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Market Talk Roundup: Latest on Trump, U.S. Politics

26 Jul 2018 6:43 am

The latest Market Talks covering President Donald Trump and U.S. politics. Published exclusively on Dow Jones Newswires throughout the day.

0243 ET - Oil markets will probably have to brace for bigger supply losses than during prior US sanctions regimes against Iran, says RBC commodity strategy chief Helima Croft. That's "because the Trump administration is prepared to be much-more aggressive in using the sanctions." She sees the White House's aim being "to basically take Iran out of the market. That was not the goal of the Obama administration." She estimates that 600,000-700,000 barrels/day of oil won't reach the market by 4Q and likely top 1 million in 1Q. The sanctions will be phased in through November. (biman.mukherji@wsj.com)

2139 ET - So far US President Trump has been positive for share markets, but this year the focus is increasingly shifting to populist policies with greater risk for investors, says Shane Oliver, chief economist at AMP Capital Markets. Key risks relate to trade conflict and the expanding U.S. budget deficit, although the latter is more a risk for when the U.S. economy turns down next. The best approach for investors in relation to Trump is to turn down the noise given the often contradictory and confusing news flow he generates, Oliver says. (james.glynn@wsj.com; @JamesGlynnWSJ)

1757 ET - Canada intends to make its case before Commerce Department that the country's uranium exports don't pose a national-security threat to the US, Foreign Minister Chrystia Freeland tells reporters during a teleconference from Mexico. The Trump administration unveiled plans to probe uranium imports last week to determine whether tariffs on national-security grounds are required. Freeland said "having access to a safe and reliable supplier" of uranium like Canada, which happens to be a NATO and Norad ally, "is very much in the national security interest of the US." Trade watchers view the uranium probe as another way for the Trump administration to exert pressure on Canada to make concessions at the Nafta talks. Canada is the top foreign supplier of uranium to the US. (paul.vieira@wsj.com; @paulvieira)

1743 ET - Speaking to reporters via teleconference from Mexico, Canadian Foreign Minister Chrystia Freeland applauds efforts by the Trump administration and EU to take a step back from a full-scale trade row. The US and EU agreed to hold off on proposed car tariffs. The two countries also pledged to resolve their dispute over tariffs on steel and aluminum, which the US imposed on Europe and other allies, like Canada, on national-security grounds. "Any act taken by the US administration to pull back from imposing these [national-security] tariffs is a really good thing," she says, without elaborating on what effect that might have on Nafta talks. (paul.vieira@wsj.com; @paulvieira)

1710 ET - Copper prices bounce after the EU and US indicate they are coming to an agreement to de-escalate their recent trade dispute. President Trump says the two will resolve steel and aluminum tariffs, along with plans to ramp up trade in soybeans, liquefied natural gas and other goods. Copper futures fall to the lowest point in over a year as tensions between the US and trading partners increased, with market participants betting that economic growth and industrial demand would suffer. Comex September copper futures rise 2% to $2.867 a pound in after-hours trading, with platinum and palladium also climbing. Gold, which often finds buyers at times of heightened tension, inches lower. (benjamin.parkin@wsj.com; @b_parkyn)

1651 ET - The loonie strengthens against the US dollar amid easing trade concerns and rising oil prices. The US dollar was recently down 0.9% at C$1.3042, its lowest since last week. The loonie will likely continue to gain if there is positive sentiment Thursday when Canada and Mexico meet to discuss Nafta, analysts say. (orla.mccaffrey@wsj.com; @Orla_McCaffrey)

1646 ET - Canadian government bond prices fall after the EU agreed to make certain tariff concessions to avoid an all-out trade war with the US, WSJ reported. Yields on the benchmark 10-year Treasury note were recently at 2.280% from 2.227% on Tuesday. Yields, which rise as bond prices fall, had risen slowly throughout the day before the afternoon report on trade, when they reached their highest levels in more than a month. "This is definitely constructive news for Canada on the trade front," TD Securities says. But the news must be taken with caution, the firm says, as Nafta talks are still ongoing. (orla.mccaffrey@wsj.com; @Orla_McCaffrey)

1635 ET - President Trump says the EU will start buying more US soybeans "almost immediately," WSJ reports, alongside other concessions designed to ease the trade dispute. The EU is the world's second largest buyer of oilseeds after China, which this month introduced tariffs on US soybean imports. But the 15.3M metric tons the USDA expects the EU to bring in 2018-19 is modest compared with China's 95M. That means increased business with EU alone likely won't be enough to offset the lost demand from China, which has shifted purchases to Brazil. South American prices have surged as American prices sagged, giving European importers all the more reason to shop in the US. (benjamin.parkin@wsj.com; @b_parkyn)

1635 ET - President Trump says the EU will start buying more US soybeans "almost immediately," WSJ reports, alongside other concessions designed to ease the trade dispute. The EU is the world's second largest buyer of oilseeds after China, which this month introduced tariffs on US soybean imports. But the 15.3M metric tons the USDA expects the EU to bring in 2018-19 is modest compared with China's 95M. That means increased business with EU alone likely won't be enough to offset the lost demand from China, which has shifted purchases to Brazil. South American prices have surged as American prices sagged, giving European importers all the more reason to shop in the US. (benjamin.parkin@wsj.com; @b_parkyn)

1610 ET - Shares of industrial companies rose after WSJ reported the EU agreed to lower industrial tariffs. WSJ reported that the Trump administration had secured some concessions from the EU to avoid a trade war. Companies that rose on the news include United Technologies, Boeing, Harris, Raytheon, Allegion, Honeywell International, Roper and 3M. The S&P Industrials closed up 1.3%, compared to the 0.9% rise of the S&P 500 as a whole. (austen.hufford@wsj.com; @austenhufford)

1546 ET - US stocks jump to session highs in the last half hour of trading after an EU official says President Trump has secured concessions to avoid a trade war. As part of the negotiations, the EU is set to agree on lowering industrial tariffs and work on more LNG exports from the US. The Dow is now up 95 points, or 0.4%, to 25342, while the S&P 500 rises 0.7% and the Nasdaq Composite adds 0.9%. (akane.otani@wsj.com; @akaneotani)

1329 ET - Cotton futures rise 1.5% to 87.97 cents a pound after the Trump Administration responds to agriculture's trade concerns with a $12B farm aid package to east concerns over trade disputes. The cotton market has worried about demand from China after some buyers there turned to India for supply over retaliatory tariffs on US cotton. US crop conditions are also keeping the market supported, says Price Futures Group, but the ongoing tariffs battle has kept a lid on prices. (julie.wernau@wsj.com)

(END) Dow Jones Newswires

July 26, 2018 02:43 ET (06:43 GMT)

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