US STOCKS-Wall St surges as trade war fears cool - Reuters News
26-Mar-2018 10:15:32 PM
• Microsoft, Intel up after upgrades by brokerages
• Boeing, Caterpillar surge amid easing trade war fears
• Wall St coming off its worst week in over two years
• Indexes up: Dow 1.73 pct, S&P 1.66 pct, Nasdaq 2.02 pct
Updates to open
By Sruthi Shankar
March 26 (Reuters) - U.S. stocks rose across the board on Monday as fears about a trade war between the United States and China eased following reports that the two countries were willing to negotiate tariffs and trade imbalances.
All the 11 major S&P indexes were up, led by a 2.4 percent gain in technology and financial indexes. Gainers on the New York Stock Exchange outnumbered losers for a 9.30-to-1 ratio and for a 7.39-to-1 ratio on the Nasdaq.
The United States asked China in a letter last week to slash tariffs on U.S. autos, buy more U.S.-made semiconductors and give U.S. firms greater access to the Chinese financial sector, the Wall Street Journal reported on Monday.
Chinese Premier Li Keqiang said on Monday the country would treat foreign and domestic firms equally, not force foreign firms to transfer technology and would strengthen intellectual property rights, repeating promises that have failed to placate Washington.
Stock markets were gripped by fears of a global trade war after President Donald Trump last week moved to impose tariffs on Chinese imports of up to $60 billion, adding to the import restrictions he has already placed on solar panels, steel and aluminum among others.
"There are some tentative signs that fears of an escalation of trade tensions are beginning to ease," Craig Erlam, a market analyst at OANDA, wrote in a note to clients.
"A rebound in global equities overnight is offering the market some optimism of stabilization after last week's rout."
At 9:34 a.m. ET, the Dow Jones Industrial Average was up 1.73 percent at 23,939.32. The S&P 500 gained 1.66 percent to 2,631.14 and the Nasdaq Composite rose more than 2 percent to 7,134.25.
Microsoft jumped 6 percent and was the biggest driver of the three main indexes. Morgan Stanley raised its price target on Microsoft's stock, saying the software company could hit $1 trillion in market value with growing public adoption of the cloud and improving margins.
Shares of Boeing and United Technologies were up about 2.8 percent. Along with other industrial stocks, they have taken a beating in the wake of Trump's tariffs plans due to their exposure to China.
Last week, the three main U.S. indexes posted their steepest weekly declines since January 2016 as the fears of a global trade war added to jitters about a faster pace of U.S. interest rate hikes and fears of increased regulations to the high-flying technology sector in the wake of Facebook's data scandal.
Facebook fell 1.4 percent, after losing $75 billion last week amid outcry over the social media company's handling of users' data.
Intel gained more than 3.4 percent after brokerage Raymond James upgraded the stock to "market perform".
(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva)
UPDATE 7-Oil prices dip on profit taking after big weekly gain - Reuters News
26-Mar-2018 11:38:07 PM
• Speculators take profits
• Stock markets recover on potential U.S.-China trade talks
• U.S. rig count hits three-year high, pointing to rising output
• China launches Shanghai crude oil futures
Refreshes prices, adds commentary, changes byline, updates dateline (previous LONDON
By Ayenat Mersie
NEW YORK, March 26 (Reuters) - Crude oil futures slipped on Monday as investors cashed in some profits from last week's strong rise, but concerns about Saudi-Iran tensions kept losses in check.
Brent crude futures were down 58 cents at $69.89 a barrel at 11:28 a.m. EDT (1528 GMT). U.S. West Texas Intermediate (WTI) crude futures lost 57 cents to $65.31.
Last week, Brent gained 6.4 percent and WTI rose 5.7 percent, the strongest weekly gains since July.
"I don't see anything extraordinarily bearish in the market today. I think some folks here are just...happy to take profits," said Bob Yawger, director of energy futures at Mizuho in New York.
Although crude and product futures slipped on Monday, most share prices for energy companies and refiners in particular were up, Yawger said. The S&P Energy Index was up 0.4 percent.
Global stocks came off six-week lows on reports that the United States and China were set to begin trade talks, easing fears about a trade war.Analysts had been concerned that a trade war could hurt oil demand.
U.S. President Donald Trump last week signed a memorandum that could impose tariffs on up to $60 billion of imports from China.
Crude was also pressured by a rise in the number of active U.S. oil rigs to a three-year high of 804 on Friday, implying further rises in production. U.S. oil output has already jumped by a quarter since mid-2016 to 10.4 million barrels per day (bpd).
"With US crude production likely to be close to 10.5 million bpd by now and NGL (natural gas liquids) output also increasing strongly, there is a clear chance that year-on-year supply growth in the U.S. could at least temporarily hit 2 million bpd over the summer months," JBC analysts wrote.
The market found some support from rising Middle East tensions.
Saudi air defenses shot down ballistic missiles fired by Yemen's Iran-aligned Houthi militia on Sunday, some of which targeted Saudi capital Riyadh.
In Asia, Shanghai crude oil futures made a strong debut in terms of volume as investors and commodity merchants bought into the world's newest financial oil trading instrument.
Hedge funds and other money managers raised their net long U.S. crude futures and options positions in the week to March 20 after two weeks of cutting bullish bets, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
(Additional reporting by Ahmad Ghaddar in London and Henning Gloystein in Singapore
Editing by David Goodman and David Gregorio)
UPDATE 5-Shanghai crude futures roar into action as global merchants dominate trade - Reuters News
26-Mar-2018 06:57:12 PM
• Glencore does first trade with Chinese trader Unipec
• Trafigura, Freepoint among first foreigners to participate
• Retail, institutional trading help boost volumes
• China crude futures seen strengthening influence of yuan
Adds scale of China market in paragraph 4, Unipec as counterparty to the Glencore trade in paragraph 22
By Meng Meng, Josephine Mason and Henning Gloystein
BEIJING/SINGAPORE, March 26 (Reuters) - China's crude futures kicked off to a roaring start on Monday as western traders and Chinese majors eagerly traded the world's newest financial oil instrument, which many expect to become a third global price benchmark alongside Brent and WTI crude.
Global commodity trader and miner Glencore, and big merchants Trafigura, Freepoint Commodities and Mercuria were among the first to trade the new contract, even as concerns remain that smaller overseas investors may struggle with unfamiliar rules and complex regulation.
The launch of the yuan-denominated oil futures - China's first commodity derivative open to foreign investors - marked the culmination of a decade-long push by the Shanghai Futures Exchange (ShFE) to give the world's largest energy consumer more power in pricing crude sold to Asia.
China is the world's second-largest oil consumer and in 2017 overtook the United States as the biggest importer of crude oil. Its demand is already a key determinant of global oil prices.
With major overseas traders displaying a strong appetite to punt in China's vast derivatives market, Shanghai's turnover challenged Brent volumes during Asian hours, reflecting the potential for arbitrage trade with oil markets in the United States, Europe and Oman.
"Whether this will have any real bearing on the other crude benchmarks, I'm not quite sure, but traders love a new toy, so I applaud China for bringing in something that could stoke up some volatility," said Matt Stanley, a fuel broker with Freight Investor Services (FIS) in Dubai.
First-day enthusiasm saw 20 million barrels of September oil changing hands in Shanghai by the 3:00 p.m. (0700 GMT) close, but it's not clear the pace will hold in the night session, which runs from 9:00 pm to 2:30 am, or on into coming days.
The 15.4 million barrels done in Shanghai's 2-1/2-hour morning session initially topped the Brent May crude contract, before Europe's benchmark came alive around 0500 GMT.
"We've seen already this morning it appears to be a liquid contract from the off," said David Martin, JPMorgan Chase & Co's Asia Pacific head of global clearing, at an event for the launch in Shanghai.
ARBITRAGE ATTRACTION
Analysts said western oil traders were attracted to Shanghai's oil contracts for the potential arbitrage between China's market specifics and global oil fundamentals as reflected by U.S. West Texas Intermediate (WTI) and international Brent crude futures.
WTI crude is the main benchmark for U.S. crude grades and a crucial hedging tool for the U.S. oil industry. Brent is priced off of North Sea oil and is a primary value marker for Europe, Africa and Middle East crudes. Both futures contracts are commonly used by financial traders.
"Prices assessed at the Shanghai exchange will reflect China's crude supply and demand," said Sushant Gupta, research director at energy consultancy Wood Mackenzie.
Despite the first-day success, the yuan-denominated trading and a blend of new rules and regulatory burdens could in the long-run hamper sustained take-up on the Shanghai International Energy Exchange (INE), executives at a dozen banks and brokers and experts involved in the launch told Reuters.
Still, China offers the potential for a deep, liquid market, buoyed by an explosion of interest from mom-and-pop investors that has supported its vast commodities derivative markets from apples to iron ore in Shanghai, Zhengzhou and Dalian.
The yuan-denominated contract will also help Beijing's efforts to internationalise the nation's currency, said Woodmac's Gupta.
WESTERN MERCHANTS ACTIVE
A surprise to many was that Glencore executed Shanghai's first crude deal. Swiss-based commodity traders Trafigura and Mercuria, U.S.-based Freepoint, and independent refiner Shandong Wonfull were other early participants.
"Glencore's first bid reflected the high participation and enthusiasm of foreign traders for Chinese crude oil futures," said Yang Xidong, general manager of Xinhu Futures Co Ltd.
"We were active with Glencore today and I've seen Trafigura in it and Freepoint ... We take the view that the contract is viable and adds to the crude oil trading value chain, and is here to stay," said Kevin Tan, executive vice president at Singapore-based brokerage Straits Financial Services.
Straits said it brokered the first trade for Glencore and cleared the deal through Xinhu Futures. Chinese trader Unipec told Reuters it was the counterparty for the Glencore deal.
The early involvement of big international traders was a morale boost to the fledging market, but state oil majors like PetroChina and Sinopec are expected to provide a significant amount of liquidity in the long-term.
Unipec, trading arm of Asia's largest refiner Sinopec, has inked a deal with a western oil major to buy Middle East crude priced against the Shanghai futures contract, a senior company official said on Monday.
This could be seen as competition to the Dubai Mercantile Exchange's (DME) crude futures and potentially the assessments published by price reporting agency S&P Global Platts.
Speculative retail and institutional investors also propped up the launch-day's liquidity, said Chen Tong, Shanghai-based senior crude analyst at First Futures.
"In the short-term, we believe price fluctuations will reflect domestic crude oil supply and demand. In the long run, yuan crude price will mirror the moves of Brent," he said.
TALE OF THE TAPE
The most-active September contract opened at 440.4 yuan ($69.78) per barrel versus a reference point of 416 yuan, jumping as high as 447.1 yuan ($70.85) in the first few minutes.
The jump came after Brent futures for May delivery opened above $70 per barrel for the first time since January on expectations OPEC-leader Saudi Arabia may extend supply cuts into 2019, as well as over concern that the United States may re-introduce sanctions against Iran.
At the end of afternoon session, Shanghai prices were up 3.34 percent at 430.2 yuan, with 40,656 lots traded.
Brent and WTI, in contrast, were down by that time, weighed down by concerns over a looming U.S. trade dispute with China.
Chinese exchanges count each side of a trade - the buy and the sell - as two lots, meaning the total oil changing hands was 20,328 lots, equal to 20.3 million barrels.
($1 = 6.3109 Chinese yuan)
(Reporting by Josephine Mason and Meng Meng in BEIJING and Henning Gloystein in SINGAPORE; Additional reporting by Ruby Lian in SHANGHAI, Aizhu Chen in BEIJING, and Roslan Khasawneh in SINGAPORE; Editing by Tom Hogue)
Gold Prices Pull Back From 5-Week Highs as Trade Tensions Ease - MIST
26-Mar-2018 11:21:53 PM
Investing -
Gold prices turned lower on Monday, pulling away from five-week highs after reports that the U.S. and China had started negotiations over escalating trade tensions eased fears over a possible all-out trade war.
Gold futures for April delivery on the Comex division of the New York Mercantile Exchange were down $4.5 or 0.33% to $1,345.4 a troy ounce by 04:19 AM ET (08:19 GMT).
Gold prices rose to a five-week high of $1350.40 on Friday as a weaker dollar and heightened trade tensions bolstered demand for the precious metal.
The Wall Street Journal reported Monday that Beijing and Washington were negotiating to improve U.S. access to Chinese markets, after a week of threats to use trade tariffs.
Recent worries that protectionist trade policies from the U.S. and China might result in a trade war have boosted gold, amid fears over the impact on global economic growth.
The report saw the safe haven yen come off 16-month highs against the dollar and U.S. stock futures rebound as investor sentiment recovered.
The U.S. dollar index, which measures the greenback's strength against a basket of six major currencies, was down 0.15% to a near one-month low of 88.97.
Investors seek out gold as a store of value during times of geopolitical uncertainty or market turmoil, while a weaker dollar makes the dollar-denominated metal cheaper for holders of other currencies.
In other precious metal trade, silver futures were down 0.16% at $16.555 a troy ounce, while platinum futures were little changed for the day at $954.9.
Among base metals, copper futures were down 1.44 % to $2.950 a pound. Recent trade fears have pressured prices to their weakest levels since December after they hit a nearly four-year high late last year.
Copyright (c) 2018 Sourced by MIST all rights reserved
PRECIOUS-Gold at more that five-week high as U.S. expels Russian diplomats - Reuters News
26-Mar-2018 11:14:27 PM
• Gold specs cut net long position by 23,822 contracts -CFTC
(Recasts, updates prices)
By Zandi Shabalala
LONDON, March 26 (Reuters) - Gold prices rose to more than five-week highs on Monday after the United States said it would expel 60 Russian diplomats, prompting investor flight into assets considered safe havens.
The United States was joining governments across Europe in taking action against the Kremlin after a nerve agent attack on a former Russian spy in Britain.
Gold, which is sought as a store of value in times of political and financial uncertainty, rose to its highest since Feb. 16 at $1,355.85 an ounce.
By 1500 GMT spot gold was up 0.6 percent to $1,355.15 while U.S. gold futures for April delivery added 0.4 percent to $1,355.
"I would attribute the rise in gold in the afternoon to the political developments," said Quantitative Commodity Research consultant Peter Fertig. "You could expect the Russians to retaliate."
The dollar index, which measures the greenback against six major currencies, fell to a five-week low.
The spectre of a global trade stand-off, however, appeared to be receding after the United States and South Korea agreed to revise a trade pact, with U.S. automakers winning improved market access and Korean steelmakers hit with quotas but avoiding hefty tariffs.
The Wall Street Journal, meanwhile, reported that the United States and China had started negotiations to improve U.S. access to Chinese markets.
Analysts said gold continued to be supported by last week's statement from the U.S. Federal Reserve, which forecast at least two more increases to interest rates in 2018, one less than previously expected by many observers.
Investors continued to monitor other developments, such as Trump's appointment of John Bolton as national security adviser and fresh tensions between Saudi Arabia and Yemen's Houthi militia.
The appointment of Bolton, who has previously advocated using military force against North Korea and Iran, last week provoked strong reactions worldwide.
Speculators cut their net long positions in gold in the week to March 20 by 23,822 contracts to 121,838 contracts, U.S. Commodity Futures Trading Commission data showed on Friday.
"Short term, we expect gold to hover around $1,350 for the next few weeks. We estimate gold to close the year around $1,410-$1,420," said Joshua Rotbart, managing partner at Hong Kong-based J. Rotbart & Co.
Among other precious metals, silver climbed 1.3 percent to $16.74 an ounce, platinum rose 0.8 percent to $954.30 and palladium was up 0.6 percent at $982.20.
(Additional reporting by Eileen Soreng in Bengaluru Editing by Dale Hudson and David Goodman)
Disappointing weekend rain ends hope for Argentine soy recovery - Reuters News
26-Mar-2018 10:23:06 PM
By Hugh Bronstein
BUENOS AIRES, March 26 (Reuters) - Rains expected to relieve Argentina's drought-hit soy and corn fields over the weekend failed to materialize, all but ending hope that yields might partially recover from four months of hot, dry weather, farmers and analysts said on Monday.
Adverse weather in the world's No. 3 soybean and corn supplier has put upward pressure on food prices, making it harder for poor countries to feed themselves.
"We had a few showers this weekend, but none of them were important," said Francisco Abello, a partner in the TraulenCO SA farm management company. "Even if it rains well going forward, yields are not going to change much. Most of our soybeans are done."
Chicago soybeans rose on Monday as concerns over trade tensions between China and the United States eased, shifting attention back to crop damage in Argentina.
Meteorologists had projected weekend rains in key farm areas of Cordoba, Santa Fe and Entre Rios provinces. But the showers never came.
"The forecasts let us down again," said Sofia Corina, farm analyst at the Rosario grains exchange
"No matter how much it rains now, it won't help. Yields are fixed. The first soy to be harvested shows a lot of variability from two to five tonnes per hectare. Soy that was planted later in the season is more affected by the drought, and a lot of those fields will not be harvested at all," Corina said.
The first corn to be harvested has shown better-than-expected yields but later-planted corn was harder hit by the dryness. Farmers were expected not to try to harvest many of their later-planted corn fields, Corina added.
Rains of one to two centimeters that fell on parts of the usually fertile Pampas grains belt did nothing to relieve fields parched by unusually dry weather that started in November. The Southern Hemisphere fall harvesting season started last week.
This month the Rosario exchange slashed its soy crop forecast to 40 million tonnes from a previous 46.5 million while cutting its corn estimate to 32 million tonnes from 35 million.
The Buenos Aires Grains Exchange meanwhile cut its soybean harvest estimate to 39.5 million tonnes from 42 million and reduced its corn crop forecast to 32 million tonnes from 34 million tonnes.
(Reporting by Hugh Bronstein
Editing by Jeffrey Benkoe)
GRAINS-Soybeans higher as U.S.-China jitters ease, Argentina stays dry - Reuters News
26-Mar-2018 08:09:28 PM
• Soybeans touch one-week high in moderate rebound
• Investors see signs of lessening U.S.-China trade tension
• Forecasters still cutting Argentina crop outlook
• Corn also firm, wheat eases after one-week high
Updates with European trading, changes byline/dateline
By Gus Trompiz and Naveen Thukral
PARIS/SINGAPORE, March 26 (Reuters) - Chicago soybeans rose on Monday as concerns over trade tensions between China and the United States eased, shifting attention back towards crop damage in Argentina.
Corn also firmed, while wheat edged lower after touching a one-week high as investors assessed the impact of rain in parched U.S. growing belts.
The Chicago Board of Trade's most-active soybean contract gained 0.5 percent to $10.33-1/2 a bushel after hitting a one-week peak of $10.40-1/4.
Soymeal, of which Argentina is the world's biggest exporter, was up 1 percent at $381.8 a tonne.
Soybean futures had slipped on Friday as traders feared an escalating trade dispute between the United States and China would disrupt soybean flows between the world's biggest producer and the world's largest importer of the oilseed.
But investors took comfort on Monday from reports that the two countries may enter trade talks, helping share prices to rebound.
In Argentina, crop analysts were continuing to lower their harvest outlook because of dry weather and meteorologists said recent rain was scattered and may have limited benefit to crops as harvesting approaches.
"The weather window in Argentina (is) rapidly closing as crops enter into late grain-fill and full-maturation stages," Thomson Reuters Agriculture Research analysts said in a note.
The Buenos Aires grains exchange last week cut its estimate of the country's soy harvest to 39.5 million tonnes from 42 million tonnes previously.
CBOT corn was up 0.4 percent at $3.78-3/4 a bushel, tracking soybeans. It also touched a one-week peak earlier in the session at $3.80-3/4.
Like soybeans, corn is among agricultural products imported by China and a major crop grown by Argentina.
Market attention was turning towards this Thursday's U.S Department of Agriculture (USDA) plantings report, with rising expectations that soybeans will overtake corn in acreage this year.
CBOT wheat ticked down 0.4 percent to $4.58-1/4 a bushel after hitting a one-week high at $4.63-3/4.
Traders were assessing rainfall in the U.S. Plains to see if it would improve the condition of parched winter wheat crops. The return of rain last week helped to push futures lower.
"U.S. hard red winter (HRW) wheat crops remain at risk of falling yields," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.
"The HRW crop regions did get a little rain last week but not enough where it was most needed."
The Commodity Futures Trading Commission's weekly commitments of traders report on Friday showed that non-commercial traders -- a category that includes hedge funds -- increased their net short position in CBOT wheat and cut their net long position in corn and soybeans in the week to March 20.
(Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore
Editing by Kenneth Maxwell and David Goodman)
RPT-COLUMN-Funds finally hit the brakes after their CBOT buying spree –Braun - Reuters News
26-Mar-2018 07:30:00 PM
Repeats for wider distribution. The opinions expressed here are those of the author, a market analyst for Reuters.
By Karen Braun
CHICAGO, March 26 (Reuters) - Speculators broke an eight-week buying trend in Chicago-traded corn and soybeans last week after their bullish bets had mounted at a record pace.
Selling also prevailed in the soybean products and in wheat, though the cumulative effect on funds' optimistic view toward futures and options on the Chicago Board of Trade was not as drastic as the week's price activity may have suggested.
In the week ended March 20, hedge funds and other money managers cut their net long position in CBOT corn futures and options to 213,231 contracts from 233,063 in the prior week, according to data from the U.S. Commodity Futures Trading Commission.
Trade estimates had pointed to a sharper decline of at least 59,000 contracts last week. May corn futures dove 4.4 percent during the reporting period, the contract's largest percentage loss in a five-day stretch since August.
Money managers also modestly trimmed bullish bets in CBOT soybeans to 195,522 futures and options contracts from 208,200 in the previous week, which was more in line with expectations.
In soybean meal, funds dialed back their net long position to 99,478 futures and options contracts from 111,449 a week earlier. They also increased their net short in soybean oil to 24,920 futures and options contracts from 21,221.
Technical selling was prominent in the corn and soybean markets through March 20, and wheat losses offered additional pressure to corn. Rains for drought-stricken crops in Argentina and the southern U.S. Plains also had traders on the sell button.
In the days since, technical buying as well as shrinking forecasts for the Argentine corn and soybean crops had futures marching back after Monday's steep losses.
But jitters over trade tension between the United States and China sent market participants into a frenzy on Friday, and corn and soybean futures plummeted early on in the session. Both countries had issued a list of one another's goods that were up for tariffs, though China's did not appear to include soybeans as many had feared.
At the end of Friday's volatile trading session, May corn settled up 1-1/4 cents while May soybeans settled down 1-1/2 cents, well off the earlier lows.
Nonetheless, trade sources indicate that commodity funds have been net sellers of soybeans and soybean oil and straight buyers in corn and soybean meal over the last three sessions.
WHEAT MOVES
Although some much-needed rain arrived for hard red winter wheat in the U.S. Plains a week ago, the drought has taken a toll and the crop is unlikely to dazzle. Commodity funds generally appear to agree.
In the week ended March 20, money managers slightly extended their net long in K.C. wheat futures and options to 29,586 contracts from 28,946 in the prior week, though they also reduced outright long positions in the process.
But Chicago wheat received no love from the market as CBOT futures got battered during the period. The week included the most-active contract's largest three-day percentage loss in almost five years, which was 7.8 percent.
Money managers ramped up their net short in Chicago wheat futures and options to 56,107 contracts from 35,584 in the week before. This was linked to the wetter pattern across the drought-stricken U.S. Plains as well as weak demand for U.S. wheat.
But toward the end of last week, forecasts for this same region started to trend drier. Friday also featured some bargain-buying following the earlier sell-off, and these factors probably mean that funds are heading into the week of March 26 with a less bearish view than the latest data reflects.
Speculators flipped back to a bearish stance on Minneapolis-traded spring wheat through March 20. The new managed money net short totals 653 futures and options contracts versus the previous week's net long of 1,240 contracts.
This new bearish position may be short-lived pending trade on Monday and Tuesday. May spring wheat futures were up 1.6 percent on Friday, the contract's largest daily percentage gain in three weeks.
(Editing by Matthew Lewis)
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