2025-03-31 05:04

Trump, mad at Putin, threatens tariffs on buyers of Russian oil Oil prices slip despite threat of disruption to Russian supply Market would look for OPEC response to any drop in Russian supply, analysts say BEIJING, March 31 (Reuters) - Oil markets on Monday shrugged off U.S. President Donald Trump's threat to hit buyers of Russian oil with tariffs as the shock value of the barrage of threats from the White House begins to wear thin with jaded traders. Trump's off-the-cuff proposal to hit any country buying Russian oil with a 25% to 50% tariff would be significant for oil markets if it turned into an order, but analysts and traders questioned whether the president's latest threat was serious. Sign up here. "There's an element of fatigue with the announcements from the U.S. administration on tariffs and sanctions," said ING's head of commodities strategy Warren Patterson. "So I suspect until we get something more concrete, the market is not going to overreact to this," he said. Oil prices dipped on Monday with the more active June Brent crude futures down 0.2%, to $72.59 a barrel by 0028 GMT, and the U.S. West Texas Intermediate crude lower by 0.3%, to $69.18 a barrel. China and India are major buyers of Russian crude and their acquiescence would be crucial to making any secondary sanctions package seriously hurt exports from the world's second largest oil exporter. Recent U.S. sanctions on Moscow have led Chinese state oil companies to shy away from Russian oil, with Sinopec (600028.SS) , opens new tab and Zhenhua Oil halting purchases, while two others scaled back volumes as they assessed compliance. However, on Monday morning several Chinese traders were unfazed by the latest threat. Three who spoke with Reuters all said Trump's constant brinksmanship meant they discounted what he said. “We're all numb now, oil prices are not responding,” said one trader who spoke on condition of anonymity. "It's no use listening to Trump anymore." "It’s hard to tell what the impact would be as Trump is always bluffing, his words have lost credibility," said a second. If the tariffs became a serious threat, markets would look to how strictly the policy would be enforced and whether the Organization of the Petroleum Exporting Countries would ramp up production to make up for any drop in Russian exports, analysts said. The secondary sanctions imposed on Venezuelan oil last week could serve as a model for markets to assess the impact of a similar set of policies against Russia, said Patterson. Chinese buyers have already paused purchases ahead of those sanctions taking effect on Wednesday. Traders and analysts expect some sales to resume as buyers find workarounds unless Beijing issues a blanket ban. https://www.reuters.com/business/energy/oil-markets-wait-see-if-trumps-russian-oil-tariff-threat-is-bluff-2025-03-31/

2025-03-31 04:04

Defence, communications and logistics stocks popular European banks up 26% YTD Pool of triple-A rated assets set to grow LONDON, March 31 (Reuters) - A more independent, less U.S.-reliant Europe is taking shape and investors sense opportunities in a long-shunned region that go beyond just snapping up defence shares. Yes, there is reason for caution since massive German spending on defence and infrastructure will take time to be felt. Yet many are playing the long game. Sign up here. "It seems that MEGA (Make Europe Great Again) trades are now rapidly replacing MAGA trades, which have lost their appeal," said Mark Dowding, CIO at RBC's BlueBay fixed income team, referring to U.S. President Donald Trump's Make America Great Again movement. 1/ DEFENCE FIRST Brussels' plan to mobilise up to 800 billion euros ($866 billion) for rearmament and German fiscal expansion mean defence stocks remain fertile ground for investors, even after their surge since Russia invaded Ukraine in 2022. European aerospace and defence stocks (.SXPARO) , opens new tab have gained 33% this year, and valuation multiples have topped those of U.S. peers, reaching levels associated with luxury or tech. Tankmaker Rheinmetall (RHMG.DE) , opens new tab was briefly more expensive than Ferrari (RACE.MI) , opens new tab this month, trading at 44 times its expected earnings, highlighting investor willingness to pay a premium for exposure to this long-term trend. Defence companies' expected average yearly profit growth to 2028 range from 8% for BAE (BAES.L) , opens new tab to 32% for Rheinmetall, Citi estimates. The European Union wants to buy more European arms, but it's a challenge. Since 2022, 78% of EU procurement has gone outside the bloc, with 63% to the U.S., European Commission data show. And after a broad rally, some advise caution. Vontobel fund manager Markus Hansen believes investors should focus on areas with real and pressing demand such as rebuilding depleted ammunition stockpiles and infantry-related equipment. Defence supply chain firms and other sectors including communications meanwhile could benefit. Eutelsat (ETL.PA) , opens new tab has surged 260% this month, driven by suggestions the Franco-British satellite operator could replace Elon Musk's Starlink in providing internet access to Ukraine. "Apart from weaponry, defence is also about logistics, data and communication, and personnel. It's a comprehensive value chain where suppliers play an important role," Evli portfolio manager Tomas Hildebrandt said. Truckmaker Scania, a unit of Traton (8TRA.DE) , opens new tab, Atlas Copco (ATCOa.ST) , opens new tab, which makes machinery for infrastructure and industrial projects, and construction companies in general, are possible examples, he said. 2/ HEY BOND Whether it's joint EU bonds or more German debt, a wider pool of triple-A rated bonds that supports the euro's reserve currency status is coming. Germany's historic infrastructure and defence spending could add up to more than a trillion euros of additional debt. What's more, the EU plans to jointly borrow up to 150 billion euros backing loans to member states to help increase defence spending, a move even proponents didn't anticipate just months ago. The bonds backing the programme, dubbed SAFE, will boost the EU's roughly 650-billion-euro debt pile. It's a sign the bloc might become a more permanent borrower as investors have long hoped, stepping up to another challenge after its vast COVID-19 recovery fund. The loans, however, are just a small share of the total 800-billion-euro plan, leaving the rest to national governments. 3/ BANKING ON IT European banks (.SX7P) , opens new tab are popular as the fiscal boost brightens the economic outlook, and have surged 26% year-to-date in their best quarter since 2020. Germany's economy should expand roughly 1.4% in 2026 and 2027 after almost four years of stagnation, Berenberg estimates. A March BofA fund manager survey showed banks and insurance are the largest sector overweights in Europe, followed by industrials. "We're positive on banks as higher growth expectations should steepen the (bond) yield curve, which would benefit banks and really spur credit growth," said GlobalX senior investment analyst Trevor Yates, noting the firm has seen strong interest in its DAX German stocks ETF. Investors also expect European regulators will ease rules for banks given a U.S. deregulation drive. BlueBay's Dowding said European bank capital bonds were the firm's largest overweight position in multi-asset credit funds. 4/ PERIPHERAL WINS Spanish and Italian equities (.IBEX) , opens new tab, (.FTMIB) , opens new tab are significantly cheaper than those in core Europe, says Societe Generale multi-asset strategist Manish Kabra, leaving them poised for gains. Southern European stocks are also proportionally less exposed to U.S. tariffs than Germany or France and have a large exposure to banks. "There are parallel things going on. One is the German debt brake and for that (mid-cap) MDAX and long euro is your trade, the other is banking regulation, and European nominal GDP growth, both of which impact banks," Kabra said. "That is exactly what the periphery of Europe provides." 5/ RENEWABLE Europe's push to become more energy independent, starting in 2022, is expected to continue, with renewable energy and home-based power firms benefiting, analysts said. The European Commission has put forward an Action Plan to speed up permits for renewable energy projects, change how energy tariffs are set, and increase state aid for clean industries and more flexible power generation. And 100 billion euros of Germany's planned spending increase will be channelled into climate and economic transformation. Solar generation provided 11% of the EU electricity mix in 2024, versus 9.3% in 2023, overtaking coal, think tank Ember says. European utility firms Iberdola (IBE.MC) , opens new tab, Endesa (ELE.MC) , opens new tab and Enel (ENEI.MI) , opens new tab have rallied 7-16% so far this year. https://www.reuters.com/markets/europe/make-europe-great-again-trades-are-gaining-traction-2025-03-31/

2025-03-31 02:39

TOKYO, March 31 (Reuters) - Japan Finance Minister Katsunobu Kato said on Monday that he would communicate closely with U.S. Treasury Secretary Scott Bessent on foreign exchange, pointing out that close dialogue is important for market stability. Kato made the comment to parliament when asked how he would communicate with Bessent, as President Donald Trump's aggressive tariff policies could drive U.S. inflation higher and affect foreign exchange markets. Sign up here. Trump said earlier this month that he told the leaders of Japan and China they could not continue to reduce the value of their currencies, as doing so would be unfair to the United States, though the yen has appreciated around 4% against the dollar so far this year. Japan has said it has not devalued its currency. "We have shared with the United States the consensus that the currency rates should be determined by markets and that excessive, disorderly currency movements could negatively affect the economic and financial stability," Kato said. "Based on this consensus, we would proactively communicate with the United States," he said. He also said he would use opportunities such as those provided by the meetings of financial leaders from the Group of Seven to bilaterally communicate with Bessent. https://www.reuters.com/markets/asia/japan-finance-minister-says-he-will-closely-communicate-with-us-forex-2025-03-31/

2025-03-31 00:49

BUENOS AIRES, March 30 (Reuters) - Argentina is seeking a first disbursement of more than 40% under a $20-billion program it is negotiating with the International Monetary Fund (IMF), Economy Minister Luis Caputo said on Sunday. The South American country had eliminated the fiscal deficit and cut public spending, Caputo reiterated, as the government aims to beef up central bank reserves, and begin unwinding forex curbs that arguably hinder business and investment. Sign up here. "We've requested more because, traditionally, these are made in exchange for monetary and fiscal targets," Caputo said in remarks on television, adding that first disbursements were usually between 20% and 30%. "We've already done everything." Last week, the government and the IMF confirmed the lender's board of directors must still approve the four-year program that follows one of $44 billion signed in 2018. https://www.reuters.com/markets/argentina-requests-first-tranche-more-than-40-under-20-billion-imf-program-2025-03-31/

2025-03-31 00:22

S&P 500, Dow end higher; Nasdaq falls Trump says US tariffs to cover all countries Flight to safety buoys bonds, gold hits record NEW YORK/LONDON, March 31 (Reuters) - Global equity markets fell and safe-haven gold hit a fresh record high on Monday after U.S. President Donald Trump said tariffs would essentially cover all countries, stoking worries a global trade war could lead to a recession. Trump's comments to reporters on Air Force One seemed to dash hopes the levies would be limited to a smaller group of countries with the biggest trade imbalances. Sign up here. Trump is due to receive tariff recommendations on Tuesday and announce initial levels on Wednesday, followed by auto tariffs the day after. On Wall Street, benchmark S&P 500 and the Dow reversed losses in early trade and finished higher with gains in consumer staples, financials, materials and energy stocks. The Nasdaq ended down. All three indexes notched both quarterly and monthly losses. "What the Trump administration has shown us so far is that you should not expect a consistent approach," said George Lagarias, chief economist at Forvis Mazars. "This is what scares the market the most. Inconsistency breeds uncertainty, and markets hate uncertainty." The Dow Jones Industrial Average (.DJI) , opens new tab rose 1.00% to 42,001.76, the S&P 500 (.SPX) , opens new tab rose 0.55% to 5,611.85 and the Nasdaq Composite (.IXIC) , opens new tab fell 0.14% to 17,299.29. Europe's STOXX 600 (.STOXX) , opens new tab fell 1.51% to its lowest in almost eight weeks, while major indexes in Frankfurt (.GDAXI) , opens new tab, London (.FTSE) , opens new tab and Paris (.FCHI) , opens new tab fell between 1.7% and 2%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab shed 1.9%. Analysts at Goldman Sachs now see a 35% chance of a U.S. recession, up from 20% previously, saying they expect Trump to announce tariffs that average 15% across all U.S. trading partners on April 2. Data out on Friday underlined the risks as a key measure of core inflation rose by more than expected in February, while consumer spending disappointed. That raised the stakes for the March payrolls report due on Friday, where any outcome below the 140,000 gain expected would only add to recession fears. "The current market narratives center on this fear of stagflation, which conceptually could be the worst possible combination for stocks," said Talley Leger, chief market strategist at The Wealth Consulting Group in New Jersey. "So in a slowing growth environment, earnings would decelerate, or even collapse in a recession. That's another big fear in the market. And on the other side, spiralling inflation would squeeze stocks on the valuation channel." Gold prices extended their stellar run, hitting another record high of $3,128.06. Spot gold rose 1.31% to $3,124.34 an ounce, while U.S. gold futures rose 1.2% to settle at $3,150.30. In currency markets, the dollar pared early losses to strengthen against the Japanese yen and the euro amid the uncertainty around tariffs. Against the Japanese yen , the dollar strengthened 0.07% to 149.93. The euro was down 0.11% at $1.0815. Against the Swiss franc , the dollar strengthened 0.48% to 0.884 franc. The dollar index , which measures the greenback against a basket of currencies, including the yen and the euro, rose 0.17%. Bond investors seemed to be betting the slowdown in U.S. economic growth will outweigh a temporary lift in inflation and prompt the Fed to cut rates by about 80 basis points this year. The yield on benchmark U.S. 10-year notes fell 3.5 basis points to 4.221%. In Europe, the yield on the benchmark German 10-year Bunds rose 0.9 basis points to 2.738%. The outlook for rates could become clearer when Fed Chair Jerome Powell speaks on Friday, following a host of other Fed speakers this week. Brent rose 1.5% to settle at $74.74 a barrel, while U.S. West Texas Intermediate crude rose 3.1% to settle at $71.48 as Trump threatened secondary tariffs on buyers of Russian oil if he felt Moscow was blocking efforts to end the war in Ukraine. https://www.reuters.com/markets/global-markets-wrapup-1-2025-03-31/

2025-03-30 23:52

ABOARD AIR FORCE ONE, March 30 (Reuters) - U.S. President Donald Trump said on Sunday Ukrainian President Volodymyr Zelenskiy wants to back out of a critical minerals deal, warning the Ukrainian leader would face big problems if he did. "He's trying to back out of the rare earth deal and if he does that he’s got some problems, big, big problems," Trump told reporters. Sign up here. "He wants to be a member of NATO, but he's never going to be a member of NATO. He understands that." https://www.reuters.com/world/trump-says-zelenskiy-wants-back-out-critical-minerals-deal-2025-03-30/