Xi visits Trump, copper in focus
The FT's Seb Morton-Clark looks at some of the big stories in the coming week, including Chinese president Xi Jinping's first meeting with US President Donald Trump, the CRU copper conference in Chile and the US jobs report.
Produced by Seb Morton-Clark. Edited by Petros Gioumpasis. Filmed by Nicola Stansfield.
Hello and welcome to "The Week Ahead" from the Financial Times in London. Here are some of the big stories we'll be looking at in the coming days. Chinese premier Xi Jinping visits the US for his first meeting with President Donald Trump. The copper industry gathers in Chile to discuss the health of the sector. And US jobs figures are released.
First, President of the People's Republic of China Xi Jinping heads to Florida this week for a meeting with US President Donald Trump at his Palm Beach resort. The visit will set the tone for the relationship between the world's two largest countries in terms of economic and, increasingly, political clout, but goals diverge. Mr. Trump wants investment pledges while not appearing soft on a country he has said is ripping off America. And Washington wants Beijing's help with North Korea, one of the thorniest security problems in Asia.
On the other hand, the Chinese hope the visit will burnish Mr. Xi's image as a global leader, as the Trump administration retreats from American-led trade and climate deals. Other Chinese targets range from reassurance that Mr. Trump won't enact punishing tariffs to a calming of tensions around the South China Sea. Our emerging markets editor, James King, says the biggest issues to watch will be concerning communication and trade.
The communication issue really is allowing Xi Jinping and Donald Trump to sit down in a fairly informal, relaxed atmosphere and straighten out some of the problems that have largely been caused by Donald Trump's position as the tweeter-in-chief in the US. So the second point is on trade, and this is a really big, substantive issue. Just recently, the US engineered the dropping of a key phrase within the G-20 grouping of countries' communique that said that the G-20 was implacably opposed to protectionism everywhere. So from that, people are getting very concerned that the US may be limbering up for a more protectionist stance, partly towards China and partly towards other countries in the world.
The trade issue for China is huge. The US is its biggest export market, with two-way trade being around $516 billion last year. But it's also significant for Americans. Consulting group Oxford Economics estimates about 2.6 million US jobs are created by trade with China.
Now this week, the global copper industry will gather in Chile, the world's largest producer of the red metal, for the annual CESCO conference. The meeting comes at a critical point for the industry. Speaking at the FT's Commodities Summit, here's our metals and mining correspondent, Henry Sanderson, with more.
The meeting comes as workers at Escondida, the world's largest copper mine, have decided to return to work after a 43-day strike. That's the longest strike in Chile since 1973. The workers have decided to try again in 18 months, after talks collapsed with BHP Billiton, one of the world's largest resources companies. So that will be a key topic of the conference. The other key focus will be copper prices, which have barely rebounded, despite the strike and the lost output from the mine.
Some analysts think the stubborn price could be due to a large volume of scrap copper coming on the market after prices recovered last year from their lowest level since the financial crisis. The conference will also discuss what the strike might mean more broadly for copper miners the country. In the wake of the commodity crash, mining companies have focused on how to cut labour costs and improve productivity, usually through technology. But productivity in Chile has fallen, even as workers' salaries and benefits have increased.
And finally, the latest snapshot of the US labour market is due out on Friday, with implications for policymakers. Figures are expected to show that job growth in the largest developed economy cooled in March, with initial estimates suggesting the economy created 175,000 jobs. That compares with 235,000 in February, when job gains helped push the US unemployment rate down to 4.7% from 4.8%. The non-farm payroll report is also expected to show that the unemployment rate held steady, while average hourly earnings inched up 0.23% in March from the previous month.
For now, the Fed has continued to signal two additional rate rises this year. Signs of wage inflation and upbeat job growth could help bolster their case. FT reporter Mamta Badkar explains how the figures could play into Fed discussions.
So the Fed, which lifted interest rates in March, is continuing to watch the US labour market. Fed chair Janet Yellen has indicated that the path of monetary policy tightening will remain gradual, but she has said that the US labour market is close to full employment. The one factor to consider is Minneapolis Fed president Neel Kashkari, who opted to leave interest rates unchanged when the Fed met last month, has argued that the U6 unemployment rate, which is a broader measure of unemployment, and it also looks at underemployment, continues to be elevated. So that is a factor that investors will like to keep their eye on.
And that's what the week ahead looks like from the Financial Times in London. See you again next time.