Friday, July 6, 2018

Trade Tariff Related News.

UPDATE 6-Oil markets volatile as trade conflict between U.S. and China escalates - Reuters

06-Jul-2018 03:03:02 PM

  • U.S. implements tariffs on Chinese goods on Friday
  • China set to take action; customs delays -sources
  • Dispute comes amid increasingly tight oil market
  • U.S. plans new sanctions against oil exporter Iran
  • South Korea stops all orders of Iranian oil - sources

Updates prices, adds China set to take action

By Henning Gloystein

SINGAPORE, July 6 (Reuters) - Oil prices seesawed in nervous trading on Friday as the United States slapped a raft of tariffs on Chinese goods in an escalating trade war between the world's two biggest economies.

Oil prices initially fell on Friday, along with Asian stock markets.

The trade dispute between the United States and China is looming over oil markets.

Washington put the tariffs in place on Chinese goods from 12:01 a.m. Washington D.C. time (0401 GMT) on Friday.

China has said it will impose tariffs on 545 U.S. goods in return. Meanwhile, major Chinese ports have already delayed clearing goods from the United States, according to several sources.

"We're headed for an unparalleled trade conflict between the world's largest economies," said Stephen Innes, head of trading for Asia/Pacific at brokerage OANDA.

As part of the retaliatory response, Beijing has threatened a 25 percent tariff on U.S. crude imports, although it has not specified an introduction date.

American crude shipments to China are around 400,000 barrels per day (bpd), worth $1 billion a month at current prices.

Tariffs would make U.S. oil uncompetitive in China.

An executive from China's Dongming Petrochemical Group said he expected Beijing to soon impose the tariff on U.S. oil imports.

He added his refinery had cancelled U.S. crude orders and would switch to Middle East or West African supplies instead.

 

TARIFFS, SANCTIONS & DISRUPTIONS

The potential trade war between the United States and China comes amid a tight oil market.

Energy consultancy FGE on Friday issued a warning of looming supply shortages due to U.S. sanctions against Iran, and because of disruptions elsewhere.

"Iran's exports are some 2.7 million bpd, including condensate," it noted.

Even if the U.S. government grants some waivers to allies, FGE estimated 1.7 million to 2 million bpd of crude and condensate would be cut out of markets once its sanctions are implemented.

U.S. investment bank Jefferies said on Friday it expected "a drop in Iranian exports well in excess of 1 million bpd" due to the U.S. sanctions.

Some are already reacting. South Korea, a major buyer of Iranian oil and condensate, will not lift any Iranian oil in July for the first time since August 2012, three sources familiar with the matter said on Friday.

Cutting Iran out from oil trading comes amid other disruptions.

"Venezuela ... will lose another 400,000 bpd by year-end with production going to below 1 million bpd," FGE said, adding that another 300,000 bpd of Libyan capacity was disrupted.

Although Saudi Arabia and Russia have said they would raise output to make up for disruptions, FGE said "there simply is not enough capacity to make up for Iran's crude losses, plus Venezuela and Libya", and warned of the possibility of oil prices rising to $100 per barrel.

 

(Reporting by Henning Gloystein in SINGAPORE; additional reporting by Meng Meng in BEIJING; editing by Christian Schmollinger and Richard Pullin)

 

 

 

PRECIOUS-Gold trims losses on soft dollar after U.S. tariffs take effect - Reuters News

06-Jul-2018 03:48:26 PM

  • Spot gold up 0.3 percent for the week
  • Tariffs on $34 bln of Chinese goods kick in
  • Investors eye China's response
  • U.S. jobs data due at 1230 GMT

(Adds comment, detail; updates prices)

By Apeksha Nair and Karen Rodrigues

BENGALURU, July 6 (Reuters) - Gold prices narrowed losses on Friday as U.S. tariffs on Chinese imports weighed on the greenback, stoking fears of a full-blown trade war between the two leading economies.

China has implemented additional tariffs on some import products from the United States immediately after U.S. tariffs on $34 billion in Chinese imports took effect, state media reported.

"If the trade war escalates and then China could sell U.S. treasuries and buy gold. This would be a big event," said Helen Lau, analyst, Argonaut Securities.

Spot gold was 0.1 percent lower at $1,256.54 an ounce by 0702 GMT, having dropped to $1,252.15 earlier in the session.

The bullion was, however, headed for its first weekly gain in four.

U.S. gold futures for August delivery slipped 0.1 percent to $1,257.50 an ounce.

The dollar eased against its peers on Friday ahead of the key U.S. jobs report later in the day and investor caution prevailed in global markets with focus turning to retaliatory measures China could employ.

China has no choice but to fight back against U.S. bullying on trade, the country's Commerce Ministry said on Friday.

"Traders are extremely cautious when it comes to gold. The intraday price-action has a bullish set-up and shows that the price has potential to test the level of $1,280 in the coming days if the dollar weakness continues," ThinkMarkets chief market analyst Naeem Aslam said.

Meanwhile, U.S. central bankers discussed whether recession lurked around the corner and expressed concerns global trade tensions could hit an economy that by most measures looked strong, minutes of the Federal Reserve's last policy meeting on June 12-13 released on Thursday showed.

The minutes described a meeting in which the Fed raised interest rates for the second time this year. It also suggested policymakers might soon signal the central bank's rate-hiking cycle was advanced enough that policy was no longer boosting or constraining the economy.

"I take the view the Fed will take a modestly dovish line, while trade tariff uncertainties persist. Gold is oversold, so I expect it to rally somewhat while interest rate expectations soften, perhaps to one more instead of two quarter point increases this year," said Alasdair Macleod, head of research with Toronto-based Goldmoney Inc.

Among other precious metals, silver climbed 0.5 percent to $16.06 an ounce.

Palladium slipped 0.2 percent to $945.97 an ounce, while platinum gained 0.3 percent to $842.70.

All three metals were headed for their fourth straight weekly decline.

 

(Reporting by Apeksha Nair and Karen Rodrigues in Bengaluru, Editing by Joseph Radford and Sherry Jacob-Phillips)

 

 

 

UPDATE 1-Confusion as China ports delay U.S. cargoes, disrupting trade - Reuters News

06-Jul-2018 03:11:03 PM

  • Customs waiting for official word on new tariffs -sources
  • Punitive duties would affect $34 billion of U.S. products
  • Absence of official statement sows confusion in markets

Updates with details

BEIJING, July 6 (Reuters) - Some major Chinese ports delayed clearing goods from the United States on Friday, four sources said, potentially disrupting imports worth billions of dollars as the world's top two economies head towards an outright trade war.

News of the hold-ups came as Washington imposed tariffs on $34 billion of Chinese imports from 0401 GMT on Friday.

Beijing had said it would retaliate with punitive measures on U.S. products worth a similar amount, including soybeans, pork and cotton, but it had not officially confirmed on Friday that they had taken effect.

The port of Shanghai had put on hold clearing some U.S. imports through customs, said an official at a company in the coastal city, which handles customs clearance for importers. He had spoken to customs officials.

There did not appear to be any direct guidance to hold up cargoes, but some customs departments were waiting until they had received official instructions from the central government on whether to start collecting the hefty new import tariffs on hundreds of products, the sources said.

A wine merchant in Shanghai, one of the country's busiest trading hubs, said customs brokers were also slowing the clearance process because of confusion about how and when to implement duties.

"They're holding everything ... because there's uncertainty," he said.

"But overall, this weekend they should be able to identify what the taxes are and how they should be implemented, and they should be processed as normal."

The absence of an official statement enforcing the tariffs also sowed confusion among nervous commodity traders, adding to choppy futures trading as soymeal and soybean contracts came under heavy selling pressure in afternoon trade.

A commodities trader in eastern Shandong province was told by customs at a major northern port that they have slowed the clearance of goods from the United States on Beijing's list.

Delays started at midnight local time on Thursday as agents waited for official go-ahead from the central government to enforce the new tariffs, he said.

The General Administration of Customs did not comment on the delays and said the agency will implement the tariffs as announced on Thursday.

The agency said on Thursday that tariffs on U.S. products will take effect immediately after U.S. tariffs on Chinese goods kick in.

 

(Reporting by Yawen Chen, Hallie Gu and Josephine Mason in BEIJING and Brenda Goh in SHANGHAI; editing by Richard Pullin)

 

 

 

EXPLAINER-The fallout in commodities from the U.S.-China Trade war: what's at stake - Reuters News

06-Jul-2018 03:05:00 PM

By Josephine Mason

- Washington imposed tariffs on $34 billion of Chinese imports on Friday and Beijing has said it will retaliate with punitive measures on U.S. products worth a similar amount, including soybeans, pork and cotton.

The Chinese government had not officially confirmed on Friday afternoon that the retaliatory tariffs had taken effect.

But the tit-for-tat measures have escalated the trade dispute between the world's two largest economies and the world's commodities markets are increasingly embroiled in the bust-up.

The higher U.S. tariffs went into effect just after noon in Beijing (0401 GMT).

The U.S. and China have also issued a second batch of proposed duties on $16 billion of each other's goods. These would hit U.S. energy exports, such as coal and crude oil, among other areas. It is unclear when these will come into effect.

Below is a detailed breakdown of the markets affected by the tariffs imposed and proposed:

 

FOOD:

* Beijing's tariffs will have the biggest impact on soybeans, the United States' top agricultural export to China in 2017 worth about $12.7 billion, hurting U.S. farmers in states, such as Iowa and Texas, which backed Republican President Donald Trump in the 2016 election.

Buying interest in U.S. beans from China, the world's top importer of the oilseed, has slowed to a trickle ahead of the tariffs, with one remaining U.S. cargo heading for China still on the water.

The vessel, Peak Pegasus, carrying 70,000 tonnes of the U.S. oilseed for state grain trader Sinograin, was due to arrive in the port of Dalian at 5:00 p.m. (0900 GMT) on Friday, just hours after the duties went into effect.

Some shipments marked for China were due to be loaded from the U.S. Pacific Northwest, and are likely to get sent elsewhere as exporters scramble to avoid paying the tariff, a U.S. trader said.

In the months ahead though, China will struggle to replace the U.S. beans, forcing processors, which crush the beans to make oil and animal feed, to pay the extra duty or find substitutes.

Rabobank reckons China may have to buy up to 15 million tonnes of U.S. beans at tariff prices. Crushers may not pass on the inflated cost at least in the short term, further eroding their already low margins, the bank said in a research note.

The biggest impact will likely be seen in sales of the next U.S. crop, which will come to market in September.

In the meantime, Brazil, the world's top exporter, will likely pick up the slack, although a trade association warned on Thursday the South American country may need to import the oilseed from the United States this year to satisfy demand from local processors.

* U.S. pork was already saddled with duties enacted in an earlier round of the trade row and now faces an extra 25 percent tariff that would raise the total charges up to 62 percent.

European pork will gain some ground over the U.S., which shipped almost $500 million worth of pork to China last year. U.S. shipments have nearly ground to a halt since the 25 percent tariffs implemented on April 2.

 

ENERGY:

* A record volume of U.S. crude oil is heading to China even as Beijing's planned tariffs threaten to cut off a relatively new and burgeoning business for U.S. exporters.

Nine vessels with 26.6 million barrels of crude oil loaded in Texas and Alaska and worth about $2 billion are due to land over the next five weeks, Thomson Reuters trade flow data shows.

That equates to 700,000 barrels per day, 8 percent of China's daily imports and a large volume for the United States, a newcomer to the Chinese market.

If enacted, the import duty would make U.S. oil less competitive than other crudes, likely causing a decline in Chinese purchases and forcing U.S. oil firms to find other buyers.

Amid a relatively well-supplied global oil market, energy consultancy Wood Mackenzie said the United States "would find it hard to find an alternative market that is as big as China," as Chinese buyers make up 20 percent of U.S. overseas crude sales.

China would likely replace the lost U.S. barrels from their top sellers Russia or Saudi Arabia, which have recently announced plans to raise output.


Among other energy products, China noticeably spared U.S. liquefied natural gas (LNG) exports from potential import tariffs, but in doing so, it has preserved a potential weapon should the trade war with Washington deepen.

However, coal could be caught in the crossfire if the second batch of duties are introduced.

Replacing American shipments with coal from other places would not be difficult for China, but a loss of business with the world's top importer of the fuel would hurt companies in West Virginia, a state that heavily favoured Trump in the 2016 presidential election.

 

(Reporting by Josephine Mason, Additional reporting by Dominique Patton in BEIJING, Karl Plume in CHICAGO and Henning Gloystein in SINGAPORE; Editing by Christian Schmollinger)




GRAINS-Soybeans tick up after hitting contract-low on U.S.-China trade war - Reuters News

06-Jul-2018 03:37:57 PM

  • Wheat eases after 2-session rally on global supply woes

By Naveen Thukral

SINGAPORE, July 6 (Reuters) - U.S. new-crop soybean prices ticked higher on Friday after dropping to a contract-low earlier in the session as the trade war between the United States and top importer China escalated.

Wheat slid after two sessions of strong gains driven by concerns over adverse weather.

Chicago Board of Trade November soybeans hit a contract-low at $8.53 a bushel and the market was up 0.2 percent at $8.57-3/4 a bushel by 0718 GMT. The most-active contract hit a 10-year low of $8.42 a bushel last month.

Wheat dipped 0.2 percent to $5.04-1/2 a bushel after rising 5.3 percent in the last two sessions, while corn gave up 0.3 percent to $3.63-1/2 a bushel.

"The soybean market has largely factored in Chinese tariffs. We expect Brazilian soybeans premium to rise further when the tariffs start," said one India-based agricultural commodities analyst.

U.S. tariffs on $34 billion in Chinese imports took effect as a deadline passed on Friday, and with Beijing having vowed to respond immediately in kind, the world's two biggest economies took a high-stakes turn towards all-out trade conflict.

China is expected to raise tariffs on U.S. soybeans to a level that is expected to curb Chinese demand for U.S. shipments.

China's soymeal futures fell more than 2 percent on Friday afternoon before erasing most of the losses, amid market confusion over whether China had implemented its tariffs on soybeans and other goods from the United States.

The January soymeal contract on the Dalian Commodity Exchange fell to a low of 3,090 yuan a tonne before closing down 0.6 percent at 3,162 yuan a tonne.

Brazil, the world's largest soybean exporter, may have to import the oilseed from the United States this year to satisfy demand from local processors, an executive of exporters association Anec said on Thursday.

If China's demand for Brazilian soy rises due to the trade war with the United States, local processors may have to resort to importing 500,000 to 1 million tonnes from the United States, Luis Barbieri said at an event in Sao Paulo.

Private analytics firm Informa Economics revised upward its forecast for the U.S. 2018 corn yield to 176.0 bushels per acre (bpa), from 174.5 bpa previously, and raised its U.S. soybean yield forecast to 49.8 bpa from 49.5 bpa, the firm said on Thursday in a client note seen by Reuters.

Wheat futures have rallied sharply in the last two sessions on worries about smaller harvests from major exporters.

The European Union may harvest almost 6 million tonnes less wheat this year after hot and dry weather damaged some crops, a Reuters poll showed.

Commodity funds were net buyers of CBOT wheat and corn futures contracts on Thursday and net sellers of soybeans, soymeal and soyoil, traders said.

Trader estimates of fund activity in corn ranged from selling a net 6,000 contracts to buying a net 5,000 contracts.

 

 

 

GRAINS-Soybeans tick up after hitting contract-low on U.S.-China trade war - Reuters News

06-Jul-2018 03:37:57 PM

  • Wheat eases after 2-session rally on global supply woes

Adds China markets, updates prices

By Naveen Thukral

SINGAPORE, July 6 (Reuters) - U.S. new-crop soybean prices ticked higher on Friday after dropping to a contract-low earlier in the session as the trade war between the United States and top importer China escalated.

Wheat slid after two sessions of strong gains driven by concerns over adverse weather.

Chicago Board of Trade November soybeans hit a contract-low at $8.53 a bushel and the market was up 0.2 percent at $8.57-3/4 a bushel by 0718 GMT. The most-active contract hit a 10-year low of $8.42 a bushel last month.

Wheat dipped 0.2 percent to $5.04-1/2 a bushel after rising 5.3 percent in the last two sessions, while corn gave up 0.3 percent to $3.63-1/2 a bushel.

"The soybean market has largely factored in Chinese tariffs. We expect Brazilian soybeans premium to rise further when the tariffs start," said one India-based agricultural commodities analyst.

U.S. tariffs on $34 billion in Chinese imports took effect as a deadline passed on Friday, and with Beijing having vowed to respond immediately in kind, the world's two biggest economies took a high-stakes turn towards all-out trade conflict.

China is expected to raise tariffs on U.S. soybeans to a level that is expected to curb Chinese demand for U.S. shipments.

China's soymeal futures fell more than 2 percent on Friday afternoon before erasing most of the losses, amid market confusion over whether China had implemented its tariffs on soybeans and other goods from the United States.

The January soymeal contract on the Dalian Commodity Exchange fell to a low of 3,090 yuan a tonne before closing down 0.6 percent at 3,162 yuan a tonne.

Brazil, the world's largest soybean exporter, may have to import the oilseed from the United States this year to satisfy demand from local processors, an executive of exporters association Anec said on Thursday.

If China's demand for Brazilian soy rises due to the trade war with the United States, local processors may have to resort to importing 500,000 to 1 million tonnes from the United States, Luis Barbieri said at an event in Sao Paulo.

Private analytics firm Informa Economics revised upward its forecast for the U.S. 2018 corn yield to 176.0 bushels per acre (bpa), from 174.5 bpa previously, and raised its U.S. soybean yield forecast to 49.8 bpa from 49.5 bpa, the firm said on Thursday in a client note seen by Reuters.

Wheat futures have rallied sharply in the last two sessions on worries about smaller harvests from major exporters.

The European Union may harvest almost 6 million tonnes less wheat this year after hot and dry weather damaged some crops, a Reuters poll showed.

Commodity funds were net buyers of CBOT wheat and corn futures contracts on Thursday and net sellers of soybeans, soymeal and soyoil, traders said.

Trader estimates of fund activity in corn ranged from selling a net 6,000 contracts to buying a net 5,000 contracts.

 

 

 

WRAPUP 6-As tariffs strike, U.S., China trade conflict escalates - Reuters News

06-Jul-2018 03:35:34 PM

  • Tariffs take effect as U.S. deadline passes
  • China says forced to respond to U.S. tariffs
  • State media: Trump administration like "gang of hoodlums"
  • Uncertainty over China implementation of tariffs

By Michael Martina and David Lawder

BEIJING/WASHINGTON, July 6 (Reuters) - U.S. tariffs on $34 billion in Chinese imports took effect as a deadline passed on Friday, with Beijing saying it had no choice but to respond in kind, as the two trading giants escalated a bitter row.

Hours before Washington's deadline for the tariffs to take effect, U.S. President Donald Trump upped the ante, warning that the United States may ultimately target over $500 billion worth of Chinese goods, or roughly the total amount of U.S. imports from China last year.

China's commerce ministry, in a statement shortly after the U.S. deadline passed at 0401 GMT on Friday, said that it was forced to retaliate, meaning $34 billion worth of imported U.S. goods including autos and agricultural products also faced 25 percent tariffs.

However, China stopped short of actually saying it had implemented tariffs, stirring market confusion.

"China promised to not fire the first shot, but to defend national core interests and the interests of the people it has no choice but to strike back as necessary," the Commerce Ministry said in a statement.

Some Chinese ports had delayed clearing goods from the United States, four sources said on Friday. There did not appear to be any direct instructions to hold up cargoes, but some customs departments were waiting for received official guidance on imposing added tariffs, the sources said.

Ford Motor Co said on Thursday that for now, it will not hike prices of imported Ford and higher-margin luxury Lincoln models in China.

China's commerce ministry called the U.S. actions "a violation of world trade rules" and said that it had "initiated the largest-scale trade war in economic history."

Chinese shares, which have been battered in the run-up to the tariff deadline, reversed earlier losses to close higher, but the yuan remained weaker against the dollar. Asian equities wobbled but also managed to end up.

"We can probably say that the trade war has officially started," said Chen Feixiang, professor of applied economics at Shanghai Jiaotong University's Antai Colege of Economics and Management.

"If this ends at $34 billion, it will have a marginal effect on both economies, but if it escalates to $500 billion like Trump said then it's going to have a big impact for both countries," Chen said.

'GANG OF HOODLUMS'

Trump has railed against Beijing for intellectual property theft and barriers to entry for U.S. businesses and a $375 billion U.S. trade deficit with China.

Throughout the escalating conflict, China has sought to take the high road, positioning itself as a champion of free trade, but state media ramped-up criticism of Trump on Friday.

"In effect, the Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China," the state-run China Daily newspaper said in an English language editorial on Friday.

"Its unruliness looks set to have a profoundly damaging impact on the global economic landscape in the coming decades, unless countries stand together to oppose it."

While the initial volley of tariffs was not expected to have major immediate economic impact, the fear is that a prolonged battle would disrupt makers and importers of affected goods in a blow to global trade, investment and growth.

"For companies with supply exposure to tariffs, they will move sourcing country of origin if they can; if they can't, they'll pass on as much of the tariff cost as they can, or see a cut in margins," said Jacob Parker, vice president of China operations at the U.S.-China Business Council in Beijing.

"Companies don't know how big this may get, or how it will end."

A China central bank adviser said the planned U.S. import tariffs on $50 billion worth of Chinese goods - $34 billion plus a planned follow-on list worth $16 billion - will cut China's economic growth by 0.2 percentage points, although the overall impact would be limited, the official Xinhua news agency reported Friday.

The dispute has roiled financial markets including stocks, currencies and the global trade of commodities from soybeans to coal in recent weeks.

"This is not economic Armageddon. We will not have to hunt our food with pointy sticks. But it is applying the brakes to a global economy that has less durable momentum than appears to be the case," Rob Carnell, chief economist at ING, said in a note.

 

VALVES AND DISK DRIVES

U.S. Customs and Border Protection officials were due to collect 25 percent duties on a range of products including motor vehicles, computer disk drives, parts of pumps, valves and printers and many other industrial components.

The list avoids direct tariffs on consumer goods such as cellphones and footwear. But some products, including thermostats, are lumped into intermediate and capital goods categories.

Chinese Commerce Ministry spokesman Gao Feng said on Thursday that the proposed U.S. tariffs would hit many American and foreign companies operating in China and disrupt their supplies of components and assembly work.

Foreign companies accounted for $20 billion, or 59 percent, of the $34 billion of exports from China that would be subject to new U.S. tariffs, with U.S. firms accounting for a significant part of that 59 percent, Gao said.

China's tariffs on hundreds of U.S. goods include top exports such as soybeans, sorghum and cotton, threatening U.S. farmers in states that backed Trump in the 2016 U.S. election, such as Texas and Iowa.

 

(Reporting by Adam Jourdan in SHANGHAI, Michael Martina and Elias Glenn in BEIJING, David Lawder and Jeff Mason WASHINGTON; Writing by Tony Munroe;
Editing by Sam Holmes & Shri Navaratnam)


Tuesday, July 3, 2018

Stock & Commodities Related News.

UPDATE 4-Libya force majeure pushes up oil, US crude hits highest since late 2014 - Reuters

03-Jul-2018 03:32:20 PM

  • Libyan disruption cuts 850,000 bpd of oil from market
  • But high fuel prices, trade disputes threaten to crimp demand
  • Trade row turbulence knocks Asian shares to 9-month low

Recasts; adds WTI high, comment

By Henning Gloystein

SINGAPORE, July 3 (Reuters) - Oil prices rose on Tuesday after Libya declared force majeure on some of its supplies, while an ongoing Canadian outage lifted U.S. crude to levels not seen since late 2014.

Traders said this was largely due to an expected fall in North American fuel inventories following the 350,000 barrel per day (bpd) Syncrude outage in Canada.

Outside North America, Brent crude oil futures were at $77.77 per barrel, up 44 cents, or 0.6 percent.

"Oil bulls seem to have returned after Libya suspended oil exports from two key ports," said Hussein Sayed, chief market strategist at futures brokerage FXTM.

"If Libya's oil doesn't return fast to the market it will be an important test to OPEC's spare capacity, especially given that output from Venezuela and Iran is expected to fall significantly in the next couple of months," he added.

The Organization of the Petroleum Exporting Countries (OPEC) saw June output at 32.32 million bpd, a Reuters survey showed on Monday, up 320,000 bpd from May. The June total is the highest since January 2018.

The UAE's Abu Dhabi National Oil Co (ADNOC), a major producer within OPEC, said on Tuesday it is able to increase production by several hundred thousand bpd if needed.

However, Libya's National Oil Corporation (NOC) declared force majeure on loadings from Zueitina and Hariga ports on Monday, resulting in 850,000 bpd of supplies being disrupted.

 

DEMAND SLOWDOWN

Outside the supply-side, a slowdown in demand is emerging, potentially ending years of consecutive records.

"U.S. petroleum demand growth slowed significantly to 385,000 bpd year-on-year in April, compared with a growth of more than 730,000 bpd year-on-year in Q1," Barclays bank said, adding that this was mostly due to higher fuel prices.

In Asia, the world's top oil consuming region, seaborne oil imports have been falling since May, as higher costs turned off consumers and as the escalating trade dispute between the United States and China starts to impact the economy.

Chinese stocks went into a tail spin on Tuesday as turbulence gripped equity markets in Asia, which sank to nine-month lows as investors feared the Sino-U.S. trade row could derail a rare period of synchronized global growth.

"There are ... signs that growth in China has slowed in recent months, particularly infrastructure spending by local governments. I would assume that infrastructure investment is quite energy intensive, so perhaps that had a knock-on effect to oil demand," said Frederic Neumann, Co-Head of Asian Economic Research at HSBC in Hong Kong.

"At this stage, however, it appears more that growth in Asia is softening, rather than decelerating sharply," he added.

(Reporting by Henning Gloystein
Editing by Joseph Radford and Richard Pullin)

 

 

 

Platinum near 10-year low; dollar, Germany trade jitters weigh - Reuters News

03-Jul-2018 09:25:21 AM

By Renita D. Young

NEW YORK, July 2 (Reuters) - Autocatalyst metal platinum tumbled to its lowest level in nearly 10 years on Monday, as the greenback strengthened, an intensifying U.S.-European Union trade spat pressured precious metals, and political risk in Germany weighed.

Traders said concerns in Germany were a factor. German 10-year bond yields dipped to five-week lows on Monday, pushed down by political uncertainty in Germany, trade war fears and an expectation that the European Central Bank could buy more long-dated bonds from next year to keep euro-zone borrowing costs in check.

The pan-European STOXX 600 ended the session down 0.8 percent with losses across the continent and sectors. Germany's trade-sensitive DAX settled down 0.6 percent.

A stronger U.S. dollar against a basket of currencies also pressured platinum prices, because it makes greenback-priced precious metals more expensive for holders of other currencies.

The dollar received a boost from better-than-expected U.S. manufacturing data earlier on Monday.

A deepening auto tariff spat between the United States and the European Union has pressured all precious metals, traders said.

The European Union has warned the United States that imposing import tariffs on cars and car parts would harm the U.S. automotive industry and likely lead to counter-measures on $294 billion of U.S. exports.

The expectation of higher U.S. interest rates pressured platinum and other precious metals, traders said. Higher rates tend to strengthen the dollar and boost bond yields, reducing the appeal of non-yielding precious metals.

The U.S. Federal Reserve is expected to release minutes from its June meeting on Thursday.

 

(Reporting by Renita D. Young
Editing by Leslie Adler)

 

 

PRECIOUS-Gold falls for a second day as dollar strength outweighs safe-haven demand - Reuters News

03-Jul-2018 12:29:45 PM

  • Spot gold may break support at $1,237/oz -technicals
  • Trade war concerns grow ahead of July 6 deadline
  • Platinum hovers near a 10-year low
  • SPDR holdings fall 1.19 on Monday

By Karen Rodrigues

BENGALURU, July 3 (Reuters) - Gold prices fell for a second day on Tuesday to the lowest since December as strength in the U.S. dollar put pressure on the yellow metal, offsetting safe-haven demand amid mounting global trade tensions.

Spot gold fell 0.2 percent to $1,239.63 an ounce as of 0342 GMT after earlier dropping to its lowest since Dec. 12 at $1,237.36. In the previous session, it fell about 1 percent.

U.S. gold futures were 0.1 percent lower at $1,240.60 an ounce.

"It's all about the USD (U.S. dollar) demand rather than any news specific as the markets insatiable demand for USD to ride out yet another building perfect storm has the USD glittering. As such Gold is especially vulnerable in such an environment," said Stephen Innes, APAC trading head at OANDA.

The dollar was a shade lower on Tuesday but remained broadly supported after strong U.S. economic data.

A stronger dollar increases the cost of dollar-denominated bullion for investors paying in other currencies.

Meanwhile, Asian shares hit a nine-month low on Tuesday on rising fears over tense trade relations between the United States and major economies, as Chinese markets saw another rocky day. The United States is set to place tariffs on $34 billion worth of Chinese goods on July 6.

U.S. President Donald Trump warned the World Trade Organization on Monday that "we'll be doing something" if the United States is not treated properly, just hours after the European Union said that U.S. automotive tariffs would hurt its own vehicle industry and prompt retaliation.

The U.S. Chamber of Commerce on Monday denounced President Trump's handling of global trade disputes, issuing a report that argued tariffs imposed by Washington and retaliation by its partners would boomerang badly on the American economy.

Gold is usually seen as a safe-haven asset in times of political and economic uncertainties but has lately failed to do so.

"Gold seems to be under pressure until we get to a level when everyone starts stepping in but that might be only between $1,235-$1,215 era," a Hong Kong-based trader said.

Spot gold may break a support at $1,237 per ounce and fall to the next support at $1,229, Reuters technicals analyst Wang Tao said.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 1.19 percent to 809.31 tonnes on Monday.

In other precious metals, silver was down 0.1 percent at $15.82 an ounce and palladium fell 0.4 percent to $940.10 per ounce.

Platinum was 0.3 percent lower at $813.30 an ounce. In the prior session, it fell to the lowest since December 2008 at $804.

Autocatalyst metal platinum tumbled as the greenback strengthened, an intensifying U.S.-European Union trade spat pressured precious metals, and political risk in Germany weighed.

 

(Reporting by Karen Rodrigues in Bengaluru; Editing by Amrutha Gayathri and Christian Schmollinger)

 

 

 

METALS-Copper bounces back from 7-month low, focus on U.S.-China trade dispute - Reuters News

03-Jul-2018 03:20:21 PM

By Naveen Thukral

- Copper rose on Tuesday, bouncing back from last session's seven-month low, although escalating U.S.-China trade tensions kept a lid on the market.

Asian shares fell as sentiment remained fragile in the face of tense trade relations between the United States and other major economies, with investors braced for another potentially rocky day for Chinese markets.

Three-month copper on the London Metal Exchange was up 0.9 percent at $6,582 a tonne by 0710 GMT, after hitting its lowest since Dec. 5 at $6,519 a tonne on Monday.

The most-traded copper contract on the Shanghai Futures Exchange finished up 0.2 percent at 51,430 yuan ($7,704.64) a tonne.

"It is fundamentals as well as macro-economic environment which are keeping pressure on copper prices," said Meng Jie Wu, copper analyst CRU in Beijing. "Manufacturing costs are pretty high for the downstream industry."

 

TRADE DISPUTE: U.S. President Donald Trump has this year sought to renegotiate some of the United States' trading relationships, in particular with China. He has imposed tariffs on some imports, in turn sparking retaliatory action by other countries, raising fears of a global trade war.

MANUFACTURING: Growth in China's manufacturing sector cooled slightly in June as firms faced rising input costs and a decline in export orders amid an escalating trade dispute with the United States, a private survey showed on Monday. China accounts for nearly half of global copper consumption, estimated this year at around 24 million tonnes.

CHINA MONEY: Monetary easing in China is expected to help support industrial metals. China's central bank in April unexpectedly cut reserve requirement ratios (RRR) for most banks, in a move that was earlier and more aggressive than expected, highlighting concerns over liquidity.

DOLLAR: The dollar eased marginally against its peers on Tuesday, as the euro steadied after partners in Germany's coalition settled a row over migration that had threatened to topple Chancellor Angela Merkel's government.

 

(Reporting by Naveen Thukral; editing by Richard Pullin and Subhranshu Sahu)

 

 

 

POLL-U.S. corn seen 76 pct good to excellent, soybeans 72 pct - Reuters News

03-Jul-2018 12:55:51 AM

- The U.S. Department of Agriculture is likely to lower its weekly condition ratings for the U.S. corn and soybean crops following a hot week in the Midwest crop belt and excessive rains in a few areas, according to a survey of analysts.

The USDA is expected to rate 76 percent of the U.S. corn crop in good to excellent condition, down from 77 percent a week ago, according to an average of estimates by 10 analysts surveyed by Reuters on Monday.

The government will rate 72 percent of the U.S. soybean crop as good to excellent, analysts predicted, down from 73 percent the prior week.

Nonetheless, ratings for both corn and soybeans would still be among the highest on record for this time of year in USDA data dating to the mid-1980s.

The USDA is scheduled to release its report at 3 p.m. CDT (2000 GMT) on Monday.

Analysts, on average, expect the USDA to rate 76 percent of the U.S. spring wheat crop as good to excellent, down from 77 percent a week ago.

For winter wheat, analysts expect the USDA to show the harvest as 56 percent complete, up from 41 percent a week ago.


(Reporting by Julie Ingwersen; Editing by Dan Grebler)

 

 

 

TECHNICALS-CBOT wheat may bounce into $5.08 to $5.13-1/4 range - Reuters News

03-Jul-2018 03:23:47 PM

SINGAPORE, July 3 (Reuters) - CBOT December wheat may bounce into a range of $5.08 to $5.13-1/4 per bushel, as it has found a support at $4.96.

The support is provided by the 176.4 percent projection level of a downward wave c from $5.75-1/2. This support is not working alone. It coincides with another one at $4.96-1/2 on the daily chart, which is the 76.4 percent retracement of the uptrend from $4.68-1/4 to $5.88.

The downtrend from $5.88 could have temporarily ended. It will be reversed by a decent bounce. A break below $4.96 (first chart) could cause a loss to $4.91-1/2.


** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.

No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses. **

 

(Reporting by Wang Tao; Editing by Subhranshu Sahu)

 

 

 

TECHNICALS-CBOT corn may hover above $3.58-3/4 - Reuters News

03-Jul-2018 02:43:04 PM

SINGAPORE, July 3 (Reuters) - CBOT December corn has found a support at $3.58-3/4 per bushel and may hover above this level or bounce into a range of $3.64-1/4 to $3.68-1/2.

The support is identified as the 100 percent projection level of a downward wave C from $4.00-1/2. This barrier is pivotal in determining whether the wave C could extend into a range of $3.32-3/4 to $3.42-3/4.

Regardless of a possible extension, the support could be strong enough to hold the fall, or cause a decent bounce. A break above the nearest resistance at $3.64-1/4 could open the way towards $3.68-1/2 to $3.74-1/2.

A break below $3.58-3/4 could confirm the extension of the wave C towards $3.52-1/2.

 

** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.

No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses. **

 

(Reporting by Wang Tao; Editing by Subhranshu Sahu)

 

 

 

TECHNICALS-CBOT soybeans may hover above $8.66 - Reuters News

03-Jul-2018 02:28:14 PM

SINGAPORE, July 3 (Reuters) - The CBOT soybeans November contract seems to have stabilized around a support at $8.66 per bushel. It may hover above this level or bounce toward a resistance at $8.75-1/2.

The support is identified as the 86.4 percent projection levels of a downward wave (c) from $8.99. Even though theoretically this wave is capable of travelling to $8.61, it could end around $8.66 as well.

The longer the contract hovers above $8.66, the more likely it will reverse its downtrend around this level. A break above $8.75-1/2 could lead to a gain into $8.80 to $8.84-1/4 range.

A break below $8.66 could cause a loss limited to $8.61.

** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.

No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses. **

 

(Reporting by Wang Tao; Editing by Vyas Mohan)

 

 

 

European shares edge higher after breakthrough in Merkel migration row - Reuters News

03-Jul-2018 04:06:47 PM

- European shares edged higher on Tuesday after German Chancellor Angela Merkel's conservatives settled a row over migration, a tailwind for investors wary that a U.S. led trade war could derail global growth.

The pan-European STOXX 600 was up 0.2 percent by 0736 GMT with Germany's DAX posting the best performance with a 0.6 percent rise.

The dispute over immigration had threatened to topple Merkel's fragile governing coalition but in a breakthrough late on Monday evening, her rebellious interior minister dropped his threat to resign after five hours of talks.

Asian shares, which had sustained heavy falls overnight, particularly in China, recouped some of their losses before European bourses opened, helping restore sentiment.

Chinese financial markets have been jittery ahead of a July 6 deadline, when the U.S. is set to slap tariffs on $34 billion worth of Chinese goods that Beijing has vowed to match with tariffs on U.S. products.

Miner Glencore fell 8.5 percent after it said a unit was subpoenaed from the United States Department Of Justice.

Societe Generale was flat and Commerzbank rose 0.4 percent after the latter agreed to sell its equity markets and commodities business (EMC) to the French bank.

 

(Reporting by Julien Ponthus
Editing by Raissa Kasolowsky)

 

 

 

WRAPUP 3-China seeks to soothe markets as trade angst rattles stocks, yuan - Reuters

03-Jul-2018 02:54:10 PM

By Winni Zhou and John Ruwitch

- China's central bank moved to calm jittery financial markets on Tuesday after the yuan dropped through the psychologically significant 6.7 to the dollar mark, hitting its lowest in almost a year as anxieties over U.S. trade frictions deepened.

Stocks also sank in morning trade as Beijing and Washington hurtled toward an end-of-week tariff deadline that has kept investors in China nervous, although they recouped their losses and flipped into positive territory in the afternoon.

Chinese currency and equity markets have been on edge ahead of July 6, when U.S. tariffs on $34 billion worth of Chinese goods kick in. Beijing has said it would retaliate with tariffs on U.S. products.

In a statement posted on the website of the People's Bank of China, Governor Yi Gang said the central bank was closely watching fluctuations in the foreign exchange market and would seek to keep the yuan at a stable and reasonable level. Cross-border capital flows were under control, Yi said.

State-controlled media had earlier called the fall in stocks an "irrational overreaction" and urged investors not to panic over the growing trade frictions.

After the morning drop, market participants suspected the central bank of intervening in the currency market to support the yuan.

The yuan fell to 6.7204 per dollar, its weakest since Aug. 7, 2017 and the first time it dropped below 6.7 since Aug. 9, 2017, before crossing back and forth over the line. At 0542 GMT it was trading at 6.7010. The currency has lost more than 4 percent of its value against the dollar since mid-June.

"It's a crucial day for the yuan today given it weakened past 6.7 per dollar," said Ken Cheung, senior Asian FX strategist at Mizuho Bank in Hong Kong.

"Let's see what level the yuan closes today, and see whether the central bank would take out some measures to stabilise the exchange rate."

Four traders told Reuters that major state-owned banks were seen swapping yuan for dollars in the forwards market and immediately selling some of them into spot market, which helped support the Chinese currency. Traders and economists say major state-owned banks sometimes act on behalf of the central bank in the foreign exchange interbank market.

The central bank was not immediately available to respond to Reuters' request for comment on the yuan's moves.

"It feels like the state-owned banks are stocking up on bullets to prevent the yuan from falling too much," said one trader at a Chinese bank in Shanghai.

The central bank earlier set the midpoint at 6.6497 yuan per dollar, its weakest fixing in about 10 months.

Speaking at an event to mark the one-year anniversary of a scheme that links Hong Kong and mainland bond markets, PBOC deputy governor and head of the foreign exchange regulator Pan Gongsheng said China was confident it could keep the yuan basically stable and at a "reasonable" level.

Another foreign exchange trader at a Chinese bank in Shanghai said those comments went some way toward calming a jittery market.

 

TRADE CONDITIONS

The outlook for Sino-U.S. trade relations was further clouded on Tuesday by Washington's moves to block China Mobile from offering services in the U.S. and news that growth in China's exports to the United States has slowed significantly this year.

Analysts at Commerzbank said in a note on Tuesday that while concerns about the trade conflict were creating a drag on the yuan, they did not expect the government to use the exchange rate as a weapon in the trade dispute.

"The uncertainty related to the trade conflict, the weak growth outlook and the easing bias in Chinese monetary policy suggest a weaker renminbi in the coming quarters," they wrote.

In equities, the blue chip CSI300 Index slumped by more than 2 percent in the morning trading session, and the Shanghai Composite Index was down more than 1 percent before staging an afternoon comeback. At 0543 GMT the Shanghai Composite was down just 0.05 percent while the CSI300 was off 0.33 percent.

Hong Kong's Hang Seng Index was hammered after a one-day hiatus on Monday to mark the day that the former British colony was returned to China. It was down by around 3 percent.

"Intensifying trade frictions between China and the United States are a test that the Chinese economy inevitably had to experience during its rise," the Economic Daily said.

"We have long anticipated and prepared for this...The impact on the Chinese economy is within a controllable range."

The Securities Daily newspaper, meanwhile, called the slump in the mainland stocks an overreaction, saying that investors should have confidence in China's domestic market and that the current macroeconomic situation was stable.

 

 

(Reporting by Winni Zhou and John Ruwitch; Editing by Sam Holmes)

 

 

FOREX-Dollar consolidates gains after rising three straight months - Reuters News

03-Jul-2018 03:48:08 PM

By Saikat Chatterjee

LONDON, July 3 (Reuters) - The dollar consolidated gains on Tuesday after three consecutive months of gains as investors waited for minutes of the U.S. Federal Reserve's June meeting and jobs data that should confirm whether policymakers will raise interest rates twice this year.

The euro also gained after Germany's coalition settled a row over migration that had threatened to topple Chancellor Angela Merkel's government.

"Notwithstanding the trade war concerns, the broader picture is the U.S. central bank still remains the most hawkish central bank among its peers and that should support the dollar for now," said Jane Foley, a senior currency strategist at Rabobank in London.

In early trading, the dollar was down 0.3 percent at 94.76. It has gained 5 percent over the last three months taking its year-to-date gains to nearly 3 percent.

The Fed will release minutes of its June meeting on Thursday, and investors will parse the data and the statements to gauge whether is still on track to raise interest rates twice more this year. Monthly payrolls data follow on Friday.

Broader appetite for risk in currency markets rose with the Australian dollar rising half a percent the day after its central bank left interest rates unchanged and signaled a steady outlook at a policy meeting.

The euro edged 0.1 percent higher at $1.1652.

The Chinese yuan remained volatile headed into July 6, when U.S. tariffs on Chinese exports are due to take effect.

The yuan earlier fell to 6.7204 per dollar, its weakest since August 2017, before recovering to 6.7035. Traders said state-owned banks were trying to prop up the currency.

"There's a strong element of 'risk off' generated by trade concerns behind the dollar's latest rise. That said, the dollar has managed to gain only as emerging market and commodity currencies have slid due to risk aversion," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.

 

(Reporting by Saikat Chatterjee, additional reporting by Shinichi Saoshiro in Tokyo, editing by Larry King)