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Trade chief: EU and US to discuss steel, chips, planes cooperation
Maros Séfcovic, European Commissioner for Trade, said that the European Commission and the United States are discussing possible cooperation in such sectors as aerospace, semiconductors, critical minerals, and steel. Sefcovic said that he spoke to his U.S. counterparts on an every-other-day basis to try to reach a deal limiting tariffs. Another call is due to take place on Thursday. "What we're looking at is first and foremost all the tariff lines. What can we do? How can we approach the market from this new perspective?" He told a news conference. Sefcovic stated that he discussed with U.S. secretary Howard Lutnick possible areas of transatlantic cooperation which would benefit both parties, naming aviation and semiconductors as well as steel, dependencies, especially for critical minerals, and steel. He said: "I am absolutely convinced that two of the largest trading partners in the world... simply need to find the best possible framework for trade and investment." We are working on this. "The intensity is high and I hope this will lead to the fair and balanced outcome in the end," said he. The European Commission (EC), which oversees the trade policy of the EU's 27 member states, has said that it believes the trade talks with the United States have gained new momentum this week, after President Donald Trump dropped the threat to impose tariffs of 50% on EU imports. This was after Trump's phone call with Ursula von der Leyen, the head of the Commission. They agreed to speed up talks. The EU wants an end to the 25% tariffs on cars and steel, and Trump should drop his "reciprocal tariff", which was initially set at 20% but is now held at 10% for a 90-day break until July. Washington is determined to reduce its goods trade deficit, which was nearly 200 billion euros ($226billion) last year. However, it has a large, but smaller, surplus in the services sector. ($1 = 0.8843 euro) (Reporting and Writing by Federico Maccioni, Editing by Mark Porter).
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BMW, Mercedes, VW seek tariff relief in return for US investment, Handelsblatt reports
The Handelsblatt reported that German automakers BMW, Mercedes-Benz, and Volkswagen were in discussions with the U.S. Department of Commerce about a tariff agreement which would include a mechanism for offsetting imports and exports. The report cited company sources to say that in exchange for tariff relief the companies would be able to invest billions of dollars in the United States. The report did not provide a specific amount. According to Handelsblatt, the goal is to reach a deal as early as July. BMW refused to comment. Mercedes and Volkwagen were not available to comment when contacted. Handelsblatt declined to comment. Following the report, shares of carmakers rose. BMW was up 3.1%; Volkswagen 2.2%; and Mercedes 1.8%. Germany's automakers, already struggling to cope with the protracted downturn in German industry as well as stiff competition from overseas, are now facing a new challenge. Fighting to stem The impact of import tariffs under U.S. president Donald Trump There is some optimism among executives. Volkswagen subsidiary, the largest auto exporter from the U.S. Recently, it was reported that there could be some movement in the next few months. BMW said that progress could be expected in July. Mercedes has also responded to the threat of tariffs with plans to Add production The GLC SUV is produced in Tuscaloosa Alabama. Reporting by Christina Amann, Victoria Waldersee and Rachel More Writing by Madeline Chambers Editing by Madeline Chambers
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Shares of Brazilian steel companies fall after the government renews tariff system
The stocks of Brazilian steel companies dropped on Wednesday, after the government announced that it would extend for another 12 months the system designed to protect the steel industry in Brazil. However, steelmakers said the system was ineffective. Why it's important Steel industry criticised the quotas almost immediately after they were introduced last year. They claimed that it did not control the imports, mostly from China. Steel products are allowed to enter the country as long as they do not exceed the import quota. They will have to pay an import tax between 9% and 16 %. Agencia Brasil, the Brazilian government's news outlet, said that if the cap is exceeded a 25% tax will be applied. MARKET REACTION CSN fell 4.4% on the first trading day following the announcement. Usiminas was down 3.6%, and Gerdau was down 1.2%. Brazil's benchmark index Bovespa dropped only 0.5%. CONTEXT Sector critics had already complained that the system was too broad. The government's announcement on Tuesday retained the exclusion of imports that come from countries with which Brazil has signed trade agreements or special conditions. Steel industry has asked the government to extend the scheme and include all steel products under the 25% tariff as done by the European Union (EU) and the United States. By the Numbers Aco Brasil did not make any comment on this matter on Wednesday. (By Alberto Alerigi Jr.; Writing by Isabel Teles, Editing by Barbara Lewis.)
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Sources say that Putin's peace demands include a stop to NATO expansion.
According to three Russian sources familiar with the negotiations, President Vladimir Putin has set conditions to end the war in Ukraine. These include that Western leaders commit in writing to stop expanding NATO eastwards as well as lifting a portion of sanctions against Russia. Donald Trump, the U.S. president, has said repeatedly that he wants the European conflict to be over. He has also shown growing frustration towards Putin in recent weeks. On Tuesday he warned the Russian leader 'playing with fire' by refusing ceasefire talks with Kyiv while his forces were making gains on the battlefield. Putin told Trump that after a two-hour conversation last week, he agreed to work on a document with Ukraine that would outline the terms of a peace agreement, including when a ceasefire will be implemented. Russia is drafting their version of the document and has no idea how long it will take. Kyiv, as well as European governments, have accused Moscow for stalling its troops' advance in the east Ukraine. One senior Russian source, speaking on condition of anonymity and with intimate knowledge of the Kremlin's thinking, said that Putin is willing to make peace at any cost. Three Russian sources have said that Putin wants an "written" commitment from major Western powers to not expand the U.S. led NATO alliance eastwards. This is a shorthand way of formally excluding Ukraine, Georgia, Moldova and other former Soviet Republics. The three sources also said that Russia wants Ukraine to remain neutral, certain Western sanctions lifted, a solution for the frozen Russian assets in the west, and protection of Russian speakers in Ukraine. First source: If Putin is unable, on his terms, to achieve a peaceful settlement, he'll try to demonstrate to the Ukrainians and Europeans, through military victories, that "peace tomorrow would be even more painful". The Kremlin has not responded to a request for a comment about'reporting. Putin and Russian officials repeatedly stated that any peace agreement must address the "root cause" of the conflict. This is Russian shorthand for NATO expansion and Western support for Ukraine. Kyiv repeatedly stated that Russia shouldn't be given veto rights over Ukraine's aspirations to become a member of the NATO alliance. Ukraine wants the West to provide a solid security guarantee that is backed up by teeth in order to deter future Russian attacks. The administration of President Volodymyr Zelenskiy did not reply to a comment request. NATO has said in the past that it would not change its policy of "open doors" just because Moscow demanded it. The 32-member alliance's spokesperson did not answer any questions. Putin sent tens-of-thousands of troops to Ukraine in February 2022, after eight years fighting between separatists backed by Russia and Ukrainian troops in the east of Ukraine. Russia controls less than one fifth of Ukraine. The Russian advance has accelerated in the last year. However, both Russia and Ukraine are paying a heavy price for the war. In January, it was reported that Putin had become increasingly concerned about the economic distortions of Russia's wartime economies. This is due to labour shortages as well as high interest rates implemented in order to combat inflation. Oil, which is the foundation of Russia's economic system, has been steadily declining in price this year. Trump, who boasts of his friendly relationship with Putin, and believes that the Russian leader is seeking peace, warned Washington it could impose additional sanctions if Moscow delayed efforts to reach a settlement. Trump suggested on social media that Putin was "absolutely CRAZY", for unleashing an aerial attack against Ukraine last week. First, the source stated that Putin would move further into Ukraine in the event he saw an opportunity to do so on the battlefield. The Kremlin also believed that Russia could continue fighting for many years despite the economic and political pressures imposed by Western countries. Second source: Putin is less willing to compromise with regards to territory, and is sticking to his public position that he wants to claim the entire four regions of eastern Ukraine. The second source stated that Putin has reaffirmed his position on the issue of territory. NATO Enlargement As Trump and Putin battled in public about the prospects for peace in Ukraine could not tell if the intensification of war and the hardening of positions signaled a determination to reach an agreement or a collapse of talks. In June of last year, Putin laid out his first terms for an end to the conflict immediately: Ukraine must abandon its NATO ambitions and remove all its troops from four Ukrainian regions that are claimed by Russia and largely controlled by them. Russia controls more than 70% Donetsk and Zaporizhzhia regions, as well as almost all of Luhansk. Russia also controls a small part of Kharkiv, Sumy and Kherson regions and threatens Dnipropetrovsk. The former U.S. president Joe Biden and Western European leaders, as well as Ukraine, have repeatedly called the invasion an imperialistic land grab. They also vowed that they would defeat Russian forces. Putin sees the war in the context of the watershed moment for Moscow's relationship with the West, which he claims humiliated Russia in 1991 after the Soviet Union collapsed by expanding NATO and encroaching upon what he believes to be Moscow's sphere. In 2008, NATO leaders in Bucharest agreed that Ukraine and Georgia will one day be members. In 2019, Ukraine amended its constitution to commit to full membership in NATO and the European Union. Trump said that the U.S.'s previous support for Ukraine’s NATO membership bid caused the war and indicated that Ukraine would not be granted membership. The U.S. State Department has not responded to a comment request on this story. Putin, who became the Kremlin's top official in 1999, has returned to NATO enlargement several times, including his most detailed remarks on a possible peaceful future in 2024. Just two months prior to the Russian invasion in 2021, Moscow presented a draft of an agreement with NATO that, under Article 6 would bind NATO "to refrain from any further expansion of NATO, which includes the accession of Ukraine and other States." At the time, U.S. diplomats and NATO officials said that Russia had no veto over the expansion of the alliance. Russia wants to see a written commitment from NATO because Putin believes that the United States misled Moscow after the fall of the Berlin Wall in 1989 when U.S. Secretary James Baker told Soviet leader Mikhail Gorbachev, in 1990, that NATO wouldn't expand eastward. William J. Burns, the former director of Central Intelligence Agency, said that there was a verbal agreement, but it never became formalized. It was also made before the fall of the Soviet Union. NATO, which was founded in 1949 as a means of providing security against the Soviet Union says that it does not pose a threat to Russia, even though the 2022 assessment on peace and security within the Euro-Atlantic region identified Russia as the "most significant and direct danger". Finland joined NATO in 2023 after the Russian invasion of Ukraine in that same year. Sweden followed in 2024. Western European leaders have said repeatedly that if Russia won the Ukraine war it could attack NATO one day - which would trigger a global war. Russia has dismissed such claims as scaremongering but also warned that the conflict in Ukraine could escalate. (Reporting in Moscow; Editing by Daniel Flynn).
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Gold prices rise on bargain-hunting ahead of Fed minutes
The gold price rose on Wednesday, as traders looked for bargains after the previous session's losses. Meanwhile, the market is still focused on the minutes of the Federal Reserve's newest policy meeting that will be released later in the day. Gold spot gained 0.4% by 8:56 am EDT (1255 GMT) to $3,312.05 per ounce, after hitting a low of $3285.19 in the previous session. U.S. Gold Futures increased 0.3% to $3310.60. The gold market has been choppy lately, only reacting to daily fundamental news with no real trending in price. Jim Wyckoff said that the market is nearing its top. The minutes can move the market. The market watchers will be looking for new comments about inflation this afternoon." The minutes of the Fed’s May policy meeting will be released at 2 pm EDT (1800 GMT). The meeting was held amid increased concern about global trade tensions following President Trump's announcement in early April of new major import tariffs. A week later, some of the most aggressive import tariffs were reduced or delayed. Gold has risen 26% this year, and reached a record-high in April. It is a good investment in low interest rate environments and can be a haven in times of uncertainty. Goldman Sachs suggested on Wednesday that long-term portfolios should include a higher allocation of gold than usual, citing increased risks to U.S. institution credibility, the Fed's pressure, and continued central bank demand. The focus is also on Friday's Personal Consumption Expenditures data (PCE) and comments by U.S. Central Bank officials. Data showed that gold imports into Switzerland from the United States rose to their highest level monthly since at least 2012. This was after precious metals were excluded from U.S. tariffs on imports. Silver spot fell by 0.3%, to $33.20 per ounce. Platinum rose 0.8%, to $1,088.65, and palladium dropped 0.6%, to $972.36. (Reporting and editing by Jan Harvey, Emelia Sithole Matarise, Ashitha Shivaprasad)
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Grossi: Any US-Iran agreement should include a 'robust IAEA inspection'
Rafael Grossi, the chief of the International Atomic Energy Agency (IAEA), said that any deal between Iran and America which would impose new nuclear restrictions on Iran must include "very rigorous" inspections from the U.N. watchdog. Both countries are currently holding talks to curb Iranian nuclear activities, which have accelerated rapidly since Donald Trump pulled Washington from a 2015 agreement between Iran and major power that limited these activities. Iran increased its enrichment of uranium purity as the deal unraveled. Up to 60% The deal has increased the amount of nuclear weapons-grade material to approximately 90%, up from the 3.67% that was allowed under the 2015 pact. The deal also removed the extra IAEA supervision imposed by that 2015 agreement. Grossi said that "my impression is that, if you had such an agreement, then a robust, solid inspection by the IAEA would be a requirement, and I am sure that it will be. Because it would mean a very, serious commitment from Iran, that must be verified." He did not say that Iran should resume the implementation of the Additional Protocol. This is an agreement between IAEA member states and the IAEA which broadens IAEA supervision to include quick inspections of undeclared nuclear sites. Iran implemented the deal under the 2015 agreement, up until the U.S. withdrawal in 2018. Grossi responded that he was "very practical" and added that the subject of the talks did not include the protocol. Grossi said that the IAEA was not a part of the discussions, but he had been in contact with both sides including Steve Witkoff, the U.S. Special Envoy. "I don't believe they are talking about it in this way. I don't think the discussion is about whether or not legal norms should be applied. Grossi said that he tends to view this more as an ad-hoc approach. Grossi says that while the talks appear to be stuck, the U.S. has repeatedly said Iran shouldn't be allowed to refine any uranium, and Tehran insists that this is a redline since enrichment of uranium is their inalienable rights, Grossi believes that the gap can be bridged. He said, "I believe there is always a solution." It's not impossible for the two sides to be reconciled. (Reporting and editing by Sharon Singleton, Mark Heinrich and Francois Murphy)
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Russian Finance Minister returns to idea of adjusting the oil price budget rule
The Finance Minister Anton Siluanov stated on Wednesday that an adjustment to the $60 oil price cut-off for Russia's Budget Rule should be considered. This could affect Moscow's capacity to increase spending and accumulate cash reserves. According to the budget rule the Finance Ministry can sell foreign currency from the National Wealth Fund for rainy days in order to cover any shortfalls in oil and gas export revenues, or purchase it if there is a surplus. Siluanov, who had earlier argued in favor of a change to the cut-off prices, has recently ruled it out for the budget for the next three years. In response to a question from a legislator on Wednesday about Russia's diminishing reserves, he seemed to switch tack again, saying that the issue would be considered when formulating budget policies. Siluanov stated that "we need to consider whether we should, when preparing the budget for the next medium-term period, look at the price cut-off level... and to what extent this corresponds to today's levels which allow us to not only ensure the preservation of National Wealth Fund but also its replenishment." Since the Russian invasion of Ukraine in February 2022, Russia's fiscal buffers are shrinking. Moscow has been using its wealth fund to finance deficits and support government-owned enterprises. On May 1, the fund's liquid assets were $40.4 billion, down from $112.7 before the invasion. Oil prices, which are the foundation of Russia's export oriented economy, allow Russia to put money aside. However, with Brent futures at about $60 per barrel and Urals crude falling even further, Moscow's finances have been under pressure. The lower price would enable Russia to save petrodollars. However, analysts note that this may not be possible, given the amount of money Moscow is spending on the Ukraine war. Reporting by Darya Kosunskaya, Writing by Alexander Marrow, Editing by Alison Williams & Helen Popper
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The Russian central bank defends its high interest rates while warning of the risks associated with oil prices
In a report published on Wednesday, the Russian central bank defended their tight monetary policies, saying that high rates contributed to a slower lending pace and signs of deflation. However, they cited low oil prices for a major risk to the Russian economy. The central bank has been battling high inflation for months, and has resisted the growing pressures to lower borrowing costs. At the same time, critical companies have cut back on their investment plans, while government officials are complaining about a slowing economy. On Monday, Economy Minister Maxim Reshetnikov said that the cooling economy faced "hypothermia", and urged the Central Bank to consider the slowing inflation when they next meet to set interest rates in June. In a review of financial stability, the bank said that "tight monetary policies are a temporary factor and necessary for a sustained reduction in inflation." It has kept its key interest rates at 21% since last October. The central bank sought to cool the overheating caused by the military spending boom in the past two years with higher rates. The growth of Russia's domestic product slowed from 4.5% to 1.4% during the first quarter. The bank stated that external conditions are still difficult. It cited risks such as global market volatility and trade wars, along with the possibility of increased sanctions towards Moscow. The bank warned that further drops in the prices of Russia's export products, notably oil, could be a "key" risk for Russia. Price drops can affect exporting companies' revenue and, therefore, the budget. The bank stated that the overall risk to financial stability is limited because of Russia's low level of debt and its reserves, which were accumulated over years with high oil prices. The bank stated that the increased credit restructuring of large and medium-sized Russian firms at the end March was only a temporary phenomenon, expressing its confidence that most companies are resilient to interest rate risks. The bank stated that banks should still conduct regular stress testing to ensure the stability of corporate loan portfolios.
Dow goes beyond 40,000, world stocks hit record amid rate cut hopes
The Dow Jones commercial average crossed the 40,000 level on Thursday for the very first time and a world stock index scored a 3rd straight record intraday high in the middle of U.S. rate of interest cut hopes and strong incomes before stocks turned primarily flat in afternoon trading.
Data on Wednesday revealed cooling customer price inflation, although that was balanced out on Thursday by news that U.S. jobless claims fell in the latest week and by figures showing U.S. import costs increased 0.9% last month.
That data boosted U.S. Treasury yields and the dollar.
The S&P 500 and Nasdaq also hit record highs in early New York trading and were little bit altered by afternoon.
Shares of Walmart jumped 7% after the retail giant raised its fiscal 2025 sales and revenue forecast.
The Dow Jones Industrial Average rose 13.70 points, or 0.03%, to 39,921.54, after earlier breaching the 40,000 level. The S&P 500 lost 2.01 points, or 0.04%, to 5,306.24 and the Nasdaq Composite lost 17.50 points, or 0.10%, to 16,725.09.
What (the Dow hitting 40,000) implies is that despite the concerns about inflation and customer belief, the business in the Dow, which represent a cross section of our economy, continue to march higher on much better profits and more powerful assistance, stated Quincy Krosby, primary global strategist at LPL Financial in Charlotte, North Carolina.
MSCI's gauge of stocks throughout the world increased 1.14 points, or 0.14%, to 794.91, after striking a third straight record intraday high. The STOXX 600 index fell 0.21%.
Overnight in Asia, Chinese and Hong Kong residential or commercial property shares had likewise rallied after reports that Beijing was considering a plan for local governments to buy up millions of unsold homes across the nation.
The dollar index, which measures the US currency against a basket of currencies including the yen and the euro, gained 0.26% at 104.47, with the euro down 0.14% at $ 1.0867.
Versus the Japanese yen, the dollar enhanced 0.26% at 155.27.
Data on Thursday revealed the variety of Americans filing new claims for welfare fell 10,000 to a seasonally adjusted 222,000 in the current week, showing a still-strong labor market.
Benchmark 10-year yields were last up 2.1 basis points to 4.377%, after earlier being up to 4.313%, the most affordable since April 5.
U.S. crude got 60 cents to settle at $79.23 a. barrel and Brent increased 52 cents to settle at $83.27.
Area gold fell 0.1% to $2,383.22 per ounce as of 1645. GMT, after striking its greatest because April 19 earlier in the. session. Bullion rose more than 1% on Wednesday.
(source: Reuters)