The World Trade Organisation (WTO) ruled that American tariffs on Chinese goods violate international rules. A panel of three WTO trade experts said the US broke global regulations when it imposed tariffs on Chinese firms in 2018. The Trump administration says its tariffs on more than $200 billion in Chinese goods were justified because China was stealing intellectual property and forcing US companies to transfer technology for access to China’s markets. WTO’s three-member panel said the US duties broke trading rules because they applied only to China and were above maximum rates agreed to by the United States. While the ruling handed China a victory on paper, it means little since the US has already dismantled the WTO panel that oversees the appeals process.
UK unemployment rose for the first time since March increasing calls for the government to keep the current job subsidy scheme. Chancellor of the Exchequer Rishi Sunak gave the strongest hint yet that he’ll support UK jobs after the government’s furlough program ends next month. Inflation also fell to 0.2%, indicating a weak domestic demand. The Bank of England has forecast that unemployment will hit 7.5% at the end of this year, when it is expected to expand its bond-buying stimulus programme again. The Bank of England is set to meet tomorrow and likely to signal that it is getting ready to pump more stimulus into Britain’s coronavirus-hit economy.
Asian currencies took the main stage as the Japanese yen inched higher following rising expectations of an accommodative FED hurting the US dollar, while the Chinese yuan extended gains further, one day after data pointed to better prospects for the world’s second-biggest economy. Through the Asia session, the yen rose 0.2%. The Australian dollar rose by the same margin to $0.7314 and the New Zealand dollar also edged higher to $0.6728. The euro was steady at $1.1857 and sterling kept below $1.29.
The EU is set to give finance firms 18 months of access to critical derivatives infrastructure in the UK after the end of the Brexit transition period, removing the most pressing concern for the industry ahead of a potentially chaotic divorce. Italy meanwhile insisted that the bloc shouldn’t pull out of trade talks with the UK despite Boris Johnson’s plan to renege on parts of the divorce accord. The UK government has called the new Internal Market Bill an “insurance policy” in case the EU “does not take the revolver off the table”, as the rhetoric between the two unions becomes more aggressive towards the ends of the negotiations.