China official PMIs for November beat estimates and higher than in October

The manufacturing PMI has come in at 50.2, back into expansion for the first time since April this year.

  • expected 49.5, prior 49.3
  • the new export orders sub-indicator moved to a 7 month high of 48.8

Services (non-manufacturing) improved also, to 54.5 and its highest since March

  •  expected 53.1, prior 52.8

The composite has thus headed higher also, comes in at 53.7

  •  prior 52.0

This is an encouraging indication for China’s economy. Authorities have been adding stimulus (monetary and fiscal), although not on a large scale. It appears to be paying some dividends.

The results should be a positive ‘risk’ input when FX markets reopen Monday. Plenty of time for other news before then to impact though!

The private survey (Caixin / Markit) PMIs follow next week:

  • manufacturing expected 51.2 (due 2 December at 0145GMT)
  • non-manufacturing expected 51.5, prior 51.1 (due 4 December at 0145GMT)
  • composite prior 52.0 (also on the 4the of December at 0145GMT)

The private survey PMIs focus more on smaller, export-orientated firms.

China manufacturing PMI expansion
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House releases testimony from official who overheard Trump call

Washington — The House released the transcript Monday from the closed-door testimony of David Holmes, a State Department official who overheard a recently revealed call that has become key to the impeachment inquiry against President Trump. Holmes will testify later this week.

In his opening statement, Holmes said he overheard Mr. Trump ask a top diplomat about the status of “investigations” into his political rivals on July 26 — one day after his now-infamous July 25 call with the president of Ukraine.

The existence of this July 26 call was revealed last week by William Taylor, the top U.S. diplomat in Ukraine who testified in public on Tuesday. Holmes, who is Taylor’s aide, corroborated Taylor’s account. It provides further support for the accusation that Mr. Trump committed a politically charged quid pro quo and withheld U.S. aid from Ukraine to pressure the foreign country to launch investigations that could help his reelection campaign.

“I’ve never seen anything like this, someone calling the president from a mobile phone at a restaurant, and then having a conversation of this level of candor, colorful language. There’s just so much about the call that was so remarkable that I remember it vividly,” Holmes testified on Capitol Hill behind closed doors last week.  


Read the full text of Holmes’ testimony here:


Holmes said he was sitting near Gordon Sondland, the U.S. ambassador to the European Union, at a restaurant in Kiev and could hear him speaking to Mr. Trump, who said “”So, he’s gonna do the investigation?” referring to Ukraine’s president, Volodymyr Zelensky. Sondland replied, “He’s gonna do it” and added that Zelensky would do “anything you ask him to.”

Holmes testified that the call was also unusual because such a call with the president would generally take place in a more secure setting, not on a cell phone.

US-POLITICS-CONGRESS-TRUMP-IMPEACHMENT-HOLMES
David Holmes, a State Department official, arrives to appear in a closed-door deposition hearing as part of the impeachment inquiry at the US Capitol in Washington, D.C., on November 15, 2019.  Olivier Douliery

Holmes said Sondland later told him that “the president did not ‘give a s**t about Ukraine.'” According to Holmes, Sondland said that only “big stuff matters” to the president, “like this Biden investigation that Giuliani is pushing.”

There is no evidence to support the claims by Mr. Trump and his Republican allies that Joe or Hunter Biden engaged in corruption in Ukraine. While Joe Biden was vice president, his son Hunter was hired by a Ukrainian gas company.

Holmes also testified that Marie Yovanovitch, the former ambassador to Ukraine who testified last week, was as good at fighting corruption as anyone known for that, and said the smear campaign against her was obvious. 

Rebecca Kaplan contributed reporting.

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Forex – Pound Little Changed Ahead of Lagarde’s First Official Speech

© Reuters.  © Reuters.

Investing.com – The British Pound was little changed on Monday in Asia as investors wait to hear the first speech from the new head of European Central Bank (ECB).

The that tracks the greenback against a basket of other currencies was unchanged at 97.041 by 12:19 AM ET (04:19 GMT).

U.S. rose by 128,000 last month, according to the Labor Department. Analysts polled by Investing.com only had a consensus for a rise of 89,000. The outperforming data provided a boost to U.S. stock markets and sent the S&P500 to record highs.

Mohammed Apabhai, head of Asia Pacific trading strategies group at Citi, told CNBC in an interview that he thinks the U.S. dollar index could fall to as low as 85 as the Federal Reserve buy more bond assets and push bond yield down.

The dollar usually weakens when bond yields fall.

“Our latest projections are that it would weaken even further — maybe to the high 80s, perhaps even as low as 85,” said Apabhai.

“We’re basically saying that the Fed is probably going to be the most dovish of all the central banks, regardless of the fact that … they’ve put rates on pause,” he said.

On the Sino-U.S. trade developments, U.S. President Donald Trump said on Friday evening that negotiations about a “phase one” agreement were going well and he hoped to sign the deal with Chinese President Xi Jinping at a U.S. location when work on the agreement was completed.

The pair inched up 0.1%. Bank of Japan’s monetary policy meeting minutes is due on Wednesday.

The pair last traded at 1.2937, up 0.03%, as traders await new ECB head Christine Lagarde’s first official speech later in the day.

The pair was also near flat. The Bank of England’s newly renamed Monetary Policy Report is out on Thursday.

The pair inched up 0.1%. The Reserve Bank of Australia’s rate decision is due on Tuesday.

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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EU official: Technical Brexit extension not needed from EU side

It would matter if the deal passes parliament

It’s not clear if a full legal text will be ready on Saturday or just a political declaration. If the text isn’t done it makes a deal less likely because members of the ERG said they won’t support it. However if it passes anyway, there may not be enough time to get it done and/or to implement a deal.

The EU is saying here is that business could continue as normal until that’s worked out and that the deal would go into place when it’s ready.

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Ex-Fed Official Takes Aim at Bank of England’s Crypto Proposal

(Bloomberg) — Bank of England Governor Mark Carney’s plan to end the dollar’s dominance in the global financial system ignores the benefits of having the greenback as a reserve currency, according to former senior Federal Reserve official Simon Potter.

The dollar should eventually be replaced by something like Facebook Inc (NASDAQ:).’s proposed Libra cryptocurrency, Carney said last month. While the Bank of England chief bemoaned the greenback’s “domineering influence” on trade, he failed to take into account how the dollar’s status has benefited other countries, Potter said at a Peterson Institute for International Economics event in New York on Wednesday.

“I see no argument that makes sense to have something that complicated out there when you have large, liquid capital markets in the U.S.,” Potter, who ran the New York Fed’s trading desk, said in his first public remarks since departing in June. “Not having one currency that you can basically price things and have a deep market in, that makes life much harder for the global economy.”

The dollar’s role in the global financial system is vast: other countries use it to pay international debts, and it commands the lion’s share of central banks’ foreign-exchange reserves. That status has afforded the U.S. several advantages: foreign investors have flocked to dollar-denominated assets, helping America keep a lid on its borrowing costs.

Carney and Potter do see eye-to-eye on one point: policy makers should keep control of the currency system. While Facebook’s Libra could lie outside the purview of central banks, Carney argued in August that the public sector would be the best provider of a new currency hegemony.

Potter agrees. While it’s unlikely that “individual sovereigns could ever coordinate” around a virtual currency, the risk is that companies might.

“Central banks should be very concerned about the private sector doing this,” Potter said. A nation’s control of its currency “is designed to protect people and get good outcomes. The private sector is much more interested in selling products.”

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 – official PMIs for August. Manufacturing 49.5 (exp. 49.6), Services 53.8 (exp. 53.7)

Purchasing Managers’ Index data from China’s National Bureau of Statistics published on Saturday.

Manufacturing 49.5

  • expected 49.6, prior 49.7
  • in contraction for the fourth consecutive month
  • trade wars and slower domestic demand persistent negatives
  • Xinhua (state media in China) report the NBS saying “demand moderated amid a complex economic environment”

Services 53.8

  • expected 53.7, prior 53.7
  • first improvement for this for five months and at odds with domestic demand pressures seen reflected in the manufacturing PMI

Composite 53.0

  • prior 53.1

So, a bit of a mix here. Services holding up. 

The privately surveyed PMIs (Caixin/Markit) will be published from Monday (the manufacturing PMI is Monday, services and composite follow on Wednesday). 

Purchasing Managers' Index data from China's National Bureau of Statistics published on Saturday.

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Exclusive: China central bank official says yuan at right level, disorderly capital flows unlikely

© Reuters. FILE PHOTO: Man sits in front of the headquarters of the People's Bank of China, the central bank, in Beijing © Reuters. FILE PHOTO: Man sits in front of the headquarters of the People’s Bank of China, the central bank, in Beijing

By Kevin Yao and Ryan Woo

BEIJING (Reuters) – China’s yuan is at an appropriate level currently and two-way fluctuations in the currency will not necessarily cause disorderly capital flows, a senior official at the People’s Bank of China told Reuters on Tuesday.

The yuan has weakened nearly 2.4% since U.S. President Donald Trump threatened early this month to impose more tariffs on Chinese goods from Sept. 1, though there are signs China is trying to stem the declines.

“The current level of exchange rate is appropriately aligned with fundamentals of China’s economy and market supply and demand,” Zhu Jun, head of the central bank’s international department, said in an interview with Reuters.

Zhu said China was “shocked” by the U.S. Treasury Department’s move last week to label China a currency manipulator, hours after Beijing let the yuan slide past the key 7-per dollar level to its lowest level since the global crisis.

But Zhu asserted that China will be able to “navigate all scenarios” arising from the Trump administration’s decision to label it a currency manipulator for the first time since 1994, which rattled global markets.

China is unlikely to face serious consequences from getting that label given the apparent lack of Group of Seven and International Monetary Fund support for Washington’s move, former and current U.S. and G7 officials said.

But some Chinese advisers and former officials have sounded alarm bells over a possible wider conflict between China and the United States. The year-long trade war between the world’s two largest economies has already spread beyond tit-for-tat tariffs on goods to other areas such as technology and currency.

UPGRADING THE TRADE WAR?

The real aim of the U.S. currency manipulator label is to disrupt China’s financial markets and its economy, said Chen , former chairman of the China Development Bank – the country’s biggest policy bank.

“The U.S. step to list China as a currency manipulating country is an important action to upgrade the trade war into a financial war,” Chen, who remains an influential figure on economic issues, told a forum over the weekend.

Zhu of the central bank told Reuters that in the short run, external shocks will play a role by influencing the yuan’s movements.

“That said, as long as RMB moves in an orderly manner based on market supply and demand, such movements in either direction do not necessarily mean disorderly movement of capital flow,” she said. The yuan is also known as renminbi, or RMB.

Zhu reiterated that recent yuan volatility was a normal market reaction to escalating trade tensions, adding “If it’s preventing such responses that would constitute real manipulation.”

Analysts say a weaker yuan could help China’s ailing exporters to cope with higher U.S. tariffs amid an escalating trade war, but any sharp yuan drops could fuel capital outflows as the world’s second-largest economy faces increased headwinds.

REPEATED PLEDGES

Chinese leaders have repeatedly pledged that they would not resort to competitive currency devaluation to support exports, or use the currency as a tool to cope with trade disputes.

Zhu said the yuan will be supported by China’s solid economic fundamentals, a stable debt ratio, contained financial risks, adequate foreign exchange reserves, and favorable interest rate spreads between China and major advanced economies.

“Over the medium and long term, we have full confidence in RMB as a strong currency,” she said.

In the second quarter, China’s annual economic growth pace slowed to a near 30-year low of 6.2%. Many analysts had expected a steadying in the second half as earlier stimulus measures started to kick in, but Trump’s latest tariff threat is likely to further pressure exporters and their domestic supply chains.

China’s foreign exchange reserves – the world’s largest – fall by $ 15.54 billion in July to $ 3.104 trillion, central bank data showed, amid rising trade tensions.

China burned through $ 1 trillion of reserves supporting the yuan in the last economic downturn in 2015, during which it devalued the currency in a surprise move. Since then, Beijing has shored up restrictions on capital outflows.

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Microsoft official says Iranian cyber activity has increased

Cyber activity originating in Iran and targeting entities across the United States “spiked” after the Trump administration announced its withdrawal from the nuclear deal last May, Tom Burt, Microsoft’s senior vice president of customer security and trust, said on Friday.

Speaking at an election security panel at the Aspen Security Forum in Colorado, Burt said the company saw “an incredible increase, a spike in activity, once the United States announced it was withdrawing from the nuclear treaty.”

Burt specified that the Iran-based actors’ cyber activity was not necessarily politically focused and “largely” targeted oil and gas organizations.  

Trending News

Earlier in the week, Microsoft published a blog post that said it had notified nearly 10,000 of its customers – which included businesses and consumer email accounts – that they had been targeted by nation-state attacks that originated, in order of volume, from Iran, North Korea and Russia.

“While many of these attacks are unrelated to the democratic process, this data demonstrates the significant extent to which nation-states continue to rely on cyberattacks as a tool to gain intelligence, influence geopolitics or achieve other objectives,” the post said.

The post also announced the demonstration, at the Aspen Security Forum, of a free open-source software system called ElectionGuard that the company said was designed to enhance voting security.

In his Friday remarks, Burt also said Microsoft had seen a “significant increase in activity” from North Korea as nuclear negotiations between Pyongyang and Washington were ongoing. He added that while the company had seen some activity originating from China, “we don’t see them [being] as active” as other countries, by volume.  

In its blog post, Microsoft said it had issued 781 notifications to customers using its AccountGuard service, which warns political and “democracy-focused” organizations worldwide about targeted cyber attacks – and that 95% of those attacks targeted U.S.-based organizations that were closely associated with the electoral process.

The slight majority of those attacks, too, Burt said, were perpetrated by Iran-based actors, followed, by volume, by Russia-based actors. While the Iranian activity was “not necessarily in any way” associated with hacking democratic processes, Burt said, and instead focused on energy interests, the Russia-based efforts reflected the “same pattern of engagement” observed ahead of the 2016 and 2018 U.S. and European elections.

“Almost every significant election cycle since 2016 we’ve seen the initial effort being to infiltrate NGOs, academics and think tanks likely to be influential,” which could be part of preparing for a disinformation campaign, Burt said.

“What we would say from the data we’ve seen so far is that we are seeing the early stages of the same kind of pattern of activity by the same actors that we’ve seen before, and we should expect it to continue,” he said.

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Olympics – Sponsorship rule change will not apply to everyone: Canadian official

© Reuters. A child plays in water near Olympic rings placed at Madureira Park ahead of the Rio 2016 Olympic Games in Rio de Janeiro © Reuters. A child plays in water near Olympic rings placed at Madureira Park ahead of the Rio 2016 Olympic Games in Rio de Janeiro

By Karolos Grohmann

LAUSANNE, Switzerland, (Reuters) – Changes in Germany to the Olympic rule that restricted sponsorship opportunities for athletes during a Games are not a “one-size-fits-all” decision for all countries, Canadian Olympic Committee President Tricia Smith said on Wednesday.

In February German athletes and their sponsors scored a major victory over the International Olympic Committee, earning more possibilities to advertise during the Tokyo 2020 Games and raising alarm bells within the Olympic body.

The German Cartel Office ruled the IOC and the German Olympic Sports Confederation (DOSB) were subject to existing competition laws and would need to grant more rights for promotional activities ahead of and during the Games.

While this decision sets a European precedent, it is not legally binding in other parts of the world.

“We had discussions with our athletes’ commission,” Smith, a lawyer, told Reuters in an interview on the sidelines of an IOC session.

“It may not be one-size fits-all. I don’t think it is, Certainly not in the changing landscape of this issue.

“The changes that will be proposed to rule 40 by the IOC will accommodate a lot of athletes’ wishes and allow them to continue their affiliation with long-term sponsors. I think it is a reasonable approach,” Smith said,

Rule 40 of the Olympic Charter states “no competitor, team official or other team personnel who participates in the Olympic Games may allow his person, name, picture or sports performances to be used for advertising purposes during the Olympic Games”.

It is seen as major advantage for Olympic sponsors, who sign up because until now they had exclusive exposure rights during the Games in all Olympic venues and areas. The German decision changes that for German athletes.

As a result the IOC has urged national Olympic committees to discuss the matter with athletes. It is not clear if and when the IOC will propose changes to Rule 40.

“The funding the IOC gets really funds the sports movement in the world. You have to make sure that is protected. The IOC puts 90 percent of their money back into sports,” Smith said.

“We have to be careful to protect that solidarity and the feedback I got from our athletes is they definitely recognize that.”

A four-time Olympian in rowing and a silver medalist at the Los Angeles 1984 Games, Smith is one of only a handful of women in charge of a national Olympic committee (NOC). In total, there are 206 NOCs.

“I have been in the sports system a very long time. I have been part of change and I have seen the change,” she said.

“Sport is one of the most powerful platforms to promote women and girls, to empower women. But there’s lot of work yet to do.

“I have seen the value that diversity brings to a board. Boards making decisions are stronger when they have those diverse perspectives on them.”

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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Top DR health official says recent American tourist deaths are from natural causes

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