Heads up: ECB president Lagarde to speak later in the session
Lagarde is scheduled to speak at 0815 GMT today She will be delivering a short keynote speech at the 30th Frankfurt European Banking Congress, carrying the theme "Towards a New Sustainable Growth Model". Given the backdrop, I would expect this to be more related to green financing and climate change potentially. Hence, there might not be much heavy policy remarks by Lagarde today.
Japan sends mixed signals on a sales tax hike
Japanese authorities have been pretty consistent in dismissing a sales tax hike as an option, but perhaps the ushering in of a new PM might bring a change? Aso floats the idea - says it would be one option in spending and revenue reform. Meanwhile Japan's chief cabinet secretary Suga, currently seen as the front-runner to become Prime Minister says he believes in prioritising economic revitalisation - says fixing fiscal health is impossible otherwise. Suga adds a consumption tax hike is not needed for the next 10 years. Mixed signals.
Thailand examining a land passageway to connect the Indian and Pacific Oceans
Thailand is looking to construct a land passageway that would connect the Indian and Pacific Oceans, bypassing one of the world’s busiest shipping lanes. The Strait of Malacca, a narrow sea lane between Malaysia and Singapore, is currently the shortest sea route linking the Asia-Pacific region with India and the Middle East. About a quarter of the world’s traded goods pass through it each year. “The Strait has become quite congested,” Transport Minister Saksiam Chidchob said in an interview last week. “Using an alternative route through Thailand would cut shipping time by more than two days, which is very valuable for businesses.” Thailand plans to build two deep seaports on either side of the country’s southern coasts, and link them via highway and rail, according to Saksiam. The 100-kilometer “land bridge” would replace an existing proposal to dredge a canal through the isthmus. That would cause too much destruction to the environment, he said. The idea for a canal that would traverse the nation’s narrowest point and trim the travel distance by 1,200 kilometers (745 miles) has been put forward and dismissed several times over the past few decades. The government has approved a 75 million baht ($2.4 million) budget [...]
China services PMI improves again
Some minor swings for currencies on the session here and some notable news flow over the weekend and through the trading session here Monday. Head of the US FDA said he was willing to fast track vaccine approval outside of normal scientific testing and procedure if benefits outweighed costs (which is what the normal process is supposed to show but there you go). In China a vaccine candidate was approved for emergency use. These two items underpinned sentiment early in the session. On the flip side of the coronavirus issues the French health ministry said rocketing case numbers there were 'very worrying'. Japanese share markets took heart from the news that Warren Buffett's Berkshire Hathaway had acquired 5% stakes in each of the 5 biggest Japanese trading companies, totalling around USD $6bn worth. On the data front the focus was on official China PMIs for August which came in steady to better and firmly in expansion. The manufacturing measure did miss expectations slightly, likely due to the widespread flood impacts in the month. Non-manufacturing was more encouraging though, indicating an improving consumer sector. While on China, the country launched a second, separate investigation into Australian wine imports - a countervailing [...]