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U.S. stock futures, dollar fall on rising concerns over Trump

U.S. share futures and the dollar tumbled on Wednesday on worries about more U.S. political turmoil after media reports said President Donald Trump asked then-FBI Director James Comey to end a probe into Trump's former national security advisor.

The reports raised questions over whether obstruction of justice charges could be laid against Trump, weakening confidence in the U.S. president's ability to push through an aggressive stimulus program that investors had been banking on since his election in November.

S&P 500 mini futures (ESc1), the world's most liquid stock futures, dropped 0.5 percent to 2,385, though they have managed to hold above their recent lows around 2,379.

European shares are expected to open lower, with spread-betters looking at declines of 0.6 percent for Germany's DAX (GDAXI), 0.4 percent in France's CAC (FCHI) and 0.2 percent for Britain's FTSE (FTSE).

MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) dropped 0.3 percent while Japan's Nikkei (N225) shed 0.5 percent.

Mike O'Rourke, chief market strategist at Jones Trading, wrote in a note that "Rising doubts about U.S. political leadership should fuel further rotation into Europe. The situation remains fluid, but this development should finally break the financial markets out of the volatility vacuum."

Nobuhiko Kuramochi, chief strategist at Mizuho Securities, said "worries about European politics and North Korea have receded... But now we have worries about the Trump Administration. Given that there are some stock indexes that have risen more than 10 percent so far this year, we may be entering a consolidation phase."

Trump asked Comey to end the FBI investigation into ties between former White House national security advisor Michael Flynn and Russia, according to a source who has seen a memo written by Comey.

The news, first reported by the New York Times, came after Trump had fired Comey and then discussed classified national security information about Islamic State with Russian Foreign Minister Sergei Lavrov.

The White House quickly denied the New York Times report, saying in a statement it was "not a truthful or accurate portrayal of the conversation between the president and Mr. Comey."

The tumult at the White House prompted currency traders to ditch the dollar against a broad range of currencies, most notably against the yen, to which investors often turn as a safe haven when there are problems in Europe and the United States.

The dollar dropped 0.7 percent to 112.37 yen , slipping further from its highs near 114.40 yen touched last week.

The dollar's index against a basket of six major currencies (DXY) <=USD> dropped to 97.93, giving up all of the gains made after Trump's election victory in November.

Other traditional safe-haven assets were also well bid. The Swiss franc gained 0.3 percent against the dollar to 0.9828 franc per dollar . The gold rose 0.6 percent to $1,243.4 per ounce .

The euro hit a six-month high of $1.1117, as it also drew support from solid economic data in the euro zone.

The euro zone's GDP grew 0.5 percent in January-March, in line with expectations, and underscoring a recovery in the currency bloc.

On the other hand, U.S. economic data published on Tuesday was mixed, raising more doubts about some rosy views on the economy.

While U.S. manufacturing production recorded its biggest increase in more than three years in April, housing starts posted a surprise fall to five-month lows.

The data came after Friday's softer-than-expected retail sales and inflation.

"Until Friday, markets had been focusing only on the bright side of the U.S. economy. But that seems to have changed," said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.

The 10-year U.S. Treasuries yield (US10YT=RR) dipped to 2.294 percent, flirting with its lowest level in two weeks.

Oil prices dropped after data showed an increase in U.S. crude inventories, stoking concerns that markets remain oversupplied despite efforts by top producers Saudi Arabia and Russia to extend output cuts.

Brent crude futures (LCOc1) were at $51.28 per barrel, down 36 cents, or 0.7 percent, from their last close.

Forex - Euro at 6-month highs before GDP data, dollar broadly lower

The euro rose to 6-month highs on Tuesday ahead of the release of euro zone data on first quarter growth, while the U.S. dollar was lower against a currency basket after an unexpectedly weak U.S. manufacturing report.

EUR/USD was up 0.44% to 1.1025 by 07.20 GMT, the strongest level since November 9.

Demand for the euro has been underpinned as investors shifted their attention back to the outlook for monetary policy as concerns over political risks receded after centrist Emmanuel Macron was elected France's president over far-right nationalist Marine Le Pen.

Investors were looking ahead to revised data on euro zone first quarter gross domestic product amid speculation over how soon the European Central Bank could scale back its stimulus program given recent signs of strength in the bloc’s economy.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.34% at 98.48, pressured lower by the stronger euro.

The dollar slipped on Monday after data showing that factory activity New York stateweakened this month, as companies reported a drop in new orders.

The Empire State manufacturing index fell to minus 1, from 5.2 in April, compared to economists’ expectations of a rise to 7.0. It was the first negative reading since October 2016 and added to a recent run of disappointing U.S. economic data.

Against the yen, the dollar was lower with USD/JPY down 0.4% at 113.31.

Meanwhile, sterling was higher ahead of the latest UK inflation report, with GBP/USD up 0.24% at 1.2925.

Economists are expecting that data to show that the cost of living in the UK jumped again in April as the weak pound drives up import costs.

Asian shares mixed as Trump comments in focus for policy impact

Asian shares were narrowly mixed on Tuesday as political turmoil engulfed the Trump administration over ties with Russia and investors turned cautious on the potential fallout on economic policy plans.

In Japan, the Nikkei 225 rose 0.52% to its highest levels since December 2015 as investors noted Japanese Prime Minister Shinzo Abe said Monday that his country he would continue pushing for a trans-Pacific trade deal while working with the U.S. on checking the missile and nuclear weapon ambitions of North Korea.

South Korea's Kospi gained 0.3% and Australia's S&P/ASX 200 rose 0.38%, while the Hang Seng Index eased 0.14% and the Shanghai Composite fell 0.66%.

Meanwhile, Moody's downgraded the corporate rating of Singapore-listed Noble Group, citing "weak operating cash flow and large debt maturities over the next twelve months." Noble Group shares gained 2.54% on Tuesday after slumping more than 20% last week on a first quarter earnings loss.

Overnight, U.S. stocks closed higher on Monday, as risk-on sentiment returned, after a surge in tech and energy stocks, while a weaker than expected manufacturing print for May failed to weigh on sentiment.

All three major U.S. indexes ended the session in positive territory, despite data showing that manufacturing in New York state shrank for the first time in seven months in May.

The Federal Reserve Bank of New York said its Empire State manufacturing index fell last month to minus 1, from 5.2 in April, as new orders dipped and shipment grew more quickly.

The Dow Jones Industrial Average at 20,981.94, up 0.41%. The S&P 500 gained 0.40% while the Nasdaq Composite closed at 6149.67, up 0.20%.

The energy sector was one of the biggest gainers for the session, after crude futures surged more than 2% amid bullish comments concerning further production cuts from Saudi and Russian energy ministers.

On the political front, investors continued to monitor developments in North Korea, after the Kim Jong-un led nation, confirmed that it had carried out a missile test on Sunday.

Greece cuts 2017 growth forecast

Greece cut its 2017 growth forecast to 1.8 percent from 2.7 percent, according to a mid-term budget plan unveiled late on Saturday, driven by uncertainty caused by delays in concluding the latest review of bailout reforms.

Greece and its foreign creditors reached a deal on reforms in early May after six months of tense negotiations but the wrangling hurt economic activity. The Greek central bank governor had warned the delays could hobble economic recovery.

The 2018-21 plan was submitted to parliament along with the reform deal which lawmakers need to approve.

It forecasts growth of 2.4 percent in 2018 and 2.6 percent in 2019. The projections are lower than those of the EU Commission, which also cut its growth estimates last week to 2.1 percent this year from 2.7 percent forecast three months ago.

GDP growth was also set to shrink to 2.5 percent in 2018 from previously estimated 3.1 percent, the Commission said.

The government hopes that legislating the new measures by May 18 will allow its euro zone partners to approve the deal when they meet on May 22 and release a new tranche of bailout funds.

It also wants the ministers to sign off on the review to qualify for inclusion in the European Central Bank's quantitative easing program and return to bond markets after three years of isolation.

Oil soars in Asia on Saudi, Russian comments on crude cut extension

Crude prices rallied sharply after Saudi Arabia and Russia said they agreed on the need to extend output cuts into March next year and despite weaker than seen China industrial output for April and as North Korea rattled markets with a statement its latest missile test at the weekend was capable of carrying a large nuclear warhead and investors also fretted over the potential spread of cyberattacks that have already hit 200,000 victims in at least 150 countries.

The U.S. West Texas Intermediate crude June contract jumped 1.71% to $48.66 a barrel, while on the ICE Futures Exchange in London, Brent oil for July delivery soared 1.59% to $51.65 a barrel. China reported industrial production rose a less than expected 6.5%, missing a 7.5% gain seen with April crude throughput the lowest since September 2016 and crude oil output down 3.7% on year to 15.99 million metric tons.

As well, China said retail sales for April rose 10.&% on year, more than the 10.^% seen, and fixed-asset investment gained 8.9%, below the 9.1% expected.

Ahead the market is looking to the latest market overview from the International Energy agency for the month of April.

Russian Energy Minister Alexander Novak amd SSSaudi energy minister Khalid al-Falah told reporters in Beijing they agreed on the need to seek a longer extension of crude oil output cuts, but did not clarify if that was a certain outcome for a a May 25 meeting in Vienna between OPEC and non-OPEC producers part of the pact such as Russia.

"Judging from the current dynamics in the decline of the oil and oil products inventories, the markets will see such decline in inventories by the end of 2017 - early 2018, which will lead to cuts in inventories to a five-year average," Novak told Russian emdia earlier.

Last week, oil futures settled nearly flat on Friday, but still registered the first weekly gain in a month on the likelihood that key crude producers will extend output cuts beyond an agreed-on June deadline when they meet later this month.

OPEC and non-member oil producers are considering extending a global supply cut past the end of the year to give the market more time to rebalance, according to OPEC and industry sources.

Some officials in recent days have also suggested the possibility of deeper production cuts to help clear a supply glut.

In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day between January and June, but so far the move has had little impact on inventory levels.

A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25. Oil futures posted their largest one-day gain since December 1 on Wednesday, rallying more than 3% after the U.S. Energy Information Administration said domestic oil stockpiles fell 5.2 million barrels in the week ended May 5, far exceeding market expectations. The reading marks the biggest weekly drawdown since December.

Crude sank to a five-month low at the start of the week, rattled by concern over increasing U.S. crude output that has shaken investors' faith in the ability of OPEC to rebalance the market.

Data from energy services company Baker Hughes showed on Friday that U.S. drillers last week added rigs for the 17th week in a row, implying that further gains in domestic production are ahead.

The U.S. rig count rose by 9 to 712, extending an 11-month drilling recovery to the highest level since August 2015.

Wall Street slides as investors fret about retail

U.S. stocks fell on Thursday after worse-than-expected sales drops at Macy's and Kohl's sparked a selloff in shares of department stores and stirred fears that consumers are not spending enough to drive strong economic growth.

Macy's (N:M) dismal quarterly performance sent its shares tumbling 17 percent, taking a toll on the consumer discretionary sector (SPLRCD), which fell 0.59 percent.

Kohl's (N:KSS) dropped 7.86 percent after it reported a drop in quarterly sales, while shares of Nordstrom (N:JWN) and J.C. Penney Co Inc (N:JCP) each dropped more than 7 percent.

"The brick-and-mortar are getting hurt probably more than anybody would have expected," said Anthony Conroy, President of Abel Noser in New York.

The weak corporate reports left investors looking to April retail sales data due out on Friday for signs of whether consumers are simply shifting their spending habits away from department stores, or just aren't spending.

"It's a gut check about the health of the consumer," said Phil Blancato, Chief Executive of Ladenburg Thalmann Asset Management. "It's a canary in the coalmine moment."

Eight of the 11 major S&P sectors declined. Financials (SPSY) fell 0.53 percent, weighed down by a 1.79-percent loss in Wells Fargo (N:WFC).

"Any market pullback, if orderly, (is) healthy as long as the underlying fundamentals for the market are strong," said Matthew Peterson, chief wealth strategist at LPL Financial in Charlotte, North Carolina.

The Dow Jones Industrial Average (DJI) fell 0.11 percent to end at 20,919.42 points and the S&P 500 (SPX) lost or 0.22 percent to 2,394.44.

The Nasdaq Composite (IXIC) dropped 0.22 percent to 6,115.96.

Shares of Snap Inc (N:SNAP) plunged 21.45 percent after the Snapchat owner reported a slowdown in user growth and revenue in its first earnings report as a publicly-listed company.

Straight Path (A:STRP) fell 20.41 percent after it agreed to be taken over by Verizon (N:VZ) in a $3.1 billion deal, snubbing a rival offer from AT&T (N:T).

Merck (N:MRK) rose 0.77 percent after the U.S. FDA cleared its lung cancer combination treatment.

Declining issues outnumbered advancing ones on the NYSE by a 1.58-to-1 ratio; on Nasdaq, a 1.73-to-1 ratio favored decliners.

The S&P 500 posted 16 new 52-week highs and 9 new lows; the Nasdaq Composite recorded 92 new highs and 65 new lows.

About 6.7 billion shares changed hands on U.S. exchanges, in line with the daily average over the last 20 sessions.

Gold prices move higher amid U.S. political turmoil

Gold prices moved higher on Friday, as recent political events in the U.S. continued to weigh on the greenback and boost demand for safe-haven assets, although investors were also eyeing the release of U.S. data due later in the day.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were up 0.26% at $1,227.36.

The June contract ended Thursday’s session 0.43% higher at $1,224.20 an ounce.

Futures were likely to find support at $1,214.30, the low of May 9 and resistance at $1,236.90, the high of May 8.

Markets were still jittery since U.S. President Donald Trump’s unexpected decision to fire FBI Director James Comey.

Comey had been leading his agency's investigation into alleged Russian meddling in the 2016 U.S. presidential campaign and possible collusion with Trump's campaign.

Investors were concerned the latest events in Washington could hamper the U.S. administration's ability to implement promised tax reform and stimulus measures.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 99.48 on Friday morning.

A weaker U.S. dollar usually supports gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

However, the greenback was still supported by the release on Thursday of upbeat reports on initial jobless claims and producer price inflation, as well as by mounting expectations for a rate hike by the Federal Reserve next month.

Market participants were now looking ahead to upcoming data on U.S. inflation, retail sales and consumer sentiment, due later Friday.

Elsewhere in metals trading, silver futures for July delivery jumped 1.13% to $16.448 a troy ounce, while copper futures for July delivery rose 0.20% to $2.513 a pound.

Oil jumps $1 after bullish weekly stockpile data

Oil prices were sharply higher in North American trading on Wednesday, hitting the strongest levels of the session after data showed a sizable drop in U.S. crude stockpiles.

The U.S. West Texas Intermediate crude June contract jumped $1.04, or around 2.3%, to $46.97 a barrel by 10:35AM ET (14:35GMT). Prices were at around $46.62 prior to the release of the inventory data.

The U.S. benchmark lost 55 cents on Tuesday amid fears that an ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance global oil supply and demand.

Elsewhere, Brent oil for July delivery on the ICE Futures Exchange in London rose $1.07 to $49.77 a barrel. The global benchmark declined 61 cents a day earlier.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 5.2 million barrels in the week ended May 5.

Market analysts' expected a crude-stock decline of around 1.8 million barrels, while the American Petroleum Institute late Tuesday reported a supply-drop of 5.8 million barrels.

Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by 438,000 barrels last week, the EIA said.

Total U.S. crude oil inventories stood at 522.5 million barrels as of last week, which the EIA considered to be at the upper half of the average range for this time of year.

The report also showed that gasoline inventories declined by 150,000 barrels, compared to expectations for a fall of 538,000 barrels.

For distillate inventories including diesel, the EIA reported a decline of 1.6 million barrels.

Crude has been under pressure in recent weeks, rattled by concern over increasing U.S. crude output that has shaken investors' faith in the ability of OPEC to rebalance the market.

OPEC and non-member oil producers are considering extending a global supply cut for nine months or more to give the market more time to rebalance, OPEC and industry sources said on Monday.

In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day between January and June, but so far the move has had little impact on inventory levels.

A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.

Elsewhere on Nymex, gasoline futures for June rose 3.1 cents, or nearly 2.2%, to $1.517 a gallon, while June heating oil added 2.7 cents to $1.469 a gallon.

Natural gas futures for June delivery gained 3.8 cents to $3.265 per million British thermal units.

Gold struggles near 8-week lows on U.S. rate hike expectations

Gold prices inched higher in European trade on Thursday, but held near their lowest level in around eight weeks amid growing expectations for a U.S. interest rate hike next month.

Comex gold futures rose around $4.00, or about 0.3%, to $1,222.70 a troy ounce by 3:05AM ET (07:05GMT). Meanwhile, spot gold was at $1,222.30.

The yellow metal hit its lowest since March 15 at $1,214.30 on Tuesday amid fading demand for safe-haven assets.

Markets are pricing in around an 80% chance of a hike at the Fed's June meeting, according to Investing.com’s Fed Rate Monitor Tool.

The metal is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.

The dollar index, which tracks the greenback against a basket of six major currencies, was at 99.46 in London morning trade, not far from a three-week high of 99.61.

The benchmark 10-year U.S. Treasury yield was at around 2.395%, within sight of a five-week peak of 2.416%.

There are a couple of economic reports Thursday, including weekly jobless claims and producer price inflation data both due at 8:30AM ET (12:30GMT).

Also on the Comex, silver futures gained 10.6 cents, or about 0.7%, to $16.31 a troy ounce. It fell to a more than four-month low of $16.06 on Tuesday.

Elsewhere in metals trading, platinum tacked on 0.9% to $918.00, while palladium added 0.2% to $801.10 an ounce.

Copper futures advanced 2.2 cents to $2.517 a pound. It slumped to the lowest level since January at $2.472 earlier this week amid renewed concern over China's economic health.

Goldman Sachs pares U.S. second-quarter GDP view to 2.9 percent

Goldman Sachs (NYSE:GS) economists on Tuesday trimmed its estimate on U.S. gross domestic product in the second quarter to 2.9 percent and raised its first-quarter GDP estimate to 0.9 percent following the release of March data on wholesale inventories.

"This morning’s data suggested a firmer pace of inventory investment in the first quarter but a somewhat smaller contribution to growth in the second quarter," Goldman economists Spencer Hill and Avisha Thakkar wrote in a research note.