Snarling orange ‘Trump baby’ blimp flies outside British parliament

LONDON (Reuters) – Opponents of Donald Trump flew a six-meter blimp depicting the U.S. president as an orange, snarling nappy-wearing baby just outside the British parliament on Friday.

Demonstrators float a blimp portraying U.S. President Donald Trump, next to a Union Flag above Parliament Square, during the visit by Trump and First Lady Melania Trump in London, Britain July 13, 2018. REUTERS/Peter Nicholls

Trump, who arrived in Britain on Thursday, told the Sun newspaper that planned protests against him in London and other British cities made him feel unwelcome so he was avoiding the capital as much as possible.

“I guess when they put out blimps to make me feel unwelcome, no reason for me to go to London,” Trump told the newspaper.

Demonstrators fly a blimp portraying U.S. President Donald Trump, in Parliament Square, during the visit by Trump and First Lady Melania Trump in London, Britain July 13, 2018. REUTERS/Peter Nicholls

“I used to love London as a city. I haven’t been there in a long time. But when they make you feel unwelcome, why would I stay there?”

Britain regards its close ties with the United States, which it calls the special relationship, as a pillar of its foreign policy and Prime Minister Theresa May has courted Trump ahead of the country’s departure from the European Union.

But some Britons see Trump as crude, volatile, unreliable and opposed to their values on a range of issues. More than 64,000 people have signed up to demonstrate in London against Trump’s visit while other protests are expected around the country.

A few hundred people gathered to watch the blimp launch in Parliament Square, with organizers of the stunt wearing red boiler suits and red baseball caps emblazoned with “TRUMP BABYSITTER”.

Slideshow (9 Images)

After counting down from 10 to 1 a cheer went up as the large balloon rose to fly around 10 meters off the ground, next to parliament and the River Thames.

Organizer Daniel Jones, a charity communications officer aged 26, said they were trying to make people laugh as well as making a serious point.

“It’s also about giving a boost to those in America resisting his policies,” he said. One man dressed as a guerilla and wore a Trump plastic mask, stood inside a large metal cage.

London Mayor Sadiq Khan, who was criticized by Trump in the Sun interview for failing to control crime and prevent militant attacks, gave his blessing for the blimp to be flown and rejected suggestions this showed a lack of respect to the U.S. president.

“The idea that we restrict freedom of speech, the right to assemble, the right to protest because somebody might be offended is a slippery slope,” he told BBC radio, adding that a protest to welcome Trump was also planned.

“We have a rich history in this country of having a sense of humor as well.”

Reporting by Paul Sandle and Peter Nicholls; editing Guy Faulconbridge

Oil falls toward $73 per barrel as supply concerns ease

TOKYO/LONDON (Reuters) – Oil prices fell more than 1 percent on Friday, set for a second straight week of decline as Libyan ports reopen and amid hopes that Iran will still export some crude despite U.S. sanctions.

FILE PHOTO: An oil pump is seen operating in the Permian Basin near Midland, Texas, U.S., May 3, 2017. REUTERS/Ernest Scheyder/File Photo

Brent crude LCOc1 was down $1, or 1.3 percent, at $73.45 a barrel by 0840 GMT, heading for a weekly fall of around 4 percent.

U.S. benchmark West Texas Intermediate crude CLc1 lost 22 cents to $70.11, set for a weekly decline of around 5 percent.

Oil approached $80 in June and early July due to Libyan and Venezuelan supply disruptions and fears the United States would press all buyers of Iranian oil to cut imports to zero from November.

But prices weakened in recent days as OPEC member Libya reopened its ports in the east and U.S. Secretary of State Mike Pompeo said Washington would consider granting waivers to some of Iran’s crude buyers.

Prices also slid amid broader market fears that a U.S.-China trade dispute could hit global economic growth.

“While the oil market could not escape the mounting trade tensions and souring sentiment in financial markets, the sell-off was more about signs of rising supplies,” Julius Baer analyst Carsten Menke said.

“If Iran was blocked from the market, we believe oil prices would rise toward $90 per barrel, which would cause significant fuel inflation, weigh on consumer and business sentiment and eventually hurt the economy,” he added.

The International Energy Agency (IEA) warned on Thursday that the world was short of spare supply capacity and hence any new disruption could further elevate oil prices.

“Rising production from Middle East Gulf countries and Russia, welcome though it is, comes at the expense of the world’s spare capacity cushion, which might be stretched to the limit,” the Paris-based IEA said in its monthly report.

“This vulnerability currently underpins oil prices and seems likely to continue doing so,” the agency said.

OPEC crude supply (Source: IEA) reut.rs/2NLDrgP

CHART: U.S. oil may retest support at $69.19 bit.ly/2Nbo3sH

CHART: Brent oil may retest support at $72.56 tmsnrt.rs/2NJLFFX

Reporting by Aaron Sheldrick and Dmitry Zhdannikov; Editing by Dale Hudson

Chinese hotel denies raising rates for Americans amid trade war

SHENZHEN, China (Reuters) – A hotel in the southern Chinese city of Shenzhen on Friday denied a report that it would charge U.S. guests an extra 25 percent amid an escalating trade war between Washington and Beijing.

FILE PHOTO: A U.S. flag is tweaked ahead of a news conference between U.S. Secretary of State John Kerry and Chinese Foreign Minister Wang Yi at the Ministry of Foreign Affairs in Beijing, China January 27, 2016. Jacquelyn Martin/Pool via REUTERS/File Photo

However, three staff members who declined to be identified told Reuters that a discriminatory rate policy had indeed been posted at the hotel as of Thursday but had since been removed.

The Global Times, a hawkish tabloid published by the ruling Communist Party’s People’s Daily, said in a report dated Thursday that the Modern Classic Hotel Group had put up a notice at its hotel informing guests of the extra charge.

It cited a spokesperson at the hotel, surnamed Yang, saying that the hotel had posted the notice last Friday.

“We have no idea where this news came from. My phone has been ringing off the hook all day today,” Bai Lulu, a front office manager, told Reuters at the hotel.

“We treat all our guests equally. We wouldn’t charge one type of guest more than another type of guest,” Bai said, adding that the hotel did not currently have any American guests.

However, another staff member, declining to be identified, said there had indeed been notices saying Americans would be charged extra.

“There were ads up yesterday in the restaurant stating Americans would be charged 25 percent extra. We took photos.”

The Global Times had cited a spokesperson for the hotel surnamed Yang as saying their boss was “really angry about the endless tariffs the U.S. planned to impose on China”.

There has been little public evidence to date of anti-American activity in China as the trade dispute has grown increasingly bitter.

The United States and China each imposed a 25 percent tariff on $34 billion worth of the other’s goods on July 6. This week, Washington published a new set of proposed tariffs on an additional $200 billion worth of goods from China, further escalating the conflict.

“Chinese public sentiment towards the U.S. is becoming more sensitive” after Washington’s latest tariff threats, the Global Times said in its report.

Several sources have told Reuters that China issued strict guidelines to its media barring personal attacks on U.S. President Donald Trump and limiting open commentary, an apparent attempt to avoid unintentional escalation.

Authorities were also censoring potentially sensitive items on social media such as Weibo, China’s Twitter-like service, where trade-related items have been mostly kept off the list of top trending topics.

Official Chinese statements this week have taken a sharper tone, accusing the United States of “bullying” and starting the trade war.

Additional reporting by Se Young Lee; Editing by Tony Munroe and Nick Macfie

Trump says May’s Brexit plan kills hope of a U.S. trade deal

LONDON (Reuters) – President Donald Trump directly criticized Prime Minister Theresa May’s Brexit strategy, saying it had probably killed off hope of a U.S.-British trade deal and that she had failed to take his advice on how to negotiate with the European Union.

In an interview published just hours before he was due to have lunch with May and tea with Queen Elizabeth on Friday, Trump chided the “very unfortunate” results of the prime minister’s Brexit negotiation.

“If they do a deal like that, we would be dealing with the European Union instead of dealing with the UK, so it will probably kill the deal,” Trump told the Rupert Murdoch-owned Sun newspaper.

“I would have done it much differently,” he told The Sun, which urged its readers to back Brexit before a referendum in June 2016. “I actually told Theresa May how to do it, but she didn’t listen to me.”

After a tumultuous week for May, when her Brexit Secretary David Davis and Foreign Secretary Boris Johnson resigned in protest at the Brexit plan, Trump heaped praise on Johnson, saying he “would be a great prime minister”.

Such public criticism by a sitting U.S. president of a British prime minister while on a visit to the United Kingdom publicly undermines May in her party, her country and abroad.

Sterling fell half a percent to a 1-1/2 week low of $1.3131, partly on Trump’s comments.

  • Snarling orange ‘Trump baby’ blimp flies outside British parliament
  • London mayor says preposterous for Trump to blame crime on immigration
  • May and Trump will have positive trade discussion: UK finance minister Hammond

When asked about the comments, May’s spokesman said she was looking forward to sitting down with Trump to talk him through the negotiating stance.

As Britain prepares to leave the EU on March 29, 2019, supporters of Brexit have made much of the so-called special relationship with the United States and the benefits of forging closer trade ties with the world’s biggest economy.

Many have cast May’s plan as a betrayal, including lawmakers in her divided Conservative Party, who have warned that she might face a leadership challenge.

White House spokeswoman Sarah Sanders said the president “likes and respects Prime Minister May very much,” adding that he said in the interview she “is a very good person” and that he “never said anything bad about her”.

TRUMP PROTESTS

For supporters, Trump and Brexit offer the prospect of breaking free from what they see as obsolete institutions and rules.

But for many British diplomats, Brexit marks the collapse of a 70-year strategy of trying to balance European integration with a U.S. alliance based on blood, trade and intelligence sharing.

Trump has frequently angered British politicians. Late last year, May criticized him for retweeting a message by a member of a British far-right group, and the speaker of parliament has said Trump would not be welcome to address the chamber.

U.S. President Donald Trump leaves the U.S. Embasssy with the ambassador to Britain, Robert Wood Johnson, London, Britain, July 13, 2018. REUTERS/Kevin Lamarque

More than 64,000 people have signed up to demonstrate in London against Trump’s visit. On Friday, protesters inflated a blimp depicting the U.S. president as an orange, snarling baby just outside the British parliament.

“I guess when they put out blimps to make me feel unwelcome, no reason for me to go to London,” Trump told the Sun.

One of the organizers of the blimp protest said the aim of the stunt was to make people laugh.

“It’s also about giving a boost to those in America resisting his policies,” said Daniel Jones, 26, who wore a red boiler suit and baseball cap emblazoned with “TRUMP BABYSITTER”.

On Thursday, May invoked World War Two leader Winston Churchill as she addressed Trump and business leaders at a black-tie dinner at Blenheim Palace, the 18th century country house where Churchill was born.

“Mr. President, Sir Winston Churchill once said that ‘to have the United States at our side was, to me, the greatest joy’,” May told Trump, according to a text of her speech.

“The spirit of friendship and cooperation between our countries, our leaders and our people, that most special of relationships, has a long and proud history,” she said, adding that the United States was “not just the closest of allies but the dearest of friends”.

Outside the mansion, northwest of London, a couple of thousand booing demonstrators lined the road. It was one of more than a hundred protests police expected during Trump’s four-day trip.

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“I think it’s a travesty of British values. How can we roll out the red carpet for someone who stands for everything we stand against?” said academic Emily Jones, 40, one of those protesting outside Blenheim Palace.

While Trump’s trip was not the full state visit he was originally promised, he was heralded by military bands on his arrival in the country and at Blenheim, and he is scheduled to take the tea with Queen Elizabeth.

Writing by Guy Faulconbridge and Michael Holden, editing by Larry King and Kevin Liffey

China’s trade surplus with U.S. hits record as exporters rush to beat tariffs

BEIJING (Reuters) – China’s trade surplus with the United States swelled to a record in June as its overall exports grew at a solid pace, a result that could further inflame a bitter trade dispute with Washington.

FILE PHOTO: A general view of a container port in Shanghai August 11, 2009. REUTERS/Aly Song/File Photo

But signs exporters were rushing shipments before tariffs went into effect in the first week of July suggest the spike in the surplus was a one-off, with analysts expecting a less favorable trade balance for China in coming months as duties on exports start to bite.

The data came after the administration of U.S. President Donald Trump raised the stakes in its trade row with China on Tuesday, saying it would slap 10 percent tariffs on an extra $200 billion worth of Chinese imports, including numerous consumer items.

China’s trade surplus with the United States, which is at the center of the tariff tussle, widened to a record monthly high of $28.97 billion, up from $24.58 billion in May, according to Reuters calculations based on official data going back to 2008.

The record surplus “won’t help already sour relations and escalating tensions”, Jonas Short, head of the Beijing office at Everbright Sun Hung Kai, wrote in a note.

Trump, who has demanded Beijing cut the trade surplus, could use the latest result to further ratchet up pressure on China after both sides last week imposed tit-for-tat tariffs on $34 billion of each other’s goods. Washington has warned it may ultimately impose tariffs on more than $500 billion worth of Chinese goods – nearly the total amount of U.S. imports from China last year.

The dispute has jolted global financial markets, raising worries a full-scale trade war could derail the world economy. Chinese stocks fell into bear market territory and the yuan currency has skidded, though there have been signs in recent days its central bank is moving to slow the currency’s declines.

China’s June exports rose 11.3 percent from a year earlier, China General Administration of Customs reported, beating forecasts for a 10 percent increase according to the latest Reuters poll of 39 analysts, and down from a 12.6 percent gain in May.

China’s commerce ministry confirmed last month that Chinese exporters were front-loading exports to the U.S. to get ahead of expected tariffs – a situation that could exacerbate any slowdown in shipments toward the year-end.

“Looking ahead, export growth will cool in the coming months as US tariffs start to bite alongside a broader softening in global demand,” Julian Evans-Pritchard, Senior China Economist at Capital Economics in Singapore wrote in a note, though he noted a weaker yuan should help offset some of the decline.

EXPORTS, ECONOMIC RISKS

China’s exports to the United States rose 13.6 percent in the first half of 2018 from a year earlier, while its imports from the U.S. rose 11.8 percent in the same period.

  • Chinese hotel denies raising rates for Americans amid trade war

Separate data suggested some Chinese retailers moved up orders to the U.S. to insulate themselves from the intensifying trade war that threatens to send up costs on a growing number of consumer products.

For January-June China’s trade surplus with the United States rose to $133.76 billion, compared with about $117.51 billion in the same period last year.

After a strong start to the year, growth in China’s exports has moderated recently, and is expected to face more pressure from the initial round of U.S. tariffs. Both official and private business surveys reported softer export orders last month.

China’s foreign trade faces risks of slowing in the second half of the year, General Administration of Customs spokesman Huang Songping told a news conference – a view backed by analysts and likely to put more strain on an economy already feeling the pinch from a multi-year debt battle that has driven up corporate borrowing costs.

Investors fear a prolonged trade battle with the United States could harm business confidence and investment, disrupting global supply chains and harming growth in China and the rest of the world.

South Korea, Asia’s fourth-largest economy, warned on Thursday that components and materials used in home appliances, computers and communications devices could be caught in the crossfire of the trade war.

SEEKING TO CUSHION TRADE BLOW?

Imports grew 14.1 percent in June, customs said, missing analysts’ forecast of a 20.8 percent growth, and compared with a 26 percent rise in May.

The commerce ministry also said this week it will use funds collected from tariffs charged on imports from the U.S. to help ease the impact of U.S. trade actions on Chinese companies and their employees.

In a sign Beijing is seeking alternative supplies of the commodities as it hit U.S. imports with extra tariffs, China had dropped import tariffs on a range of animal feed ingredients from several Asian countries.

Separate customs data on Friday showed imports of commodities from soybeans to crude oil eased compared with a year ago, but China’s steel mills and aluminum smelters sold much more abroad spurred by higher international prices amid growing concerns about slowing demand growth.

The data could renew longstanding criticism from the United States and Europe that the world’s top metal producer is selling its surplus product abroad, hurting foreign rivals.

“We expect slowing export growth to put downward pressure on the current account and RMB (yuan), and believe China is likely to be willing to make concessions in future rounds of trade negotiations with the U.S.,” Nomura analysts said in a note to clients.

Reporting by Yawen Chen and Elias Glenn; additional reporting by Lusha Zhang; Editing by Shri Navaratnam

Pfizer separates consumer health unit in business rejig

(Reuters) – Pfizer Inc announced plans on Wednesday to reorganize into three units, separating its consumer healthcare business that the U.S. drugmaker has been trying to sell since last year.

The company said it is still looking for options for the lower-margin, non-core consumer healthcare business that makes products ranging from painkiller Advil to lip balms and is worth about $15 billion.

“Given the lack of urgency, management is being rational about its divestiture,” BMO Capital Markets analyst Alex Arfaei said, adding the new structure will help Pfizer maintain its options for the business.

The news comes a day after Pfizer deferred drug price increases for no more than six months, following criticism from U.S. President Donald Trump.

Starting 2019, Pfizer’s new units would be Innovative Medicines, Established Medicines and Consumer Healthcare.

The company is currently split into two units – Innovative Medicines, which includes the consumer business, and Essential Health which houses legacy drugs such as Viagra.

“This design gives us a sharper focus on diverse patients in diverse markets,” Albert Bourla, chief operating officer, said.

The innovative medicines business will include biosimilars and a new hospital business unit, and together with the consumer healthcare business, will account for about three-quarters of the company’s revenue. Pfizer’s 2017 annual revenue was $52.55 billion.

The established medicines unit would now include a majority of the company’s brands such as soon-to-be off-patent neurological disease treatment Lyrica as well as some generic drugs.

The restructuring will allow the company to evaluate its businesses better and could result in selling or spinning off its off-patent drugs, Wall Street analysts said.

While the company expects the business to generate sustainable moderate revenue growth after Lyrica goes generic, Credit Suisse analyst Vamil Divan said the reorganization would allow the established medicines unit to have more autonomy.

“We believe the potential for Pfizer to ultimately sell or spin the business likely remains on the table over time,” Divan said.

Pfizer shares were trading marginally down at $37.27 in early trading.

FILE PHOTO: The Pfizer logo is seen at their world headquarters in Manhattan, New York, U.S., August 1, 2016. REUTERS/Andrew Kelly

Reporting by Manas Mishra in Bengaluru; Editing by Sweta Singh and Arun Koyyur

China vows to hit back over U.S. proposal for fresh tariffs

BEIJING/WASHINGTON (Reuters) – China accused the United States of bullying and warned it would hit back after the Trump administration raised the stakes in their trade dispute, threatening 10 percent tariffs on $200 billion of Chinese goods in a move that rattled global markets.

China’s commerce ministry said on Wednesday it was “shocked” and would complain to the World Trade Organisation, but did not immediately say how Beijing would retaliate in the dispute between the world’s two biggest economies. In a statement, it called the U.S. actions “completely unacceptable”.

The Chinese foreign ministry said Washington’s threats were “typical bullying” and described the dispute as a “fight between unilateralism and multilateralism”.

U.S. officials on Tuesday issued a list of thousands of Chinese goods to be hit with the new tariffs. The top items by value were furniture at $29 billion of imports in 2017, network routers worth $23 billion last year and computer components to the value of $20 billion.

The list is subject to a two-month public comment period.

Some U.S. business groups and lawmakers from President Donald Trump’s own Republican Party who support free trade were critical of the escalating tariffs. The Republican-controlled Senate voted 88-11 in favour of a non-binding resolution calling for Congress to have a role in implementing such tariffs.

Republican U.S. Senate Finance Committee Chairman Orrin Hatch said the U.S. announcement “appears reckless and is not a targeted approach.” Republican U.S. House of Representatives Speaker Paul Ryan accused China of unfair trade practices but added, “I don’t think tariffs are the right way to go.”

The U.S. Chamber of Commerce has supported Trump’s domestic tax cuts and efforts to reduce regulation of businesses, but does not back Trump’s aggressive tariff policies.

  • U.S. House Speaker Ryan: tariffs not the way to go in China trade dispute
  • China to its state media: keep calm, don’t inflame trade row with U.S.
  • U.S. says the ‘reckoning’ over China trade is too big for WTO

“Tariffs are taxes, plain and simple. Imposing taxes on another $200 billion worth of products will raise the costs of every day goods for American families,” a Chamber spokeswoman said.

Among the potential ways Beijing could hit back are “qualitative measures,” a threat that U.S. businesses in China fear could mean anything from stepped-up inspections to delays in investment approvals and even consumer boycotts.

HOLDING UP LICENSES

The Wall Street Journal, citing unnamed Chinese officials, said Beijing was considering holding up licenses for U.S. companies, delaying approvals of mergers involving U.S. firms and stepping up border inspections of American goods.

China could also limit visits to the United States by Chinese tourists, a business that state media said is worth $115 billion, or shed some of its U.S. Treasury holdings, Iris Pang, Greater China economist at ING in Hong Kong, wrote in a note.

Investors fear an escalating Sino-American trade war could hit global growth and damage sentiment.

The $200 billion far exceeds the total value of goods China imports from the United States, which means Beijing may need to think of creative ways to respond to such U.S. measures.

It also highlights how dependent U.S. businesses and consumers are on Chinese goods. In Trump’s first round of tariffs, China accounted for 20 percent of total U.S. imports, meaning that substitutes were readily available. In this round, China accounted for more than half of the imports.

There was a price to be paid by American companies as government policies legislated winners and losers.

Slideshow (6 Images)

Home furnishing retailers are expected to be hit particularly hard because China supplies 65 percent of U.S. furniture imports, according to analysts at Goldman Sachs.

The prospect of a 10 percent tariff on Chinese furniture imports sent shares of online home store WayFair Inc (W.N) down 2.9 percent, while shares of Restoration Hardware (RH.N) tumbled 4.3 percent.

Auto parts retailers, which would also be affected by the latest tariff threats the U.S. lobbed at China, fell more steeply than the broader market. Shares of Advance Auto Parts Inc (AAP.N) were down 1.1 percent, Autozone Inc (AZO.N) fell 1.6 percent and O’Reilly Automotive Inc (ORLY.O) dropped 1.6 percent.

The Dow Jones Industrial Average .DJI closed down 0.88 percent, the SP 500 .SPX was down 0.71 percent and the Nasdaq was off 0.55 percent.

The MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 1.1 percent, while the main indexes in Hong Kong .HSI and Shanghai .SSEC recovered somewhat after falling more than 2 percent.

Trump has been following through on pledges he made during his 2016 presidential campaign to get tough on China, which he accuses of unfair trade practices including theft of intellectual property and forced technology transfer that have led to a $375 billion U.S. trade deficit with China.

The U.S. president has said he may ultimately impose tariffs on more than $500 billion worth of Chinese goods, roughly the total amount of U.S. imports from China last year.

U.S. financial analysts said Trump appeared to believe there was a political benefit to waging a trade war, although that could change quickly amid economic fallout.

“It is now much more likely that the dispute will continue for a prolonged period of time and that we will see ratcheting up of protectionist measures,” said Elena Duggar, an associate managing director at Moody’s, the credit rating agency.

Reporting by Eric Beech in WASHINGTON, Elias Glenn, Stella Qiu and Christian Shepherd in BEIJING, April Joyner and Sinead Carew in NEW YORK; Writing by Tony Munroe and John Whitesides; Editing by Shri Navaratnam, Sam Holmes and Will Dunham

Stocks, oil prices slide on trade war worries

NEW YORK (Reuters) – Concerns about an escalating U.S.-China trade war made markets topsy-turvy on Wednesday, with U.S. stocks breaking a four-session winning streak and Brent crude prices seeing their biggest one-day drop in two years.

Even so, the U.S. dollar hit a six-month high against the safe-haven Japanese yen as currency traders put trade worries aside and focused on Labor Department data that showed producer prices rising more than expected.

Metal prices also slumped after U.S. President Donald Trump’s threat overnight of 10 percent tariffs on another $200 billion of Chinese goods dampened hopes that Washington will eventually step back from the escalating row.

The clock now starts ticking on a two-month period of public comment before the levies are imposed. Trump has said he may ultimately target more than $500 billion worth of Chinese goods – roughly the total amount of U.S. imports from China last year.

To view a graphic on Trade tensions in China’s markets, click: reut.rs/2L7D8Ls

“Unfortunately the markets haven’t come to grips with the current levels of trade policies and tariffs,” said Art Hogan, chief market strategist at B. Riley FBR in New York.

“Concerns over trade and trade wars are really having an adverse effect, less so on the U.S. markets than the international markets, but it is certainly taking a bite.”

The Dow Jones Industrial Average fell 219.21 points, or 0.88 percent, to 24,700.45, the SP 500 lost 19.82 points, or 0.71 percent, to 2,774.02 and the Nasdaq Composite dropped 42.59 points, or 0.55 percent, to 7,716.61.

In currencies, both the yen and the dollar act as safe-haven investments. But the strength of the greenback against the yen suggests investors are reflecting faith in the U.S. economy rather than seeking safety.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 11, 2018. REUTERS/Brendan McDermid

The dollar index rose 0.6 percent, with the euro down 0.59 percent to $1.1673.

The Japanese yen weakened 0.92 percent versus the greenback at 112.02 per dollar.

To view a graphic on Trade war hit to equity markets, click: reut.rs/2L8nZtk

In Europe, shares extended losses after Trump kicked off a NATO summit in Brussels by accusing Germany of being a “captive” of Russia.[.EU]

Australia’s dollar, often seen as a proxy for China’s economic fortunes due to Australian raw materials exported there, extended losses and was last down 1.21 percent. [/FRX]

Industrial metals copper, zinc and lead all slumped as much as 4 percent to their lowest levels in about a year over worries that the trade dispute could dent China’s commodity-hungry economy. [MET/L]

Copper lost 3.12 percent to $6,135.00 a tonne.

Three-month aluminum on the London Metal Exchange lost 1.41 percent to $2,060.50 a tonne.

Oil also fell on news that Libya would reopen its ports, raising expectations of a growing supply.

U.S. crude fell 4.71 percent to $70.62 per barrel and Brent was last at $74.12, down 6.01 percent on the day.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 11, 2018. REUTERS/Brendan McDermid

Reporting by Hilary Russ in New York, additional reporting by Amy Caren Daniel in Bengaluru and Jessica Resnick-Ault and Kate Duguid in New York; Editing by Nick Zieminski and Rosalba O’Brien

Papa John’s drops after report alleges chairman used racial slur

** Shares of Papa John’s International Inc (PZZA.O) pizza chain down 3.5 pct to a more-than-two-year low on Wednesday a report that Chairman, founder and former CEO John Schnatter used a racial slur on a conference call

The Papa John’s store in Westminster, Colorado, U.S. August 1, 2017. REUTERS/Rick Wilking

** Forbes reported here that Schnatter used the offensive term for black people on a call with a marketing agency aimed at preventing future public-relations crises

** According to the report, Schnatter complained that in the past, “Colonel Sanders” used the racist term without facing a public backlash

** Schnatter stepped down as CEO of PZZA in January after he came under fire for blaming soft pizza sales on the National Football League’s handling of national anthem protests by players

** In a statement, PZZA said: “Papa John’s condemns racism and any insensitive language, no matter the situation or setting. … We take great pride in the diversity of the Papa John’s family, though diversity and inclusion is an area we will continue to strive to do better.”

** PZZA is a favorite among short sellers, with more than 22 pct of the free float sold short, according to S3 Partners data

** Stock is now at its lowest since Feb 2016 and is off 45 pct from record high close in Dec 2016; YTD shrs down 12.8 pct vs 3.9 pct gain for the SP 500 .SPX

Crude oil benchmark Brent sees biggest one-day fall in two years

NEW YORK (Reuters) – Global benchmark Brent crude oil had its biggest one-day drop in two years on Wednesday as escalating U.S.-China trade tensions threatened to hurt oil demand, and news that Libya would reopen its ports raised expectations of growing supply.

FILE PHOTO: A pump jack is seen at sunrise near Bakersfield, California October 14, 2014. REUTERS/Lucy Nicholson/File Photo

Brent crude LCOc1 fell $5.46, or 6.9 percent, to settle at $73.40 a barrel. The decline was the largest one-day move on a percentage basis since Feb. 9, 2016. U.S. crude CLc1 fell $3.73, or 5 percent, to $70.38 a barrel.

The sell-off began early in the session after Libya’s National Oil Company said it would reopen ports which had been closed since late June.

“The headline on Libya was merely the trigger,” said John Saucer, a vice president at advisory firm Mobius Risk Group. The sell-off intensified after news of a fall in U.S. crude oil inventories failed to reverse market sentiment.

“The scope of today’s sell-off is unequivocally a speculative washout,” said Saucer. Hedge funds and other money managers with bullish wagers appeared to pare long positions, pulling back from positions added as crude approached three and a half year highs last month, Saucer said.

The selling pressure intensified as trade tensions between the U.S. and China raised concerns about demand. The specter of tariffs on a further $200 billion of Chinese goods sent commodities lower, along with stock markets, as tension between the world’s biggest economies intensified.

“Escalating trade tensions between the U.S. and China has prompted risk aversion in today’s trading session, which is evident in oil prices,” said Abhishek Kumar, senior energy analyst at Interfax Energy.

Crude oil prices also fell as the U.S. dollar rose on Wednesday’s surprisingly strong U.S. inflation report, which increased prospects the Federal Reserve will raise interest rates twice more this year. A stronger dollar can weaken dollar-denominated commodities, like crude.

“Trade concerns have bitten today,” said Michael McCarthy, chief markets strategist at CMC Markets. “If these tariffs are introduced, there will be an impact on global growth and demand.” China is a top buyer of U.S. crude, and has said it could tax U.S. oil if trade tensions escalate.

Tripoli-based Libya National Oil Corp said on Wednesday four export terminals were being reopened after eastern factions handed over the ports, ending a standoff that had shut down most of Libya’s oil output.

Libyan oil production has fallen to 527,000 barrels per day (bpd) from a high of 1.28 million bpd in February following port closures in late June, the NOC said on Monday.

“Libyan relief changes the conversation about spare capacity,” said John Kilduff, a partner at Again Capital Management. Concerns about a lack of spare capacity had led crude to rally.

Prospects of U.S. sanctions on crude exports from Iran, the world’s fifth-biggest oil producer, has helped push oil prices up in recent weeks, with both crude contracts trading near 3-1/2-year highs until Wednesday.

U.S. Secretary of State Mike Pompeo said on Tuesday that Washington would consider requests from some countries to be exempt from sanctions due to go into effect in November to prevent Iran from exporting oil.

Washington had previously said countries must halt all imports of Iranian oil from Nov. 4 or face U.S. financial restrictions, with no exemptions.

The market shrugged off bullish U.S. government data showing crude stockpiles slumped by nearly 13 million barrels last week, the biggest slide in nearly two years. [EIA/S] USOILC=ECI Supply to the U.S. market has also been squeezed by the loss of some Canadian oil production.

“In spite of the extraordinary draw in crude oil inventories, the market is under pressure after refiners produced a record amount of gasoline this week and in conjunction with a greater than expected build in distillate inventories,” said Andrew Lipow, president at Lipow Oil Associates in Houston.

During the session, CME Group said a technical issue impacted connectivity for some customers. “Our markets remain open while we work directly with customers to resolve the issue,” a CME spokesman said in an emailed statement.

To view a graphic on Iran crude oil exports to major Asian clients in H1 2018, click: reut.rs/2NIum8v

Reporting by Jessica Resnick-Ault, additional reporting by Christopher Johnson in London and Aaron Sheldrick in Tokyo; Editing by Richard Chang, and Clive McKeef