· The dollar fell on Tuesday, reversing gains to a near six-month high, as the euro rallied after Italian Prime Minister Giuseppe Conte said the government had never considered leaving the euro zone.
The euro also benefited as Bloomberg, citing sources, reported that the European Central Bank could conclude its next policy meeting this month with a public announcement on when its quantitative easing program would end, analysts said.
Markets have not been expecting an announcement on QE this month given the uncertainty caused by the Italian political situation.
The euro rose 0.1 percent against the dollar to $1.1712 EUR=, which pushed the dollar index, also 0.1 percent lower to 93.894 .DXY.
· The Institute for Supply Management's non-manufacturing activity index jumped 1.8 points to 58.6, ending three straight monthly declines. The reading indicates expansion in the sector, which accounts for more than two-thirds of U.S. economic activity.
Strong growth and tightening labor market conditions should guarantee that the Fed will hike interest rates next week, and boosts chances for two more hikes later in the year.
· The Federal Reserve may need to slow interest rate hikes, if policymakers in Europe battling sluggish growth fall behind unwinding central bank accommodation, a U.S. investment strategist said on Tuesday.
· The summit between U.S. President Donald Trump and North Korean leader Kim Jong Un will be on Singapore’s southern island of Sentosa, the White House said on Tuesday as preparations accelerated for next week’s event.
Trump told reporters at an Oval Office event that plans for what will be the first meeting between a serving U.S. president and a North Korean leader, were “moving along very well.”
· Russian President Vladimir Putin said on Wednesday a decision by U.S. President Donald Trump to set up a meeting with North Korean leader Kim Jong Un was “brave and mature”, and said that he was expecting a “positive outcome”.
· Mexico said it would impose a 20 percent tariff on U.S. pork imports after U.S. President Donald Trump slapped tariffs on steel and aluminum.
The tariff was in response to the Trump administration’s decision last week to impose steel and aluminum tariffs on Mexican exporters on grounds that countries including Mexico engage in competition damaging to U.S. national security.
· The European Union does not expect any breakthrough on steel and aluminum tariffs imposed by the United States on the EU and Canada at talks of G7 leaders in Canada later this week, a senior EU official said on Tuesday.
Finance ministers of the United States’ closest allies vented anger over the tariffs last Saturday, ending their meeting with a stern rebuke of Washington and setting up a heated fight at the G7 summit in Charlevoix on June 8-9. Some said the issue could be tackled by the leaders in direct talks.
But the EU official, involved in the preparation of the summit, said the issue was unlikely to be resolved there.
· The Group of Seven leading industrial nations at its summit this week is poised to disagree over U.S. metals tariffs, which have infuriated Canada and European Union members of the bloc, a Canadian official said on Tuesday.
· A coalition of retailers and restaurants on Tuesday asked the U.S. Congress to fix a “drafting error” in December’s tax-cut bill that they said is deterring companies from investing in their stores.
· U.S Senate Majority Leader Mitch McConnell said on Tuesday he was cancelling most of the Senate’s August recess to give lawmakers time to pass spending bills before a Sept. 30 deadline and to confirm more of President Donald Trump’s appointees.
· Iran has begun preparations to boost its uranium enrichment capacity, its nuclear chief said on Tuesday, adding to pressure on European powers trying to save a nuclear accord with Tehran in peril after a U.S. withdrawal.
· Brent crude reversed losses on Tuesday, after hitting its lowest price in nearly a month following a report the U.S. government asked Saudi Arabia and other major exporters to increase oil output.
Brent crude LCOc1 futures rose 9 cents to settle at $75.38 a barrel, a 0.12 percent gain. It touched a low of $73.81, its lowest since May 8.
U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 77 cents to settle at $65.52 a barrel, a 1.2 percent gain. Earlier, WTI hit a session low of $64.22, the lowest since April 10.
· The premium for Brent to WTI hit a session low of $9.38, recovering slightly from last week when the spread reached $11.57, the widest since March 2015. That divergence was “overcooked,” prompting profit-taking, said Jim Ritterbusch, president of Ritterbusch and Associates.
· The U.S. government has unofficially asked Saudi Arabia and some other OPEC producers to raise oil output, three OPEC and industry sources said, although it has not requested a specific figure.
Reference: Reuters
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