Daily Briefing: Trump's new buddy NATO reinforces eastern flank
Russian Foreign Minister Sergei Lavrov shakes hands with U.S. Secretary of State Rex Tillerson during a news conference following their talks in Moscow, Russia, April 12, 2017. REUTERS/Sergei Karpukhin
U.S. President Donald Trump (R) and NATO Secretary General Jens Stoltenberg hold a joint news conference in the East Room at the White House in Washington, U.S., April 12, 2017. REUTERS/Jonathan Ernst
LONDON Polish President Andrzej Duda and NATO Supreme Allied Commander Europe, Gen. Curtis Scaparrotti officially welcome U.S., British and Romanian troops deployed as part of NATO’s plan to reinforce its eastern flank in the Polish town of Orzysz.
Last night, U.S. President Donald Trump said NATO was his new best buddy, telling NATO Secretary-General Jens Stoltenberg in the White House: "I said it was obsolete. It’s no longer obsolete" reversing what he had said on the campaign trail and thanking the alliance for its support after U.S. missiles hit a Syrian airfield in retaliation for a chemical weapons strike in northern Syria the United States blamed on the Syrian military.
Trump spoke hours after his Secretary of State Rex Tillerson was given the frostiest of frosty receptions by Russia's President Vladimir Putin and Foreign Minister Sergei Lavrov in Moscow, where he got short shrift on a plea to give up support for Syrian President Bashar al-Assad.
Putin attends a security meeting of his own on Friday, that of the Collective Security Treaty Organization, a Moscow-led bloc of ex-Soviet nations, in Bishkek.
MARKETS AT 0700 GMT
The dollar is sharply lower after Trump’s comments that the dollar is "getting too strong" and that he preferred the Federal Reserve to keep interest rates low.
U.S. Treasury yields are at five-month lows and, in the euro zone, German benchmark yields are also lower. Dollar weakness again hit Tokyo stocks and, along with still widespread concerns over geopolitics, pushed gold to its highest since Nov. 10.
The comments helped push Wall Street lower, though MSCI’s main Asia-Pacific ex-Japan stocks index rose 0.6 percent.
The dollar index, which measures the greenback against a basket of currencies, fell 0.7 percent. The dollar fell as low as 108.37 yen but is now up 0.1 percent on the day at 109.12 yen. The euro is marginally higher at $1.0668 and sterling has gained 0.2 percent to $1.2560.
China’s yuan hit a two-week high versus the dollar after Trump said his administration would not label China a currency manipulator and after forecast-beating Chinese trade data.
European stocks futures opened slightly lower on Thursday, indicating a softer open. Danish, Icelandic and Norwegian exchanges are closed for Maundy Thursday, taking volumes out of the pan-European benchmarks.
First-quarter results are beginning to trickle in from European companies, and France’s biggest retailer Carrefour could be one to watch after posting higher first-quarter revenue, with strong performance in its Brazilian segment, where it is mulling a public listing.
Recruiter Hays provided a read on the health of the British hiring market as it posted record third-quarter net fees, with international hiring offsetting weakness in the UK, and particularly London which it says is still "challenging".
The vociferous Akzo Nobel shareholder Elliott Advisors overnight said it planned legal action if Akzo did not give its upcoming shareholders meeting the chance to vote to dismiss its chairman, who rebuffed a $26 billion takeover bid by American rival PPG.
Elsewhere in company news and potential stock movers: Private equity firms have bid $22 billion for SCA hygiene unit-paper; Yancoal says Australian government clears Rio coal sale; Royal Mail to close defined benefit pension scheme; Daimler’s Mercedes-Benz undecided if it will sell future U.S. diesels.
U.S. markets later will focus on banks, when JPMorgan, Citigroup and Wells Fargo open the U.S. corporate reporting season.
Oil prices were flat at $55.87 a barrel. Copper, closely linked to the health of the Chinese economy, was up 1.6 percent after strong trade numbers.
Gold, which has prospered this week as investors have bought safe havens from the worries associated with Syria, North Korea, U.S.-Russia relations and the French presidential election, among others, hit a fresh five-month high. It was last down 0.1 percent on the day at $1,284 an ounce.
Trump sending the dollar lower and softening his anti-China rhetoric helped lifts emerging currencies and stocks. MSCI’s benchmark index jumped 0.8 percent – its biggest daily gain in nearly four weeks – putting it on track for a second straight week of gains.
China March trade showed exports rising at the fastest rate in more than two years in March, climbing 16.4 percent year-on-year, in a sign that global demand is picking up while imports, especially of commodities, surged by a fifth. Buoyed by Trump and the data, the yuan gained 0.24 percent in its biggest gain in over two weeks as the central bank set a much higher fix against the dollar while other Asian currencies also strengthened.
Mexico’s peso trades at its strongest since Trump’s election win last November while Turkey’s lira gains to hit its strongest level in 10 days ahead of Sunday’s referendum. But South Africa’s rand snaps a two day winning streak to weaken 0.3 percent after the parliament said late on Wednesday that a motion of no-confidence against President Jacob Zuma had been postponed pending a court decision on whether it should be a secret ballot.
South Korea’s central bank held its base rate steady at 1.25 percent as expected. Singapore’s Q1 GDP contracted 1.9 percent while the central bank kept rates unchanged – both in line with forecasts.
Late on Wednesday, Brazil cuts its key interest rate to 11.25 percent - the lowest level in over two years – in a bid to lift the economy out of its worst recession in over a century.
(editing by John Stonestreet)