Aurelia Butler

Good morning. US secretary of state Antony Blinken will visit China this month, the latest sign that Beijing and Washington are beginning to stabilise a turbulent bilateral relationship that had sunk to the lowest point in decades. The US diplomat had abruptly cancelled a trip in February in response to a suspected Chinese spy balloon’s flight over the US, which derailed efforts to repair relations.Blinken’s visit would be a sign of renewed progress between Washington and Beijing to re-establish high-level engagement. At the G7 summit in Hiroshima last month, president Joe Biden said he expected an imminent “thaw” in relations, and the sides have resumed a flurry of contacts recently.The FT reported last week that CIA director Bill Burns made a secret trip to Beijing in May, making him the most senior Biden administration official to visit China. His trip came at China’s invitation, according to two people familiar with the matter. Here’s what else I’m keeping tabs on today:Economic data: Revised first-quarter GDP figures are due from Japan and the EU. Economists expect the EU’s data to show the eurozone economy is shrinking. CRH: The world’s largest building materials maker holds an extraordinary general meeting for shareholders to vote on shifting its primary listing from London to New York.India: The central bank announces its interest rate decision. Economists expect policymakers to hold rates steady through the rest of the year. (Reuters) Five more top stories1. Thick smoke from Canadian wildfires has spread across North American cities, with New York’s air quality falling below New Delhi as the worst of any big urban area in the world. The plumes have triggered health warnings for millions of people in the eastern US and Canada.Elsewhere in New York: The city is suing South Korean carmakers Hyundai and Kia over a “virtual explosion” of car thefts. 2. Thousands of Ukraine residents struggled to escape from flooded homes and towns yesterday, and large areas were left without clean drinking water following the destruction of the Kakhovka dam. In his nightly video, Ukraine president Volodymyr Zelenskyy repeated his belief that Russian forces occupying the dam had deliberately blown it up from inside. Read more on the evacuation of residents.3. Turkish lira experienced its largest fall since late 2021 after president Recep Tayyip Erdoğan’s new finance minister’s pledge to restore “rational” policies. The currency dropped 6.9 per cent to a record low of 23.17 against the US dollar.4. Australian tax officials have said they are working with international peers to explore any potential offences outside the country related to the PwC tax leaks scandal.5. India and Germany are discussing a submarine deal that could be worth about €5bn, aimed at reducing the south-Asian nation’s dependence on Russian military equipment and boosting Berlin’s defence industry.Deep dive

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Rising tensions between the US and China have precipitated the break-up of Sequoia Capital. The announcement from Sequoia shattered the view that one of the world’s most successful venture capital empires could navigate the tricky geopolitics of investing across the world’s two biggest markets. In an interview with the FT, Sequoia Capital boss Roelof Botha described how much investing conditions had changed.We’re also reading . . . Job scams: Fake recruiters are targeting jobseekers, putting candidates and reputable employers at risk.Courting Riyadh: The old world order is dead, writes Kim Ghattas, and Saudi Arabia has carefully positioned itself as a linchpin for whatever comes next.American paranoia: Robert Kennedy Junior’s appeal to conspiracists poses a genuine threat to Joe Biden, warns Edward Luce.Chart of the dayChinese exports contracted more than expected in May on weaker global demand for the country’s goods, as the world’s second-largest economy struggled to revive growth after a pandemic-induced slowdown last year.

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Take a break from the news. . . and read the FT’s timely interview with Charlie Brooker, creator of the darkly satirical Netflix series Black Mirror, now in its sixth season. Brooker discusses avoiding Elon Musk and NFTs, and asking ChatGPT to write an episode summary.Additional contributions by Tee Zhuo and Gordon Smith More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever.An interest rate decision from India and revised Japanese GDP will be the big local drivers for Asian markets on Thursday, with wider sentiment soured by a profit-taking slump in U.S. tech stocks and a surprising rate hike in Canada. After rallying more than 25% this year, and more than 20% from the U.S. banking shock low in March, the Nasdaq had its worst day since April, sliding 1.3%.The index of Mega Tech stocks that has driven this year’s U.S. equity rally almost single-handedly – up more than 60% this year – slumped almost 3% for its biggest fall since February.The Bank of Canada’s decision to raise rates to a 22-year high of 4.75% was not widely expected. This followed an equally surprising rate hike from Australia the day before, a one-two hawkish punch from policymakers that investors had probably not braced for. Throw in a 1% rise in oil prices, a slump in Chinese trade activity, and the yuan hitting a fresh 6-month low, and the backdrop for Asian markets in the second half of the week looks a bit darker than the first half.The Reserve Bank of India is expected to leave its key interest rate unchanged at 6.50% and for the rest of 2023, according to a Reuters poll of economists. Although inflation hit an 18-month low of 4.70% in April, it is not seen falling to the RBI’s 4% medium-term target for at least another two years. If inflation is that sticky, investors can perhaps expect a ‘hawkish pause’ rather than a ‘dovish pause’ from the RBI, especially in light of the hawkish surprises from Australia and Canada this week. Japanese first quarter growth, meanwhile, is expected to be revised up one tenth of a percent to 0.5% on a quarterly basis, and three tenths of a percent to 1.9% on an annualized basis, thanks to solid investment from manufacturers.The U.S. dollar is back above 140.00 yen and a soft GDP print could push it closer to the year-to-date high just below 141.00 yen. A narrower-than-expected current account surplus in April, figures for which are also out on Thursday, could do the trick too.The Australian dollar, which hit a one-month high on Wednesday following the RBA’s rate hike, could get a nudge from Australian trade data on Thursday. The consensus forecast is for the surplus to narrow slightly from March to A$14 billion. Here are three key developments that could provide more direction to markets on Thursday:- India interest rate decision- Japan GDP (Q1, revised)- Australia trade (April) (By Jamie McGeever) More