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.

Trade tensions build as Daimler warns on sales

Mercedes-Benz maker Daimler (DAIGn.DE) shocked investors on Thursday with a warning that trade tensions were hitting sales, while fears of a “tit-for-tat” trade war grew as Europe readied retaliatory tariffs against the United States.

Auto stocks sank to a nine-month low on European markets .SXAP after Daimler cut its 2018 profit forecast and said it was considering “possible strategic options” in light of the rising trade tensions between China and the United States.

The revised forecast sparked fears of earnings downgrades across the industry and followed a proposal by U.S. President Donald Trump to impose tariffs on imported vehicles, arguing that trade imbalances threatened U.S. national security.

Trump is separately promising to impose tariffs on up to $200 billion of Chinese goods, escalating a conflict that has already drawn retaliatory steps from nearly all corners of the world. China for its part has warned it will retaliate with levies on U.S. products, potentially including the Mercedes-Benz SUVs shipped to China from Alabama.

Daimler’s news comes a day after top central bank chiefs said a developing trade war between the world’s biggest economies was weighing on business confidence and could force central banks to downgrade their outlook.

Meeting in Portugal, the heads of the U.S. Federal Reserve, the European Central Bank, the Bank of Japan and the Reserve Bank of Australia on Wednesday all took a gloomy view on the conflict, arguing the consequences are already evident.

Mario Draghi, head of the European Central Bank (ECB), said it was too early to assess the monetary policy impact of an escalation in trade tariffs between the United States and its partners but there was no reason for optimism.

Global stocks, oil suffer as U.S.-China trade spat heats up

Global stocks slid on Monday and U.S. oil prices slumped after U.S. President Donald Trump announced tariffs on Chinese goods and Beijing responded with similar measures in an escalating trade dispute.

Fears the spat between the world’s two largest economies could intensify added to pressure on oil prices, which extended Friday’s big fall into the start of week, while the dollar retreated from a seven-month high against a basket of currencies.

The MSCI world equity index, which tracks shares in 47 countries, fell 0.3 percent, nearing a seven-day low. Trump announced tariffs on Friday on $50 billion of Chinese imports, including cars, starting on July 6.

China said it would retaliate immediately by slapping duties on American export products, including crude oil, and suspend all previous trade agreements with Trump’s administration.

The exchange of blows between Washington and Beijing has heightened fears of a protracted dispute that could hurt global growth and particularly Europe, given that Trump has signalled he wants to impose tariffs on automotive exports.

Futures on main euro zone benchmarks were trading down 0.2-0.5 percent as investor angst about the outlook for economic growth filtered through to European stocks.

The pan-regional STOXX 600 was on track to relinquish gains recorded on Thursday when a dovish European Central Bank pushed back expectations for an interest rate hike.

Germany’s DAX was down 1.36 percent while France’s CAC 40 declined 1.23 percent.

U.S. light crude oil hit a two-month low of $63.59 a barrel before recovering somewhat to trade at $64.72, down 30 cents, by 1100 GMT.

The producer cartel of the Organisation of the Petroleum Exporting Countries (OPEC), which is de facto led by Saudi Arabia, and some allies including Russia have been restricting output since the start of 2017.

Wall Street ends high-volume session lower on trade jitters

Wall Street stocks ended lower on Friday, capping a day of heavy trading with investors mostly pulling back from initial concerns over an escalating trade dispute between the United States and China.

U.S. President Donald Trump unveiled an initial list of strategically important goods that would be subject to a 25 percent tariff effective July 6, a move China’s Commerce Ministry called “a threat to China’s economic interest and security.”

China issued its own list of U.S. imports subject to tariffs, targeting soybeans, aircraft, autos and chemicals.

Since early May, the two countries have held several rounds of talks but have yet to reach a deal, as the United States pressures China to narrow a $375 billion trade deficit.

Friday also marked “quadruple witching day,” the quarterly simultaneous expiration of U.S. options and futures contracts, which tends to boost trading volume as investors replace expiring positions.
Volume hit the highest point since Feb. 8, when the S&P 500 sank to its lowest level of the year so far.

Companies considered the most sensitive to trade war worries were among the day’s biggest drags. Shares of Boeing Inc (BA.N), the single-largest U.S. exporter to China, fell 1.3 percent, while tariff-sensitive construction equipment maker Caterpillar Inc (CAT.N) and chemical company DowDupont.
Inc (DWDP.N) were down 2.0 percent and 0.9 percent, respectively.

Trump sets tariffs on $50 billion in Chinese goods; Beijing strikes back

U.S. President Donald Trump said he was pushing ahead with hefty tariffs on $50 billion (£37.6 billion) of Chinese imports on Friday, and the smouldering trade war between the world’s two largest economies showed signs of igniting as Beijing immediately vowed to respond in kind.

Trump laid out a list of more than 800 strategically important imports from China that would be subject to a 25 percent tariff starting on July 6, including cars, the latest hardline stance on trade by a U.S. president who has already been wrangling with allies.

China’s Commerce Ministry said it would respond with tariffs “of the same scale and strength” and that any previous trade deals with Trump were “invalid.” The official Xinhua news agency said China would impose 25 percent tariffs on 659 U.S. products, ranging from soybeans and autos to seafood.

China’s retaliation list was increased more than six-fold from a version released in April, but the value was kept at $50 billion, as some high-value items such as commercial aircraft were deleted.

Shares of Boeing Co, the single largest U.S. exporter to China, closed down 1.3 percent after paring earlier losses. Caterpillar Inc, another big exporter to China, ended 2 percent lower.

Washington and Beijing appeared increasingly headed toward open trade conflict after several rounds of negotiations failed to resolve U.S. complaints over Chinese industrial policies, lack of market access in China and a $375 billion U.S. trade deficit.

Analysts, however, did not expect the U.S. tariffs to inflict a major wound to China’s economy and said the trade dispute likely would continue to fester.

Stocks creep higher, dollar retreats after U.S.- North Korea summit

World stocks crept higher on Tuesday while the dollar turned negative after hitting a three-week high at the end of a U.S.-North Korea summit aimed at the denuclearization of the Korean peninsula.

U.S. President Donald Trump and North Korean leader Kim Jong Un pledged to work toward complete denuclearization of the Korean peninsula, while Washington committed to provide security guarantees for its old enemy.

The MSCI All-Country World index .MIWD00000PUS, which tracks shares in 47 countries, was higher by less than 0.1 percent on the day. The dollar .DXY slipped into negative territory in European trade after earlier hitting a three-week high.

Investors had mixed reactions to the summit, which ended with the signing of a joint statement that gave few details on how the goals set by both sides would be achieved.

Others, such as RBC Capital Markets’ head of Asia FX strategy Sue Trinh said although a historic event, there was “nothing particularly game-changing” about the summit and both sides stood far apart on what denuclearization means.

In Asian equity markets, trading was volatile with Japan's Nikkei .N225 paring early gains to close 0.3 percent higher after earlier rising as much as 0.9 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS seesawed between positive and negative territory, and was last up 0.15 percent.

South Korean shares .KS11 were a tad weaker while Chinese shares were buoyant after starting in the red. The blue-chip CSI 300 index .CSI300 jumped about 1.3 percent.

Europe had a muted open, with the pan-European STOXX 600 index up 0.1 percent.

Wall Street set to open flat ahead of U.S.-North Korea summit

U.S. stock futures pointed to a flat open for Wall Street on Monday, as investors looked past a chaotic G7 summit over the weekend and focused on a historic U.S.-North Korea summit.

President Donald Trump threw the G7’s efforts to show a united front into disarray after taking aim at Canadian Prime Minister Justin Trudeau and announcing that he was backing out of the joint communique.

The markets appeared to be calm even as Trudeau spoke of retaliatory measures that Canada would take next month in response to Trump’s decision to slap tariffs on steel and aluminum imports from Canada, Mexico and the European Union.

At 8:47 a.m. ET, Dow e-minis were up 12 points, or 0.05 percent. S&P 500 e-minis were down 0.5 points, or 0.02 percent and Nasdaq 100 e-minis were down 11.5 points, or 0.16 percent.

The escalating clash over trade between Washington and some of its closest global partners cast a cloud over Trump’s efforts to make history in nuclear talks in Singapore on Tuesday with Kim Jong Un of North Korea, one of America’s bitterest foes.

Trump said the summit could “work out very nicely” as officials from both countries met to narrow differences on how to end a nuclear stand-off on the Korean peninsula.

Investors are also bracing for monetary policy changes, with three of the world’s top central banks - the U.S. Federal Reserve, the European Central Bank and the Bank of Japan - set to meet this week.

The Fed is almost certain to raise rates again on Wednesday, inching closer to a neutral policy stance, while the ECB is likely to signal on Thursday that its 2.55 trillion euro bond purchase scheme will end this year, a key move in dismantling crisis-era stimulus.

Among stocks, insurer Genworth Financial’s shares surged 28.3 percent in premarket trading after a U.S. security panel approved China Oceanwide Holdings Group’s [OWREAC.UL] purchase of the insurer.

Shares in Exxon and Chevron fell 0.4 percent and 0.2 percent, respectively, as oil prices fell nearly 1 percent on rising Russian production and the highest U.S. drilling activity in more than three years.

Envision Healthcare jumped 2.5 percent after private equity firm KKR & Co said it would take the physician services provider private in a deal valued at $5.57 billion.

Global stocks rise despite G7 clash; Italy helps euro

European stocks edged higher on Monday, shrugging off the weekend’s fractious G7 meeting as investors looked forward to an event-packed week while receding tensions in Italy nudged the euro towards a recent three-week high.

President Donald Trump’s rejection of a previously signed communique separates the United States from its traditional global economic allies and underlines trade tensions, though markets have taken the news as yet another theatrical gesture by the U.S. administration.

If anything, markets believe the G7 summit might force policymakers to adopt a cautious stance as two of the world’s top central banks - the U.S. Federal Reserve and the European Central Bank - are set to tighten policy this week.

While stocks wobbled and the dollar edged higher in initial reaction to the G7, which Societe Generale termed as a “mess”, markets quickly recouped losses, with stocks firmer across the board on expectations that any withdrawal in policy stimulus would be very gradual on the backdrop of rising trade tensions.

An MSCI index of European stocks was up 0.7 percent in early trading, not far from a recent two-week high.

The S&P 500 futures were 0.1 percent lower after dropping as much as 0.3 percent in early trading, indicating a firm start for Wall Street.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped early but was last up 0.3 percent. Hong Kong’s Hang Seng also gained 0.3 percent while the Shanghai Composite Index fell 0.5 percent.

The Fed is almost certain to raise rates again on Wednesday, inching closer to a neutral policy stance, while the ECB is likely to signal on Thursday that its 2.55 trillion euro bond purchase scheme will end this year, a key move in dismantling crisis-era stimulus.

'Fair trade, fool trade', Trump's tweets spew ire on NATO allies, Trudeau

U.S. President Donald Trump fired off a volley of tweets on Monday venting anger on NATO allies, the European Union and Canadian Prime Minister Justin Trudeau in the wake of a divisive G7 meeting over the weekend.

The escalating clash over trade between Washington and some of its closest global partners cast a cloud over Trump’s efforts to make history in nuclear talks in Singapore on Tuesday with Kim Jong Un of North Korea, one of America’s bitterest foes.

Having left the Group of Seven summit in Canada early, Trump’s announcement that he was backing out of the joint communique torpedoed what appeared to be a fragile consensus on the trade dispute between Washington and its top allies.

The communique, which had appeared to have papered over the cracks that surfaced so uncharacteristically at the G7, said the leaders of the United States, Canada, Britain, France, Italy, Germany and Japan were agreed on the need for “free, fair, and mutually beneficial trade” and the importance of fighting protectionism.

Trump’s extraordinary outburst on Monday against NATO allies, the European Union and Canada appeared aimed at striking a chord with voters who support his “America First” agenda.

At the same time, however, it put Trump in the position of going into a crucial summit at odds with countries he needs on his side to pressure North Korea to move toward dismantling a nuclear arsenal that threatens the United States.

It was left to Trump’s aides to figure out how to explain Trump’s airing of grievances against trading partners instead of focusing on his coming talks with Kim, which the president’s supporters hope will provide him with a major foreign policy win.

Rising exports push U.S. trade deficit to seven-month low

The U.S. trade deficit fell to a seven-month low in April as exports rose to a record high, lifted by an increase in shipments of industrial materials and soybeans.

Wednesday’s report from the Commerce Department was the latest sign of robust economic growth in the second quarter.

But a protectionist trade policy being pursued by President Donald Trump, which has seen the United States slapping tariffs on imports from a host of countries including China, Mexico and Canada, as well as those in the European Union, poses a threat to the otherwise rosy economic outlook.

The Commerce Department said the trade gap narrowed 2.1 percent to $46.2 billion, the smallest since September. Data for March was revised to show the trade deficit falling to $47.2 billion, instead of the previously reported $49.0 billion.

Economists polled by Reuters had forecast the trade deficit unchanged at $49 billion in April. When adjusted for inflation, the trade gap narrowed to $77.5 billion from $78.2 billion in March. The so-called real trade deficit is below its $82.5 billion average in the first quarter.

If the trend in the real trade deficit is maintained, trade could contribute to gross domestic product in the second quarter after having a neutral impact in the January-March period.

Prices for U.S. Treasuries were trading lower. The dollar fell against a basket of currencies while stocks on Wall Street rose.

Trump in March announced tariffs on steel and aluminum imports to protect domestic industries from what he says is unfair competition from foreign producers. Last week he extended the duties to steel and aluminum imports from Canada, Mexico and the European Union.

Trump sticks with hard line on trade as showdown looms at G7

U.S. President Donald Trump is not backing down from the tough line he has taken on trade, the White House’s top economic adviser said on Wednesday, setting the stage for a showdown with top allies at this week’s G7 summit in Canada.

The meeting on Friday and Saturday in Charlevoix, Quebec, will be the first chance G7 leaders have had to confront Trump in person since U.S. tariffs on steel and aluminium imports from Canada, Mexico and the European Union were imposed last week.

That move unleashed fury in the Group of Seven industrialized nations and prompted quick retaliation from Canada and Mexico and a promise from the EU to do so as well, unnerving investors who fear a trade war that could derail the global economy.

Trump, who has vowed to protect U.S. industry and workers from what he describes as unfair international competition as part of an “America First” agenda, is due to hold bilateral meetings with Trudeau and French President Emmanuel Macron during the summit, Kudlow said.

A French presidency official said that while G7 members would raise their unhappiness over the tariffs with Trump, they would not deliver an ultimatum that he drop them because the summit “isn’t the place where you negotiate things like that.”

The official, speaking to reporters after Macron met Trudeau for talks in Ottawa on Wednesday, said the six non-U.S. G7 nations were united on the main topics to be discussed. The G7 groups Canada, the United States, Japan, Britain, Italy, France and Germany. The EU also attends.

Trump’s meeting with Trudeau could be particularly frosty, given the president’s recent sharp criticism of Canadian trade policies and the anger in Ottawa over Washington’s decision to justify its new tariffs on national security grounds.

Asian stocks battered as market turmoil spreads

Asian stock markets slumped Wednesday as jitters spread over Italy's escalating political crisis and renewed US-China trade tensions.

In morning trading, Japan's Nikkei fell 1.8%, Hong Kong's Hang Seng slid 1.3%, and China's Shanghai Composite was down 2%.

The losses across Asia came after sharp declines Tuesday in Europe and the United States, where the Dow closed down 1.6%.

Traders in Asia said investors were exiting riskier assets such as stocks after political turmoil in Italy sparked fears over the future of the euro and the White House revived plans to slap tariffs on $50 billion worth of Chinese goods.

Italy is headed for new elections after populist politicians failed to form a government, and investors worry the result could throw the European Union into turmoil. They are demanding higher yields to hold Italian government debt.

Investors in Asia are also worried about President Donald Trump's hardening stance on trade with China. The administration announced Tuesday that it would proceed with its proposal to impose 25% tariffs on $50 billion worth of goods from China and place new limits on Chinese investments in US high-tech industries.

The decision was a surprise, coming less than two weeks after China and the United States said they had agreed to put threats of new tariffs on hold.

China's Commerce Ministry said the Trump administration's latest announcement is "obviously in violation of the consensus" reached by the two countries in recent talks.

The gloomy mood may not continue in US markets later Wednesday, though. Dow futures indicated small gains.

World's Top Oil Trader Says No One Will Avoid Iran Sanctions

Global Stock Markets

The world’s top oil trader said it will be near impossible to avoid U.S. sanctions on Iran, suggesting Donald Trump’s attack on OPEC’s third-largest producer may have a bigger impact on the global crude market than many anticipate.

“For us it’s a real challenge,” Vitol Group Chairman Ian Taylor said on Friday at the St. Petersburg Economic forum, adding there are unanswered questions about Europe’s response, and whether the European Central Bank will “stand up” to Trump’s measures. "I personally think none of us will be able to get around it.”

President Donald Trump said May 8 he was withdrawing the U.S. from an international pact on Iran’s nuclear program and reimposing sanctions that will force other nations to cut purchases.

So far, there’s been little clarity about how his actions will impact the oil market because there’s less international support than last time. In particular, it’s been unclear by how much European refineries will cut purchases, if at all.

In the prior sanctions, which ran from 2012 to 2016, a handful of mostly Asian countries carried on purchasing but had to show the U.S. that they were lowering imports to avoid their banks losing access to America’s financial system. European purchasers all withdrew.

Taylor’s comments echo recent remarks by some of the world’s biggest oil companies and traders. Total SA CEO Patrick Pouyanne said nobody can have “any illusions” about European companies being exempt from U.S. sanctions.

Bob Dudley, his counterpart at BP Plc, said his company won’t test the waters when it comes to Iran sanctions.

This time around, Europe is pushing back against Trump’s sanctions, raising the question about whether the bloc will organize a way for imports to continue.

That would require a workaround in the financial market, and probably some new means of insuring tankers bringing cargoes from the Islamic Republic.

Gold holds above $1,300 after Trump ditches North Korea summit

Global Stock Markets

Gold prices steadied on Friday after breaking above $1,300 an ounce in the previous session when US President Donald Trump called off a meeting with North Korean leader Kim Jong Un, fanning political tensions.

Spot gold was flat at $1,304.84 an ounce at 0944 GMT but on track to end the week up 1 per cent for its biggest weekly gain since March.

US gold futures for June delivery were also unchanged at $1,304.40.

Gold is traditionally used as a safe place to park assets ..

Gold tends to move higher when the US dollar weakens because this makes dollar-priced bullion cheaper for buyers with other currencies.

After losing ground on Thursday the dollar strengthened with support from a North Korean statement that it was open to resolving issues with the United States.

Global shares also regained some lost ground after Pyongyang's measured response to Trump's announcement, reducing the clamour for gold as a safer asset.

On the technical side, resistance was at gold's 200-day moving average around $1,307, with Fibonacci support at $1,286.80, ScotiaMocatta analysts said.

Investors were focused on the psychologically important $1,300 level, MKS trader Samuel Laughlin said.

Gold had been trading in a range between about $1,310 and $1,360 since hitting a 1.5 year high in January.

Gold had been trading in a range between about $1,310 and $1,360 since hitting a 1.5 year high in January.

In other precious metals, silver was up 0.1 per cent at $16.64 an ounce, on track for a weekly gain of 1.3 per cent.

Platinum was 0.3 per cent down at $906.24, up 2.7 per cent on the week, while palladium was flat at $974.55 but set to finish with a weekly gain of 1.2 per cent.

Spot gold was flat at $1,304.84 an ounce at 0944 GMT but on track to end the week up 1 per cent for its biggest weekly gain since March.

US gold futures for June delivery were also unchanged at $1,304.40.

Gold is traditionally used as a safe place to park assets ..

Gold prices steadied on Friday after breaking above $1,300 an ounce in the previous session when US President Donald Trump called off a meeting with North Korean leader Kim Jong Un, fanning political tensions.
Spot gold was flat at $1,304.84 an ounce at 0944 GMT but on track to end the week up 1 per cent for its biggest weekly gain since March.

US gold futures for June delivery were also unchanged at $1,304.40.

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Stocks Rebound as Korea Concerns Cool; Oil Falls

European Stock Markets

The Stoxx Europe 600 Index advanced, with most sectors in the green, and equity-index futures pointed to a higher U.S. open as concerns about an escalation in tensions over North Korea’s nuclear program eased. 

WTI crude slumped below $70 a barrel after a Saudi minister said supply would likely be boosted in the second half. Italy’s bonds dropped as worries mounted over its leadership, sending the spread between German and Italian 10-year yields above 2 percentage points. 

Earlier, stocks in Asia saw modest declines.

Investors are are taking a more sanguine view on geopolitical risks, after stocks declined from the U.S. to Asia as President Donald Trump blamed the “tremendous anger and open hostility” from Pyongyang for his decision to scrap his planned meeting with Kim Jong Un. While North Korea’s apparent willingness to keep talking appeared to soothe markets, other risks remain. 

Spain’s biggest opposition party is ready to push for a no-confidence motion against Prime Minister Mariano Rajoy, while tensions around global trade linger.

Elsewhere, Turkey’s lira swung between gains and losses, though still heading for its worst week since in eight years, after the central bank said it would allow exporters to repay dollar-denominated loans in the local currency, while the pound weakened after the European Union dismissed many of the U.K.’s plans for their post-Brexit relationship.


The Stoxx Europe 600 Index rose 0.5 percent as of 11:10 a.m. London time.
Futures on the S&P 500 Index rose 0.2 percent.
The U.K.’s FTSE 100 Index gained 0.2 percent.
Germany’s DAX Index increased 1.1 percent.
The MSCI Emerging Market Index rose 0.3 percent.
The MSCI Asia Pacific Index fell 0.1 percent.

Yen slides from 2-week high after North Korea says still open to talks with U.S.

Asian Stock Markets

The yen stepped back from a two-week high against the dollar on Friday when North Korea said it was open to resolving issues with the United States after President Donald Trump called off a June summit with its leader, Kim Jong Un.

Although the yen and the safe-haven Swiss franc had gained on Thursday in response to heightened worries over global politics, traders were quick to lock in gains ahead of a long weekend in the United States and Britain.

The yen fell 0.3 percent to 109.59 yen in Asian trade following conciliatory comments from North Korean Vice Foreign Minister Kim Kye Gwan.

It had hit a two-week high of 108.955 per dollar overnight in a knee-jerk reaction after President Donald Trump called off the planned summit with Kim.

Trump blamed the cancellation on what he said was Pyongyang’s “open hostility,” and warned that the U.S. military was ready in the event of any reckless acts by North Korea.

The dollar index, which measures the greenback against a basket of six other currencies, was up 0.2 percent at 93.912 and not far from the five-month high it hit on Wednesday.

The dollar had been rising for weeks on its widening yield advantage but lost some of its momentum after minutes of the Federal Reserve’s last policy meeting published on Wednesday were seen as more dovish than markets had expected.

Stock futures flat as auto tariff threat dulls Fed optimism

Global Stock Markets

Worries over U.S. trade protectionism, this time around car imports, weighed on Wall Street’s main indexes on Thursday, overshadowing optimism that the Federal Reserve may be more tolerant of rising inflation than previously expected.

The Trump administration launched a national security probe into car and truck imports that could lead to new tariffs, with Beijing calling the move an “abuse” of national security clauses and saying it would defend its interests.

The decision added to jitters over trade negotiations, reignited after Trump called for “a different structure” in any trade deal with China.

While shares of international automakers skidded on the tariff possibility, shares of U.S. automakers inched higher. Ford (F.N), General Motors (GM.N) and Tesla (TSLA.O) rose between 0.2 to 0.6 percent premarket.

At 7:34 a.m. ET, Dow e-minis 1YMc1 were down 27 points, or 0.11 percent. S&P 500 e-minis ESc1 were down 2 points, or 0.07 percent and Nasdaq 100 e-minis NQc1 were down 0.75 points, or 0.01 percent.

Wall Street posted small gains on Wednesday after minutes from the Fed’s latest meeting suggested higher inflation may not result in faster interest rate hikes.

Shares of Victoria’s Secret-owner L Brands (LB.N) fell 5.9 percent, while those of data storage equipment maker NetApp (NTAP.O) dropped 3.9 percent following the companies’ weak forecasts.

Williams-Sonoma (WSM.N) jumped 11.8 percent after the Pottery Barn owner posted strong quarterly results and gave a healthy forecast.

Initial jobless claims is expected to have fallen to 220,000 for last week, from 222,000 the week before. Data is due at 8:30 a.m. ET.

Asian shares under pressure with Trump tempering Sino-U.S. trade optimism

Asian Stock Markets

Asian shares were mostly weak on Wednesday with investors cautious after U.S. President Donald Trump tempered optimism over progress made so far in trade talks between the world’s two largest economic powers. 

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.2 percent, while Japan's Nikkei .N225 lost as much as 1.4 percent to hit a 1-1/2-week low and the Shanghai Composite Index .SSEC retreated 0.6 percent.

On Wall Street, the S&P 500 .SPX shed 0.31 percent overnight, losing steam after hitting a two-month high.

Trump said on Tuesday he was not pleased with recent trade talks between the United States and China, souring the improved market sentiment following weekend comments from U.S. Treasury Secretary Steven Mnuchin that the “trade war” is “on hold”.

His remarks followed Beijing’s announcement that it would cut import tariffs for automobiles and car parts.

Trump also floated a plan to fine ZTE Corp (000063.SZ), (0763.HK) and shake up its management as his administration considered rolling back more severe penalties.

Further weighing on prices of risk assets, Trump also said there was a “substantial chance” his summit with North Korean leader Kim Jong Un will not take place as planned on June 12 amid concerns that Kim is resistant to giving up his nuclear weapons.

Investors fret Abe’s long-running cronyism scandal could attract more attention as the Ministry of Finance is due to release related documents on Thursday.

The cautious mood helped to underpin bonds. The 10-year U.S. Treasuries yield US10YT=RR stood at 3.054 percent, off Monday’s near seven-year high of 3.128 percent.

As lower U.S. yields sap the appetite for the dollar, the euro traded at $1.1754 EUR=, hovering above Monday's five-month low of $1.1717.

Against the yen the dollar slipped 0.4 percent to 110.47 JPY= from Monday's four-month high of 111.395.

The biggest mover in the currency market was the Turkish lira TRYTOM=D3, which fell more than two percent early on Wednesday to a record low of 4.8450 after rating agencies sounded the alarm on Tuesday over plans by President Tayyip Erdogan to tighten his grip on monetary policy.

The lira has fallen almost 15 percent so far this month.

In commodities, oil prices held firm near 3-1/2-year highs on potential supply concerns surrounding Venezuela and Iran.

U.S. West Texas Intermediate (WTI) crude CLc1 futures traded little changed at $72.01 a barrel, a 0.26 percent loss. They touched $72.83 a barrel, the highest since November 2014, on Tuesday.

Brent LCOc1 futures stood at $79.23 a barrel. Last week, the global benchmark topped $80 for the first time since November 2014.

Bitcoin BTC=BTSP dropped below $8,000 to five-week lows, entering a downtrend channel on technical charts. The cryptocurrency last traded at $7903.61, down 1.0 percent on the day.

Nikkei suffers biggest fall in two months with return of trade worries

Japan’s Nikkei share average suffered its biggest fall in two months on Wednesday, as comments from U.S. President Donald Trump rekindled worries about trade friction, hurting steelmakers and shippers among others.

The Nikkei tumbled 1.2 percent to 22,690, after sliding to 22,650 earlier, the weakest intraday level since May 11.

Trump on Tuesday said he was not pleased with recent trade talks between the United States and China, checking hopes that the world’s two biggest economies were on course to hammer out a deal.

U.S. Treasury Secretary Steven Mnuchin has earlier said that trade war is “on hold”, sending the

Nikkei over the psychologically important 23,000 level on Monday.

Trump’s latest remarks followed Beijing’s announcement that it would cut import tariffs for automobiles and car parts.

Shippers were under pressure, with Mitsui OSK Lines and Kawasaki Kisen dropping 2.8 percent and 2.9 percent, respectively.

Steelmakers fell 1.4 percent, with JFE Holdings shedding 3.5 percent.

The broader Topix skidded 0.7 percent to 1,797, with small shares outperforming large cap shares.

Topix Small eased 0.1 percent, compared to a 0.9 percent fall in Topix Core 30. So far this week, the

Topix Small is down 0.2 percent whereas the top 30 firms are down 1.4 percent.

Stock index futures rise as U.S.-China trade talks progresses

Global Stock Markets

U.S. stock index futures rose on Tuesday on signs of further progress in trade talks between the United States and China as the world’s two largest economies pull back from the brink of a full-blown trade war. 

Washington neared a deal to lift its ban on U.S. firms supplying Chinese telecoms gear maker ZTE Corp (000063.SZ), sources said on Tuesday, and Beijing said it will steeply cut import tariffs for automobiles and car parts.

Shares of Ford (F.N), General Motors (GM.N), Tesla (TSLA.O), as well as the U.S.-listed shares of Ferrari (RACE.N) and Fiat (FCAU.N), were up between 0.8 percent and 2.4 percent in premarket trading.

The stock market has generally been volatile this year on a combination of factors including the fear of higher inflation spurring faster U.S. interest rate hikes and worries over a global trade war.

While investors may be relieved over the easing trade tensions, many U.S. government and industry officials view President Donald Trump is backing off from his tough stance against what they see as China’s unfair trade and market access practices.

At 7:26 a.m. ET, Dow e-minis 1YMc1 were up 55 points, or 0.22 percent. S&P 500 e-minis ESc1 were up 5 points, or 0.18 percent and Nasdaq 100 e-minis NQc1 were up 26.5 points, or 0.38 percent.

Micron (MU.O), which raised its quarterly forecast and led the chipmakers higher on Monday, jumped 5.3 percent after announcing a $10 billion share buyback.

Facebook (FB.O) edged up 0.3 percent ahead of Chief Executive Mark Zuckerberg’s defense of the company’s data practices to European lawmakers in Brussels. The testimony starts at 12:15 p.m. ET and comes three days before tough new European Union rules on data protection take effect.

The possibility of a ZTE reprieve boosted shares of optical component makers. Acacia Communications (ACIA.O), which got 30 percent of its 2017 revenue from ZTE, rose 4.6 percent, while Oclaro (OCLR.O) gained 1.4 percent.