ISTANBUL, August 17, 2018 (News Wires) - The Turkish currency fell again on Friday, breaking a three-day quiet spell in the country currency crisis, after the United States threatened to impose new sanctions on the NATO country.
The lira dropped about 5 per cent, to about 6.11 per dollar, after US President Donald Trump posted a tweet warning the country of more punitive measures over the continued detention in Turkey of American pastor Andrew Brunson, an evangelical pastor who faces 35 years in prison on charges of espionage and terror-related charges.
Turkey's trade minister, Ruhsar Pekcan, said her government would respond to any new trade duties.
Dashing hopes for a quick solution to the dispute, a Turkish court on Friday rejected an appeal for the pastor's release from house detention. Upholding a lower court's decision earlier this week, it also ruled against lifting a travel ban imposed on Brunson.
The United States has already imposed sanctions on two Turkish government ministers and doubled tariffs on Turkish steel and aluminum imports. Turkey retaliated with some $533 million of tariffs on some US imports - including cars, tobacco and alcoholic drinks - and said it would boycott US electronic goods.
The diplomatic dispute is worsening investors' concerns about Turkey's fundamental economic problems. The country has amassed high levels of foreign debt to fuel growth in recent years and as the currency drops, that debt becomes so much more expensive to repay, leading to potential bankruptcies. Economists are worried of a recession.
SYDNEY, August 17, 2018 (News Wires) - Oil headed for the longest run of weekly declines in three years, dragged down by everything from an emerging-market rout to rising global supplies and lingering concerns over a spat between the world’s biggest economies.
Futures in New York were headed for a 3.3 per cent drop this week, their seventh straight decline. Turmoil in Turkey this month has reverberated across financial markets in developing economies, US crude inventories expanded by the most since 2017, Opec raised output in July while the outlook for a Chinese-American trade standoff is still uncertain.
The bearish sentiment has brought prices down to about $65 a barrel, near the lowest level since early June. While the standoff between China and the US could ease after they showed a willingness to resume negotiations, an earlier breakdown in talks have left investors skeptical about the outcome.
Adding to macro-economic concerns is the risk of contagion from Turkey’s market rout, which seeped into the world of oil as investors grew anxious over a potential slide in global energy consumption from falling economic growth.
Meanwhile, increased output from the Organisation of Petroleum Exporting Countries as well as a surprise increase in US crude stockpiles have added to worries that supplies may outstrip demand.
“If the Turkish crisis worsens further, it will stoke concerns over the negative impact on the global economy, which already faces a US-China trade war,” Satoru Yoshida, a commodity analyst at Rakuten Securities Inc. in Tokyo, said by phone.
“Prices will also be negatively impacted if US crude inventories continue to rise in the coming weeks as stockpiles tend to drop in August.”
West Texas Intermediate crude for September delivery traded at $65.40 a barrel on the New York Mercantile Exchange, down 6 cents, at 3:46pm in Tokyo. Total volume traded was about 51 per cent below the 100-day average. Prices are down about 12 per cent over the last seven weeks and are headed for the longest stretch of weekly losses since August 2015.
Brent for October was at $71.36 a barrel on the London-based ICE Futures Europe exchange, down 7 cents. Prices have fallen about 2 per cent this week. The global benchmark crude traded at a $6.54 premium to WTI for the same month.
Futures for December delivery were little changed near 500 yuan a barrel on the Shanghai International Energy Exchange. The contract is set to drop 1.8 per cent this week.
BENGALURU, August 17, 2018 (News Wires) - Gold eked out small gains in Asian trade on Friday after declining to a 19-month low in the previous session, but the metal remained on track for its biggest weekly decline since mid-2017.
Spot gold was up 0.1 per cent at $1,175.22 an ounce, as of 06:37 GMT, while US gold futures were down 0.2 per cent at $1,181.30 an ounce.
For the week, spot gold has shed 2.9 per cent in what could be its sixth consecutive weekly decline. It hit its lowest since January 2017 at $1,159.96 Thursday on some aggressive stop-loss selling.
"Investors, businesses and perhaps a lot of people are looking to pick up gold and that's why we're seeing some support," said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
A mild correction in the dollar, after the currency gained against most peers this week, also lent support to gold's recovery. A weaker dollar makes greenback-denominated gold cheaper for holders of other currencies.
The dollar edged further away from a 13-1/2-month high hit earlier this week, as risk aversion eased after China agreed to hold lower-level trade talks with Washington this month, offering hope that they might resolve an escalating tariff war.
Weakness in emerging-market currencies amid the Sino-US trade spat and Turkey crisis has seen investors pour money into the US dollar, leading the greenback to serve as a safe-haven asset during uncertainty.
"The dollar is still trending higher and is the safe-haven vehicle of choice, so gold is still under pressure from that source," said Nicholas Frappell, general manager with ABC Bullion.
LONDON, August 17, 2018 (News Wires) - Euro zone bond yields fell on Friday as upcoming talks between China and the US eased concerns about trade, but further sanctions were threatened on Turkey, tempering a return to riskier assets and leaving bund yields pinned to recent lows.
Asian and European stocks gained, with the dollar coming off the 13-1/2 month highs on Friday morning as next week´s talks between China and the United States eased concerns of a global trade war, and helped stem risk aversion in the broader markets.
Turkish bonds and the lira had also found some support on Thursday after Finance Minister Berat Albayrak assured international investors on a conference call that the country would emerge stronger from its currency crisis and that its banks were healthy.
Earlier supportive measures from the Turkish central bank and key ally Qatar have helped the Turkish lira strengthen, although it was little changed after Albayrak's call.
But threats of further economic sanctions on Turkey from Washington on Thursday caused the lira to weaken to 5.86 against the dollar from its previous close of 5.815, though it then recovered to 5.80.
Peripheral euro zone bonds, particularly in Italy, had been hit by concerns about European bank exposure to Turkey, as well as receding global risk appetite.
With Turkish risk looking to recede, Italian government bond yields found support in early trade on Friday and were 1- 2 basis points lower across the curve. Italy's 10-year was at 3.10 per cent.
Spanish and Portuguese government bonds were also lower in early trading.,
Italian 10-year yields hit a 2 1/2-month high of 3.20 percent on Wednesday, with the spread over German bonds also the widest since late May at 289 bps.
"We´re seeing some improvement, some stabilisation of risk appetite which implies some demand for BTPS," said Michael Leister, rates strategist at Commerzbank. "Looking at the spreads, we´re going to see some demand attracted to those extreme levels."
Despite the improving global backdrop however, investors are reluctant to add risk going into the weekend, meaning that safe haven assets such as Germany's 10-year government bond yield, the benchmark for the euro zone, remain well bid.
Germany's 10 year Bund was almost unchanged from Thursday´s close at 0.31 per cent, with the rest of the government bond curve also flat.
"Investors are sensitive to the headline risk that might come over the weekend," said Commerzbank's Leister.
"We would expect Bund yields to rise given concerns about Turkey and China are receding - we expected a sell-off - but there will be some demand not to be exposed over the weekend."
ANKARA, August 13, 2018 (News Wires) - Iran's Supreme Leader Ayatollah Ali Khamenei criticised the government for economic mismanagement after US imposed biting sanctions on the country, Iranian state TV reported on Monday.
"More than (US) sanctions, economic mismanagement is putting pressure on ordinary Iranians ... I do not call it betrayal but a huge mistake in management," Khamenei was quoted as saying.
The United States reimposed strict sanctions against Iran on Tuesday, with Trump threatening to penalise businesses from third countries that continue to operate in the Islamic Republic. Iran has denounced the sanctions as "US unilateralism".
BEIJING, August 11, 2018 (News Wires) - China’s business and energy ties with Iran do not harm the interests of any other country, the country’s Foreign Ministry said, after US President Donald Trump said companies doing business with Iran would be barred from the United States.
China has already defended its commercial relations with Iran as open and transparent as US sanctions on Iran took effect despite pleas from Washington’s allies.
In a statement released late Friday, China’s foreign ministry reiterated its opposition to unilateral sanctions and “long-armed jurisdiction”.
“For a long time, China and Iran have had open, transparent and normal commercial cooperation in the fields of business, trade and energy, which is reasonable, fair and lawful,” it said.
“This does not violate United Nations Security Council resolutions or China’s promised international obligations, nor does it harm the interests of any other country, and should be respected and protected,” the ministry added.
Using sanctions at the slightest pretext or to threaten anyone won’t resolve the problem, it said.
“Only dialogue and negotiations are the true path to resolving the issue,” the ministry added.
China, Iran’s top oil customer, buys roughly 650,000 barrels a day of crude oil from Tehran, or 7 per cent of China’s total crude oil imports. At current market rates, the imports are worth some $15 billion a year.
State energy firms CNPC and Sinopec have invested billions of dollars in key Iranian oil fields such as Yadavaran and North Azadegan and have been sending oil to China.
European countries, hoping to persuade Tehran to continue to respect the nuclear deal, have promised to try to lessen the blow of sanctions and to urge their firms not to pull out.
But that has proven difficult, and European companies have quit Iran, arguing that they cannot risk their US business.
Few American companies do much business in Iran so the impact of sanctions mainly stems from Washington’s ability to block European and Asian firms from trading there.