like this is difficult,” he said. “There aren’t any obvious safe zones.”
(read more: Bloomberg)
China vows it won’t back down after Trump’s latest tariff threat
Commerce Secretary Wilbur Ross signaled there’s more pain ahead unless China changes its economic system, as the Asian nation repeated it will never surrender to U.S. trade threats.
“We have to create a situation where it’s more painful for them to continue their bad practices than it is to reform,” Ross said in an interview on Fox Business Network on Thursday. The U.S. will keep turning up the pressure on China for as long as the country refuses to level the economic playing field, said Ross.
“The reason for the tariffs to begin with was to try and convince the Chinese to modify their behavior. Instead they have been retaliating. So the president now feels that it’s potentially time to put more pressure on, in order to modify their behavior,” he said.
President Donald Trump fanned tensions by ordering his trade office to considering imposing a 25 percent duty on $200 billion worth of Chinese goods, up from an initial 10 percent rate. The move for a higher tariff, which was announced Wednesday, is intended to bring China back to the negotiating table for talks over U.S. demands that China make structural changes to its economy and narrow the U.S. trade deficit. The negotiations broke down last month.
(read more: Bloomberg)
Canadian microbreweries are facing a shortage of cans and higher costs
Canadian microbreweries are facing a shortage of cans and higher costs, forcing some to cut beer production after the country imposed retaliatory import duties on U.S. aluminum imports in the busy summer season.
Though Canada is the world’s third biggest aluminum producer and cans are made in the country, beer makers also rely on the import of more than 2 billion cans annually, largely from the United States, Statistics Canada data shows.
So when Canada struck back at the United States’ tariffs on aluminum imports on July 1, and included cans, some craft brewers received notices of higher prices due to the duties while others have been unable to secure their usual supply of aluminum cans.
“It seems like no one has cans to sell,” said Steve Beauchesne, co-founder and chief executive of Beau’s Brewing Co in Ottawa, which sold a quarter of the 6.5 million liters (1.7 million gallons) of beer last year in cans.
“Whether it’s tariff-related or not, clearly some large producers have greatly underestimated their demand so that the suppliers were caught off guard and unable to provide it,” he added. Beauchesne, who declined to name his supplier, expects to run out of cans by mid-August, with their next delivery not expected until September at the earliest.
Grand Prairie, Alberta-based GP Brewing Co resumed production in recent days, following a nearly two-week suspension, after receiving an order from U.S.-based can maker Crown Holdings Inc (CCK.N), GP’s president Matt Toni said. Ninety percent of GP’s beer is sold in cans and Toni cited shortages from supplier Crown Holdings for the disruption.
(Read more: Reuters)