Overseas Headlines-December 3, 2019

December 3, 2019

United States:

Trump Sees No Deadline for China Deal, Prefers to Wait For 2020 Election

“President Donald Trump signaled he would be willing to wait for another year before striking a trade agreement with China, casting doubt on the likelihood of a phase-one accord within weeks between Washington and Beijing. “I have no deadline,” he told reporters Tuesday on London when asked if he wanted an agreement by year end. Stocks dropped in Europe and U.S. equity futures sold off as Trump’s comments indicated no urgency to reach a deal by Dec. 15, which U.S. Commerce Secretary Wilbur Ross on Monday called a “logical deadline.” The Trump administration has threatened to impose tariffs on more Chinese imports starting that day. Those levies would hit American consumer products such as smartphones, toys and childrens’ clothing just before the Christmas holiday. “If nothing happens between now and then, the president has made quite clear he’ll put the tariffs in — the increased tariffs,” Ross said on Fox Business Network. A flurry of U.S. trade moves in the past 24 hours has eroded investor optimism that Trump would ease up on tariffs that have slowed the global economy. Rather than ratcheting down trade tensions, Trump is indicating confidence that his import taxes are good for America.”



Moody’s Cuts Outlook for U.K. Banks, Citing Brexit Concern

“British banks have worked hard to bolster their finances since the global crash a decade ago, but Brexit might be about to undo their good work, according to a warning from Moody’s Investors Service. The ratings firm cut its outlook on British lenders to negative from stable, citing factors including the “prolonged uncertainty over Brexit” and its impact on economic growth over the next two years. “The operating environment for U.K. banks is deteriorating, weighing on their asset quality and profitability,” Moody’s said in a report published Tuesday. “Our base case is that the U.K. and the European Union will ultimately reach a free-trade agreement, but it is increasingly unlikely that any such deal will substantially mitigate the negative economic impact of Brexit.” Moody’s said the worsening economic environment more than outweighs positive trends, such as the lenders’ strong capital position and the wind-down of costs linked to the payment protection insurance scandal. The ratings company also cited the persistence of low interest rates, as well as the increased competition in the mortgage market that has eroded net interest margins. The mortgage price war has been a side effect of Britain’s so-called ring-fencing regulation, which legally separates investment banking from retail, deposit-taking business, and has trapped some of the biggest banks’ excess capital inside the U.K.”



Singapore Salaries to Rise in 2020 as Talent Pool Is ‘Shrinking’

“Singapore’s economy may be facing headwinds and inflation’s muted but companies in the Southeast Asian city-state are set to step up salary increases next year in a bid to retain staff, according to a survey. The overall increase projected for 2020 is 3.7%, up from a 3.6% rise this year, according to Mercer LLC, which conducted the survey across industries from banking and finance to real estate. One in three companies now pay retention bonuses, up from one of four in 2017, it said. Trade-dependent Singapore has posted slower economic growth this year amid the fall-out from the U.S.-China trade war, although the government forecasts a recovery in 2020. At present, inflation remains less than 0.5% on-year, far below the salary increases projected in the Mercer survey. Like a number of its Asian counterparts, the city-state’s workforce is aging. “Talent pools are shrinking,” according to Mercer, which said that companies may struggle to keep workers even after offering more compensation. There needs to be a shift toward “more holistic talent strategies that acknowledge pay as only one means of differentiation and motivation,” Kulapalee Tobing, career products leader, Singapore, said in a statement. Income growth in Singapore has slowed this year as the labor market softened, according to preliminary data last week. The real median income of full-time employed residents weakened to 2.2% in June 2019 from 4.4% in the same period last year, the Ministry of Manpower said.”


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