World stocks rises up from two and a half month low, China soothes currency markets

Global Stock Markets

World stocks rose on Tuesday, supported by gains in Europe and three straight days of tech-driven rises in the United States, even though markets across Asia and especially China remained in the grip of trade turbulence. 

Wall Street was set for another firmer session as investors positioned for strong Silicon Valley earnings before the reporting season starts next week, while European shares also rose after a deal on settling a migration policy row that had threatened Germany’s coalition government.

But a July 6 deadline is looming for Washington to impose tariffs on $34 billion worth of Chinese goods that Beijing has vowed to match with tariffs on U.S. products. President Donald Trump also threatened on Monday to “do something” if the United States was not better treated by the World Trade Organisation.

The prospects of a full-blown trade war and relentless yuan weakening CNY= -- it has fallen 5 percent in the past two weeks to 10-month lows -- reportedly forced China into intervention via state-run banks.. The currency then reversed earlier losses to move back into positive territory for the day against the dollar.

Other Asian currencies weakened, especially those such as the Indonesian rupiah that are doubly exposed — to trade and oil prices approaching $80 a barrel LCOc1.

Wall Street was set for another firmer session as investors positioned for strong Silicon Valley earnings before the reporting season starts next week, while European shares also rose after a deal on settling a migration policy row that had threatened Germany’s coalition government.

But a July 6 deadline is looming for Washington to impose tariffs on $34 billion worth of Chinese goods that Beijing has vowed to match with tariffs on U.S. products. President Donald Trump also threatened on Monday to “do something” if the United States was not better treated by the World Trade Organisation.

On equity markets, Hong Kong dived as much as 3.3 percent at one point to nine-month lows .HSI, hit also by a U.S. move to block China Mobile (0941.HK) from offering services to the U.S. market. Shanghai's bourse hit a 2-year trough .SSEC though both indexes inched higher towards the close as the yuan recovered. Japan's Nikkei .N225 edged to a near three-month closing low.

The mood was more cheerful in Europe where a pan-European equity index rose half a percent , the euro firmed marginally and bond yields rose after German Chancellor Angela Merkel struck the deal with her Bavarian conservative coalition partners.

Equity futures for the U.S. S&P500 and Nasdaq ESc1 NQc1 indicated a firmer session after Wall Street ended higher on Tuesday for the third day in a row. Gains of around 1 percent in tech firms such as Microsoft and Apple offset concerns about trade and its impact on growth.

Tech shares have been relatively resilient to trade fears - the New York Stock Exchange’s index of 10 tech giants including China’s Alibaba has gained over 30 percent this year. They are seen delivering another set of robust quarterly earnings.

While U.S. growth and company earnings seem unassailable, tit-for-tat tariffs from China and Europe may ultimately prove detrimental for American businesses and jobs.

U.S. Treasury bond yields rose slightly amid the easier mood but concern about the trade row has pushed the gap between two- and 10-year yields to the narrowest since 2007 US2US10=RR

Iran issues oil warning as UAE says production can rise

Global Stock Markets

Iran issued a new warning over Mideast oil supplies as the United Arab Emirates said on Tuesday it could increase its own production, the latest remarks to follow President Donald Trump's demand for lower global energy prices. 

The comments by Iranian President Hassan Rouhani and the unexpected announcement by the UAE's oil-rich capital Abu Dhabi came as US benchmark crude traded around $75 a barrel.

A recent decision by the Organization of the Petroleum Exporting Countries to increase the cartel's own production by 1 million barrels a day has yet to tamp down prices. That's led to higher prices at gasoline pumps in the United States as it heads toward midterm elections for Congress.

Speaking to Iranian expatriates Monday night in Switzerland, where he was on an official visit, Rouhani took aim at America.

The US pulled out of the Iran nuclear deal in May and initially said it wanted allies to stop buying Iranian crude entirely. The State Department said Monday it would examine waivers on a "case-by-case basis'' as it re-imposes sanctions.

Rouhani did not elaborate, but Iran long has asserted it could shut down the Strait of Hormuz, the narrow body of water that separates the Persian Gulf from the wider world. A third of all oil traded by sea passes through the strait and the US Navy regularly has direct, tense encounters with Iran's paramilitary Revolutionary Guard there.

The US Navy's 5th Fleet, which patrols the region, has said it has not seen any ``unsafe and unprofessional'' actions by Iranian naval forces in the Persian Gulf since August 2017. It did not immediately respond to a request for comment Tuesday over Rouhani's remarks.

Separately, Iran's interior minister Abdolreza Rahmani Fazli warned Tuesday that ``if we close our eyes for 24 hours, 1 million refugees will go toward Europe through our Western borders'' via Turkey. Some 5,000 tons of narcotics also could be smuggled to the West, he added, according to the semi-official .

Iran lies on a major trafficking route between Afghanistan and Europe, as well as the Persian Gulf states. Large drug seizures are common across the region.

Meanwhile, the state-run Abu Dhabi National Oil Co. issued a surprise statement Tuesday saying it has an oil production capacity of 3.3 million barrels per day. It added that it ``remains on track to increase its production capacity to 3.5 million (barrels per day) by the end of 2018.''

The company also said it ``has the ability to increase oil production by several hundred thousand barrels of oil per day, should this be required to help alleviate any potential supply shortage in the market.''

The oil company previously announced in November it had plans to expand its capacity to 3.5 million barrels of oil per day. It produced some 2.8 million barrels of oil per day in May, according to the most recent figures released by OPEC.

Bitcoin Prices Will go Even Higher Once Regulations Become Clearer

Global Stock Markets

Ryan Rabaglia isn’t ready to stop being bullish about Bitcoin any time soon. The Octagon Strategy trader believes that the top-ranked cryptocurrency can still hit new highs.

BTC prices have risen above $6,500 after twice dropping below $6,000 in June 2018.
Regulatory Certainty Will Take Pressure off Bitcoin

In a recent interview with CNBC, Rabaglia declared that clearer market regulations were the likely catalyst for a sustained Bitcoin price rally. According to Rabaglia, regulatory uncertainty was putting immense pressure on the market.

He also said that mainstream investors were reticent on committing fully to the market since the laws guiding crypto commerce are still somewhat vague

In another development, David Garrity, the CEO of GVA Research believes the current BTC price surge is a temporary relief. Speaking recently, Garrity opined that trading levels had come under pressure in the market. Thus, a “relief rally” was inevitable.

Garrity also pointed to the emergence of some positive regulatory developments as the reason the current BTC price surge. According to the GVA Research CEO, recent comments by the SEC concerning the status of Bitcoin and Ethereum, in particular, have taken away some of the negative sentiment among retail investors in the market.

Unlike Rabaglia, Garrity identified end-user adoption as the critical parameter that will drive any sustained BTC price rally. He decried that lack of significant Bitcoin use cases especially in the payments market.

In addition to slow adoption, Garrity mentioned a large number of government investigations into activities in the market as another reason for the price struggles of 2018.

European shares edge higher after breakthrough in Merkel migration row

European Stock Markets

European shares edged higher on Tuesday after German Chancellor Angela Merkel’s conservatives settled a row over migration and gave some respite to investors facing a rage of political worries including trade tensions with the United States. 

The pan-European STOXX 600 was up 0.6 percent by 0833 GMT with Germany's DAX .GDAXI posting the best performance with a 0.9 percent rise.

The dispute over immigration had threatened to topple Merkel’s fragile governing coalition but in a breakthrough late on Monday evening, her rebellious interior minister dropped his threat to resign after five hours of talks.

Asian shares, which had sustained heavy falls overnight, particularly in China, recouped some of their losses before European bourses opened, helping restore sentiment.

Chinese financial markets have been jittery ahead of a July 6 deadline, when the U.S. is set to slap tariffs on $34 billion worth of Chinese goods that Beijing has vowed to match with tariffs on U.S. products.

Miner Glencore fell more than 10 percent after it said a subsidiary had received a U.S. Department of Justice subpoena requesting documents and records on compliance with the Foreign Corrupt Practices Act and U.S. money-laundering statutes.

The documents requested from subsidiary Glencore Ltd relate to the group’s business in Nigeria, the Democratic Republic of Congo (DRC) and Venezuela from 2007 to present, Glencore said, adding it was reviewing the subpoena.

Another big faller was BE Semiconductor, the Dutch equipment maker (BESI.AS) lost over 8 percent after cutting revenue forecast.

Societe Generale (SOGN.PA) rose 1.3 percent and Commerzbank (CBKG.DE) up 2.1 percent after the latter agreed to sell its equity markets and commodities business (EMC) to the French bank.

FTSE climbs higher, Sterling holds gains

European Stock Markets

The UK’s top share index climbed on Tuesday following a shaky start to the month, although mining giant Glencore (GLEN.L) fell after one of its subsidiaries received a U.S. subpoena. 

The pound rose on Tuesday as a rebound in risk appetite supported sterling and after a survey showed Britain’s construction industry enjoying its fastest growth in June in seven months.

The British currency rose 0.4 percent versus the dollar to as high as $1.3196, away from 2018 lows hit last week of $1.3050. Sterling made most of those gains before the construction survey numbers were released. 

The blue-chip FTSE 100 .FTSE index was up 0.3 percent at 7,571.59 points by 0855 GMT, making back some of Monday's 1.2 percent loss when concerns over global trade hit risky assets.

The mood was upbeat across the wider European equity trading landscape after German Chancellor Angela Merkel’s conservatives settled a row over migration that threatened to topple her fragile governing coalition late on Monday evening.

On the FTSE, consumer staples, health stocks and financials added the most points to the index.

Shares in IAG (ICAG.L) were among the top gainers, up 2.3 percent on the back of a supportive research note from Credit Suisse in which analysts raised their price target for the British Airways-owner, saying that they expect efficiency gains to drive up margins.

Miners, however, were a weak spot as Glencore (GLEN.L) dropped 12.2 percent to a one-year low. The miner said that a subsidiary had received a U.S. Department of Justice subpoena on compliance with money-laundering laws.

The broader FTSE 350 mining index .FTNMX1770 fell 3.2 percent. The sector has come under pressure from uncertainty over the United States’ trade dispute with China, which has kept a lid on underlying copper prices.

The FTSE 100 has dipped back into negative territory for the year, down 1.5 percent year to date, though it has managed to slightly outperform a 2.1 percent decline for the Euro stoxx .STOXXE index.

British mid caps .FTMC rose 0.4 percent, helped by gains in industrials and consumer stocks.

Asian shares stumble as China extends declines amid trade tensions

Asian Stock Markets

Asian stocks traded mostly lower on Tuesday, with greater China markets extending their declines as investor worries over Beijing's trade relations with the U.S. soured sentiment in the region.

China markets pulled back, extending the last session's sharp declines. The Shanghai composite sank 1.27 percent after touching two-year lows in the last session and the Shenzhen composite pulled back by 1.36 percent.

Hong Kong's Hang Seng Index plunged 3.08 percent as markets there reopened for trade after a holiday, with the energy and services sectors leading losses. Heavily weighted financials also slumped, with HSBC down 2.79 percent, while technology blue chip Tencent dropped 2.74 percent.

Asian stocks traded mostly lower on Tuesday, with greater China markets extending their declines as investor worries over Beijing's trade relations with the U.S. soured sentiment in the region.

China markets pulled back, extending the last session's sharp declines. The Shanghai composite sank 1.27 percent after touching two-year lows in the last session and the Shenzhen composite pulled back by 1.36 percent.

Hong Kong's Hang Seng Index plunged 3.08 percent as markets there reopened for trade after a holiday, with the energy and services sectors leading losses. Heavily weighted financials also slumped, with HSBC down 2.79 percent, while technology blue chip Tencent dropped 2.74 percent.
Symbol
   
Elsewhere, Japan's Nikkei 225 turned lower, declining 0.65 percent after earlier retracing some of the sharp declines seen in the overnight session. Airlines and oil producers clung to gains, while most other sectors eased.

In South Korea, the Kospi edged down by 0.37 percent. Manufacturers and technology plays were mixed, with Samsung Electronics gaining 0.99 percent while steelmaker Posco lost 2.06 percent. The S&P/ASX 200, however, bucked the broader trend to rise 0.51 percent.

Meanwhile, MSCI's index of stocks in Asia Pacific outside of Japan sank 1.22 percent in Asia morning trade.

Investors were cautious as markets continued to watch developments on the trade front. A looming July 6 deadline is set to see the U.S. impose a 25 percent tariff on $34 billion worth of Chinese goods from more than 800 product categories. China has also announced that it will retaliate with duties on the same value of U.S. products.

"While we still think that a full-blown trade war is unlikely, the harsh rhetoric and punitive measures have reached a point that warrants serious consideration of such eventualities," Tamur Baig, chief economist at DBS Bank, said in a note. He added that the U.S. would likely be hurt more than China if a trade war ensues, given how China's retaliation can be on multiple fronts and the U.S. is involved in more than one trade spat.

The U.S. is also engaged in disputes on trade issues with other key trading partners, including Canada and the European Union. The U.S. could face tariffs from the European Union on as much as $300 billion in U.S. goods if the Trump administration proceeds with imposing duties on European cars, the Financial Times reported.

Markets in Europe and Asia closed lower in the previous session amid the concerns over trade, with the pan-European Stoxx 600 declining 0.84 percent. Asian stock indexes saw steeper losses as China markets resumed their slide after getting some reprieve at the end of last week, with the Shanghai composite dropping 2.52 percent on Monday.

Amid the market moves ahead of that July 6 deadline for tariffs, U.S. Commerce Secretary Wilbur Ross told CNBC there was no "bright line level of the stock market" that would change U.S. President Donald Trump's mind on trade policy.

Those jitters also overshadowed the moderate gains made on Wall Street overnight, with U.S. stocks closing in positive territory after dipping early in the overnight session on trade concerns. The Dow Jones Industrial Average rose 0.15 percent, or 35.77 points, to close at 24,307.18.

Investor jitters over trade concerns, meanwhile, supported the greenback. The dollar index, which tracks the dollar against a basket of currencies, traded at 94.925 at 11:24 a.m. HK/SIN after rising above the 95 handle in the overnight session. Against the yen, the dollar traded at 110.86.

China stocks hit turbulence with Asian shares sinking

Asian Stock Markets

Chinese stocks went into a tail spin on Tuesday as turbulence gripped equity markets in Asia, which sank to nine-month lows as investors feared the Sino-U.S. trade row could derail a rare period of synchronized global growth. 

Speculation was rife the central bank in China was intervening in the currency market to staunch losses and prevent a potentially destabilising sell-off in the yuan.

Chinese financial markets have been jittery ahead of a July 6 deadline, when the U.S. is set to slap tariffs on $34 billion worth of Chinese goods that Beijing has vowed to match with tariffs on U.S. products.

The trade row between the United States and major economies has rattled financial markets in the past several weeks, with no sign U.S. President Donald Trump is about to back down from his ‘America First’ protectionism policies that many fear will harm the global economy.

The Asia Pacific MSCI index ex-Japan .MIAPJ0000PUS tumbled 1.4 percent to its lowest since September 29, while Japan's Nikkei average .N225 was down 0.86 percent to a near three-month low.

Chinese stocks were hit the most, with Hong Kong's Hang Seng index .HSI diving 3.3 percent to its lowest level in ten months, the Shanghai Composite Index .SSEC shedding 1.9 percent to hit a fresh 28 month low.


The Chinese yuan CNY=CFXS, on a downward spiral since mid-June, slipped past 6.7 per dollar in early trading on Tuesday for the first time since Aug. 9, 2017 before paring losses on talk of intervention by the Chinese central bank.

The central bank put the midpoint CNY=PBOC roughly in line with market expectations at 6.6497 yuan per dollar, its weakest level in about 10 months, setting the stage for the day's drop.

The yuan was last traded at 6.6998 per dollar.

Trump told the World Trade Organization on Monday that “we’ll be doing something” if the United States is not treated properly, just hours after the European Union said that U.S. automotive tariffs would hurt its own vehicle industry and prompt retaliation.

Officials in China, the epicentre of the international trade row, have warned the United States that the ti-for-tat tariffs on each others goods will ultimately prove detrimental for American businesses and jobs. L4N1TN1RH

Elsewhere in currency markets, the euro EUR=, which had been pressured by political uncertainty in Germany, pared losses after Chancellor Angela Merkel's conservatives settled a row over migration that threatened to topple her governing coalition after interior minister Horst Seehofer dropped his threat to quit.

The euro last traded at $1.1632 EUR=, after shedding 0.45 percent overnight.

The dollar last stood at 110.82 yen, giving up gains following sharp falls in Chinese shares.

Investors are also keeping an eye on the Reserve Bank of Australia’s (RBA) policy meeting later on Tuesday for any mention of the U.S.-China trade tensions. The central bank is considered certain to maintain rates at 1.5 percent, where they have been since mid-2016.

China is Australia’s major export market and its currency, the Australia dollar, is considered a liquid proxy for China-related risk.

The Aussie dollar was not far off a 1-1/2-year low of $0.7311 AUD=D4 plumbed on Monday, fetching $0.7328.

Oil prices climbed on Tuesday after Libya declared force majeure on some of its supplies, with Brent crude LCOc1 rising 0.83 percent to $77.94 per barrel and West Texas Intermediate (WTI) crude CLc1 was up 0.87 percent to $74.58 a barrel.

Oil prices rise with Libya's force majeure and emerging slowdown in demand held back markets.

Oil Stock Markets

Oil prices climbed on Tuesday after Libya declared force majeure on some of its supplies, although an overall rise in OPEC output and an emerging slowdown in demand held back markets. 

Brent crude oil futures LCOc1 were at $77.71 per barrel at 0217 GMT, up 41 cents, or 0.5 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 57 cents, or 0.8 percent, at $74.51.

OPEC’s June output was 32.32 million barrels per day (bpd), a Reuters survey showed on Monday, up 320,000 bpd from May. The June total is the highest since January 2018.

Libya’s National Oil Corporation (NOC) declared force majeure on loadings from Zueitina and Hariga ports on Monday, resulting in total production losses of 850,000 bpd due to the closure of eastern fields and ports.

Traders have also been watching U.S. oil production C-OUT-T-EIA, which has surged by 30 percent over the last two years to 10.9 million bpd, absorbing some of the recent disruptions.

Overall, however, analysts said OPEC’s production policy as well as unplanned supply disruptions
were currently the main price drivers.

“In the near-term, the level of OPEC production - deployment of spare capacity by Saudi Arabia, Iraq, UAE, Kuwait (and ex-OPEC by Russia), and involuntary disruptions in Libya, Venezuela, Iran - are more important drivers of crude prices,” Goldman Sachs said in a note published late on Monday.

What has become a concern, at least for producers, is a slowdown in demand which may end years of consecutive records.

In Asia, the world’s top oil consuming region, seaborne oil imports have been falling since May, as higher costs turned off consumers and as the escalating trade dispute between the United States and China starts to impact the economy.

Things to watch on the ASX today

Australian Stock Markets

Will the market be able to bounce back on Tuesday? Here are five things that could shape today’s trade:

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) started the new financial year with a day in the red on Monday. It gave back its early gains to finish the day down 0.3% to 6,177.8 points.

ASX expected to open the day higher.

According to the latest SPI futures, the local market is expected to open the day higher by 0.3% or 21 points on Tuesday. This follows a positive night of trade on Wall Street which saw U.S. markets rebound from early declines to push notably higher. The Dow Jones Industrial Average rose 0.15%, the S&P 500 climbed 0.3%, and the NASDAQ pushed almost 0.8% higher.

Reserve Bank of Australia meets today.
The Reserve Bank of Australia will meet at 14:30 AEST today to discuss the cash rate. Think there is not a single economist in the country that expects the central bank to make a move on rates.

In fact, the consensus appears to be for rates to remain on hold at the record low of 1.5% until at least the end of 2019.

Toll road operator Atlas Arteria announces fees.

The shares of Atlas Arteria Group (ASX: ALX), formerly known as Macquarie Atlas Roads, will be on watch on Tuesday after providing its final performance fee. According to the release, a final performance fee was earned by Atlas Arteria’s manager, Macquarie Fund Advisers, for the 12 months ended 30 June 2018.

During this period, the company outperformed the S&P/ASX 300 Industrials Accumulation Index by 10.8%, resulting in a 2018 performance fee of $54.7 million. The 2018 performance fee will be payable in one instalment.

Oil prices give back gains.
Oil prices have taken a tumble overnight after data revealed a surprise rise in output from Saudi Arabia and Russia. The WTI crude oil price has fallen 0.1% to US$74.06 a barrel and the Brent crude oil price is down 2.3% to US$77.39 a barrel.

This could put pressure on the shares of Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL).

Amaysim shares tipped as a buy.
According to a note out of Goldman Sachs, its analysts have retained their buy rating and placed a $1.30 price target on Amaysim Australia Ltd (ASX: AYS) shares.

Despite the company suffering a slowdown in subscriber growth, the broker sees a lot of value in its shares at the current level.

ASX Shares that are climbing high today

Australian Stock Markets

Four shares that are climbing more than most today are listed below. Here’s why they are storming higher 

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has bounced back from yesterday’s decline with a push higher on Tuesday. In afternoon trade the benchmark index is up 0.5% to 6,208.6 points.

The A2 Milk Company Ltd (ASX: A2M) share price has climbed 4% to $10.80 after announcing a variation to its manufacturing and supply arrangements with Synlait Milk Ltd (ASX: SM1).

According to the release, the two parties have signed a new minimum term of five years to 31 July 2023, with an increase in volume of infant formula products over which Synlait has exclusive supply rights.

Synlait will increase its committed production capacity and pricing terms will reflect the commitment from both companies to an ongoing market-competitive pricing regime.

The FlexiGroup Limited (ASX: FXL) share price has pushed 4% higher to $2.27 after being the subject of a positive broker note out of Credit Suisse.

According to the note, the broker has upgraded the financial services company’s shares to an outperform rating with a $2.45 price target on the belief that it has a chance of meeting its earnings forecasts in FY 2018.

The InvoCare Limited (ASX: IVC) share price is up 2% to $14.00 after the funerals company announced yet another acquisition.

It has signed an agreement to buy Lester & Son in Albury-Wodonga. This is the leading funeral business on the New South Wales and Victoria border and is part of the company’s strategy of expanding its presence in regional markets.

The Treasury Wine Estates Ltd (ASX: TWE) share price is up 2% to $17.48.

This week the wine company’s shares were given an overweight rating and $20.00 price target by analysts at Morgan Stanley. The broker believes that the recent China-related selloff has brought the wine company’s share price down to an attractive level.

Oil prices fall admist increasing Saudi output & Asian economic slowdown

Oil Stock Markets

Oil prices fell by more than 1 percent on Monday as supplies from top exporter Saudi Arabia rose and as signs of an economic slowdown in Asia dented the outlook for demand. 

Brent crude oil futures LCOc1 were at $78.16 per barrel at 0316 GMT, down $1.07, or 1.35 percent, from their last close.

U.S. West Texas Intermediate crude futures CLc1 were down 94 cents, or 1.3 percent, at $73.21 a barrel, after rising more than 8 percent last week.

U.S. President Donald Trump wrote in a tweet on Saturday that Saudi Arabia’s King Salman bin Abdulaziz Al Saud had agreed to produce more oil. The White House later walked back on the president’s comments, saying the king said his country can raise oil production if needed.

Saudi Arabia’s output is up by 700,000 barrels per day (bpd) from May, a Reuters survey found on Friday, and close to its 10.72 million bpd record from November 2016, more than making up for disruptions elsewhere within the Organization of the Petroleum Exporting Countries (OPEC).

Voluntary supply cuts by OPEC and some non-OPEC suppliers like Russia have tightened world oil markets since 2017, and unplanned disruptions from Canada to Venezuela and Libya along with upcoming new U.S. sanctions against major exporter Iran have sparked concerns of supply shortfalls.

Despite the apparent supply relief from Saudi Arabia, oil markets remain tense over escalating trade disputes between the United States and other major economies including China, the European Union, India and Canada.

Asia’s main economic hub around China, Japan and South Korea all reported a slowdown in export orders in June amid an escalating trade dispute with the United States.

Trump warned close U.S. allies in an interview that aired on Sunday with a threat to sanction European companies that do business with Iran.

Oil markets are also awaiting the impact of looming U.S. sanctions against major exporter crude Iran.

Five things to watch on the ASX on Monday

Australian Stock Markets

On Friday the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) finished the financial year with a whimper when it gave back its earlier gains to finish the day down 0.3% at 6,194.6 points.

Will the market be able to start the new financial year in style on Monday? Here are five things to watch:

The ASX is expected to open higher.

The local market is expected to open the day higher on Monday. According to the latest SPI futures, the S&P/ASX 200 is poised to open 23 points or 0.4% higher following a positive end to the week on Wall Street.

The Dow Jones Industrial Average finished the week with a 0.2% gain, the S&P 500 was up 0.1%, and the NASDAQ was 0.1% higher.

Oil prices have continued to rise.

Australian energy producers such as Oil Search Limited (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) could be set for another positive day of trade after the price of U.S. crude settled above US$74.00 for the first time since November 2014.

Prices have been rising after sanctions against Iran threatened to remove a substantial volume of oil from world markets. WTI crude closed up 1% at US$74.15 a barrel and Brent crude was up 2% to US$79.44 a barrel. The latter is closing in on a three and a half year high.

Aluminium prices slide.

According to the London Metal Exchange, the aluminium price dropped lower on Friday. Aluminium closed the week with a 1% decline to US$2,159 a tonne, which could put pressure on the Alumina Limited (ASX: AWC) share price today.

CSL and ResMed rated as buys.

The shares of CSL Limited (ASX: CSL) and ResMed Inc (ASX: RMD) could be on the rise on Monday after they were the subject of positive broker notes out of Goldman Sachs.

The broker has initiated coverage on both companies with buy ratings.

Ramsay Health Care rated as a sell.

Ramsay Health Care Limited (ASX: RHC) shares, on the other hand, could be set for another day in the red after Goldman Sachs initiated coverage on the private hospital operator with a sell rating.

It is concerned that hospitals face industry headwinds which are expected to unwind over several periods.

Why these 4 ASX shares are starting the week on a high

Australian Stock Markets

Four shares that have climbed more than most today are listed below. Here’s why they have started the week on a high:

In afternoon trade the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is fading but is still on course to make a positive start to FY 2019. At the time of writing it is up 0.1% at 6,201.2 points.

The EBOS Group Ltd (ASX: EBO) share price has surged almost 5% higher to $17.67 after it announced that it has won the tender to act as the exclusive third party distributor of pharmaceutical products to more than 400 Chemist Warehouse and My Chemist stores in Australia.

The five-year deal is expected to generate sales of approximately A$1 billion in the first year of the agreement.
 
The EML Payments Ltd (ASX: EML) share price has jumped 8% higher to $1.52 after entering into a multi-year agreement with UK-based GVC Holdings for the provision of branded reloadable cards for their European online gaming brands.

No financial details have been provided, but management expects the gross debit volume to revenue conversion ratio to be materially in line with other reloadable card programs the group operates.

The Mitula Group Ltd (ASX: MUA) share price has pushed 3.5% higher to 74 cents after its takeover approach moved a step closer to completion. According to today’s release, the shareholders of LIFULL Co have met and approved the issue of shares to Mitula shareholders in connection to the proposed scheme of arrangement.

The scheme remains subject to approval by Mitula shareholders, approval by the Supreme Court of Victoria, and other customary conditions.

The Yancoal Australia Ltd (ASX: YAL) share price has climbed 3.5% to 14.5 cents after the coal miner announced that it has applied for a dual listing on the Hong Kong Stock Exchange.

Management advised that it has applied for the dual listing in the interests of increasing liquidity in its shares and to help further diversify its investor base. It also announced an impending capital raising, though no details were provided.

Oil climbs as market tightens on lost supply

Oil prices rose on Friday as U.S. sanctions against Iran threatened to remove a substantial volume of crude oil from world markets at a time of rising global demand.

Benchmark Brent crude LCOc1 jumped $1.49 to a high of $79.34 a barrel before easing back to around $79.00 by 1030 GMT.

U.S. light crude CLc1 was down 15 cents at $73.30. On Thursday, the contract hit its highest since November 2014 at $74.03 per barrel.

Iran is the fifth-largest oil producer in the world, pumping about 4.7 million barrels per day (bpd), or almost 5 percent of world’s oil, much of it to China and other energy-hungry nations such as India.

The U.S. government wants to stop Tehran exporting oil to cut off a vital supply of finance and hopes other big oil producers in the Organization of the Petroleum Exporting Countries and Russia will make up for the deficit.

But the world oil market is already tight and many analysts and big investors think strict enforcement of U.S. sanctions against Iran will push up prices sharply.

A Reuters survey of 35 economists and analysts on Friday forecast Brent would average $72.58 a barrel in 2018, 90 cents higher than the $71.68 forecast in last month’s poll and compared with the $71.15 average so far this year.

North American oil stocks have fallen as an outage at Canada’s Syncrude has locked in more than 300,000 bpd of production. The outage is expected to last at least through July, according to operator Suncor Energy

OPEC and Russia have said they will raise output to meet demand and replace crude from unplanned disruptions but many analysts think that the extra supply may be inadequate.

STOCKS GAIN, YUAN PAIN

While Asian stocks rose, the Chinese yuan suffered its worst month on record, losing 3 percent against the dollar in June as investors pulled money from a market likely to suffer from higher barriers to trade.

The Chinese yuan traded as low as 6.6441 to the dollar on Friday, its lowest since November. It traded at 6.6211 to the dollar around 0800 GMT.

The dollar index edged down 0.5 percent to 94.924, and was up 0.1 percent against the yen at 110.65.
European bonds diverged, with the EU Summit migration agreement pushing Germany’s Bund yields up while Italian 10-year government bond yields fell to a one-week low.

The yield on benchmark 10-year Treasury notes rose to 2.8547 percent and the yield curve widened slightly to 33.3 basis points.

Oil prices also came under pressure from trade frictions, falling despite tight crude market conditions that had pushed prices to three-and-a-half-year highs on Thursday.

U.S. crude was 0.4 percent lower at $73.19 a barrel. Brent crude rose 0.2 percent to $78.01 per barrel.
Gold remained near 6 1/2 month lows, weighed down by trade worries, interest rate expectations and the strong dollar.

Spot gold traded up 0.2 percent at $1250.78 per ounce, but was still headed for its worst monthly performance since November 2016.

Emerging stocks jumped 1.6 percent, having hit a one-month low in the previous session. The index was set for its worst month since January 2016 as the rising dollar battered emerging economies.

World stocks jump on lull in trade tensions, euro gets summit boost

World stocks enjoyed a strong bounce on Friday as a recovery in Asian markets spread to European shares after a turbulent week of selling as investors’ fears of higher barriers to trade came closer to becoming reality. 

MSCI’s index of world stocks rose 0.5 percent by 0800 GMT, its strongest gain in three weeks, but its second quarter was still set to be in the red as investors priced in U.S. tariffs that are set to be implemented next week.

The U.S. administration is due to activate tariffs on Chinese goods worth $34 billion on July 6, which is expected to prompt a tit-for-tat response from Beijing.

European stocks rallied strongly, with the pan-European STOXX 600 up 1.2 percent and Germany’s trade-sensitive DAX up 1.5 percent.

But trade wars have already mauled assets from the Chinese yuan to European autos stocks, and wiped $1.75 trillion off world stocks’ market capitalization since June 12.

The euro jumped after leaders at an EU summit reached an agreement on migration, rising 0.5 percent to $1.1622 at 0800 GMT.

Bitcoin skids below $6,000, hits lowest level since November

Bitcoin’s value slid to its lowest level since November on Friday, as waning investor interest and recent negative headlines from global regulators weakened demand for the cryptocurrency and most of its rivals.

Virtual currencies, including the best-known and biggest, bitcoin, have been stuck in a downward trend for most of 2018 after last year’s frenzied interest fizzled.

Recent hacks and the “cyber intrusion” of cryptocurrency exchanges in key Asian markets has also encouraged investors to exit.

Bitcoin fell to as low as $5,774 BTC=BTSP on the Bitstamp exchange, the lowest since Nov. 12. It was last up 0.7 percent at $5,891.

So far in 2018, bitcoin has tumbled almost 60 percent after soaring more than 1,300 percent last year. It is now down 70 percent from its December peak.

Other cryptocurrencies .MVETH .MVXRP also slid on Friday. Ethereum’s ether, the second-biggest cryptocurrency by value, fell 4 percent to $416, its weakest since April. Ripple’s XRP also dropped 4 percent to $0.44, a 2018 low, according to Coinmarketcap.com.

The Bank of England on Thursday warned banks and insurers that they should be wary of crypto assets because they can be highly volatile and vulnerable to fraud.

After cryptocurrency prices surged in 2017 big institutional players were predicted to step into the industry, but most have waited on the sidelines amid regulatory worries and as they weight up whether investor interest is more than a fad.

The total market capitalization of cryptocurrencies has fallen to around $230 billion from a peak of around $800 billion in January.

Still, money continues to be plowed into the sales of new digital currencies. Sales jumped to $13.7 billion in the first five months of the year, nearly double the amount raised for the whole of 2017, according to a report released on Thursday.

Ambassador says U.S. unconvinced China willing to make fast progress on trade

The United States is not convinced China is willing to make sufficient progress on trade, the U.S. ambassador to China said on Friday, as the world’s two biggest economies remain locked in spiralling disputes.

U.S. President Donald Trump is set to impose tariffs on billions of dollars worth of Chinese imports on July 6 to punish China for what the United States says are intellectual property abuses.

Speaking at the opening of a financial forum in Beijing, the U.S. ambassador, Terry Branstad, said there was still a chance to address issues such as non-tariff barriers, loss of intellectual property and forced technology transfers.

China unveiled on Thursday a long-anticipated easing of foreign investment curbs, including in the banking, agriculture, automotive and heavy industry sectors, as it moved to show it would fulfil pledges to open its markets further.

Branstad said there was “scepticism” in the United States that China would follow through on its pledges to truly open up in areas such as financial services.

A strengthened review process by the Committee on Foreign Investments in the United States, or CFIUS, an interagency panel that checks the national security implications of transactions, was likely, Branstad said, adding that he thought that was the right way to deal with investment issues.

Trump said on Wednesday he would use a strengthened CFIUS process to thwart Chinese acquisitions of sensitive American technologies, a softer approach than imposing China-specific investment restrictions.

White House trade adviser Peter Navarro, a harsh China critic, has argued for China-specific restrictions using an emergency sanctions law, while Treasury Secretary Steven Mnuchin has favoured a more global approach.

EU leaders unite over Trump tariffs, foreign investments

European Union leaders pledged on Friday to react firmly against protectionism and called for a new EU law to screen foreign investments, with Washington and Beijing clearly in mind. 

The leaders, meeting in Brussels for a crucial summit focussed more on migration, said the U.S. import tariffs imposed on EU steel and aluminium could not be justified and supported the European Commission’s legal challenge and the duties set on U.S. products.

The conclusions backed by the leaders said Europe would continue to negotiate ambitious free trade agreements with partners - after provisional deals struck in the past 12 months with Japan and Mexico.

The bloc is still seeking a trade deal with the Mercosur group of Argentina, Brazil, Paraguay and Uruguay and will start talks in July with Australia and New Zealand.

However, there were also lines showing the European Union wants to protect its own industries and retain technologies in the face of what it sees as unfair competition.

Chinese companies are the chief target of EU measures to counter dumping and unfair subsidies, although the leaders did not mention China in their joint text.

The European Commission last year proposed that it should be allowed to scrutinize foreign investments amid rising concern about Chinese acquisitions on the continent.

The European Parliament, which wants tougher screening, and the 28 member states, many of whom favour a lighter touch, have agreed common positions ahead of negotiations with each other expected to start next month and last at least until the end of 2018.

The European Union countries have also committed themselves to driving reform of the World Trade Organization to ensure trade is both free and fair.

Oil rises on supply losses, U.S. push to isolate Iran

Oil prices rose on Wednesday on a supply disruption in Canada, falling U.S. crude stocks, uncertainty over Libyan exports and after U.S. officials told importers to stop buying Iranian crude from November.

Brent crude LCOc1 was up 30 cents a barrel at $76.61 by 0800 GMT. U.S. light crude CLc1 was 25 cents higher at $70.78.

A supply outage at Syncrude in Canada has locked in 350,000 barrels per day (bpd) of crude, with repairs expected to last at least through July.

The fall in Canadian exports has helped drain supplies of heavy crude across North America and contributed to a major draw in U.S. crude oil inventories, analysts say.

The American Petroleum Institute (API) on Tuesday reported a much-higher-than-expected 9.2 million barrel reduction in U.S. crude inventories in the week to June 22 to 421.4 million barrels.

Analysts polled by Reuters had estimated, on average, that crude stocks fell about 2.6 million barrels last week.

Also keeping markets on edge was the risk of a disruption to oil supplies from the Africa and the Middle East.

The United States has told all countries to stop importing Iranian oil from November, a State Department official said on Tuesday, as the Trump administration ramped up pressure on the Islamic Republic.

Trying to make up for disrupted supply, the Organization of the Petroleum Exporting Countries (OPEC) said late last week it would increase output.

Top exporter and de-facto OPEC leader Saudi Arabia plans to pump a record 11 million bpd in July, up from 10.8 million bpd in June, an industry source familiar with Saudi plans told Reuters on Tuesday.