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Business Standard
12-05-2025
- Business
- Business Standard
Markets to decide if 'substantial progress' enough after US-China talks
By Naomi Tajitsu, Anya Andrianova and Elena Popina Financial markets will reopen needing to decide if warm words are as good as action after trade talks between the US and China ended with President Donald Trump 's advisers declaring 'substantial progress' had been made, yet without providing many details. Speaking after two days of negotiations in Geneva, US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer said that they will share more information on Monday. Greer told reporters 'differences were not as large as maybe thought.' Chinese officials echoed the message during a separate briefing on Sunday, saying that talks between the two sides achieved a 'sound sustainable development' for the Chinese-US relationship. 'I'd imagine we'll see at least some kind of knee-jerk risk-on move, as participants had trimmed risk ahead of the talks, and are likely now a bit more comfortable to re-enter those positions given that we've seemed to avoid a worst case scenario of the talks collapsing, and do appear to have achieved some progress,' said Michael Brown a senior research strategist at Pepperstone Group Ltd. in London, 'That said, I'd imagine conviction is going to be lacking until we hear specifics. It's very much a case of having more questions than answers at this stage.' Early indicative prices in foreign exchange markets in Australia and Asia, showed both euro and yen edging lower against the US dollar. The offshore yuan was also indicated slightly stronger. Investors entered the weekend seeking signs of a detente in the trade war that's been the biggest driver of markets this year. The fear is that unless reversed, tit-for-tat tariffs risks dealing a stagflationary blow to the US and world economies by driving them into recession and at the same time boosting inflation. Markets have erased much of the damage from Trump's so-called Liberation Day tariff announcements as the president pulled back on some of his protectionist pledges, but investors are nevertheless likely to stay wary of staking large bets on encouraging comments before any concrete plans are announced to reduce levies, especially those between the world's two largest economies. Wall Street ended Friday on a cautious note, with stocks and bonds fluctuating, after some optimism in the preceding days that the talks in Switzlerland would at least narrow differences between Washington and Beijing. 'The de-escalation of trade, economic and geopolitical tensions could give market risk sentiment a boost,' said Valentin Marinov, head of G-10 FX research and strategy at Credit Agricole. 'The latest developments could become a boon for risk-correlated assets and currencies and a blow to safe-haven currencies like the yen, Swiss franc and even the euro.' Risk assets may also benefit from the ceasefire between India and Pakistan, as well as signs the leaders of Russia and Ukraine may meet this week. Sentiment toward the Australian dollar, often seen as a proxy for the Chinese economy, has improved recently and will also be a key asset to monitor when market renew trading. Rounds of retaliation have raised US tariffs on imports from China to 145 per cent, while the Chinese have put in place a 125 per cent duty on US goods. Two-way annual trade between both countries is around $700 billion, and China has an estimated $1.4 trillion of portfolio investments in the US. The US side had set a target of reducing tariffs below 60 per cent as a first step that they feel China may be prepared to match, people familiar with the conversations said before the weekend. Trump said on social media on Friday that an 80 per cent levy 'seems right!' The S&P 500 Index has risen back to around where it was prior to Trump's announcement of reciprocal tariffs in early April, a declaration which triggered the worst day for equities since 2020. A week later, Trump paused the steepest of the tariffs on most countries other than China, sparking a rally in the S&P 500 that was the best since the 2008 financial crisis. A trade deal struck with the UK last week also helped lift confidence that pacts were possible although the details disappointed. Trade pressures are already starting to hit US businesses, with companies from United Parcel Service Inc. to Ford Motor Co. to Mattel Inc. withdrawing guidance, citing tariff uncertainty that's getting too hard to navigate. The average member of the S&P 500 made 6.1 per cent of its revenue from selling goods in China or to Chinese companies in 2024, according to an analysis from Bloomberg Intelligence. The dollar last week enjoyed its biggest weekly gain since late March, but is still suffering its worst start to the year in at least two decades with the Bloomberg Dollar Spot Index down 6 per cent so far. Since April 2, speculative traders — including hedge funds and asset managers — have build an increasingly bearish position on the dollar, according to data from the Commodity Futures Trading Commission. They hold some $17 billion worth of wagers tied to bets that the greenback will weaken, the latest data show. Chinese shares edged lower on Friday amid investor caution. The region's CSI 300 Index has come close to recouping all its losses since Chinese goods were targeted with US tariffs above 100 per cent early last month. Strategists at Goldman Sachs Inc. last week raised their 12-month index targets for MSCI China and CSI 300 to 78 and 4,400, implying about 7 per cent and 14 per cent returns from the current levels. Despite their traditional safe-haven status, Treasuries have also slipped since early April, sending the yield on 30-year bonds up to 4.83 per cent on Friday, from a recent low of 4.41 per cent in early April.
Business Times
06-05-2025
- Business
- Business Times
Europe: German stocks cut losses as Merz elected as chancellor after initial setback
GERMAN shares trimmed early losses on Tuesday after conservative leader Friedrich Merz was elected chancellor during a second vote in parliament after an unexpected initial setback. Germany's DAX index ended 0.5 per cent lower, after falling as much as 2 per cent earlier when Merz's new alliance with the centre-left Social Democrats was dealt a surprise defeat in the first attempt. 'It's very un-German because we know Germany particularly for its political stability. Until recently, it would have been unthinkable that parliament would not vote immediately for said Teeuwe Mevissen, senior market economist at Rabobank. The pan-European Stoxx 600 index closed 0.18 per cent lower at 536.35 points, snapping a 10-day winning streak. Uncertainty over tariffs also weighed, with investors attempting to keep up with US President Donald Trump's unpredictable trade policies. Trump said on Monday he intended to announce pharmaceutical tariffs over the next two weeks. This came a day after he announced a 100 per cent tariff on movies produced outside the US. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The sub-index of healthcare companies lost 1 per cent, with shares in heavyweight drugmaker Novo Nordisk falling 4 per cent. 'If there's something that investors are allergic to, it's uncertainty. So that's never good for stock markets,' Rabobank's Mevissen added. However, slight optimism remained around prospects of easing Chinese-US trade tensions after Beijing last week said it was evaluating an offer from Washington to hold talks over tariffs. Meanwhile, a survey showed the euro zone economy continued to expand in April but at a slower pace as demand weakened and the dominant services sector nearly stagnated, suggesting the region's recovery remains fragile. The US Federal Reserve is expected to keep rates unchanged on Wednesday, with attention on the policymakers' comments on the impact of tariffs on economic growth. The Bank of England's rate decision is also due this week. European companies are expected to report growth of 0.4 per cent in first-quarter earnings, according to LSEG I/B/E/S data, compared to the 1.7 per cent drop analysts had expected a week ago. Vestas shares surged 8.9 per cent after the wind turbine maker reported an unexpected operating profit for the first quarter. Fresenius Medical Care jumped 5.1 per cent after the German kidney dialysis company reported first-quarter results above market expectations. On the downside, Philips fell 2.7 per cent after the Dutch healthcare technology company cut its profit margin forecast for 2025. Castellum slumped 6.2 per cent after the Swedish real estate group posted weaker-than-expected first-quarter results. Coloplast fell 6 per cent after the Danish medical equipment maker's CEO stepped down on Monday and it reported a second-quarter miss on Tuesday. REUTERS
Euronews
25-02-2025
- Politics
- Euronews
British couple arrested in Afghanistan to be released 'as soon as possible,' Taliban says
An elderly British couple arrested and detained in Afghanistan will be released "as soon as possible", the Taliban has reportedly said. Peter and Barbie Reynolds, 79 and 75, were arrested on 1 February while returning to their home in the country's Bamiyan province, according to their family in England. The couple have lived in Afghanistan for 18 years — staying after the Taliban toppled the Western-backed government in 2021 — and run Rebuild, an organisation that provides education and training programmes for businesses, government agencies and NGOs. Interior ministry spokesman Abdul Mateen Qani said four people had been arrested: two British citizens with Afghan identity cards and passports, a Chinese-US citizen and their translator. British media reports identified the Chinese-US citizen as Faye Hall, a friend of the couple, and said that the translator was an Afghan national working with Rebuild. Qani told the BBC and the Daily Telegraph late on Monday that the Taliban were taking care of the couple while the group was carrying out its investigation. "A series of considerations is being taken into account, and after evaluation, we will endeavour to release them as soon as possible," he told the BBC. The spokesman did not say why the couple had been detained. A Taliban source previously told the BBC that the arrests were because they had used a plane without informing police or security forces. UK urged to act Sarah Entwistle, one of the couple's children, said her parents had initially stayed in touch with text messages following their arrest — telling their four children that they were fine — but went silent three days later. "Our parents have always sought to honour the Taliban, so we wanted to give them the opportunity to explain their reasons for this detention," Entwistle told Times Radio. 'However, after more than three weeks of silence, we can no longer wait." "We're now urgently calling on the British consulate to do everything in their power to get us answers and to put as much pressure as they can on the Taliban for their release," added Entwistle, who lives in England. The UK Foreign Office said on Monday that it was "supporting the family of two British nationals who are detained in Afghanistan". It did not provide any further details. The couple married in Kabul in 1970 and have been running Rebuild since 2009. According to the organisation's website, one of its programmes involved training mothers and children in Bamiyan, which is one of the biggest cities in central Afghanistan. Although the Taliban has severely restricted women's education and activities, the project had apparently been approved by the local authorities, British media reported. Western nations, including the UK and the US, closed their embassies and withdrew their diplomats as the Taliban took over Afghanistan in August 2021. The UK Foreign Office advises against all travel to Afghanistan, and says there is a heightened risk of British nationals being detained in the country.
