US-China Trade Talks Yield Framework Agreement
Negotiations Aim to Ease Economic Tensions, Boost Global Trade
A tentative framework agreement reached between the United States and China offers a glimmer of hope for easing trade tensions and stabilizing the global economy. The deal, announced Tuesday, focuses on accelerating exports of key materials and loosening restrictions on certain commodities.
Agreement Details Emerge
Howard Lutnick, US Minister of Trade, stated that the agreement includes accelerating exports of rare earth metals and magnets from China, crucial components for the automotive and US defense industries. In return, the US will relax export restrictions on a number of its own commodities, though specific details remain undisclosed.
US and China officials say consensus reached on Geneva framework https://t.co/qJq9q9q9q9
— Bloomberg (@business) June 10, 2024
This framework builds upon a temporary agreement reached last month in Geneva, Switzerland, which saw both countries agree to reduce import tariffs by 115 percentage points. The ongoing negotiations reflect a commitment to de-escalate trade disputes that have pressured the Chinese economy.
Economic Pressures in China
Recent economic indicators reveal growing strain on the Chinese economy. The Purchasing Managers’ Index (PMI) for Chinese manufacturing fell to 48.3 in May 2024, the lowest level since September 2022, signaling a contraction in factory activity. Furthermore, China experienced its fourth consecutive month of annual deflation in May, with prices falling by 0.1% year-over-year, according to the National Bureau of Statistics of China. China National Bureau of Statistics
Corporate Actions and Market Movers
Several Indonesian companies announced significant corporate actions. Bank BTPN Syariah plans a stock buyback program worth 927 billion rupiah, while Bank Negara Indonesia intends to issue sustainability bonds totaling 5 trillion rupiah to finance environmentally and socially responsible projects. PT PP secured new contracts valued at 7.65 trillion rupiah, and Siloam International Hospitals opted not to distribute dividends for fiscal year 2024, choosing to reinvest funds for growth.
Market Performance Highlights
On Wednesday, the IHSG index closed at 7,222, down 0.11%. Foreign flow saw a positive influx of Rp79 billion. The USD/IDR exchange rate slightly decreased to 16,260, falling 0.08%. Gold prices rose by 0.34% to 3,355. Oil prices increased by 0.90% to 67.5, while coal prices edged up 0.58% to 104.3.
Top Gainers and Losers
Leading gainers included MBMA (+15.46%), BRMS (+12.04%), ENRG (+6.96%), and BDKR (+6.80%). Conversely, Hmsp (-6.77%), TINS (-4.86%), Tlkm (-3.78%), and RAJA (-2.92%) experienced the largest declines.
The market reaction to the US-China trade framework was muted, with S&P 500 futures down 0.28%, SSE up 0.52%, Eurostoxx 50 down 0.22%, and the US dollar index (Dxy) remaining relatively flat at +0.03%.
