The Bank of Canada walked back some of its enthusiasm about the economic outlook amid a crisis in the nation's oil sector, keeping interest rates unchanged Wednesday and suggesting there may be less urgency to tighten monetary policy in the future. The Ottawa-based central bank held its overnight benchmark rate at 1.75 percent, reiterating it expects to eventually remove all monetary stimulus from the economy. But its statement was more guarded than the last one in October and cited the possibility that recent negative economic developments may mean the economy isn't running up as much against capacity constraints as previously thought.
U.S. equity futures tumbled alongside stocks in Europe and Asia as concern resurfaced that trade tensions between the world's two largest economies are far from resolved. Oil slid as OPEC ministers met in Vienna. Contracts on the Dow Jones Industrial Average sank more than 450 points, while S&P 500 futures signaled the underlying index will resume its slide after one of the biggest routs of the year. Trade tensions reignited after the arrest of the chief financial officer of tech giant Huawei Technologies Co. -- dousing hope China and the U.S. would make immediate progress on a deal. The yuan dropped the most since October. The start of the futures session was marred by a sudden and unexpected plunge that sent a shock wave across equity markets.
Volkswagen (VOWG_p.DE) announced another 3 billion euros ($3.4 billion) of cost cuts on Thursday in an effort to speed up an improvement in profit margins at its core VW brand. Still battling to recover from a 2015 scandal over emissions test cheating, the German automaker has been cutting costs to fund an ambitious shift to electric cars and automated driving. A key goal is to improve margins at its mass-market VW brand, its largest division by sales, but which has long lagged the profitability of rivals such as Japan's Toyota due in part to high labor costs at its German plants.
Global chip stocks tumbled on Thursday as the arrest of a top executive at Chinese tech giant Huawei renewed fears of an escalation in U.S.-China trade tensions. Shares of Austrian chipmaker AMS plunged around 7 percent. Switzerland-based STMicroelectronics dropped 4 percent, while the U.K.- headquartered Dialog Semiconductor slumped around 3 percent. The moves in European stocks followed losses in Asia, where shares of Japanese chipmakers Sumco, Tokyo Electron and Advantest each fell around 5 percent. Canadian authorities arrested Huawei CFO Meng Wanzhou in Vancouver on Wednesday, where she is facing extradition to the U.S. according to Canada's Department of Justice. The arrest is reportedly related to Huawei's violation of U.S. sanctions on Iran.