“China Won’t Weaponize the Yuan in Trade War, PBOC Official Says.”
Chinese central bankers vowed to keep their nation’s currency stable and to not deploy it as a weapon in the trade conflict with the U.S., helping the yuan reverse some of its recent plunge.
People’s Bank of China Governor Yi Gang said China will «keep the yuan exchange rate basically stable at reasonable and balanced level,» a repetition of standard language that helped stoke speculation that policy makers are prepared to take tougher actions to arrest the plunge in the currency.
Later Tuesday, Sun Guofeng, head of the central bank’s financial research institute, said that the currency’s decline isn’t the result of China deliberately weakening it to gain an advantage over the U.S.
The yuan is the worst performing currency in Asia over the past three weeks, losing 3.7 percent against the dollar as the domestic economy slows and the nation slides closer to a trade war with the U.S. A failure to contain the tumble will feed speculation that officials are effectively depreciating the currency to defend against the effects of trade tariffs. The yuan erased losses to advance in onshore and overseas markets after Yi’s comments.
While there were no heavy-handed actions in the market, there were some signs of mild, suspected intervention during morning trading on Tuesday. Some major Chinese banks sold the dollar after the yuan slid past 6.7 per greenback, a move that strengthened the currency above that level, according to four traders who asked not to be named. Read about why analysts and traders expected China to defend the yuan at 6.7 per dollar.
“Shouting CEO, changing rules: inside Tesla’s Model 3-building sprint.”
A tense and short-tempered Chief Executive Elon Musk barked at engineers on the Fremont, California assembly line. Tesla Inc pulled workers from other departments to keep pumping out the Model 3 electric sedans, disrupting production of the Model S and X lines. And weekend shifts were mandatory.
Tesla pulled out all the stops in the final week of June to meet its goal of making 5,000 Model 3s in a week, according to employees who spoke to Reuters. Whether Tesla can do it week in and week out – and without relying on overtime and extra hands – is another question, and one that weighed on investors Monday, as shares slumped 2.3 percent.
Leading up to Sunday morning’s production milestone, Musk paced the Model 3 line, snapping at his engineers when the around-the-clock production slowed or stopped due to problems with robots, one worker said. Tesla built a new line in just two weeks in a huge tent outside the main factory, an unprecedented move in an industry that takes years to plan out its assembly lines, and said the tented production area accounted for 20 percent of the Model 3s produced last week.
Disruption of the Model S and X lines could threaten Tesla’s target of building 100,000 of those vehicles in 2018. Tesla built 49,489 of those cars in the first half of this year. Asked about the potential S and X impact, Tesla said it also produced 1,913 of those vehicles during the last week of the quarter along with its Model 3s.
Tesla said it built a total of 28,578 Model 3s in the second quarter, and 40,989 since production began last July. Last week’s big push also brought a rewrite of the employee attendance policy. After mandatory weekend shifts were assigned, two workers said, Tesla rescinded a policy promising workers at least one week’s notice before weekend work.
“Malaysia 1MDB: Ex-Prime Minister Najib arrested by anti-corruption officials.”
Former Malaysian prime minister Najib Razak has been arrested by anti-corruption authorities and is due to be charged on Wednesday. Mr Najib, who has long been plagued by allegations of corruption, has been accused of pocketing $700m (£517m) from state development fund 1MDB. Billions of dollars are unaccounted for from the fund, set up by Mr Najib.
He has been under investigation since his shock election loss in May. Mr Najib denies wrongdoing. According to a statement by the 1MDB special task force, Mr Najib was arrested at 14:35 local time (06:35 GMT) at his house in relation to matters dealing with SRC, a subsidiary of 1MDB. He will be charged at 08:30 on Wednesday at the Kuala Lumpur High Court.
Raids in recent weeks have been carried out across properties linked to Mr Najib. Police say they recovered $273m in luxury goods and cash from a raid in June, calling the seizure of valuables the biggest in Malaysian history.
Jewellery accounted for the biggest portion of the seizure, with the most expensive item being a $1.6m diamond and gold necklace. Mr Najib has always denied the corruption charges and had been cleared by Malaysian authorities while in power, but he is being investigated by several other countries.
He has been banned from leaving Malaysia. 1MDB, set up by Mr Najib in 2009, was meant to turn Kuala Lumpur into a financial hub and boost the economy through strategic investments. But it started to attract negative attention in early 2015 after it missed payments for some of the $11bn it owed to banks and bondholders.
Then the Wall Street Journal (WSJ) reported it had seen a paper trail that allegedly traced close to $700m from the fund to Mr Najib’s personal bank accounts. Mr Najib has consistently denied taking money from 1MDB or any public funds.
“Oil Surges Above $75 in New York as Supply Outages Outpace OPEC.”
Crude soared above $75 a barrel in New York for the first time since 2014 on signs global supply outages outweigh OPEC’s pledged production rise.
Futures in New York jumped as much as 1.7 percent. Even as U.S. President Donald Trump — facing sky-high retail gasoline prices ahead of midterm elections — pushes Saudi Arabia to boost output more than it planned, outages around the world from Libya to Canada and Venezuela are keeping prices elevated. U.S. crude stockpiles, already the lowest since January, are expected to tighten further.
The market “is anticipating a very bullish number” in Thursday’s inventory report, said Bob Yawger, director of futures at Mizuho Securities USA Inc. in New York. “All eyes will be on that Cushing number.”
Oil is surging as the U.S. pushes allies to end imports of Iranian crude, as global supply disruptions persist and American crude inventories are already at the lowest since January. Morgan Stanley raised its Brent crude forecast to $85 a barrel through to the third quarter of 2019, citing a tighter market than previously anticipated.
West Texas Intermediate crude for August delivery jumped $1.19 to $75.13 a barrel at 9:41 a.m. on the New York Mercantile Exchange.
The premium for near-term U.S. oil over longer-dated contracts increased as analysts forecast continued shrinking supplies in the key Cushing, Oklahoma, supply hub. The prompt WTI spread was at $2.41 on Tuesday after closing at its widest since 2014 on Monday.