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Good morning! Here’s what you need to know in markets on Tuesday.
1. The U.S. Department of Agriculture said on Monday its $12 billion farm aid package would include $4.7 billion in direct payments to farmers to help offset losses from retaliatory tariffs on American exports this season. The bulk of the payments, $3.6 billion, would be made to soybean farmers. That amounts to $1.65 per bushel multiplied by 50 percent of production, Undersecretary for Farm Production and Conservation Bill Northey said on a conference call.
2. Asian shares advanced again on Tuesday while major currencies held on to gains amid hopes global tariff tensions were abating as the United States and Mexico made a deal to overhaul the North American Free Trade Agreement. Investors expect Canada too would agree to the new terms to preserve a three-nation pact, ultimately dispelling the economic uncertainty caused by U.S. President Donald Trump’s repeated threats to ditch the 1994 NAFTA accord.
3. Chinese crude steel production hit another record high in July, surpassing the previous peak struck in May this year. According to the World Steel Association, Chinese output rose to 81.2 million tonnes during the month, up from 80.2 million tonnes in June and the previous record high of 81.1 million tonnes set in May.
4. Nestle and Starbucks said on Tuesday they had concluded their licensing deal for the Swiss food giant to market the U.S. coffee maker’s packaged coffees and teas around the world. The $7.15 billion deal grants Nestle perpetual rights to sell Starbucks products such as Starbucks, Seattle’s Best Coffee and TeavanaTM/MC outside of the U.S. company’s coffee shops, and will result in about 500 Starbucks employees shifting to Nestle.
5. ASX futures are pointing higher, up 0.18% against the S&P at 7.55am BST, after the US and Mexico reached a preliminary deal on a modernised version of the NAFTA trade agreement. The deal still needs to pass Congress but optimism on trade helped push US stocks to new record highs.
7. The Turkish lira tumbled around 1.05% against the US dollar on Tuesday (at 7.55am BST), hit by persistent concern about a diplomatic rift with Washington over a U.S. pastor on trial in Turkey. The slide left the lira down about 40 percent this year, driven by worries over President Tayyip Erdogan’s grip on monetary policy and the stand-off with the United States over the fate of evangelical Christian Andrew Brunson.
8.Berkshire Hathaway made an investment in India’s One97 Communications, the parent of digital payments firm Paytm, a spokeswoman said on Monday. Billionaire Warren Buffett, who runs the conglomerate, was not involved in the transaction, according to the emailed statement from Buffett’s assistant, Debbie Bosanek.
9. A narrowing gap between short-term and long-term borrowing costs could be signaling heightened risk of a U.S. recession, researchers at the San Francisco Federal Reserve Bank said in a study published on Monday. The research relies on an in-depth analysis of the gap between the yield on three-month and 10-year U.S. Treasury securities, a gap that like other measures of short-to-long-term rates has narrowed in recent months.
10. Four Transamerica entities will pay $97.6 million to settle U.S. Securities and Exchange Commission charges that they sold investments that were supposedly based on quantitative models but which did not work as intended, the regulator said on Monday.The settlement with the units of Netherlands-based Aegon NV includes a $36.3 million civil fine plus $61.3 million of disgorged sums and interest, all of which will be returned to investors.