- Macro data released yesterday afternoon showed a -1.1% drop in Europe’s industrial production, confirming fears that the euro zone is in economic depression. Also, US retail sales contracted by -0.1% and the producer price index by -0.5%, also fuelling sentiment of an economic slowdown in the US, and thus less pressure from the Federal Reserve and possible monetary stimulus in the coming months.
- Meanwhile, China’s new home prices have dropped by 0.1% year-on-year in October 2023, marking the fourth consecutive month of decline. Demand remains sluggish despite efforts from Beijing to reverse the prolonged property slump.
- US President Joe Biden and Chinese leader Xi Jinping have agreed to open a presidential hotline, resume military-to-military communications, and work on fentanyl production in their first in-person talks in a year. However, this positive development was tarnished when Biden stated that he still believes Xi is a dictator.
The two leaders met to discuss issues that have strained US-Chinese relations, including Taiwan and the South China Sea. They agreed to collaborate on AI risks and preventing the export of items linked to fentanyl production.
Regarding Taiwan, Xi stated that China’s preference is for peaceful reunification, but also mentioned conditions in which force could be used. Biden emphasized the need for peace and stability in the Taiwan Strait and for respecting Taiwan’s electoral process.
Moreover, Xi urged the United States to cease sending weapons to Taiwan and support China’s peaceful reunification with the territory.