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ICBC Financial Market Daily Review-February 12, 2019

International News
1. U.S. President Donald Trump said that U.S. diplomats had a “very productive meeting” with North Korean officials, and he announced his summit later this month with North Korean leader Kim Jong Un would be held in Vietnam’s capital, Hanoi. Trump wrote on Twitter, “It will take place in Hanoi, Vietnam, on February 27 & 28.” 
2. The results of a high profile poll released on Monday, which shows that the Australian conservative government will face a failure in election. Australia will have the general election in May. The last parliamentary meeting before the election is about to be held. During the adjournment, Morrison verbally attacked the Labor Party’s plan of cutting some dividend tax benefits in his speeches delivered across the country. But the latest survey shows that 44% of voters oppose the cancellation of refund of franking credits, lower than the figure in December, 48%.
3. U.S. Secretary of State Mike Pompeo cautioned U.S. allies against deploying equipment from Chinese telecoms giant Huawei on their soil, saying it would make it more difficult for Washington to partner alongside them. The U.S. government is particularly worried about Huawei’s expansion in Hungary and Poland. “We want to make sure we identify (to) them the opportunities and the risks of using that equipment,” Pompeo told reporters in Hungary, “We have seen this all around the world, it also makes it more difficult for America to be present...  If that equipment is co-located where we have important American systems, it makes it more difficult for us to partner alongside them.” Hungary is the first stop of Pompeo’s visit to Central Europe. He will also visit Slovakia and Poland.
4. According to official data, the UK economy slowed down as expected in the fourth quarter of last year. The growth rate in 2018 fell to the lowest level in the past six years, as the doubts over Brexit suppressed investment activities. In the fourth quarter of 2018, the gross domestic product (GDP) of UK fell to 0.2% from 0.6% in the previous quarter. This is in line with the average forecast of Reuters survey analysts, but slightly lower than the Bank of England’s estimate last week. The GDP growth for the full year of 2018 fell to 1.4% from 1.8% in the previous year, being the lowest since 2012.
5. According to data available to Reuters, Germany’s trade surplus with the U.S. reduced last year, but remained at around EUR49 billion (USD55.37 billion). The preliminary calculations by the Federal Statistical Office of Germany shows that Germany’s exports to the U.S. increased by 1.5% last year to a record high of EUR113.5 billion. Last year, Germany’s imports from the U.S. increased by about 4% to EUR64.6 billion. This means that last year Germany’s trade surplus with the U.S. reduced by about EUR1 billion compared to 2017. However, it is still greater than Germany’s trade surplus with any other country, and accounts for more than one-fifth of Germany’s total export surplus of about EUR228 billion.

Domestic News
6. U.S. negotiators are preparing to pressure China this week to reform its approach to intellectual property rights of U.S. companies in order to reach a trade deal and avoid raising tariffs on Chinese exports to the U.S. The Ministry of Foreign Affairs of China said that China hopes that Sino-US trade negotiations will achieve good results.
7. According to the Ministry of Commerce of the China, from the lunar New Year’s Eve to the sixth day of the first month (February 4 to 10), the national retail and catering enterprises achieved sales of approximately RMB1,005 billion, an increase of 8.5% over the Spring Festival last year with more favor won by the experience consumption.
8. The comprehensive calculation by the China Tourism Academy (Data Center of the Ministry of Culture and Tourism) shows that during the Spring Festival this year, scenic spots across the country accepted 415 million tourists, with a YOY increase of 7.6%; the tourism income was RMB513.9 billion, with a YOY growth of 8.2%.
9. Due to the loose liquidity and seasonal factors, new loans in China are expected to hit a new monthly high in January. The median forecast of Reuters based on the figures from 30 institutions shows that the new RMB loans in January rose to RMB2,970.5 billion, nearly three times higher than those of last month, slightly higher over the same period of last year. The increase in social financing is also expected to reach an amazing figure of RMB3.3 trillion. The effect of loose credit policy gradually appeared. The M2 growth rate remained at a low level, up slightly by 0.1 percentage points from 8.1% in the previous month.
10. A U.S. official told Reuters that two U.S. warships sailed near the islands over which China claimed to have sovereignty on the South China Sea. At a time when the Sino-US relations are tense, this move may irritate Beijing.