The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June7, 2019. REUTERS/Staff
June 12, 2019
(Reuters) – European shares pulled back from three-week highs on Wednesday after the United States toughened its stance on trade with China and data from Beijing showed factory inflation slowed in May, deepening fears of a global economic slowdown.
President Donald Trump said on Tuesday he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees to four or five “major points” which he did not specify.
The pan-regional STOXX 600 index fell 0.45% by 0713 GMT, with the tariff-sensitive technology sector down 0.76%.
Also weighing down the sector was a 1.2% fall in shares of Dassault Systemes after the French technology company agreed to buy Medidata Solutions, a U.S. software company involved in the sphere of clinical trials, in a deal worth $5.8 billion.
Trump also took aim at the Federal Reserve, saying interest rates were “way too high”, ahead of a reading on U.S. inflation that could shift the odds for an early cut in rates.
Italy’s FTSE MIB fell 0.38% and its banking index dropped 0.63% after the European Union moved closer to taking disciplinary action over the country’s growing debt.
However, authorities in Rome made tentative steps to avert a procedure that could saddle the country with large fines and alienate investors.
Axel Springer jumped 12.4% after funds controlled by U.S. private equity investor KKR offered 63 euros a share to buy out minority shareholders of the German publisher.
(Reporting by Amy Caren Daniel and Susan Mathew in Bengaluru)
FILE PHOTO: Pumpjacks are seen against the setting sun at the Daqing oil field in Heilongjiang province, China December 7, 2018. REUTERS/Stringer
June 11, 2019
By Henning Gloystein
SINGAPORE (Reuters) – Oil prices rose on Tuesday in line with firmer financial markets and bolstered by expectations that producer group OPEC and its allies will keep withholding supply.
Front-month Brent crude futures were at $62.56 at 0707 GMT, up 27 cents, or 0.4%, from Monday’s close.
U.S. West Texas Intermediate (WTI) crude futures were at $53.75 per barrel, 49 cents, or 0.9%, above their last settlement.
Prices fell by around 1% in the previous session and crude futures are down by some 20% from their 2019 peaks in late April, dragged lower by a widespread economic downturn that has started to impact oil consumption.
Traders said crude oil futures on Tuesday were pushed up by a broader lift in financial markets after Beijing eased financing rules to stem an economic downturn.
On the production side, Russia said on Monday it might support an extension of supply cuts that have been in place since January, warning oil prices could fall as low as $30 per barrel if producers supply too much crude.
The Organization of the Petroleum Exporting Countries (OPEC) and some non-affiliated producers including Russia, known collectively as OPEC+, have withheld supplies since the start of the year to prop up prices.
OPEC+ is due to meet in late June or early July to decide output policy for the rest of the year.
“It seems likely that OPEC will roll over the current supply cuts at the next meeting,” said Callum MacPherson, head of commodities at investment bank Investec.
Despite this, MacPherson said “there is a limit to how much longer it (OPEC+) can continue to avoid addressing the serious challenge of being squeezed out by growing U.S. production”.
U.S. crude output has risen by 1.6 million barrels per day (bpd) over the past year, to a record of 12.4 million bpd, making the United States the world’s biggest oil producer ahead of Russia and Saudi Arabia.
On the demand side, analysts expect fuel consumption growth to stutter along with the global economy.
Energy consultancy FGE said global crude oil demand growth could drop below 1 million barrels per day (bpd) in 2019, down from previous expectations of 1.3 to 1.4 million bpd.
“This effectively gives us an extra 300,000-400,000 barrels per day of supply,” said FGE chairman Fereidun Fesharaki.
This revision comes on the back of concerns about the health of the global economy.
“With China slowing, the EU sickly and the U.S. data starting to wobble, an economic downturn remains a clear and present danger,” said Stephen Innes, managing partner at Vanguard Markets.
(Reporting by Henning Gloystein; editing by Richard Pullin)
FILE PHOTO: Russian Finance Minister Anton Siluanov attends a session of the Moscow Financial Forum in Moscow, Russia September 6, 2018. REUTERS/Sergei Karpukhin
June 8, 2019
ST PETERSBURG (Reuters) – Russia is considering issuing a sovereign Eurobond as market conditions are currently favorable, Finance Minister Anton Siluanov said at an economic forum.
“We would have borrowed now probably on better terms that at the beginning of the year,” Siluanov told reporters on the sidelines of the forum late on Friday.
Siluanov declined to say if that could happen this month or later.
VTB Capital, the investment bank that organized Russia’s latest Eurobond issues, also told Reuters this week that market conditions were favorable for a Eurobond issue.
Speaking about oil, Siluanov said it would not be fair for the Russian government to compensate oil companies for shortfalls that they might face because of the global deal to cut production that Russia and other major crude producers have signed.
The head of Russian oil giant Rosneft, Igor Sechin, said earlier this week the company was discussing possible compensation with the government in the event that a global deal to cut supply is extended.
(Reporting by Darya Korsunskaya; Writing by Andrey Ostroukh; Editing by Elaine Hardcastle)
A 100 Yuan note is seen in this illustration picture in Beijing March 7, 2011. REUTERS/David Gray/File Photo
June 7, 2019
SHANGHAI (Reuters) – A “little bit of flexibility” in the yuan currency is good for the Chinese and global economies, and there is no “numerical number” for the exchange rate that was more important than another, Bloomberg quoted China’s central bank governor as saying on Friday.
The China-U.S. trade war would exert “temporary depreciation pressure on renminbi, but you see, after the noise, renminbi will continue to be very stable and relatively strong compared to emerging market currencies, even compared to convertible currencies,” it quoted Governor Yi Gang as saying.
(Reporting by John Ruwitch; Editing by Simon Cameron-Moore)
FILE PHOTO: The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France March 28, 2019. REUTERS/Christian Hartmann
June 7, 2019
By Aaron Sheldrick
TOKYO (Reuters) – Oil prices rose more than 1% on Friday, climbing further away from five-month lows hit earlier in the week after a report that Washington could postpone trade tariffs on Mexico and amid signs that OPEC and other producers may extend their supply cuts.
Brent crude futures were up 85 cents, or 1.4%, at $62.51 a barrel by 0356. They gained 1.7% on Thursday.
U.S. West Texas Intermediate (WTI) crude futures were up 71 cents, or 1.4%, at $53.30 per barrel. They finished the previous session 1.8% higher.
Brent and WTI on Wednesday hit their lowest marks since mid-January at $59.45 and $50.60, respectively, after U.S. crude output reached a record high and stockpiles climbed to their highest since July 2017.
That put both contracts in bear territory, having lost more than 20% from peaks reached in late April.
But on Thursday oil prices followed U.S. equities higher after Bloomberg News reported that the United States may delay tariffs on goods from Mexico as talks continue.
“After prices hit the depth of the sewer this week, and (were) arguably in oversold territory, traders were always going to be predisposed to book profits ahead of the weekend,” Stephen Innes, managing partner at Vanguard Markets said in a note.
Despite the two-day bounce, Brent is heading for a third week of decline, down more than 3%. So too is WTI, which is on track for a decline of about 0.4%.
Sentiment for oil remains dim as fresh signs emerge of a stalling global economy, with the trade war between the U.S. and China intensifying.
Prices had been supported by supply curbs by the Organization of the Petroleum Exporting Countries (OPEC) and producing allies, including Russia. Supply has also been limited by U.S. sanctions on oil exports from Iran and Venezuela.
President Vladimir Putin said on Thursday that Russia had differences with OPEC over what constituted a fair price for oil, but that Moscow would take a joint decision on output at a policy meeting in coming weeks.
Also potentially keeping a lid on prices is the unrelenting rise in U.S. crude production.
U.S. oil output rose to a record 12.4 million barrels per day (bpd) in the week to May 31, the Energy Information Administration said on Wednesday, an increase of 1.63 million bpd since May 2018.
U.S. crude oil inventories also surged by 6.8 million barrels over the same week, to 483.26 million barrels, their highest levels since July 2017.
Research firm Rystad Energy has raised its forecast for U.S. crude output by 200,000 barrels bpd, to 13.4 million bpd by the December 2019, it said in a statement on its website.
(GRAPHIC: U.S. oil drilling, production & storage levels – https://tmsnrt.rs/2DxgF8W)
(Reporting by Aaron Sheldrick; Editing by Joseph Radford and Tom Hogue)
FILE PHOTO: Oil facilities are seen on Lake Maracaibo in Cabimas, Venezuela January 29, 2019. REUTERS/Isaac Urrutia
June 6, 2019
By Henning Gloystein
SINGAPORE (Reuters) – Oil prices firmed on Thursday after falling to near five-month lows in the previous session, but sentiment remained weak as markets remain under pressure from rising U.S. supply and a stalling global economy.
Front-month Brent crude futures were at $60.79 at 0718 GMT. That was 16 cents, or 0.3%, above last session’s close.
U.S. West Texas Intermediate (WTI) crude futures were at $51.84 per barrel, up 16 cents, or 0.3%, above their last settlement.
Brent and WTI on Wednesday hit their lowest levels since mid-January at $59.45 and $50.60 per barrel, respectively, amid a surge in U.S. crude inventories and record production, and as a global economic slowdown was starting to hit energy demand.
Despite Thursday’s gains, oil markets are moving into bear territory as defined by a 20% fall from recent peaks reached in late April.
U.S. crude production rose to a record 12.4 million barrels per day (bpd) in the week to May 31, the Energy Information Administration (EIA) said on Wednesday, an increase of 1.63 million bpd since May 2018.
Amid the surging output, U.S. commercial crude inventories jumped by 6.8 million in week to May 31, to 483.26 million barrels, their highest since July 2017.
“Rising U.S. production is more than offsetting the efforts from the OPEC+, and if we add the negative effect a trade war could have on energy demand the result is lower prices,” said Alfonso Esparza, senior analyst at futures brokerage OANDA.
The Middle East-dominated producer club of the Organization of the Petroleum Exporting Countries (OPEC) and some non-affiliated producers including Russia, known as OPEC+, have been withholding oil supply since the start of the year to prop up the market.
But outside OPEC+ supply is rising, not just in the United States.
Oil output at Kazakhstan’s Kashagan field reached a record 400,000 bpd this week, industry sources told Reuters.
Output rose after completion of maintenance in May. Prior to that, production at Kashagan was about 330,000 to 340,000 bpd.
With supply ample despite the OPEC-led cuts, much will depend on demand.
Bank of America Merrill Lynch said this week “global oil demand growth is running at the weakest rate since 2012” at below 1 million bpd, and that this was “leading the selloff” in oil prices recently.
Global economic growth took a dip late last year before recovering in early 2019, but analysts now warn growth is stalling again.
“The nascent recovery has stalled amid trade tensions,” Morgan Stanley said.
The U.S. bank said it expected this downturn to result in “the lowest growth rate since global financial crisis” of 2008/2009.
As a result, Morgan Stanley lowered its Brent price forecast for the second half of 2019 to $65-$70 per barrel, from $75-$80.
(Reporting by Henning Gloystein; Editing by Richard Pullin and Tom Hogue)
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, May 23, 2019. REUTERS/Staff
June 5, 2019
By Sruthi Shankar and Amy Caren Daniel
(Reuters) – Signs of a more accommodative U.S. Federal Reserve helped European stock markets rise for a third day on Wednesday, with technology stocks leading the way higher.
Europe’s main STOXX 600 index rose 0.4% by 0829 GMT, shaking off a muted start and joining a rally in Asia and on Wall Street after U.S. central bank chief Jerome Powell promised to act “as appropriate” to combat rising trade war risks.
Allied to hints from St Louis Fed chief James Bullard a day earlier, investors took that as a shift from the “patient” approach the Fed has taken in recent months, and a pointer for the European Central Bank’s own policy update on Thursday, where low inflation is making the case for more stimulus.
“The markets are strongly pricing in two rate cuts this year and the Fed leaving it open is a positive,” said Craig Erlam, senior market analyst at OANDA in London.
“Powell hasn’t necessarily said that we’re cutting rates. Markets were excited about the fact that he didn’t push back on Bullard’s comments and that is why we got the initial reaction.”
The pan-European stock index posted its worst monthly loss in over three years in May as trade tensions between the United States and China showed little signs of easing, raising fears of a slide into recession.
Technology stocks, under pressure from trade and regulatory issues in recent weeks, rose 1.5%, the most among the major subsectors, helped by a 1.9% rise in German business software firm SAP.
U.S. peer Salesforce.com Inc gave a strong full-year forecast on Tuesday.
French aviation company Dassault Aviation’s shares jumped 4% to the top of the STOXX 600 after Goldman Sachs upgraded the stock to “buy”, citing capital flexibility and inexpensive valuation.
Germany’s DAX, France’s CAC 40 and Spain’s IBEX rose between 0.35% and 0.5%.
Italy’s main market underperformed after a report that the European Commission will launch disciplinary procedures against Italy with a letter stating that fiscal policy lacks prudence and could expose it to a loss of market confidence.
Milan’s FTSE MIB was flat and its banking index dropped 0.9%.
“I don’t see a fine being levied on them, but we could see the implications weighing on Italian stocks and government bonds,” said Erlam.
Elsewhere, aluminum maker Norsk Hydro ASA’s shares rose 3.5% as its quarterly revenue and earnings beat expectations although the company said a cyber attack in March would cost it between 300 million and 350 million crowns.
A rebound in Carnival Corp drove the travel and leisure index 1.2% higher after cruise stocks came under pressure on Tuesday from the Trump administration’s new restrictions on travel to Cuba.
(Reporting by Sruthi Shankar and Amy Caren Daniel in Bengaluru; editing by Patrick Graham)
A surveillance camera is seen next to containers at a logistics center near Tianjin Port, in northern China, May 16, 2019. REUTERS/Jason Lee
June 2, 2019
BEIJING (Reuters) – The latest U.S. tariffs on Chinese imports will not resolve the two countries’ trade issues, and the United States bears responsibility for setbacks in the talks process, a policy paper published by the Chinese government said on Sunday.
China can ensure good momentum for sustained economic development and economic prospects for the country are “extremely optimistic”, the paper said.
China will not concede on issues of principle, it added.
(Reporting by Cate Cadell; Writing by Ben Blanchard; editing by Darren Schuettler)
FILE PHOTO: A man holds the flags of India and the U.S. while people take part in the 35th India Day Parade in New York August 16, 2015. REUTERS/Eduardo Munoz
June 1, 2019
MUMBAI (Reuters) – The Indian government said on Saturday it will continue to seek to build strong economic ties with the United States despite a decision by U.S. President Donald Trump to end preferential trade treatment for India from June 5.
In a relatively tame response to the announcement from Washington on Friday, the Indian government said it was “unfortunate” that its attempts to resolve significant U.S. requests had not been accepted.
“India, like the U.S. and other nations shall always uphold its national interest in these matters,” the government said in a statement issued through India’s trade ministry.
The privileges come under the Generalized System of Preferences (GSP), which had been allowing preferential duty-free imports of up to $5.6 billion a year into the U.S. from the South Asian nation. India is the biggest beneficiary of the GSP program.
The Indian government said that India viewed the issue as part of its ongoing economic relationship with the U.S. and “will continue to build on our strong ties with the US, both economic and people-to-people.”
It added: “We are confident that the two nations will continue to work together intensively for further growing these ties in a mutually beneficial manner.”
(Reporting by Sankalp Phartiyal; Edited by Martin Howell)
Containers are seen at a port in Huaian, Jiangsu province, China May 5, 2019. Picture taken May 5, 2019. REUTERS/Stringer
June 1, 2019
WASHINGTON (Reuters) – The United States began collecting higher, 25% tariffs on many Chinese goods arriving in U.S. seaports on Saturday morning in an intensification of the trade war between the world’s two largest economies and drawing retaliation from Beijing.
U.S. President Donald Trump imposed the tariff increase on a$200 billion list of Chinese goods on May 10, but had allowed a grace period for sea-borne cargoes that departed China before that date, keeping them at the prior, 10% duty rate.
The U.S. Trade Representative’s office in a May 15 Federal Register notice set a June 1 deadline for those goods to arrive in the United States, after which U.S. Customs and Border protection would begin collecting the 25% duty rate at U.S. ports. The deadline expired at 12:01 a.m. EDT on Saturday
The tariff increase affects a broad range of consumer goods, and intermediate components from China including internet modems and routers, printed circuit boards, furniture, vacuum cleaners and lighting products.
Earlier on Saturday, China began collecting higher retaliatory tariffs on much of a $60 billion target list of U.S. goods. The tariffs, announced on May 13 and taking effect as of midnight in Beijing (1600 GMT), apply additional 20% or 25% tariffs on more than half of the 5,140 U.S. products targeted. Beijing had previously imposed additional rates of 5% or 10% on the targeted goods.
No further trade talks between top Chinese and U.S. negotiators have been scheduled since the last round ended in a stalemate on May 10, the same day when Trump announced higher tariffs on $200 billion of Chinese goods and then took steps to levy duties on all remaining Chinese imports.
China ordered the latest tariff increases in response to Trump’s move.
Trump has accused China of breaking a deal to settle their trade dispute by reneging on earlier commitments made during months of negotiations. China has denied the allegations.
Beijing has grown more strident in recent weeks, accusing Washington of lacking sincerity and vowing that it will not cave to the Trump administration’s demands.
Its rhetoric has hardened particularly since Washington put Chinese company Huawei Technologies Co Ltd on a blacklist that effectively bans the firm from doing business with U.S. companies.
(Reporting David Lawder in Washington and Stella Qiu and Se Young Lee in Beijing; editing by Grant McCool)