Overseas Headlines – March 22, 2017


Wall St. set to open lower as ‘Trump trade’ fizzles
U.S. stocks looked set to open slightly lower on Wednesday, a day after Wall Street posted its biggest one-day fall since the November election, as investors fret about potential delays to President Donald Trump’s pro-growth policies. Trump on Tuesday tried to rally Republican lawmakers behind a plan to dismantle Obamacare, his first major legislation since assuming office in January. Republican leaders aim to move the controversial legislation to the House floor for debate as early as Thursday, amid concerns over support from party lawmakers. Some investors fear that if the healthcare reform act runs into trouble or takes longer-than-expected to pass, then Trump’s tax reform policies may face setbacks. "The markets were reminded yesterday the ‘Trump trade’ is not a one-way trade and there’s room for disappointment as actions on tax cuts and infrastructure spending might not materializes as quickly as we want," said Anastasia Amoroso, global market strategist at J.P. Morgan Private Bank in Houston.


UK economy growing solidly despite inflation hit – BoE report
Britain’s economy looks set to defy a slowdown again this year as the country moves closer to leaving the European Union, with the hit to shoppers from surging inflation partly offset by more investment and exports, a Bank of England report suggested. Britain last year was the fastest-growing major advanced economy after Germany, despite June’s shock vote to leave the European Union, which caused the pound to tumble and prompted widespread predictions of recession. Wednesday’s report from the central bank’s regional staff broadly tallies with BoE forecasts last month that growth will remain solid in 2017, even as inflation erodes households’ disposable income.


China’s money rates up on concerns over PBOC liquidity checks
Cash conditions in China’s interbank market remained tight on Wednesday as market participants scrambled for short-term funds on concerns central bank-led liquidity checks later this month will limit big bank’s lending to smaller peers. The benchmark seven-day repo rate traded in the interbank market, considered a key indicator of general liquidity in China, opened at 2.45 percent and spiked to hit a high of 6.0 percent at one point in morning trade. On Tuesday, the rate spiked to 9.5 percent in intraday trade, its highest since January 2014. The People’s Bank of China’s Macro Prudential Assessment (MPA) for the current quarter will include off-balance sheet wealth management products (WMPs) for the first time. The assessment is due at the end of March. Market participants believe the tightened supervision could pile pressure on the money market.