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·         The U.S. dollar rose and Treasury yields slipped on Friday on anxiety about a potential global trade war as the leaders of the Group of Seven countries met in Canada.

In late trading, the U.S. dollar rose 0.2 percent against a basket of currencies .DXY to 93.56, but fell 0.7 percent for the week, its steepest weekly fall in 10 weeks.

Against the yen, however, the dollar was last down 0.2 percent at 109.45 JPY=.

The yield on benchmark 10-year Treasury notes US10YT=RR was 2.926 percent, down 0.3 basis point from late Thursday.

·          An unprecedented U.S.-North Korea summit is also scheduled for June 12 in Singapore, with Washington seeking to pressure Pyongyang into abandoning its nuclear weapons program.

·         Expectations for another interest rate rise in the United States at next Wednesday’s Federal Reserve policy meeting, and the prospect that the European Central Bank will soon signal a winding-down of its massive monetary stimulus could add to market volatility next week, investors said.

 

·         France and Germany have criticized President Donald Trump for threatening to pull the United States out of a joint statement with key G7 allies.

Trump tweeted Saturday that he had instructed his representatives not to sign a communique between the seven nations that make up the group just after host Canadian Prime Minister Justin Trudeau announced all countries had agreed to it.

Key to Trump's concerns appeared to be declarations on trade, a thorny issue following Trump's announcement that he planned to impose tariffs on steel and aluminum exports from the European Union, Canada and Mexico.

 

·         The United States and Canada swung sharply toward a diplomatic and trade crisis on Sunday as top White House advisers lashed out at Canadian Prime Minister Justin Trudeau a day after U.S. President Trump called him “very dishonest and weak.”

The spat drew in Germany and France, who sharply criticized Trump’s decision to abruptly withdraw his support for a Group of Seven communique hammered out at a Canadian summit on Saturday, accusing him of destroying trust and acting inconsistently.

White House economic adviser Larry Kudlow accused Trudeau of betraying Trump with “polarizing” statements on trade policy that risked making the U.S. leader look weak ahead of a historic summit with North Korean leader Kim Jong Un.

·         Germany continues to support the Group of Seven communique despite U.S. President Donald Trump’s decision to back out of the declaration drawn up at a summit in Canada, a government spokesman said on Sunday.

·         Europe will implement counter-measures against U.S. tariffs on steel and aluminum just like Canada, German Chancellor Angela Merkel said on Sunday, voicing regret about President Donald Trump’s abrupt decision to withdraw support for a G7 communique.

·         Japanese Prime Minister Shinzo Abe said on Saturday that no country benefits from protectionism, and that all measures should be consistent with World Trade Organization rules, as he wrapped up a sometimes contentious summit with other Group of Seven leaders in Canada.

·         U.S. producers can sell pork legs and shoulders to Mexico via an import quota despite retaliatory measures taken this week after U.S. President Donald Trump imposed tariffs on steel and aluminum, the Mexican government said on Thursday.

·         France and Germany have made progress but have yet to agree on a roadmap for euro zone reforms, French and German officials told Reuters after finance ministers from both countries held talks in Paris on Saturday.

 French President Emmanuel Macron and German Chancellor Angela Merkel have promised to present a joint reform proposal at a European Union summit on June 27-28, but differences remain on euro zone issues and banking regulation.

·         Tightening policy by a notch just one day apart, the world’s top two central banks will hope to signal confidence in global economic growth, despite risks of a trade war, currency swings and political turbulence.

The U.S. Federal Reserve is almost certain to raise rates again on Wednesday, inching closer to a neutral policy stance, while the European Central Bank is likely to signal on Thursday that its 2.55 trillion euro bond purchase scheme will end this year, a key move in dismantling crisis-era stimulus.

Though largely a coincidence, their twin steps suggest the era of cheap central bank cash will soon be over. That indicates major economies are strong enough to stand on their own but also that central banks are keen to replenish their policy firepower before the next downturn.

·         U.S. President Donald Trump arrived in Singapore on Sunday for a historic summit with North Korean leader Kim Jong Un that could lay the groundwork for ending a nuclear stand-off between the old foes and the transformation of the isolated Asian nation.

·         North Korea’s state media said on Monday its leader Kim Jong Un and U.S. President Donald Trump will discuss a “permanent and durable peace-keeping mechanism” on the Korean Peninsula, denuclearization of the Korean peninsula and other issues of mutual concern.

·         China’s producer inflation picked up for the second month in a row to a four-month high in May, buoyed by stronger commodity prices, suggesting the world’s No.2 economy has retained growth momentum despite rocky trade relations with the United States.

Annual consumer inflation held steady in May from the previous month, as food prices remained largely stable, official data also showed on Saturday.

The producer price index (PPI) rose 4.1 percent in May from a year earlier, bolstered by a recent jump in commodity prices and up from a lower base last year, according to the National Bureau of Statistics (NBS). That compared with an acceleration to 3.4 percent in April.

·         Israel’s government raised its economic growth estimates by 0.3 percentage point for this year and next, citing better than expected private spending and exports and an expansion of capacity at Intel’s (INTC.O) chip plant.

Growth is forecast at 3.5 percent in 2018 and 3.4 percent next year, the Finance Ministry said on Sunday in updated estimates. It expects growth of 3.3 percent in2020.

The new forecasts are more in line with those from the Bank of Israel, IMF and OECD.

 

·         Oil prices fell on Friday as concerns about surging U.S. output and falling demand in China weighed on the contract and JP Morgan cut its price forecast.

Brent crude futures LCOc1 settled down 86 cents, or 1.1 percent, at $76.46 a barrel. U.S. West Texas Intermediate (WTI) crude futures CLc1 ended 21 cents lower at $65.74 a barrel. For the week, Brent fell 0.5 percent, while U.S. crude slipped 0.3 percent.

·         Hedge funds and other money managers cut their bullish bets on U.S. crude futures in the week ended June 5, the U.S. Commodity Futures Trading Commission (CFTC) said.

·         JP Morgan cut its 2018 crude forecast for WTI by $3 to $62.20 a barrel. The bank said geopolitical tensions and lingering risks of supply disruptions may push prices higher during the second half 2018, it expects prices will head lower late in the year, and remain capped in 2019.

China’s May crude oil imports eased away from a record high hit the previous month, customs data showed, with state-run refineries entering planned maintenance.

May shipments were 39.05 million tonnes, or 9.2 million barrels per day (bpd). That compared with 9.6 million bpd in April.

·         Russia’s oil production increased to 11.1 million barrels per day (bpd) in the first week of June, far exceeding production limits outlined in a global oil deal, Interfax news agency cited a source as saying on Saturday.

Russia agreed to cut its production by 300,000 bpd from 11.247 million bpd as part of a global pact. The Russian Energy Ministry did not immediately respond to a request for comment.

·         OPEC is likely to reject a request by Iran to discuss U.S. sanctions against Tehran at this month’s meeting of the oil producer group, a source familiar with the matter told Reuters.

Reference: Reuters, CNN