US STOCKS-Wall St gripped by trade war fears - Reuters News
22-Mar-2018 11:52:04 PM
• Dow, S&P and Nasdaq all drop more than 1.5 pct
• Trump plans tariffs on $50 bln worth of China imports
• Industrials tumble: Boeing, Caterpillar down 3.5 pct
• Rate-sensitive REIT and utilities sectors gain
• VIX jumps to three-day high; Treasury yields drop
Changes comment, adds details, updates prices
By Sruthi Shankar
March 22 (Reuters) - The three major U.S. indexes fell more than 1.5 percent on Thursday, on track for their steepest drop in six weeks, gripped by the growing threat of a global trade war.
President Donald Trump was expected to lay the foundation for tariffs on Chinese imports worth around $50 billion, a move likely to trigger retaliation from Beijing. The presidential memorandum is expected to be signed at 12:30 p.m. ET.
China is preparing a range of responses and has threatened to retaliate by hitting U.S. agricultural exports.
"The markets should dislike the possibility of a trade war between United States and other countries," said Stephen Wood, chief market strategist for Russell Investments in New York.
"However, there's a lot of negotiation taking place there. Suddenly we're seeing smaller numbers and exemptions."
Still, major industrials Boeing and Caterpillar fell more than 3.5 percent.
Nine of the 11 major S&P sectors were in the red, with five of them down more than 2 percent. Only the interest-rate sensitive utilities and real estate sectors were higher after the Federal Reserve raised interest rates, as was widely expected, on Wednesday.
The Fed forecast at least two more hikes for 2018, also as expected. But nearly half of the policy makers projected three more this year and the pace of increases is seen quickening in the next two years, ending the years-long easy-money policy.
"What we've got is a strong risk-off trade, which I think is a follow on to the comments from (Fed Chair Jerome) Powell and some of the Facebook issues," said Paul Norte, portfolio manager at Kings view Asset Management in Chicago.
"Investors are looking to take some money off the table."
At 11:50 a.m. ET, the Dow Jones Industrial Average fell 446.9 points, or 1.81 percent, to 24,235.41. The S&P 500 lost 44.65 points, or 1.65 percent, to 2,667.28 and the Nasdaq Composite dropped 135.21 points, or 1.84 percent, to 7,210.08.
The Cboe Volatility Index, the most widely followed barometer of expected near-term volatility in the S&P 500, was up 3.25 points at 21.11, after touching a three-day high of 21.24.
U.S. treasury prices gained as the fears of a trade war sent investors to safe-haven investments.
The S&P 500 technology index, the best performing sector over the past year, fell 1.63 percent. Apple, Microsoft, Amazon and Alphabet dropped 0.9 percent to 3 percent.
Facebook shares fell 1.5 percent, reversing course after brief gains early in the session.
AbbVie slumped about 11 percent after the drugmaker said it would not seek accelerated approval for its experimental lung cancer treatment based on results from a mid-stage study.
Declining issues outnumbered advancers on the NYSE for a 2.79-to-1 ratio, and for a 3.05-to-1 ratio on the Nasdaq.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Dan Burns and Savio D'Souza)
UPDATE 7-Oil retreats after failing to hit $70 a barrel - Reuters News
22-Mar-2018 10:30:28 PM
• Investors book profits after two-week price surge
• Wednesday's gains were biggest one-day rise since November
• Soaring U.S. production tempers bullish mood
Updates with comment, refreshes prices, adds options graphic
By Tom Balmforth
LONDON, March 22 (Reuters) - Oil prices fell on Thursday as investors booked profits after this week's rally, but losses were limited by the continuing efforts of OPEC and its allies to curb supplies.
Brent crude futures were down 66 cents at $68.81 a barrel by 1410 GMT, having retreated from a session peak of $69.70, close to its highest level since early February. U.S. West Texas Intermediate (WTI) futures fell 69 cents to $64.48.
Oil prices have risen nearly 10 percent in the past two weeks, boosted by a weaker U.S. dollar and tensions between Iran and Saudi Arabia that raised concern about Middle East supplies already restricted by an OPEC-led production pact.
Prices recorded their biggest one-day gain since November on Wednesday after an unexpected drop in U.S. crude inventories.
"The bulls are back in town and they're all looking for much bigger gains. But I think it is too early and today is really just a reality check," said Saxo Bank senior manager Ole Hansen.
"We have come within half a dollar of key resistance on May crude and that is attracting some profit-taking."
The oil derivatives market shows most activity in the past week has centred around options to buy, known as "call options", which give the holder the possiblity to purchase oil at a given price by a certain date.
Call options to buy oil at $80 a barrel by the end of next month have changed hands more often in the past week than options at any other price level.
The U.S. Energy Information Administration said on Wednesday that U.S. crude inventories fell by 2.6 million barrels to 428.31 million barrels in the week ending March 16.
ING said the drawdown was partly because of a drop in imports of about 500,000 barrels per day (bpd) to an average 7.08 million bpd last week and an 86,000 bpd rise in exports to an average 1.57 million bpd.
But the confident mood in the oil market has been tempered by U.S. crude production, which climbed to a record 10.4 million bpd last week, putting U.S. output ahead of Saudi Arabia and closing in on Russia's 11 million bpd.
U.S. production rises have been countered by the deal to cut output by the Organization of the Petroleum Exporting Countries, Russia and their allies. The agreement has run since the start of 2017 and is due to expire at the end of 2018.
"We continue to see fragility in the oil market," said Julius Baer's head of commodity strategy, Norbert Ruecker.
"Profit-taking risks still loom large, strong output growth challenges the market-tightening narrative and the supply deal's overdue transitioning remains blanketed in uncertainty."
(Additional reporting by Amanda Cooper in LONDON and Henning Gloystein in SINGAPORE
Editing by Edmund Blair and David Goodman)
Trump to set stage for China tariffs amid trade war fears - Reuters News
22-Mar-2018 11:27:29 PM
By Roberta Rampton
WASHINGTON, March 22 (Reuters) - U.S. President Donald Trump was expected to lay the foundation for tariffs on Chinese imports worth around $50 billion on Thursday, in a move likely to trigger retaliation from Beijing and stoke fears of a global trade war.
The tariffs will target China's high-technology sector and could also include restrictions on Chinese investments in the United States, U.S. Trade Representative Robert Lighthizer said on Wednesday.
The White House said Trump would sign a presidential memorandum "targeting China's economic aggression" at 12:30 p.m. EDT (1630 GMT) on Thursday.
"The president will announce the actions he has decided to take based on USTR's 301 investigation into China's state-led, market-distorting efforts to force, pressure, and steal U.S. technologies and intellectual property," a White House official said.
The tariffs would be worth between $50 billion and $60 billion, a source familiar with the process said.
The investigation by the United States under Section 301 of the 1974 Trade Act has identified theft from and coercion of U.S. companies to disclose their intellectual property as well as purchases by Chinese state funds of U.S. companies for their technology knowledge.
Lighthizer told the U.S. House of Representatives Ways and Means Committee that the aim would be to minimize the impact of any tariffs on U.S. consumers.
China has threatened to retaliate by hitting U.S. agricultural exports.
Asked about the impact on farmers in conservative-leaning states, White House legislative director Marc Short said the administration was concerned but could not allow China to steal intellectual property.
"The president is looking to make sure he's protecting American businesses here," Short told MSNBC in an interview.
The Unites States also is expected to sue China at the World Trade Organization over alleged trade law violations as part of its planned trade announcement, the Wall Street Journal reported, citing a person with knowledge of the plans.
Lighthizer conceded China would likely hit back with measures on U.S. agricultural exports, particularly soybeans, and said Washington would impose counter-measures if that happened.
TARIFF EXEMPTIONS
Since taking office, Trump has taken a hard line on trade, abandoning an Asia-Pacific trade pact and threatening to pull out of the North American Free Trade Agreement with Canada and Mexico.
He also has announced tariffs on steel and aluminum imports, with initial exemptions for Canada and Mexico.
Lighthizer told a Senate committee on Thursday that the European Union, along with Argentina, Australia, Brazil and South Korea, would be exempted from the steel and aluminum tariffs, which become effective on Friday.
The National Association of Manufacturers urged caution on tariffs on Thursday, saying they risked provoking Chinese retaliation and making things more expensive for Americans.
"The only way we'll truly make lasting progress is through a strategic approach that uses both carrots and sticks to accelerate changes to Chinese policies," NAM President Jay Timmons said, urging a trade agreement with China.
(Additional reporting by Steve Holland, David Chance and Susan Heavey
Editing by Doina Chiacu and Paul Simao)
China's refined copper imports to fall 7.5 pct in 2018 -Antaike - Reuters News
22-Mar-2018 07:07:06 PM
• Antaike sees China importing 3 mln T of refined copper 2018
• Says labour talks in Chile, Peru create supply risk
• Forecasts 6 pct growth in China's aluminium consumption
By Tom Daly
BEIJING, March 22 (Reuters) - China's refined copper imports will fall for the third straight year in 2018 as domestic production picks up and consumption slows amid weaker demand from the real estate sector, an influential research house said on Thursday.
Antaike, research arm of the China Nonferrous Metals Industry Association, expects top copper consumer China to import 3 million tonnes of refined copper this year, down 7.5 percent from 3.243 million tonnes in 2017, He Xiaohui, an analyst with the agency, said in an industry outlook in Beijing.
Despite the import drop, China's refined copper consumption will still rise this year, He said, although just 3.3 percent to 11.1 million tonnes, after growing 4.2 percent in 2017.
Domestic production is expected to increase by 4.3 percent to 8.35 million tonnes as new smelters start up. That has Antaike projecting China's copper concentrate imports to rise by 3.7 percent to 4.5 million tonnes of metal equivalent this year.
Outside China, growth in consumption is set to accelerate, while the threat of mine strikes persists, especially in Chile and Peru as labour talks loom, He said. The potential supply loss could have a bigger impact on the refined copper market than disruptions did in the first half of 2017, when inventories were high, the analyst said.
Around 20 copper mines with labour negotiations pending will likely use the outcome of talks at BHP Billiton's Escondida mine in Chile, the world's largest, as their benchmark, said Fu Xiao, head of commodity markets strategy at Bank of China subsidiary BOC International.
BHP said last week it has invited Escondida's workers' union to start talks on a new collective labour contract.
Analyst He also warned China's tighter restrictions on scrap copper imports could affect supply, forecasting that London copper prices, currently near $6,800 a tonne, would average around $6,900-$7,000 a tonne this year.
China's aluminium consumption, meanwhile, is expected to rise by 6 percent to 37.6 million tonnes in 2018, according to Antaike aluminium analyst Yao Xizhi.
That is 2 percentage points slower than in 2017 as demand from key industries like the power sector cools, said Yao, who also forecasts that China's exports of aluminium products would fall by 3.3 percent to around 4.08 million tonnes this year amid trade friction with the United States.
Aluminium output in China, biggest global producer of the metal, is set to rise 3.6 percent to 38 million tonnes in 2018, he said, as 2.7 million tonnes of new capacity comes on line.
Nearly 40 percent of China's operating smelting capacity is losing money at current Shanghai aluminium prices of around 14,000 yuan ($2,200) a tonne, Yao said, forecasting a trading range of 13,000-16,500 yuan this year.
(Reporting by Tom Daly; Editing by Tom Hogue)
PRECIOUS-Gold steadies after hitting two-week high on Fed rate view - Reuters News
22-Mar-2018 11:02:29 PM
• Fed hikes interest rates, still views two more hikes
• U.S. central bank upbeat on 2019, 2020 economic outlook
• U.S.-China trade war tension seen supporting gold
(Updates prices)
By Maytaal Angel
LONDON, March 22 (Reuters) - Gold steadied on Thursday below a two-week high hit in the previous session as the dollar slid after the U.S. Federal Reserve showed a less hawkish stance on rates than expected.
The Fed raised its key rate by 25 basis on Wednesday and flagged at least two more increases this year, stopping short of pointing to three increases that some economists predicted.
The dollar dropped to a month low versus a currency basket on Thursday, before recovering slightly and moving into positive territory. A stronger dollar makes dollar-priced gold costlier for holders of other currencies.
Although the Federal Reserve's outlook for 2018 was seen as bearish, the central bank was otherwise upbeat on the economy, revising up rate projections for 2019 and 2020 and raising the estimated longer-term "neutral" interest rate a touch.
"(Gold's) initial reaction to the Fed was positive, but then reading through to 2019 and 2020 you see potentially a faster pace of (rate) tightening, so it's like giving with one hand and taking away with the other," ICBC Standard Bank analyst Tom Kendall said.
"Gold is doing pretty well to be trading where it is. You've got conflicting signals on the macro-economic and political side, and softening (physical) demand, so net gold is comfortable in its existing range," he added.
Spot gold dipped 0.1 percent to $1,330.49 per ounce at 1440 GMT. Prices rose to a two-week high of $1,336.59 on Wednesday, and also registered their biggest single-day percentage gain since May 17, 2017.
U.S. gold futures for April delivery rose 0.7 percent to $1,330.40 per ounce.
In the wider markets, Europe and U.S. equities were in the red as technology stocks stayed under pressure and as Beijing braced for new tariffs from U.S. President Donald Trump on some $60 billion worth of Chinese imports.
"We expect the prospect of a trade war between the U.S. and other economies to put a floor under gold prices in the short term but ultimately we think that Fed tightening will prove too strong a headwind," Capital Economics analyst Simona Gambarini told the Reuters Global Metals Forum.
"Considering that the Fed just hiked interest rates for the sixth time in this tightening cycle and revised up its rate expectations for 2019, the price of gold is faring quite well," she added.
Spot silver was down 0.4 percent at $16.45 per ounce, while platinum fell 0.4 percent to $950.20.
Palladium fell 1 percent to $980 per ounce.
(Additional reporting by Eileen Soreng Editing by Edmund Blair and Elaine Hardcastle)
U.S. Cash Soymeal-Rail, truck offers flat; CIF market weak - Reuters News
22-Mar-2018 11:24:34 PM
CHICAGO, March 22 (Reuters) - Spot basis offers for U.S. soymeal held steady at processors in both the rail and truck markets on Thursday, dealers said.
• Bids and offers for soymeal shipped by barge to the U.S. Gulf fell, pressured by increased availability of supplies from South America, a trader said.
• Domestic demand from livestock and poultry producers was steady.
• At 10:20 a.m. CDT (1520 GMT), Chicago Board of Trade May soymeal futures were up $2.10 at $366.60 a ton.
(Reporting by Mark Weinraub; Editing by David Gregorio)
EU 2017/18 soybean imports down 5 pct, palm oil up 4 pct by March 20 - Reuters
22-Mar-2018 11:11:46 PM
PARIS, March 22 (Reuters) -
• EU 2017/18 soybean imports had reached 9.2 million tonnes by March 20, down 5 percent from year-earlier 9.65 million, official data showed on Thursday.
• EU 2017/18 soymeal imports were at 13.7 million tonnes, up 7 percent from year-earlier 12.7 million tonnes.
• EU 2017/18 palm oil imports were at 4.5 million tonnes, up 4 percent from year-earlier 4.3 million tonnes.
UPDATE 1-Global grain stocks to fall in 2018/19 - IGC - Reuters News
22-Mar-2018 10:22:14 PM
• Corn stocks seen falling by 42 million T in 2018/19
• Wheat production, stocks also forecast to decline
• Soybean production seen at record high in 2018/19
•
Adds details, quotes
LONDON, March 22 (Reuters) - The International Grains Council (IGC) on Thursday forecast that global grain stocks would fall in 2018/19, with the bulk of the decline seen in corn (maize).
"Initial projections for grains supply and demand in 2018/19 indicate a tighter outlook," the inter-governmental body said in a monthly report, which included its first full set of projections for next season.
"A modest fall in production is anticipated (mainly wheat), but with a smaller old crop carry-in, overall availabilities of grains will be down to a three-season low," it said.
The IGC said total grain stocks would fall by 46 million tonnes to 560 million, including a 42 million tonne drawdown in corn to 265 million tonnes, while wheat inventories were seen declining by 3 million tonnes to 253 million tonnes.
Total grains production in 2018/19 was projected to fall marginally to 2.087 billion tones, down 0.2 percent from the prior season, with consumption up 1.1 percent to 2.134 billion.
Global wheat production was forecast to fall by 17 million tonnes to 741 million, with the largest decline seen in Russia (74.5 million tonnes vs 84.9 million).
Corn production was seen rising by 7 million tonnes to 1.052 billion tonnes, boosted by an expected rebound in Argentina to 48.3 million tonnes, up from this season's drought-hit crop of 40.0 million.
Global soybean production was also seen rising in 2018/19 to a new record high of 354 million tonnes.
The IGC cut its forecast for 2017/18 global soybean production by 6 million tonnes to 341 million tonnes "reflecting worsening conditions in Argentina."
(Reporting by Nigel Hunt
Editing by Mark Potter and David Evans)
CBOT Trends-Wheat up 3-4 cents, corn up 1-2, soybeans steady-up 1 - Reuters News
22-Mar-2018 09:28:03 PM
CHICAGO, March 22 (Reuters) - Following are U.S. trade expectations for the resumption of the grain and soy complex trading at the Chicago Board of Trade at 8:30 a.m. CDT (1330 GMT) on Thursday.
NOTE: The U.S. Department of Agriculture delayed its weekly export sales report until Friday due to inclement weather delays in the Washington, D.C., area.
WHEAT - Up 3 to 4 cents per bushel
• Wheat heading higher on technical buying and short-covering, bucking bearish forecasts for beneficial rains in the U.S. Plains winter wheat belt next week.
• Russia's winter grain sowings have passed the winter well, with only 3 to 5 percent in poor condition, the head of weather forecaster Hydrometcentre said, indicating the country is on track for large crop in 2018.
• CBOT May soft red winter wheat last traded up 4-3/4 cents at $4.58-1/4 per bushel. K.C. May hard red winter wheat was last up 6-1/2 cents at $4.72 and MGEX May spring wheat was last up 3-3/4 cents at $5.93.
CORN - Up 1 to 2 cents per bushel
• Corn higher on technical moves after the CBOT May contract held above chart support at its 50-day moving average in the previous two sessions. Rallies capped by uncertainty about the impact of a potential trade war with China as U.S. President Donald Trump prepares to announce tariffs of as much as $60 billion on Chinese imports.
• Traders starting to shift their focus to the U.S. Department of Agriculture's March 29 planting intentions and quarterly stocks reports.
• CBOT May corn last traded up 1-1/2 cents at $3.76-1/2 a bushel.
SOYBEANS - Steady to up 1 cent per bushel
• Soybeans steady to firm as market attempts to rise for a third session following Monday's one-month low in the CBOT May contract. Rallies capped by uncertainty about the impact of a potential trade war with China, the world's biggest soy buyer.
• Rabobank in a monthly report on Wednesday said it expected Argentina's 2017-18 soybean production to fall "below 40 million tonnes" due to hot and dry weather.
• CBOT May soybeans last traded up 3/4 cent at $10.30-1/2 per bushel.
(Reporting by Julie Ingwersen)
No comments:
Post a Comment