NZ dollar lifted as Donald Trump predicts great deal with China

Andrew Cummings
November 1, 2018

The US is preparing to announce by early December tariffs on all remaining Chinese imports if talks next month between presidents Donald Trump and Xi Jinping fail to ease the US-China trade war, three people familiar with the matter said. Trump has also threatened to impose tariffs on the remaining goods imports from China, which previous year were worth $505 billion.

So far the USA has so far placed $250 billion in taxes on imported Chinese goods, about half of all imports from China, and the taxes on most of those goods are set to rise on January 1. The Shanghai Composite index rebounded 1 percent to 2,568.05 and South Korea's Kospi picked up 0.9 percent to 2,014.69.

New Zealand's two-year swap rate rose 1 basis point to 1.99 per cent; the 10-year swaps were unchanged at 2.78 per cent.

With the initial market reaction, Wall Street came under a heavy selling pressure and Nasdaq was last seen down 1.26% on the day while the DJIA and the S&P 500 indexes were losing 0.25% 0.05%, respectively.


Both Trump and Xi are expected to attend next month's G20 summit in Buenos Aires, where they could meet.

Among industrials, Boeing sank 6.6% to $335.59.

Tariff "wave" the stock market gains away. Microsoft shed 2.9 percent to $103.85.

Amazon.com dropped 6.3% to $1,538.88.


Oil prices fell more than 1 percent in choppy trading on signs of rising supply and concern that global economic growth and demand for fuel would be hit by a deepening of the U.S. The Nasdaq has dropped 13% from its August 29 record high.

"I think we will make a great deal with China, and it has to be great because they've drained our country", Trump said. "A trade war with China was one of the bigger overhangs".

China's ambassador to the USA said on Tuesday that the "goodwill" and "wisdom" of the Chinese and American people would carry the countries through a tense period in their relations, and that "we have heard enough" of trade war threats and territorial sabre rattling.

"And I have $267 billion waiting to go if we can't make a deal", Trump said. The average flirted with a correction earlier Tuesday and is still down more than 8 percent in October, on track for its worst month of the bull market.


China has retaliated with its own tariffs against USA goods, but continues to maintain that there can be no winners in a trade war.

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