· The euro climbed on Friday as traders were encouraged by improved regional economic growth data and new assurances by Italian politicians that their nation would not leave the single currency.
The euro registered a weekly gain of nearly 0.5 percent against the dollar, reversing the prior week’s 1.35 percent drop tied to the European Central Bank’s hint it would hold interest rates through the summer of 2019.
The euro rose 0.5 percent to $1.1662, and increased 0.6 percent to 128.17 yen.
· The current Italian government “does not want to exit the euro,” Claudio Borghi, a top lawmaker in the far-right League party, said in a newspaper interview.
· Business activity in Germany and France, the euro zone’s top two economies, picked up in June despite trade tensions between Europe and the United States, IHS Markit data showed.
· An index that tracks the dollar versus a basket of currencies including the euro was down 0.24 percent at 94.517, retreating from an 11-month peak of 95.529 on Thursday.
· Speculators turned bullish on the dollar for the first time since July last year, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday, as sentiment improved after the Federal Reserve forecast two more interest rate hikes this year.
The value of the net long dollar position was $8.64 billion in the week ended June 19, shifting from a net short of $7.42 billion the previous week. This week’s net long dollar position was the largest since May 16 last year.U.S. dollar positioning was derived from net contracts of International Monetary Market speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars.
· President Donald Trump on Friday threatened to escalate a trade war with Europe by imposing a 20 percent tariff on all U.S. imports of European Union-assembled cars.
Trump posted his threat on Twitter the day European Union reprisals took effect against U.S. tariffs on European steel and aluminum. The EU targeted $3.2 billion in American goods exported to the 28-member bloc.
“If these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!” Trump wrote.
· The European Union will respond to any U.S. move to raise tariffs on cars made in the bloc, a senior European Commission official said, the latest comments in an escalating trade row.
· China’s central bank said on Sunday it would cut the amount of cash that some banks must hold as reserves by 50 basis points (bps), releasing $108 billion in liquidity, to accelerate the pace of debt-for-equity swaps and spur lending to smaller firms.
The reserve reduction, the third by the central bank this year, had been widely anticipated by investors amid concerns over market liquidity and a potential economic drag from a trade dispute with the United States.
· President Donald Trump said on Sunday that people who enter the United States illegally should be sent back immediately to where they came from without any judicial process, likening them to invaders who are trying to “break into” the country.
· German Chancellor Angela Merkel said on Sunday she would seek direct deals with separate European Union states on migration, conceding the bloc had failed to find a joint solution to the issue threatening her government.
Since Mediterranean arrivals spiked in 2015, when more than a million refugees and migrants reached the bloc, EU leaders have been at odds over how to handle them. The feud has weakened their unity and undermined Europe’s Schengen free-travel area.
Sixteen EU leaders met for emergency talks in Brussels on Sunday hoping to get a deal for the full summit of all 28 states on June 28-29.
They will endorse further tightening of their external borders and giving more money to foreign countries to prevent people from setting sail for Europe. But they cannot agree on how to share out those asylum seekers who make it.
· ZTE Corp (000063.SZ) is expected to deposit $400 million in an escrow account in a U.S. bank in the “next couple of days,” the last step the Chinese company must take before a ban on U.S. suppliers can be lifted, a U.S. Department of Commerce official told Reuters on Friday.
· China’s consumer prices are likely to be stable in the second half of the year, the state planner said on Saturday, soothing concerns that have grown amid China’s escalating trade dispute with the United States.
· Britain’s looming departure from the European Union has led nearly half of big companies from the rest of the bloc to cut investment in the country, a poll of 800 executives released two years after the Brexit referendum found.
The survey, by law firm Baker & McKenzie, also found that three quarters of bosses wanted Brussels to make concessions to Britain to secure a better trading relationship after it leaves the EU in early 2019.
“It’s very clear that, especially German companies, think that Brexit is bad for business,” said Anahita Thoms, a trade partner at Baker & McKenzie in Duesseldorf.
· Oil prices soared on Friday after oil producers agreed to modest crude output increases to compensate for losses in production at a time of rising global demand.
Brent crude settled up $2.50, or 3.4 percent, to $75.55 a barrel.
U.S. crude rose $3.04, or 4.6 percent, to $68.58 a barrel, getting an additional boost after a surprise large drawdown at the storage hub at Cushing, Oklahoma.
Brent crude was up 2.7 percent on the week, while U.S. crude was up 5.5 percent.
· The Organization of the Petroleum Exporting Countries and other top crude producers, meeting in Vienna, agreed to raise output from July by about 1 million barrels per day (bpd).
The real increase, however, will be around 770,000 bpd, according to Iraq, because several countries that recently suffered production declines will struggle to reach full quotas, while other producers may not be able to fill the gap.
Iran’s oil minister Bijan Zanganeh said on Saturday that OPEC and its allies will increase oil output by close to 500,000 barrels per day after agreeing a new production deal on Friday.
Reference: Reuters
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