Saturday, 29 June 2019

Weekend Update 29/06/2019 The G-20. What happened?


Baltic Dry Index. 1354 +14     Brent Crude 66.55

Never ending Brexit now October 31, maybe.
Trump’s Nuclear China Tariffs Now In Effect.
USA v EU trade war postponed to November, maybe.

'Some people make things happen. Some people watch things happen. And some people wonder, 'what  happened?'

For now the outcome of the two Presidents meeting in Japan is unknown, though the spin meisters are expected to be very active later in the day. The G-20 final communique is still being finalised. What happened?

For now, other less reported news. Continental Europe swelters in record and near record heat. The USA economy seems to be rolling over, joining the rest of the world. China imports Iranian oil. Everyone’s bugging everyone else. The USDA loses the plot. June 29, 1377, a day that will live in infamy (or not.) The monthly Coppock Indicators give out a mixed signal for the summer. Sell in May, go away….

Trump, Xi hold high-stakes trade war talks at G20 in Japan

June 29, 2019 / 12:39 AM
OSAKA (Reuters) - U.S. President Donald Trump said on Saturday he was open to a potentially “historic” trade deal with Chinese President Xi Jinping, as they began talks that could ease tensions or plunge the world’s two largest economies into a deeper trade war.

The dispute has already cost companies in both countries billions of dollars, disrupted global manufacturing and supply lines, and roiled global markets.

Trump and Xi were meeting on the sidelines of a Group of 20 (G20) summit in Osaka, western Japan, where the trade feud including a dispute over Huawei Technologies Co [HWT.UL] has raised concerns about its threat to global growth.

“I actually think that we were very close and ... that something happened where it slipped a little bit, and now we’re getting a little bit closer,” Trump told Xi as the cameras rolled at the start of the closely-watched talks.

“But it would be historic if we could do a fair trade deal.

“We’re totally open to it, and I know you’re totally open to it.” He gave no details of what a deal would entail.

The U.S. president has said he would extend existing tariffs to cover almost all imports from China into the United States if there was no progress from the meeting on wide-ranging U.S. demands for economic reforms.

Xi told Trump he was ready to exchange views on fundamental issues and stressed the need for dialogue over confrontation.

---- China’s Global Times, published by the ruling Communist Party’s official People’s Daily, said earlier on Saturday the world had to “contain capricious U.S. actions”, pointing to examples like Trump withdrawing from the Paris climate accord.

“The world needs to rein in the U.S., although it’s difficult,” the paper said in an editorial.
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Explainer: U.S.-China trade war - the levers each country can pull

June 28, 2019 / 7:23 PM
---- Negotiations between the two sides on trade broke down in May. Since then, the trade war has escalated with both sides imposing higher tariffs on the other, and Trump declaring Chinese telecommunications giant Huawei Technologies a national security threat. 

Trump has said he could hit China with more tariffs, depending on the outcome of the meeting with Xi. Neither side has softened its position ahead of the meeting.

The following are some other possible pressure points for each side:

RARE EARTH METALS

Xi visited a rare earth firm in southern China in May, fuelling speculation that China could cut off supplies of the metals, a key ingredient in high-technology consumer electronics and military equipment, to the United States as part of the trade war. China supplies 80% of U.S. rare earths.

HIKING TARIFFS FURTHER

China could impose tariffs on around $10 billion (£7.9 billion) of U.S. goods that as yet carry no retaliatory tariffs. Beijing removed some tariffs on American car imports in December, and could reimpose them.

China could raise tariffs from 25 percent on some U.S. goods such as soybeans. China was the top buyer of U.S. soybeans until the trade war, which came close to halting the flow altogether. If it raises tariffs again, Chinese soy importers will seek more supplies from Brazil and elsewhere, as they did in 2018, which would hurt U.S. farmers. These are targeted tariffs, aimed at the U.S. farming community that helped Trump win the presidency in 2016.

High-tech items, such as semiconductor manufacturing equipment and chips, would be unlikely to feature on a list for higher tariffs because China cannot easily find alternatives.

China has so far spared Boeing Co (BA.N) passenger jets, its single most valuable U.S. import, from tariffs. Chinese carriers are expanding rapidly to meet rising demand, so tariffs on Boeing could slow development of the domestic travel industry.

China could buy more aircraft from France’s Airbus (AIR.PA) instead of Boeing, which would make it more reliant on Europe for a few years until it completes development of homegrown commercial aircraft, the COMAC C919.
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Chicago PMI falls to 49.7 in June, first time in contraction territory in two years

By Greg Robb Published: June 28, 2019 9:53 a.m. ET
A measure of business conditions in the Chicago region fell in June into contraction territory for the first time since January 2017. The Chicago PMI business barometer declined to 49.7 in June from 54.2 in May, MNI Indicators said Friday. Any reading below 50 indicates worsening conditions. The index had been as high as 64.7 just four months ago. 

The survey found that 80% of the firms said that trade tariffs had negatively impacted their businesses, with prices rising leading to a pullback in orders. "With customers rethinking their purchases, demand tumbled, and consequently firms pulled back production, weakening overall sentiment," said Shaily Mittal, senior economist at MNI.

Consumer sentiment weakens in June on tariff concerns

By Steve Goldstein Published: June 28, 2019 10:05 a.m. ET
The numbers: The University of Michigan said the final reading of its consumer sentiment index in June was 98.2, down from the 100 reading in May.

Economists polled by MarketWatch expected a 98 reading.

What happened: Wealthier Americans got rattled over tariffs. Households with incomes in the top third of the distribution were responsible for the decline, according to the University of Michigan, and tariffs were mentioned more frequently.

Consumers’ assessment of current conditions actually rose a bit, rising to 111.9 from 110, but the index of consumer expectations fell to 89.3 from 93.5.

The big picture: The reading of sentiment certainly isn’t a bad one as the economic expansion approaches the longest since the mid-1850s. Until the strong jobs market meaningfully changes, the U.S. economy will continue to support solid spending, even as businesses have become more cautious in the face of trade fears.
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China imports first Iranian oil since US ended sanction waivers

Published time: 27 Jun, 2019 13:51 Edited time: 27 Jun, 2019 14:05
Iran has delivered the first crude oil to a Chinese refinery complex since the United States removed as of May all sanction waivers for Iranian oil customers, including its biggest buyer China.

According to TankerTrackers, a medium-sized Suezmax vessel, named SALINA and owned by the National Iranian Tanker Company (NITC), loaded around 1 million barrels of crude oil from Iran and departed on May 28. The tanker arrived on June 20 at Jinxi Refining and Chemical Complex in China in a first independent tanker-tracking confirmation that China is defying the U.S. sanctions on Iran’s oil exports.

The arrival of an Iranian crude cargo at the Jinxi complex, which is ultimately owned and operated by state giant China National Petroleum Corporation (CNPC), suggests that China is resuming Iranian crude oil imports as part of a government policy, according to Bourse & Bazaar.

Last month, TankerTrackers said on May 16 that it had sighted what was the first confirmed export of crude oil out of Iran since the end of all US waivers on May 2.

Iran’s oil exports will greatly depend on how China will proceed with its crude oil imports from the Islamic Republic, if at all, after the US removed the sanction waivers, IHS Markit said in an analysis earlier this month.

Despite the US push to drive Iranian oil exports to zero, China is not expected to totally cut off its crude imports from Iran, according to Fotios Katsoulas, Liquid Bulk Principal Analyst, Maritime & Trade at IHS Markit.

Still, Chinese oil imports from Iran will likely be very low for a long period of time going forward, Katsoulas said.

China has criticized the US decision to end the sanction waivers and some Chinese refiners may continue to buy Iranian oil amid the US-China trade war and Beijing could simply brush off the US sanctions on Iranian oil.

China’s total crude oil imports dropped in May from a monthly record in April, as Chinese refiners drastically reduced Iranian oil imports after the end of the US waivers and as some state refineries were offline for planned maintenance.

June 29, 2019

France sets all-time high as Europe heat wave expands, threatens more lives



By Kristina Pydynowski, AccuWeather senior meteorologist
By Eric Leister, AccuWeather senior meteorologist


The extreme heat wave that is suspected in killing several people this past week set an all-time high in France on Friday. Relief is on the horizon but not before the heat strengthens its grip across Europe this weekend.

The highest temperature ever measured across France in the entirety of record keeping was set on Friday afternoon. Temperatures soared to 45.9 C (114.6 F) at Gallargues-le-Montueux in southeastern France, exceeding the nation's previous all-time record high of 44.1 C (111.4 F) at Conqueyrac on Aug. 12, 2003.

Amid the unrelenting grip of dangerous heat, France's national weather service issued the first ever "red" hazardous weather warning for southeastern portions of the country on Friday. A “red” warning is the highest level out of a four-level alert system put into effect after the deadly 2003 heat wave that claimed 15,000 lives, according to the Associated Press.

---- The extreme heat wave continues to be one for the record books across Europe with daily, June and all-time temperatures records broken.

Earlier this past week, all-time June record highs were set in Germany, Poland and the Czech Republic.

Coschen station (Berlin-Brandenburg) reached 38.6 C (101.5 F) in Germany. The all-time highest temperature ever recorded in Germany remains 40.3 C (104.5 F), set in Kitzingen on Aug. 7, 2015.

Temperatures soared to 38.2 C (100.8 F) at RadzyƄ, Poland, on Wednesday, while Doksany in the Czech Republic, recorded a high of 38.9 C (102.0 F).
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Up next, everyone does it. Western pots call Russia and China’s kettles black. I  suspect that it eventually ends in unintended war. 

Exclusive: Western intelligence hacked 'Russia's Google' Yandex to spy on accounts - sources

June 27, 2019 / 7:24 PM
WASHINGTON/LONDON/SAN FRANCISCO (Reuters) - Hackers working for Western intelligence agencies broke into Russian internet search company Yandex in late 2018 deploying a rare type of malware in an attempt to spy on user accounts, four people with knowledge of the matter told Reuters.

The malware, called Regin, is known to be used by the “Five Eyes” intelligence-sharing alliance of the United States, Britain, Australia, New Zealand and Canada, the sources said. Intelligence agencies in those countries declined to comment.

Western cyberattacks against Russia are seldom acknowledged or spoken about in public. It could not be determined which of the five countries was behind the attack on Yandex, said sources in Russia and elsewhere, three of whom had direct knowledge of the hack. The breach took place between October and November 2018.

Yandex spokesman Ilya Grabovsky acknowledged the incident in a statement to Reuters, but declined to provide further details. “This particular attack was detected at a very early stage by the Yandex security team. It was fully neutralized before any damage was done,” he said.

The company also said that “the Yandex security team’s response ensured that no user data was compromised by the attack.”

The company, widely known as “Russia’s Google” for its array of online services from internet search to email and taxi reservations, says it has more than 108 million monthly users in Russia. It also operates in Belarus, Kazakhstan and Turkey.

The sources who described the attack to Reuters said the hackers appeared to be searching for technical information that could explain how Yandex authenticates user accounts. Such information could help a spy agency impersonate a Yandex user and access their private messages.

The hack of Yandex’s research and development unit was intended for espionage purposes rather than to disrupt or steal intellectual property, the sources said. The hackers covertly maintained access to Yandex for at least several weeks without being detected, they said.

The Regin malware was identified as a Five Eyes tool in 2014 following revelations by former U.S. National Security Agency (NSA) contractor Edward Snowden.

---- Security experts say attributing cyberattacks can be difficult because of obfuscation methods used by hackers.

But some of the Regin code found on Yandex’s systems had not been deployed in any known previous cyberattacks, the sources said, reducing the risk that attackers were deliberately using known Western hacking tools to cover their tracks.

Yandex called in Russian cybersecurity company Kaspersky, which established the attackers were targeting a group of developers inside Yandex, three sources said. A private assessment by Kaspersky, described to Reuters, concluded hackers likely tied to Western intelligence breached Yandex using Regin.
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Next more on the USA’s rain affected grain crops. For now, even the USDA doesn’t have a good grasp on what happened during planting.

June 28, 2019 / 2:56 PM

Corn prices plummet as USDA shows far more acres planted than predicted

EVANSVILLE, Ind., June 28 (UPI) -- Corn prices plummeted Friday after the U.S. Department of Agriculture released data on the number of acres planted, showing numbers that were far higher than previous predictions. However, the USDA has warned that that numbers may not be accurate.

This survey was gathered in early June, during a time when millions of acres of corn that farmers intended to plant remained unplanted due to excessive rainfall.

"At the time of this survey, the number of acres farmers intended to plant, but had not planted, was 15.5 million acres," said Scott Irwin, a professor of agricultural economics at the University of Illinois. "That's 15.5 million acres that the USDA reported as planted that we have no idea what happened to in this survey."

The USDA report shows farmers have planted 91.7 million acres. But industry groups estimate the planted acreage is around 86.7 million acres, according to Successful Farming.

"The numbers we're seeing in the report for Illinois don't feel right to us based on what we're seeing in the Illinois countryside," said Tricia Braid, a spokeswoman for the Illinois Soybean Association.

Regardless, hours after the report was published, corn prices dropping more than 20 cents a bushel, according to the Chicago Mercantile Exchange. A majority of that corn is processed into animal feed, ethanol, high fructose corn syrup and other food ingredients.

Before the report, corn prices were climbing. By mid-June, they had reached their highest in more than five years.

"We had a huge rally from low to high," Kluis said. "Now, this report is bombing the market back low."

It is likely those prices will climb again once the market gets a clearer picture of how many acres were truly planted, Kluis added.

The USDA plans to conduct a second planted acreage survey in July. If the results of that survey differ substantially from the June report, the agency will update the report in mid-August.

Soybean acres were also featured in the June report, though those numbers are even more uncertain, as more than 40 percent of the intended soybean acres were unplanted at the time of the survey, Irwin said.

Finally, who can forgive or forget the French raid on Rye, England, June 29, 1377. Turns out, nearly everyone. The good old days.

29 June 1377, the French raid Sussex
After King Edward III death in 1377, the French start raiding the south coast of England. They first sacked Rye, taking much Plunder. Abbot Haimo of Battle Abbey, on hearing that Rye had been sacked by the French, organized a militia and successfully defended Winchelsea, despite a ferocious attack by the French. The French disappointed by their lack of success at Winchelsea, sent a detachment to Hasting. Disappointed at finding little plunder in Hasting, they set fire to the town.

Later in the summer they tried raiding the Isle of Wight, but were fought off by Sir John Arundel. They also landed at Pevensey, but were met by the Earl of Salisbury and driven off. The French succeeded in landing at Rottingdean and made their way north to Lewes. The town and surrounding villages were burnt down and the Prior of Lewes captured by the French.

Early in 1378, the men of Rye and Winchelsea banded together and raided the French towns of St Pierre-en-Porte and Veulettes. They were able to recover much of the plunder taken by the French the previous year, including the Rye church bells and lead which had been stripped from Rye church. Hostages were taken for ransom and St Pierre-en-Porte set ablaze. 
http://www.sussexcastles.com/sussex-timeline/1377-the-french-raid-susex.html

"On the whole human beings want to be good, but not too good, and not quite all the time.”

George Orwell.

The monthly Coppock Indicators finished June

 DJIA: 26,600 +51 Up. NASDAQ: 8,006 +70 Down. SP500: 2,942 +50 Up. 

The S&P has reversed again to up after only one month. The Dow has reversed to up, while the NASDAQ remains down.  On to next month’s numbers for clarification.