China: Beijing Considers Tighter Visa Rules for Some US Citizens

Galtero Lara
Octubre 10, 2019

Australian shares were down 0.76 per cent.

In a speech last night, Fed Chair Jerome Powell said the Fed would be addressing last month's tightness in United States money markets with a permanent addition of dollar liquidity - replacing several temporary open market operations now underway.

Oil prices fell in Asia as U.S. visa restrictions on Chinese officials and the addition of more Chinese companies to a United States trade blacklist battered already slim hopes that Washington and Beijing could reach a truce at trade negotiations this week. Slower growth in the U.S. and China, the world's two-largest economies, suggests less demand for energy in the future.

"Stock markets are still trying to price in the slowdown in global growth", said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co in Tokyo.

China's Ministry of Public Safety has for months been engaged on guidelines to restrict the flexibility of anybody employed, or sponsored, by U.S. intelligence providers and human rights teams to journey to China. Powell said balance sheet expansion should not be read as an effort to stimulate the economy, but weak data on the USA manufacturing and services sector last week rattled investors' confidence that the U.S. economy remained robust. Quoting statistics, on Tuesday's (October 8th) Wall St. closure, trade sensitive Dow fell by 1.19 per cent to settle down the day at 26,164.04 and S&P 500 index was plunged by 1.56 per cent to wrap up the day at 2,893.06, while leading the falls of Tuesday's (October 7th) Wall St., Nasdaq was nudged 1.67 per cent lower to wind down the day at 7,823.78. Japan's Nikkei Pink 0.

Background: The U.S. decision to impose visa restrictions on Chinese officials on October 8 came just a day after the U.S. Commerce Department blacklisted 28 Chinese entities, including several technology companies. Although the U.S. has cited China's treatment of Muslim minorities in the country as the reason for the restrictions, it has created a negative backdrop for the trade talks, with negotiations set to move to top-level discussions on Thursday.

Several reports at the start of the week indicated that China won't even discuss some of the issues the USA is demanding like industrial subsidies and IP theft.

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Tit-for-tat tariffs imposed by the United States and China have roiled financial markets and slowed capital investment and trade flows.

"The plan has been widely discussed by senior police officers over recent months, but made more likely to be implemented after the Hong Kong protests and the USA visa ban on Chinese officials", the supply mentioned.

Among currencies, the pound sterling traded near a one-month low of $1.2196 due to reports that Brexit talks between Britain and the European Union were close to breaking down.

Sterling was little changed against the dollar after losing almost 1% over the past two sessions. The dollar eased slightly against the yen after Powell's remarks but remained broadly supported by weakness in other majors, which have been pummelled by weakening economic prospects. This because: (i) the programme will be a lot smaller than QE (which at its peak was worth US$85 billion per month), (ii) involves short term securities that can roll off the Fed's balance sheet quickly and (iii) the market is witnessing very little progress in either US-China trade or Brexit negotiations. The decision to allow the balance sheet to grow is in response to the recent funding squeeze in money markets that led to a spike in short-term interest rates.

Powell said balance sheet expansion should not be read as an effort to stimulate the economy, but weak data on the USA manufacturing and services sector last week rattled investors' confidence that the USA economy remained robust.

WTI November crude oil slipped 0.2% to settle at $52.63/bbl. But at settlement, Brent was down 11 cents, or 0.2 per cent at $ 58.

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