Asian stocks climb ahead of US-China trade talks in London, buoyed by upbeat US jobs data
TOKYO, June 9 — Shares jumped and the dollar pared recent gains today as Asian markets reacted to better-than-expected US jobs data ahead of talks in London aimed at mending a trade rift between the US and China.
Wall Street stocks had closed sharply higher on Friday after the jobs data eased concerns about damage to the world's biggest economy from President Donald Trump's unpredictable tariff regime.
Today, MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.7 per cent, with Australia's markets shut for a holiday. Japan's Nikkei stock index rose 0.9 per cent.
But pan-region Euro Stoxx 50 futures pointed to a decline while US stock futures, the S&P 500 e-minis, slid 0.2 per cent.
Sentiment was weighed down by a standoff in Los Angeles that led to Trump calling in the California National Guard to quell demonstrations over his immigration policies.
The dollar slid 0.3 per cent against the yen to 144.46, trimming its 0.9 per cent jump on Friday. The European single currency was up 0.2 per cent on the day at US$1.1417 (RM4.84). Sterling traded at US$1.3553, up 0.3 per cent.
Top trade representatives from Washington and Beijing are due to meet for talks expected to focus on critical minerals, whose production is dominated by China. The discussions follow a rare call last week between Trump and Chinese President Xi Jinping.
'Trade policy will remain the big macro uncertainty,' said Kyle Rodda, a senior financial market analyst at Capital.com. 'Signs of further momentum in talks could give the markets fresh boost to kick-off the week.'
US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer will represent Washington in talks with China, Trump said in a social media post. China's foreign ministry said Vice Premier He Lifeng will be in Britain for the first meeting of the China-US economic and trade consultation mechanism.
'China export growth slows'
US job growth slowed in May by less than had been forecast, data showed on Friday. But dour economic readings from China added to evidence the trade war is taking a toll.
China's export growth slowed to a three-month low in May, while factory-gate deflation deepened to its worst level in two years, separate reports showed today.
Even so, trade optimism lifted Chinese shares. Hong Kong's Hang Seng Index rose 0.8 per cent, touching the 24,000-point level for the first time since March 21. China's blue-chip CSI300 Index added 0.2 per cent.
Attention now turns to US inflation data on Wednesday that will feed into expectations for the timing of any rate cuts by the Federal Reserve. The Fed is in a blackout period ahead of its June 18 policy decision.
Markets are facing 'mixed fortunes' today as they balance optimism over trade and the US economy against the potential for social unrest in California, said Jeff Ng, Head of Asia Macro Strategy at SMBC.
'The trade talks, if there's any progress, may help as well, but markets may not have priced in a lot of breakthrough for that,' Ng said. 'In the meantime, we are also quite cognisant that in the US there are protests in LA and the National Guard is also being sent in, so we have to be on the watch for event risk as well.'
Gold was little changed at US$3,311.65 per ounce after a 1.3 per cent slide on Friday. US crude was steady at US$64.54 a barrel following a 1.9 per cent surge late last week. — Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
2 hours ago
- The Star
U.S. inflation rises modestly in May, fueling political pressures on Fed
NEW YORK, June 11 (Xinhua) -- Inflation in the United States edged slightly higher in May, with the consumer price index (CPI) rising 2.4 percent on an annual basis, up from 2.3 percent in April, according to the data released by the Bureau of Labor Statistics on Wednesday. The increase was just below economists' expectations of a 2.5 percent rise, based on a FactSet survey. Core inflation, which strips out the often volatile categories of food and energy, climbed 2.8 percent over the past year -- also below the 2.9 percent projected. Despite these softer-than-expected readings, inflation remains above the Federal Reserve's 2 percent target, underscoring ongoing challenges in fully stabilizing prices. The inflation rate likely rose less than expected due to a sharp dip in gasoline prices. Lower energy prices were a "major source of disinflationary/deflationary pressure," noted Adam Crisafulli, an analyst with Vital Knowledge. Gasoline prices fell 12 percent from a year earlier, while clothing prices declined 0.9 percent, and airline fares dropped 7.3 percent. On the other hand, prices for beef, coffee, and housing continued to rise, offsetting the broader easing in other sectors. In financial markets, the report prompted a modest lift in U.S. stock indexes during midday trading, while the U.S. Treasury yields and the U.S. dollar slipped, reflecting expectations that the Federal Reserve may be inching closer to cutting interest rates later this year. Political pressure quickly mounted in response to the CPI data. U.S. President Donald Trump reiterated his call for the Fed to slash interest rates by a full percentage point, while U.S. Vice President JD Vance accused the central bank of engaging in "monetary malpractice" by maintaining current borrowing costs. Although the inflation numbers do not yet reflect significant upward pressure from tariffs imposed by the Trump administration, economists warn the full effects could materialize in the second half of 2025. "The impact of tariffs was smaller than expected in May. We expect to see it more clearly starting next month," said economists with Bank of America Global Research. Combined with the solid May jobs report, the latest CPI data reduce the chances of a nasty bout of stagflation in the United States, according to Bank of America Global Research. "Tariff impacts may begin appearing in the CPI data later this summer," said Seema Shah, chief global strategist at Principal Asset Management, noting the potential for inflation to creep above 3 percent by year-end if trade-related costs feed through the broader economy. "Today's below forecast inflation print is reassuring -- but only to an extent," Shah added. "Tariff-driven price increases may not feed through to the CPI data for a few more months yet, so it is far too premature to assume that the price shock will not materialise."
The Star
3 hours ago
- The Star
Trump says China will supply rare earths in ‘done' trade deal
President Donald Trump says the US is 'getting a total of 55% tariffs, China is getting 10%' in a social media post. - Photo: Reuters WASHINGTON: US President Donald Trump said a trade framework with China has been completed, with Beijing supplying rare earths and magnets 'UP FRONT' and the US allowing Chinese students into its colleges and universities. The United States and China will maintain tariffs at their current, lower levels following negotiations between the two nations this week in London, Trump said on Wednesday (June 11). He said the deal is subject to final approval by him and Chinese President Xi Jinping. 'OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME,' Trump posted on social media. 'WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT!' A White House official said the agreement allows the US to charge a 55 per cent tariff on imported Chinese goods. This includes a 10 per cent baseline 'reciprocal' tariff, a 20 per cent tariff for fentanyl trafficking and a 25 per cent tariff reflecting pre-existing tariffs. China would charge a 10 per cent tariff on US imports, the official said. In a later post, Trump said Xi and he 'are going to work closely together to open up China to American Trade. This would be a great WIN for both countries!!!' His post suggested China may have to restart rare earth shipments before the US agrees to lower export controls on key technology. And his comments left doubt about whether Beijing could negotiate tariff rates even lower. 'FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA. LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES (WHICH HAS ALWAYS BEEN GOOD WITH ME!),' Trump said. US and Chinese officials said on June 10 they agreed on a framework to get their trade truce back on track and remove China's export restrictions on rare earths while offering little sign of a durable resolution to longstanding trade tensions. At the end of two days of intense negotiations in London, US Commerce Secretary Howard Lutnick told reporters the framework deal puts 'meat on the bones' of an agreement reached in May in Geneva to ease bilateral retaliatory tariffs that reached crushing triple-digit levels The Geneva deal faltered over China's curbs on critical minerals exports, prompting the Trump administration to respond with export controls of its own preventing shipments of semiconductor design software, aircraft and other goods to China. Trump's shifting tariff policies have roiled global markets, sparked congestion and confusion in major ports and cost companies tens of billions of dollars in lost sales and higher costs. - Reuters, Bloomberg
The Star
3 hours ago
- The Star
Deal ‘is done', says Trump, as China and US trade truce gets back on track after London talks
BEIJING: China and the United States agreed to revive a fragile trade truce after two days of talks in London, further defusing tensions between the two geopolitical rivals. US President Donald Trump said on Wednesday (June 11) that the deal with China 'is done' and that the relationship was 'excellent'. Hours earlier, Chinese Vice-Premier He Lifeng, who led the negotiating delegation in London, called on the US to 'stay true to your words', and 'demonstrate good faith in keeping promises'. The agreement, which concluded close to midnight on June 10 in London, followed a roller coaster of rising and easing tensions over non-tariff measures, after both sides agreed in May in Geneva to a 90-day truce that sharply lowered tariffs on each other's goods. The main sticking points since May were Beijing's restrictions on rare earth exports to the US and Washington's curbs on the export of chip design technology to China. In a Truth Social post, Trump said full magnets, along with any necessary rare earth minerals, will be supplied upfront by China. In return, the US will provide to China 'what was agreed to', including allowing Chinese students to attend colleges and universities in the US, which he noted 'has always been good with me!'. Separately, US Commerce Secretary Howard Lutnick told reporters that the 'framework' reached in London puts 'meat on the bones' of the Geneva agreement, adding that it will still need approval from both leaders. He said Chinese restrictions on rare earth minerals and magnets and some of the recent US export restrictions would be removed 'in a balanced way' but did not provide details. China's Vice-Commerce Minister Li Chenggang told reporters after the talks that both countries had agreed on a framework to implement the consensus that Chinese President Xi Jinping and Trump had reached after a June 5 phone call, as well as May's trade truce. He described the talks as in-depth, professional, rational and frank. 'The progress achieved at the London talks is beneficial to enhancing trust between the two countries, advancing the healthy and stable development of China-US economic ties, as well as provide positive energy to the global economic development,' Li said. Analysts saw the latest talks as positive. Professor Wu Xinbo, director of the Centre for American Studies at Shanghai's Fudan University, said he expects the US to roll back the non-tariff measures threatened or imposed on China after the Geneva talks, such as revoking visas of Chinese students studying in the US. 'As for the Chinese side, it may accelerate the process of rare earth exports to help resolve the urgent needs of the Americans,' he said. The May agreement was derailed on June 1 when the US accused China of 'slow-rolling' licences for exports of rare earths, which are critical in the production of cars, chips and other products. China dominates the world's rare earth supply chain, accounting for nearly 70 per cent of the global mining output and processing about 90 per cent of the total supply – a trump card Beijing has cultivated for decades. However, economist Bert Hofman noted that China's delay in rare earth export licences was partly due to 'bureaucratic inertia'. 'The process was cumbersome and brought issues for industries around the world, not just for the US. So it was not specifically targeted at US companies,' he said. Washington, meanwhile, activated its own levers on China. On May 29, it announced the revocation of visas for Chinese students and issued export control guidelines for AI chips, as well as effectively halting sales of chip design software to China. Chinese tech firms that design chips rely on such foreign software, known as electronic design automation. China's Ministry of Commerce on June 2 criticised these measures as discriminatory and accused the US of violating the consensus of the Geneva talks. Just as all the signs pointed to the breakdown of the truce, the June 5 call between Xi and Trump was widely seen as having reset fraught relations. This was followed on June 7 by China's Ministry of Commerce's announcement that it had approved a number of applications for rare earth exports, and will continue to strengthen the approval process for such applications. Even as the London talks were ongoing, Beijing strategically underscored its resilience. In a front-page interview on the official People's Daily on June 10, Huawei founder Ren Zhengfei discussed China's technology and research capabilities, particularly in chips. The Chinese telecommunications equipment giant has emerged as a national champion for areas such as AI chips called the Ascend processors, which Washington has recently warned other countries against using. Asked how he feels about Huawei being under a blockade, Ren said: 'Don't think about the difficulties – just do it, one step at a time.' - The Straits Times/ANN
