WORLDWIDE: HEADLINES
China’s Xpeng to be added to FTSE’s equity indexes on July 8
Chinese electric vehicle maker Xpeng’s American Depositary Receipts will be added to FTSE Russell’s global equity indexes on July 8, the index publisher said.
Xpeng shares will be included in the FTSE All-World Index, the FTSE Global Large Cap Index, and the FTSE Emerging Index, FTSE Russell said in a statement on its website.
The announcement came after Guangzhou-based Xpeng said on Wednesday it would raise $1.8 billion in a Hong Kong dual primary listing to expand its product line-up and develop its technology.
The company said on Thursday that it delivered 17,398 vehicles in the second quarter, a five-fold increase from a year earlier.
Full coverage: REUTERS
130 countries back global minimum corporate tax of 15%
Most of the countries negotiating a global overhaul of cross-border taxation of multinationals have backed plans for new rules on where companies are taxed and a tax rate of at least 15%, they said on Thursday after two days of talks.
The Paris-based Organization for Economic Cooperation and Development, which hosted the talks, said a global minimum corporate income tax of at least 15% could yield around $150 billion in additional global tax revenues annually.
It said 130 countries, representing more than 90% of global GDP, had backed the agreement at the talks.
New rules on where the biggest multinationals are taxed would shift taxing rights on more than $100 billion of profits to countries where the profits are earned, it added.
“With a global minimum tax in place, multinational corporations will no longer be able to pit countries against one another in a bid to push tax rates down,” U.S. President Joe Biden said in a statement.
“They will no longer be able to avoid paying their fair share by hiding profits generated in the United States, or any other country, in lower-tax jurisdictions,” he said.
One source close to the talks said it had taken tough negotiations to get Beijing on board. A U.S. administration official said there were no China-specific carveouts or exceptions in the deal.
Full coverage: REUTERS
WORLDWIDE: FINANCE / MARKETS
Dollar rides high to U.S. jobs test
The U.S. dollar was perched at a 15-month high on the yen and at multi-month peaks against other majors on Friday, as traders wagered strong U.S. labor data could lift it even further.
The jobs report is due at 1230 GMT and is forecast to show a solid rise of 700,000. But there is chatter about the number coming in higher and the risk that upsets the assumption that U.S. interest rates can stay at rock-bottom levels for years.
The dollar has climbed 0.7% against the yen this week and hit its highest since March 2020 on Friday, as investors have re-assessed short dollar positions following months of strong data and a hawkish shift in tone from the Federal Reserve.
The dollar rose 0.06% to 111.65 yen early in Asia, and at $1.1843 per euro it was also a whisker short of Thursday’s three-month high of $1.1837 per euro.
It crept to a fresh two-and-a-half month high of $1.3752 against the British pound and sat near its highest since December against the Australian dollar at $0.7467 – putting it well above milestone lows it struck in May.
The U.S. dollar index was steady at 92.549 in Asia, having gained 0.8% over the week so far and moves elsewhere were slight as markets await the U.S. data.
The dollar index is now up 3.4% from its May lows as shorts have cut their positions, and some say that move leaves it vulnerable if the jobs figures miss lofty expectations.
Full coverage: REUTERS
Stocks reach for records as U.S. jobless claims dive
Global stock markets rose on strong European and U.S. shares on Thursday, with stocks brushing off a rapid re-acceleration in coronavirus cases and oil and the dollar extending their first-half rallies.
On Wall Street, the S&P 500 reached its sixth consecutive all-time closing high on upbeat economic data, and European shares ended higher on a rally in crude prices.
Investors now eye Friday’s much-anticipated employment report.
“Markets are digesting improved economic data and rising inflation, closely scrutinizing central bank communication for clues regarding the timing, process and magnitude of policy normalization,” said Ben Randl, a senior analyst at Bank of America Merrill Lynch.
In an Asia session thinned by a holiday in Hong Kong, Japan’s Nikkei (.N225) fell 0.3% and the yen hit a 15-month low as sources in Tokyo said COVID-19 restrictions were likely to be extended.
Oil prices rose about 2% on indications that OPEC+ producers could increase output more slowly than expected in coming months, while rising global fuel demand would continue to tighten supply.
The dollar index hit three-month highs and U.S. Treasury yields crept a little higher ahead of Friday’s U.S. jobs report, which could offer clues on when the Federal Reserve will start to pare back stimulus.
The benchmark 10-year yield was last up 3.1 basis points at 1.4747%. On Wednesday, it tumbled to its lowest level since June 21 at 1.438%, due mostly to quarter- and month-end demand.
Full coverage: REUTERS
Oil steady after OPEC+ delays meeting on supply decision
Oil prices held steady on Friday after OPEC+ ministers delayed a meeting on output policy as the United Arab Emirates balked at a plan to add back 2 million barrels per day (bpd) in the second half of the year.
U.S. West Texas Intermediate (WTI) crude futures were up 5 cents at $75.28 a barrel at 0155 GMT, having jumped 2.4% on Thursday to close at their highest since October 2018.
Brent crude futures inched up 4 cents to $75.88 a barrel, after rising 1.6% on Thursday.
Both benchmark contracts posted strong gains on Thursday as a plan backed by Saudi Arabia and Russia for the Organization of Petroleum Countries and allies, together known as OPEC+, to add back 400,000 bpd each month from August through December 2021 was more cautious than investors had expected.
Prices retreated after the plan met resistance from the UAE and OPEC+ postponed a ministerial meeting to Friday.
“Failure to come to an agreement could mean that the group continues with current levels of production, which would mean that the market tightens even quicker,” ING commodities strategists said in a note.
If existing curbs are extended, however, some OPEC+ producers may be less willing to stick to their quotas, which would result in an increase in supply, ING said.
WTI was on track for a 1.6% rise for the week with the U.S. crude market seen tightening as refinery runs pick up to meet recovering gasoline demand, while U.S. shale oil production has not risen at the same pace.
Brent was heading for a 0.5% fall for the week, reflecting concerns about fuel demand in parts of Asia where cases of the highly contagious COVID-19 Delta variant are surging.
Citi analysts said they do not expect WTI to climb to a premium to Brent, as they expect U.S. oil output to pick up at the end of 2021 and grow further in 2022.
Full coverage: REUTERS
