CAC Down 62 Points As Banks Drag On Turkey Concerns

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 French stocks fell sharply on Friday, with a fresh turmoil in Turkey as well as renewed fears of a trade war between the U.S. and China keeping investors nervous.

Investors ignored official data showing that France's industrial and manufacturing output rebounded in June, driven by a recovery in petroleum output.

Industrial output climbed 0.6 percent month-on-month in June, reversing a 0.2 percent fall in May. Analysts had expected output to rise 0.5 percent.

The benchmark CAC 40 was down 63 points or 1.14 percent at 5,439 in opening deals after finishing marginally higher the previous day.

Banks succumbed to heavy selling after the European Central Bank reportedly said it is concerned over the impact of a weak Turkish lira on European banks.

BNP Paribas tumbled 3.3 percent, Credit Agricole dropped 1.7 percent and Societe Generale declined 1.9 percent.

United Kingdom Industrial Output Recovers In June

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UK industrial production expanded in June after falling for three straight months, data from the Office for National Statistics showed Friday.

Industrial production climbed 0.4 percent month-on-month, reversing a 0.2 percent fall in May. This was the first increase in four months. Output was expected to climb 0.3 percent.

On the other hand, manufacturing rose at a slower pace of 0.4 percent after gaining 0.6 percent in May. Economists had forecast a 0.3 percent rise for June.

On a yearly basis, growth in industrial output slowed slightly to 1.1 percent from 1.2 percent in May. At the same time, manufacturing output growth held steady at 1.5 percent.

Economists had forecast industrial output to climb 0.7 percent and manufacturing to rise 1 percent in June.

According to monthly GDP estimate, the economy grew only 0.1 percent in June, slower than the 0.3 percent rise seen in May.

The index of services remained flat in June, while farm output contracted 0.2 percent in June. At the same time, growth in construction came in at 1.4 percent, but slower than the 2.9 percent increase in May.

$160 million corruption scandal in Argentina roils its financial markets

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  • More than a dozen former Argentine government officials and business executives have been arrested in a large scale corruption scandal.

  • The investigation is throwing Argentina upside down just as it gears up for economic recovery. 

 

Just as Argentina looked poised for a shot at economic recovery, a corruption scandal is roiling the embattled country.

More than a dozen former government officials and business executives were arrested after police raids last week in a case involving illegal payments for favors including public-works contracts that took place over a decade under President Cristina Fernandez de Kirchner.

The century bond, which marks debts due in 2117, fell to a record low Wednesday. Its yields, which move opposite of prices, rose to as high as 9.37%. They have jumped by about 38 basis points since the end of July, when the corruption allegations came to light.

The Argentine peso also fell to a two-week low. It was trading down as much as 1% to 27.6710 against the dollar around 2 p.m. ET. Argentina's central bank, which has been struggling to effectively combat 30% inflation, had a day earlier held its key interest rate unchanged at 40%. 

Last Wednesday, Buenos Aires-based newspaper La Nacion published the notebooks of a former driver in the Fernandez administration that detailed how he transported roughly $160 million in bribe payments from construction companies to government officials from 2005 until 2015. 

Fernandez, who was president during much of that period, has been indicted in the case but enjoys immunity from prosecution as an Argentine senator. Prosecutors on Tuesday questioned President Mauricio Macri's cousin, who is a construction executive.

Argentina scored the largest bailout in IMF history earlier this year after its currency hit an all-time low. The $50 billion loan, which is part of a three-year standby program, was extended in attempt to rein in soaring twin deficits in the country and to stabilize the peso.

Moody's rating agency called the scandal "credit negative for Argentine corporations."

The pound sees more downward pressure after dollar 'sucker punch'

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  • UK GDP estimates in-line: a quarterly growth of 0.4% and annual growth of 1.3%.

  • The figures failed to revive the pound, which hit a fresh year low against the dollar on Friday morning.

  • Sterling is suffering from "no deal" Brexit fears and a strong dollar.

LONDON — In line UK GDP growth in the second quarter failed to revive the bombed-out pound on Friday.

 

The UK Office for National Statistics said on Friday morning that its preliminary estimate for UK GDP growth in the second quarter was 1.3%, in line with economists' forecasts and up from 1.2% in the first quarter. Quarter-on-quarter growth came in at 0.4%, in line with consensus forecasts and up from 0.2% in the previous quarter.

 

The figures failed to do much to reverse the poor performance of the pound on Friday. Sterling has been under pressure all week amid rising fears of a "no-deal" Brexit. A rallying dollar put more pressure on the currency. The dollar index, which measures the currency's strength against a basket of others, hit its highest level since June 2017 on Friday.

 

The pound was down 0.5% against the dollar to $1.2761 at 9.31 a.m. GMT (5.31 a.m. ET), a minute after GDP figures were released. It marks a fresh 11-month low for the pound against the dollar.

 

"The fears of a no-deal Brexit have piled the pressure on the pound and the dollar’s rally has come as a sucker punch," Louis Walsh, the chief market analyst at cmtrading.com, said in an email.

 

The pound was up around 0.11% against the euro at the same time. The euro is suffering amid concerns about possible contagion from Turkey's economy and currency spreading to eurozone banks.

 

Connor Campbell, a financial analyst with SpreadEx, said: "That the pound managed to nudge higher against the euro, alongside the single currency’s own 0.7% slide against the greenback, suggests Friday’s fall is a tad more informed by trade war-fearing investors pouring into the safe-haven dollar than the week’s ‘no deal’ Brexit concerns (though that undoubtedly isn’t helping)."

UK GDP Growth Accelerates In Q2

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UK economic growth doubled in the second quarter driven by stronger growth in both services and construction sectors, first quarterly estimate from the Office for National Statistics showed Friday.

Gross domestic product rose 0.4 percent, faster than the 0.2 percent expansion seen in the first quarter. The rate came in line with expectations.

On a yearly basis, GDP advanced 1.3 percent versus 1.2 percent growth seen a quarter ago.

The dominant services output expanded 0.5 percent. At the same time, construction logged a quarterly growth of 0.9 percent. Meanwhile, production dropped 0.8 percent.

DAX Under Pressure On Turkey Concerns

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German stocks plunged on Friday as a fresh turmoil in Turkey as well as renewed fears of a trade war between the U.S. and China sapped investors' appetite for risk.

The benchmark DAX was down 195 points or 1.54 percent at 12,481 in opening deals after rising 0.3 percent in the previous session.

Banks led the downtrend, with Commerzbank down 2.3 percent and Deutsche Bank losing 3.5 percent after the European Bank reportedly expressed concerns over the impact of a weak Turkish lira on European banks.

The lira tumbled more than 14 percent in early trade to hit a new low amid a deepening rift with the United States and intensifying worries about the state of the economy.

Energy group Innogy dropped almost 1 percent on reporting a 10 percent fall in first-half operating profit. RWE shed 0.7 percent and E.ON gave up 1.5 percent.

Today Markets Need To Know

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Good morning! Here's what you need to know in markets on Friday.

1. Asian stock markets fell on Friday amid heightened global trade tensions, while currency markets were whipsawed by a searing sell off in Russia's rouble and as economic worries sent the Turkish lira tumbling. Washington said it would impose fresh sanctions because it had determined that Moscow had used a nerve agent against a former Russian agent and his daughter in Britain, which the Kremlin denies.

2. The pound's extended slump continued on Friday as it fell to a fresh low against the dollar. Sterling is down 0.27% against the dollar to $1.2792 at 7.30 a.m. BST (2.30 a.m. ET), marking a fresh 11-month low.

3. Russia would consider it an economic war if the United States imposed a ban on banks or a particular currency, Prime Minister Dmitry Medvedev said on Friday, the TASS state news agency said. "I would not like to comment on talks about future sanctions, but I can say one thing: If some ban on banks' operations or on the use of one or another currency follows, it would be possible to clearly call it a declaration of economic war," Medvedev said.

4. Investors are pulling billions of dollars out of Europe.Investors have pulled $35 billion from European equities this year and $51 billion from European funds, according to Barclays data.

5. Mobile chipmaker Qualcomm is settling an antitrust case brought against it by Taiwan regulators by paying T$2.73 billion ($89 million), the island's Fair Trade Commission said on Friday. The commission said Qualcomm also agreed to bargain in good faith with other chip and phone makers in patent-licensing deals.

6. A divided federal appeals court on Thursday ordered the US Environmental Protection Agency to ban a widely-used pesticide that critics say can harm children and farmers. The 2-1 decision by the 9th US Circuit Court of Appeals in Seattle overturned former EPA commissioner Scott Pruitt's March 2017 denial of a petition by environmental groups to ban the use of chlorpyrifos on food crops such as fruits, vegetables, and nuts.

7. Blockchain company Soluna plans to build a 900-megawatt wind farm to power a computing center in Dakhla in the Morocco-administered Western Sahara, its chief executive John Belizaire said in an interview work on the initial off-grid phase will start in 2019 and complete a year later, with the possibility of connecting the site to the national grid, Belizaire told Reuters.

8. Ryanair is bracing for its biggest-ever one-day strike on Friday with pilots based in five European countries set to walk out, forcing the cancellation of about one in six of its daily flights at the height of the holiday season. Ryanair, which averted widespread strikes before Christmas by agreeing to recognize unions for the first time in its 30-year history, has been unable to quell rising protests since over slow progress in negotiating collective labor agreements.

 

9. Mercedes-Benz sports utility vehicles built in Tuscaloosa, Alabama, are being checked for potential problems by Shanghai customs authorities, Daimler confirmed on Thursday. Mercedes-Benz GLE and GLS models, built in the United States between May 4 and June 12, 2018, have a brake issue which poses a "safety risk," according to a Chinese customs document circulating on Chinese social media.

10. Dropbox reported its second-ever earnings as a public company on Thursday. The company beat Wall Street's expectations on revenue and earnings per share but the stock slid on news of Chief Operating Officer Dennis Woodside's impending departure.

France Industrial Output Recovers In June

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France's industrial and manufacturing output rebounded in June driven by a recovery in petroleum output, data from the statistical office Insee showed Friday.

Industrial output climbed 0.6 percent month-on-month in June, reversing a 0.2 percent fall in May. Production was expected to gain 0.5 percent.

Likewise, manufacturing output advanced 0.6 percent, in contrast to a 0.5 percent fall a month ago. Economists had forecast output to remain flat.

Data showed that manufacture of coke and refined petroleum products surged 25.2 percent, after a sharp 14.4 percent decrease in May.

Construction output logged a notable monthly expansion of 3.9 percent, following a 3.4 percent decrease.

Another report from Insee revealed that private payroll employment grew at a moderate pace of 0.2 percent, the same pace of increase as seen in the first quarter. Net job creations totaled 31,000 after 46,000 in the previous quarter.

Year-on-year, private payroll employment rose 1.3 percent.

Asian Shares Mostly Lower As Trade Worries Weigh

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Asian stocks ended broadly lower on Friday as investors fretted about rising trade tensions between the U.S. and China as well as the new set of U.S. sanctions on Russia. A diplomatic rift between the U.S. and Turkey also kept underlying sentiment cautious.

Chinese shares posted their best weekly gains in a month, with technology companies leading the surge after China revamped a national leadership group charged with planning and studying its key technological development strategies.

The benchmark Shanghai Composite index ended flat at 2,795.31, but ended the week up by 2 percent. Hong Kong's Hang Seng index, however, dropped 0.84 percent to 28,366.62.

Japanese shares fell sharply to hit one-month low, with a firmer yen and heavy selling in the technology sector weighing on markets. The Nikkei average fell by 300.31 points or 1.33 percent to 22,298.08, the lowest closing level since July 12. The broader Topix index closed 1.15 percent lower at 1,720.16.

The yen rose against the dollar as trade worries persisted and data showed the country's economy grew more than expected in the second quarter, driven by higher consumer spending and business investment.

Japan's GDP expanded a seasonally adjusted 0.5 percent sequentially in the second quarter of 2018, the Cabinet Office said in a preliminary reading. That exceeded expectations for an increase of 0.3 percent following the 0.2 percent loss in the three months prior.

Tokyo Electron lost 3.6 percent, Advantest Corp slumped 4.9 percent and Sumco Corp retreated 4.7 percent after Morgan Stanley downgraded its view on the U.S. chip sector. Fujifilm Holdings rallied 3.5 percent after announcing a share buyback.

Australian shares fell modestly as energy stocks retreated and building materials supplier James Hardie Industries forecast adjusted net operating profit for fiscal 2019 that fell slightly below expectations.

The benchmark S&P/ASX 200 index dropped 19.30 points or 0.31 percent to 6,278.40 while the broader All Ordinaries index ended down 16.80 points or 0.26 percent at 6,366.80.

Energy stocks Santos, Oil Search, Origin Energy and Beach Energy fell 2-4 percent. Australia's biggest power producer AGL Energy declined 2.3 percent to extend Thursday's losses.

Mining heavyweight Rio Tinto gave up 0.8 percent on going ex-dividend, while rival BHP Billiton eased 0.7 percent. Banks ANZ, NAB and Westpac rose between 0.3 percent and half a percent.

Seoul stocks closed lower amid heavy selling in large-cap technology shares by foreign and institutional investors. The benchmark Kospi ended down 20.92 points or 0.91 percent at 2,282.79.

Market heavyweight Samsung Electronics tumbled 3.2 percent to snap a five-day winning streak while chipmaker SK Hynix gave up 3.7 percent.

New Zealand shares rose notably, with the benchmark S&P/NZX 50 index closing up 70.42 points or 0.79 percent at 9,010.61 after credit card spending and manufacturing data painted a positive picture of the economy.

Fonterra Co-operative Group shares fell 2.4 percent after the world's biggest dairy exporter cut its milk-price forecast for 2017/18 and said it won't pay farmers and investors a second-half dividend.

U.S. stocks ended mixed overnight for a second straight session as investors weighed lingering trade war concerns against largely upbeat corporate earnings news. The Dow dropped 0.3 percent and the S&P 500 slid 0.1 percent while the tech-heavy Nasdaq Composite inched up marginally.

Today Markets 10 Things

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Here's what you need to know in markets on Monday.

1. US employers added 157,000 jobs last month, fewer than expected, according to a Bureau of Labour Statistics report released Friday. Economists had expected the jobs report to show nonfarm payrolls increasing by 193,000 on net. The job gains in June were revised higher.

2. British trade minister Liam Fox said "intransigence" from the European Commission was pushing Britain towards a no-deal Brexit, in an interview published on Saturday by the Sunday Times. Fox put the odds of Britain leaving the European Union without first agreeing a deal over their future relationship at 60-40, the newspaper reported.

3. Oil prices rose on Monday after Saudi crude production registered a surprising dip in July and as American shale drilling appeared to plateau. Markets also anticipated an announcement from Washington due later on Monday detailing renewed US sanctions against major oil exporter Iran, set to be reinstated at 1201 EDT on Tuesday (1601 GMT), according to a US Treasury official.

4. Munich Re, the world's biggest reinsurer, will stop investing in bonds and shares of companies that generate more than 30% of their sales with coal-related business, its chief executive said, caving to pressure from investors. "In the individual risk business, where we can see the risks exactly, we will in future in principle no longer insure new coal-fired power plants or mines in industrial countries," Joachim Wenning added in a commentary to be published in German daily Frankfurter Allgemeine Zeitung on Monday.

5. HSBC said on Monday its pretax profit rose 4.6% for the first half of the year, as Europe's biggest bank showed early progress in its strategy of returning to growth mode after years of restructuring. HSBC reported a pretax profit of $10.7 billion in the six months through June, up from $10.2 billion in the same period a year earlier.

6. China's Unipec, the trading arm of state oil major Sinopec, has suspended crude oil imports from the United States due to a growing trade spat between Washington and Beijing, three sources familiar with the situation said on Friday. The sources declined to be identified as they are not authorized to speak to the media.

7. Huawei Technologies is facing increased scrutiny in Britain because it is using an ageing software component sold by a firm based in the United States, one of the countries where lawmakers allege its equipment could facilitate Chinese spying, sources told Reuters. The fact that the British misgivings stem in part from Huawei's relationship with a US company shows how trade wars and heightened national security concerns are making it harder for technology firms and governments to safeguard products and communication networks.

8. Deutsche Bank has uncovered shortcomings in its ability to fully identify clients and the source of their wealth, internal documents seen by Reuters show, more than a year after it was fined nearly $700 million for allowing money laundering. In two confidential reviews, dated June 5 and July 9, Germany’s biggest lender detailed the results of tests on a sample of investment bank customer files in several countries, including Russia.

9. Asian shares pared gains on Monday as Chinese stocks swung into negative territory, dragged lower by the escalating Sino-US trade war, though Beijing’s efforts to stop sharp declines in the yuan helped support the currency. Japan's Nikkei closed down 0.05%, the Hong Kong Hang Seng is up 0.10% at the time of writing (8.05 a.m. BST/3.05 a.m. ET), and the Shanghai Composite is down 1.26%.

10. ICE, the parent company of the iconic New York Stock Exchange, is making a big move into the crypto market with a digital asset platform. The firm, which previously dove into the market for digital assets via a data feed product earlier this year, had reportedly been exploring a cryptocurrency exchange platform. On Friday, the company officially announced it had been developing out such an offering.

Indonesia's Economic Growth Tops Expectations In Q2

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Indonesia's economy expanded at a faster than expected pace in the second quarter, data from statistics bureau revealed Monday.

Gross domestic product grew 5.3 percent year-on-year. Economists had forecast an annual growth of 5.12 percent compared to 5.06 percent expansion seen in the first quarter.

On a quarterly basis, GDP expanded 4.21 percent in the second quarter.

In the first half of the year, the economy grew 5.17 percent from the same period of last year.

"Looking ahead, we doubt Indonesia's economy can maintain its current pace of expansion," Gareth Leather, an economist at Capital Economics, said. On the plus side, rapid wage growth should help support consumption.

However, the economist noted that weaker global demand and lower prices for its main commodity exports mean export revenues are likely to remain low by past standards.

Moreover, spending on infrastructure will need to slow if the government is to keep the budget deficit within the 3 percent of GDP mandatory limit, Leather noted.

China is preparing a counterattack to Trump's latest tariff threat as the trade war continues to escalate

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China on Friday threatened to impose tariffs on $60 billion worth of US goods.
The move is in response to threats by the Trump administration to raise the tariff rate on an additional $200 billion worth of Chinese goods.
The two countries have already imposed about $34 billion worth of tariffs on each other.

China on Friday said it would impose retaliatory tariffs on about $60 billion worth of US goods if the Trump administration continued to escalate a trade war between the two countries.

The tariffs would be imposed at four different tax rates, China's Ministry of Commerce said in a statement.

"The implementation date of the taxation measures will be subject to the actions of the US, and China reserves the right to continue to introduce other countermeasures," the statement said.

The move is a response to the Trump administration's recent threat to raise the proposed tariff rate on an additional $200 billion worth of Chinese goods to 25% from 10%. That threat is part of efforts to make it more painful for China "to continue their bad practices than it is to reform," US Commerce Secretary Wilbur Ross said Thursday on Fox Business Network.

The Trump administration last month enacted a 25% tariff on roughly $34 billion worth of Chinese goods, prompting Beijing to retaliate in kind, and then threatened to slap additional duties on nearly all Chinese goods sent to the US. US tariffs on another $16 billion worth of Chinese imports are set to be enacted at a later date.

Here's a timeline of the US-China trade war so far:

March 1: President Donald Trump announces tariffs on all imports of steel and aluminum, including metals from China.
March 22: Trump announces plans to hit $50 billion worth of Chinese goods with a 25% tariff. China announces tariffs in retaliation to the steel and aluminum duties and promises a response to the latest US announcement.
April 3: The US trade representative announces a list of Chinese goods subject to the tariffs. There is a mandatory 60-day comment period for industries to ask for exemptions from the tariffs.
April 4: China rolls out a list of more than 100 US goods worth roughly $50 billion that are subject to retaliatory tariffs.
May 19: After a meeting, the two countries announce the outline of a trade deal to avoid the tariffs.
May 29: The White House announces that the tariffs on $50 billion of Chinese goods will move forward, with the final list of goods released June 15. The move appears to wreck the nascent trade deal.
June 15: Trump rolls out the final list of goods subject to new tariffs. Chinese imports worth $34 billion would be subject to the new 25% tariff as of July 6, with another $16 billion worth of imports subject to the tariff at a later date. China retaliates with an equivalent set of tariffs.
June 18: Trump threatens a 10% tariff on another $200 billion worth of Chinese goods.
July 6: The first tranche of tariffs on $34 billion worth of Chinese goods takes effect; China responds in kind.
July 10: The US releases an initial list of an additional $200 billion worth of Chinese goods that could be subject to a 10% tariff.
August 1: Washington more than doubles the value of its tariff threats against Beijing, announcing plans to increase the size of proposed duties on $200 billion worth of Chinese goods to 25% from 10%.

New Zealand Commodity Prices Fall Further

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New Zealand's commodity prices declined for the second straight month in July, mainly driven by dairy prices, the results of a survey by ANZ showed Monday.

The ANZ commodity price index declined 3.2 percent month-over-month in July, well above the 0.9 percent drop in June.

Dairy prices alone fell 6.5 percent monthly in July. Among components, butter prices declined the most by 8.9 percent.

The meat and fibre index registered a fall of 1.1 percent, while aluminum prices showed a bigger contraction of 7.6 percent.

The NZD ANZ commodity price index dipped 3.1 percent from June, when it dropped by 1.0 percent.

On an annual basis, the NZD ANZ commodity price index rose 6.5 percent in July, following a 7.5 percent increase in the preceding month

HSBC H1 Profit Rises; Says Cautiously Optimistic For Global Growth

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Asia-focused lender HSBC Holdings Plc (HSBC, HSBA.L) reported Monday that its first-half profit before tax increased 5 percent to $10.7 billion from $10.2 billion a year ago.

Adjusted profit before tax was $12.1 billion, compared to $12.4 billion in the previous year.

Revenue for the period grew 4 percent to $27.3 billion from $26.2 billion last year.

Adjusted revenue increased 2%, reflecting higher revenue across all global businesses, partly offset by a reduction in Corporate Centre.

Looking ahead, Mark Tucker, Group Chairman, said, "We remain cautiously optimistic for global growth in the remainder of the year. In particular, the fundamentals of Asia remain strong despite rising concerns around the future of international trade and protectionism."

The Board has appointed Jonathan Symonds as the Deputy Group Chairman of HSBC Holdings plc. He already serves as the senior independent director.

European Economics Preview: Germany's Factory Orders Data Due

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Factory orders data from Germany is due on Monday, headlining a light day for the European economic news.

At 2.00 am ET, Destatis is slated to publish Germany's factory orders figures for June. Economists forecast orders to fall 0.1 percent on month, reversing a 2.6 percent rise in May.

At 3.00 am ET, industrial production and retail sales figures from the Czech Republic are due. Industrial output is forecast to rise 2 percent on year in June after climbing 1.4 percent in May. At the same time, retail sales growth is seen rising to 2.3 percent from 2.1 percent in May.

At 4.30 am ET, Eurozone Sentix investor confidence data is due. The investor sentiment index is seen rising to 14.0 in August from 12.1 in July.

At 5.45 am ET, Romania's central bank is set to announce its rate decision. The bank is widely expected to raise its key rate to 2.75 percent from 2.50 percent.

Japanese Market Rises

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The Japanese stock market is rising in choppy trade on Monday, tracking the gains on Wall Street following the release of the closely-watched U.S. monthly jobs data, while a stronger yen weighed on exporters' shares.

The benchmark Nikkei 225 Index is up 90.66 points or 0.40 percent to 22,615.84, off a high of 22,620.15 in early trades.

The major exporters are weak on a stronger yen. Panasonic is lower by almost 2 percent, Sony is declining 0.5 percent and Canon is down 0.2 percent, while Mitsubishi Electric is unchanged.

In the auto space, Honda is advancing more than 1 percent.

Toyota is losing almost 1 percent after the automaker reported an increase in profit for the first quarter and said it has agreed to dissolve its twelve-year-old capital tie-up with Isuzu Motors. Shares of Isuzu Motors are higher by more than 3 percent.

Among oil stocks, Inpex is lower by 0.3 percent and Japan Petroleum is edging down 0.1 percent after crude oil prices declined on Friday.

In the banking sector, Mitsubishi UFJ Financial is losing more than 2 percent and Sumitomo Mitsui Financial is declining almost 2 percent.

Among the market's best performers, Pacific Metals is gaining 15 percent, NTT Data Corp is rising more than 7 percent amid news that the company is set to merge three of its subsidiaries, while Suzuki Motor is advancing almost 4 percent after upbeat first-quarter financial results.

On the flip side, Hitachi Zosen is losing almost 7 percent, Sapporo Holdings is declining more than 6 percent and Concordia Financial is lower by almost 6 percent.

In the currency market, the U.S. dollar is trading in the lower 111 yen-range on Monday.

On Wall Street, stocks closed higher on Friday as traders digested the Labor Department's closely watched monthly jobs report showing weaker than expected job growth in July, partly due to a drop in government employment and the closing of Toys "R" Us stores. The report also showed a modest decrease in the unemployment rate.

While the Nasdaq inched up 9.33 points or 0.1 percent to 7,812.01, the Dow climbed 136.42 points or 0.5 percent at 25,462.58 and the S&P 500 rose 13.13 points or 0.5 percent to 2,840.35.

The major European markets also moved to the upside on Friday. While the U.K.'s FTSE 100 Index jumped by 1.1 percent, the German DAX Index advanced by 0.6 percent and the French CAC 40 Index rose by 0.3 percent.

Crude oil prices edged lower on Friday amid renewed concerns about excess supply in the market, after data showed oil output in Russia to have increased sharply in July. WTI crude for September settled at $68.49 a barrel, down $0.47 or 0.7 percent on the New York Mercantile Exchange.

Australian Market Advances

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The Australian stock market is advancing on Monday following the gains on Wall Street Friday after the release of the closely-watched U.S. monthly jobs report and as a rise in metal prices boosted mining stocks.

In late-morning trades, the benchmark S&P/ASX 200 Index is adding 25.30 points or 0.41 percent to 6,260.10, off a high of 6,270.10 earlier. The broader All Ordinaries Index is up 24.90 points or 0.39 percent to 6,351.30.

The major miners are advancing on higher iron ore and copper prices. BHP Billiton is rising 2 percent, Fortescue Metals is higher by almost 2 percent and Rio Tinto is advancing more than 1 percent.

Gold miners are also gaining after gold prices edged higher. Evolution Mining is up 1 percent and Newcrest Mining is advancing more than 1 percent.

In the banking space, ANZ Banking, Westpac, National Australia Bank and Commonwealth Bank are up in a range of 0.4 percent to 0.7 percent.

Oil stocks are also mostly higher despite a decrease in crude oil prices. Woodside Petroleum is rising 0.5 percent and Oil Search is adding 0.3 percent, while Santos is declining 0.6 percent.

Seek said it anticipates full-year earnings and revenue at the top end of its guidance range despite expecting to book one-time items totaling A$142 million. However, the online jobs site's shares are losing more than 9 percent.

Packaging company Amcor has requested a trading halt, pending an announcement about an acquisition.

In economic news, Australia will see July figures for the inflation forecast from TD Securities and the Melbourne Institute today. Australia also will see July results for job ads from ANZ.

In the currency market, the Australian dollar is higher against the U.S. dollar on Monday. The local currency was quoted at US$0.7398, up from US$0.7360 on Friday.

On Wall Street, stocks closed higher on Friday as traders digested the Labor Department's closely watched monthly jobs report showing weaker than expected job growth in July, partly due to a drop in government employment and the closing of Toys "R" Us stores. The report also showed a modest decrease in the unemployment rate.

While the Nasdaq inched up 9.33 points or 0.1 percent to 7,812.01, the Dow climbed 136.42 points or 0.5 percent at 25,462.58 and the S&P 500 rose 13.13 points or 0.5 percent to 2,840.35.

The major European markets also moved to the upside on Friday. While the U.K.'s FTSE 100 Index jumped by 1.1 percent, the German DAX Index advanced by 0.6 percent and the French CAC 40 Index rose by 0.3 percent.

Crude oil prices edged lower on Friday amid renewed concerns about excess supply in the market, after data showed oil output in Russia to have increased sharply in July. WTI crude for September settled at $68.49 a barrel, down $0.47 or 0.7 percent on the New York Mercantile Exchange.

Reddit confirmed data breach compromised usernames, passwords and email addresses

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Forum website Reddit has confirmed it was the victim of a data breach which has compromised usernames, passwords and email addresses but has not confirmed the size of the breach.

The website confirmed two sets of data had been accessed by hackers who broke in using compromised employee accounts - one from 2007 which included account details and all public and private posts between 2005 and May 2007.

A second, likely larger set of data was also accessed between June 3 and 17 this year, which included logs and databases linked to the daily email digests Reddit sends out to users.

This data includes usernames and email addresses linked to those accounts.

The firm said it discovered the breach on June 19, with the attack having taken place during the four previous days.

Reddit said it was messaging user accounts "if there's a chance the credentials taken reflect the account's current password" and has urged users to check their Reddit inboxes as well as their emails to establish if they were affected by either breach.

"If your account credentials were affected and there's a chance the credentials relate to the password you're currently using on Reddit, we'll make you reset your Reddit account password," the firm's chief technology officer Christopher Slowe said.

"Whether or not Reddit prompts you to change your password, think about whether you still use the password you used on Reddit 11 years ago on any other sites today.

"If your email address was affected, think about whether there's anything on your Reddit account that you wouldn't want associated back to that address."

The forum said the employee accounts had been accessed when hackers were able to breach the two-factor authentication used to confirm log-in.

It used a text message system that required employees to enter a code sent to them via SMS as well as normal log-in details when trying to access the site.

However, Reddit said hackers had intercepted those text messages.

In response to the attack, cybersecurity experts have warned users to be vigilant of any phishing scams that could be attempted using the stolen data.

Robert Capps, vice president at NuData Security, said: "Fortunately, this Reddit breach doesn't include credit card information.

"However, we all know bad actors are very talented at preparing fraud schemes with the kind of user information that was leaked.

"From phishing scams and dictionary attacks - where fraudsters try certain common passwords based on the user's information - to synthetic identities, as little as an email address can go a long way in the hands of a bad actor.

"Reddit is doing the right thing by immediately informing its global community of the extent of the damage, advising of the steps Reddit is taking and letting its community know what they should watch for and do."

Google plans return to China search market with censored app - sources

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  • Google employee says search engine project is genuine

  • "Very unlikely" to be approved this year - official source

  • Comes as Google ramping up other China projects

 

Google plans to launch a version of its search engine in China that will block some websites and search terms, two sources said, in a move that could mark its return to a market it abandoned eight years ago on censorship concerns.

The plan, which was criticised by human rights advocates, comes as China has stepped up scrutiny of business dealings involving U.S. tech firms including Facebook Inc, Apple Inc and Qualcomm Inc amid intensifying trade tensions between Beijing and Washington.

Google, which quit China's search engine market in 2010, has been actively seeking ways to re-enter China where many of its products are blocked by regulators.

The Intercept earlier reported Google's China plans on Wednesday, citing internal Google documents and people familiar with the plans.

The project is code named "Dragonfly" and has been underway since the spring of 2017, the news website said.

Progress on the project picked up after a December meeting between Google's Chief Executive Sundar Pichai and a top Chinese government official, it added.

Search terms about human rights, democracy, religion and peaceful protests will be among the words blacklisted in the search engine app, which The Intercept said had already been demonstrated to the Chinese government.

The finalised version could be launched in the next six to nine months, pending approval from Chinese officials, it added.

Chinese state-owned Securities Times, however, said reports of the return of Google's search engine to China were not true, citing information from "relevant departments".

But a Google employee familiar with the censored version of the search engine confirmed to Reuters that the project was alive and genuine.

On an internal message board, the employee wrote: "In my opinion, it is just as bad as the leak article mentions."

The worker, who declined to be named, said that he had seen slides on the effort and that many executives at the vice president level were aware of it. He said he had transferred out of his unit to avoid being involved.

Separately, a Chinese official with knowledge of the plans said that Google has been in contact with authorities at the Cyberspace Administration of China (CAC) about a modified search program.

The official, who declined to be named, said the project does not currently have approval from authorities and that it is "very unlikely" such a project would be made available this year.

A separate report, by technology news site The Information on Wednesday, said that Google was developing a news-aggregation app for use in China that would comply with the country's censorship laws.

Google declined to comment on the accounts and the CAC did not immediately respond to requests for comment from Reuters on Thursday.

A day earlier, the search giant also declined to comment on specifics mentioned in The Intercept report, but noted that it has launched a number of mobile apps in China and works with local developers as part of maintaining its domestic presence.

'CHILLING PRECEDENT'

But the report pummelled shares of U.S.-listed Baidu , which dominates China's search engine market. Baidu shares fell 7.7pc on Wednesday, despite posting better than expected quarterly results.

Human rights group Amnesty International said it was calling on Google to change course.

"Google would be setting a chilling precedent and handing the Chinese government a victory," its China researcher, Patrick Poon, said in an e-mailed statement.

"This also raises serious questions as to what safeguards Google is putting in place to protect users' privacy," he said.

Google's main search platform has been blocked in China since 2010, but it has been attempting to make new inroads into China.

In January, the search engine joined an investment in Chinese live-stream mobile game platform Chushou, and earlier this month, launched an artificial intelligence (AI) game on Tencent Holdings Ltd's social media app WeChat.

Facebook's website is also banned in China but the company has also signalled its interest to enter the market.

Reports of Google's possible re-entry spurred a strong reaction on Chinese social media outlets on Wednesday evening, including debates over the merits of a censored search engine versus accessing the U.S. version through illegal virtual private networks.

"Let's carry on jumping the Firewall," said one anonymous poster. "I'd rather not have it than use a castrated version."

IAG will walk away if no deal for Norwegian done in a year

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IAG boss Willie Walsh has given Scandinavian airline Norwegian a maximum of one year to agree to a takeover deal.

IAG - which owns Aer Lingus, British Airways, Iberia and Vueling - snapped up a 4.6pc stake in Norwegian earlier this year. Mr Walsh said at the time that IAG would be interested in making an outright bid for the airline.

 

But he stressed yesterday that the window for thrashing out a deal was finite.

"There's no immediate hurry. But this time next year, if we haven't acquired Norwegian, we won't be holding those shares," he said.

"If we're not acquiring it, we're not interested in being a shareholder. We'll wait and see what happens, but it's not a big issue on our agenda."

Mr Walsh confirmed that no talks had been held between IAG and Norwegian since April.

The former Aer Lingus pilot and chief executive said that IAG could continue to use its new low-cost Level airline to deliver the strategy that would have been accelerated with the acquisition of Norwegian.

Level started as a long-haul operation, but has now launched a short-haul base in Vienna, serving 14 European destinations.

That move puts it in direct competition with Vienna-based low-cost carrier Laudamotion, in which Ryanair will soon have a 75pc stake.

Mr Walsh said he was "surprised" at the €150m that Ryanair said last month that it expected Laudamotion to lose in its first year.

That's higher than the €100m Ryanair had previously predicted.

"We're very pleased to have to have the opportunity to grow with Level," said Mr Walsh.

"We started with four aircraft and clearly have plans to expand that significantly. We think it's going to be a good market for us.

"We've always said that we have two options. One is that we can grow organically, and that's why we created Level," he said.

"When we expressed our interest in Norwegian, we said it wasn't going to slow us down in terms of our growth plans and we continue to focus on that organic growth."

Mr Walsh also said it would be "foolish" not to exploit the growth opportunities presented by Aer Lingus.

The Irish carrier saw its operating profit soar 51pc to €104m in the first half of the year, and delivered a return on invested capital in the past four quarters of 27.8pc - the highest by far of any other IAG division.

IAG delivered an operating profit of €835m for the second quarter, which was up from €790m in the second quarter of 2017.

Aer Lingus plans to launch two new routes to North America next year as it takes delivery of four new Airbus A321 LR jets, according to its chief executive, Stephen Kavanagh. It will bring its total North American routes to 15.

The new routes will be announced in the coming weeks, with plans to launch them next July.

Mr Walsh said Aer Lingus' model had been "very effective".

"We always believed that there was a market opportunity there but, credit to the team there, they've demonstrated that it's even better than we thought," said Mr Walsh.

But Mr Kavanagh has also said that infrastructure development at Dublin Airport needed to keep up with the airline's growth ambition.

"Dublin Airport's forthcoming capital investment plan will represent a step change in investment to facilitate further long- term growth at the airport," said a DAA spokesman.