China’s war hawks make it difficult for U.S. to improve relations with Beijing/Xi
Reasons are being cited for why the farm bill is behind schedule to get it done this year. More in Policy section. A defense forum in Singapore kicked off with a friendly handshake between Pentagon chief Lloyd Austin and Chinese Defense Minister Li Shangfu, but ended Sunday with few little hope the countries could avoid an eventual collision. Austin chided China over its refusal to meet unless the U.S. lifted sanctions on Li, while Li accused the U.S. of creating divisive alliances and seeking to contain China with its support for Taiwan.
A mystery trader made a suspiciously timed investment ahead of a surprise debt-ceiling-deal concession. See Markets section for more. Hormel Foods has invested significantly in transitioning their pig farms to comply with California's Proposition 12 standards. More in Livestock section. The Dow gained 701.19 points, 2.12%, at 33,762.76. The Nasdaq rose 139.78 points, .107%, at 13,240.77. The S&P 500 was up 61.35 points, 1.45%, at 4,282.37.
Producer price inflation in the Eurozone declined to 1.0% year-on-year in April 2023, following a downward revision from the previous month's 5.5% and missing market expectations of 1.4%. The rate of inflation has been easing for eight consecutive months and reached its lowest level since January 2021, primarily driven by a significant drop in energy prices . Excluding energy, producer price inflation slowed to 5.1% year-on-year in April from 8.0% in March.
HSBC USA is in the process of selling hundreds of millions of dollars' worth of commercial real estate loans, potentially at a discount, to stop direct lending to U.S. property developers, the FT writes. PacWest recently sold $2.6 billion of construction loans at a loss, and others are modifying the way they account for commercial real estate debt to ease future sales.
Western countries are concerned that China and Russia may exploit the escalating geopolitical tensions in the Arctic to gain influence over the region and its valuable resources. They fear the end of Arctic exceptionalism, where the polar region was historically unaffected by global tensions. Senior western policymakers have voiced these concerns in interviews with the Financial Times.
Danish Prime Minister Mette Frederiksen warns against naivety regarding the Arctic and calls for increased awareness of China's role in the region. Norway is trying to work with other Arctic Council members while excluding Russia, but diplomats admit that Russia's exclusion presents a dilemma, as the Arctic's management is difficult without Russia's involvement. • Outside markets: The U.S. dollar index was firmer amid weakness in the euro and British pound against the greenback.
• A mystery trader made a suspiciously timed investment ahead of a surprise debt-ceiling-deal concession. There was no public reason to believe that the approval of the Mountain Valley Pipeline — a pet project of Sen. Joe Manchin — would be included. But a trader bought 100,000 call options on the pipeline's owner days before it was announced.
• Raw sugar futures in the U.S. fell past 24.7 cents per pound in early June, the lowest since April, on signs of strong supply. Current weather forecasts suggest that precipitation in top producer Brazil is expected to ease soon, enabling the progress of the ongoing harvest. Other forecasts expect India and Southeast Asia to receive regular amounts of monsoon rainfall in 2023 despite the possible arrival of El Niño, easing concerns that adverse growing conditions would further hurt yields.
— Ukraine winter grain yields could suffer if hot, dry conditions persist. Most of Ukraine’s winter grain crops are in good condition but yields could fall by 20% if current dry and hot weather persists, APK-Inform consultancy quoted agricultural scientists as saying. “In general, weather conditions for most of the spring period were sufficiently favorable for growth and development of winter cereal crops,” Ukraine’s national academy of agricultural science said in a report.