UPDATE 4-Libya force majeure pushes up oil, US crude hits highest since late 2014 - Reuters
03-Jul-2018 03:32:20 PM
- Libyan disruption cuts 850,000 bpd of oil from market
- But high fuel prices, trade disputes threaten to crimp demand
- Trade row turbulence knocks Asian shares to 9-month low
Recasts; adds WTI high, comment
By Henning Gloystein
SINGAPORE, July 3 (Reuters) - Oil prices rose on Tuesday after Libya declared force majeure on some of its supplies, while an ongoing Canadian outage lifted U.S. crude to levels not seen since late 2014.
Traders said this was largely due to an expected fall in North American fuel inventories following the 350,000 barrel per day (bpd) Syncrude outage in Canada.
Outside North America, Brent crude oil futures were at $77.77 per barrel, up 44 cents, or 0.6 percent.
"Oil bulls seem to have returned after Libya suspended oil exports from two key ports," said Hussein Sayed, chief market strategist at futures brokerage FXTM.
"If Libya's oil doesn't return fast to the market it will be an important test to OPEC's spare capacity, especially given that output from Venezuela and Iran is expected to fall significantly in the next couple of months," he added.
The Organization of the Petroleum Exporting Countries (OPEC) saw June output at 32.32 million bpd, a Reuters survey showed on Monday, up 320,000 bpd from May. The June total is the highest since January 2018.
The UAE's Abu Dhabi National Oil Co (ADNOC), a major producer within OPEC, said on Tuesday it is able to increase production by several hundred thousand bpd if needed.
However, Libya's National Oil Corporation (NOC) declared force majeure on loadings from Zueitina and Hariga ports on Monday, resulting in 850,000 bpd of supplies being disrupted.
DEMAND SLOWDOWN
Outside the supply-side, a slowdown in demand is emerging, potentially ending years of consecutive records.
"U.S. petroleum demand growth slowed significantly to 385,000 bpd year-on-year in April, compared with a growth of more than 730,000 bpd year-on-year in Q1," Barclays bank said, adding that this was mostly due to higher fuel prices.
In Asia, the world's top oil consuming region, seaborne oil imports have been falling since May, as higher costs turned off consumers and as the escalating trade dispute between the United States and China starts to impact the economy.
Chinese stocks went into a tail spin on Tuesday as turbulence gripped equity markets in Asia, which sank to nine-month lows as investors feared the Sino-U.S. trade row could derail a rare period of synchronized global growth.
"There are ... signs that growth in China has slowed in recent months, particularly infrastructure spending by local governments. I would assume that infrastructure investment is quite energy intensive, so perhaps that had a knock-on effect to oil demand," said Frederic Neumann, Co-Head of Asian Economic Research at HSBC in Hong Kong.
"At this stage, however, it appears more that growth in Asia is softening, rather than decelerating sharply," he added.
(Reporting by Henning Gloystein
Editing by Joseph Radford and Richard Pullin)
Platinum near 10-year low; dollar, Germany trade jitters weigh - Reuters News
03-Jul-2018 09:25:21 AM
By Renita D. Young
NEW YORK, July 2 (Reuters) - Autocatalyst metal platinum tumbled to its lowest level in nearly 10 years on Monday, as the greenback strengthened, an intensifying U.S.-European Union trade spat pressured precious metals, and political risk in Germany weighed.
Traders said concerns in Germany were a factor. German 10-year bond yields dipped to five-week lows on Monday, pushed down by political uncertainty in Germany, trade war fears and an expectation that the European Central Bank could buy more long-dated bonds from next year to keep euro-zone borrowing costs in check.
The pan-European STOXX 600 ended the session down 0.8 percent with losses across the continent and sectors. Germany's trade-sensitive DAX settled down 0.6 percent.
A stronger U.S. dollar against a basket of currencies also pressured platinum prices, because it makes greenback-priced precious metals more expensive for holders of other currencies.
The dollar received a boost from better-than-expected U.S. manufacturing data earlier on Monday.
A deepening auto tariff spat between the United States and the European Union has pressured all precious metals, traders said.
The European Union has warned the United States that imposing import tariffs on cars and car parts would harm the U.S. automotive industry and likely lead to counter-measures on $294 billion of U.S. exports.
The expectation of higher U.S. interest rates pressured platinum and other precious metals, traders said. Higher rates tend to strengthen the dollar and boost bond yields, reducing the appeal of non-yielding precious metals.
The U.S. Federal Reserve is expected to release minutes from its June meeting on Thursday.
(Reporting by Renita D. Young
Editing by Leslie Adler)
PRECIOUS-Gold falls for a second day as dollar strength outweighs safe-haven demand - Reuters News
03-Jul-2018 12:29:45 PM
- Spot gold may break support at $1,237/oz -technicals
- Trade war concerns grow ahead of July 6 deadline
- Platinum hovers near a 10-year low
- SPDR holdings fall 1.19 on Monday
By Karen Rodrigues
BENGALURU, July 3 (Reuters) - Gold prices fell for a second day on Tuesday to the lowest since December as strength in the U.S. dollar put pressure on the yellow metal, offsetting safe-haven demand amid mounting global trade tensions.
Spot gold fell 0.2 percent to $1,239.63 an ounce as of 0342 GMT after earlier dropping to its lowest since Dec. 12 at $1,237.36. In the previous session, it fell about 1 percent.
U.S. gold futures were 0.1 percent lower at $1,240.60 an ounce.
"It's all about the USD (U.S. dollar) demand rather than any news specific as the markets insatiable demand for USD to ride out yet another building perfect storm has the USD glittering. As such Gold is especially vulnerable in such an environment," said Stephen Innes, APAC trading head at OANDA.
The dollar was a shade lower on Tuesday but remained broadly supported after strong U.S. economic data.
A stronger dollar increases the cost of dollar-denominated bullion for investors paying in other currencies.
Meanwhile, Asian shares hit a nine-month low on Tuesday on rising fears over tense trade relations between the United States and major economies, as Chinese markets saw another rocky day. The United States is set to place tariffs on $34 billion worth of Chinese goods on July 6.
U.S. President Donald Trump warned the World Trade Organization on Monday that "we'll be doing something" if the United States is not treated properly, just hours after the European Union said that U.S. automotive tariffs would hurt its own vehicle industry and prompt retaliation.
The U.S. Chamber of Commerce on Monday denounced President Trump's handling of global trade disputes, issuing a report that argued tariffs imposed by Washington and retaliation by its partners would boomerang badly on the American economy.
Gold is usually seen as a safe-haven asset in times of political and economic uncertainties but has lately failed to do so.
"Gold seems to be under pressure until we get to a level when everyone starts stepping in but that might be only between $1,235-$1,215 era," a Hong Kong-based trader said.
Spot gold may break a support at $1,237 per ounce and fall to the next support at $1,229, Reuters technicals analyst Wang Tao said.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 1.19 percent to 809.31 tonnes on Monday.
In other precious metals, silver was down 0.1 percent at $15.82 an ounce and palladium fell 0.4 percent to $940.10 per ounce.
Platinum was 0.3 percent lower at $813.30 an ounce. In the prior session, it fell to the lowest since December 2008 at $804.
Autocatalyst metal platinum tumbled as the greenback strengthened, an intensifying U.S.-European Union trade spat pressured precious metals, and political risk in Germany weighed.
(Reporting by Karen Rodrigues in Bengaluru; Editing by Amrutha Gayathri and Christian Schmollinger)
METALS-Copper bounces back from 7-month low, focus on U.S.-China trade dispute - Reuters News
03-Jul-2018 03:20:21 PM
By Naveen Thukral
SINGAPORE, July 3 (Reuters) - Copper rose on Tuesday, bouncing back from last session's seven-month low, although escalating U.S.-China trade tensions kept a lid on the market.
Asian shares fell as sentiment remained fragile in the face of tense trade relations between the United States and other major economies, with investors braced for another potentially rocky day for Chinese markets.
Three-month copper on the London Metal Exchange was up 0.9 percent at $6,582 a tonne by 0710 GMT, after hitting its lowest since Dec. 5 at $6,519 a tonne on Monday.
The most-traded copper contract on the Shanghai Futures Exchange finished up 0.2 percent at 51,430 yuan ($7,704.64) a tonne.
"It is fundamentals as well as macro-economic environment which are keeping pressure on copper prices," said Meng Jie Wu, copper analyst CRU in Beijing. "Manufacturing costs are pretty high for the downstream industry."
TRADE DISPUTE: U.S. President Donald Trump has this year sought to renegotiate some of the United States' trading relationships, in particular with China. He has imposed tariffs on some imports, in turn sparking retaliatory action by other countries, raising fears of a global trade war.
MANUFACTURING: Growth in China's manufacturing sector cooled slightly in June as firms faced rising input costs and a decline in export orders amid an escalating trade dispute with the United States, a private survey showed on Monday. China accounts for nearly half of global copper consumption, estimated this year at around 24 million tonnes.
CHINA MONEY: Monetary easing in China is expected to help support industrial metals. China's central bank in April unexpectedly cut reserve requirement ratios (RRR) for most banks, in a move that was earlier and more aggressive than expected, highlighting concerns over liquidity.
DOLLAR: The dollar eased marginally against its peers on Tuesday, as the euro steadied after partners in Germany's coalition settled a row over migration that had threatened to topple Chancellor Angela Merkel's government.
(Reporting by Naveen Thukral; editing by Richard Pullin and Subhranshu Sahu)
POLL-U.S. corn seen 76 pct good to excellent, soybeans 72 pct - Reuters News
03-Jul-2018 12:55:51 AM
CHICAGO, July 2 (Reuters) - The U.S. Department of Agriculture is likely to lower its weekly condition ratings for the U.S. corn and soybean crops following a hot week in the Midwest crop belt and excessive rains in a few areas, according to a survey of analysts.
The USDA is expected to rate 76 percent of the U.S. corn crop in good to excellent condition, down from 77 percent a week ago, according to an average of estimates by 10 analysts surveyed by Reuters on Monday.
The government will rate 72 percent of the U.S. soybean crop as good to excellent, analysts predicted, down from 73 percent the prior week.
Nonetheless, ratings for both corn and soybeans would still be among the highest on record for this time of year in USDA data dating to the mid-1980s.
The USDA is scheduled to release its report at 3 p.m. CDT (2000 GMT) on Monday.
Analysts, on average, expect the USDA to rate 76 percent of the U.S. spring wheat crop as good to excellent, down from 77 percent a week ago.
For winter wheat, analysts expect the USDA to show the harvest as 56 percent complete, up from 41 percent a week ago.
(Reporting by Julie Ingwersen; Editing by Dan Grebler)
TECHNICALS-CBOT wheat may bounce into $5.08 to $5.13-1/4 range - Reuters News
03-Jul-2018 03:23:47 PM
SINGAPORE, July 3 (Reuters) - CBOT December wheat may bounce into a range of $5.08 to $5.13-1/4 per bushel, as it has found a support at $4.96.
The support is provided by the 176.4 percent projection level of a downward wave c from $5.75-1/2. This support is not working alone. It coincides with another one at $4.96-1/2 on the daily chart, which is the 76.4 percent retracement of the uptrend from $4.68-1/4 to $5.88.
The downtrend from $5.88 could have temporarily ended. It will be reversed by a decent bounce. A break below $4.96 (first chart) could cause a loss to $4.91-1/2.
** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses. **
(Reporting by Wang Tao; Editing by Subhranshu Sahu)
TECHNICALS-CBOT corn may hover above $3.58-3/4 - Reuters News
03-Jul-2018 02:43:04 PM
SINGAPORE, July 3 (Reuters) - CBOT December corn has found a support at $3.58-3/4 per bushel and may hover above this level or bounce into a range of $3.64-1/4 to $3.68-1/2.
The support is identified as the 100 percent projection level of a downward wave C from $4.00-1/2. This barrier is pivotal in determining whether the wave C could extend into a range of $3.32-3/4 to $3.42-3/4.
Regardless of a possible extension, the support could be strong enough to hold the fall, or cause a decent bounce. A break above the nearest resistance at $3.64-1/4 could open the way towards $3.68-1/2 to $3.74-1/2.
A break below $3.58-3/4 could confirm the extension of the wave C towards $3.52-1/2.
** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses. **
(Reporting by Wang Tao; Editing by Subhranshu Sahu)
TECHNICALS-CBOT soybeans may hover above $8.66 - Reuters News
03-Jul-2018 02:28:14 PM
SINGAPORE, July 3 (Reuters) - The CBOT soybeans November contract seems to have stabilized around a support at $8.66 per bushel. It may hover above this level or bounce toward a resistance at $8.75-1/2.
The support is identified as the 86.4 percent projection levels of a downward wave (c) from $8.99. Even though theoretically this wave is capable of travelling to $8.61, it could end around $8.66 as well.
The longer the contract hovers above $8.66, the more likely it will reverse its downtrend around this level. A break above $8.75-1/2 could lead to a gain into $8.80 to $8.84-1/4 range.
A break below $8.66 could cause a loss limited to $8.61.
** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses. **
(Reporting by Wang Tao; Editing by Vyas Mohan)
European shares edge higher after breakthrough in Merkel migration row - Reuters News
03-Jul-2018 04:06:47 PM
LONDON, July 3 (Reuters) - European shares edged higher on Tuesday after German Chancellor Angela Merkel's conservatives settled a row over migration, a tailwind for investors wary that a U.S. led trade war could derail global growth.
The pan-European STOXX 600 was up 0.2 percent by 0736 GMT with Germany's DAX posting the best performance with a 0.6 percent rise.
The dispute over immigration had threatened to topple Merkel's fragile governing coalition but in a breakthrough late on Monday evening, her rebellious interior minister dropped his threat to resign after five hours of talks.
Asian shares, which had sustained heavy falls overnight, particularly in China, recouped some of their losses before European bourses opened, helping restore sentiment.
Chinese financial markets have been jittery ahead of a July 6 deadline, when the U.S. is set to slap tariffs on $34 billion worth of Chinese goods that Beijing has vowed to match with tariffs on U.S. products.
Miner Glencore fell 8.5 percent after it said a unit was subpoenaed from the United States Department Of Justice.
Societe Generale was flat and Commerzbank rose 0.4 percent after the latter agreed to sell its equity markets and commodities business (EMC) to the French bank.
(Reporting by Julien Ponthus
Editing by Raissa Kasolowsky)
WRAPUP 3-China seeks to soothe markets as trade angst rattles stocks, yuan - Reuters
03-Jul-2018 02:54:10 PM
By Winni Zhou and John Ruwitch
SHANGHAI, July 3 (Reuters) - China's central bank moved to calm jittery financial markets on Tuesday after the yuan dropped through the psychologically significant 6.7 to the dollar mark, hitting its lowest in almost a year as anxieties over U.S. trade frictions deepened.
Stocks also sank in morning trade as Beijing and Washington hurtled toward an end-of-week tariff deadline that has kept investors in China nervous, although they recouped their losses and flipped into positive territory in the afternoon.
Chinese currency and equity markets have been on edge ahead of July 6, when U.S. tariffs on $34 billion worth of Chinese goods kick in. Beijing has said it would retaliate with tariffs on U.S. products.
In a statement posted on the website of the People's Bank of China, Governor Yi Gang said the central bank was closely watching fluctuations in the foreign exchange market and would seek to keep the yuan at a stable and reasonable level. Cross-border capital flows were under control, Yi said.
State-controlled media had earlier called the fall in stocks an "irrational overreaction" and urged investors not to panic over the growing trade frictions.
After the morning drop, market participants suspected the central bank of intervening in the currency market to support the yuan.
The yuan fell to 6.7204 per dollar, its weakest since Aug. 7, 2017 and the first time it dropped below 6.7 since Aug. 9, 2017, before crossing back and forth over the line. At 0542 GMT it was trading at 6.7010. The currency has lost more than 4 percent of its value against the dollar since mid-June.
"It's a crucial day for the yuan today given it weakened past 6.7 per dollar," said Ken Cheung, senior Asian FX strategist at Mizuho Bank in Hong Kong.
"Let's see what level the yuan closes today, and see whether the central bank would take out some measures to stabilise the exchange rate."
Four traders told Reuters that major state-owned banks were seen swapping yuan for dollars in the forwards market and immediately selling some of them into spot market, which helped support the Chinese currency. Traders and economists say major state-owned banks sometimes act on behalf of the central bank in the foreign exchange interbank market.
The central bank was not immediately available to respond to Reuters' request for comment on the yuan's moves.
"It feels like the state-owned banks are stocking up on bullets to prevent the yuan from falling too much," said one trader at a Chinese bank in Shanghai.
The central bank earlier set the midpoint at 6.6497 yuan per dollar, its weakest fixing in about 10 months.
Speaking at an event to mark the one-year anniversary of a scheme that links Hong Kong and mainland bond markets, PBOC deputy governor and head of the foreign exchange regulator Pan Gongsheng said China was confident it could keep the yuan basically stable and at a "reasonable" level.
Another foreign exchange trader at a Chinese bank in Shanghai said those comments went some way toward calming a jittery market.
TRADE CONDITIONS
The outlook for Sino-U.S. trade relations was further clouded on Tuesday by Washington's moves to block China Mobile from offering services in the U.S. and news that growth in China's exports to the United States has slowed significantly this year.
Analysts at Commerzbank said in a note on Tuesday that while concerns about the trade conflict were creating a drag on the yuan, they did not expect the government to use the exchange rate as a weapon in the trade dispute.
"The uncertainty related to the trade conflict, the weak growth outlook and the easing bias in Chinese monetary policy suggest a weaker renminbi in the coming quarters," they wrote.
In equities, the blue chip CSI300 Index slumped by more than 2 percent in the morning trading session, and the Shanghai Composite Index was down more than 1 percent before staging an afternoon comeback. At 0543 GMT the Shanghai Composite was down just 0.05 percent while the CSI300 was off 0.33 percent.
Hong Kong's Hang Seng Index was hammered after a one-day hiatus on Monday to mark the day that the former British colony was returned to China. It was down by around 3 percent.
"Intensifying trade frictions between China and the United States are a test that the Chinese economy inevitably had to experience during its rise," the Economic Daily said.
"We have long anticipated and prepared for this...The impact on the Chinese economy is within a controllable range."
The Securities Daily newspaper, meanwhile, called the slump in the mainland stocks an overreaction, saying that investors should have confidence in China's domestic market and that the current macroeconomic situation was stable.
(Reporting by Winni Zhou and John Ruwitch; Editing by Sam Holmes)
FOREX-Dollar consolidates gains after rising three straight months - Reuters News
03-Jul-2018 03:48:08 PM
By Saikat Chatterjee
LONDON, July 3 (Reuters) - The dollar consolidated gains on Tuesday after three consecutive months of gains as investors waited for minutes of the U.S. Federal Reserve's June meeting and jobs data that should confirm whether policymakers will raise interest rates twice this year.
The euro also gained after Germany's coalition settled a row over migration that had threatened to topple Chancellor Angela Merkel's government.
"Notwithstanding the trade war concerns, the broader picture is the U.S. central bank still remains the most hawkish central bank among its peers and that should support the dollar for now," said Jane Foley, a senior currency strategist at Rabobank in London.
In early trading, the dollar was down 0.3 percent at 94.76. It has gained 5 percent over the last three months taking its year-to-date gains to nearly 3 percent.
The Fed will release minutes of its June meeting on Thursday, and investors will parse the data and the statements to gauge whether is still on track to raise interest rates twice more this year. Monthly payrolls data follow on Friday.
Broader appetite for risk in currency markets rose with the Australian dollar rising half a percent the day after its central bank left interest rates unchanged and signaled a steady outlook at a policy meeting.
The euro edged 0.1 percent higher at $1.1652.
The Chinese yuan remained volatile headed into July 6, when U.S. tariffs on Chinese exports are due to take effect.
The yuan earlier fell to 6.7204 per dollar, its weakest since August 2017, before recovering to 6.7035. Traders said state-owned banks were trying to prop up the currency.
"There's a strong element of 'risk off' generated by trade concerns behind the dollar's latest rise. That said, the dollar has managed to gain only as emerging market and commodity currencies have slid due to risk aversion," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.
(Reporting by Saikat Chatterjee, additional reporting by Shinichi Saoshiro in Tokyo, editing by Larry King)
