Stocks Firm Despite G6+1 Summit, Euro Jumped
Asian stocks are rather strong after the G7 meeting. Leaders promised to recommit to “rules-based international trading system”, to “continue to fight protectionism”, to “strive to reduce tariff barriers, non-tariff barriers and subsidies”. They also urged to “avoid excess capacity in other sectors such as aluminum and high technology”. Canada, European Union, Japan and Mexico reiterated their feelings about US tariffs by claiming retaliation measures were already prepared.
Chinese government decided to keep up with G7 and hosted the security summit, which included Prime Minister of the Republic of India Narendra Modi, President of the Kyrgyz Republic Sooronbay Jeenbekov, President of the Republic of Tajikistan Emomali Rahmon, Russian President Vladimir Putin, President of the People’s Republic of China Xi Jinping, President of the Republic of Kazakhstan Nursultan Nazarbayev, President of the Republic of Uzbekistan Shavkat Mirziyoyev and President of Republic of Pakistan Mamnoon Hussain.
Nikkei rose around 0.6%. HK HSI grew 0.28%. Now, the majority is expecting a summit between Donald Trump and Kim Jong-Un tomorrow as well as Fed rate hike and ECB meeting later this week. Meanwhile, euro turned the firmest for the week thanks to the news that Italy wasn’t planning to quit the common currency.
Mahathir Mohamad, Malaysian Prime Minister, is having his first foreign visit in Japan. The PM urged that the TPP (Trans Pacific Partnership) requires renegotiation because “smaller countries would have the chance to compete because they would be given certain handicaps.” He added: “small countries cannot compete on the same terms as bigger countries.” Mahathir is also expected to call for EAEC (East Asian Economic Caucus) trade pact.
New Zealand manufacturing activity increased 0.6% in the first quarter. Japanese M2 was up 3.2% yoy in May, machine orders grew 10.1% mom. Today, Britain will release trade balance, industrial and manufacturing production, construction output and NIESR Gross Domestic Product.