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For all the tension in US-China relations this week, it now looks like at least one point of contention has been taken out of play, at least for the time being: the renminbi.

US President Donald Trump announced on Wednesday that he would not label China a currency manipulator because it would hurt talks over North Korea. “They’re not currency manipulators,” he said.

Readers with a particularly keen memory may recall that in an interview with the FT last week, Mr Trump said, regarding China: “when you talk about currency manipulation, when you talk about devaluations, they are world champions”.

Mr Trump also said the dollar was getting “too strong”, which served to send foreign exchange markets into a panicked reaction that weakened the dollar and – to the likely relief of policymakers in Beijing – helped push the offshore renminbi’s exchange rate about 0.25 per cent stronger to Rmb6.8824 per dollar.

On Wall Street the S&P 500 lost ground on Wednesday as treasuries extended a rally and gold rebounded as a risk-off sentiment proved resurgent. German government bonds inched higher ahead of France’s presidential election and Brent crude oil gave up early gains in spite of US crude inventories falling for the first time in four weeks.

In Asia Pacific equities, futures tip Sydney’s S&P/ASX 200 index to dip 0.5 per cent at the open, while in Tokyo the Topix is set to open 0.4 per cent lower and Hong Kong’s Hang Seng is expected to drop by the same amount when trading begins.

Corporate earnings reports out today include Nomura, Fast Retailing, Infosys, YTO Express, Japan Retail Fund Investment, Beijing Capital Development and GLP J-Reit.

The economic calendar for Thursday feels like a Friday (all times Hong Kong):

  • 07.50: Japan M2 and M3 money supply
  • 08.00: Singapore advance Q1 GDP
  • 09.00: Bank of Korea interest rates decision (expected)
  • 09.30: Australia unemployment rate
  • 10.00: China imports, exports and trade balance (expected)

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