GLOBAL NEWS:
U.S. President Donald Trump said on Monday he opposed renegotiating the U.S.-China “Phase 1” trade deal after a Chinese state-run newspaper reported some government advisers in Beijing were urging fresh talks and possibly invalidating the agreement.Trump, who himself has considered abandoning the pact signed in January, told a White House press briefing he wanted to see if Beijing lived up to the deal to massively increase purchases of U.S. goods. The Global Times tabloid reported on Monday that unidentified advisers close to the talks have suggested that Chinese officials revive the possibility of invalidating the trade pact and negotiate a new one to tilt the scales more to the Chinese side. The Global Times is published by the People’s Daily, the official newspaper of China’s ruling Communist Party. While not an official party mouthpiece, the Global Times’ views are believed at times to reflect those of its leaders. Hours after the report was published, Chinese importers on Monday bought at least four cargoes, or about 240,000 tonnes, of U.S. soybeans on Monday for shipment beginning in July, and additional sales are possible, two traders familiar with the deals said on Monday. Under the Phase 1 deal signed in January, Beijing pledged to buy at least $200 billion in additional U.S. goods and services over two years while Washington agreed to roll back tariffs in stages on Chinese goods. Trump, who has blamed China’s early handling of the new coronavirus outbreak in its central city of Wuhan for thousands of U.S. deaths and millions of job losses, said last week he was “very torn” about whether to end the Phase 1 trade deal. Those comments came just hours after top trade officials from both countries pledged to press ahead with implementing the agreement.
Hawkish voices have emerged in China seeking a reevaluation of its Phase 1 trade deal with the United States, with some advisers urging fresh talks, a state-controlled tabloid said, citing sources close to the Chinese government. Advisers close to the talks have suggested that Chinese officials revive the possibility of invalidating the trade pact and negotiate a new one to tilt the scales more to the Chinese side, the Global Times reported on Monday, citing the sources. The Global Times is published by the People’s Daily, the official newspaper of China’s ruling Communist Party. While the Global Times is not an official mouthpiece of the party, its views are believed to reflect those of its leaders at times. Under the Phase 1 deal signed in January, Beijing pledged to buy at least $200 billion in additional U.S. goods and services over two years while Washington agreed to roll back tariffs in stages on Chinese goods. U.S. President Donald Trump said last week that he was “very torn” about whether to end the so-called Phase 1 trade deal, just hours after top trade officials from both countries pledged to press ahead with implementing the agreement. In recent months, Trump has blamed China’s early handling of the new coronavirus outbreak in the central Chinese city of Wuhan for causing thousands of deaths and millions of job losses in the United States. The Trump administration also asserted that there was evidence the new coronavirus came from a Wuhan laboratory. China has rejected the accusation. “It’s in fact in China’s interests to terminate the current Phase 1 deal,” a trade adviser to the Chinese government told the Global Times, pointing to the weakening U.S. economy and the upcoming U.S. presidential elections. “The U.S. now cannot afford to restart the trade war with China if everything goes back to the starting point.”
Malaysia’s industrial production index fell 4.9% from a year earlier in March, the sharpest decline in nearly a decade, government data showed on Tuesday, as curbs imposed to contain the coronavirus pandemic severely disrupted activity. The index measures factory output from the manufacturing, mining and electricity generation sectors. The drop was just shy of the 5% fall forecast by analysts surveyed by Reuters and the steepest since May 2011, when it declined 5.2%. In February, the index had risen 5.8%, fastest in more than two years.All three main sectors tracked by the index posted declines in March, with electricity output falling 7% from a year earlier, the Statistics Department said in a statement. Manufacturing output fell 4.2% on-year, while the mining sector index was down 6.5%, data from the department showed. Malaysia’s exports had fallen 4.7% from a year earlier in March amid a global slowdown due to the coronavirus pandemic, government data showed last week.
Indian shares fell on Tuesday, tracking Asian markets that dropped on worries about a second wave of coronavirus cases, following news of fresh infections in the Chinese city where the COVID-19 pandemic originated. The NSE Nifty 50 index was down 1.15% to 9,133.70 by 0355 GMT, and on course to fall for the second straight day, while the S&P BSE Sensex fell 1.27% to 31,161.65. The central Chinese city of Wuhan reported five new cases on Monday, casting doubts over efforts to lower coronavirus-related curbs as businesses restart and individuals went back to work. The Nifty banking index fell the most among the 12 sectoral indexes, with a 2.2% drop. India’s retail inflation data for April was due later on Tuesday. A Reuters poll predicted inflation likely eased to a five-month low last month as India’s lockdown and subsequent sluggish demand drove price pressures down. As of Tuesday, COVID-19 cases in India had surged well past 70,000 and deaths neared 2,300.
Oil futures climbed in early trade on Tuesday, boosted by an unexpected commitment from Saudi Arabia to deepen production cuts in June to help drain the glut in the global market that has grown as the coronavirus pandemic crushed fuel demand. Brent crude LCOc1 futures climbed to a high of $30.11 a barrel and were up 0.9%, or 28 cents, at $29.91 at 0021 GMT, clawing back some of the previous session’s losses. The benchmark fell $1.34 on Monday. U.S. West Texas Intermediate crude CLc1 futures were up 1%, or 24 cents, at $24.38 after touching a high of $24.77. Saudi Arabia said overnight it would cut production by a further 1 million barrels per day in June, slashing its total production to 7.5 million bpd, down nearly 40% from April. “This reduction in production provided excellent optics encouraging other OPEC+ members to comply and even offer additional voluntary cuts, which should quicken the global oil markets’ rebalancing act,” Stephen Innes, chief global market strategist at AxiCorp, said in a note. OPEC+ is a grouping comprising members of the Organization of the Petroleum Exporting Countries and other producers including Russia. U.S. crude inventories likely rose by about 4.3 million barrels in the week to May 8, a preliminary Reuters poll showed, ahead of reports from the American Petroleum Institute industry group on Tuesday and the U.S. Energy Information Administration on Wednesday. Meanwhile six analysts polled estimated that gasoline stockpiles fell by 2.3 million barrels, down for a third straight week.