Mnuchin: US considering to issue 50-year bond next year

The US Treasury Secretary Steven Mnuchin said the Government is “seriously considering” issuing a 50-year bond next year. He said in the CNBC interview that the Government is looking for cheaper and longer-term ways to finance its debt.

-This is something I have talked about over the last two years, it is something we are very seriously considering. We think there is some demand for it, he said.

For US the longest bond duration now is 30 years and this new 50-year bond would be called ultra bonds.

Regarding the bond demand in the financial markets, the European Central Bank announced today that they will start their asset purchase programme again in November. This means that the ECB will be buying 20 billion euros worth of bonds every month.

 

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US to tighten terror sanctions in the financial markets

The US is tightening terror sanctions in the financial markets. According to the Treasury Secretary Steven Mnuchin and the Secretary of State Mike Pompeo, the Trump Administration is tightening terror sanctions in the financial markets.

– The US is continuing to protect the US and the people from terrorist attacks. The Government has taken new actions related to terrorist organizations, regarding individuals and entities, in the financial markets, the Treasury Secretary Steven Mnuchin said today in the White House press conference.

The press conference was arranged due to the changes in the White House national security. According to the tweet by President Donald Trump he will name the new National Security Advisor next week while John Bolton resigned today.

 

 

 

 

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US-China trade talks continue – Asia shares up

The US and China governments have confirmed that the countries will continue the trade talks again in October. The parties will seek to form a favourable dialogue in order to proceed with the trade negotiations.

According to Wall Street Journal, Chinese Vice Premier Liu He, Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke by phone on Thursday morning Bejing time. Both countries are in the process of raising tariffs if there is no new agreement.

The news was well received by the financial markets and the Asian shares were trading up on Thursday. Nikkei-index was up 2,42 % to 21 148 points, the Hang Seng in Hong Kong up 0,24 % to 26 586 points and the CSI in Shanghai +1,17% to 3952 points.

The dollar was trading up 0,18% to 106,57 yens. The UK sterling was trading down 0,09% to 1,22 dollars after the Brexit votes on Wednesday in London. The UK Parliament decided to block the no-deal Brexit and to prevent the snap elections as well. The voting means that the UK can extend the trade talks with the EU at the end of January 2020.

 

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Mnuchin: US close to resolve steel tariffs – WSJ

According to US Treasury Secretary Steven Mnuchin, the US is close to an understanding with resolving the steel and aluminium tariffs with Mexico and Canada.

Wall Street Journal also reported that according to Mnuchin the US negotiators are likely to travel to Beijing soon to continue the negotiations with China. The goal is to have “free and fair trade” policy with China.

According to Bloomberg, the US President Donald Trump is considering to delay the auto tariffs up to six months in order to avoid the time overlaps with the EU and Japan. The auto industry is vital for the US trade balance, while it is estimated that the half of the US trade deficit comes from automotive.

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China´s Xi Jinping: Focus on stable development

Chinese President Xi Jinping said that the country need to focus on stable economic and financial development according to news agency Xinhua on Saturday.

– It is necessary to focus on preventing risks on the basis of steady growth, while strengthening the countercyclical adjustment of fiscal policy and monetary policy and ensuring that the ecnomomy operates in a reasonable range, Xi said.

According to President Xi, preventing and resolving financial risks, especially systemic financial risks, is a fundamental task, the Xinhua reported.

One of the biggest issues lately has also been the US China trade talks. According to Reuters, the country negotiators met also on Saturday to reach the agreement and trying to prevent the escalation of the trade tariffs.

According to US President Donald Trump and US Treasury Secretary Steven Mnuchin the countries have reached an understanding of the currency issues. The US have argued long time that China´s yuan is undervalued and thus giving trade advantage and partly offsetting the US tariffs. No more information was given about the currency agreement.

It is expected that the President Xi Jinping and Donald Trump would meet next time in March in Florida.

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Brexit: Defeat today in the UK – markets mixed

New Brexit-defeat was today in the UK Parliament, when the MPs voted by 303-258 to reject the UK Goverment´s motion. This means that the Parliament has voted no to the Goverment´s plan to renegotiate the Irish border backstop.

The UK is planning to leave the EU on the 29th March 2019 and the next EU leaders summit will be on the 21st March. It was planned that UK PM Theresa May would  have tried to renegotiate the Irish Border issue with the EU collaques before the EU Summit. According to Prime Minister´s office, the target is still the same, to get a new agreement regarding the backstop.

In the City of London, the FTSE- index was quite stable and gained 0,09% to 7197 points. In Germany, the DAX-index declined by 0,69 % to 11 089 points and in France the CAC40 -index lost 0,23 % to 5062 points.

In Wall Street the financial markets were mixed, while the Dow Jones as down 0,13 % to 25511 points and S&P 500 -index -0,09 % to 2750 points. The Nasdaq was up 0,24 % to 7438 points.

In Asia the stocks ended by 0,23 % decline in HongKong and HangSeng- index was 28 432 points. In Tokyo the Nikkei-index ended down 0,02 % to 21139 points.

According to Bloomberg, the US President Donald Trump is ready to sign a compromise spending legislation that would avoid goverment shutdown and on the other hand would get funding for a border wall. The US-China trade talks are going “very well” and goverment spokesman said that the US President is considering delaying the possible tariffs by 60 days to get the deal done.

The trade negotiations have been led by the US Treasury Secretary Steven Mnuchin and his Chinese collaque Vice Premier Liu He.

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Brexit: No more time – new backstop?

After UK Brexit votes  this week, the situation with the UK- EU is still the same. No new news  – this means that solution is not ready yet. The UK Parliament agreed that the deal could be done if the Irish border issue, the backstop, would have a new approach. What that would be, is still unclear and the EU has said  on Wednesday that there would be no new agreements.

The UK Parliament voted that no new timeline was given, which means that the March 29th exit-day is still valid. Prime Minister Theresa May was granted a mandate to negotiate with the EU collaques about the Irish border issue. According to news agencies, she is not travelling to Brussels this week any more.

The UK Parliament is having the Brexit-vote on Valentine´s Day, the February 14th and according to Bloomberg, some EU diplomats are expecting to have the EU summit about the Brexit on the March 21-22.

The financial markets have seen increasing prices in spite of the turbulence in this Brexit-matter. For example in London the FTSE 100 -index ended up 1,58 % to 6941 points, but also the Wall Street increased to new level due to the news that the Federal Reserve will be “patient” with the future interest-rates moves. The Feds Funds Rate is now at 2,25 – 2,50 percent and the Fed is still having the 2 percent inflation target.

Dow Jones was up 1,61 % to 24976 points, the S&P 500-index was up 1,51 % to 2679 points and technology-index Nasdaq was up 2,01 % to 7169 points.

The US-China tradetalks are having a new chapter when the Chinese economic advisor, Vice Premier Liu He is meeting with the US Treasury Secretary Steven Mnuchin today and tomorrow.

In Asia, the stockmarkets were mixed while the HangSeng increased by 0,40 % to 27642 points and the Nikkei-index in Tokio decreased by 0,52 % to 20 556 points.

 

 

 

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