GLOBAL NEWS:-
The dollar weakened on Tuesday on heightened expectations the Federal Reserve will hold off on raising rates this year due to a slowdown in global growth, while sterling edged up ahead of Britain’s parliamentary vote on its Brexit plan.
U.S. President Donald Trump defended his tough trade policies in front of thousands of farmers who have suffered because of his trade war with China, disappointing some who had hoped to hear a plan for a swift resolution. Trump dedicated much of his speech to explaining why he believes the United States needs a wall on its southern border, in his second consecutive visit to the American Farm Bureau Federation’s annual convention. He also said his trade policies would deliver long-term benefits for the American heartland. U.S. farmers, numbering some 3.2 million, have been reliable Trump supporters, despite struggling financially since Beijing imposed a tariff on imports of U.S. soybeans in July in retaliation for Trump’s tariffs on Chinese goods. China has also implemented duties on other U.S. farm goods, including pork and grain sorghum. China bought about $12 billion worth of U.S. soy in 2017, but mostly shifted purchases to Brazil last year because of the trade dispute.
Three cargoes of U.S. crude are heading to China from the U.S. Gulf Coast, trade sources said on Monday, the first departures since late September and a 90-day pause in the two countries’ trade war that began last month.China is the world’s biggest crude importer and became a top buyer of U.S. crude after Washington lifted a 40-year ban on shipments in late 2015. It imported 325,000 barrels per day (bpd) of U.S. crude in the first nine months of 2018.
Bank of China, the country’s fourth-biggest lender by assets, has offered a loan of $300 million to Sri Lanka which can be raised to $1 billion.Sri Lanka, an island nation off India’s southeastern coast, is struggling to repay its foreign loans, with a record $5.9 billion due this year including $2.6 billion in the first three months alone.
China will aim to achieve “a good start” in the first quarter for the economy, the state planner said on Tuesday, signalling authorities could roll out more stimulus measures in the near term to counter slowing growth. China will strengthen monitoring of its economic situation and improve its “reserve” of economic policies, the National Development and Reform Commission (NDRC) said in a statement.
People's Bank of China further eased reserve ratio cuts in order to increase liquidity in its economy. The PBOC injected 80 billion yuan ($11.86 billion) through 7-day reverse repos and 100 billion yuan through 28-day tenor, while a batch of 390 billion yuan worth of one-year MLF was set to mature on the same day.
India’s retail inflation and wholesale inflation fell to multi-month lows in December amid signs of weakening economic recovery, creating wiggle room for the Reserve Bank of India’s (RBI) monetary policy committee to cut interest rates at its meeting on 7 February.Data released by the Central Statistics Office (CSO) showed consumer price index (CPI) based inflation at an 18-month low of 2.19% in December against 2.33% a month ago, as food prices continued to slide. The wholesale price index (WPI) data released earlier in the day by the Department of Industrial Policy and Promotion showed that wholesale price inflation decelerated to an eight-month low of 3.8% from 4.64% the previous month, on the back of softening inflation for fuel as well as manufactured items.
Prime Minister Narendra Modi’s government budgeted 700.8 billion rupees for fertilizer subsidies for the 2018/19 year ending March 31, but the sources said nearly half of the money was used to settle dues from the previous year.A rise in fertilizer prices overseas and a fall in the rupee currency also made imported fertilizers more expensive, lifting the total subsidy requirement for the year to 1 trillion rupees, the highest ever.The bank route could also help the government meet its decade-low headline fiscal deficit target of 3.3 percent of the gross domestic product.
Agriculture losses caused by Mexico’s ongoing fuel shortage are estimated at nearly $300 million, a sector leader said on Monday, and overall economic growth is also likely to be hit as the government struggles to stabilize gasoline distribution.Losses of at least 5.5 billion pesos ($290 million) have been reported by major farm and ranching businesses as delayed shipments and spoiled supplies have accumulated due to shortage of motor fuels that are required to transport products.
British Prime Minister Theresa May will force a second parliamentary vote on her Brexit deal despite facing defeat, The Sun reported on Monday.The British parliament is widely expected to vote against May’s deal on Tuesday, opening up outcomes ranging from a disorderly divorce to reversing Brexit.Allies claim that German Chancellor Angela Merkel has offered May last-minute help after saying the European Union could grant extra concessions if MPs reject her deal.Earlier this month, May spoke with European Commission President Jean-Claude Juncker to secure concessions from Brussels to help get her Brexit deal through parliament. She has also spoken to Germany’s Angela Merkel twice in recent weeks.
Asian stocks pulled ahead on Tuesday, led by a bounce in Chinese shares as Beijing signalled more supportive measures to stabilise a slowing economy, while the British pound braced for a showdown in parliament over the government’s Brexit plan.Tokyo’s Nikkei rose 0.55 percent to 20,474 after a market holiday on Monday while MSCI’s broadest index of Asia-Pacific shares outside Japan recovered from early losses and advanced 0.56 percent. South Korea’s Kospi hit one-month highs.In China, the CSI300 index of Shanghai and Shenzhen shares rose 0.62 percent, seemingly supported by expectations of more government policy measures to prop-up a slowing economy.China’s state planner said on Tuesday it will aim to achieve “a good start” in the first quarter for the economy in a signal of more growth-boosting steps.
The Organization of Petroleum Exporting Countries (Opec), led by Saudi Arabia, agreed to cut oil output this year to support prices. The group and its allies, known collectively as Opec+, said they would start to trim 1.2 million barrels of daily production this month to stabilize the market. They already reduced output by 600,000 barrels a day in December, Al-Falih said.
Saudi Arabia’s energy minister has no quarrels with US shale and even sees output cuts by Opec and its allies as directly aiding American drillers. “The action we have taken, quickly in December and that we’re seeing implemented as we speak, is a lifeline to US shale producers,” Khalid Al-Falih said at a conference in Abu Dhabi.
The German economy grew by 1.5 percent in 2018, the weakest rate in five years and a clear slowdown from the previous year, a preliminary estimate from the Federal Statistics Office showed on Tuesday.Europe’s largest economy is struggling with a cooling of the global economy, trade disputes triggered by U.S. President Donald Trump’s ‘America First’ policies and the risk of Britain leaving the European Union without a deal in March.
Gold prices held steady on Tuesday, supported by market expectations of fewer interest rate hikes in the year by the U.S. Federal Reserve, while a bounce in Chinese equities stoked interest in riskier assets.Spot gold edged about 0.1 percent lower to $1,290.80 per ounce at 0401 GMT, while U.S. gold futures were unchanged at $1,291.4 an ounce.
Oil prices rose 1 percent on Tuesday amid supply cuts led by producer club OPEC and Russia, although a darkening economic outlook capped gains.nternational Brent crude oil futures LCOc1 were at $59.64 per barrel up 65 cents, or 1.1 percent, from their last close.U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $51.09 per barrel, up 58 cents, or 1.2 percent.The impact of OPEC+ (OPEC and others including Russia) cuts, Iran sanctions and lower month-on-month growth in U.S. production should help to support oil prices from current levels.The date for the next meetings of the Organization of Petroleum Export Countries and its allies has been proposed for 17 and 18 April.