Global News August 06, 2018

  1. BBC
  2. Global News August 06, 2018

“U.S. Stocks Fluctuate as Dollar, Bonds Advance: Markets Wrap.”

U.S. stocks fluctuated and the dollar climbed versus most of its major peers after China signaled it won’t flinch in a trade war.
Major American equity averages failed to hold early gains in trading that was 17 percent lower than the 30-day average at this time of day. The S&P 500 was little changed after five straight weekly gains. PepsiCo Inc. said its chief executive officer was stepping down. The Bloomberg Dollar Spot Index climbed for the fourth time in five sessions. West Texas crude crept above $69 a barrel and most metals fell. The yield on 10-year Treasuries fell to 2.92 percent.
“There are certainly reasons for concern. The potential of a trade war leads the list,” Matt Maley, equity strategist at Miller Tabak + Co., wrote in a note to clients this morning. “Then again, there have been reasons for concern all year. And yet, that hasn’t stopped the stock market from bouncing back strongly from its February lows.”
Rhetoric in the trade war ramped up again this weekend, with U.S. President Donald Trump saying he has the upper hand, and Beijing responding through state media that it is ready to endure the economic fallout. The Asian country on Friday stepped in to try to cushion the yuan after a record string of weekly losses saw the currency closing in on the milestone of 7 per dollar.
Elsewhere, Turkey’s lira fell for a sixth day, while a basket of emerging market currencies held steady.


“How Russian gas is a problem for Germany”

For decades, the Friendship pipeline has delivered oil from Russia to Europe, heating German homes even in the darkest days of the Cold War.
But a new pipeline that will carry gas direct from Russia under the Baltic Sea to Germany is doing rather less for friendship, driving a wedge between Germany and its allies and giving Chancellor Angela Merkel a headache.
For U.S. President Donald Trump, Nord Stream 2 is a “horrific” pipeline that will increase Germany’s dependence on Russian energy. Ukraine, fighting Russian-backed separatists, fears the new pipeline will allow Moscow to cut it out of the lucrative and strategically crucial gas transit business.
In April she accepted for the first time that there were “political considerations” to Nord Stream 2, a project she had until then described as a commercial venture. Most European countries want Germany to do more to project European influence and protect eastern neighbors that are nervous of Russian encroachment.
But letting Russia sell gas to Germany while avoiding Ukraine does the opposite, depriving Kiev of transit revenues and making it, Poland and the Baltic states more vulnerable to cuts in gas supplies. On the flip side, German industry likes anything that will provide energy more cheaply.
Merkel’s Social Democrat coalition partners, the leading voices in Germany calling for a conciliatory approach towards Russia, are also in favor. The issue has divided Berlin’s political class. The parties agreed in their coalition talks earlier this year to make a commitment to the pipeline, but did not put it in writing.


BBC News
“Lombok quake: Thousands evacuated after dozens die on Indonesia island.”

Some 10,000 people have been evacuated on the Indonesian island of Lombok after a powerful 6.9 magnitude quake on Sunday left nearly 100 people dead. Witnesses spoke of chaos and terror, with thousands of buildings damaged, and power and communication lines cut.
Boats have been sent to evacuate more than 1,000 tourists from the nearby Gili islands. Aid agencies said the priority was to provide shelter for residents too scared to return to their homes.
The agencies said the impact was far bigger than another quake that hit Lombok last week, killing 16 people. President Joko Widodo urged the speedy evacuation of casualties, calling for more flights to be sent to the affected areas.
Sutopo Purwo Nugroho, a spokesman for the Indonesian Disaster Management Agency, said that the northern area of Lombok had suffered massive damage.
Three C-130 Hercules aircraft and two helicopters have been deployed to deliver tents and medical aid, but the earthquake has brought down roads and bridges, making areas difficult to reach.
Electricity supply in the worst-affected areas has been cut off and telecommunication networks are not working. The death toll stands at 98, all Indonesians, but Mr Sutopo said that number would «definitely increase». At least another 236 people have been injured.
He pointed to the situation at a collapsed mosque in the village of Lading-Lading in north Lombok, where a lack of heavy lifting equipment had made it difficult to locate victims. One official said 80% of north Lombok had suffered damage. The main city of Mataram was also badly affected, with medical staff struggling to cope with the injured at the damaged hospitals.


“Iron Ore Surges, Copper Sags as Investors See Different Fortunes.”

It’s a tale of two metals that are fundamental to China’s outlook: while iron ore’s on a tear, copper is under heavy pressure.
In Singapore, SGX AsiaClear iron ore futures spiked toward $70 a metric ton, trading 2.8 percent higher at $69.57 at 8:45 a.m. in London. By contrast, copper sagged 1.4 percent to $6,120 a ton on the London Metal Exchange.
The divergence highlights the metals’ different concerns. Copper’s lost ground in the past two months as trade tensions surge, denting the outlook for economic growth. By contrast, iron ore’s made headway, aided by a pollution crackdown in China that’s supporting demand for higher-quality material.
The “ferrous market is a regional market,” Zhu Yi, an analyst at Bloomberg Intelligence, said by phone from Hong Kong, adding that it’s been aided by recent production curbs, the State Council’s stimulus measures, and sentiment is fairly bullish. “Copper is a more global product, a barometer of the global economy. Sentiment has been greatly affected by the trade war.”