Wednesday, June 6, 2018

Stock & Commodities Related News.

UPDATE 7-Oil prices slip on expectations of higher supply - Reuters News

06-Jun-2018 09:41:53 PM

  • Washington asks Saudi, others to raise output
  • Venezuela considers force majeure on some exports
  • U.S. crude stocks fall by 2 million barrels, API reports

Recasts, updating detail, prices; paragraphs 1-7

By Christopher Johnson

LONDON, June 6 (Reuters) - Oil prices fell on Wednesday on increasing signs that Saudi Arabia and other big crude producers may raise supply to balance a surge in demand during the peak U.S. summer driving season.

Global oil benchmark Brent crude climbed above $80 a barrel last month, but prices have eased since then on talk of higher output by the Organization of the Petroleum Exporting Countries.

Brent was down 35 cents a barrel at $75.03 by 1320 GMT. U.S. light crude was 30 cents lower at $65.22.

India's oil minister said on Wednesday his Saudi counterpart had told him the kingdom was revisiting its policy of cutting production, which has been a major factor in supporting prices in recent months.

The U.S. government has unofficially asked Saudi Arabia and some other OPEC producers to increase output, sources told Reuters on Tuesday.

OPEC and Russia will meet on June 22/23 to decide whether to increase production following a fall in global inventories as world demand outstrips supply.

The producers have been considering a supply increase of up to 1 million barrels per day, sources told Reuters.

"The oil price is being driven by OPEC and views on how much and how quickly 'OPEC plus' will raise output," Energy Aspects analyst Virendra Chauhan said.

Balancing expectations of higher OPEC output has been falling Venezuelan oil production.

Venezuela has the world's biggest oil reserves and is a key supplier to American fuel markets but its output has been hampered by inadequate investment, mismanagement and a confrontation with the United States that has led to sanctions.

Three sources have told Reuters Venezuelan state firm PDVSA is considering declaring force majeure on some exports, after plummeting output and tanker bottlenecks at ports.

U.S. sanctions on Iran also threaten to reduce oil exports from the OPEC producer.

"It's a tug of war between the loss of supply from Venezuela and Iran and the potential output increase from OPEC and U.S. shale," said Tony Nunan, risk manager at Mitsubishi Corp. "$80 is a temporary ceiling for oil until we hear from OPEC."

Industry data from the American Petroleum Institute showed on Tuesday that U.S. crude inventories fell by 2 million barrels last week, compared with analysts' expectations for a draw of 1.8 million barrels.

Investors awaited official inventories data from the U.S. Energy Department's Energy Information Administration at 1430 GMT.

(Additional reporting by Florence Tan in Singapore and Osamu Tsukimori in Tokyo
Editing by Dale Hudson and Edmund Blair)




US STOCKS-Dow heads higher, tech stocks mixed after surge - Reuters News

06-Jun-2018 09:19:37 PM

  • UnitedHealth rises on dividend raise, buyback plan
  • Signet jumps after posting surprise Q1 profit
  • Tesla to meet Model 3 goal - Musk, shares rise
  • Futures up: Dow 0.49 pct, S&P 0.17 pct, Nasdaq 0.04 pct

Adds comment, adds details, updates prices

By Medha Singh

June 6 (Reuters) - U.S. stock index futures rose on Wednesday, with electric carmaker Tesla and insurer United Health among the biggest drivers after the tech-heavy Nasdaq index hit a record high on Tuesday.

UnitedHealth shares jumped 1.3 percent in premarket trading after the health insurer hiked its quarterly dividend and announced a buyback.

Tesla Inc jumped 3.9 percent after billionaire Chief Executive Elon Musk reassured shareholders that building 5,000 of its mass market Model 3 cars per week by the end of June was "quite likely".

The Nasdaq closed at a record high on both Monday and Tuesday, helped by gains for Apple, Amazon and other tech giants.

However, Nasdaq 100 e-minis were up only 2.75 points, or 0.04 percent, pointing to a slightly higher open.

Also playing in were gains for some of the suppliers of ZTE Corp after sources familiar with the matter said it had signed an agreement in principle that would lift a U.S. ban on the telecoms equipment maker.

Shares of Qualcomm rose 0.9 percent and Intel Corp rose 0.1 percent while smaller optical components makers including Acacia Communications gained 3.2percent and Finisar Corp was up 2.0 percent.

U.S. officials were weighing an offer by China to import an extra $70 billion of American goods over a year as Beijing tries to defuse a potential trade war between the world's two largest economies, according to sources.

"There is no new escalation on the trade front and a result of that, there is absence of bad news and stocks will tend to rebound in a relief rally," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin.

At 8:55 a.m. ET, Dow e-minis were up 121 points, or 0.49 percent. S&P 500 e-minis were up 4.75 points, or 0.17 percent.

U.S. President Donald Trump is due to attend a G7 summit in Canada later this week, where leaders were likely to discuss the global economy and concerns about U.S. trade policy.

Six of the other G7 countries - Britain, Canada, France, Germany, Italy and Japan - are now paying the metals import tariffs Trump announced earlier this year.

Trump last week pushed on with imposing the tariffs - 25 percent on steel and 10 percent on aluminum - on Canada, the EU and Mexico, with Mexico retaliating by putting tariffs on American products ranging from steel to pork and bourbon.

Signet Jewelers jumped 9.4 percent after reporting a surprise profit and higher-than-expected revenue in the first quarter.

L Brands rose 1.9 percent after the Victoria's Secret owner reported a 10 percent jump in sales in May.

(Reporting by Medha Singh in Bengaluru; Editing by Shounak Dasgupta)




UPDATE 1-EU plans to hit U.S. imports with duties from July - Reuters

06-Jun-2018 07:13:57 PM

  • EU counter-measures on 2.8 bln euro of U.S. imports
  • Canada, Mexico also imposing tariffs

By Philip Blenkinsop

BRUSSELS, June 6 (Reuters) - The European Union expects to hit U.S. imports with additional duties from July, ratcheting up a transatlantic trade conflict after Washington imposed its own tariffs on incoming EU steel and aluminium.

EU members have given broad support to a European Commission plan to set 25 percent duties on up to 2.8 billion euros ($3.3 billion) of U.S. exports in response to what is sees as illegal U.S. action. EU exports that are now subject to U.S. tariffs are worth 6.4 billion euros.

"The Commission expects to conclude the relevant procedure in coordination with member states before the end of June so that the new duties start applying in July," Commissioner Maros Sefcovic told a news conference on Wednesday after he and other commissioners endorsed the plan for duties on U.S. imports.

That plan also includes duties of between 10 and 50 percent on a further 3.6 billion euros of U.S. imports in March 2021 or potentially sooner if the World Trade Organization has ruled the U.S. measures illegal.

U.S. products on the list include orange juice, bourbon, jeans, motorcycles and a variety of steel products.

The European Union, Canada and Mexico have all responded after U.S. President Donald Trump last Friday ended their exemptions from tariffs of 25 percent for steel and 10 percent for aluminium.

Canada has announced it will impose retaliatory tariffs on C$16.6 billion ($12.9 billion) worth of U.S. exports from July 1. Mexico put tariffs on American products ranging from steel to pork and bourbon on Tuesday

Some of the products chosen are designed to target states of senior Republicans who are seeking to retain control of both chambers of Congress in hotly contested November elections.

The European Commission launched a legal challenge against the U.S. tariffs at the World Trade Organization last Friday. It is also assessing the need for measures to prevent a surge of imports of steel and aluminium into Europe as non-EU exporters divert product initially bound for the United States.

European Trade Commissioner Cecilia Malmstrom said on Monday that preliminary "safeguard" measures for steel could come as early as July.

($1 = 0.8500 euros)
($1 = 1.2918 Canadian dollars)


(Reporting by Philip Blenkinsop; editing by Robert-Jan Bartunek and Richard Balmforth)




PRECIOUS-Gold steady, weaker dollar provides support - Reuters News

06-Jun-2018 08:21:46 PM

  • Geopolitics providing only limited support to gold -analysts
  • SPDR holdings dip to lowest in nearly 3 months

(Updates prices)

By Eric Onstad

LONDON, June 6 (Reuters) - Gold steadied on Wednesday, supported by a weaker dollar and trade tensions as the market looked ahead to an expected U.S. rate hike next week when the Federal Reserve meets.

Spot gold was little changed at $1,295.76 per ounce at 1314 GMT while U.S. gold futures for August delivery dipped 0.2 percent to $1,300.10 per ounce.

"Investors are sitting on the fence, they only want to be involved when we break out of the range," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

Gold was trapped between the 200-day moving average at around $1,308 and $1,286 on the downside, he added.

The case for hiking U.S. interest rates next week was bolstered on Tuesday when data showed U.S. services sector activity accelerated in May and job openings rose to a record high in April.

Gold, which is a non-interest-paying asset, could see demand take a hit from higher rates.

Once the rate decision has been taken, gold is likely to move higher, Hansen said. "There is potential for gold to follow the same pattern it's taken after recent rate hikes: defensive before, only to rally afterwards."

A softer greenback provided support to dollar-denominated gold after the euro rose to a 10-day high when European Central Bank officials said an end to the bank's bond-buying programme by the end of 2018 was plausible.

Potential investors in gold were also waiting to see how trade tensions play out since many believe recent U.S. tariffs are negotiating tactics, analysts said.

"Investor interest is mixed towards gold in the current environment, with geopolitical tensions attracting reduced flows and limiting the downside risk rather than propelling prices higher," Standard Chartered said in a note on Tuesday.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.03 percent to 836.13 tonnes on Tuesday, the lowest since mid-March.

In other precious metals, silver gained 0.6 percent to $16.57 an ounce.

Platinum slipped 0.21 percent to $898.5 an ounce and palladium ceded 0.3 percent to $990.5 per ounce.


(Additional reporting by Karen Rodrigues in Bengaluru Editing by Edmund Blair and Louise Heavens)




Platinum eyes gradual price recovery as deficit widens this year-GFMS - Reuters News

06-Jun-2018 04:30:00 PM

By Jan Harvey

- Platinum prices are set to begin a gradual recovery as the market deficit hits a four-year peak this year, an industry report said on Wednesday, with industrial and autocatalyst demand inching higher while mine supply contracts.

The shortfall in the platinum market will push back out to 280,000 ounces in 2018, GFMS analysts at Thomson Reuters forecast in their Platinum Group Metals Survey 2018, a level that would be its highest since 2014 and up from 53,000 ounces last year.

The palladium market deficit meanwhile is expected to reach another record.

"We expect the platinum price will start a recovery this year, albeit a gradual one," GFMS head Rhona O'Connell said. "This is predicated on a small deficit this year of nearly 0.3 million ounces, fuelled by a contraction in supply, chiefly from the South African mining sector, coupled with rising demand."

"Meanwhile the palladium price is set to exceed platinum on an annual average basis in 2018, an historical first," she added.

Platinum prices have languished near decade lows in recent years on perceptions that demand from jewellers and automakers - which use the metal in catalytic converters primarily for diesel cars - is under pressure against a backdrop of plentiful supply.

Autocatalyst demand for platinum is forecast to rise marginally this year, having edged up 2 percent in 2017 as buoyant Chinese buying outweighed a drop in European consumption linked to the move away from diesel.

Jewellery consumption is expected to contract again, however, with Chinese buyers in particular continuing to shy away from the market. Industrial demand is seen rising further after buying from China's glass and petroleum sectors drove it to record highs last year.

Mine supply meanwhile is tipped to contract for a third year this year, with South African production easing more than 2 percent. Lower costs helped relieve pressure on South Africa's beleaguered platinum sector last year, with 32 percent of output operating at a loss, compared to 36 percent in 2016.

Platinum's sister metal palladium, which in contrast was a standout performer among metals last year, is expected to maintain a hefty market deficit of 1.3 million ounces this year, marginally above 2016's record level.

Demand from the autocatalyst sector, which accounts for nearly four out of five ounces of palladium demand, is expected to keep growing this year to 8.09 million ounces, another record high.



2018 (f)



Mine production




Autocatalyst scrap




Jewellery scrap




















Retail investment








Physical balance






2018 (f)



Mine production




Autocatalyst scrap




Jewellery scrap
























Retail investment








Physical balance





*Source: GFMS Platinum Group Metals Survey 2018

(Reporting by Jan Harvey
Editing by Louise Heavens and Edmund Blair)




METALS-Copper hits 3-month high on strong growth, Chile supply concerns - Reuters News

06-Jun-2018 06:52:46 PM

Recasts, updates prices, adds details/quote; changes dateline

By Maytaal Angel

LONDON, June 6 (Reuters) - Copper hit a three-month high on Wednesday as the dollar dropped, concerns lingered over possible supply disruptions in Chile and as investors saw solid global economic growth boosting demand for the metal.

Nickel and zinc hit their highest in more than a month, meanwhile, tracking the ferrous complex higher after a blast at an iron ore mine in China and amid falling inventories.

Copper has risen nearly 4 percent this week after the union at BHP's, Escondida mine in Chile, the world's largest, said on Friday it had started the latest round of wage negotiations.

Failure to reach a deal last year led to a strike that resulted in a near 8 percent drop in annual output.

"It's natural that anything related to Escondida is going to cause a bit of a flare up. The concentrates market is very tight. That's magnifying any (possible) supply shocks," said Kash Kamal, analyst at BMO Capital Market.

Also boosting metals were signs of solid global growth, with trepidation over trade wars and fractious European politics taking a backseat after data this week showed ongoing expansion in global business activity.

The dollar hit a 10-day low versus the euro, which was lifted by hawkish comments from the European Central Bank. A weaker dollar makes dollar-priced metals cheaper for non-U.S. investors.

* LME COPPER: Three-month copper on the London Metal Exchange hit $7,163 a tonne, its highest since Feb. 26, and stood at $7,153.50 a tonne at 1023 GMT, up 0.7 percent on the day.

Signs of slowing downstream demand in China, the world's top copper consumer, and the strength of the dollar mean copper "may continue to be range-bound with periodic upside surprise on the newsflow of supply disruptions," Argonaut Securities said in a note.

* ALUMINIUM: LME aluminium rose 0.8 percent to $2,329.50, having hit $2,345 a tonne, the highest since May 10.

* ALUMINIUM PREMIUMS: Spot aluminium premiums in Asia have nearly halved in recent weeks, even as U.S. premiums hold at three-year highs, driven down by an influx of Chinese metal and bets that Russian producer Rusal will avoid sanctions.

* FERROUS: Chinese iron ore futures climbed to their highest level in two weeks after an iron ore mining accident, stirring concerns about potential tight supply in the market. Steel rebar futures also gained.

* ZINC/NICKEL: Steelmaking ingredient zinc hit its highest since late April at $3,220, while stainless steelmaking ingredient nickel hit its highest since mid April at $15,845.

(Additional reporting by Tom Daly; Editing by Susan Fenton)




CBOT Trends-Wheat up 6-7 cents, corn and soybeans steady up 1 - Reuters News

06-Jun-2018 09:25:22 PM

CHICAGO, June 6 (Reuters) - Following are U.S. trade expectations for the resumption of grain and soy complex trading at the Chicago Board of Trade at 8:30 a.m. CDT (1330 GMT) on Wednesday.

WHEAT - Up 6 to 7 cents per bushel

  • Rose for a second straight day on technical buying after surpassing the 20- and 30-day moving averages around $5.14 cents in the CBOT July contract.
  • The association of German farm cooperatives cut its forecast of Germany's 2018 wheat crop to 22.89 million tonnes, down 6.5 percent on the year after grains suffered from dry weather in past weeks.
  • CBOT July soft red winter wheat last up 6-1/2 cents at $5.16-1/2 per bushel. K.C. July hard red winter wheat last traded up 7-1/4 cents at $5.36-1/4 and MGEX July spring wheat was up 4-1/2 cents at $6.01-1/2 a bushel.

CORN - Steady to up 1 cent per bushel

  • Corn drew support from follow-through buying with the July contract above 200-day moving average support of $3.82 cents and below 100-day moving average technical resistance at $3.89-1/4 cents.
  • The Trump administration indefinitely delayed a proposed overhaul of U.S. biofuels policy aimed at reducing costs for the oil industry, under pressure from corn state lawmakers who worry the move would undermine demand for corn-based ethanol.
  • CBOT July corn last traded up 1 cent at $4.05 a bushel.


SOYBEANS - Steady to up 1 cent per bushel

  • Soybeans moved in a narrow trading range with the CBOT July contract hovering below major moving averages.
  • Markets were limited by mostly favorable crop growing weather in the U.S. Midwest, bolstering yield prospects.
  • CBOT July soybeans last up 1/4 cent at $10.01-1/2 per bushel.


(Reporting by Theopolis Waters and Julie Ingwersen)




VEGOILS-Palm extends losses to near one-month low on poor exports - Reuters News

06-Jun-2018 07:35:31 PM

By Mayank Bhardwaj

- Malaysian palm oil futures extended losses on Wednesday, hitting their lowest in nearly a month, as weak exports and waning demand during the otherwise high-consumption period of Ramadan.

The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was down 0.37 percent at 2,393 ringgit ($602.47) a tonne by the close.

The benchmark contract edged slightly higher during the midday break, largely because of higher soybean prices in Chicago and India's plans to raise the import tax on soft oils.

Trading volume stood at 26,101 lots of 25 tonnes each.

"Exports continue to be weak and demand for the Ramadan festival has become slack now," said a Kuala Lumpur-based palm trader.

Buyers typically stock up on palm oil a month before Ramadan, which began in mid-May this year.

Malaysia's palm oil exports in May dropped 8.8 percent from April to around 1.2 million tonnes, independent inspection company AmSpec Agri Malaysia said last week.

Cargo surveyor Societe Generale de Surveillance (SGS) said the country's May palm oil exports fell 9.9 percent from a month ago.

In Indonesia, the world's top palm oil exporter, shipments of palm and palm kernel oils plunged 13.6 percent in April, data from the Indonesia Palm Oil Association showed.

Palm oil inventories in Malaysia, the world's second-largest producer, are expected to slip to an eight-month low in May, weighed down by a decline in production, according to a Reuters poll.

Palm oil may fall to 2,364 ringgit, as it has broken a support at 2,408 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

In related vegetable oils, the Chicago July soybean oil contract was up 0.06 percent, while September soybean oil on China's Dalian Commodity Exchange dropped by up to 0.27 percent.

Palm oil is affected by movements in rival edible oils as they compete for a share in the global vegetable oils market.


Palm, soy and crude oil prices at 1111 GMT







































































Palm oil prices in Malaysian ringgit per tonne

CBOT soy oil in U.S. cents per pound

Dalian soy oil and RBD palm olein in Chinese yuan per tonne

India soy oil in Indian rupee per 10 kg

Crude in U.S. dollars per barrel

($1 = 3.9720 ringgit)

($1 = 6.3929 Chinese yuan)

($1 = 66.9150 Indian rupees)

(Reporting by Mayank Bhardwaj, editing by David Evans)




FOREX-Euro rallies as ECB moves to discuss ending stimulus - Reuters News

06-Jun-2018 08:03:17 PM

  • Euro boosted by upbeat ECB comments
  • ECB to discuss unwinding QE this month
  • Speech by Italian PM Conte mixed blessing for euro
  • C$, Mexico peso hit by fears US may abandon NAFTA

Adds quote, updates figures

By Tom Finn

LONDON, June 6 (Reuters) - The euro rose to a 10-day high on Wednesday after officials said the European Central Bank (ECB) could wind down its stimulus programme by end-2018 and that inflation was rising back to its target.

Having revived growth with an unprecedented 2.55 trillion euro ($2.99 trillion) bond purchase scheme, the ECB has been debating whether to end the purchases this year as the threat of deflation has passed and the bloc is on its best growth run in a decade.

Many traders expected the central bank to remain cautious at its June 14 policy meeting given the uncertainty caused by a political crisis in Italy.

But ECB chief economist Peter Praet said on Wednesday the central bank would next week debate whether to gradually unwind bond purchases.

Germany's central bank head said market expectations for an end to bond-buying this year were plausible.

The comments pushed the euro up half a percent to a 10-day high of $1.1780 and the currency also hit an eight-day high of $1.1640 versus the safe haven Swiss franc.

As well as boosting the euro, analysts said the comments would introduce heightened volatility in the options markets over the ECB meeting.

"Markets have already factored in a U.S. rate hike; that means the ECB is the most likely trigger for heightened volatility and I'm expecting to see that as we head into the meeting," said Ulrich Leuchtmann, head of FX strategy at Commerzbank.

"What's important isn't if they [the ECB] announce the end of quantitative easing now or in July, but whether this will really constitute the end of unconventional monetary policy and a reason therefore to expect higher interest rates," he said.

The euro has gained about 0.8 percent so far this week after hitting a 10-month low of $1.1510 on May 29.

The euro's rise put pressure on the U.S. dollar. The index fell 0.3 percent to a 10-day low of 93.604.

The ECB comments followed a speech by Italy's new Prime Minister Giuseppe Conte, whose promise of radical change had a mixed impact on the euro.

While his reassurance that leaving the euro was not on his agenda helped to underpin the common currency, the new government's tax cuts and higher welfare spending plan lifted Italian bond yields, undermining investor confidence.

"The market will start to focus on the ECB from now on. Politics in Italy and Spain will play second fiddle as we now have new governments in both countries," said Kazushige Kaida, head of foreign exchange at State Street Bank.

Elsewhere the Australian dollar rose sharply after the country's GDP data beat market expectations.

The Mexican peso steadied after falling to its weakest since February 2017 late on Tuesday. The United States has raised the possibility of turning negotiations over the North American Free Trade Agreement into bilateral talks.

That added fuel to speculation the United States could scrap the North American Free Trade Agreement (NAFTA).

The Canadian dollar recovered half a percent from 2-1/2 month lows on Wednesday after a media report that Treasury Secretary Steven Mnuchin is said to have urged Trump to exempt Canada from tariffs.

In emerging markets the Brazilian real fell 1.8 percent to 3.81 per dollar as a poll showed increased polarisation ahead of October presidential elections.


(Editing by Peter Graff)

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