Date: January 15, 2018
China absence looms over Canada meeting on how to pressure North Korea
Foreign ministers from around 20 nations gather on Tuesday to discuss how to curb North Korea’s nuclear ambitions through diplomatic and financial pressure, but China, seen as a key player in any long-term solution, will be absent. The Vancouver meeting, co-hosted by Canada and the United States, comes amid signs that tensions on the peninsula have eased, at least temporarily. North and South Korea held talks for the first time in two years last week and Pyongyang says it will send athletes across the border to the Pyeongchang Winter Olympics. Butthe United States and others say the international community must look at ways of expanding a broad range of sanctions aimed at North Korea’s nuclear program. The 17-nation Proliferation Security Initiative, which aims to prevent the trafficking of weapons of mass destruction, on Friday said “it is imperative for us to redouble our efforts to put maximum pressure on North Korea”.But North Korean leader Kim Jong Un has shown no sign of willingness to give in to U.S. demands and negotiate away a weapons program he sees as vital to his survival.Another challenge in Vancouver will be the absence of China, which has significant influence in North Korea. Beijing is Pyongyang’s only ally and its chief trading partner.
Euro hits three-year high as bullish bets hit record level
The euro rose to a three-year high against the dollar on Monday, fuelled by growing economic optimism in the euro zone and expectations that the European Central Bank will tighten monetary policy. The currency’s rise against a broadly weakened dollar has been particularly marked, with the euro zone’s improving economic outlook spurring more investors to rebalance their portfolios towards the region. Speculators boosted net long positions in the euro to a record high in the week to Jan. 12, according to the latest futures data. Against a basket of currencies, the euro is at its highest since late 2014. The dollar has weakened as markets grow increasingly confident that a global recovery would outpace U.S. growth and prompt other major central banks led by the ECB to unwind its easy policy quicker than market expectations. Measured against a basket of currencies, the dollar was down 0.5 percent on Monday, its lowest since early 2015.
Oil hovers below $70 highs, clouded by rise in U.S. output
Oil hovered below a three-year high near $70 a barrel on Monday on signs that production cuts by OPEC and Russia are tightening supplies, but analysts warned of “red flags” due to surging U.S. production. International benchmark Brent crude futures LCOc1 were trading 12 cents lower at $69.75 by 1330 GMT, having risen above $70 earlier in the session.U.S. West Texas Intermediate (WTI) crude futures CLc1 were unchanged at $64.30 a barrel. Trading was relatively slow due to a national holiday in the United States.A production-cutting pact between the Organization of the Petroleum Exporting Countries, Russia and other producers has given a strong tailwind to oil prices, with both benchmarks last week hitting levels not seen since December 2014.Growing signs of a tightening market after a three-year rout have bolstered confidence among traders and analysts that prices can be sustained near current levels.Bank of America Merrill Lynch on Monday raised its 2018 Brent price forecast to $64 a barrel from $56, forecasting a deficit of 430,000 barrels per day (bpd) in oil production compared to demand this year. Other factors, including political risk, have also supported crude.