Treading a fine line

Today’s news headlines:

‘Trump signals he has more Chinese companies in his sights'. The US President has set his sights on e-commerce giant Alibaba as well as other Chinese companies, a day after he ordered TikTok’s owner to divest their US operations within the next 90 days. Trump confirmed that his administration is looking at punitive action against companies like Alibaba but didn’t offer an explanation as to why. Most China experts believe Trump will increase pressure on Beijing ahead of the upcoming US election. (Financial Times)

‘UK looks to extend bailout loans to private equity-owned groups’. The British government is looking to offer state-backed loans to struggling companies in the hope of rescuing some high street staples. The BEIS department wants to help private-equity-backed groups that employ large numbers of people without breaching EU state aid rules. The controversial loans, which are worth up to £200m, would leave the taxpayer liable for 80% of the repayments if the company fails. (Financial Times)

Today's events, rates, and data 

  • Commodity currencies inched higher against the Dollar after a delay to the review of the US-China trade agreement left the deal intact, for now. Asian markets were mixed, shares in China and Hong Kong outperformed after a People's Bank Of China injection of liquidity, but equities in Japan suffered as a result of a stronger Yen.

Events

Japan Preliminary GDP: -7.8% vs -0.6% previously
Japan Revised Industrial Production: 1.9% vs 2.7% previously
US Empire State Manufacturing Index: 1.30pm

Interbank rates:

GBP/USD: 1.3110
GBP/EUR: 1.1060
EUR/USD: 1.1860
USD/CAD: 1.3235