Apr 8, 2019, by Lorcan Roche Kelly
Talks on a deal to end the U.S. trade war with China will continue this week with “a lot of teleconferencing” according to Larry Kudlow, President Donald Trump’s economic adviser. Chinese media are reporting that President Xi Jinping has called for an early conclusion to the negotiations, while citing progress made during Vice Premier Liu He’s visit to Washington last week. For markets, the question hinges on when a deal will be signed, rather than if an agreement will be forged.
Crude is close to the highest level in five months this morning, with a barrel of West Texas Intermediate for May delivery trading at $63.45 by 5:40 a.m. Eastern Time as the escalation of fighting in Libya increases supply concerns. In other oil-market news today, there is huge interest in Saudi Aramco’s bond sale. Aramco Chairman and Saudi Energy Minister Khalid Al-Falih told Bloomberg TV this morning that $30 billion of orders have been received. The company is expected to offer at least $10 billion, with pricing as soon as tomorrow.
It’s another big week for Brexit with a summit, a deadline, and a continuing impasse. By 6 p.m. on Friday either Brexit will have happened or it will be delayed – possibly for a very long time. British Prime Minister Theresa May is hoping to re-start stalled talks with opposition leader Jeremy Corbyn as she continues to search for a compromise deal that she can present to EU leaders this week. Pound traders continue to sit on their hands as they await something that looks like an outcome to the seemingly interminable mess.
Overnight, the MSCI Asia Pacific Index climbed 0.1 percent while Japan’s Topix index closed 0.4 percent lower as the yen gained against the dollar. In Europe, the Stoxx 600 Index was 0.2 percent lower at 5:40 a.m., with automakers getting hit after BMW AG announced it was taking a charge for a possible EU emissions-cartel fine. S&P 500 futures pointed to a lower open, the 10-year Treasury yield was at 2.499 percent and gold was higher.
Homeland Security Secretary Kirstjen Nielsen resigned at Trump’s request yesterday spurred by the president’s frustration on fulfilling his signature campaign promise on curbing immigration. Kevin McAleenan, the commissioner of Customs and Border Protection, was appointed as acting secretary of the department. Trump’s increasingly hard line stance on immigration and concerns that he might order a closure of the southern border is leading to huge traffic snarl-ups at the crossing as Mexican companies try to ship as much produce into the U.S. while the frontier is still open.