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Stocks hit record highs as US drops China's currency manipulator charge – business live


The opening bell at the New York Stock Exchange yesterday

The opening bell at the New York Stock Exchange yesterday Photograph: Johannes Eisele/AFP via Getty Images

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Peace is breaking out between the US and China in their long-running, damaging, trade dispute.

A high-level delegation of Chinese officials have landed in Washington, ready to put their signature to the Phase One deal agreed with the US.

The signing ceremony, scheduled for tomorrow, will allow Donald Trump to declare a victory — and could eventually lead to lower tariffs on each country’s imports.

The preliminary deal doesn’t tackle some of the tough issues, but it does include a pledge for China to buy more US food, agriculture and seafood products, and to stop forcing US companies to hand over their intellectual property.

And in an important sign that relations are thawing, America is also stopping labelling China a currency manipulator. It no longer claims that Beijing keeps the yuan unfairly cheap to make its exports competitive, at the expense of rivals.

Treasury Secretary Stephen Mnuchin announced the change of policy, saying that:


“China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability

Kit Juckes of Societe Generale it’s an encouraging sign for investors:


The symbolic removal of the ‘currency manipulator’ tag from China has no great significance but it’s a reward for getting the ‘Phase 1’ trade deal over the line and markets are euphoric ahead of tomorrow’s signing ceremony.

The yuan is stronger, and is dragging trade -sensitive currencies with it.

Global stocks are also continuing to rally. The US stocks scaled new peaks last night, lifting MSCI’s All Country Index of stocks to a new record as well.

The MSCI index of World Stocks

The MSCI index of World Stocks Photograph: Refinitiv

Also coming up today

UK regional airline Flybe continues to fight for survival, send ministers scurrying to fins ways to keep its planes in the air.

The latest rumour is that the government is considering cutting air passenger duty on domestic flights, or allowing Flybe to defer its bill, to provide the company with some breathing space.

Flybe continues to operate this morning, as the UK’s pilots union urges the government to do ‘whatever it takes’ to save the firm. Environmentalists, though, take another view….

It’s also a busy morning for corporate news. UK housebuilder Taylor Wimpey has reported a 5% increase in home completions in 2019, while retailer BooHoo posting a 44% surge in revenues over Christmas.

The agenda

  • 1.30pm GMT: US inflation for December. CPI is expected to rise to 2.4% year-on-year, from 2%



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