Blackstone wins EU approval to buy Thomson Reuters unit

BRUSSELS (Reuters) – U.S. private equity firm Blackstone Group (BX.N) has secured EU antitrust approval to acquire a majority stake in Thomson Reuters’ (TRI.TO) Financial and Risk unit, the European Commission said on Monday.

FILE PHOTO – The logo of Blackstone Group is displayed at the post where it is traded on the floor of the New York Stock Exchange (NYSE) April 4, 2016. REUTERS/Brendan McDermid/File Photo

Blackstone is making its biggest bet since the financial crisis with the $20 billion deal which pits co-founder Stephen Schwarzman against fellow billionaire and former New York Mayor Michael Bloomberg.

FILE PHOTO: A Thomson Reuters logo is pictured on a building during the World Economic Forum (WEF) annual meeting in Davos, Switzerland January 25, 2018. Picture taken January 25, 2018. REUTERS/Denis Balibouse

Much like Thomson Reuters, Blackstone’s portfolio company Ipreo, which it agreed to sell to IHS Markit (INFO.O) in May,provides information and related services to financial market professionals, the Commission said.

The EU enforcer said it did not see any competition concerns despite the overlaps between the two companies.

“The proposed transaction would raise no competition concerns given the limited market shares of the companies, the fact that a number of competitors will remain in the market post-transaction, and the fact that Blackstone accounts for only a minimal share of the demand for Thomson Reuters F&R’s products,” it said.

Thomson Reuters declined to comment on the Commission’s decision.

Reporting by Foo Yun Chee; Editing by Keith Weir

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Oil higher on Middle East, North Sea supply worries

LONDON (Reuters) – Oil prices rose on Monday on worries over supply after tensions worsened between Iran and the United States, while some offshore workers began a 24-hour strike on three oil and gas platforms in the British North Sea.

file photo: Oil barrels are pictured at the site of Canadian group Vermilion Energy in Parentis-en-Born, France, October 13, 2017. REUTERS/Regis Duvignau

Iranian Supreme Leader Ayatollah Ali Khamenei on Saturday backed a suggestion by President Hassan Rouhani that Iran could block Gulf oil shipments if its exports were stopped.

The Iranian leadership was responding to the threat of U.S. sanctions after President Donald Trump in May pulled out of a multinational agreement to trade with Tehran in return for its commitment not to develop nuclear weapons.

The Trump administration has launched an offensive of speeches and online communications meant to foment unrest and help pressure Iran to end its nuclear program and its support of militant groups, U.S. officials said.

Brent crude oil LCOc1 rose $1.19 a barrel to a high of $74.26 before easing to around $74.05 by 1030 GMT. U.S. light crude CLc1 was up 70 cents at $68.96 a barrel.

“Potential Gulf supply is at risk – this is triggering the upward trend,” said Tamas Varga, analyst at London brokerage PVM Oil Associates.

The rise also followed news of a 24-hour strike by 40 rig workers on three oil and gas platforms in the British North Sea. The dispute curbed gas flows to shore, but stored crude was expected to mitigate any oil supply disruption.

Limiting supply worries were concerns about the impact on global economic growth and energy demand of the escalating trade dispute between the United States and its trading partners.

Finance ministers and central bank governors from the world’s 20 biggest economies ended a meeting in Buenos Aires over the weekend calling for more dialogue to prevent trade and geopolitical tensions from hurting growth.

“Downside risks over the short and medium term have increased,” the finance leaders said in a statement.

The talks occurred amid escalating rhetoric in a trade dispute between the United States and China, the world’s largest economies, which have already slapped tariffs on $34 billion worth of each other’s goods.

Trump threatened on Friday to impose tariffs on all $500 billion of Chinese exports to the United States unless Beijing agreed major changes to its technology transfer, industrial subsidy and joint venture policies.

Economic and oil demand growth are correlated as expanding economies support fuel consumption for trade and travel, as well as for automobiles.

Reporting by Christopher Johnson and Parissa Hedvat in LONDON, Aaron Sheldrick in TOKYO and Jane Chung in SEOUL; Editing by Dale Hudson

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China says it won’t devalue currency to bolster exports

BEIJING (Reuters) – China said on Monday the value of its currency is driven by market forces and that it has no intention to devalue the yuan to help exports, after Washington said it was monitoring the currency’s weakness amid the escalating bilateral trade row.

FILE PHOTO: Shipping containers are seen stacked at the Dachan Bay Terminals in Shenzhen, Guangdong province, China July 12, 2018. REUTERS/Stringer

The Chinese Foreign Ministry also said that threats and intimidation on trade would never work on China, after U.S. President Donald Trump said he was ready to impose tariffs on all $500 billion of goods imported from the country.

At a daily news briefing, ministry spokesman Geng Shuang was asked about comments on Friday by U.S. Treasury Secretary Steven Mnuchin, who told Reuters the yuan’s weakness would be reviewed as part of the Treasury’s semi-annual report on currency manipulation, which is due on Oct. 15.

Mnuchin’s comments were the first since the early days of the Trump administration in 2017 that raised the prospect of designating China as a manipulator.

Geng said the value of the yuan was subject to the forces of demand and supply, and that healthy economic performance offered support for its level.

“China has no intention to use means like the competitive devaluation of its currency to stimulate exports,” he said.

While the ministry has no say in currency policy, it is the only government department which holds a daily news briefing that foreign reporters can attend.

Neither the People’s Bank of China nor the State Administration of Foreign Exchange responded to requests for comment on Mnuchin’s remarks.

China’s yuan CNY=CFXS, battered by the trade brawl and strong dollar, has lost more than 7 percent against the greenback since the end of the first quarter.

Around $505 billion of Chinese goods were imported to the United States in 2017, leading to a trade deficit of nearly $376 billion, U.S. government data shows. Chinese imports from the United States totaled $205 billion in the first five months of 2018, with the deficit reaching $152 billion.

Earlier this month, the United States imposed tariffs on $34 billion of Chinese imports. China promptly levied taxes on the same value of U.S. products.

“We advise the U.S side to remain calm and maintain a rational attitude,” Geng said.

Reporting by Philip Wen; Additional reporting by Beijing Newsroom; Writing by Ben Blanchard; Editing by Tony Munroe and Richard Borsuk

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Bond yields rise on BoJ easing talk while stocks slide

LONDON (Reuters) – Signs that the Bank of Japan could scale back its monetary stimulus faster than expected sent tremors through bond markets on Monday, while European stocks slid as threats of further U.S. tariffs on China drained risk appetite.

People walk past an electronic board showing Japan’s Nikkei average outside a brokerage at a business district in Tokyo, Japan August 9, 2017. REUTERS/Kim Kyung-Hoon

Europe’s bond yields climbed after a Reuters report that the BoJ was discussing modifying its huge easing program sent Japan’s 10-year bond yield to a six-month high.

The report rekindled anxieties about global monetary policy easing and piled further pressure on investors already struggling to navigate rising protectionism and tense geopolitics.

The yield on Europe’s benchmark bond, the German 10-year Bund, hit a one-month high of 0.39 percent while U.S. 10-year Treasury yields also hit their highest in a month at 2.90 percent.

The yen climbed to two-week highs against the dollar JPY= and was last up 0.4 percent at 110.98 per dollar.

“It’s all that concern investors have about the move from global quantitative easing to global quantitative tightening. That fear gets stoked when you have reports such as this,” said Rory McPherson, head of investment strategy at Psigma Investment Management.

FILE PHOTO: Bundles of banknotes of U.S. Dollar are pictured at a currency exchange shop in Ciudad Juarez, Mexico January 15, 2018. REUTERS/Jose Luis Gonzalez/File Photo

“The ECB meeting this week will be more in focus now that we’ve had this concern about Japan.”

(Graphic: Japanese bond yields jump to six-month high reut.rs/2LgVPjJ)

The dollar index .DXY meanwhile languished at two-week lows after U.S. President Trump criticized the Federal Reserve’s tightening policy and accused the European Union and China of manipulating their currencies.

“We see the latest news on trade policy as pointing to continued high risk of escalation between the U.S. and China, and a renewed focus of the Trump Administration on currency matters,” said Goldman Sachs analysts.

Trump’s comments against Fed rate hikes also helped steepen the Treasury yield curve US2US10=TWEB.

Trump’s new threats to slap duties on all U.S. imports from China triggered sell-offs across stock markets, though good corporate earnings kept a lid on losses.

Pedestrians are reflected in a window in front of a board displaying stock prices at the Australian Securities Exchange (ASX) in Sydney, Australia, February 9, 2018. REUTERS/David Gray

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.1 percent and the MSCI all-country world index declined just 0.02 percent.

Europe’s STOXX 600 fell 0.3 percent as investors braced for a packed week of corporate earnings in Europe and a meeting between European Commissioner Jean-Claude Juncker and Trump to discuss threatened auto tariffs which could damage carmakers.

Goldman Sachs analysts said auto tariffs, if they came to pass, would likely cause weakness in the Canadian dollar and Mexican peso, possibly also affecting the euro, pound, yen, and Korean won as investors priced in a hit to the economy.

“The global economy is still OK, but the risk is now very high, and if trade policies don’t make a U-turn very soon, we’ll see a measurable impact on growth already next year,” said UniCredit chief economist Erik Nielsen.

The euro EUR=, which has been gaining from dollar weakness, climbed for a third straight day to a two-week top of $1.1750. It was last up 0.2 percent at $1.135.

Concerns about fuel demand dented oil prices after finance ministers and central bank governors at the G20 meeting in Buenos Aires said the risks to global economic growth have increased due to trade and geopolitical tensions.

U.S. crude CLcv1 fell slightly to $68.24 a barrel after posting its third straight weekly loss. Brent crude LCOc1 rose 16 cents to $73.23.

Copper, among the most sensitive to trade tensions, hovered above a one-year low hit last week, trading at $6,151 a ton. Copper fell for the sixth week in a row last week. Gold prices declined 0.1 percent to $1,30.76 an ounce XAU=.

(Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh)

Reporting by Helen Reid, Graphic by Dhara Ranasinghe, Editing by Hugh Lawson

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Saudi Aramco aims to buy controlling stake in SABIC: sources

DUBAI (Reuters) – Saudi Aramco aims to buy a controlling stake in petrochemical maker SABIC 2010.SE, possibly taking the entire 70 percent stake owned by Saudi Arabia’s sovereign wealth fund, two sources familiar with the matter told Reuters.

FILE PHOTO: General view of Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia May 21, 2018. REUTERS/Ahmed Jadallah/File Photo

Late last week Aramco IPO-ARMO.SE confirmed a Reuters report that it was working on a possible purchase of a “strategic stake” in Saudi Basic Industries Corp (SABIC) 2010.SE from the Public Investment Fund, the kingdom’s top sovereign wealth fund.

Aramco’s initial thinking is to buy the full stake owned by the Public Investment Fund (PIF), but if that fails to materialize Aramco could end up with a stake in SABIC of more than 50 percent, making it a majority owner, the sources said.

No final decision has been made on the size of the stake as the discussions are still at a very early stage, they added.

FILE PHOTO: The logo of Saudi Aramco is seen at Aramco headquarters in Dhahran, Saudi Arabia May 23, 2018. REUTERS/Ahmed Jadallah/File Photo

Aramco declined to comment. The PIF did not respond to a Reuters request for comment.

Riyadh-listed SABIC, the world’s fourth-biggest petrochemicals firm, has a market capitalization of 385.2 billion Saudi riyals ($103 billion).

The potential acquisition would affect the time frame of Aramco’s planned initial public offering set for later this year, the state oil giant’s chief executive, Amin Nasser, said in a TV interview on Friday.

Aramco plans to boost investments in refining and petrochemicals to secure new markets and sees growth in chemicals as central to its downstream strategy to cut the risk of an oil demand slowdown.

Aramco plans to raise its refining capacity to between 8 million and 10 million barrels per day, from around 5 million bpd now, and double its petrochemicals production by 2030.

Aramco, the world’s largest oil producer, pumps around 10 million bpd of crude oil.

Writing by Rania El Gamal, editing by Louise Heavens

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New Fiat Chrysler boss set to stay on course in post-Marchionne era

MILAN (Reuters) – Fiat Chrysler’s (FCHA.MI) new boss, Mike Manley, faces the task of executing his predecessor’s plan to ramp up production of SUVs and catch up on electric cars to keep the world’s seventh-largest carmaker competitive in the absence of a merger.

FILE PHOTO: Mike Manley, head of the Jeep brand, speaks the Los Angeles Auto Show in Los Angeles, California U.S. November 29, 2017. REUTERS/Lucy Nicholson/File photo

Jeep division head Manley was named on Saturday to succeed longtime Chief Executive Sergio Marchionne, one of the auto industry’s most tenacious and respected auto chiefs, who fell seriously ill after suffering complications following surgery.

Marchionne was already due to step down next April, but shares are likely to react to the news of his health crisis on Monday. The stock closed at 16.42 euros on Friday.

Fiat Chrysler Automobiles NV (FCA) said British-born Manley would pursue the strategy that Marchionne outlined last month.

FCA has pledged to increase production of sport utility vehicles and invest in electric and hybrid cars to double operating profit by 2022. It also unveiled bold targets for Jeep, which has become FCA’s ticket to creating a high-margin brand with global appeal.

Analysts said that choosing the 54-year-old Manley, under whose watch Jeep’s sales surged fourfold, sent a clear message that FCA was staying on course and would keep the Jeep brand at the heart of its growth plan.

“Manley knows that his primary focus is on execution and that, already, he has a strategy into which his team has bought,” said George Galliers, an analyst at Evercore ISI.

“There is no reason the 2022 plan cannot be executed.”

Under Manley, the company is expected to sharpen its focus on revamping individual brands, including ailing Fiat in Europe, Chrysler in the United States and Alfa Romeo, which has yet to turn a profit despite multibillion-euro investments.

Marchionne, widely credited with rescuing both Fiat and Chrysler from the brink of bankruptcy, had focused on fixing FCA’s finances first, notably erasing all debt.

He was a gift to investors, including Italy’s Agnelli family, through 14 years of canny dealmaking, growing Fiat’s value 11 times, helped by spinoffs of tractor maker CNH Industrial NV (CNHI.MI) and Ferrari NV (RACE.MI). The Agnellis still have a controlling interest in all three companies.

But his track record at fixing some of FCA’s brands was mixed, with investments and product launches repeatedly delayed.

Profitability in Europe is only gradually recovering, FCA has yet to make significant inroads in China, and the company relies on North America for three-fourths of profits just as that market is expected to come off its peaks.

‘RIGHT MAN’

“FCA needs to fix the volume brands before it’s too late and make them appealing again. … Manley is the right man for that job,” said Felipe Munoz, an automotive analyst at JATO.

Marchionne had advocated industry mergers to share the cost of building electric, hybrid and self-driving cars, but gave up the quest when his preferred target, General Motors Co (GM.N), rejected his advances.

FCA said on Saturday that Manley would execute the new strategy to ensure a “strong and independent” future for the group.

But without a partner in sight, Manley needs to show FCA can keep churning out profits on its own, even as emissions rules tighten, SUV competition intensifies and worries over potential U.S. emissions fines abound.

While FCA had a succession plan, the future appears less clear at Ferrari, the luxury brand that Marchionne was due to lead until 2021.

Ferrari announced some midterm targets earlier this year – pledging to double core earnings and churn out hybrids and an SUV – but a detailed strategy was due in September.

Marchionne made some bold choices in recent years, notably raising production, but was always careful to not dilute the brand’s exclusivity.

Analysts questioned whether new CEO Louis Camilleri would be able to do the same and grow Ferrari beyond what it is today while keeping dealers, racing fans, owners and collectors on board.

“(Ferrari) will always be like a fine race car. Marchionne increasingly had it tuned to perfection,” Galliers said. “It has to be seen if it can remain so without him.”

Reporting by Agnieszka Flak; Editing by Peter Cooney

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Mortgage, Groupon and card debt: how the bottom half bolsters U.S. economy

PHILADELPHIA (Reuters) – By almost every measure, the U.S. economy is booming. But a look behind the headlines of roaring job growth and consumer spending reveals how the boom continues in large part by the poorer half of Americans fleecing their savings and piling up debt.

FILE PHOTO: A Walmart employee helps a customer load a 50″ TV he bought on sale in Broomfield, Colorado, U.S., November 28, 2014. REUTERS/Rick Wilking/File Photo

A Reuters analysis of U.S. household data shows that the bottom 60 percent of income-earners have accounted for most of the rise in spending over the past two years even as the their finances worsened – a break with a decades-old trend where the top 40 percent had primarily fueled consumption growth.

With borrowing costs on the rise, inflation picking up and the effects of President Donald Trump’s tax cuts set to wear off, a negative shock – a further rise in gasoline prices or a jump in the cost of goods due to tariffs – could push those most vulnerable over the edge, some economists warn.

That in turn could threaten the second-longest U.S. expansion given consumption makes up 70 percent of the U.S. economy’s output.

To be sure, the housing market is far from the dangerous leverage reached in 2007 before the crash. With unemployment near its lowest since 2000 and job openings at record highs, people may also choose to work even more hours or take extra jobs rather than cut back on spending if the money gets tight.

In fact, a growing majority of Americans says they are comfortable financially, according to the Federal Reserve’s report on the economic well-being of U.S. households published in May and based on a 2017 survey.

Yet by filtering data on household finances and wages by income brackets, the Reuters analysis reveals growing financial stress among lower-income households even as their contribution to consumption and the broad economy grows.

The data shows the rise in median expenditures has outpaced before-tax income for the lower 40 percent of earners in the five years to mid-2017 while the upper half has increased its financial cushion, deepening income disparities. (Graphic: tmsnrt.rs/2LdUMBa )

It is this recovery’s paradox.

A hot job market and other signs of economic health encourage rich and poor alike to spend more, but tepid wage growth for many middle-class and lower-income Americans means they need to dip into their savings and borrow more to do that.

As a result, over the past year signs of financial fragility have been multiplying, with credit card and auto loan delinquencies on the rise and savings plumbing their lowest since 2005.

FILE PHOTO: Shoppers ride escalators at the Beverly Center mall in Los Angeles, California, U.S., November 8, 2013. REUTERS/David McNew/File Photo

Myna Whitney, 27, a certified medical assistant at Drexel University’s gastroenterology unit in Philadelphia, experienced that firsthand.

Three years ago, confident that a steady full-time job offered enough financial security, she took out loans to buy a Honda Odyssey and a $119,000 house, where she lives with her mother and aunt.

Since then she has learned that making $16.47 an hour – more than about 40 percent of U.S. workers – was not enough.

“I was dipping into my savings account every month to just make all of the payments.” Whitney says. With her savings now down to $900 from $10,000 she budgets down to toilet paper and electricity. Cable TV and the occasional $5 Groupon movie outings are her indulgences, she says, but laughs off a question whether she dines out.

“God forbid I get a ticket, or something breaks on the car. Then it’s just more to recover from.”

DRAINING SAVINGS

Stephen Gallagher, economist at Societe Generale, says stretched finances of those in the middle dimmed the economy’s otherwise positive outlook.

“They are taking on debt that they can’t repay. A drop in savings and rise in delinquencies means you can’t support the (overall) spending,” he said. An oil or trade shock could lead to “a rather dramatic scaling back of consumption,” he added.

Some economists say that without the $1.5 trillion in tax cuts enacted in January spending, which has grown by around 3 percent a year over the past few years, could already be stalling now.

In the past, rising incomes of the upper 40 percent of earners have driven most of the consumption growth, but since 2016 consumer spending has been primarily fueled by a run-down in savings, mainly by the bottom 60 percent of earners, according to Oxford Economics.

This reflects in part better access to credit for low-income borrowers late in the economic cycle.

Yet it is the first time in two decades that lower earners made a greater contribution to spending growth for two years in a row.

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“It’s generally really hard for people to cut back on expenses, or on a certain lifestyle, especially when the context of the economy is actually really positive,” said Gregory Daco, Oxford’s chief U.S. economist. “It’s essentially a weak core that makes the back of the economy a bit more susceptible to strains and potentially to breaking.”

JOBS NOT RAISES

While the Fed expects the labor market to get even hotter this year and next, policymakers have been perplexed that wages do not reflect that.

With inflation factored in, average hourly earnings dropped by a penny in May from a year ago for 80 percent of the country’s private sector workers, including those in the vast healthcare, fast food and manufacturing industries, Bureau of Labor Statistics figures show.

“It stinks,” says Jennifer Delauder, 44, who runs a medical lab at Huttonsville Correctional Center in West Virginia. In seven years her hourly wage has risen by about $2 to $14.

She took on two part-time jobs to help pay rent, utilities and a student loan. But she still sometimes trims her weekly $15 grocery budget to make ends meet, or even gathers broken fans, car parts, and lanterns to sell as scrap metal. A $2,000 hospital bill early this year wiped out her savings.

Even so, Delauder, a grandmother, recently signed papers for a mortgage of up to $150,000 on a house. “I’m paying rent for a house. I might as well pay for a house that I own,” she said.

Hourly wages for lower- and middle-income workers rose just over 2 percent in the year to March 2017, compared with about 4 percent for those near the top and bottom, while spending jumped by roughly 8 percent.

That reflects both higher costs of essentials such as rent, prescription drugs and college tuition but also some increased discretionary spending, for example at restaurants.

Economists say one symptom of financial strain was last year’s spike in serious delinquencies on U.S. credit card debt, which many poorer households use as a stop-gap measure. The $815-billion market is not big enough to rattle Wall Street, but could be an early sign of stress that might spread to other debt as the Fed continues its gradual policy tightening.

More borrowers have also been falling behind on auto loans, which helped bring leverage on non-mortgage household debt to a record high in the first quarter of this year.

While painting a broadly positive picture, the Fed’s well-being survey also noted that one in four adults feared they could not cover an emergency $400 expense and one in five struggled with monthly bills. This month the central bank reported to Congress that rising delinquencies among riskier borrowers represented “pockets of stress.”

That many Americans lack any financial safety net remains a concern, New York Fed President John Williams told Reuters in an interview last month. “Even though the overall picture is pretty good, pretty solid, or strong,” he said, “this is a problem that continues to hang over half of our country.”

(Graphic: Poorer Americans help fuel economic boom – at a price – tmsnrt.rs/2LdUMBa)

Reporting by Jonathan Spicer; Additional reporting by Ann Saphir in San Francisco and Howard Schneider in Washington; Editing by Tomasz Janowski

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Oil prices fall on demand concerns as G20 warns of risks to growth

TOKYO (Reuters) – Oil prices fell on Monday because of increasing concerns about fuel demand after finance ministers and central bank governors from the G20 warned that global economic growth risks have increased amid rising trade and geopolitical tensions.

file photo: Oil barrels are pictured at the site of Canadian group Vermilion Energy in Parentis-en-Born, France, October 13, 2017. REUTERS/Regis Duvignau

Brent crude LCOc1 dropped 10 cents, or 0.1 percent, to $72.97 a barrel by 0350 GMT. U.S. West Texas Intermediate (WTI) futures CLc1 declined 8 cents, or 0.1 percent, to $68.18 a barrel.

Finance ministers and central bank governors ended the meeting of the Group of 20 largest economies in Buenos Aires over the weekend calling for more dialogue to prevent trade and geopolitical tensions from hurting growth.

“Global economic growth remains robust and unemployment is at a decade low,” the finance leaders said in a statement. “However, growth has been less synchronized recently, and downside risks over the short and medium term have increased.”

The talks occurred amid escalating rhetoric in the trade conflict between the United States and China, the world’s largest economies, which have so far slapped tariffs on $34 billion worth of each other’s goods.

U.S. President Donald Trump threatened on Friday to impose tariffs on all $500 billion of Chinese exports to the United States unless Beijing agrees to major structural changes to its technology transfer, industrial subsidy and joint venture policies.

“The impact of the trade war and the recognition that President Trump and his administration are serious about going to the mat on this issue is finally starting to register in the consciousness of traders and investors in oil and other financial markets,” said Greg McKenna, chief market strategist at AxiTrader.

Economic growth and oil demand growth are closely correlated as expanding economies support fuel consumption for trade and travel as well as for automobiles.

U.S. energy companies last week cut the number of oil rigs by the most since March as the rate of growth has slowed over the past month or so with recent declines in crude prices.

Drillers cut 5 oil rigs in the week to July 20, bringing the total count down to 858, General Electric Co’s (GE.N) Baker Hughes energy services firm said in its closely followed report on Friday. RIG-OL-USA-BHI

The U.S. rig count, an early indicator of future output, is higher than a year ago when 764 rigs were active as energy companies have been ramping up production in anticipation of higher prices in 2018 than previous years.

Hedge funds and money managers cut their bullish wagers on U.S. crude for the first time in nearly a month, a further sign of weaker sentiment for the market.

The speculator group cut their combined futures and options positions by 34,067 contracts to 423,650 in the week to July 17, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

Most of the reduction occurred as money managers reduced their long position, or bets that oil prices would rise.

Reporting by Aaron Sheldrick; Additional reporting by Jane Chung in SEOUL; editing by Richard Pullin and Christian Schmollinger

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Asian stocks ease, dollar near two-week lows on Trump comments

SYDNEY (Reuters) – Asian shares dipped on Monday on fears of more protectionist measures from the United States while the dollar declined against major currencies after U.S. President Donald Trump criticized the Federal Reserve’s tightening policy.

People walk past an electronic board showing Japan’s Nikkei average outside a brokerage at a business district in Tokyo, Japan August 9, 2017. REUTERS/Kim Kyung-Hoon

Trump, on Friday, lamented the recent strength of the U.S. dollar and accused the European Union and China of manipulating their currencies.

The dollar index .DXY is so far up 2.4 percent this year led largely by Fed rate rises, strong macro-economic data and nervousness about a full-blown tariff war. It was last down 0.2 percent at 94.27, the lowest in more than two weeks.

Trump’s remarks on Friday, coupled with new threats to slap duties on all U.S. imports from China, triggered sell-offs in Wall Street and European stocks on Friday, despite good corporate earnings. [nL1N1UG076]

Asian stocks took Wall Street’s cue on Monday with MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS falling 0.2 percent. Japan’s Nikkei .N225 stumbled 1.4 percent, Australian shares and South Korea’s KOSPI index .KS11 fell 0.9 percent each.

Chinese shares also opened lower but quickly reversed their losses, with both the blue-chip index .CSI300 and Shanghai’s SSE Composite .SSEC up a touch.

Slideshow (2 Images)

“Although U.S. equities edged lower on Friday and the yen strengthened, most cross-asset moves are supportive of APAC equities – particularly dollar weakness, strength in emerging markets FX, and a dramatic bear steepening of global yield curves. Commodities are also mostly trading higher,” analysts at JPMorgan said in a note to clients.

Trump’s comments against Fed rate hikes helped steepen the Treasury yield curve.

Also playing a role in the global tick-up in yields was a Reuters report that the Bank of Japan was in unusually active discussions to modify its massive easing program. [nL4N1UG3OJ]

The BOJ, in turn, offered to buy an unlimited amount of five- to- 10-year Japanese government bonds on Monday. [nL4N1PS23K]

Benchmark 10-year JGB futures 2JGBv1, which had started lower on Monday, pared some of their losses on the announcement.

The Reuters report and the dollar’s weakness together added to the yen’s strength JPY=, which was last up 0.5 percent at 110.91 per dollar.

“Trade tensions remain a risk, but with an extended period until implementation (of the tariffs) and the next round of escalation, APAC equities are unlikely to respond much to Trump repeating threats already known,” JPMorgan added.

Investors are now looking ahead to an important meeting between Trump and European Commission President Jean-Claude Juncker.

“Trade tensions are likely to remain in the headlines as Juncker meets President Trump in Washington to discuss potential U.S. tariffs on European autos,” asset manager Insight Investment, which is owned by BNY Mellon, said in a note.

“It’s probably a little too early for the indirect impact of the U.S.-China trade issue to be showing up in the data. Nonetheless, the trade numbers that were released for Singapore and Japan were worse than expected.”

In Singapore, for example, exports rose 1.1 percent in the year to June compared with expectations of a 7.6 percent increase, while electronic exports slipped 7.9 percent. [nL4N1U900W]

Elsewhere, the euro EUR=EBS climbed for a third straight day to a two-week top of $1.1746. It was last up 0.1 percent at $1.1741.

In commodities, oil prices were held back by concerns over U.S.-China trade tensions and increased supply. [O/R]

U.S. crude CLcv1 was last off 16 cents at $68.1 a barrel after posting its third straight weekly loss. Brent LCOcv1 eased 17 cents to $72.90.

Spot gold was barely changed at $1,231.8 an ounce XAU=.

Reporting by Swati Pandey; Editing by Eric Meijer

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Oil prices mixed as G20 warns of risks to growth

TOKYO (Reuters) – Oil prices were mixed on Monday as finance ministers and central bank governors from the G20 warned that risks to global growth have increased with rising trade and geopolitical tensions among other vulnerabilities.

file photo: Oil barrels are pictured at the site of Canadian group Vermilion Energy in Parentis-en-Born, France, October 13, 2017. REUTERS/Regis Duvignau

Brent crude LCOc1 was up 2 cents at $73.09 a barrel by 0037 GMT, having ended up 49 cents on Friday. U.S. West Texas Intermediate CLc1 was down 8 cents at $68.18 a barrel, after finishing up 2 cents on Friday.

G20 finance ministers and central bank governors ended a meeting in Buenos Aires over the weekend calling for more dialogue to prevent trade and geopolitical tensions from hurting growth.

“Global economic growth remains robust and unemployment is at a decade low,” the finance leaders said in a statement. “However, growth has been less synchronized recently, and downside risks over the short and medium term have increased.”

The talks come amid escalating rhetoric in the trade conflict between the United States and China, the world’s largest economies, which have so far slapped tariffs on $34 billion worth of each other’s goods.

U.S. President Donald Trump raised the stakes on Friday with a threat to impose tariffs on all $500 billion of Chinese exports to the United States unless Beijing agrees to major structural changes to its technology transfer, industrial subsidy and joint venture policies.

U.S. energy companies last week cut the number of oil rigs by the most in a week since March as the rate of growth has slowed over the past month or so with recent declines in crude prices.

Drillers cut 5 oil rigs in the week to July 20, bringing the total count down to 858, General Electric Co’s GE.N Baker Hughes energy services firm said in its closely followed report on Friday.

The U.S. rig count, an early indicator of future output, is higher than a year ago when 764 rigs were active as energy companies have been ramping up production in anticipation of higher prices in 2018 than previous years.

Reporting by Aaron Sheldrick; editing by Richard Pullin

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