ForexLive Americas FX news wrap: Trump reveals Phase One of China trade deal

Forex news for North American trade on October 11, 2019:


  • Gold down $ 5 to $ 1489
  • WTI crude up $ 1.36 to $ 54.91
  • US 10-year yields up 6 bps to 1.73%
  • S&P 500 up 32 points to 2970
  • GBP leads, JPY lags

The US-China trade deal finally arrived but high hopes for something comprehensive were significantly whittled down over the last few weeks and we ended up with something that essentially boiled down to soybeans for a tariff delay. Most importantly, the Dec 15 tariffs are still scheduled to be implemented.

Risk trades rallied ahead of the official announcement but there was a considerable sell-the-fact trade afterwards as the S&P 500 fell to 2970 from 2992 in the aftermath. The moves were more-subtle in yen crosses and commodity currencies but they finished off the highs.

The pound was the big story as the EU and UK move towards a real detail. Negotiators will now enter “the tunnel” which is a quiet period where details are hammered out. There probably isn’t enough time to complete a deal before Oct 31 but that doesn’t really matter so long as it’s on track to get done with a short extension. The week ahead (and weekend) will be critical. The pound capped its best two-day rally in a decade with a 225 pip rally, but finished 40 pips off the highs on a bit of position squaring.

USD/CAD fell after yet-another strong Canadian jobs report. The headline was coupled with strong full-time numbers and wages . Heavy gov’t hiring was a bit of a caveat but it didn’t matter much to the pair, especially with risk trades higher and oil up 2.5%. The immediate drop was to 1.3215 from 1.3280 and that eventually extended to 1.3170 before a 25 pip bounce late. The close was the lowest in a month. Note that Monday is a holiday in Canada.

The euro rose for the third day and hit a three-week high but the peak came as New York arrived and there was a minor double top at 1.1063 before a fall to 1.1031 late. We finished at the worst levels of North American trade.

Have a great weekend, it was a fun week in markets. Given the lack of a China resolution, there will be more lively weeks to come.

Forex news for North American trade on October 11, 2019:

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China Plans $90 Billion Cut in VAT for Manufacturers

(Bloomberg) — China is planning to cut the value-added tax rate that covers the manufacturing sector by 3 percentage points as part of measures to support the slowing economy, a person familiar with the matter said.

The reduction in the highest of the nation’s three VAT brackets could be announced as soon as this week, when political leaders are gathering in Beijing for the annual National People’s Congress, the person said, who declined to be named as the matter isn’t public.

Premier Li Keqiang is due to deliver his annual report on economic policy on Tuesday, a detailed document that sets targets for gross domestic product expansion as well as objectives for fiscal and monetary policy. A 3 percentage-point cut to VAT could deliver a boost worth up to 600 billion yuan ($ 90 billion) or 0.6 percent of GDP, according to estimates by Morgan Stanley.

The move helps corporate profits at a time when the economy is facing pressure from the U.S. trade standoff and the impact of a domestic debt cleanup. Officials have increasingly turned to tax policy in their efforts to support growth, as debt-fueled spending and monetary policy become increasingly constrained.

The tax cut is also part of broader, more “proactive” fiscal support. The budget deficit target is said to be widened to 2.8 percent of GDP from 2.6 percent in 2018, and the quota for special bonds is said to be set to 2.15 trillion yuan, a significant rise from 1.35 trillion yuan in 2018.

The Finance Ministry didn’t respond to faxed request for comment on the VAT reduction plans.

To contact Bloomberg News staff for this story: John Liu in Beijing at

To contact the editors responsible for this story: Jeffrey Black at, Sharon Chen

©2019 Bloomberg L.P.

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Apple pulls Quartz news app from China app store

Violence in Hong Kong ahead of celebration

The news organization Quartz, which has been covering the Hong Kong protests in depth, recently found its app unavailable from Apple’s app store in China.

Quartz received a notice from Apple on September 30 that said the app was being removed “because it includes content that is illegal in China,” according to a Quartz spokeswoman. No specifics were given on what that content was, she said.

The news outlet also said that its entire website is inaccessible in mainland China.

Trending News

Quartzt has been covering the protests in Hong Kong for months, including information on how readers can get around government censorship by using VPNs, or virtual private networks.

“We abhor this kind of government censorship of the internet,” Zach Seward, Quartz’s CEO, said in a statement.

Apple did not immediately reply to CBS News’ request for details on what content was deemed illegal.

The company has also pulled an app used in the Hong Kong protests,, from its China app store. The app disappeared on Thursday afternoon after a government-backed Chinese newspaper accused it of facilitating illegal behavior.

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Forex – U.S. Dollar Weak As China Signals Openness to Trade Deal  

© Reuters.  © Reuters. – The U.S. dollar was weak despite reports that China is open to a partial trade deal despite the U.S. blacklisting Chinese firms earlier in the week, as traders await the Federal Reserve latest meeting minutes for clues on the direction of interest rates.

The , which measures the greenback’s strength against a basket of six major currencies, was down 0.1% to 98.762 as of 11:03 AM ET (15:03 GMT). Investors were also waiting for the minutes from the Federal Reserve’s latest policy meeting at 2:00 PM ET (18:00 GMT) for clues on whether or not the central bank will cut rates.

China is willing to accept a trade deal, Bloomberg reported, and has even offered to increase how many soybeans it buys from American farmers as a measure of goodwill before trade talks. Chinese Vice Premier Liu He is due to arrive this week in Washington for trade talks and is expected to meet U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday.

The Japanese yen, which is seen as a safe haven in times of market turmoil, fell, with rising 0.3% to 107.36.

Elsewhere, was flat at 1.2212 while gained 0.2% to 0.0977 as it appeared that Brexit talks between the EU and U.K. had stopped just a few weeks before the two were set to split. The two sides have struggled to reach an agreement over the Irish backstop, with the EU insisting that there is a way for controls to flow across the Irish border without additional checks and that Northern Ireland remain in the customs union until an alternative solution is found.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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China says US interferes with China’s internal affairs

Chinese embassy in Washington with the statement: 

  • US imposition of visa restrictions on Chinese officials “seriously violates the basic norms governing international relations, interferes in China’s internal affairs and undermines China’s interests”

In relation to this:

This is going well really, all things considered

Chinese embassy in Washington with the statement: 


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China MOFCOM urges US to remove Chinese entities from blacklist

The US added Chinese companies to blacklist yesterday

The timing of the US announcement has contributed to the negative tone in markets today. They warned about retaliation earlier today in a press conference.

The statement also urged the US to stop making irresponsible remarks on the Xinjiang issue and to stop interfering in China’s internal affairs.


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China and Taiwan clash over Wikipedia edits

Ask Google or Siri: “What is Taiwan?”

“A state”, they will answer, “in East Asia”.

But earlier in September, it would have been a “province in the People’s Republic of China”.

For questions of fact, many search engines, digital assistants and phones all point to one place: Wikipedia. And Wikipedia had suddenly changed.

The edit was reversed, but soon made again. And again. It became an editorial tug of war that – as far as the encyclopedia was concerned – caused the state of Taiwan to constantly blink in and out of existence over the course of a single day.

“This year is a very crazy year,” sighed Jamie Lin, a board member of Wikimedia Taiwan.

“A lot of Taiwanese Wikipedians have been attacked.”

Edit wars

Wikipedia is a movement as much as a website.

Anyone can write or edit entries on Wikipedia, and in almost every country on Earth, communities of “Wikipedians” exist to protect and contribute to it. The largest collection of human knowledge ever amassed, available to everyone online for free, it is arguably the greatest achievement of the digital age. But in the eyes of Lin and her colleagues, it is now under attack.

The edit war over Taiwan was only one of a number that had broken out across Wikipedia’s vast, multi-lingual expanse of entries. The Hong Kong protests page had seen 65 changes in the space of a day – largely over questions of language. Were they protesters? Or rioters?

The English entry for the Senkaku islands said they were “islands in East Asia”, but earlier this year the Mandarin equivalent had been changed to add “China’s inherent territory”.

The 1989 Tiananmen Square protests were changed in Mandarin to describe them as “the June 4th incident” to “quell the counter-revolutionary riots”. On the English version, the Dalai Lama is a Tibetan refugee. In Mandarin, he is a Chinese exile.

Angry differences of opinion happen all the time on Wikipedia. But to Ms Lin, this was different.

“It’s control by the [Chinese] Government” she continued. “That’s very terrible.”

‘Socialist values’

BBC Click’s investigation has found almost 1,600 tendentious edits across 22 politically sensitive articles. We cannot verify who made each of these edits, why, or whether they reflect a more widespread practice. However, there are indications that they are not all necessarily organic, nor random.

Both an official and academics from within China have begun to call for both their government and citizens to systematically correct what they argue are serious anti-Chinese biases endemic across Wikipedia. One paper is called Opportunities And Challenges Of China’s Foreign Communication in the Wikipedia, and was published in the Journal of Social Sciences this year.

In it, the academics Li-hao Gan and Bin-Ting Weng argue that “due to the influence by foreign media, Wikipedia entries have a large number of prejudiced words against the Chinese government”.

They continue: “We must develop a targeted external communication strategy, which includes not only rebuilding a set of external communication discourse systems, but also cultivating influential editors on the wiki platform.”

They end with a call to action.

“China urgently needs to encourage and train Chinese netizens to become Wikipedia platform opinion leaders and administrators… [who] can adhere to socialist values and form some core editorial teams.”

Shifting perceptions

Another is written by Jie Ding, an official from the China International Publishing Group, an organisation controlled by the Chinese Communist Party. It argues that “there is a lack of systematic ordering and maintenance of contents about China’s major political discourse on Wikipedia”.

It too urges the importance to “reflect our voices and opinions in the entry, so as to objectively and truly reflect the influence of Chinese path and Chinese thoughts on other countries and history”.

“‘Telling China’s story’ is a concept that has gained huge traction over the past couple of years,” Lokman Tsui, an assistant professor at the Chinese University of Hong Kong, told BBC Click. “They think that a lot of the perceptions people have of China abroad are really misunderstandings.”

To Tsui, an important shift is now happening as China mobilises its system of domestic online control to now extend beyond its borders to confront the perceived misconceptions that exist there. Wikipedia has confronted the problem of vandalism since its beginning. You can see all the edits that are made, vandalism can be rolled back in a second, pages can be locked, and the site is patrolled by a combination of bots and editors.

People have tried to manipulate Wikipedia from the very beginning, and others have worked to stop them for just as long.

However, much of the activity that Lin described isn’t quite vandalism. Some – such as Taiwan’s sovereignty – is about asserting one disputed claim above others. Others, subtler still, are about the pruning of language, especially in Mandarin, to make a political point.

Should the Hong Kong protests be considered “against” China? Should you call a community “Taiwanese people of Han descent”, or “a subgroup of Han Chinese, native to Taiwan”?

It is over this kind of linguistic territory that many of the fiercest battles rage.

Coordinated strategy?

The attacks are often not to Wikipedia’s content, but rather its community of Wikipedians.

“Some have told us that their personal information has been sprayed [released], because they have different thoughts,” Lin said.

There have also been death threats directed at Taiwanese Wikipedians. One, on the related public Wikimedia Telegram Channel, read “the policemen will enjoy your mother’s forensic report”. And elections to administrator positions on Wikipedia, who hold greater powers, have similarly become starkly divided down geopolitical lines.

Attributing online activity to states is often impossible, and there is also no direct, proven link between any of these edits and the Chinese government.

“It’s absolutely conceivable,” Tsui continued, “that people from the diaspora, patriotic Chinese, are editing these Wikipedia entries. “But to say that is to ignore the larger structural coordinated strategy the government has to manipulate these platforms.”

Whilst unattributed, the edits do happen against the backdrop where a number of states, including China, have intensified attempts to systematically manipulate online platforms. They have done so on Twitter and Facebook, and researchers around the world have warned of state-backed online propaganda targeting a range of others.

Compared with almost any other online platform, Wikipedia makes for a tempting, even obvious, target.

“I’m absolutely not surprised,” said Heather Ford, a senior lecturer in digital cultures at the University of New South Wales, whose research has focused on the political editing of Wikipedia. I’m surprised it’s taken this long actually… It is a prioritised source of facts and knowledge about the world.”

Of course, every state cares about its reputation.

“China is the second largest economy in the world and is doing what any other country in this status would seek,” said Shirley Ze Yu, a visiting senior fellow at the LSE. “Today China does owe the world a China story told by itself and from a Chinese perspective. I think it’s not only Chinese privilege, it’s really a responsibility”.

Taiwan is itself locked in a messaging war with China, with its own geopolitical points to make and many of the misconceptions may be genuine ones, at least in the eyes of the people who edit them.

So does this amount to telling China’s story, or online propaganda?

At least on Wikipedia, the answer depends on where you fall on two very different ideas about what the internet is for. There is the philosophy of open knowledge, open source, volunteer-led communities.

But it may now be confronted by another force: the growing online power of states whose geopolitical struggles to define the truth now extend onto places like Wikipedia that have grown too large, too important, for them to ignore.

* The Chinese Embassy was approached for a comment but we did not receive a reply.

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BBC News – Technology

China pulls out of $5 billion deal to develop Iranian natural gas

Trade war signal?

China’s state oil company has pulled out of a $ 5 billion deal to develop offshore Iranian natural gas deposits, the oil minister said Sunday.

The deal had been struck after the 2015 Iran nuclear deal.

Oil Minister Bijan Zangeneh, quoted by the ministry’s SHANA news agency, said Sunday that the China National Petroleum Corp. was “no longer in the project.”

This could be a sign that China is looking to curry favor with the US but I would warn against that line of thought. Just last month, China updated a comprehensive strategic partnership with Iran that includes $ 280 billion for developing Iran’s oil, gas and petrochemicals sectors and another $ 120 billion to upgrade transport and manufacturing infrastructure.


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Trump sees ‘very good chance’ of China trade deal, says no link to Biden probe request

By David Lawder and Lisa Lambert

WASHINGTON (Reuters) – U.S. President Donald Trump said on Friday that his administration has a “very good chance” of making a trade deal with China, and insisted there were no links between China talks and his desire for Beijing to investigate Democratic presidential candidate Joe Biden.

Trump, speaking to reporters before departing the White House, said negotiations to end the U.S. trade war with China were separate from any investigation into Biden, whom Trump has accused of foreign corruption.

“One thing has nothing to do with the other,” the Republican president said when asked whether he would be more likely to make a deal with China if it investigated Biden. “I want to do a trade deal with China, but only if it’s good for our country.”

Top-level U.S.-China trade talks are scheduled to resume next Thursday and Friday, when Chinese Vice Premier Liu He meets with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in Washington

The talks will be preceded on Monday and Tuesday by deputy-level discussions, White House economic adviser Larry Kudlow said earlier.

Trump has waged a two-year effort to change China’s trade, intellectual property and industrial policy practices, which he has long said are unfair and have cost millions of U.S. jobs.

His administration is seeking stronger protections of U.S. intellectual property, an end to forced transfers of American technology to Chinese firms, curbs to industrial subsidies and increased access to China’s largely closed domestic markets.

In a trade war that has lasted 15 months, the United States and China have heaped hundreds of billions of dollars in tariffs

“I view China as somebody we’re trying to make a deal with, we have a very good chance of making a deal with,” Trump said. Right now, we’re in a very important stage in terms of possibly making a deal. If we make it, it will be the biggest trade deal ever made.”

On Thursday Trump publicly urged Beijing to investigate Biden, a Democrat, again raising concerns that he has invited foreign interference in the U.S. presidential election. Last week Trump released a transcript of a call where he asked Ukraine’s president to also look into Biden, a request that has triggered an impeachment inquiry by House of Representatives Democrats.


Kudlow, in television interviews, held out hope for progress in opening China’s financial services markets to American companies in next week’s talks, adding the U.S. team was heading into them “open-minded.”

“Everything’s on the table, we’d love to go back to where we were in May when we were a lot closer,” Kudlow told Bloomberg TV.

The Trump trade team hoped to revisit a mostly agreed text from which China had backtracked in May, causing talks to break down, he said.

The text at that time included an agreement negotiated by Mnuchin that involved the lifting of foreign ownership caps on financial services firms in China.

“I’m not giving you news. I’m just saying we had some pretty good things last spring, like financial services opening – that could be extended,” Kudlow said in a subsequent interview on Fox Business Network. “I say ‘could’ and the president would have to sign off on it, but don’t rule out the possibility of good news.”

Kudlow declined to make any predictions about the talks but said there had been a “softening of the psychology on both sides” over the past month, with the United States delaying some tariff increases and China making some modest purchases of American farm products.

Kudlow also said the impeachment inquiry was unlikely to affect the trade talks with China.

“I don’t think that’s an impact right now. I think maybe it has only the tiniest, tiniest effect, maybe occasionally on stock market psychology,” Kudlow said.

However, he said the Trump administration continued to monitor freedom and democracy protests, which he said could have an impact on the talks, without specifying how. China-backed Hong Kong authorities have struggled to curb anti-government protests that have continued for four months.

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ICYMI – China markets are closed again today

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