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IMF deal: Argentine stock market up!

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BUENOS AIRES: Argentina’s stock market rose 4.15 percent while its currency fell 1.68 percent against the dollar Friday, a day after Buenos Aires agreed to a $50 billion standby loan from the International Monetary Fund.

During the week, the leading Merval index rose 10.5 percent while the peso lost 2.3 percent. The exchange rate closed at 25.98 pesos per dollar after the central bank announced it would let the currency float, removing the 25 pesos per dollar ceiling it had set.

The Argentine economy climbed 2.8 percent in 2017, but growth slowed after a crisis of confidence that resulted in the loss of over $10 billion of central bank reserves and saw the peso plunge by nearly 20 percent.

That led Latin America’s third-largest economy to ask for IMF assistance to help it face mounting inflation, budget deficits, and a weakening currency – an unpopular move in a country in which many associate the financial institution with painful memories of past economic and social crises.

A relevant piece published earlier: World stock markets were mixed on Friday at the start of a tense Group of Seven summit amid disagreement between the US and allies on trade, Iran, and other issues. The two-day G7 meeting that opened in Canada has earned the unofficial “G6 plus one” moniker following a series of aggressive trade actions by US President Donald Trump that have angered allies. “Investors are either worried that nothing will get resolved, or Trump will become more entrenched in his aggressive approach to trade,” said Connor Campbell, a financial analyst at Spreadex traders, adding that the meeting would probably be “feisty.” Traditional allies such as the European Union and Canada are also frustrated at Trump’s withdrawal from hard-fought international agreements on climate change and on containing Iran’s nuclear program. Trump threw an additional curveball at the group early Friday when he called for Russia to be readmitted into the group. European stocks closed mostly lower following a slump in Asia – and after a week of largely strong gains in the wake of robust US jobs data and easing political headwinds in Italy and Spain.

Frankfurt’s DAX 30 was also pressured by data showing industrial production in Germany unexpectedly fell in April, adding to fears of a slowdown in Europe’s powerhouse economy. Wall Street stocks moved cautiously on Friday in the shadow of a tense Group of Seven meeting in Canada amid trade conflicts, finishing a choppy session slightly higher. The Dow Jones Industrial Average gained 0.3 percent to 25,316.53. The broad-based S&P 500 also advanced 0.3 percent to 2,779.03, while the tech-rich Nasdaq Composite Index edged up 0.1 percent to 7,645.51. A two-day G7 meeting opened in Canada that has earned the unofficial “G6 plus one” moniker following a series of aggressive trade actions by President Donald Trump that have angered allies. Trump threw an additional curveball at the group early Friday when he called for Russia to be readmitted into the group. “The G7 is usually neutral to the markets, but now there are concerns that perhaps the trade talks will deteriorate,” said Quincy Krosby, chief market strategist at Prudential Financial. “It adds some caution to the market.” In recent weeks worries about a trade war have been offset by a string of largely positive US economic data. Krosby attributed Friday’s mixed trading also to next week’s calendar, which includes meetings of the Federal Reserve and European Central Bank. (9th of June, 2018)

 

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Asia

Tokyo stocks close lower

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Tokyo stocks close down

TOKYO: Shares here closed lower today as uncertainty caused by factors including Brexit and trade tensions weighed on the market, wiping out early gains.
The benchmark Nikkei 225 index fell 0.34 percent or 71.48 points to 21,148.02 while the broader Topix index was down 0.91 percent or 14.50 points at 1,575.31. Tokyo shares opened higher, rebounding from sharp drops the previous day, with investors apparently relieved that Wall Street eked out gains after a volatile session.
“But sentiment worsened as investors remained cautious amid uncertain elements such as the postponement of Britain’s Brexit vote and the US-China trade war,” Daiwa Securities senior technical analyst Hikaru Sato told AFP. European stock markets and the pound slid Monday after British Prime Minister Theresa May said she was delaying a parliamentary vote on her deal to leave the EU after conceding it would not win sufficient support.
“The market is concerned that the postponement uses up valuable time before the 29th March exit date, and the risk of a no-deal scenario is growing,” David de Garis, director of economics and markets at National Australia Bank said in a commentary. The dollar slipped to 113.10 yen in late Asian trade from 113.35 yen in New York Monday afternoon. In individual stocks trade, SoftBank Group jumped 2.44 percent to 8,827 yen after announcing Monday it aims to raise over $23 billion by listing its Japanese mobile unit next week.
Nissan kept falling, down 3.10 percent at 915.7 yen after tumbling 2.90 percent on Monday as ousted chairman Carlos Ghosn was charged and faced new allegations of alleged financial misconduct. Prosecutors also charged Nissan for filing documents that allegedly understated Ghosn’s earnings. The Nikkei daily reported Tuesday that Nissan plans to book years of under-reported compensation paid to Ghosn as expenses in the year to March 2019 all at once, a move that could worsen the automaker’s balance sheet. Toyota lost 1.09 percent to 6,745 yen but Sony rose 0.72 percent to 5,735 yen.

 

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Pound stuck a 20-month low

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Pound stuck a 20-month low

HONG KONG: Asian equities were mixed Tuesday as investor attempts to track gains in New York are weighed by a perfect storm of issues that have hammered global markets, while the pound remained stuck around 20-month lows on Brexit uncertainty.
Bargain-buyers tried to step in after the latest sell-off but were unable to gain traction, with fears about the outlook for the global economy keeping sentiment beaten down. The China-US trade row, signs of softness in both countries’ economies, the Huawei arrest, Brexit, demonstrations in France and tanking oil prices are among the problems facing investors, and analysts warned of more volatility to come.
Adding to those problems is upheaval in India – another crucial economy – where the head of the central Reserve Bank of India has resigned following a row with Prime Minister Narendra Modi’s administration over alleged government interference. Monday’s development sent the rupee, which was already Asia’s worst-performing currency,  tumbling more than one percent Tuesday, with speculation the RBI had intervened to pare the losses. The  Mumbai stock market initially fell a similar amount before bouncing back.
Global risk sentiment “is facing a towering wall of worry as virtually every major economy in the world is slowing, suggesting the synchronized global slowdown is accelerating at a much faster pace than thought,” said Stephen Innes, head of Asia-Pacific trade at OANDA. In Asian trade, Hong Kong rose 0.2 percent and Shanghai gained 0.4 percent but Tokyo shed 0.3 percent. Singapore slipped 0.3 percent, Seoul was marginally lower and Sydney rose 0.4  percent. Bangkok and Jakarta slipped, while Wellington, Manila, and Taipei were up.

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Asia

Iran-US Pistachio War!

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TEHRAN: Global pistachio market is dominated by Iran and the United States who are in stiff competition to gain a bigger share of the market, said the head of Iran Pistachio Association today. 

Mahmoud Abtahi told Iran Daily that although the US had managed to grab a larger share of the global pistachio market in recent years, Iran’s high-quality product had been able to attract more buyers. He said the annual pistachio exports of Iran and the US stood at 160,000 tons and 200,000 tons respectively in recent years. He said Italy, Greece, Afghanistan, Syria, and Turkey were also among the main players in the world pistachio market, but none of them could compete with Iran. “Turkey is seeking to raise its pistachio harvest to gain a bigger share of the global market,” he noted.

He said Iran’s pistachio sold for between US $10 and US $12 per kilogram in the global market. Abtahi noted that Iran exports about 80 percent of its pistachio harvest, adding that the price of the product in the local market was determined by its global price as well as its supply and demand. The official referred to the 100-year history of Iran’s pistachio exports and said, “We export pistachio to almost all countries both directly and indirectly.” Abtahi reiterated that dried fruits were among the country’s most important non-oil export items, of which the share of pistachios was 70 percent.

He said that Iran mostly exports pistachio in bulk as each country processes and packs pistachio based on its preferences. “On the other hand, tariffs on packaged pistachios are high in many countries, therefore exporters prefer to export pistachio in bulk,” he said. Abtahi noted that pistachio production in Iran declined in the year to March 21, 2019, adding pistachio yields bumper crop every other year. The official blamed spring frost as the other factor responsible for a decline in Iran’s pistachio output. He said about 230,000 tons of pistachios were produced in Iran in the year to March 2018 and this figure is expected to reach 50,000 tons in the current year. The official cited Kerman, Khorasan Razavi and Yazd as the provinces with the highest number of pistachio orchards in the country.

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