By Andreea Papuc
Federal Reserve Chairman Jerome Powell met with President Donald Trump and Treasury Secretary Steven Mnuchin Monday to discuss the economy, marking a second face-to-face sit-down this year amid relentless White House criticism of the U.S. central bank. Powell’s comments “were consistent with his remarks at his congressional hearings last week,” the Fed said in a statement released after the meeting at the White House, adding that the gathering was at the president’s invitation. The meeting comes amid a steady stream of criticism of the Fed by Trump, who tweeted it was a “very good & cordial meeting.”
Asian equity futures were modestly lower early Tuesday as U.S. stocks struggled to extend gains beyond the record levels reached last week with traders looking for signs of progress in U.S.-China trade negotiations. Futures in Japan and Australia were little changed with Hong Kong contracts slipping after escalating violence in the city Monday. The dollar extended a slide after it emerged Powell and Trump discussed negative interest rates and the greenback. Oil dropped and gold gained.
The Australian Securities Exchange is counting on a pipeline of at least a dozen companies to help salvage what is shaping up as the market’s worst year for initial public offerings since the global financial crisis in 2008. Lightweight wheel manufacturer Carbon Revolution and mining explorer Godolphin Resources are among companies targeting to raise A$371 ($253 million) combined before the end of this year, according to pre-listing documents on the ASX website. The success of these listings would help ease concerns over the appetite for IPOs in Australia, where more than $1.5 billion of first-time share sales have been withdrawn this year — the most since 2008, when $2 billion of IPOs were postponed, according to data compiled by Bloomberg.
Local government investment arms in China — once considered one of the country’s riskiest groups of borrowers and a time bomb in a creaky financial system — have emerged as white knights of a troubled private sector, offering guarantees to loans and bonds from garment makers to construction firms. Around 2,000 of these funding platforms have offered a total of 5.9 trillion yuan ($842 billion) worth of credit guarantees to domestic firms, representing nearly a quarter of their combined net assets, said Liu Yu, an analyst from Guosheng Securities Co. These heavily-indebted entities, known as local government financial vehicles, have guaranteed nearly $1 trillion of debt, according to Guosheng. The added responsibility may prove to be unbearable as these LGFVs themselves face a giant wall of debt.