China sends ripples through global financial, commodity and FOREX markets
China made a few noteworthy headlines this weekend, sending ripple affects through everything from Forex markets to cotton trading desks around the world.
HONG KONG—Hong Kong Exchanges & Clearing Ltd. 0388.HK +2.65% said Friday it entered into a deal to buy the London Metal Exchange for £1.39 billion (US$2.16 billion), giving the city’s stock exchange instant entry into commodities trading amid China’s growing appetite for metals.
It muscled out shortlisted IntercontinentalExchange Inc. ICE +4.67% as the allure of China swung the balance. But the deal still awaits approval from the U.K.’s Financial Services Authority and shareholders representing at least 75% of LME’s ordinary shares.
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China’s Cotton Order Jolts Market
NEW YORK—Cotton futures reached a nearly one-month high, rising nearly 10% this week after China shocked the market with a huge purchase from the U.S.
The sale indicated that demand isn’t dead for the widely used fiber—especially from China, the world’s largest cotton consumer. Prices had touched a 31-month low earlier in the month due to overproduction and a sagging economic outlook.
The purchase “caught people off-guard,” said independent cotton analyst Mike Stevens.
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Deutsche Bank Makes Cross-Border Yuan Payment
BEIJING—A pilot scheme intended to make it easier for companies to settle trade in the Chinese yuan officially kicked off Friday, with Deutsche Bank AG completing the first cross-border yuan payment transaction under the program.
The new program, launched by the Shanghai branch of the People’s Bank of China on a trial basis, aims to streamline the process for settling cross-border trade in the yuan by exempting qualified companies from submitting original trade documentation to support each payment. Information on the program has recently been circulated among banks in Shanghai, bankers said, though the central bank hasn’t yet made a public announcement on the initiative.
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