GLOBAL NEWS-
Bank of Japan Governor Haruhiko Kuroda said on Monday the central bank would debate and communicate at an appropriate timing an exit plan from its ultra-loose monetary policy. Kuroda said the BOJ did not have a specific exit strategy now because it would take “significant time” in achieving its 2 percent inflation target. But he said an exit from ultra-easy policy would involve a hike in interest rates on excess reserves financial institutions park with the BOJ, and measures to shrink the central bank’s balance sheet. “To ensure markets remain stable, it’s important to come up with a strategy and guidance at an appropriate timing on how to proceed with an exit,” Kuroda said.
Australian businesses reported only meagre growth in profits and wages for the fourth quarter of last year, a dry spell for incomes that likely saw the whole economy struggle to expand. A range of data out on Monday also showed home building was heading for a deep hole after years of outperformance, while job ads suffered their biggest annual drop in five years. The signs were of an economy that has clearly lost traction in recent months and may have grown only marginally in the December quarter, figures for which are due Wednesday. Annual growth is seen slowing to around 2.6 percent, from 2.8 percent, challenging the Reserve Bank of Australia’s (RBA) optimism for a pick up to 3 percent this year.
The United States and China appear close to a deal that would roll back U.S. tariffs on at least $200 billion worth of Chinese goods, as Beijing makes pledges on structural economic changes and eliminates retaliatory tariffs on U.S. goods. U.S. President Donald Trump and Chinese President Xi Jinping could seal a formal trade deal at a summit around March 27 given progress in talks between the two countries, the Wall Street Journal reported on Sunday. IN an eight-month trade war, the United States has imposed punitive tariffs on $250 billion worth of imports from China, while Beijing has hit back with tariffs on $110 billion worth of U.S. goods, including soybeans and other commodities. The actions have roiled financial markets, disrupted manufacturing supply chains and reduced U.S. farm exports. Trump administration officials have said they expect the two presidents to “close” a deal at a summit in coming weeks at Trump’s Mar-a-Lago estate in Florida. The source briefed on the talks said that no dates for a summit had been determined, but that Beijing had reserved a 10-day window from around March 20 for a possible summit.
Asian shares started the week on the front foot on signs the United States and China were close to striking a tariff deal to end their protracted trade war while the dollar eased as traders wagered Federal Reserve policy would remain accommodative. The Wall Street Journal reported on Sunday Washington could lift most or all of its tariffs on Beijing while a summit between U.S. President Donald Trump and his Chinese counterpart Xi Jinping to sign a final trade deal could happen later this month. All of that proved positive for risk sentiment with E-mini futures for the S&P500 and the Dow rising 0.5 percent each on Monday. Chinese shares were the biggest gainers in Asia, with the blue-chip index up 3 percent. Australian shares rose 0.5 percent and Hong Kong’s Hang Seng index added 0.7 percent. That left MSCI’s broadest index of Asia-Pacific shares outside Japan with gains of 0.4 percent. Japan’s Nikkei strengthened more than 1 percent. The Asia ex-Japan index has risen almost 10 percent so far this year.
British Prime Minister Theresa May will on Monday set out plans for a 1.6 billion-pound ($2.11 billion) fund to help to boost economic growth in Brexit-supporting communities, particularly in the north of England. The “Stronger Towns Fund”, details of which appeared in newspapers last month, is seen by many as part of May’s efforts to win support for her Brexit deal from opposition Labour lawmakers who represent areas that voted strongly in favour of leaving the European Union. Britain is due to leave the bloc at the end of the month and May, whose exit deal with Brussels was rejected by a large majority of lawmakers in January, has promised parliament will get to vote on a revised deal by March 12.
Indonesia and Australia on Monday signed an economic partnership agreement aimed at boosting trade and investment between the two neighbors in areas ranging from cattle to education and cars to textiles.Indonesian Trade Minister Enggartiasto Lukita and Australian Trade Minister Simon Birmingham signed the deal at a Jakarta hotel after the countries had been in talks since early in the decade, with diplomatic tension occasionally stalling the process.“Following the signing... Indonesia and Australia will work on an expedited ratification process toward the entry into force of the agreement, so that businesses from both economies can reap the benefits of the agreement,” a joint statement said.The Indonesia-Australia Comprehensive Economic Partnership Agreement will eliminate all Australian tariffs on imports from Indonesia, while 94 percent of Indonesian tariffs will be gradually removed, it said.
Malaysia’s exports rose better than expected in January, but the pace of growth was slower than the previous month as palm oil shipments fell, government data showed on Monday.Exports grew 3.1 percent in January from a year earlier, above the 1.4 percent rise forecast in a Reuters poll. In December, exports grew 4.8 percent.January’s export growth was driven largely by higher shipments of manufactured and mining goods, data from the International Trade and Industry Ministry showed.Exports of mining goods rose 10.5 percent year-on-year in January, on higher volumes and prices of liquefied natural gas, the data showed.Shipments of manufactured goods, which accounted for over 82.3 percent of total exports, grew 2.9 percent. But exports of palm oil, a major export commodity for Malaysia, fell 16.6 percent year-on-year, the ministry said.Imports rose 1 percent in January from a year earlier, unchanged from the growth rate posted in December.
World palm oil demand may suffer its first contraction in two decades during the 2019/20 crop year due to rising domestic oilseed supplies in top buyer India and slowing demand in Europe and China, industry participants.Indian traders expect flat to slightly larger palm oil imports this year against a backdrop of record oilseed production that should boost domestic edible oil supplies.In the European Union, the world’s second-largest palm oil importer, buyers are avoiding the oil because of concerns of alleged environmental damage from palm cultivation, while the Washington-Beijing trade war has caused uncertainty over demand potential in the third-largest market in China.Malaysian palm oil futures slipped almost 8 percent in February as rising inventories and declining demand weighed. Sustained sub-par demand in major markets is expected to keep prices on the defensive.
Gold prices edged higher on Monday, after falling below the critical $1,300 level to their lowest since Jan. 25 in the previous session, as the dollar softened on prospects of a trade deal between China and the United States.Spot gold was up 0.3 percent at $1,296.61 per ounce as of 0352 GMT, after touching its lowest in more than a month at 1,289.91 in the previous session.U.S. gold futures were down 0.2 percent at $1,297.20 per ounce.Gold may break a support at $1,289 per ounce and fall towards the next support at $1,271, as suggested by a retracement analysis.
Oil prices rose on Monday as supply tightened amid output cuts by producer club OPEC and as the United States and China were reported to be close to signing a trade deal that would end a tariff row that has slowed global economic growth.International Brent futures were at $65.39 a barrel at 0416 GMT, up 32 cents, or 0.5 percent, from their last close.U.S. West Texas Intermediate (WTI) crude futures were at $56.08 per barrel, up 28 cents, or 0.5 percent.The rally came on reports that the United States and China are close to ending their trade disputes, which have weighed on global economic growth.U.S. President Donald Trump and Chinese President Xi Jinping could reach a formal trade deal at a summit around March 27 given progress in talks between the two countries, the Wall Street Journal reported on Sunday.