Trump visits Asia, Burberry results
The FT's Josh de la Mare previews some of the big stories in the week ahead, including the five-nation visit to Asia by US President Donald Trump, latest economic data from Europe, and results from global fashion brand Burberry.
Words by Simon Greaves and Claire Jones. Edited by Filip Fortuna. Studio filmed by Rod Fitzgerald and Andy Mitchell. Images from Getty and Reuters. Produced by Josh de la Mare.
Hello, and welcome to The Week Ahead, from the Financial Times in London. Here are some of the big stories we're watching this week. North Korea and trade top the agenda on Donald Trump's 10-day visit to Asia. The latest economic data on Germany and Europe is published. And Burberry brings up results, amid big changes at the top of the fashion brand.
US President Donald Trump this week starts a 10-day, 5-country tour through Asia. The trip, Mr. Trump's longest yet, comes at a tense moment in the region, with the threat of North Korea's expanding nuclear programme still looming. Mr. Trump's interactions with Chinese President Xi Jinping will be scrutinised, especially in Asian countries trying to balance relationships with both Washington and Beijing.
The trip, which includes stops in Japan, South Korea, Vietnam, and the Philippines, as well as China, also puts pressure on the White House to better define what some experts say is a muddled Asia strategy. However some observers believe time away from Washington will offer the president a brief respite from the Russia-related revelations and terrorism issues that have occupied his administration in recent days. Chief foreign-affairs commentator Gideon Rachman has this analysis.
The overarching issue, clearly, is going to be the crisis on the Korean peninsula, where Donald Trump has sworn that North Korea will not be able to develop an intercontinental ballistic missile that can hit the United States. The North Koreans are getting very close. He will be talking to allies in Japan and South Korea, and particularly to the Chinese, about what further pressure can be put on North Korea and maybe even discussing, if there were military action, how would everybody handle the fallout from that.
But there'll be other issues, as well. The South China Sea, where the US and China have a continuing dispute, is important. And then, above all, trade. Mr. Trump talked very protectionist, as a candidate, put a lot of protectionists into the White House, has threatened China with trade action, but is also showing up in Beijing with a lot of CEOs in tow. So it will be very important to see how the Chinese and Americans manage those trade tensions, and can they make a deal on that front?
Now, one of the surprise economic success stories of this year has been the strength of the eurozone's economy. After years of sluggish growth and slow unemployment, the recovery in the single-currency area is now strengthening, and not only in the region's stronger parts. Places like Italy which until now have performed poorly are returning to better health.
This week sees the release of business surveys which will offer an early indication of whether the region's economic performance has continued into the final months of the year. Frankfurt bureau chief Claire Jones has more.
So there's no doubt that the eurozone's recovery has been pretty strong this year. Last week, we saw figures for growth for the third quarter. They showed that growth is still very strong in the region.
We also saw data that showed unemployment has fallen to a new post-crisis low. What we get this week are the latest purchasing-managers' indices, and they're going to tell us whether or not that strong performance of the region's economy continued into the fourth quarter of this year. I'd expect them to show that it did, even though the euro's been a bit stronger of late-- over the summer, it appreciated quite a lot against the dollar. It seems that export activity has held up pretty well. And growth should remain decent, going into the final quarter of 2017.
Now, investors in classic fashion brand Burberry will be looking to see if its sustained fall in profits is ending, when it reports first-half results on Thursday. Last week, it announced visionary designer Christopher Bailey was abandoning his three-year struggle to carve out a role at the top of the brand he helped rescue from catwalk oblivion. Analysts say replacing Mr. Bailey after 17 years, in which he made Burberry into a showy, sartorial expression of Britishness, could be even harder than the commercial challenges the brand faces, such as the decline of American department stores and a corruption crackdown that has made Chinese consumers shun conspicuous consumption. Retail correspondent Mark Vandevelde says all eyes will be on new chief executive Marco Gobbetti's plans for Burberry's renewal.
Financially, Burberry is a huge British export. They make most of their sales outside the UK. And so, whereas lots of British companies have been struggling as the pound has fallen, Burberry has actually done very well, because it's not made much difference to their costs in the UK but it's increased the value of the stuff that they sell overseas. But actually, in a way more interesting than the financial news that we get will be Marco Gobbetti, the new chief executive, setting out his stall, saying where he's going to take the company, how he's going to improve on his predecessor's record, in which profits have gone backwards for a number of years.
His predecessor, Christopher Bailey, was also the chief creative guy in charge of Burberry, and he announced his departure this week. So people will also be looking for any hints about who might replace him. Can they find comparable talent to replace this guy who created incredible magic around the Burberry brand?
And that's what the week ahead looks like, from the Financial Times in London. Goodbye!