CDN NEWS | 
US NEWS 
June 18, 2018, by Lorcan Roche Kelly and Natasha Doff
(Bloomberg)
Oil flow
OPEC and it’s allies are discussing an output increase of between 300,000 and 600,000 barrel per day over the next few months, according to people briefed on the talks. Oil trimmed earlier losses after the Bloomberg News report, with the output increase significantly lower than the 1.5 million barrels a day proposed by Russian Energy Minister Alexander Novak last week. Iran, Venezuela and Iraq are opposed to any increase in production at all, Iran’s OPEC representative Hossein Kazempour Ardebili said on Sunday. There are also moves to make Russia a permanent member of the oil-exporters’ alliance. A barrel of West Texas Intermediate for July delivery was trading at $64.78 by 5:45 a.m. Eastern Time.
Trade escalation
Analysts are increasingly expecting the U.S./China trade dispute to turn into a war of attrition, with neither side willing to bow to pressure from the other. “The country that wins a trade war is the country that can endure most pain,” said Andrew Polk, co-founder of research firm Trivium China in Beijing, adding that China “thinks it can outlast the U.S.” because it doesn’t have elections to worry about. With President Donald Trump under pressure to appease his base ahead of the November mid-terms, President Xi Jinping determined to stick to his plan to make China a global technology leader, and neither side willing to appear weak by compromising first, a significant increase in tensions still seems the most likely outcome.
Merkel under pressure
German Chancellor Angela Merkel is seeing her position under threat from her party’s sister Christian Social Union party over immigration policy. The CSU will give the chancellor two weeks to overhaul the country’s asylum system, according local media reports, as Merkel attempts to find a wider EU solution to the thorny issue. The internal wrangling risks eroding German influence at this month’s EU summit where immigration, as well as any progress on Brexit talks. are set to be discussed.
Markets drop
Overnight the MSCI Asia Pacific Index fell 0.7 percent, as many of the region’s largest markets were closed for a holiday, while Japan’s Topix index closed 1.0 percent lower amid rising trade tensions and following an earthquake in the important Osaka manufacturing hub. In Europe, the Stoxx 600 Index was 0.7 percent lower at 5:45 a.m. as trade concerns hit industrial stocks. S&P 500 futures pointed to a lower open, the 10-year Treasury yield was at 2.913 percent and gold was higher.
Coming up…
For anyone suffering central bank withdrawal after last week’s round of major rate decisions, there is a full slate of speakers coming up over the next few days. Today sees departing New York Fed president William Dudley speak at 8:45 a.m. at a conference on banking reform, with his replacement, John Williams, addressing the same conference at 4:00 p.m. Atlanta Fed President Raphael Bostic will speak on the economy and monetary policy in Georgia at 1:00 p.m. In Europe, ECB president Mario Draghi will deliver the opening address at his bank’s economic conference in Sintra, Portugal at 1:30 p.m. The heads of the Federal Reserve, the ECB, the Bank of Japan and the Reserve Bank of Australia will take part in a policy panel at that conference on Wednesday.
Share This:
