Good morning! Here’s what you need to know on Tuesday.
A powerful earthquake struck near Fukushima, Japan, at approximately 6 a.m. local time on Tuesday morning. The US Geological Survey initially measured the earthquake at magnitude-7.3, but later downgraded it to a magnitude-6.9 earthquake. A tsunami warning issued soon after the quake has now been lifted.
The Japanese yen has rallied after the magnitude 6.9 earthquake 61km off the coast of Namie, Japan. The USD/JPY is currently trading at 111.05, well off the highs of 111.36 struck earlier in the session.
US President-elect Donald Trump said he would withdraw the United States from the Trans-Pacific Partnership in a video released on Monday laying out actions he would take on his first day in office. Japan’s Prime Minister Shinzo Abe quickly responded, saying the 12-nation trade deal would be meaningless without the US.
China is the biggest “black swan” risk to the global economy, according to Societe Generale’s quarterly update of the biggest risks facing the world. This time around, China is the big “‘pure’ economics” risk in the G5. SocGen argues that it’s the major economy with the “most significant risks with pockets of significant excess in housing, high debt levels and a burgeoning NPL problem,” and thus they see the risk of a hard landing at 20%.
Oil prices rose to their highest level since October on Tuesday. The surge comes as the market priced in a potential output cut led by producer cartel OPEC, although analysts warned that a failure to agree a cut could lead to a ballooning supply overhang by early 2017. Around 6.45 a.m. GMT (1.45 a.m. ET) Brent crude, the international benchmark is up 1.2% to trade at $49.48 per barrel.
Goldman Sachs Vice Chairman Michael Sherwood is leaving after 30 years at the firm. Sherwood, who is also co-CEO of Goldman Sachs International, has decided to retire at the end of the year, according to the memo, which was signed by CEO Lloyd Blankfein and COO Gary Cohn. Richard Gnodde will become the sole CEO of Goldman Sachs International.
Canada’s finance minister has crushed British hopes that it will be at the front of the queue for a trade deal once it leaves the European Union. In an interview with the Financial Times, Bill Morneau said: “From our perspective, clearly the Nafta [North American Free Trade Agreement] relationship [with the US] is of huge importance. That’s our biggest relationship by a very big margin, so that’s important to us. And then the Ceta relationship [with the EU] opens up a very significant market.”
The favourite to be next French president wants Brexit to be fast, hard and uncompromising. Francois Fillon, the former French prime minister who is in a strong position to be elected president next year, believes Brexit must be “fast” and leave Britain without its crucial financial passport.
President-elect Trump wants UKIP leader Nigel Farage to be the UK’s Ambassador to the USA. In a tweet sent late on Monday night, Trump said: “Many people would like to see @Nigel_Farage represent Great Britain as their Ambassador to the United States. He would do a great job!”
China could pose a significant hurdle to Elon Musk’s plans to bring high-speed internet to the world. China routes internet access for its 1.37 billion inhabitants through a censorship technology known as “the Great Firewall” and the government would have to agree to let SpaceX build antenna dishes, or ground links, to send and receive data to and from the company’s spacecraft.
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