Asia-Pacific trading today saw Hong Kong’s Hang Seng fall 1.3 percent. Australia’s S&P/ASX 200 dropped 1.2 percent and Japan’s Topix index shed 0.3 percent. Overnight, Wall Street’s S&P 500 index reversed gains of 1 percent to close down 0.2 percent. The drop came after US President Donald Trump said he would hold a news conference regarding China on Friday after Beijing agreed the new legislation.
Elsewhere, onshore exchange rate for the renminbi, which investors have been watching as US-China tensions rise, was 0.1 percent weaker at Rmb7.1515 per dollar.
The People’s Bank of China set the currency’s trading band stronger than analysts had expected.
Larry Brainard, chief emerging markets economist at TS Lombard, told the FT: “Recent [renminbi] fixings by the PBoC suggest an effort to dampen volatility — not drive the currency lower.”
He added that the currency was set for “periodic bursts of volatility . . . but not of continuing steady depreciation”. Oil prices dropped on the prospect of further escalation in US-China tensions.
Brent crude, the international benchmark, was down 0.5 percent to $35.11 a barrel.
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7.30am update: Renault to slash nearly 15,000 jobs as part of €2bn cost cutting plan
Renault has announced plans to cut 14,600 jobs, shrink production and restructure a number of its factories in France as part of a €2bn cost cutting programme.
The huge job cuts will be based on “based on retraining, internal mobility and voluntary departures”, with 4,600 of those jobs being lost in France. Renault employs more than 180,000 people around the world.
The carmaker is looking to achieve the huge savings over the next three years, while cutting its global production capacity from four million vehicles in 2019 to 3.3 million in 2024.
Renault is also beginning talks with various unions as part of plans to re-purpose manufacturing plants in France, some of which may stop making cars altogether, and will also involve more jobs being lost.
The future if six sites, including at Flins and Dieppe, remains undecided.
7am update: Japan’s industrial production sinks to historic lows
Japan’s industrial production plummeted to a historic low in April and much worse than forecast as the full impact of the coronavirus crisis becomes evident.
Production fell by 9.1 percent compared to April – the worst decline since the current data series began in 2013 and way below analyst estimates of a 5.1 percent drop.
The coronavirus pandemic has had a huge impact on manufacturing, with several production lines suspended, with a rapid rebound seeming increasingly unlikely.
But the labour market data did offer some signs of encouragement, with the unemployment rate rising by just 0.1 percent to 2.6 percent last month.
6.08am update: Some sectors of Australian economy will need additional support – Prime Minister Morrison
Some sectors of Australia’s economy will require additional stimulus, Prime Minister Scott Morrison said on Friday.
To prevent a prolonged economic depression triggered by COVID-19, Australia’s government and central bank has pledged to spend A$250 billion ($166.1 billion).
Much of Australia’s stimulus is expected to expire in September, but Morrison said some additional support may be needed.
Published at Fri, 29 May 2020 04:56:00 +0000