If the weekend began with deliberation over what impact the wedding between the royal prince and the Hollywood actress would have on the ‘special relationship’ between the UK and US, it ended with a clear statement that America was casting its attention east in the search for more cordial relations.
Steve Mnuchin, the US Treasury secretary, confirmed on Sunday that Washington’s plans to impose tariffs on up to $150bn of imports from China would be halted, putting a potential trade war between the world’s two largest economies “on hold”. News of the deal bolstered most Asia-Pacific equities and the yen passed the ¥111 per dollar mark.
Mnuchin’s comments followed a joint statement from the two nations on Saturday in which Beijing promised to ramp up its purchases of US goods and services, thus reducing a trade imbalance that currently sits at approximately $335bn. However, Chinese negotiators resisted committing themselves to the White House’s firm figure of $200bn annually.
Chinese Vice-Premier Liu He described the deal as a "win-win choice" for his country, and this assessment that China had come out on top of the weekend negotiations was shared by commentators in the States.
Dan DiMicco, a former Nucor Steel chief executive who was supportive of Donald Trump’s tariffs on aluminum and steel imports, tweeted that the deal was “not good enough” and it was time for the president to “take the gloves off”.
Some, including Brad Setser, a China expert at the Council on Foreign Relations, argue that it is "the kind of deal that China would be able to offer any US president," with many of China’s concessions already scheduled to take place. For the US, they are left with a vague agreement that achieves little action against the Chinese over intellectual property theft, considered the real battleground between the two countries.
With the North Korea summit a matter of weeks away, one can’t help but notice that the Chinese government holds significant leverage over the US administration, which will need China on-side if it is to make real progress on the Korean peninsula.
Russian billionaire Roman Abramovich’s UK visa has not yet been renewed, fuelling further tensions between the UK and Russia. The oligarth was a notable absentee from the FA Cup final on Saturday in which Chelsea, the team that he owns, defeated Manchester United to lift the trophy. Sources at the club have stressed that he has not been denied a visa but that there has merely been a delay to the renewal of his paperwork. Abramovich is a close ally of President Putin and this incident is expected to be seen as another diplomatic snub for Moscow.
The UK hopes to partner with Australia as it aims to launch the first tenders for a satellite navigation system to rival Europe’s €10bn Galileo project by the end of this year. The Ministry of Defence will today announce plans to boost resources for a specialist space unit after the EU insisted that the UK will be barred from secure elements of Galileo. (£)
The first phase of the public inquiry into the Grenfell Tower fire will begin later today and will open with tributes for the 72 victims. The commemoration hearings are expected to take up the first fortnight of the inquiry, which begins almost a year since the disastor.
Business & Economy
Ryanair has this morning reported a 10% rise in annual profits to €1.45bn (£1.27bn), though the company did warn of a cautious outlook for the current financial year, with rising staff and fuel costs anticipated. Staffing shortages and poor weather conditions – most notably the Beast from the East – caused the airline to be grounded for spells last autumn, but passenger numbers were up more than nine per cent year-on-year.
Royal Bank of Scotland is said to be considering re-commencing the payment of dividends on a scale that will see it become one of the most generous payers to shareholders in the country and would likely accelerate the government’s sale of its holding. The £45.5bn bailout a decade ago banned dividends from being paid, but proposals could apparently see a final dividend of 6p for 2018, rising to 16p by 2020, a five per cent yield and a similar level of payout to that of Lloyds. (£)
The latest Janus Henderson Global Dividend Index report has shown that global dividends grew by more than 10% in the first quarter of 2018. Favourable exchange rates and US companies beginning to pay out windfalls from President Trump’s tax reforms were both cited as key factors in this growth. Dividends climbed to 10.2% compared with the same period last year to reach $244.7bn, a record for first-quarter payouts. (£)
The number of French, Dutch and Belgian businesses registering in the UK has fallen in the period since the vote by Britain to leave the EU. Figures by Companies House show that companies from these nations registering in the UK fell by as much as 52% last year compared to 2015-16, which follows OECD figures that illustrate that foreign direct investment into the UK has collapsed, plummeting 90% in 2017 compared to the previous year.
The week ahead
On Tuesday, South Korean President Moon Jae-in will travel to Washington to meet Donald Trump. North Korea will undoubtedly be item one on the agenda, as the two leaders are expected to share strategies ahead of the US president’s much anticipated meeting with North Korean leader Kim Jong-un in Singapore on June 12.
It is likely to be a tetchy Tuesday for Royal Dutch Shell at its annual general meeting as Institutional Shareholder Services, the advisory firm whose recommendations influence votes at annual meetings, is threatening to block the chief executive’s €9m annual pay award when the oil giant holds its meeting in The Hague.
As we reach the midway point of the week, the Office for National Statistics publishes its Consumer Prices Indices for April 2018. It will be announced under the watchful eye of Bank of England economists, who held off increasing interest rates over concerns about slowing consumer expenditure.
Marks & Spencer’s performance will be closely scrutinised as it posts full-year results on Wednesday after its last trading update warned of “ongoing underperformance” in food sales.
Finally, a boost to SSE’s profits from higher demand for gas and gas-fired power during unseasonably cold weather at the end of February and start of March is expected when the energy firm announces its preliminary results on Friday.
Jersey Electricity 'A' Shares
Secure Income Reit
TBC Bank Group
Columns of Note
Can Scotland be a great nation inside the Union? Kevin Pringle contemplates this question in The Sunday Times as he considers to what extent those who voted ‘no’ in 2014 would prioritise a practical approach to the issue of Scottish independence if asked to vote on it again. (£)
Writing in The Times, Alex Massie argues that Brexiteers see Ireland as a country that only serves to complicate life for British governments, and their opinion that the “Irish tail is wagging the British dog” fails to recognise the fact that Ireland is its own country with its own interests. Massie concludes that Brexit might reset the relationship and reaffirm the interdependence of the peoples of Britain. (£)
Did you know?
One of the Soviet space dogs’ puppies, Pushinka, was given by Nikita Khrushchev to John F Kennedy as a gift. One of Kennedy’s dogs, Charlie, took a liking to Pushinka, resulting in the birth of four pups referred to jokingly by Kennedy as “pupniks”.
House of Commons
Work and Pensions (including Topical Questions)
House of Lords
Encouraging Iran and Saudi Arabia to work together to bring peaceful solutions to the conflicts in Syria and Yemen - Lord Ahmed
Banning sales of hot and cold drinks in disposable cups - Lord Scriven
Repealing discriminatory legislation in Commonwealth countries - Baroness Barker
Transport services through Marine Special Protection Zones and recommendations for new or extended Special Protection Areas - Lord Berkeley
No business scheduled
House of Commons
HM Treasury (including Topical Questions)
Ten Minute Rule Motion
Social Justice Commission - Robert Halfon
House of Lords
Impact of Brexit on sheep farmers in the UK - Lord Wigley
Plans to reform sexual offence legislation - Lord Campbell-Savours
Rights of leaseholders in high-rise blocks in which cladding has failed fire safety tests - Lord Shipley
Smart Meters Bill - Third reading - Lord Henley
Scottish Government Debate: A Fairer Scotland for Disabled People: tackling the employment gap