· The dollar rose on Friday as concern about next weeks European parliamentary elections dented demand for the euro, while the British pound dropped to a four-month low on worries about Britains exit from the European Union.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.957 after touching lows below 97.2 last week.
· The U.S. dollar was roughly unchanged Monday as investors held off on making big moves while awaiting developments in U.S-China trade negotiations and insight into the Federal Reserve’s thinking on interest-rate policy.
The dollar was 0.07% weaker against the euro, last at $1.116, but maintained gains made last week. It ignored trade bickering which saw China on Monday accuse the United States of harboring “extravagant expectations” for a trade deal, underlining the gulf between the two sides as U.S. action against Chinese technology giant Huawei began hitting the global tech sector.
· Powell’s speech on Monday “will be something we’re watching very closely to see if there are any comments from the Federal Reserve as to if they feel there will be a change in their outlook ... because of the increased trade tensions,” said Chuck Tomes, portfolio manager at Manulife Asset Management.
Remarks by several members of the Fed on Monday contributed to the market’s lack of conviction, as they showed a diversity in opinion at the U.S. central bank, said Franulovich.
"If (low inflation) turns out to be persistent, I’ll get more aggressive in pushing the FOMC to lower rates in reaction and try to recenter inflation expectations at 2%," St. Louis Fed President James Bullard said in an interview with Handelsblatt.
Meanwhile, Atlanta Fed President Raphael Bostic is not expecting an imminent interest rate cut and is confident in the economy, he told CNBC in an interview on Monday.
· Federal Reserve Chairman Jerome Powell said rising levels of corporate debt need watching but so far do not pose a threat to the financial system.
· CNBC reported on Friday that U.S.-China trade talks have stalled. Sources told CNBC’s Kayla Tausche that scheduling discussions had not happened as the U.S. increases pressure on Chinese telecom companies. Meanwhile, the South China Morning Post said that China was in no rush to continue trade talks.
· The Trump administration on Thursday officially added China’s Huawei Technologies Co Ltd to a trade blacklist, immediately enacting restrictions that will make it extremely difficult for the telecom giant to do business with U.S. companies.
Washington lawyer Douglas Jacobson, a trade expert, said there would be collateral impact on the U.S. companies that sell to Huawei.
“While the intent is to punish Huawei, ultimately U.S. companies are also being penalized,” Jacobson said.
· Analysts cut price targets on several microchip companies, including Xilinx Inc. Shares of Xilinx closed down 7.3 percent, while those of rival chipmaker Qualcomm Inc fell 4 percent.
· The U.S. Commerce Department said on Friday it may soon scale back restrictions on Huawei Technologies after this week’s blacklisting would have made it nearly impossible for the Chinese company to service its existing customers.
· Google has severed business ties with Huawei, in a stunning move that could threaten the smartphone maker’s global ambitions.
The U.S. tech giant has decided to stop licensing its Android operating system to the Chinese telecommunications firm, in order to comply with a U.S. trade blacklist.
It can however continue to use an open-source version of Android, but won’t be able to integrate key Google services like the Play app store.
Reuters reported Sunday that Huawei will now lose access to Android updates. That’s pretty significant considering all Huawei phones operate on Android. The operating system powers more than 80% of the world’s smartphones.
Huawei’s new phones will also reportedly lose access to proprietary apps like the Google Play app store, Gmail and YouTube.
But Google said people with existing Huawei devices will still be able to use Google apps and download updates for them.
However the problem could be longer term. Peter Richardson, a research director of tech strategies at Counterpoint Research, told CNBC via email that Huawei will not have access to the new version of Android, code-named Q, that will be launched later in the year.
Experts predict the impact will likely be limited in the short term. The consensus view is that anyone with a Huawei and Honor handset should be safe for now.
“The current devices will continue to support Google services and Google updates,” Francisco Jeronimo, associate vice president for European devices at IDC, told CNBC by telephone. “I think it’s more of a long-term impact than very short term.”
In China, the story is a little different. Consumers there have access to a more limited version of the operating system, which doesn’t come pre-installed with Google services that are blocked there.
· Trade tensions between the U.S. and China stalled a global recovery and are continuing to endanger investment and growth, the secretary general of the OECD warned Monday.
“We were in the middle of a recovery when all these decisions about trade started and not only did it stifle the recovery, it basically has produced the slowdown and the potential for greater damage is still there,” Angel Gurria told CNBC.
“Everybody is betting today… on a deal between China and the U.S. but the problem is that on the face of it the tensions are getting greater and, second, the problem - the spillover effect of this tension - is becoming more and more evident,” he told CNBC’s Joumanna Bercetche at the start of the OECD’s Spring Forum in Paris.
· The U.S. government on Monday temporarily eased some trade restrictions imposed last week on China’s Huawei, a move that sought to minimize disruption for the telecom company’s customers around the world.
The U.S. Commerce Department will allow Huawei Technologies Co Ltd to purchase American-made goods in order to maintain existing networks and provide software updates to existing Huawei handsets.
The company is still prohibited from buying American parts and components to manufacture new products without license approvals that likely will be denied.
· Oil prices slipped on Friday, but both benchmarks posted a weekly gain on rising concerns over further Middle East supply disruptions due to U.S.-Iran political tensions.
U.S. West Texas Intermediate crude futures settled 11 cents lower at $62.76 per barrel. WTI posted a weekly gain of 1.8%, the first rise in four weeks.
Brent crude futures fell 41 cents to $72.21 a barrel, but was up 2.3% for the week, posting its first gain in three weeks.
· Oil were mixed on Monday after hitting multi-week highs overnight, as OPEC indicated over the weekend that it was likely to maintain production cuts that have helped boost crude prices this year.
Escalating Middle East tensions provided further support.
U.S. West Texas Intermediate crude futures settled 34 cents higher at $63.10 a barrel. WTI reached $63.81 earlier, the highest since May 1.
Brent crude oil fell 24 cents to $71.97 a barrel, after the international benchmark for oil prices earlier touched $73.40, the highest since April 26.
Reference: CNBC, Reuters
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