ICBC Financial Market Daily Review - December 12, 2018
International News 1. A Canadian court has granted bail to the Huawei CFO Meng Wanzhou while she awaits a hearing on extradition to the United States, subject to a guarantee of CAD10 million (CAD 7.5 million in cash) and other conditions of five guarantors. Meng must agree to wear an electronic monitoring device. She is also subject to a curfew between 11pm and 6am. The court ordered her to hand over all her passports and travel documents and forbade her from applying for new travel documents. Huawei believed the Canadian and U.S. legal systems will deliver a fair conclusion. 2. China and the United States discussed a road map for the next stage of their trade talks on Tuesday, during a telephone call. China has indicated it will cut tariffs on U.S.-made autos and car parts, a Trump administration official said, adding that Washington is still awaiting formal documentation of the reduction and details on timing of the move. White House officials told automakers following a U.S.-China trade call that the Trump administration believes China will cut tariffs on U.S. autos to 15 percent from the current 40 percent, an auto executive said after being briefed on the previous evening’s call. The White House is delaying additional payments from a $12 billion aid package for farmers stung by President Donald Trump's trade war with China because it expects Beijing to resume buying U.S. soybeans, three sources familiar with the matter told Reuters. 3. An attempt to oust British Prime Minister Theresa May gathered pace, a day after her decision to delay a vote in parliament on her Brexit deal for fear of a rout angered many in her Conservative Party. The BBC and other media cited sources as saying the required number of letters from Conservative lawmakers calling for a no-confidence vote in her leadership of the party had been met. Britain's parliament will vote on whether to approve Prime Minister Theresa May's Brexit deal before Jan. 21, her spokesman said on Tuesday. 4. US President Donald Trump openly fought with the top two Democratic lawmakers at an Oval Office meeting on Tuesday about government funding, throwing into question whether a deal was possible ahead of a deadline later this month. In a remarkable public argument, the likes of which is seldom seen before cameras, Trump brawled with U.S. Senate Democratic Leader Chuck Schumer and House Democratic Leader Nancy Pelosi about paying for a wall on the U.S.-Mexico border. 5. Canada confirmed that one of its citizens was detained in China but said it saw no explicit connection to the arrest in Vancouver of CFO Meng Wanzhou at Chinese telecoms giant Huawei Technologies. Confirmation of the detention came soon after the executive, Huawei CFO Meng Wanzhou, returned to a packed Vancouver courtroom for a bail hearing in a case Former Canadian diplomat Michael Kovrig was the person detained, two sources had said earlier. Kovrig works for the International Crisis Group, an independent conflict resolution think-tank. 6. U.S. producer prices unexpectedly rose in November as increases in the costs for services offset a sharp decline for energy products, but the overall momentum in wholesale inflation appears to be slowing. The Labor Department said its producer price index (PPI) for final demand edged up 0.1 percent last month after jumping 0.6 percent in October. In the 12 months through November, the PPI rose 2.5 percent, slowing from October's 2.9 percent surge. However, the core producer price index remained strong. A key gauge of underlying producer price pressures that excludes food, energy and trade services increased 0.3 percent last month. The report did not change the market's expectation that Federal Reserve will raise interest rates at its Dec. 18-19 meeting.
Domestic News 7. China's Ministry of Commerce said on Tuesday that, during a phone call between Chinese Vice Premier Liu He, Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer, both sides exchanged views on putting into effect the consensus reached by the two countries’ leaders at their meeting, and pushing forward the timetable and road map for the next stage of economic and trade consultations work. 8. CFO Meng Wanzhou at Chinese telecoms giant Huawei Technologies will attend the hearing again in Vancouver on Tuesday. The judge has the right to weigh whether to release on bail while she awaits a hearing on extradition. In response to the hearing on Monday (10th), STCN quoted Huawei's official statement as saying that it will continue to pay attention to the bail hearing on the 11th, believing that the legal systems of Canada and the United States will come to a fair conclusion. 9. Chip supplier Qualcomm on Monday said it had won a preliminary order from a Chinese court banning the importation and sale of several Apple iPhone models in China due to patent violations. In a statement, Apple said its iPhones remain on sale in the country.