New Zealand Prime Minister Luxon Talks Trade in Meeting With China’s Xi

Economic

Summary:

New Zealand Prime Minister Christopher Luxon emphasized strong trade ties with China during his meeting with President Xi Jinping, while also addressing geopolitical tensions and regional security concerns.

The prime minister of New Zealand stressed the mutual benefits of trade with China in a meeting with Chinese leader Xi Jinping on Friday, while acknowledging their disagreements on geopolitical issues.

Christopher Luxon, on his first visit to China since becoming prime minister in late 2023, flew to Beijing after two days of meetings with officials and business leaders in Shanghai, China’s commercial center.

He wants to maintain healthy trade ties despite differences over regional and global security issues and China’s growing divide with the United States. China is an important market for New Zealand food, dairy and other exports.

Xi told Luxon that the two countries should seek common ground while setting aside their differences, Chinese state broadcaster CCTV said. He called for deepening trade and investment cooperation and exploring cooperation in areas such as climate.

Luxon raised the necessity of reducing tensions in the Indo-Pacific region, according to a news release from his office. He also brought up the importance of what he called “the key role” that China can play in helping to resolve global challenges such as the war in Ukraine,

“In a complex world, open dialogue is more important than ever,” Luxon said in a post about the meeting on X.

His exchange with Xi came one day after revelations that New Zealand had suspended millions of dollars in aid to the Cook Islands over concerns about the latter’s deepening ties with China.

China accounts for more than 20% of New Zealand’s exports of goods and services.

“Our trade and economic links are complementary and contribute to prosperity in both countries,” Luxon was quoted as saying in the news release.

New Zealand announced this week a limited easing of visa requirements for Chinese visitors, a major source of tourism revenue.

Luxon is headed to Europe next, where he will have meetings in Brussels and the Netherlands, his office said.

He will discuss trade, security and geopolitical issues with European Union leaders. In the Netherlands, he is an invited guest to next week’s NATO summit in The Hague.

Source: AP

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Adam

Stocks

London stocks had extended gains by midday on Friday despite uninspiring UK data releases, as worries about possible US involvement in the Israel-Iran conflict abated.

The FTSE 100 was up 0.5% at 8,832.77.

Neil Wilson, UK investor strategist at Saxo Markets, said: "Some temporary relief but not enough for anyone to hang their hats on properly as the situation remains way too unpredictable. Trump has opened a two-week window for a diplomatic solution to the conflict between Israel and Iran - a move that has diminished some of the geopolitical risk premia affecting global markets heading into the weekend. European ministers are due to meet Iran's foreign minister in Geneva today to hash something out.

"Oil retreated along with gold and stocks rose a touch early on Friday as hopes for some kind of de-escalation permeated markets. Let’s be clear though - stocks hadn’t moved all that much in the first place given we’re talking about an extreme tail risk of WW3 erupting that has a more-than-zero probability.

"Base case has started to shift in the direction of direct US involvement, which opens up a pandora's box of mess, but markets seem to be clinging to expectation that it all remains contained like it has in the past. The meeting today is material and could shift the needle - stay sharp."

On the UK macroeconomic front, figures from the Office for National Statistics showed the government borrowed more than expected in May.

Public sector net borrowing came in at £17.7bn. This was up £700m on May last year and £600m higher than the £17.1bn forecast by the Office for Budget Responsibility.

Separate figures from the ONS showed that retail sales fell more than expected in May in what turned out to be a "dismal" month for supermarkets.

Retail sales fell 2.7% following a 1.3% increase in April, which was revised up from a 1.2% jump. Economists were expecting a much more modest 0.7% decline.

The data showed that sales volumes at food stores fell 5% in May following 4.7% growth the month before. This was the largest monthly drop since May 2021.

The ONS said the fall was due mainly to reduced sales volumes in supermarkets, with retailers pointing to inflation and customer cutbacks, alongside reduced sales of alcohol and tobacco products.

ONS senior statistician Hannah Finselbach said: "Retail sales fell sharply in May with their largest monthly fall since the end of 2023.

"This was mainly due to a dismal month for food retailers, especially supermarkets, following strong sales in April. Feedback suggested reduced purchases for alcohol and tobacco with customers choosing to make cutbacks.

"The falls were consistent across all sectors with clothing and household goods stores reporting slow trading due to reduced footfall. There was also decreased demand for DIY items as consumers took advantage of the good weather over the previous few months.

"Looking at the wider picture, retail sales are still up across the latest three-months as a whole."

There wasn’t much happening on the corporate front, but shares in housebuilder Berkeley tumbled as it posted a 5% fall in annual earnings but said it was confident about the future against a backdrop of falling interest rates and government plans to ramp up supply using brownfield sites.

Full-year pre-tax profit came in at £529m, while new house sales rose to 4,047 from 3,521 in 2024.

The company also announced that finance chief Richard Stern would become CEO, succeeding Rob Perrins, who will take on the role of executive chair as chairman Michael Dobson steps down in September after the group's annual general meeting.

source :sharecast

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Michelle

Economic

Forex

The Philadelphia Federal Reserve Manufacturing Index, a key indicator of general business conditions in Philadelphia, has remained steady, according to recently released data. The actual number for the index stood at -4.0, an identical figure to the previous month’s reading.

Interestingly, the actual figure of -4.0 also defied the forecasted number, which had been pegged at -1.7. The prediction suggested a slight improvement in the business conditions, however, the actual data showed that the conditions remained unchanged in the Philadelphia Federal Reserve district.

The Philadelphia Fed Manufacturing Index is compiled from a survey of about 250 manufacturers in the Philadelphia Federal Reserve district. A level above zero on the index indicates improving conditions, while a reading below zero indicates worsening conditions. The steady figure of -4.0, therefore, suggests that the business conditions in the region have not improved since the last reading.

The index carries significant importance as it not only provides insights into the health of the manufacturing sector but also has implications for the USD. A higher than expected reading is typically taken as positive or bullish for the USD, while a lower than expected reading is considered negative or bearish.

In this case, the actual figure of -4.0, which is lower than the forecasted -1.7, could be perceived as bearish for the USD. However, it is essential to note that the figure is not a further decline, but a continuation of the previous month’s conditions.

The steady reading of the Philadelphia Fed Manufacturing Index suggests that manufacturers in the region are still facing challenging business conditions. The data underscores the need for strategies to stimulate the manufacturing sector and improve the overall business climate in the Philadelphia Federal Reserve district.

Source: Investing

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Adam

Stocks

U.S. stock index futures slipped lower Friday, ending the week on a negative note as investors continue to monitor the ongoing conflict between Israel and Iran that has now entered its second week.

At 05:25 ET (09:25 GMT), Dow Jones Futures fell 80 points, or 0.2%, S&P 500 Futures dropped 14 points, or 0.2%, and Nasdaq 100 Futures slipped 54 points, or 0.3%.

Wall Street was closed for the Juneteenth holiday on Thursday, and investors have been wary of placing any big bets this week. The S&P 500 is up marginally so far this week with a gain of 0.1%. The 30-stock Dow has lost 0.1%, while the Nasdaq has advanced about 1%.

Trump to decide on Iran strike in two weeks - White House

President Donald Trump will decide on direct U.S. involvement in the Israel-Iran conflict within the next two weeks, the White House said on Thursday.

Trump was seen still holding out for the possibility of nuclear talks with Tehran, even as hostilities between Israel and Iran showed little signs of cooling. While the president has publicly mused about directly attacking Iran, he has also touted the possibility of nuclear talks with the Islamic republic.

The Israel-Iran conflict, which entered its eighth day on Friday, has kept Wall Street largely risk-off over the past week, as markets feared a wider conflict in the Middle East.

A spike in oil prices, resulting from the conflict, also sparked concerns over energy-driven inflation.

Philly Fed manufacturing survey due

On the economic front, investors will monitor the Philadelphia Fed’s manufacturing survey, followed by the Conference Board’s leading economic indicators reading for May.

The Federal Reserve left interest rates unchanged as expected on Wednesday, with Chair Jerome Powell mostly reiterating the Fed’s data-driven approach to any future interest rates, while also flagging persistent inflation risks from Trump’s tariff agenda.

Powell still forecast at least two interest rate cuts in 2025, but slightly trimmed the Fed’s forecast for rate cuts in 2026.

Trump added to his criticism of Federal Reserve Chair Jerome Powell after the decision, labeling Powell as “destructive” in a Truth Social post on Thursday, adding that the central bank chair is costing the United States “hundreds of billions of dollars” by leaving rates steady.

Markets were also assessing a wave of central bank decisions over the course of the week, including announcements from the Bank of England, Norges Bank, and Swiss National Bank. A murky economic outlook due to Trump’s often erratic trade agenda played heavily into policymakers’ thoughts.

Apple heavily linked to India

In the corporate sector, Apple (NASDAQ:AAPL) is scouting for Indian companies to manufacture the equipment required to build the company’s flagship iPhone devices in the country, Business Standard reported on Thursday.

Apple had earlier flagged plans to drastically increase its iPhone production in India, especially as its manufacturing hubs in China face increased U.S. trade tariffs. While the company still intends to maintain a manufacturing base in China, it has signaled intent to produce all of its U.S.-sold iPhones in India.

Brent slumps on Trump delay

Brent crude futures slumped on Friday following the White House’s comments, although the contract is on course to rise for a third consecutive week.

At 05:25 ET, Brent crude futures -- the price barometer for much of the world’s oil market -- had fallen by 2.2% to $77.15 per barrel. The U.S. West Texas Intermediate crude futures for August edged higher to $73.89 per barrel.

Oil prices spiked by nearly 3% on Thursday, although trading volumes were relatively light due to the U.S. holiday. Oil has broadly gained since the beginning of the Israel-Iran fighting, with traders fretting that the conflict could spill into the wider Middle East region and possibly disrupt crucial supply flows -- particularly in the Strait of Hormuz, which runs along Iran’s southern coast.

Source : investing

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Warren Takunda