US-China trade talks, Danske Bank results, Japanese groups' earnings
The FT's Veronica Kan-Dapaah looks at the main stories making the news this week, including resumed US-China trade talks, results from Danske Bank and leading Japanese groups, and US employment data
Written by Simon Greaves, Kana Inagaki. Produced and directed by James Sandy. Studio filmed by Rod Fitzgerald
Here are some of the stories we'll be watching this week. China's vice premier will visit Washington for trade talks. Danske Bank will publish full-year results following their money-laundering scandal. There will be non-farm payroll data from the United States. Plus, tech giants Nintendo and Sony will lead earnings results from Japan.
First up, Washington will host China's vice premier, Liu Hao, for trade talks on Wednesday and Thursday. The latest round of negotiations are aimed at resolving a trade war between the global economic superpowers. President Donald Trump and Chinese President Xi Jinping agreed to call a truce over tariffs for the first 90 days of this year. The US negotiators have been upbeat about the prospects of resolving the dispute following recent talks in Beijing, but as our World Trade editor, James Politi, reports, the process still faces significant challenges from both sides.
In the last few weeks, negotiators from both countries have made some progress in tackling some of the easier issues in the economic relationship. The Chinese are agreeing to purchase more US goods in certain areas and in particular farm goods. But they still have to tackle the thornier issues between the two countries, such as US allegations that China is forcing their companies to transfer technology and stealing intellectual property and essentially unfairly gaining a leg up in the race for the technologies of the future.
Staying in the United States, January's non-farm payroll data will be released on Friday. The figures will publish amid the longest partial government shutdown in the country's history. Despite strong economic performance elsewhere, events in Washington could tarnish employment figures, as Mamta Badkar reports.
The economy is expected to have created 160,000 jobs and average hourly earnings are projected to have increased by 0.3 per cent month on month. Now the data comes at a time when officials at the Federal Reserve have urged a more patient and prudent approach to monetary policy, even as they characterise the US economy as being strong. Investors will scrutinise the data for additional clues on the health of the US labour market and signs of rising wage pressures as they try to assess if the Fed will take a more dovish approach to policy going forward.
Now to Denmark, where Danske Bank will publish its full-year results on Friday. Danske has been investigated in several countries about a 200 billion euro money laundering scandal revealed last year. The company's chief executive, Thomas Borgen, resigned in the wake of the scandal, but the fallout is far from over. The FT's Nordic and Baltic correspondent, Richard Milne, has more analysis.
They've been under attack from numerous investor lawsuits. It looks like the French prosecutors are going to upgrade them from an assisted witness to being a company under suspicion. And so investors will be looking at these results for any clues about the extent of the money laundering scandal, how much it might cost, but I think they'll also be looking at whether the scandal is starting to affect the underlying business. And there are signs that customer confidence, especially here in Denmark, is being undermined by this scandal.
And finally, Japan Inc kicks off its earnings season this week, with the results expected from Sony, Nintendo, and Nomura. The impact from the US-China trade war has cast a shadow over Japanese business in recent months. The country's largest broker, Nomura, is likely to face a souring of investor sentiment over concerns about global growth. In Sony's case, investors will be paying particular attention to its struggling smartphones business, but there'll also be a keen interest in the battle of the consoles as the company goes head to head with longtime rival, Nintendo. The FT's Kana Inagaki has more.
With both Sony and Nintendo announcing results next week, the big focus will be on the console battle between the PlayStation 4 and the Switch. At the recent consumer electronics show in Las Vegas, Sony announced some impressive figures. The PS4, which is already in its fifth year since release, has sold 5.6 million units during the holiday period. While sales continue to be robust, investors are paying attention to when Sony will develop its next generation console. Shares in rival Nintendo have been hit hard over the past year on concerns about slower-than-expected sales of the Switch. Analysts are hoping that the quarterly results will be a catalyst for a rebound.
And that's what the week ahead looks like from here at the Financial Times in London.