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Yahoo
a day ago
- Business
- Yahoo
Morning Bid: Trump and Xi's big chat
By Mike Dolan LONDON (Reuters) - What matters in U.S. and global markets today The dollar and U.S. Treasuries found their footing on Tuesday after a rough start to the week, but stocks remained edgy due to a mix of trade war concerns and spluttering factory activity. I'll discuss this and all of today's market news below. And for today's deep dive, I'll explain why market fears are growing that the 'new cold war' could be turning hot. Today's Market Minute * Dutch far-right leader Geert Wilders' PVV party left the governing coalition on Tuesday, in a move that is set to topple the right wing government and will likely lead to new elections. * Saudi Arabia and Russia had to reach a difficult compromise on OPEC+ policies on Saturday as Riyadh pushed to accelerate oil output increases while Moscow argued for a pause, four OPEC+ sources with knowledge of the talks said. * Surging government debt levels are becoming a pressure point for big economies and bond investors have their sights on those not doing enough to improve their finances. Trump and Xi's big chat The weekend saw testy bilateral exchanges between Washington and Beijing, as well as a doubling of U.S. steel tariffs to 50%. But hopes for some easing in Sino-U.S. tensions were stoked by news that President Donald Trump and Chinese leader Xi Jinping were scheduled to hold a call as soon as this week. If they jump on the phone this Thursday, they could rope in German Chancellor Friedrich Merz - who will be meeting Trump that day in Washington - for a trilateral discussion among the world's three biggest economies. There's clearly some urgency in Washington to get bilateral talks on track with time running out on its 90-day pause of reciprocal tariffs imposed on April 2. A draft letter sent to negotiating partners showed the Trump administration wants countries to provide their best offer on trade negotiations by Wednesday as officials seek to accelerate talks with multiple partners. Perhaps pointedly, European Union sources said they had not received the letter. Meanwhile, the tariff war's negative impact on global manufacturing is starting to show. U.S. factory activity contracted for a third straight month in May, and suppliers took the longest time in nearly three years to deliver inputs, potentially signalling looming shortages of some goods. The reading was the lowest in six months and missed expectations. Additionally, China's factory activity in May shrank for the first time in eight months, a private-sector survey showed on Tuesday, indicating U.S. tariffs are now starting to directly hurt the manufacturing superpower. The Organisation for Economic Cooperation and Development's latest global outlook, meantime, now expects world growth to slow more than the group expected only a few months ago, as the fallout from the trade war takes a toll on the U.S. economy. The slowing economic pulse helped keep a lid on Treasury yields, with 30-year bonds falling below 5% again. And the greenback perked up from Monday's six-week lows. Helping to drive both those moves were surprisingly soft euro zone inflation numbers for May, which increased the likelihood of another European Central Bank interest rate cut this week - and possibly more ahead. Headline euro zone inflation fell below the ECB's 2% target last month, slowing to 1.9% from 2.2% in April. That was below forecasts, amid falling oil prices and service sector inflation as well as the strong euro. Core rates dropped sharply to as low as 2.3%. Next up is this week's sweep of U.S. labor market reports. April job openings due out later on Tuesday are expected to slip further from last month. Ahead of the open, U.S. stock futures were back in the red after the S&P 500's late session recovery on Monday, led in part by big tech and oil stocks. Crude oil prices sustained the bulk of Monday's gains after the OPEC+ meeting this weekend resulted in less significant output hikes than feared. Taiwan's TSMC, meantime, said on Tuesday that even though U.S. tariffs were having some impact on the company, it is continuing to benefit from the strong demand for artificial intelligence tools. Be sure to check out today's column, where I look into the increasingly bellicose political rhetoric around the world, as countries engage in a new arms race and multiple conflicts escalate. Today's events to watch * U.S. April factory goods orders (10:00 AM EDT) U.S. April JOLTS job openings (1000EDT) * Federal Reserve Board Governor Lisa Cook, Dallas Fed President Lorie Logan and Chicago Fed President Austan Goolsbee speak; * U.S. corporate earnings: Crowdstrike, Hewlett Packard, Dollar General * OECD Ministerial Council Meeting 2025 in Paris * Italy's Prime Minister Giorgia Meloni meets French President Emmanuel Macron in Rome Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. ($1 = 0.8738 euros) (By Mike Dolan; Editing by Anna Szymanski)
Reuters
a day ago
- Business
- Reuters
AMERICAS Trump and Xi's big chat
LONDON, June 3 (Reuters) - What matters in U.S. and global markets today The dollar and U.S. Treasuries found their footing on Tuesday after a rough start to the week, but stocks remained edgy due to a mix of trade war concerns and spluttering factory activity. I'll discuss this and all of today's market news below. And for today's deep dive, I'll explain why market fears are growing that the 'new cold war' could be turning hot. Today's Market Minute * Dutch far-right leader Geert Wilders' PVV party left the governing coalition on Tuesday, in a move that is set to topple the right wing government and will likely lead to new elections. * Saudi Arabia and Russia had to reach a difficult compromise on OPEC+ policies on Saturday as Riyadh pushed to accelerate oil output increases while Moscow argued for a pause, four OPEC+ sources with knowledge of the talks said. * Surging government debt levels are becoming a pressure point for big economies and bond investors have their sights on those not doing enough to improve their finances. * BP has jumped from crisis to crisis in recent years, severely eroding its stature as one of the world's leading oil companies. The British firm may finally need to accept that it is no longer a true oil major and can't keep managing cash like one. Read the latest from Reuters columnist Ron Bousso. * Headwinds from tariffs, bond yields and 'stagflation' are gathering force, but corporate America could not be in better shape to face the economic storm that may be building. Read the latest from Reuters columnist Jamie McGeever. Trump and Xi's big chat The weekend saw testy bilateral exchanges between Washington and Beijing, as well as a doubling of U.S. steel tariffs to 50%. But hopes for some easing in Sino-U.S. tensions were stoked by news that President Donald Trump and Chinese leader Xi Jinping were scheduled to hold a call as soon as this week. If they jump on the phone this Thursday, they could rope in German Chancellor Friedrich Merz - who will be meeting Trump that day in Washington - for a trilateral discussion among the world's three biggest economies. There's clearly some urgency in Washington to get bilateral talks on track with time running out on its 90-day pause of reciprocal tariffs imposed on April 2. A draft letter sent to negotiating partners showed the Trump administration wants countries to provide their best offer on trade negotiations by Wednesday as officials seek to accelerate talks with multiple partners. Perhaps pointedly, European Union sources said they had not received the letter. Meanwhile, the tariff war's negative impact on global manufacturing is starting to show. U.S. factory activity contracted for a third straight month in May, and suppliers took the longest time in nearly three years to deliver inputs, potentially signalling looming shortages of some goods. The reading was the lowest in six months and missed expectations. Additionally, China's factory activity in May shrank for the first time in eight months, a private-sector survey showed on Tuesday, indicating U.S. tariffs are now starting to directly hurt the manufacturing superpower. The Organisation for Economic Cooperation and Development's latest global outlook, meantime, now expects world growth to slow more than the group expected only a few months ago, as the fallout from the trade war takes a toll on the U.S. economy. The slowing economic pulse helped keep a lid on Treasury yields, with 30-year bonds falling below 5% again. And the greenback (.DXY), opens new tab perked up from Monday's six-week lows. Helping to drive both those moves were surprisingly soft euro zone inflation numbers for May, which increased the likelihood of another European Central Bank interest rate cut this week - and possibly more ahead. Headline euro zone inflation fell below the ECB's 2% target last month, slowing to 1.9% from 2.2% in April. That was below forecasts, amid falling oil prices and service sector inflation as well as the strong euro . Core rates dropped sharply to as low as 2.3%. Next up is this week's sweep of U.S. labor market reports. April job openings due out later on Tuesday are expected to slip further from last month. Ahead of the open, U.S. stock futures were back in the red after the S&P 500's late session recovery on Monday, led in part by big tech and oil stocks. Crude oil prices sustained the bulk of Monday's gains after the OPEC+ meeting this weekend resulted in less significant output hikes than feared. Taiwan's TSMC ( opens new tab, meantime, said on Tuesday that even though U.S. tariffs were having some impact on the company, it is continuing to benefit from the strong demand for artificial intelligence tools. Be sure to check out today's column, where I look into the increasingly bellicose political rhetoric around the world, as countries engage in a new arms race and multiple conflicts escalate. Today's events to watch * U.S. April factory goods orders (10:00 AM EDT) U.S. April JOLTS job openings (1000EDT) * Federal Reserve Board Governor Lisa Cook, Dallas Fed President Lorie Logan and Chicago Fed President Austan Goolsbee speak; * U.S. corporate earnings: Crowdstrike, Hewlett Packard, Dollar General * OECD Ministerial Council Meeting 2025 in Paris * Italy's Prime Minister Giorgia Meloni meets French President Emmanuel Macron in Rome Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias. ($1 = 0.8738 euros)
Business Recorder
2 days ago
- Business
- Business Recorder
China's yuan slips as caution prevails ahead of Trump-Xi talks
SHANGHAI: China's yuan weakened against the dollar on Tuesday, the first trading session after the holiday, as investors cautiously awaited fresh developments in the Sino-U.S. relations following some signs of a re-escalation of tensions. U.S. President Donald Trump and Chinese leader Xi Jinping will likely speak this week, the White House said on Monday, and market participants will be closely monitoring the outcome after Trump accused China of violating an agreement to roll back tariffs and trade restrictions. 'The yuan is likely to swing in a thin range before the talk as heightened trade tensions should hurt both of the world's two largest economies,' said a trader at a Chinese bank. As of 0351 GMT, the onshore yuan was 0.02% lower at 7.1974 per dollar, while its offshore counterpart traded at 7.1994. Prior to the market open, the People's Bank of China (PBOC) set the midpoint rate at 7.1869 per dollar, and 3 pips firmer than a Reuters' estimate of 7.1872. The spot yuan is allowed to trade 2% either side of the fixed midpoint each day. China's yuan looks set for monthly rise Recent broad dollar weakness has allowed the central bank to gradually close the gap between its official guidance and market projections. The PBOC had set persistently firmer-than-expected midpoint settings since November to keep the yuan stable and prevent excess weakness. However, FX analysts at Barclays said the PBOC was in 'a difficult situation now.' 'On the one hand, daily USD/CNY fixings suggest no intention to drive the exchange rate significantly below 7.20, likely on the back of concerns of potential large repatriation flows from exporters,' they said in a note. 'On the other hand, a greater than 5% decline in CFETS within five months may be too fast and a further dip below 95 could fuel concerns or even some hostility from other Asian trading partners.' Based on Tuesday's midpoint fixing, the yuan's value against its major trading partners, as measured by CFETS index, eased to 95.79, and down 5.6% year-to-date, according to Reuters calculations based on official data. The onshore yuan has gained about 1.4% to the dollar during the same period. Traders and analysts noted seasonal foreign exchange demand would kick in to pressure the yuan soon. Overseas-listed Chinese companies usually have higher foreign exchange needs to make dividend payments to their shareholders between May and August. Separately, markets were little swayed by manufacturing activity data, which contracted last month, based on both official and private surveys. On the macro front, investors will switch their attention to trade data due on June 9, seeking more clues from export figures and getting a clearer picture of the health of the economy. The Hong Kong dollar eased to 7.8450 per U.S. dollar on Tuesday, a level not seen since September 2023 and not too far from testing the weaker end of its trading band. The Hong Kong dollar's weakness reflected loose cash conditions, with overnight HKD Hong Kong Interbank Offered Rate (HIBOR), a key barometer of liquidity conditions, hitting record lows. It was last fixed at 0.02027% on Tuesday.
Business Standard
2 days ago
- Business
- Business Standard
Australian markets end modestly lower
Australian markets ended modestly lower, dragged down by banks and energy stocks on renewed Sino-U.S. trade tensions. The benchmark S&P/ASX 200 dipped 0.24 percent to 8,414.10 while the broader All Ordinaries index closed 0.26 percent lower at 8,637.50. Shares of Brickworks soared 27.6 percent after an announcement that the building products maker and investment company Washington H Soul Pattinson's will merge to create a new A$14 billion by Capital Market - Live News
Mint
3 days ago
- Business
- Mint
HK-listed Chinese shares near one-month low, offshore yuan weakens on tariff concerns
(Updates prices, adds context) HONG KONG, June 2(Reuters) - Chinese stocks listed in Hong Kong weakened to near a one-month low on Monday and offshore yuan slipped as renewed Sino-U.S. tariff tensions weighed on sentiment. Concerns over U.S.-China trade tensions flared up again following a fresh spat over tariffs. China's Commerce Ministry rebuked U.S. President Donald Trump's accusations that Beijing had violated the consensus reached in Geneva talks, calling them "groundless," and vowed to take "forceful measures" to safeguard its legitimate rights and interests. U.S. President Donald Trump and Chinese President Xi Jinping will speak soon to iron out trade issues including a dispute over critical minerals, Treasury Secretary Scott Bessent said over the weekend. The Hang Seng China Enterprises Index, which tracks mainland companies listed in Hong Kong, tumbled 2.6% to the lowest since May 6, while Hong Kong's benchmark Hang Seng Index slipped 2.2% to 22,778.45. The offshore yuan traded at 7.2193 yuan per dollar, falling about 0.2% in Asian trading hours, while the Hong Kong dollar continued to hover around weaker side of the 7.75-7.85 per dollar trading band. Mainland markets are closed for Dragon Boat Festival and will resume trading on Tuesday. The declines on Monday were across the board, with the Hang Seng Tech Index losing 2.4%, while property subindex and healthcare sector both sliding more than 3%. Among the biggest laggards, local property firm New World Development plunged 7.5% to a fresh two-month low after it deferred coupon payments. Car makers continued the slide amid ongoing price war concerns. Shares of Li Auto tumbled 4.2%, while BYD and Nio lost more than 3%. (Reporting by Jiaxing Li in Hong Kong; Editing by Janane Venkatraman and Rashmi Aich)
