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Commodities: US China tariffs will go into effect at the stroke of midnight

By Alexander Bueso

Date: Thursday 05 Jul 2018

Commodities: US China tariffs will go into effect at the stroke of midnight

(Sharecast News) - Commodities were trading on the back foot ahead of the expected launch of America's tariffs on $34bn-worth of Chinese-made goods at 0501 BST on Friday, with the reaction from Beijing likely to follow soon thereafter.
Compounding matters, the White House had already announced that it would quickly follow-up with additional levies if China countered with its own set of measures.

Against the backdrop of an imminent ratcheting-up in trade tensions, the Bloomberg commodity index was 0.28% lower to 85.69, alongside a 0.12% dip for the US dollar spot index to 94.150.

Likely in anticipation of such a move, September copper on COMEX was shedding 3.03% to $2.8215/lb., but agricultural futures - which often react poorly to negative news on the trade front - were in fact mostly higher.

Gold futures for next month delivery were cautiously higher alongside, with the August contract on COMEX adding 0.34% to $1,257.70/oz..

September wheat on CBoT was the standout performer, adding 3.21% to stand at $5.0675 a bushel.

Energy futures meanwhile were mixed, as traders reacted to the latest weekly DoE inventory report.

According to the Energy Information Administration, the DoE's statistical arm, commercial crude oil inventories built by 1.2m barrels a day over the week ending on 29 June to reach 417.9m barrels, thanks to a big jump in net imports.

That was counter to analysts' expectations for a drop of 3.5m barrels.

In reaction to Thursdays' figures, WTI futures for prompt month delivery were down by 1.38% at $73.12 a barrel, even as similarly-dated RBOB gasoline on NYMEX rose 0.87% to $2.1361 a gallon.





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