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Trump Says Need to Address Unfair Trade Practices

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Deals in China, worries in Saudi Arabia and talks in Brussels. Here are some of the things people in markets are talking about today.

Unfair Trade 

President Donald Trump said that China had taken advantage of America with unfair trade practices in a speech alongside President Xi Jinping this morning. The Chinese leader did not address Trump’s comments in his own remarks in which he reiterated his government’s commitment to opening up the economy. While the visit to China has seen the announcement of $250 billion in business deals, scratching the surface of that number shows many of the agreements lack substance, with mostly non-binding memorandums of understanding that could take years to materialize.

Moving money

The continuing crackdown in Saudi Arabia has billionaires and millionaires seeking to move assets from the kingdom and the wider Gulf Cooperation Council region. The moves come amid the freezing of personal bank accounts and after Saudi attorney general said in a statement earlier this week that the weekend arrests were only “phase one.” For investors, the big question is whether the shakeup spurs greater economic liberalization, or if it constitutes a Machiavellian power play.

Brexit talks

Negotiations on the U.K. exit from the European Union resumed this morning in Brussels with no indication that a breakthrough is on the cards. The continuing political crisis in Britain adds further pressure to the talks, as the EU side is waiting for the U.K. to make on offer on the size of the divorce bill. In further bad news for Prime Minister Theresa May, the latest forecasts from the European Commission published this morning show that the British economy will post the slowest growth in 2019 since the height of the financial crisis a decade earlier, even if all current trading relationships are maintained. 

Markets slip

Overnight, the MSCI Asia Pacific Index gained 0.1 percent, while shares in Japan slumped with the Nikkei 225 Stock Average ending 0.2 percent lower after an afternoon session that saw its biggest reversal on a points basis since exactly a year ago. In Europe, the Stoxx 600 Index was 0.2 percent lower at 5:45 a.m. amid disappointing corporate results. S&P 500 futures were down 0.2 percent, the 10-year Treasury yield was at 2.320 percent, and gold was unchanged.

Fiscal update

Today is crunch day for Republican tax writers. The House Ways and Means Committee is in its final day of negotiating legislation, while the Senate prepares to reveal a a blueprint of sorts. Analysts say that the bill still favors the top 1 percent, who may see income gains that are triple those for middle-income earners. Negotiations are succeeding in one respect: taking attention away from the looming threat of a government shutdown, with current funding expiring on Dec. 8

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