Articles

Chinese Premier Li Qiang spoke in a symposium with Chinese firms in Jakarta over the weekend. Info from state news agency Xinhua, via Reuters:.

• China is weighing new policy tools in the face of an international economic and trade order that is “under severe impact”
• “The fragmentation of industrial and supply chains has deepened, and trade barriers have increased, which has had a great impact on the economic development of all countries”
• China is studying new policy tools, including some “unconventional measures”, which will be launched as the situation changes
• China will continue strengthening economic cooperation with more countries

Li is on a three-day visit to Indonesia until Monday and will then travel to Malaysia for the ASEAN-GCC-China Summit.

This article was written by Eamonn Sheridan at www.forexlive.com.

Chinese equities are likely to gain further support from a strengthening yuan, which has remained resilient despite ongoing trade tensions with the US, according to Goldman Sachs strategists.

They noted that for every 1% rise in the yuan against the US dollar, Chinese stocks could climb about 3%, driven by improved earnings prospects and increased foreign investment. Goldman recently revised its 12-month yuan forecast to 7 per dollar, up from 7.35.

• “Chinese stocks usually perform well when the yuan appreciates,”
• GS maintain an overweight view on the market.
• Sectors such as consumer discretionary, property, and brokerages are seen as key beneficiaries of a stronger currency.

This article was written by Eamonn Sheridan at www.forexlive.com.

Citi 0 – 3 month price target for gold back to $3,500/oz

• expect price to consolidate between $3,100/oz and $3,500/oz

Citi cite the latest tariff escalation

This article was written by Eamonn Sheridan at www.forexlive.com.

Sen. Ron Johnson, R-Wis spoke with CNN on Sunday:

• “My primary focus now is spending. This is completely unacceptable. Current projections are $2.2 trillion per year deficit,” he said. “There should be a goal of this Republican Senate to reduce the deficit, not increase it. We’re increasing it.”
• “I think we have enough to stop the process until the president gets serious about spending reduction and reducing the deficit,” Johnson said.

We heard similar from Republicans objecting in the House and they all caved in.

More here (very detailed!)

Senate leaders are aiming for a July 4 vote

This article was written by Eamonn Sheridan at www.forexlive.com.

China’s ambassador to Australia has criticised Canberra’s plan to return Darwin Port to local ownership, arguing the Chinese firm running it, Landbridge, should not be penalised.

Prime Minister Albanese said in April the government would force a sale on national interest grounds.

The port was leased to Chinese company Landbridge in 2015 for 99 years. The Chinese embassy said it was unfair to reclaim the port now that it has become profitable, calling the move ethically questionable. Landbridge says the port is not for sale.

–

This will be something to keep an eye on for Aus/China relations.

This article was written by Eamonn Sheridan at www.forexlive.com.

AUD/USD has its highest since December 2, 2024.

EUR, GBP (highest since February of 2022!), NZD, CAD, CNH all rising also.

My headline remark about the People’s Bank of China ‘propping up’ the dollar is a jest. BUT … the PBoC didi flip its damping today to slow the rise of the CNY against the poorly performing USD:

• PBOC sets USD/ CNY reference rate for today at 7.1833 (vs. estimate at 7.1737)

Offshore yuan is rising regardless:

• Offshore yuan is hitting its highest since early November last year

This article was written by Eamonn Sheridan at www.forexlive.com.

Country Garden Holdings, formerly China’s top property developer by contracted sales, will appear in a Hong Kong court on Monday to request more time to progress its $14.1 billion offshore debt restructuring.

The company has reportedly gained backing from creditors representing over 70% of its debt.

However, as of May 22, key bank lenders had yet to sign on, according to media reports.

–

I’m not sure this saga will ever end!

This article was written by Eamonn Sheridan at www.forexlive.com.

A couple of snippets from analysts on Friday, that have proved prescient, comments indicating Trump’s tariff threats being viewed as hollow.

Vanguard:

• investors expect the steep 50% tariff proposal on imports from the E.U. to be negotiated down, similarly to what happened with China
• market has slowed down now because it’s happened before, and we know what happened before
• “It’s kind of like the boy who cried wolf”
• administration is not crazy, they have a plan and there is a limit,” to how far they will go

Barclays:

• threats on the EU are ‘primarily a negotiating tactic’
• “the US has not turned the page on tariffs and that more trade policy volatility lies ahead”

This article was written by Eamonn Sheridan at www.forexlive.com.

Its Spring Bank holiday in the UK and Memorial Day in the US.

Markets are closed in those countries. Although the CME will offer limited hours for Globex. Its open now, for example, with equity index futures supported by Trump’s backing away from his June 1 imposition of 50% tariffs on the European Union, giving the bloc until July 9 to work a trade deal out.

Any bets he extends the deadline again if we get to July 9 without a deal singed?

—

Meanwhile, S&P 500 futures update:

This article was written by Eamonn Sheridan at www.forexlive.com.

Japanese Prime Minister spoke on Sunday:

• aims to advance tariff talks with the US
• goal of achieving an outcome during the Group of Seven summit in June
• said there has been progress in negotiations
• willingness to cooperate in shipbuilding

Japan Prime Minister Ishiba held phone talks with Trump on Friday, a 45 minute call. Also this:

• Japan PM Ishiba: No change to our stance on U.S. tariffs

would seem to be a bit of a roadblock?

This article was written by Eamonn Sheridan at www.forexlive.com.

Trump’s comments are here, wide-ranging (Iran, wants a list of student names, tax bill):

• Trump says had some good talks with Iran, says had some real progress

EU head von der Leyen requested the extension:

• EU’s Von der Leyen spoke with Trump, said EU needs time until July 9 to reach a good deal

Trump has met the request.

USD/JPY and EUR/USD have popped a little:

This article was written by Eamonn Sheridan at www.forexlive.com.

Trump says had some good talks with Iran, says had some real progress.

I posted on this earlier:

• Update – Iran and US wrapped up a fifth round of nuclear talks – “constructive”

While soothing noisec are being made the two sides didn’t agree a date to meet again.

—

More from Trump:

• thinks the Senate will make significant changes to his tax bill
• says the EU asked for an extension and he agreed to move to July 9
• US steel will be controlled by the US

This article was written by Eamonn Sheridan at www.forexlive.com.