- North Korea-US Summit back on the cards
- North American Free Trade Agreement negotiations continue
By Killian Greenwood
Financial markets are reflecting signs of stress from the Italian political uncertainty; a development that has led to Euro weakness over the weekend. Italy appears to be heading back to the polls, and there is a good chance that the two leading anti-establishment parties that won the last vote could increase their vote share in the rerun.
The prospect of both Liga and the Five Star Movement increasing their mandate when polls are eventually held have caused fresh concerns for the Euro, which is seen to be the worst performing major currency on a rolling monthly basis, thanks to a combination of under-par economic data releases and renewed political uncertainty surrounding Italy.
North Korea-US Summit back on the cards
The summit on 12th June between Kim Jong-un and Donald Trump seems to be back on and the US and North Korea are making preparations. On the North Korean side, Kim Jong-un’s chief of staff, Kim Chang Son, flew to Singapore via Beijing overnight. Separately, head of national intelligence for North Korea, Chief Kim Yong-chol, is flying to Washington.
On the US side, White House Deputy Chief of Staff for operations, Joe Hagin, flew to Singapore from Japan with other officials. Trump talked separately with Japan’s Prime Minister, Shinzo Abe, on the phone yesterday. The White House said Trump and Abe “affirmed the shared imperative of achieving the complete and permanent dismantlement of North Korea’s nuclear, chemical, and biological weapons and ballistic missile programs,” and confirmed they would meet before the Kim-Trump summit.
St. Louis Federal Reserve President, James Bullard, urged caution on a further interest rate hike in the near term at a seminar in Tokyo. The reasons he gave were as follows: firstly, market-based inflation expectations in the US remain somewhat low. Second, the current level of the policy rate appears to be neutral, meaning it is putting neither upward nor downward pressure on inflation.
North American Free Trade Agreement negotiations continue
Canadian Foreign Minister, Chrystia Freeland, will fly to Washington today to continue North American Free Trade Agreement (NAFTA) negotiations. Her spokesman, Adam Austen, said she will be there on Tuesday and Wednesday, and added that “we’ve said all along we are ready to go to Washington at any time”.
A spokesman for US Trade Representative, Robert Lighthizer, said Freeland would meet the US trade chief today, but did not give details of the meeting. Mexican Economy Minister, Ildefonso Guajardo, said last week that there is around 40% chance of concluding NAFTA talks before Mexican presidential election on 1st July. But Guajardo will not be there at the Tuesday meeting. Instead, he is in Paris for meetings of The Organisation for Economic Co-operation and Development (OECD) and World Trade Organization (WTO).
On the data front…
The Japanese unemployment rate was unchanged at 2.5% in April.
Later today, the US will release Standard & Poor’s Case-Shiller House Price Index, but the main focus for markets is on the US consumer confidence data, due to be released at 3pm today.