2025-01-20 23:50

WASHINGTON, Jan 20 (Reuters) - U.S. President Donald Trump is ordering federal agencies to "investigate and remedy" persistent U.S. trade deficits, and address other countries' unfair trade practices and currency manipulation, according to a draft White House trade memo seen by Reuters that stops short of ordering immediate new tariffs. The memo, expected to be signed shortly, also directs federal agencies to assess China's performance under the "Phase 1" trade deal he signed with Beijing in 2020 to end a nearly two-year tariff war. The deal required China to increase purchases of U.S. exports by $200 billion over two years, but Beijing failed to meet the targets as the COVID-19 pandemic hit. "China's adherence to this agreement will now be assessed, to determine whether enforcement or changes are required," the memo reads. Sign up here. https://www.reuters.com/world/us/draft-trump-trade-memo-targets-us-trade-deficit-china-purchases-us-exports-2025-01-20/

2025-01-20 22:06

Pro-Russian separatist enclave's leader makes new appeal for gas Moldovan government studying proposal on gas supplies Region's residents still facing power and heating cuts CHISINAU, Jan 20 (Reuters) - Moldova and its separatist Transdniestria region inched towards a deal on Monday to allow gas to flow to residents of the rebel enclave, who have been suffering from power and heating cuts since the start of the year. Ukraine refused to renew an agreement allowing transit through its territory of supplies from gas giant Gazprom (GAZP.MM) , opens new tab for pro-Russian Transdniestria, as well as customers in Slovakia and Austria. Transdniestria residents remained subjected on Monday to a five-hour rolling blackout and authorities said those in high-rise apartments had been without heating for nearly three weeks. They said gas reserves in the territory were sufficient for 11 days at current reduced levels of consumption. Transdniestria's separatist leader, Vadim Krasnoselsky, said his region had told Moldova's pro-European authorities two days earlier that it was ready to agree to a deal to accept - and pay for - gas supplies provided by the Moldovagaz national company. Moldova blames Moscow for the crisis and has urged Gazprom to send gas by alternative routes, including pipelines running through Turkey, Bulgaria and Romania. Gazprom says it will send no gas to Moldova pending payment of arrears it estimates at $709 million, a figure disputed by Moldova's central government. "Today is already 20th January and we have no reply. I ask you to stop politicising this issue and think about people," Krasnoselsky said during a meeting of local officials. He called for action "in the interests of people freezing in their apartments, the interests of social institutions and of enterprises that are idle due to lack of gas supply". Krasnoselsky proposed having the gas supplied to Moldova's border by an independent, private gas company and the Moldovan government's press secretary, Daniel Voda, said officials were considering the proposal. Igor Ananskikh, a member of the Russian parliament's State Duma lower house, said he believed Russia would help finance gas supplies if an agreement could be reached. "I think with the help of the Russian Federation these supplies will be paid for in the end," Ananskikh, a member of the Duma's Energy Committee, said in comments reported by Moldovan media. Transdniestria, Ananskikh said, had "no options". Transdniestria, supported by Moscow after breaking away from Moldova at the end of the Soviet era, had long received Russian gas through Ukraine free of charge. Krasnoselsky describes the supplies as "humanitarian gas". Moldovan President Maia Sandu, who has spearheaded the ex-Soviet state's campaign to join the European Union, offered at the weekend to provide financial help for Transdniestria. But she said any such arrangement was possible only after the withdrawal from Moldova of 1,500 Russian "peacekeeping" troops deployed since a brief 1992 war between Trandniestrian separatists and the newly independent Moldovan state. Sign up here. https://www.reuters.com/world/europe/moldova-separatist-region-inch-toward-gas-supply-deal-2025-01-20/

2025-01-20 21:54

Jan 21 (Reuters) - A look at the day ahead in Asian markets. The first full day of financial market trading in U.S. President Donald Trump's second term in office is set to get off to a strong start on Tuesday, with Trump's seemingly more measured approach to tariffs giving investor sentiment an instant shot in the arm. Trump issued a broad trade memo on Monday that stopped short of immediately imposing new tariffs on key trading partners, something he had previously indicated he would do on his first day in office. Instead, trade relationships with China, Canada and Mexico will be assessed and reviewed before he decides what steps to take. The U.S. stock and bond markets were closed for Martin Luther King Jr. Day on Monday, but FX markets were open, and the dollar's steep fall across the board reflected the relief among investors that Trump appears to be dialing down the tariff rhetoric in favor of a less belligerent approach. Even if it turns out to be only temporary. The dollar index slumped 1%, its biggest decline since August. The dollar may have been primed for a fall, going by hedge fund positioning - the latest Commodity Futures Trading Commission data shows funds last week held a net long dollar position against a range of currencies worth $35 billion last week, the biggest in nine years. The dollar had rallied around 10% since September alongside the surge in U.S. Treasury yields of more than 100 basis points, a tightening of financial conditions that hit Asian and emerging markets particularly hard. A pause or reversal should ease that squeeze. U.S. stock futures are pointing to gains of around 0.4% on Wall Street on Tuesday. Asian markets were already on the front foot on Monday, with the MSCI Asia ex-Japan and Nikkei 225 indexes both rising more than 1%. Markets around the world will be sensitive to the deluge of headlines that's likely to flow from Washington in the coming days as the new administration announces policy directives and executive orders. It is shaping up to be a volatile week. Crude oil prices dipped further from last week's six-month high, falling for a third straight day as traders await details on Trump's executive order declaring a national energy emergency and promise to fill up strategic reserves. Cryptocurrencies, on the other hand, were more buoyant as the self-styled "crypto President" was sworn in and bitcoin leaped to a new high just shy of $110,000. The Asian economic calendar on Monday is light, with producer price inflation from South Korea and consumer price inflation from Hong Kong the only major economic indicators on tap. Expect markets to take their cue from headlines out of Washington, the upturn in global stocks, and the diving dollar. Here are key developments that could provide more direction to markets on Tuesday: - Reaction to Trump's first day in office - South Korea PPI (December) - Hong Kong CPI (December) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-2025-01-20/

2025-01-20 21:09

WASHINGTON, Jan 20 (Reuters) - President Donald Trump will order the U.S. to withdraw from the Paris climate agreement, the White House said on Monday, once again placing the world's top historic emitter of greenhouse gas emissions outside of the global pact aimed at pushing nations to tackle climate change through domestic actions. The announcement, which has been widely expected ever since Trump won the Nov. 5 presidential election, drew criticism from other Paris signatories and environmental groups as well as statements of continued support by states, cities and other countries for the goals of the agreement. The eventual U.S. departure further threatens the central goal of the agreement to avoid a rise in global temperatures of 1.5 degrees Celsius, a target that appears even more tenuous as last year was the planet's hottest on record. Here are some reactions to the announcement of the second U.S. withdrawal from the climate pact: SIMON STIELL, U.N. CLIMATE CHANGE EXECUTIVE SECRETARY "Embracing (the global clean energy boom) will mean massive profits, millions of manufacturing jobs and clean air. Ignoring it only sends all that vast wealth to competitor economies, while climate disasters like droughts, wildfires and superstorms keep getting worse, destroying property and businesses, hitting nation-wide food production, and driving economy-wide price inflation. The door remains open to the Paris Agreement, and we welcome constructive engagement from any and all countries." ALI MOHAMED, CHAIR OF THE AFRICA GROUP OF NEGOTIATORS AND KENYA'S SPECIAL ENVOY FOR CLIMATE CHANGE "The leadership of the United States is critical in mobilizing climate finance, advancing clean energy transitions, and ensuring the equitable implementation of global climate goals. Equally important is the need to promote multilateralism as the foundation for addressing climate change and other global challenges. The African Group underscores its belief that the United Nations Framework Convention on Climate Change and other international platforms remain the most effective avenues for fostering collaboration and accountability." NEW YORK GOVERNOR KATHY HOCHUL AND NEW MEXICO GOVERNOR MICHELLE LUJAN GRISHAM, CO-CHAIRS OF THE U.S. CLIMATE ALLIANCE "Our states and territories continue to have broad authority under the U.S. Constitution to protect our progress and advance the climate solutions we need. This does not change with a shift in federal administration ... It's critical for the international community to know that climate action will continue in the U.S. Climate Alliance will bring this message to the United Nations Climate Change Conference in Brazil (COP30) later this year." ANI DASGUPTA, PRESIDENT AND CEO OF WORLD RESOURCES INSTITUTE "It simply makes no sense for the United States to voluntarily give up political influence and pass up opportunities to shape the exploding green energy market. Sitting on the sidelines also means the United States will have fewer levers to hold other major economies accountable for living up to their commitments. LAURENCE TUBIANA, CEO OF THE EUROPEAN CLIMATE FOUNDATION AND A KEY ARCHITECT OF THE PARIS AGREEMENT "The context today is very different to 2017. There is unstoppable economic momentum behind the global transition, which the U.S. has gained from and led, but now risks forfeiting." ABBY MAXMAN, PRESIDENT AND CEO OF OXFAM AMERICA "The U.S. should be leading the fight for a livable planet - not only because of its responsibility as the largest historical polluter, but because ignoring the problem at our doorstep will harm people living in the United States, who have recently suffered severe damage from climate-driven disasters like the Los Angeles wildfires and will face even more in the years ahead." Sign up here. https://www.reuters.com/business/environment/world-reacts-trumps-plan-withdraw-us-paris-climate-pact-2025-01-20/

2025-01-20 20:59

SINGAPORE/LONDON/NEW YORK, Jan 21 (Reuters) - Global markets were volatile while the dollar rebounded on Tuesday in choppy trading as Donald Trump returned to the White House. President Trump did not immediately impose tariffs on Monday as previously promised, but said he was thinking about imposing 25% duties on imports from Canada and Mexico on Feb. 1 over illegal immigrants and fentanyl crossing into the U.S. While the Mexican peso and Canadian dollar fell against the greenback, European shares dipped in early trade and U.S. stock futures were firmer. Here are some comments from investors and analysts: THOMAS URANO, CO-CHIEF INVESTMENT OFFICER, SAGE ADVISORY, AUSTIN, TEXAS "This is typical of what we're going to see: there's a lot of rhetoric and talk about policies or upcoming policies, or policy intentions. But the reality is all about the actual implementation." "Post-election, the bond market built a lot of anxiety and concern over Trump policy causing a re-acceleration of inflation. And I get that and it's because of this wave of uncertainty. You don't really know what's going to happen. You know something may spark it and you know the market has a tendency to price in a worst-case outcome, which I think is reasonable. That was what really drove this post-election move higher in rates." "There was speculation over the weekend that Trump will not actually go with Day One tariffs and of course we didn't see that. So the market has been good. And the CPI number has been been very helpful. Yields are off 23 basis points from the recent peak." HELEN GIVEN, FX TRADER, MONEX USA, WASHINGTON "Volatility is clearly back in a big way, and after the relatively calm term of Joe Biden, FX markets are on a hair trigger for any tariff talk from the Trump administration. Trump's proposed tariffs, though, are right now still just that - proposals. Traders are trying to get ahead of the risk of tariffs on Mexico and Canada, but until such actions materialize trying to hedge around them is going to keep markets very choppy, and we've seen that price action today. "The last 24 hours have harkened back to Trump's first term in office, when the President could upend markets with a single statement or tweet, and MXN and CAD's wild swings in the last day in particular have served as a reminder of that. We're preparing for substantially higher volatility through the next two weeks for sure, at least through Trump's new self-imposed Feb 1 deadline on tariffs against Canada and Mexico." "The lack of a deadline on tariffs against China, though, is weighing on the U.S. dollar a bit and we could see some downside for the Buck until more concrete actions are announced." WALTER TODD, CHIEF INVESTMENT OFFICER, GREENWOOD CAPITAL, GREENWOOD, SOUTH CAROLINA "If there's one kind of 'surprise,' it was the lack of specificity or any type of specificity on tariffs." "I think there was an expectation that he was just going to do an executive order and hit it hard and he didn't. And so you're seeing rates down, you're seeing the dollar down, I think as a function of that." JASON DRAHO, HEAD OF ASSET ALLOCATION AMERICAS, UBS GLOBAL WEALTH MANAGEMENT (EMAILED COMMENTS) "(Trump) took off the Day One announcement of new tariffs and instead issued a memorandum of understanding directing federal agencies to study trade policies. It's only the first day, but that decision supports our view that Trump 2.0 policies will ultimately favor DOGE over MAGA economic ideologies, which means that the net effect of the policies should be positive for the supply side of the economy." MARK HAEFELE, CHIEF INVESTMENT OFFICER, UBS GLOBAL WEALTH MANAGEMENT "Our base case for the U.S. economy is for 'growth despite tariffs.' While we will be closely monitoring for risks, we do not believe that the tariff measures outlined in our base case would be sufficient to derail U.S. growth. Nor do we believe that such tariffs would preclude inflation continuing to fall from current levels, enabling the Fed to cut rates by 50 bps later this year." AMELIE DERAMBURE, SENIOR MULTI-ASSET MANAGER, AMUNDI "Markets will clearly try to anticipate and dissect which sectors and areas will be targeted by tariffs so the volatility on markets will come from that." "European assets, especially equities, will be volatile because tariff news wily be especially important for Europe." JIM REID, GLOBAL HEAD OF MACRO STRATEGY, DEUTSCHE BANK, LONDON "A lack of immediate moves on tariffs supported the market mood yesterday, but this has partially reversed overnight as late in the day Trump renewed an immediate threat of 25% tariffs on Canada and Mexico, which could be announced as soon as February 1st." KYLE RODDA, SENIOR MARKETS ANALYST, CAPITAL.COM, MELBOURNE "It's Trump's world and we are all just living in it - and the markets are going to have to get used to that again. I think the price action in currencies tells you a clearer story about trade war risks and the signals are pretty apparent - tariffs mean a stronger U.S. dollar due to higher import prices and weaker global growth, no tariffs means stronger global trade and a more robust global growth backdrop." "Just like the first Trump administration, the markets are highly sensitive to headline risk, especially as it relates to trade wars." CHARLES WANG, CHAIRMAN OF SHENZHEN DRAGON PACIFIC CAPITAL MANAGEMENT CO, SHENZHEN: "You don't expect Trump's inauguration to trigger a big rally, as it's unrealistic for Sino-U.S. ties to suddenly reverse … and you don't read too much into the words of Trump, who is very fickle." "I think Trump is now more pragmatic toward China." KIYONG SEONG, LEAD ASIA MACRO STRATEGIST, SOCIETE GENERALE, HONG KONG "While there was no immediate tariff imposed on China, providing some relief to the market, President Trump has initiated tariffs on Canada and Mexico. It is unlikely that he will alter his plan regarding tariffs on China." "A potential delay in the imposition of tariffs on China could also lead Chinese authorities to abstain from implementing a definitive stimulus. In such a scenario, renewed market skepticism about China's growth recovery may overshadow the tariff narrative, as an inadequate stimulus to bolster domestic consumption would underscore the growth disparity between China and the U.S." SHOKI OMORI, CHIEF GLOBAL DESK STRATEGIST, MIZUHO SECURITIES, TOKYO "Twenty five percent looks high as a starter, and markets reacted quickly, especially in FX. I think market participants thought Trump would start with China, with say a 10%-20% tariff on goods but gradual increase." "USDCNH (dollar/Chinese yuan) cheapening is temporary, I doubt it will continue. USDCNH is set to go lower with the Trump administration coming up with tariffs." CHARU CHANANA, CHIEF INVESTMENT STRATEGIST, SAXO, SINGAPORE "The first few hours of Trump administration has underscored that policy environment will be dynamic once again and markets should brace for volatility. Clearly, the markets celebrated too soon with tariff threats missing at the outset in Trump’s inaugural speech." "However, the respite was short-lived and latest announcement on Canada and Mexico tariffs likely to be enacted Feb 1 reaffirmed that the tariff threat was only delayed and not averted. Still, the absence of any threats on China has kept the hopes of a negotiation alive there, especially after the Trump-Xi phone call last week as well." ANDREW SWAN, PORTFOLIO MANAGER, MAN GLG. SYDNEY "I'll say one positive surprise we may see this year is actually some sort of resolution between U.S. and China from an economic point of view, not a strategic point of view. At least an economic sort of deal to be done so the risk is actually lower tariffs. That will be extremely positive for Asia." VIS NAYAR, CHIEF INVESTMENT OFFICER, EASTSPRING INVESTMENTS, SINGAPORE: "Tariffs are necessarily an overhang. I would just say that we simply don't know, what we had was pressure on the currency and pressure on markets in the lead-up to yesterday. So he (Trump) didn't announce anything (on China), which is naturally a little bit better than we might have expected. I think we should expect volatility." "But there is hope that there is some pragmatism. We have to assume that he's not going to do anything that just brings up U.S. inflation without paying attention to that." Sign up here. https://www.reuters.com/markets/global-markets-trump-quotes-instant-view-2025-01-20/

2025-01-20 20:51

Ethics experts worry about conflict of interest, national security Trump-linked businesses own 80% of the meme coins Crypto investor, Democrat warn of foreign influence through tokens PARIS/WASHINGTON, Jan 20 (Reuters) - U.S. President Donald Trump's launch of a crypto token shortly before his inauguration on Monday creates new conflict-of-interest concerns, ethics experts and industry insiders said. Trump has pledged to hand management of his assets to his children, but the crypto asset is raising particular concerns due to its ability to quickly attract billions of speculative dollars with little transparency. The companies behind the "meme coins" $TRUMP and $MELANIA, for first lady Melania Trump, said they are not investments or securities but are an "expression of support." The tokens follow Trump-branded non-fungible tokens, sneakers and a Bible, among other items he has launched. Ethics advisors and industry experts say this investment is different because his administration will regulate an industry in which he has a stake through the new token, and one where any value is arguably tied to his presidency. The companies behind the Trump token, CIC Digital LLC, an affiliate of the Trump Organization, and Fight Fight Fight LLC, co-owned by CIC Digital, collectively own 80% of the tokens, meaning that Trump-linked businesses could have gained $8 billion worth of crypto over the weekend. Danielle Brian, head of the watchdog group Project On Government Oversight, said Trump's moves into crypto are concerning given the industry's loose oversight. Besides being "a blatant financial conflict of interest on behalf of the president ... it is deepening his engagement in a world that raises real national security concerns," she said. Trump's office did not respond to a request for comment. Prominent crypto investor Nic Carter said on social media the creation of personal meme coins "opens the door to secretive foreign buyers trying to curry influence with our leaders." Some Democratic U.S. lawmakers echoed the national security concerns and conflict-of-interest worries. "Anyone globally, even individuals who have been sanctioned by the U.S. or banned from our capital markets, can now trade and profit off of $TRUMP through various unregulated platforms," U.S. House Financial Services Committee top Democrat Maxine Waters wrote. Meme coins typically refer to small, extremely volatile, cryptocurrencies, often named after online jokes or trends. While supporters hope the tokens will rise as the memes go viral, most have little value. Both the Trump tokens’ websites avoid using the word cryptocurrency – referring instead to “fungible crypto assets” and marketing them as memes. University of Sussex finance professor Carol Alexander said the Trump and Melania tokens were functioning more like fan tokens that took off in 2021 and would likely become a barometer for support of the couple. Crypto markets were buoyant on Monday, with bitcoin hitting an all-time high as investors anticipated Trump's crypto-friendly policies. Some said Trump's coin was a game-changer. "The fact that a president is doing this brings some sort of legitimacy to the space, and I think just means that the industry is moving ahead in a way it hasn’t for the last 10 years," said Paul Howard, senior director at crypto market-maker Wincent. Sign up here. https://www.reuters.com/world/us/trumps-new-crypto-coin-sparks-ethics-concerns-2025-01-20/