US STOCKS-Wall St set to extend recovery as trade war fears cool - Reuters News
05-Apr-2018 09:05:10 PM
• Zuckerberg says no "meaningful impact" on Facebook ad sales
• Wells Fargo, Citi gain after UBS upgrade
• U.S. trade deficit rises to near 9-1/2-year high
• Futures up: Dow 0.33 pct, S&P 0.48 pct, Nasdaq 0.77 pct
Adds comments, details, updates prices
By Sruthi Shankar
April 5 (Reuters) - U.S. stocks on Thursday looked set to add to late-session gains from a day earlier as concerns over a trade war between the United States and China eased on signs that the world's two biggest economies were open to negotiations on tariffs.
Technology stocks, which have taken a beating in the past three weeks, were higher in premarket trading. Facebook, Amazon, Alphabet, Netflix - collectively known as the "FANG" group - were up between 1.1 percent and 3.8 percent.
"U.S. equity markets are poised to open in the green as investors temporarily shrug off trade war fears," Craig Erlam, senior market analyst at Oanda said in a note.
The Dow Jones Industrial Average dropped about 500 points on Wednesday after a proposed U.S. tariffs on $50 billion of Chinese goods prompted swift retaliation from Beijing. China hit back with equal measure on U.S. goods such as soybeans, autos, chemicals and some types of aircraft.
Shares of big U.S. manufacturers, grain traders and chipmakers were hit hard until mid-day.
But sentiment reversed after President Donald Trump's top economic adviser Larry Kudlow said the administration was involved in a "negotiation" with China rather than a trade war.
"The bounce on Wednesday was really quite impressive, especially as there was not much of a catalyst for the turnaround given that neither the U.S. or China is backing down on tariffs and negotiations were always going to take place in the background," Erlam wrote.
Also, the effective date of China's move depended on when the U.S. action took effect, providing room for maneuver.
Economic data on Thursday showed that the U.S. trade deficit increased to a near 9-1/2-year high in February, but the shortfall with China narrowed sharply.
While exports to China were unchanged in February, imports from the country declined 14.7 percent.
At 8:35 a.m. ET, Dow e-minis were up 79 points, or 0.33 percent, with 65,148 contracts changing hands.
S&P 500 e-minis were up 12.75 points, or 0.48 percent, with 224,988 contracts traded.
Nasdaq 100 e-minis were up 50.5 points, or 0.77 percent, on volume of 80,483 contracts.
Facebook shares were up 3.7 percent after Chief Executive Mark Zuckerberg said the company had not seen "any meaningful impact" on usage or ad sales since the scandal.
Wells Fargo rose 1 percent and Citigroup gained 1.5 percent following upgrades by UBS.
Advanced Micro Devices jumped 2.8 percent after Stifel upgraded to "buy", while Micron Technology fell 1.5 percent after UBS started with a "sell" rating.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)
UPDATE 4-Oil steady as easing U.S.-China tension, U.S. stockdraw support - Reuters News
05-Apr-2018 08:59:46 PM
• Investors hope for U.S., China trade negotiations
• U.S. crude stockpiles fell by 4.6 mln barrels -EIA
Updates prices, adds dollar move
By Ahmad Ghaddar
LONDON, April 5 (Reuters) - Oil prices were broadly steady on Thursday as an easing of trade tensions between the United States and China and a surprise draw in U.S. crude inventories last week supported the market.
Brent crude was 2 cents lower at $68 a barrel at 1248 GMT, and U.S. West Texas Intermediate crude was down 11 cents at $63.26 a barrel.
"Oil prices are profiting from the general brightening of sentiment on the markets as signs emerge that the trade dispute is easing between the U.S. and China," analysts at Commerzbank said in a note.
Global equities rose after the United States expressed willingness to negotiate a resolution on trade after proposed U.S. tariffs on $50 billion in Chinese goods prompted a quick response from Beijing that it would retaliate by targeting key American imports.
"I suspect that we are going to have period of wait and see in markets as both parties enter into a period of negotiations before those tariffs actually go into effect," BNP Paribas head of commodities strategy Harry Tchilinguirian told the Reuters Global Oil Forum.
A slightly stronger U.S. dollar weighed on prices. Since oil is dollar-priced, a stronger greenback makes purchases in other currencies more expensive.
WTI and Brent had hit two-week lows on Wednesday after China proposed a broad range of tariffs on U.S. exports, feeding fears of a trade war.
But prices rebounded after U.S. crude inventories fell by 4.6 million barrels last week, compared with analysts' expectations for an increase of 246,000 barrels, according to Energy Information Administration data.
OPEC member Qatar's energy minister told Reuters the organisation should stay the course in its joint cuts with non-OPEC members led by Russia to allow increased investment in the oil industry.
"I would see the need to keep the (OPEC cooperation) momentum ... We need to restore investments. It could take months ... OPEC could start being concerned about gross over-tightening," Mohammed al-Sada said.
The Organization of the Petroleum Exporting Countries and other producers are collectively curbing 1.8 million barrels per day of crude output to help eliminate a glut in oil inventories.
The cuts run until the end of the year but leading OPEC member Saudi Arabia has said they could be extended in one form or another into 2019.
Oil has also received support after a Reuters survey showed on Wednesday that OPEC output fell in March to an 11-month low due to declining Angolan exports, Libyan outages and a further slide in Venezuelan production.
(Additional reporting by Osamu Tsukimori in Tokyo, editing by David Evans)
PRECIOUS-Gold prices fall as U.S.-China trade tensions ease - Reuters News
05-Apr-2018 08:00:52 PM
• U.S. and China say they are willing to negotiate on tariffs
• Rising global stocks, stronger dollar dampen gold demand
• China markets closed on Thursday and Friday
(Updates prices)
By Peter Hobson
LONDON, April 5 (Reuters) - Gold prices fell on Thursday after the United States and China signalled willingness to resolve a trade dispute through negotiations, reducing demand for bullion as a safe place to park assets.
Investors moved money back into equities, sending global stock markets higher, while the dollar strengthened, making gold more expensive for users of other currencies.
"It's been a double whammy (for gold)," said Fawad Razaqzada, an analyst at FOREX.com. "Stock markets have stabilised, at least for the time being, and that has reduced demand for safe havens."
The slide in gold prices had also created a negative technical picture that encouraged further selling, Razaqzada said.
Spot gold was down 0.3 percent at $1,329.03 an ounce at 1247 GMT.
U.S. gold futures were 0.6 percent lower at $1,332.50 an ounce.
Gold had surged to $1,348.06 on Wednesday after China threatened to retaliate against proposed U.S. tariffs on Chinese imports worth around $50 billion with its own threatened duties on U.S. imports including soybeans, planes, cars, whiskey and chemicals.
Both Washington and Beijing later said they were willing to negotiate a resolution.
Trump's top economic adviser called the announcements by the two countries mere opening proposals and suggested the U.S. tariffs may never go into effect, while China's ambassador in Washington said Beijing's preference was to resolve the dispute through talks.
Technical support for gold was now around $1,320 and the 100-day moving average at $1,311, said MKS trader Sam Laughlin.
Gold prices reached an 18-month high of $1,366,07 in January but have since then been locked in a trading range between around $1,310 and $1,360.
Investors were looking ahead to U.S. jobs data on Friday to give new direction to prices. Strong employment and wage growth would encourage the U.S. Federal Reserve to raise interest rates more aggressively and push gold prices lower.
Gold is sensitive to rising interest rates because they push up bond yields, reducing the attractiveness of non-yielding bullion, and tend to boost the dollar, in which gold is priced.
Trading volumes were likely to be lower however with markets in mainland China, the world's largest gold consumer, closed on Thursday and Friday for the Tomb Sweeping Day holiday.
In other precious metals, spot silver was flat at $16.29 an ounce.
Platinum was 0.4 percent lower at $907.99 an ounce after touching $901.50, its lowest since December.
Palladium was down 0.5 percent at $919.75 an ounce, close to Wednesday's six-month low of $913.
(Additional reporting by Swati Verma in Bengaluru; Editing by Adrian Croft and David Evans)
ASIA GOLD-India demand up ahead of festival, subdued buying elsewhere - Reuters News
05-Apr-2018 07:18:12 PM
• Demand picks up in India ahead of Akshaya Tritiya
• Premiums narrow in Singapore, little changed in China
By Rajendra Jadhav and Eileen Soreng
MUMBAI/BENGALURU, April 5 (Reuters) - Physical gold demand in most Asian hubs was muted this week, weighed down by stronger prices, despite a slight pick-up in buying in India ahead of the wedding season and a key festival.
This month Indians will be celebrating the annual festival of Akshaya Tritiya, when buying gold is considered auspicious.
"Jewellers want to build inventory for Akshay Tritiya, but due to the price rise they are postponing purchases," said a Mumbai-based dealer with a private bank.
Dealers in India were offering a discount of up to $3 an ounce on official domestic prices this week, unchanged from the last week. The domestic price includes a 10 percent import tax.
In the local market, gold futures closed at 30,500 rupees ($468.71) per 10 grams on Wednesday, after hitting an over one-year high of 30,995 on Monday.
"Retail buying has improved due to wedding season, but still demand is lower than last year due to price rise," said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in Kolkata, India.
Benchmark spot gold prices touched a week high of $1,348.06 per ounce on Wednesday as the dollar dipped versus the yen after China retaliated against a U.S. move to slap tariffs on $50 billion worth of its imports.
Meanwhile, demand for gold in other Asian centres was quiet this week due to holidays in China and Thailand.
Premiums in top consumer China hovered around $7 to $8, little changed from the previous week.
"This is a short week in China due to the Qingming festival ... There is not much activity in the market," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
In Hong Kong, premiums were steady at 60 cents to $1.20 an ounce, while in Singapore premiums narrowed to 40-50 cents from 60-80 cents charged last week.
"If we see prices go down below $1,300 or move up above $1,350 then probably we will see some demand," a Singapore-based banker said.
Gold was being sold at par with the global benchmark in Japan this week, a Tokyo-based trader said. Premiums were at 25 cents last week.
($1 = 64.99 Indian rupees)
(Reporting by Rajendra Jadhav in Mumbai and Eileen Soreng in Bengaluru, editing by David Evans)
METALS-Copper climbs 1 pct as U.S.-China trade fears ease - Reuters News
05-Apr-2018 08:37:24 PM
By Jan Harvey
LONDON, April 5 (Reuters) - Copper rose 1 percent on Thursday as fading concerns over the prospect of a trade war between China and the United States sparked a bounce in cyclical assets such as stocks and industrial metals.
Stock markets rebounded from the previous session's two-month low after the United States indicated it was willing to negotiate a resolution to the trade spat between the world's two biggest economies.
Investors had sought nominally safer assets earlier this week after a U.S. proposal for tariffs on $50 billion in Chinese goods prompted Beijing to respond that it would target key American imports in retaliation.
"The positive (factor) today is that there are possible talks on (averting) a trade war, and a possible de-escalation," ABN Amro analyst Casper Burgering said. "Copper is a very cyclical metal, and it tends to react very swiftly to macroeconomic events."
Copper remains undervalued given its underlying fundamentals, he added. "From the data I've received there is still no real shortage in the copper market, but given the projections for this year and next, it appears to be heading for a deficit," he said.
* COPPER: London Metal Exchange copper was untraded in official midday rings, and was last bid at $6,795 a tonne, up 1.1 percent. The metal is recovering from a three-month low of $6,532 a tonne hit on March 23.
* FINANCIAL MARKETS: World stocks rose as investors dipped back into riskier assets after signs that Sino-U.S. trade tensions are easing, while the recovery in equities helped lift the dollar index to a two-week high.
* SHFE: The Shanghai Futures Exchange was closed on Thursday and Friday for China's national Tomb Sweeping Day holiday. "Since Chinese markets will be closed for the rest of the week because of the Qingming festival, impetus for the metals markets will come only from the U.S.," Commerzbank said in a note.
* ALUMINIUM: Shanghai Futures Exchange (ShFE) aluminium stocks fell for the first time in more than nine months, giving the market faint hopes of a drawdown on record inventories of the metal in China, the world's biggest aluminium producer and consumer.
* ALUMINIUM PRICES: LME aluminium was down 0.1 percent in official midday trading at $1,990 a tonne.
* ZINC STOCKS: Headline zinc inventories in LME warehouses fell 2,175 tonnes to 207,325 tonnes, exchange data showed, but on-warrant stocks - those not earmarked for delivery and therefore available to the market - surged 16 percent to 166,650 tonnes, their highest since mid March.
* ZINC PRICES: LME zinc was untraded in official rings, and was last bid 0.8 percent lower at $3,231 a tonne.
* OTHER METALS: LME lead was also untraded in official rings, and was last bid 0.5 percent higher at $2,383 a tonne. Nickel was up 1.5 percent at $13,350 a tonne in official trading, while tin was 0.6 percent higher at $21,025 a tonne.
(Additional reporting by Melanie Burton in Melbourne, editing by David Evans and Susan Fenton)
CORRECTED-RPT-U.S., China rivalry poses risks, benefits for Latin America - Reuters News
05-Apr-2018 09:30:33 PM
Corrects name of bank in paragraph 22 to Asian Infrastructure Investment Bank from Asian American Investment Bank
By Luc Cohen
MENDOZA, Argentina, April 5 (Reuters) - As the trade dispute between the United States and China was gaining steam last month, a half-dozen Chinese dancers and a person in a panda bear suit paraded across a stage inside a hotel lobby in the heart of Argentina's wine country.
The March 24 ceremony celebrated the Washington-based Inter-American Development Bank's (IDB) choice to hold its next annual meeting in Chengdu, China, a decision criticized by the United States, whose regional influence has been increasingly challenged by the Asian economic superpower.
Just over a week later, China imposed tariffs on a range of U.S. products from frozen pork to wine in response to U.S. President Donald's Trump's decision to place tariffs on steel and aluminum from countries including China.
The trade fight, which escalated further on Wednesday with China targeting key American imports including soybeans, planes and cars in retaliation for proposed U.S. tariffs on $50 billion in Chinese goods, has left Latin America in the middle, analyzing risks and opportunities.
"The U.S. is forcing countries in the region to choose between the U.S. and China," said Margaret Myers, director of the Latin America and the World program at the Inter-American Dialogue. "It's putting Latin American countries in a very challenging position while at the same time not offering a particularly attractive policy."
China, whose demand for raw materials increased during rapid economic growth the past two decades, is already the top trade partner for countries ranging from Brazil, Latin America's largest economy and the world's top soybean exporter, to tiny Uruguay.
Rather than celebrating a chance to gain market share, Brazil and Argentina responded cautiously to the tariffs on Wednesday. Brazil's Agriculture Ministry declined to comment. Argentina, the world's No. 3 soy exporter, said it was "analyzing the situation."
Analysts in both countries said, however, the tariffs could force China to purchase more soybeans and soy-based products from South America.
CHINESE LOANS, INVESTMENT
Latin American countries' turn to China for financing has alarmed Washington even as its own policy toward the region shifts.
Trump's December 2017 national security strategy said China was seeking to "pull the region into its orbit through state-led investment and loans."
David Malpass, the U.S. Treasury Department's undersecretary for international affairs, said at a March conference in Buenos Aires that China's hosting of next year's IDB meeting "does not serve the interests of the Western Hemisphere."
In response, IDB President Luis Alberto Moreno noted that the IDB would hold a special meeting for the bank's 60th anniversary in Washington next year, saying: "We have found the best of all worlds."
Trump's trade policies and rhetoric about immigration have disturbed even the most U.S.-friendly governments in Latin America.
Before the United States temporarily exempted Brazil from planned steel tariffs, a Foreign Ministry official said trade relations between the two countries were in "uncharted waters."
Argentina is threatening to take Washington to the World Trade Organization over biodiesel import tariffs. While the United States is the IDB's largest shareholder, it backed out last year of one of the bank's key funds.
Still, China's perceived disregard for projects' social and environmental costs has generated opposition within Latin America.
Civil society groups from Ecuador, Argentina and Peru set up an alliance to present information on "multiple human rights violations" linked to Chinese investments to the United Nations, according to a February statement from global nonprofit alliance Civicus.
MORE CHINESE PLAYERS
Chinese foreign direct investment, or FDI, in the region has increased by $70 billion since 2012, according to the Adrienne Arsht Latin America Center. While the United States remains the largest source of FDI, its share fell to 20 percent in 2016 from 25.7 percent in 2015 and 24 percent in 2012, according to the Economic Commission for Latin America and the Caribbean.
Data from the Inter-American Dialogue and Boston University show lending from Chinese state-run banks to countries in the region exceeded $20 billion in 2015 and 2016. Since 2005, those loans have exceeded combined financing to the region from the IDB, World Bank and CAF, a Latin American development bank.
Commercial banks like ICBC are becoming increasingly active, Myers said, and the Asian Infrastructure Investment Bank (AIIB) - a 2-year-old Beijing-based multilateral lender - is seeking to partner with the IDB on projects in the region, such as roads, railways, ports or tunnels that could improve connectivity with Asia.
Seven Latin American countries including Argentina have been approved to join the AIIB, although none have yet paid in to become full members.
(Additional reporting by Maximilian Heath in Buenos Aires, Anthony Boadle in Brasilia, Jose Roberto Gomes in Sao Paulo and Daniela Desantis in Asuncion; Editing by Caroline Stauffer and Peter Cooney)
CBOT Trends-Wheat up 5-8 cents, soy up 4-7 cents, corn up 1-3 cents - Reuters News
05-Apr-2018 09:15:21 PM
CHICAGO, April 5 (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.
WHEAT - Up 5 to 8 cents per bushel
• Forecasts for dryness in southwestern U.S. Plains, key areas for hard red winter wheat production, underpin wheat market.
• Support for benchmark CBOT May soft red winter wheat contract noted near 100-day moving average during overnight trading. Resistance seen at Wednesday's high of $4.61-1/2 a bushel.
• A weekly U.S. Agriculture Department report showed wheat export sales of 309,200 tonnes, in line with market forecasts that ranged from 250,000 tonnes to 700,000 tonnes.
• CBOT May soft red winter wheat last traded up 4-3/4 cents at $4.60-1/2 per bushel. K.C. May hard red winter wheat was last up 6 cents at $4.92 and MGEX May spring wheat was last up 6-1/4 cents at $5.83.
CORN - Up 1 to 3 cents per bushel
• Technical buying expected to support corn futures after benchmark CBOT May contract found support from overnight weakness at 40-day moving average and the 50 point retracement point on a Fibonacci chart tracking its recent rally to a 2-1/2 week high.
• USDA said weekly corn export sales totaled 909,300 tonnes, below analysts' estimates that ranged from 1.100 million tonnes to 1.600 million tonnes.
• CBOT May corn last traded up 2-3/4 cents at $3.83-3/4 a bushel.
SOYBEANS - UP 4 to 7 cents per bushel
• Mild round of bargain buying expected following Wednesday's 2.2 percent decline that stemmed from China's announcement that it will slap 25 percent tariff on imports of U.S soybeans.
• Weekly soybean export sales of 1.491 million tonnes top market expectations for 600,000 to 1.150 million tonnes.
• CBOT May soybeans last traded up 6-1/2 cents at $10.21-3/4 per bushel.
(Reporting by Mark Weinraub
Editing by Bill Trott)
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