GLOBAL FX-
U.S. still plans to impose tariffs on Mexico next week, as American and Mexican officials planned further talks aimed at defusing a crisis between the two countries over the flow of undocumented migrants into the U.S. Negotiations wrapped up on Thursday evening without an agreement, Mexican Foreign Minister Marcelo Ebrard said, adding that another round of discussions would take place on Friday in Washington to head off the tariffs.The U.S. has been preparing a draft emergency order to allow President Donald Trump to proceed with the tariffs in the event that talks fail to satisfy his concerns on immigration.At the same time, administration officials have considered delaying the tariffs to give Mexico time to prepare a solution, according to people familiar with the matter.
Britain’s opposition Labour Party held on to the parliamentary seat of Peterborough in eastern England on Friday, seeing off a challenge from Nigel Farage’s insurgent Brexit Party.The vote was triggered when the incumbent Labour lawmaker was ousted by her constituents in a recall petition. Labour candidate Lisa Forbes won with 10,484 votes, a majority of 683 over the Brexit Party that came second on 9,801 votes.
Japan’s household spending rose less than expected in April while real wages declined, adding to worries about consumption as global trade frictions weigh on broader economic activity.Spending grew 1.3% from a year earlier, government data showed on Friday, up for a fifth straight month but below a median market forecast for a 2.6% increase.Separate data showed inflation-adjusted real wages fell 1.1% in April from a year earlier, a sign consumer spending power was weakening.
A “little bit of flexibility” in the yuan currency is good for the Chinese and global economies, and pressure on the yuan caused by the China-U.S. trade war would be temporary, China’s central bank chief Yi Gang as saying on Friday.Asked if there was a red line for the yuan, which has shed more than 3 percent against the dollar since mid-April and was flirting with the 7-per-dollar level, Yi said no “numerical number” was more important than another.“The trade war would have a temporary depreciation pressure on renminbi, but you see, after the noise, renminbi will continue to be very stable and relatively strong compared to emerging market currencies, even compared to convertible currencies,” Yi said, using the yuan’s official name.
Australia’s central bank on Friday said it would allow banks to hold a greater proportion of the country’s government bonds to meet their prudential requirements, and would increase the cost of using a complementary liquidity facility.Regulators require the country’s banks hold enough high-quality liquid assets (HQLA), in the form of government bonds, to withstand a 30-day stress test.However, government bonds are not sufficient to cover the need for super liquid assets to meet this requirement, and therefore banks will be allowed to use a liquidity facility to comply with the rules.
The central bank said financial institutions would now be able to increase their holdings of high quality liquid assets (HQLA) from 25% to 30% of all federal and state government bonds.To minimize the effect on the government bond market, the change would occur at a pace of 1 percentage point per year until 2024, starting with an increase to 26% in 2020.The Reserve Bank of Australia (RBA) will also raise the fee for using the liquidity facility to 20 basis points per annum, from the current 15 basis points. The fee will rise to 17 basis points on Jan. 1, 2020 and to 20 basis points on Jan. 1, 2021.
Britain’s finance minister Philip Hammond said he would press the Group of 20 leading economies this weekend to introduce a global tax on the revenues of online giants such as Google, Facebook and Amazon.Hammond was due to take his case for a global digital tax - which would make it harder for online firms to minimise their tax bills - to a meeting of G20 finance ministers and central bankers in Japan on Saturday and Sunday.“
I will further strengthen our successful economic relationship by showcasing how we’re embracing the new economy and champion our world-class expertise in tackling the challenges posed by the digital revolution,” he said.“I will also meet with my G20 counterparts to reaffirm the need for global reform of the international corporate tax framework, to ensure it is fit for the future.”Last year, Hammond said he wanted a global tax but Britain was ready to move on its own by taxing profitable companies at 2 percent on the money they make from UK users from April 2020, raising more than 400 million pounds ($512 million) a year.
Gold prices declined in futures trade on Friday owing to profit-booking, while a fall in demand from jewellers at spot markets also weighed on the precious metal. An uptick in the riskier equities also dented the demand for the safe-haven metal. In the international markets, the yellow metal eased but was headed for their best week this year supported by expectations of an interest rate cut by Federal Reserve and heightened global trade conflicts.
Oil prices rose more than 1% on Friday, climbing further away from five-month lows hit earlier in the week after a report that Washington could postpone trade tariffs on Mexico and amid signs that OPEC and other producers may extend their supply cuts.Brent crude futures were up 85 cents, or 1.4%, at $62.51 a barrel by 0356. They gained 1.7% on Thursday.U.S. West Texas Intermediate (WTI) crude futures were up 71 cents, or 1.4%, at $53.30 per barrel. They finished the previous session 1.8% higher.Brent and WTI on Wednesday hit their lowest marks since mid-January at $59.45 and $50.60, respectively, after U.S. crude output reached a record high and stockpiles climbed to their highest since July 2017.