German Construction Sector Expands At Faster Pace

german construction.jpg

 Germany's construction sector activity expanded at the fastest pace in four months in May, survey data from IHS Markit showed Wednesday.

The construction Purchasing Managers' Index rose to 53.9 in May from 50.9 in April. Any reading above 50 indicates expansion in the sector.

The sector continued to rebound from a weather-related downturn at the end of the first quarter.

Of the three broad areas of activity monitored by the survey, both residential and commercial sectors registered the strongest rate of growth since January. Meanwhile, civil engineering activity remained in contraction.

New orders increased and construction companies continued to raise employment in order to expand capacity.

However, the rate of job creation eased to a 15-month low amid reports from surveyed firms of difficulties finding suitably skilled staff.

"With the survey continuing to highlight difficulties finding skilled staff as well as another sharp deterioration in sub-contractor availability, constructors have become a little less optimistic about the outlook," Phil Smith, Principal Economist at IHS Markit, said.

Asian Shares Edge Up In Cautious Trade

cityscape.jpg

Asian stocks finished mostly higher on Wednesday as higher commodity prices lifted resource stocks and the Japanese yen weakened on solid U.S. non-manufacturing activity data released overnight. Nevertheless, renewed trade concerns helped to limit overall gains to some extent.

China's Shanghai Composite index finished marginally higher at 3,115.18 while Hong Kong's Hang Seng index gained half a percent to close at 31,259.10. South Korean markets were closed for the Memorial Day holiday.

Japanese shares hit a two-week high as technology stocks followed their U.S. peers higher. The Nikkei average closed up 86.19 points or 0.38 percent at 22,625.73 after hitting as high as 22,662.82 earlier in the day, its highest level since May 23. The broader Topix index closed 0.15 percent higher at 1,777.59.

Exporters like Panasonic, Toyota Motor and Sony climbed 1-3 percent. Sharp Corp gained about 1 percent after it agreed to acquire Toshiba's personal computer business for 4 billion yen, or $36 million. Subaru Corp shares shed 1.4 percent after the automaker said it found more cars affected by data fabrication.

Australian shares finished modestly higher after the Nasdaq Composite index hit a record high for the second consecutive session overnight. The benchmark S&P/ASX200 index rose 30.20 points or 0.50 percent to 6,025.10 while the broader All Ordinaries index ended up 28.90 points or 0.47 percent at 6,137.40.

Higher base metal prices helped lift miners, with BHP Billiton, Fortescue Metals Group and Rio Tinto closing up between 1 percent and 2.5 percent. Gold miner Newcrest Mining rallied 2.1 percent after an increase in gold prices.

Energy stocks like Woodside Petroleum, Santos Oil Search and Origin Energy jumped 2-3 percent after crude oil futures rose more than 1 percent on Tuesday.

ANZ slid half a percent after criminal charges were laid against the bank. The other three big banks dropped 1-2 percent.

Metcash fell 2.2 percent after the IGA supermarkets supplier said it would take a $352 million impairment in its full-year results.

On the data front, Australia's gross domestic product gained a seasonally adjusted 1.0 percent sequentially in the first three months of 2018, the Australian Bureau of Statistics said.

That beat expectations for an increase of 0.8 percent following the 0.4 percent gain in the previous three months. On a yearly basis, GDP expanded 3.1 percent, up from 2.4 percent in the three months prior.

New Zealand shares hit a record high as investors lapped up shares of companies offering hefty dividends. The benchmark S&P/NZX 50 rose 56.41 points or 0.64 percent to 8,813.45, with Ryman Healthcare and F&P Healthcare closing up 2.1 percent and 3.5 percent, respectively.

The volume of total building activity in New Zealand dropped a seasonally adjusted 0.9 percent sequentially in the first three months of 2018, Statistics New Zealand said. That was well shy of forecasts for an increase of 0.5 percent.

Separately, the results of a survey by ANZ showed that New Zealand's commodity prices increased for the fifth straight month in May.

India's Sensex was rising 0.6 percent ahead of the repo rate decision by RBI. Indonesia's Jakarta Composite index was declining 0.2 percent and Singapore's Straits Times index was losing half a percent, while Malaysia's KLSE Composite index was gaining 0.9 percent and the Taiwan Weighted added 0.9 percent.

Overnight, U.S. stocks ended narrowly mixed as figures on the labor market and services sector activity strengthened the case for a Federal Reserve interest increase next week.

The tech-heavy Nasdaq Composite rose 0.4 percent to reach another fresh record closing high amid gains in technology shares like Apple and eBay.

ECB's Praet Sees Signals Of Inflation Converging Towards Target

ECB's Praet.jpg

European Central Bank Executive Board member Peter Praet sees signs of inflation converging towards target.

"Signals showing the convergence of inflation towards our aim have been improving, and both the underlying strength in the euro area economy and the fact that such strength is increasingly affecting wage formation supports our confidence that inflation will reach a level of below, but close to, 2% over the medium term," Praet said at the Congress of Actuaries, in Berlin on Wednesday.

He said any decision concerning the termination or further extension of net purchases will hinge on the ultimate judgement of the Governing Council.

Praet noted that low interest rates fundamentally reflect the consequences of unfavorable secular trends, combined with the fall-out from the global financial crisis and euro area sovereign debt crisis.

Australia GDP Climbs 1.0% On Quarter In Q1

a gdp.jpg

Australia's gross domestic product gained a seasonally adjusted 1.0 percent on quarter in the first three months of 2018, the Australian Bureau of Statistics said on Wednesday.

That beat expectations for an increase of 0.8 percent following the 0.4 percent gain in the previous three months.

On a yearly basis, GDP expanded 3.1 percent - again beating forecasts for 2.8 percent and up from 2.4 percent in the three months prior.

Exports of goods and services contributed 0.5 percentage points to GDP growth.

"Growth in exports accounted for half the growth in GDP, and reflected strength in exports of mining commodities," ABS Chief Economist Bruce Hockman said.

Mining industry gross value added grew 2.9 percent during the quarter. Production of coal, iron ore and liquefied natural gas showed strong increases.

Private non-financial corporations profits increased 6.0 percent in the March quarter, the strongest increase in the past year.

"The rise in profits was consistent with the strong increase in mining exports coupled with a lift in the terms of trade this quarter," Hockman added.

Private investment contributed to GDP growth with continued strong investment in machinery and equipment and was particularly strong in the non-mining sector. Growth in the construction of new dwellings fell slightly, but the recent high levels continued, consistent with the number of building approvals observed in recent months.

General government final consumption expenditure increased 1.6 percent and was up 5.1 percent through the year. Public investment fell slightly but remained at elevated levels.

Household consumption grew 0.3 percent driven by rises in non-discretionary items and grew 2.9 percent through the year. The household savings ratio fell to 2.1 per cent and was at its lowest rate since December 2007. The savings ratio declined over the past decade but the rate of decline has moderated in the past 4 quarters.

Compensation of employees increased 1.2 percent, while gross operating surplus increased 4.0 percent and terms of trade rose 3.3 percent.

Norway's Current Account Surplus Grows In Q1

gas.jpg

Norway's current account surplus increased notably in the three months ended March, figures from Statistics Norway showed Wednesday.

The current account surplus climbed to NOK 61.0 billion in the first quarter from NOK 40.2 billion in the previous quarter.

The surplus also rose from NOK 57.6 billion in the corresponding period last year.

The goods and services trade surplus for the March quarter was NOK 36.5 billion versus NOK 29.4 billion in the December quarter.

Balance of income and current transfers came in at a surplus of NOK 24.5 billion in the first quarter, up from NOK 10.7 billion in the fourth quarter.

Ireland Services Growth Strongest In 4 Months

services.jpg

Ireland's service sector activity expanded at the fastest pace in four months in May, driven by strong increase in new orders, survey data from IHS Markit showed Wednesday.

The seasonally adjusted Investec services Purchasing Managers' Index rose to 59.3 in May from 58.4 in April. Any reading above 50 indicates expansion in the sector.

New orders grew strongly in May amid improving economic conditions, but also attributed higher activity to favorable weather. But the rate of growth was slower than in April.

The rate of job creation also eased, but remained marked.

On the price front, input prices continued to rise sharply in May, while the rate of output price inflation eased to a 19-month low amid reports of competitive pressures.

Asian Markets Mostly Positive

asian markets.jpg

Asian stock markets are mostly higher on Wednesday following the mostly positive cues overnight from Wall Street and as higher commodity prices lifted resources stocks.

Nevertheless, lingering worries about global trade wars and Italy's debt weighed on the markets. Italy's new leadership said they want to boost spending and cut taxes rather than pursue austerity in order to get the nation's debt under control.

The Australian market is advancing, reflecting gains in mining and oil stocks, while banking stocks are weak. Better-than-expected Australian GDP data also boosted sentiment.

In late-morning trades, the benchmark S&P/ASX 200 Index is adding 25.60 points or 0.43 pecent to 6,020.50, off a high of 6,025.60. The broader All Ordinaries Index is up 24.10 points or 0.39 percent to 6,132.60.

In the banking space, Westpac, Commonwealth Bank and National Australia Bank are lower in a range of 0.2 percent to 0.8 percent.

Shares of ANZ Banking are down 0.2 percent after the Australian Competition and Consumer Commission or ACCC confirmed late Tuesday that ANZ Banking, Deutsche Bank and Citigroup have been charged with criminal cartel offences in relation to an August 2015 share placement.

The major miners are higher, aided by an increase in iron ore prices. BHP Billiton and Rio Tinto are rising more than 2 percent, while Fortescue Metals is adding more than 1 percent.

Gold miners are also advancing after an increase in gold prices. Evolution Mining is rising more than 1 percent and Newcrest Mining is adding almost 2 percent.

Oil stocks are mostly higher as crude oil prices rose more than 1 percent overnight. Woodside Petroleum is up more than 1 percent and Oil Search is higher by 0.4 percent, while Santos is down 0.3 percent.

Shares of Metcash are down 3 percent after the supermarkets supplier said it will record impairment charges of A$352 million following the decision of a South Australian supermarket customer to not renew its contract.

In economic news, the Australian Bureau of Statistics said that Australia's gross domestic product was up a seasonally adjusted 1.0 percent on quarter in the first three months of 2018. That exceeded expectations for an increase of 0.8 percent following the 0.4 percent gain in the previous three months.

In the currency market, the Australian dollar is almost unchanged against the U.S. dollar on Wednesday. The local unit was trading at US$0.7633, compared to US$0.7638 on Tuesday.

The Japanese market is edging higher after a weak start following the mostly positive cues from Wall Street and on a slightly weaker yen.

In late-morning trades, the benchmark Nikkei 225 Index is adding 23.52 points or 0.10 percent to 22,563.06, after touching a low of 22,498.59 in early trades.

Among the major exporters, Sony and Panasonic are higher by more than 1 percent each, while Mitsubishi Electric is declining more than 1 percent and Canon is down 0.3 percent.

Automaker Toyota is rising more than 1 percent and Honda is edging higher by less than 0.1 percent.

Shares of Subaru Corp. are down more than 1 percent after the automaker said Tuesday it has found new cases of product data fabrication, bring the total number of affected vehicles to 1,551 from the previously reported 903. Yasuyuki Yoshinaga will step down as president and CEO to take responsibility for the inspection scandal.

In the banking sector, Mitsubishi UFJ Financial is lower by 0.7 percent while Sumitomo Mitsui Financial is up 0.1 percent.

Sharp Corp. has agreed to acquire Toshiba's personal computer business for 4 billion yen, or $36 million. Shares of Sharp are advancing more than 1 percent, while Toshiba's shares are down 0.3 percent.

Among oil stocks, Inpex is adding 0.8 percent and Japan Petroleum is higher by more than 1 percent after crude oil prices rose overnight.

Among the market's best performers, Nippon Electric Glass is gaining more than 5 percent, Mitsui Mining & Smelting is higher by almost 4 percent and Toho Zinc is up 3 percent.

On the flip side, Tokai Carbon is losing almost 5 percent and Okuma Corp. is down more than 4 percent. Fanuc, Kyowa Hakko Kiron and Daikin Industries are all lower by more than 2 percent each.

In economic news, Japan will provide April numbers for labor and real cash earnings today.

In the currency market, the U.S. dollar is trading in the upper 109 yen-range on Wednesday.

Elsewhere in Asia, New Zealand, Malaysia, Hong Kong and Taiwan are also higher, while Shanghai, Singapore and Indonesia are lower. The markets in South Korea are closed on Wednesday for the Memorial Day holiday.

On Wall Street, stocks closed mixed in choppy trading on Tuesday, with the tech-heavy Nasdaq reaching another new record closing high. The lack of direction shown by stocks came as traders seemed to be expressing some uncertainty about the near-term outlook for the markets.

An upcoming G-7 summit in Canada as well as the planned meeting between President Donald Trump and North Korean leader Kim Jong Un next week also kept some traders on the sidelines.

While the Dow edged down 13.71 points or 0.1 percent to 24,799.98, the Nasdaq climbed 31.40 points or 0.4 percent to 7,637.86 and the S&P 500 inched up 1.93 points or 0.1 percent to 2,748.80.

The major European markets also turned in a mixed performance on Tuesday. While the German DAX Index inched up by 0.1 percent, the French CAC 40 Index edged down by 0.2 percent and the U.K.'s FTSE 100 Index fell by 0.7 percent.

Crude oil futures rebounded Tuesday amid bargain hunting after steep recent losses. WTI crude added $0.77 or 1.2 percent to $65.52 a barrel on the New York Mercantile Exchange, after hitting a 2-month low.

EU will hit Republican voters to fight trade war

tarrfs.jpg

The European Union will target consumer, agricultural and steel products made in many key Republican constituencies when it imposes tariffs against US imports in retaliation for punitive duties US President Donald Trump announced yesterday.

The Trump administration's tariffs on imports from key allies sent US and European stocks into a tailspin and stoked demand for the safety of government bonds.

The US president's escalation of trade tensions with Canada, Mexico and the European Union hammered American industrial and financial shares.

The Trump administration's unilateral action upended the global trade order and was met with retaliatory actions that could imperil economic growth.

The ratcheting up of tension overshadowed reports that Italy is close to forming a government that is more EU-friendly than investors had feared.

The Trump administration hit the EU, Canada and Mexico with 25pc duties on imported steel and 10pc on aluminium in Washington's most aggressive trade action yet against allies.

Washington claimed it was acting to protect national security, an assertion members of the EU have dismissed. Ireland risks being on the front line if the trade war heats up.

A presentation circulated by the National Treasury Management Agency (NTMA) yesterday shows the US is our biggest single trading partner - followed by the United Kingdom.

Last night Brussels said it will impose retaliatory tariffs on €2.8bn of selected American imports as soon as June 20. Harley-Davidson motorbikes and bourbon whiskey, both produced in districts supportive of the ruling US Republican Party are expected to be among the goods slapped with import duties.

Europe will also take its case to the World Trade Organisation (WTO).

"The US now leaves us with no choice but to proceed with a WTO dispute settlement case and with the imposition of additional duties," European Commission President Jean-Claude Juncker said. "We will defend the Union's interests, in full compliance with international trade law."

The Republican speaker of the House of Representatives, Paul Ryan, is from Wisconsin, home of Harley-Davidson, and Senate Majority Leader Mitch McConnell is from Kentucky, where bourbon whiskey is made.

Harley-Davidson said it will suffer as a result of tariffs.

"We support free and fair trade and hope for a quick resolution to this issue," the bike-maker said in an emailed statement. "A punitive, retaliatory tariff on Harley-Davidson motorcycles in other major markets would have a significant impact on our sales, our dealers, our suppliers and our customers in those markets."

The dispute is likely to dominate a meeting of finance ministers from the Group of Seven nations in Canada. The US has just slapped tariffs on five of it six counterparts, including the host.

"We are deeply disappointed that the US has decided to apply tariffs to steel and aluminium imports from the EU on national security grounds," the UK government said in a statement.

Germany "rejects the tariffs imposed by the US on steel and aluminium," Chancellor Angela Merkel's chief spokesman said in emailed statement.

"We consider that this unilateral measure is unlawful, and that the national security concerns given as the reasons can't be upheld," the spokesman added. "The measures instead carry the risk of creating a spiralling escalation that will harm everyone."

French officials said the EU isn't seeking a trade war but has no choice but to impose "re-balancing" tariffs on selected US exports. The finance officials said it was hard to envision talks happening with the tariffs in place.

Positive US jobs data and European politics lift markets

NFP_04_184367861.jpg

US stocks rose yesterday after the latest monthly jobs report pointed to strength in the world's largest economy.

The upbeat jobs report also cemented expectations of at least two more rate hikes by the Federal Reserve this year.

Technology stocks led the rally, with gains in behemoths such as Apple, Microsoft and Alphabet lifting the S&P tech index to a record high.

Government data showed the US economy added 223,000 jobs in May, while the average hourly earnings rose 0.3pc after edging up 0.1pc in April, both topping estimates by economists polled by Reuters.

US unemployment fell to an 18-year low of 3.8pc.

Prospects of interest rate hikes lifted the S&P financial index by 1.3pc, with shares of big US banks gaining between 1.2pc and 2.2pc.

In Europe, Italian and Spanish borrowing costs fell yesterday after anti-establishment parties in Italy revived a coalition deal, apparently averting snap elections, while in Spain socialist Pedro Sanchez took over as prime minister. Efforts to end three months of political turmoil in Italy were the main focus, pushing peripheral Eurozone bond yields down for a third straight day.

Italian two-year yields, which soared to five-year highs of more than 2.7pc on Tuesday in a throwback to the euro debt crisis, recouped some of the losses yesterday.

However, investors are keeping an eye out on developments around trade after Washington imposed steel and aluminium tariffs on imports from Canada, Mexico and the European Union.

Canada and Mexico retaliated, targeting products from the US such as bourbon whiskey, orange juice, steel, aluminium and others.

European shares, led by Italy, breathed a sigh of relief yesterday.

The Iseq closed up 0.60pc, the pan-European STOXX 600 index rose 1pc, German stocks gained 0.9pc and Britain's FTSE 100 rose 0.3pc.

Italian stocks rallied as much as 2.9pc, the standout performers in Europe as Italian banks gained 3.8pc.

America's global partners retaliate against Trump's 'illegal' levies on trade

thH967OF6R.jpg

The European Union, Canada and Mexico retaliated yesterday after the US imposed tariffs on imports of steel and aluminium.

All three hit back with charges that will hurt American competitiveness by adding billions of dollars to the price of US goods from orange juice and whiskey to blue jeans and Harley-Davidson motorcycles.

The EU has also formally taken the US to the World Trade Organization to challenge the legality of the new tariffs and the Trump administration's national-security justification.

Brussels lodged an eight-page list at the international trade body of goods it would hit with retaliatory measures.

They run the gamut from big motorcycles like Harleys, built on the home turf of House Speaker Paul Ryan, to "canoes", "manicure or pedicure preparations" and even "sinks and washbasins, of stainless steel" - the proverbial kitchen sink.

If the tit-for-tat measures continue, a likely escalation will see the US impose levies on further categories of goods, potentially including Irish whiskey.

Pharmaceuticals, Ireland's biggest single export to the US, are likely to escape the trade war, even if it worsens.

"Almost all countries in the developed world have signed up to a 'zero-for-zero' approach to tariffs in pharma", according to Ryan McGrath, an analyst with Cantor Fitzgerald.

That's good news, but he said the Irish alcohol sector appears to be most at risk. "Irish spirits exports to the US have experienced huge growth over the last number of years and currently there are no tariffs on Irish whiskey in the US. "Although small when compared to pharma, the Irish spirits industry employs 1,500 people."

President Trump's tariffs on Washington's closest allies drew condemnation at home from Republican politicians and from the country's main business lobbying group and sent a chill through financial markets. Tariffs of 25pc on steel imports and 10pc on aluminium were imposed on the EU, Canada and Mexico from today.

"We look forward to continued negotiations, both with Canada and Mexico on the one hand, and with the European Commission on the other hand, because there are other issues that we also need to get resolved," US Commerce Secretary Wilbur Ross said. But the anti-trade action has been branded illegal by America's closest trade partners. EU Trade Commissioner Cecilia Malmstrom said the bloc won't even discuss the issue until the US stands down.

"We were not at the negotiating table. Our offer was: 'You take this gun away from us, we sit together as friends and equals and we discuss', and this would eventually lead to negotiations," Malmstrom told a news conference in Brussels. "We never got this. So now this door for the moment is closed."

The issue dominated as finance ministers from the G7 group of the world's biggest economies met in the Canadian ski resort of Whistler, near Vancouver, where Treasury Secretary Steven Mnuchin represented the US. "I don't want to kid you, we will need to talk about this first and foremost," said Canadian Finance Minister Bill Morneau. "We think it's absurd that Canada is considered in any way a security risk, so that will be very clearly stated by me," said Morneau, who attended Mnuchin's wedding last year and said he considers the Treasury Secretary a friend. "I have every expectation that our other allies around the table will express the same sentiment." German Finance Minister Olaf Scholz claimed the US levies are illegal. "The decision by the US government to unilaterally implement tariffs is wrong, and - from my point of view - also illegal," Scholz told reporters. The trade wars are hijacking a summit that was initially seen as an opportunity to tout the successes of the global upswing. It is severely testing the resiliency of the Western economic alliance represented by the G7.

Mnuchin held a string of bilateral meetings after his arrival in Whistler, meeting Japan's Taro Aso, Scholz and Morneau. America's use of a security justification for its new levies has been particularly badly received, with Germany's Scholz calling the move "spurious".

"We'll always be ready to talk about reaching common agreements on trade policy but that's only possible if unilaterally implemented tariffs are lifted,'' Scholz said.

The G7 finance ministers, along with their central bankers, kicked off the official part of the meetings with a dinner on Thursday, and were holding talks all day yesterday and this morning.

Frictions in Whistler could foreshadow even more high drama at a G7 leaders' summit next week in Quebec which Trump is due to attend. 

Chinese and ECB calm nerves over Deutsche Bank health

2018-06-02_bus_41427928_I1.JPG

Deutsche Bank, the European Central Bank (ECB) and the German bank's biggest investor all sought to reassure shareholders and staff of its financial strength yesterday after S&P cut its rating and questioned its plan to return to profitability.

Shares in Deutsche Bank closed at an all-time low on Thursday as past misadventures in high-risk investment banking haunted new CEO Christian Sewing's attempt to refocus on its more staid corporate banking roots.

In an unusual move, a source familiar with the thinking of the ECB, which regulates Deutsche Bank, and its top shareholder, HNA Group of China, separately said they backed management's strategy of retrenchment.

Deutsche Bank shares were up 3.7pc by midday yesterday on the supportive tone. Deutsche Bank will face another challenge this month when the US Federal Reserve publishes for the first time the results of a "stress test" on its US operations.

Standard & Poor's downgraded the bank's credit rating to BBB+ from A- yesterday.

The downgrade came after reports earlier in the week that the Fed last year designated one of Deutsche Bank's US businesses as "troubled", something a person with knowledge of the matter confirmed to Reuters yesterday.

The Fed's stress test results, expected later this month, are the next big public barometer of Deutsche Bank's financial strength. The regulator has been examining how banks would cope with any new crisis.

The apparent discord between Deutsche Bank's regulators at the ECB and those in the US is unusual.

So too is contradicting ratings agencies like S&P, which the ECB relies on when deciding what collateral to accept from banks and even which bonds to buy as part of its stimulus programme.

The ECB was previously criticised by politicians after it emerged that regulators in Frankfurt had granted Deutsche Bank special treatment in its 2016 stress test, resulting in a boost to its capital level.

Asian Markets Mixed After Trump Cancels North Korea Summit

singapore exchange.jpg

Asian stock markets are mixed on Friday amid cautious trades after U.S. President Donald Trump cancelled the planned historic summit with North Korean leader Kim Jong Un and accused North Korea of displaying "tremendous anger and open hostility". Lingering worries about trade wars also weighed on investor sentiment.

However, some of the markets in the region pared earlier losses after North Korea said it is open to talks with the U.S. despite Trump's cancellation of the summit. Crude oil further slipped in Asian trades after falling overnight.

The Australian market is declining following the negative cues from Wall Street. Banks, mining and oil stocks are weak, while gold miners are higher.

In late-morning trades, the benchmark S&P/ASX 200 Index is losing 13.00 points or 0.22 percent to 6,024.10, off a low of 6,016.60 earlier. The broader All Ordinaries Index is down 12.90 points or 0.21 percent to 6,131.20.

In the mining space, BHP Billiton is declining more than 1 percent, Fortescue Metals is lower by 1 percent and Rio Tinto is down 0.5 percent.

Banks are also mostly lower. Westpac, Commonwealth Bank and National Australia Bank are lower in a range of 0.3 percent to 0.9 percent, while ANZ Banking is edging up less than 0.1 percent.

In the oil sector, Santos is losing 0.5 percent, Oil Search is declining almost 1 percent and Woodside Petroleum is lower by more than 2 percent after crude oil prices fell overnight.

Bucking the trend, Evolution Mining is rising almost 2 percent and Newcrest Mining is advancing more than 1 percent after gold prices surged overnight.

Wesfarmers said it will sell its Homebase business in the UK and Ireland by the end of the financial year to turnaround specialist Hilco Capital and record a loss of A$323 million to A$406 million on the sale. Wesfarmers' shares are adding 0.1 percent.

In the currency market, the Australian dollar is higher against the U.S. dollar on Friday. The local unit was trading at US$0.7577, up from US$0.7563 on Thursday.

The Japanese market recovered after a weak start and is modestly higher following the weak cues from Wall Street. Investor worries eased after North Korea said it is willing to resolve issues with the U.S. despite Trump's cancellation of the summit.

The benchmark Nikkei 225 Index is adding 53.51 points or 0.24 percent to 22,490.52, after opening lower and touching a low of 22,318.15 in early trades.

The major exporters are mixed on a slightly weaker yen. Canon is up 0.2 percent and Mitsubishi Electric is edging up less than 0.1 percent, while Sony is losing almost 1 percent and Panasonic is down 0.3 percent.

Among automakers, Toyota is declining more than 1 percent and Honda is lower by 0.4 percent. In the banking sector, Mitsubishi UFJ Financial is declining 1 percent and Sumitomo Mitsui Financial is down almost 1 percent.

Among oil stocks, Inpex is losing more than 2 percent and Japan Petroleum Exploration is declining more than 3 percent after crude oil prices dipped overnight.

Among the market's best performers, Kirin Holdings is rising more than 4 percent, Sumitomo Dainippon Pharma is gaining almost 3 percent and IHI Corp. is rising more than 2 percent.

On the flip side, Mitsui E&D Holdings is declining more than 3 percent, while Mitsubishi Estate and NSK are losing almost 3 percent each.

In economic news, the Ministry of Internal Affairs and Communications said that overall consumer prices in Tokyo were up just 0.4 percent on year in May. That was beneath expectations for 0.5 percent, which would have been unchanged.

In the currency market, the U.S. dollar is trading in the upper 109 yen-range on Friday.

Elsewhere in Asia, Shanghai, Singapore, South Korea and Hong Kong are also lower, while New Zealand, Malaysia, Indonesia and Taiwan are higher.

On Wall Street, stocks climbed off their worst levels of the day on Thursday, but still closed in negative territory following news that President Donald Trump has called off the historic summit with North Korean leader Kim Jong Un. The president attributed the decision to call off the meeting to North Korea displaying "tremendous anger and open hostility."

The Nasdaq briefly turned positive in late-day trading but closed down 1.53 points or less than a tenth of a percent at 7,424.43. The Dow fell 75.05 points or 0.3 percent to 24,811.76 and the S&P 500 slipped 5.53 points or 0.2 percent to 2,727.76.

The major European markets also moved to the downside on Thursday. While the French CAC 40 Index fell by 0.3 percent, the U.K.'s FTSE 100 Index and the German DAX Index both slumped by 0.9 percent.

Crude for July delivery plunged $1.13 to $70.71 a barrel on the New York Mercantile Exchange Thursday on concerns OPEC may boost output. In Asian trades, crude oil further declined $0.13 or 0.18 percent to $70.58.

European Economics Preview: Germany Ifo Business Confidence Due

1441168527098.jpg

Business sentiment from Germany and quarterly national accounts from the UK are due on Friday, headlining a light day for the European economic news.

At 2.00 am ET, Statistics Norway is set to issue unemployment data for March. The jobless rate is forecast to remain unchanged at 3.9 percent in March.

At 2.45 am ET, France's Insee publishes consumer confidence survey results for May.

At 3.00 am ET, Spain's INE releases producer prices for April. Prices had advanced 1.3 percent on year in March.

At 4.00 am ET, Germany's Ifo business confidence survey results are due. The sentiment index is forecast to drop to 102 in May from 102.1 in April.

In the meantime, Poland's unemployment data is due. The jobless rate is forecast to fall to 6.3 percent in April from 6.6 percent in March.

Half an hour later, the Office for National Statistics releases second estimate for the UK GDP. The ONS is expected to confirm 0.1 percent sequential growth for the first quarter.

Today Markets

5-format2403.jpg

Good morning! Here's what you need to know.

1. The Meghan Markle effect has spread to yellow gold jewelry, helping boost United States sales in the first quarter of 2018 with further gains expected, jewelers said. The first three months of the year were the strongest first quarter for gold jewelry demand in the United States since 2009, according to the World Gold Council. 

2. Apple has blocked Steam's plans to extend its reach into iPhones. Steam, the dominant online store for downloaded games played on Windows PCs, had planned to release a free mobile phone app called Steam Link so that gamers could continue playing on their mobile phones while away from their desktop machines. 

3. Asian shares were slightly weaker on Friday amid fragile market sentiment after U.S. President Donald Trump called off a key summit with North Korea. South Korea's Kospi fell 0.65% and Japan's Nikkei fell 0.3%.

4. A US jury said Samsung should pay $539 million to Apple for copying patented smartphone features. The world's top smartphone rivals have been in court over patents since 2011, when Apple filed a lawsuit alleging Samsung's smartphones and tablets "slavishly" copied its products.

5. European Union negotiators dismiss as "fantasy" some main British demands for Brexit, including on the sensitive issue of the Northern Ireland border. The official accused London of failing to accept that Brexit will necessarily distance it from the EU.

6. Netflix's stock market value ballooned to a record $153 billion on Thursday and eclipsed Walt Disney for the first time.Netflix's stock has surged 82% so far in 2018.

7. Russia has increased its naval activity in international waters close to Norway and its military capabilities are a growing concern, Norway's navy chief said. Norway has an Arctic border with Russia and its economy is highly reliant on its free access to the seas.

8. Mai Mai militia attacked Banro Corp's east Congo Namoya gold mine for the second time in less than a year. Geologist Bienfait Mukelo said the militia tried to enter the compound and seize some expatriate staff as hostages, but they were repelled in a fire fight with the guards. 

9. A US Environmental Protection Agency official said he is not satisfied with Volkswagen's efforts to improve accountability after its diesel emissions fraud. "The VW story is not over yet, not for VW and not for the EPA," Christopher Grundler, director of the EPA's Office of Transportation and Air Quality said.

10. Deutsche Bank erroneously transferred €21 billion to Macquarie in 2014. The transfer was a human error and not related to faulty technology. 

Sensex, Nifty Marginally Higher In Early Trade

tttu.jpg

Indian shares opened on a flat note on Monday as investors digested the formation of a non-BJP government in Karnataka as well as news that the U.S. and China have reached an agreement to set up a framework for addressing trade imbalances in the future.

The benchmark BSE Sensex was margianlly higher at 34,876 after falling around 2 percent last week amid persistent selling by foreign funds. The broader Nifty index was virtually unchanged at 10,596.

UltraTech Cement climbed 3 percent after it agreed to acquire the cement business of BK Birla Group company Century Textiles. Shares of the latter slumped 6 percent.

SBI rallied 1.7 percent and Bank of India jumped over 3 percent after Tata Steel's bid for Bhushan Steel received NCLT approval.

Adani Enterprises slid half a percent on reports that it is foraying into electric buses manufacturing.

Jaiprakash Associates lost about 1 percent after posting a standalone net loss of Rs 78.70 crore for the fourth quarter ended March.

Asian Markets Mostly Higher As Trade War Fears Ease

singapore exchange.jpg

Asian stock markets are mostly higher on Monday after U.S. Treasury Secretary Steven Mnuchin said that the U.S. trade war with China is "on hold" as the world's two largest economies work on a wider trade agreement. On Saturday, Chinese and American negotiators reached an agreement to set up a framework for addressing trade imbalances in the future.

The Australian market is edging higher after a weak start. Gains by oil stocks helped offset weakness in banks and mining stocks.

In late-morning trades, the S&P/ASX 200 Index is adding 3.00 points or 0.05 percent to 6,090.40, after touching a low of 6,070.30 earlier. The broader All Ordinaries Index is up 4.40 points or 0.07 percent to 6,195.30.

Oil stocks are higher despite crude oil prices edging lower on Friday. Woodside Petroleum is adding 0.3 percent and Oil Search is advancing 0.6 percent. Santos is rising more than 2 percent after U.S. private equity firm Harbour Energy raised its takeover bid for the company to about $10.9 billion.

The big four banks are mostly lower as the royal commission into banking practices is due to kick off this week. Westpac, Commonwealth Bank and National Australia Bank are down in a range of 0.6 percent to 0.9 percent, while ANZ Banking is edging up less than 0.1 percent.

In the mining sector, BHP Billiton is down 0.2 percent, Rio Tinto is declining 0.6 percent and Fortescue Metals is losing almost 2 percent after a fall in iron ore prices and some base metals.

Gold miners are mixed. Evolution Mining is losing 0.2 percent, while Newcrest Mining is advancing more than 1 percent after gold prices edged higher.

AGL Energy has rejected Alinta Energy's A$250 million offer to buy Liddel Power Station and reiterated its decision to close the plant in 2022. Shares of AGL Energy are rising more than 1 percent.

Shares of Vocus Group are gaining almost 4 percent after the company named former Optus boss Kevin Russell as managing director and chief executive, three months after Geoff Horth resigned.

In the currency market, the Australian dollar is lower against the U.S. dollar on Monday. The local unit was trading at US$0.7514, down from US$0.7523 on Friday.

The Japanese market is advancing after U.S. Treasury Secretary Steven Mnuchin said that the U.S. trade war with China is "on hold". Better-than-expected Japanese trade surplus for the month of April also boosted investor sentiment.

The benchmark Nikkei 225 Index is adding 83.18 points or 0.36 percent to 23,013.54, off a high of 23,038.64 earlier.

The major exporters are mostly lower despite a slightly weaker yen. Canon, Mitsubishi Electric and Panasonic are lower in a range of 0.2 percent to 0.4 percent, while Sony is adding 0.4 percent.

Automaker Toyota is rising 0.6 percent, while Honda is edging down less than 0.1 percent. In the banking sector, Mitsubishi UFJ Financial is edging lower by 0.1 percent and Sumitomo Mitsui Financial is down 0.2 percent.

Among oil stocks, Inpex is advancing almost 1 percent and Japan Petroleum Exploration is adding 0.5 percent despite crude oil prices declining on Friday.

In the tech space, Advantest is declining almost 4 percent, while Kyocera is adding 0.3 percent and Alps Electric is rising almost 1 percent.

Among the market's best performers, Tokai Carbon is gaining almost 5 percent, while Fujikura and Asahi Glass Co. are rising more than 4 percent each.

On the flip side, Sompo Holdings is losing more than 5 percent, MS&AD Insurance Group is declining more than 3 percent and Screen Holdings is down almost 3 percent.

In economic news, the Ministry of Finance that Japan posted a merchandise trade surplus of 625.977 billion yen in April, up 30.9 percent on year. The headline figure exceeded expectations for a surplus of 440.0 billion yen following the downwardly revised 797.0 billion yen surplus in March.

Exports were up 7.8 percent on year to 6.822 trillion yen, missing forecasts for an increase of 8.7 percent but up from 2.1 percent in the previous month. Imports advanced an annual 5.9 percent to 6.196 trillion yen versus expectations for 9.8 percent following the 0.6 percent contraction a month earlier.

In the currency market, the U.S. dollar is trading in the upper 110 yen-range on Monday.

Elsewhere in Asia, Singapore, Hong Kong and Taiwan are all rising more than 1 percent each, while Shanghai, South Korea and Malaysia are also higher. Meanwhile, New Zealand and Indonesia are lower.

On Wall Street, stocks closed mixed on Friday in a lackluster session as traders seemed reluctant to make more significant moves amid a quiet day on the U.S. economic front. Uncertainty about the outcome of the second round of trade talks between the U.S. and China also kept some traders on the sidelines.

The Dow inched up 1.11 points or less than a tenth of a percent to 24,715.09, but the Nasdaq fell 28.13 points or 0.4 percent to 7,354.34 and the S&P 500 dipped 7.16 points or 0.3 percent to 2,712.97.

The major European markets saw modest weakness on Friday. While the German DAX Index fell by 0.3 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both edged down by 0.1 percent.

Crude oil futures slipped on Friday, but posted a third straight week of gains. WTI crude dipped $0.21 or 0.3 percent to $71.28 a barrel on the New York Mercantile Exchange.

Japanese Market Advances

japanese stock market.jpg

The Japanese stock market is advancing on Monday after U.S. Treasury Secretary Steven Mnuchin said that the U.S. trade war with China is "on hold". Better-than-expected Japanese trade surplus for the month of April also boosted investor sentiment.

The benchmark Nikkei 225 Index is adding 83.18 points or 0.36 percent to 23,013.54, off a high of 23,038.64 earlier.

The major exporters are mostly lower despite a slightly weaker yen. Canon, Mitsubishi Electric and Panasonic are lower in a range of 0.2 percent to 0.4 percent, while Sony is adding 0.4 percent.

Automaker Toyota is rising 0.6 percent, while Honda is edging down less than 0.1 percent. In the banking sector, Mitsubishi UFJ Financial is edging lower by 0.1 percent and Sumitomo Mitsui Financial is down 0.2 percent.

Among oil stocks, Inpex is advancing almost 1 percent and Japan Petroleum Exploration is adding 0.5 percent despite crude oil prices declining on Friday.

In the tech space, Advantest is declining almost 4 percent, while Kyocera is adding 0.3 percent and Alps Electric is rising almost 1 percent.

Among the market's best performers, Tokai Carbon is gaining almost 5 percent, while Fujikura and Asahi Glass Co. are rising more than 4 percent each.

On the flip side, Sompo Holdings is losing more than 5 percent, MS&AD Insurance Group is declining more than 3 percent and Screen Holdings is down almost 3 percent.

In economic news, the Ministry of Finance that Japan posted a merchandise trade surplus of 625.977 billion yen in April, up 30.9 percent on year. The headline figure exceeded expectations for a surplus of 440.0 billion yen following the downwardly revised 797.0 billion yen surplus in March.

Exports were up 7.8 percent on year to 6.822 trillion yen, missing forecasts for an increase of 8.7 percent but up from 2.1 percent in the previous month. Imports advanced an annual 5.9 percent to 6.196 trillion yen versus expectations for 9.8 percent following the 0.6 percent contraction a month earlier.

In the currency market, the U.S. dollar is trading in the upper 110 yen-range on Monday.

On Wall Street, stocks closed mixed on Friday in a lackluster session as traders seemed reluctant to make more significant moves amid a quiet day on the U.S. economic front. Uncertainty about the outcome of the second round of trade talks between the U.S. and China also kept some traders on the sidelines.

The Dow inched up 1.11 points or less than a tenth of a percent to 24,715.09, but the Nasdaq fell 28.13 points or 0.4 percent to 7,354.34 and the S&P 500 dipped 7.16 points or 0.3 percent to 2,712.97.

The major European markets saw modest weakness on Friday. While the German DAX Index fell by 0.3 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both edged down by 0.1 percent.

Crude oil futures slipped on Friday, but posted a third straight week of gains. WTI crude dipped $0.21 or 0.3 percent to $71.28 a barrel on the New York Mercantile Exchange.

Australian Market Edges Higher

30d2f3dd4372295303e74a1eb40d7239.jpg

The Australian stock market is edging higher on Monday after a weak start following the mixed cues from Wall Street Friday as investors focused on the U.S.-China trade talks. Gains by oil stocks helped offset weakness in banks and mining stocks.

In late-morning trades, the S&P/ASX 200 Index is adding 3.00 points or 0.05 percent to 6,090.40, after touching a low of 6,070.30 earlier. The broader All Ordinaries Index is up 4.40 points or 0.07 percent to 6,195.30.

Oil stocks are higher despite crude oil prices edging lower on Friday. Woodside Petroleum is adding 0.3 percent, Oil Search is advancing 0.6 percent and Santos is rising more than 2 percent.

The big four banks are mostly lower as the royal commission into banking practices is due to kick off this week. Westpac, Commonwealth Bank and National Australia Bank are down in a range of 0.6 percent to 0.9 percent, while ANZ Banking is edging up less than 0.1 percent.

In the mining sector, BHP Billiton is down 0.2 percent, Rio Tinto is declining 0.6 percent and Fortescue Metals is losing almost 2 percent after a fall in iron ore prices and some base metals.

Gold miners are mixed. Evolution Mining is losing 0.2 percent, while Newcrest Mining is advancing more than 1 percent after gold prices edged higher.

AGL Energy has rejected Alinta Energy's A$250 million offer to buy Liddel Power Station and reiterated its decision to close the plant in 2022. Shares of AGL Energy are rising more than 1 percent.

Shares of Vocus Group are gaining almost 4 percent after the company named former Optus boss Kevin Russell as managing director and chief executive, three months after Geoff Horth resigned.

In the currency market, the Australian dollar is lower against the U.S. dollar on Monday. The local unit was trading at US$0.7514, down from US$0.7523 on Friday.

On Wall Street, stocks closed mixed on Friday in a lackluster session as traders seemed reluctant to make more significant moves amid a quiet day on the U.S. economic front. Uncertainty about the outcome of the second round of trade talks between the U.S. and China also kept some traders on the sidelines.

The Dow inched up 1.11 points or less than a tenth of a percent to 24,715.09, but the Nasdaq fell 28.13 points or 0.4 percent to 7,354.34 and the S&P 500 dipped 7.16 points or 0.3 percent to 2,712.97.

The major European markets saw modest weakness on Friday. While the German DAX Index fell by 0.3 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both edged down by 0.1 percent.

Crude oil futures slipped on Friday, but posted a third straight week of gains. WTI crude dipped $0.21 or 0.3 percent to $71.28 a barrel on the New York Mercantile Exchange.

Blackstone checks out of Hilton Worldwide hotel group

business-1031754_960_720.jpg

Blackstone Group is checking out of Hilton Worldwide Holdings. The hotel chain's largest investor agreed to sell 15.8m shares, valued at about $1.3bn (€1.1bn) based on Thursday's close.

The sale brings to an end a 11-year investment relationship of highs and lows that ended up being widely regarded as the most-profitable large private equity deal on record.

Blackstone took the hotel behemoth private in October 2007, investing $6.5bn of equity from its real estate and private-equity funds as well as from co-investors in those funds.

The investment was later written down by about 70pc during the financial crisis and New York-based Blackstone had to put in more cash and restructured the debt before taking the company public again in December 2013.

Since then, the hotel chain has more than doubled in value, according to data compiled by Bloomberg.

The firm has been gradually shedding its stake since 2014, and sold a 25pc stake of the hotelier to HNA Group in March 2017.

The Chinese firm - to combat deep indebtedness - recently sold its holdings.

HNA made a profit of roughly $2bn from its Hilton investment, Bloomberg News has previously reported.

Hilton's strong performance has been driven by organic growth as well as some lucrative sales of real estate within its portfolio, including the sale of Manhattan's iconic Waldorf Astoria New York for $1.9bn in 2015.

Hilton also sought to create shareholder value by deciding to spin off its so-called owned- real estate unit Park Hotels & Resorts and its timeshare business, Hilton Grand Vacations.

Hilton is buying back 1.25m of the shares that were owned by Blackstone.

Hilton operates a number of properties in Ireland, and Blackstone invested in hotels here after the crash.

The group bought the former Burlington Hotel in Dublin 4 for €67m in 2012, trading it under the DoubleTree by Hilton brand and then selling the property for around €180m to German asset manager DekaBank.

Having invested approximately €20m in the refurbishment of the hotel, Blackstone still doubled its money on the Burlington deal.

Intel lines up €4bn expansion for its Israel chip plant

pc banner 2.jpg

Intel has said that it has submitted plans to expand its production operations in Israel, with the Israeli government saying the US chipmaker would invest about $5bn (€4.2bn).

Intel is one of the biggest employers and exporters in Israel, where many of its new technologies are developed. The new investment will upgrade its Kiryat Gat manufacturing plant in southern Israel, the company said in a statement.

Intel did not provide financial details.

Israel's Finance Ministry said the company would invest about 18 billion shekels (€4.3bn) in the factory between 2018-2020 and had agreed to spend 3 billion shekels (€710m) on local suppliers.

"According to company officials, this investment is expected to pave the way for a future significant investment for a technological upgrade at the Israeli site," the ministry said in a statement.

In return, Intel will be granted an extension of its reduced tax rate of 5pc until 2027. The Finance Ministry said it was also considering giving Intel a 700 million shekel (€165m) grant, with a second grant of the same size to come with future investments.

"This is to incentivise the company to carry out the future investment that could be significantly higher than past and current investments," the ministry said.

Intel said it exported €3bn of goods and services from Israel in 2017, about 8pc of the country's total hi-tech exports.

Intel employs around 5,000 people in Ireland.