2024-09-09 05:36

Spanish Prime Minister Pedro Sanchez arrives in Beijing Tensions between China and EU over dumping allegations Spain is top exporter of pork goods in China anti-dumping probe China canvassing EU member states ahead of Oct EV tariff vote BEIJING, Sept 9 (Reuters) - Spanish Prime Minister Pedro Sanchez met Chinese President Xi Jinping on Monday and said he hoped the European Union could avoid a trade war with China even as Brussels weighs imposing tariffs on China-manufactured electric vehicles. Sanchez told business events before meeting Xi that measures such as imposing additional EU tariffs on Chinese EVS were "challenging" and that Spain would work for a negotiated consensus at the World Trade Organization, according to a government source. "A trade war would benefit no one," Sanchez said, adding that he was seeking to create a level playing field in cooperation with Chinese companies. Beijing in June warned that frictions with the EU over its EVs could trigger a trade conflict, days after China announced an anti-dumping investigation into European pork imports. China in August then raised the stakes by kicking off a probe of the 27-strong bloc's dairy subsidies. Spain in 2023 exported $1.5 billion worth of the pork products that China will investigate, Chinese customs data showed, followed by the Netherlands with $620 million and Denmark at $608 million. Spain also sold just under $50 million worth of targeted dairy products to China last year. FAIR TRADE "We want to build bridges together to defend a trade order that's fair," Sanchez told Chinese Premier Li Qiang, before meeting Xi. Sanchez's official X account published a video of his arrival in Beijing on Sunday, saying: "Our objective is to maintain the political momentum of the bilateral relationship, strengthen economic and trade relations and support Spanish culture, education and science in China." Sanchez wants reassurance that China will not strike back at Brussels by raising its own tariffs on imported large-engined gasoline-powered vehicles, as state Chinese media have suggested it might. That could hurt SEAT, an automaker owned by Volkswagen (VOWG_p.DE) , opens new tab that is one of Spain's biggest employers. Beijing's January and May announcements that it would also examine whether European brandy and POM copolymers, a type of manufacturing plastic, had been sold into China below market rates will impact Paris and Berlin more than Madrid and the broader bloc will be hoping Sanchez can dial down the tensions a notch. State-owned newspaper Global Times said on Monday it was important for China and Spain to have constructive communication on trade issues. China has been canvassing the EU's member states to reject the European Commission's proposal to adopt additional duties of up to 36.3% on Chinese-made EVs when they vote on it in October. The curbs would be implemented in addition to the EU's standard 10% import tariff unless a qualified majority of 15 EU members representing 65% of the EU population vote against them. In an advisory vote in July, Spain along with France and Italy, supported the tariffs, while Germany, Finland and Sweden abstained. Sign up here. https://www.reuters.com/world/asia-pacific/spanish-autos-pork-beijings-sights-with-pm-sanchez-china-2024-09-09/

2024-09-09 05:17

Dollar gains against yen after four-day decline Investors focus on upcoming US CPI release, ECB decision Pound slides to more than two-week low versus dollar NEW YORK, Sept 9 (Reuters) - The dollar snapped back against the yen and other major currencies on Monday after losses last week, as investors looked ahead to key U.S. inflation data and reduced expectations for an outsized Federal Reserve interest rate cut next week. The greenback rose for the first time in five sessions versus the Japanese currency, while rising for a second straight day against the euro. U.S. rate futures have fully priced in a 25-basis-point rate cut at the Fed's Sept. 17-18 policy meeting, with a roughly 29% chance of a bigger, half-percentage-point move, according to LSEG calculations. On Friday, pricing for the bigger cut rose as high as 50%. For 2024, traders expect 113 bps of easing, up from around 100 bps. "I think the Fed is going to cut by 25 (basis points) next week. There could be a jumbo rate move of 50 in November depending on the inflation data that comes out. But the latest information on growth shows the economy is doing okay: it's definitely slowing and moderating," said Amo Sahota, executive director at Klarity FX in San Francisco. "It would be too harsh to say that the economy is collapsing, or in recession ... Is the Fed behind the curve? Potentially yes, but they can get there if they do a series of 25-basis-point moves. At some point a 50-basis-point cut would help the Fed get ahead of the curve." In afternoon trading, the dollar was up 0.4% at 142.84 yen . The recovery on Monday was a welcome respite for the dollar after a rough month so far. In September, the dollar has lost 2.1%. Last week, the U.S. currency fell 2.7% versus the yen. Against the euro, the dollar advanced, with the single European currency falling 0.4% to $1.1041 . The euro's fall pushed the dollar index, a gauge of the greenback's value against six major peers, up 0.4% at 101.56 . INFLATION DATA The attention is now on the release on Wednesday of the U.S. consumer price index (CPI) report even though the Fed has made it clear employment has become more of a focus than inflation. The headline CPI is expected to have risen 0.2% on a month-on-month basis in August, according to a Reuters poll, unchanged from the previous month. But on a year-on-year basis it is forecast to have gained 2.6%, down from 2.9% in July. The release on Friday of the U.S. jobs report for August did not offer clarity on the question of whether the Fed would deliver a regular 25-basis-point or an outsized 50-basis-point rate cut next week. Fed policymakers on Friday signalled they are ready to kick off a series of rate cuts, noting a cooling in the labor market that could accelerate into something more worrying in the absence of lower borrowing costs. The European Central Bank, on the other hand, will meet on Thursday and is widely expected to cut its main interest rate by 25 bps to 3.50%, having kicked off its rate-cutting cycle in June with a quarter-percentage-point easing. Traders have priced in a 48% chance of a similar move in December, according to LSEG calculations. In other currency pairs, the dollar gained 0.6% against the Swiss franc to 0.8482 francs . It touched an eight-month low versus the franc on Friday. The British pound fell to more than a two-week low of $1.3068 ahead of a slew of economic data this week that could shape expectations around the Bank of England's policy moves this year. Sterling was last down 0.4% at $1.3075. Sign up here. https://www.reuters.com/markets/currencies/dollar-tentative-yen-dips-muddled-fed-rate-cut-outlook-2024-09-09/

2024-09-09 05:12

BEIJING, Sept 9 (Reuters) - State-owned China Minmetals (CHMIN.UL) plans to establish a 10 billion yuan ($1.41 billion) miner with local companies in the lithium-rich province of Qinghai in northwestern China, a statement and exchange filing showed. Minmetals said in a statement that the jointly owned company, tentatively called China Salt Lake Industry Group, will build a "world-class" production hub and enhance national security of potassium and lithium resources. Major uses of lithium include electric vehicle batteries and solar-power panels. Potassium is also used in batteries. The new company will buy 12.54% of Qinghai Salt Lake Industry (000792.SZ) , opens new tab and become a controlling shareholder, the latter said in a filing to the Shenzhen Stock Exchange. Qinghai Salt Lake Industry, currently owned by local authorities, controls the most potassium and lithium resources in China. Minmetals plans to invest 5.3 billion yuan in China Salt Lake Industry whose main operations will include mining, exploration and the production of lithium chemicals and other battery materials, the stock exchange filing showed. It will invest alongside Qinghai state-owned Assets Investment Management and Qinghai Assets Supervision and Administration Commission, the filing showed. ($1 = 7.1069 Chinese yuan renminbi) Sign up here. https://www.reuters.com/world/china/china-minmetals-jointly-set-up-14-bln-lithium-miner-qinghai-2024-09-09/

2024-09-09 05:11

MUMBAI, Sept 9 (Reuters) - The Indian rupee was nearly flat on Monday, supported by market expectations that the Reserve Bank of India (RBI) will not allow the currency to weaken below the 84 mark, even as Asian currencies slipped on worries of a slowdown in the U.S. The rupee was at 83.93 against the U.S. dollar as of 10:20 a.m. IST, nearly unchanged from its close at 83.9475 in the previous session. The Indian central bank has been "consistently supporting," the rupee to help it hold above 84, a foreign exchange trader at a state-run bank said. While there is a small possibility that the RBI may let the currency weaken slightly below the 84 mark, runaway moves remain quite unlikely, the trader added. The dollar index was slightly higher at 101.3 while Asian currencies declined by 0.1% to 0.5%. Globally, the focus remains on whether the Federal Reserve will deliver a 25- or 50-basis point (bp) rate cut at its policy decision next week. U.S. jobs data released on Friday did little to change expectations on that front, with interest rate futures signalling a 70% chance of a 25 bp rate cut, nearly the same as a week earlier. The rupee is likely to be influenced by inflows related to local IPOs this week while also keeping an eye on U.S. consumer inflation data for August, due on Wednesday. The dollar-rupee pair is expected to "decline gradually amid USD correction on the back of robust portfolio inflows," Societe Generale said in a note. The bank expects the currency pair to move to 83.30 by the end of 2024. Overseas investors have net bought Indian stocks worth $1.3 billion in September so far, according to stock depository data. Sign up here. https://www.reuters.com/markets/currencies/rupee-flat-rbi-intervention-expectations-support-even-asian-peers-slip-2024-09-09/

2024-09-09 04:33

A look at the day ahead in European and global markets from Wayne Cole It's been a down day for Asia as it catches up with the post-payrolls fallout on Wall Street, with the Nikkei (.N225) , opens new tab losing another 1.7% on top of last week's nearly 6% slide. At least S&P 500 futures have recouped early losses to trade up 0.3% and European equity futures are modestly firmer ahead of an all-but-certain rate cut from the ECB on Thursday. Treasury yields have come off their lows, while the dollar has regained some ground on the safe-haven yen. Not helping the mood were misses for Chinese inflation data where producer prices dropped 1.8% against forecasts for a 1.4% fall. CPI rose an annual 0.6% in August and almost all of that was food, with goods prices up just 0.2%. All this is positive for continued global disinflation, but hardly smacks of a long-awaited recovery in demand at home and Chinese blue chips fell 1.3%. The U.S. CPI report for August comes out on Wednesday and forecasts are for the headline figure to slow to 2.6%, the lowest since March 2021 and a world away from the peak of 9.1%. The range of forecasts also runs from 2.4% to 2.6%, suggesting the risk is to the downside. A soft outcome would encourage calls for the Federal Reserve to cut by 50 basis points next week, which futures currently price at a 31% chance. A move of 25 basis points is 100% priced, with 112 basis points implied by Christmas. Fed speakers on Friday did not sound overly keen on an outsized cut, with Governor Christopher Waller suggesting he would only advocate "front-loading" easing if "subsequent" data showed weakness in the labour market. There is little in the way of major jobs data between now and Sept. 18. The August U.S. unemployment rate of 4.2% and jobs growth of 142,000, released on Friday, were hardly recessionary, although the downward revision of 86,000 to the prior two months has markets assuming August will get revised down as well. The three-month average also slowed to 116,000, which is well short of the 200,000-odd needed to meet growth in the labour force and stop the jobless rate from rising. An added wrinkle for the Fed is that their Nov. 7 meeting comes just two days after the U.S. presidential election and it might not be entirely clear by then which side has won. Deciding on whether to go by 50 bp in such a politically charged environment could be a tough call. That just underlines the stakes for the debate between Harris and Trump on Tuesday evening. Key developments that could influence markets on Monday: - Euro Zone Sentix Index for Sept - Fireside chat by ECB Board Member Elizabeth McCaul in New York Sign up here. https://www.reuters.com/markets/global-markets-view-europe-2024-09-09/

2024-09-09 02:59

MUMBAI, Sept 9 (Reuters) - The Indian rupee is likely to open weaker on Monday, tracking the decline in Asian equities and currencies fuelled by U.S. slowdown worries. The 1-month non-deliverable forward indicated that the rupee will open at 83.97-83.98 to the U.S. dollar compared with 83.9475 in the previous session. The rupee for a large part of last week remained near the 84 mark, hitting an all-time low of 83.9850 on Thursday. The Reserve Bank of India likely intervened on multiple occasions last week to support the rupee. "Will the RBI allow 84? Will the break of it lead to a large move and a pick up in volatility?" a currency trader at a bank said. "Impossible to know what the RBI will do. If they do allow 84, I doubt it leads to a big breakout." Asian equities and currencies declined following Friday's selloff in U.S. equities on concerns over the U.S. growth outlook. Investors digested the U.S. jobs report, which did not provide the much-wanted clarity on the size of the rate cut the Federal Reserve will opt for at next week's meeting. The U.S. economy added fewer jobs than expected in August, leading to worries over the slowing labour market and what that means for the economy. However, there was a slight improvement in the unemployment rate. Following the report, the odds of a 50-basis-point rate cut are at 1-in-3 and those for a 25-bp cut are at 2-in-3, almost unchanged from prior to the jobs data. Comments by Fed speakers on Friday indicated that policymakers had little appetite for a 50-bp cut, ANZ Bank said in a note. On balance, the U.S. employment data "didn't provide conclusive evidence of a deterioration in labour market conditions" and reduce the likelihood of the Fed starting the easing cycle in "a forceful manner", it said. KEY INDICATORS: ** One-month non-deliverable rupee forward at 84.06; onshore one-month forward premium at 8 paise ** Dollar index up at 101.24 ** Brent crude futures up 1.3% at $72 per barrel ** Ten-year U.S. note yield at 3.74% ** As per NSDL data, foreign investors sold a net $107.7 mln worth of Indian shares on Sept. 5 ** NSDL data shows foreign investors sold a net $6.2 mln worth of Indian bonds on Sept. 5 Sign up here. https://www.reuters.com/markets/currencies/rupee-may-dip-risk-aversion-fed-uncertainty-persists-2024-09-09/