The annual Strategic and Economic Dialogue kicked off in Beijing today with an address by Chinese President Xi Jinping stressing the importance of cooperation with the U.S. This year’s summit begins as growth expectations for both nations are moderating. A survey released by the National Association for Business Economics over the weekend revealed a consensus forecast for U.S. GDP slipping below an annualized pace of 2 percent for 2016 to a multiyear low. Meanwhile, market concerns over monetary policy and debt levels in China inspired U.S. Treasury Secretary Jacob Lew to allude to the need for greater policy transparency in his address to the summit. While geopolitical and military concerns will also factor heavily in this year’s gathering of officials, concerns over diminished prospects for global demand will cast a long shadow over discussions.
Line to go public. Bloomberg News reported today that Line Corp., a Japanese messaging apps producer, is preparing for an initial public offering with listings in Tokyo and New York that could result in a total market capitalization of more than $5 billion. According to unnamed sources in the report, Line, a subsidiary of Korean-based Internet search company Naver Corp., and its underwriters are seeking to place roughly half the shares offered with U.S. investors. If successful, the IPO would be the largest tech IPO in 2016 so far.
German factory orders slump. April factory order data released today by the Deutsche Bundesbank revealed that new business for German manufacturers declined for the month. Total orders declined by 2 percent versus March, or 0.5 percent year-over-year with declining export demand as a primary driver. Orders from outside the common-currency region contracted by 13 percent versus April in 2015.
Mixed Brexit poll results leave currency markets guessing. A poll by YouGov on behalf of U.K. commercial television network ITV released over the weekend indicated a narrow single-digit lead for U.K. voters intent on leaving the European Union. Several published polls in recent weeks had suggested that Prime Minister David Cameron was succeeding in convincing his country that exiting the EU would be an economic and political mistake. In response to the ITV poll, the pound sterling declined against all major currencies to reach a multiweek low versus the U.S. dollar.
Chinese company to buy soccer club. The announcement that Chinese retailer Suning has agreed to pay more than $300 million to acquire majority control of F.C. Internazionale Milan, or Inter Milan, sent shock waves across the European soccer community. The acquisition marks the first time that a major Chinese company has bought a top-level soccer franchise. Inter Milan has not qualified for the Championship Leagues for four years, in part because it has struggled to compete with better-capitalized rivals.
Clinton wins Puerto Rico. Former Secretary of State Hillary Clinton secured a victory on Sunday in the Democratic Party presidential primary in Puerto Rico, following a decisive win in the Virgin Islands on Saturday. With only 30 more delegates required for Clinton to secure her party’s nomination, the presumptive candidate still faces stiff opposition from Vermont Senator Bernie Sanders. The Democratic primaries end tomorrow, including contests in New Jersey and California.
