Tentative signs of improvement have surfaced in China’s industrial sector. Data from the National Bureau of Statistics showed that industrial profits rose 1.4% year-on-year between January and April, which is an improvement from the 0.8% growth recorded in the first quarter. This provides some confidence for traders that the recent stimulus measures put forward by Chinese policymakers are beginning to filter through the economy. Since September, the authorities have been gradually introducing initiatives aimed at boosting domestic demand and investor sentiment – with the latest announcement this month referring to planned cuts to their loan prime rates.
Markets were already breathing a sigh of relief after President Trump announced a pause on new tariffs targeting European imports. That optimism surged further on Wednesday when the U.S. Court of International Trade blocked all reciprocal tariffs that had been imposed by the President, ruling that he had exceeded his authority.
The Court also prohibited any further changes to the contested tariffs and gave the administration 10 days to remove what it called illegal duties – although most are currently suspended anyway.
This ruling is a serious blow to one of President Trump’s key economic policies that he has aggressively pursued for the last two months. The Trump administration responded almost immediately by filing an appeal, which sets the stage for a legal fight in higher courts. This will ultimately determine whether the President has the authority to act on trade policy without legislative backing.
Asian markets responded enthusiastically, with Japan’s Nikkei climbing 1.9% and Hong Kong’s Hang Seng gaining 1.1%. UK and European markets are also set to open (unsurprisingly) in the green.
