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SHANGHAI (Reuters) – Asian shares rose on Tuesday, lifted by gains in China and as auto firms climbed on merger news, but broad uncertainties over trade and economic growth kept investor enthusiasm in check.

European equity markets were expected to open higher. In early European trade, pan-region Euro Stoxx 50 futures were up 0.39% at 3,365, German DAX futures were up 0.39% at 12,112, FTSE futures were up 0.5% at 7,299.5, and France’s CAC 40 futures were up 0.41% at 5,319.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.38%, and U.S. S&P 500 e-mini futures rose 0.22% to 2,837.25, pointing to gains when U.S. markets reopen on Tuesday after a holiday.

Despite the day’s gains, Joanne Goh, Asia equity strategist at DBS in Singapore, said broad market sentiment remained uncertain ahead of a possible meeting between the Chinese and U.S. presidents at the G20 summit next month.

“There’s still a lack of direction in the markets in terms of all the different asset classes,” she said.

“You actually see Chinese bond yields are ticking up, but that shouldn’t be the case because we are expecting stimulus and bond yields should start to come off…there’s quite a lot of uncertainty in the markets right now.”

Chinese blue-chips climbed 0.61% a day after data showed Chinese industrial firms’ profits shrank in April, which could prompt more government stimulus to support the slowing economy.

A planned increase in the weighting of Chinese A-shares in MSCI indexes after the market close later on Tuesday also boosted shares.Seoul’s KOSPI added 0.37%, while Australian shares gained 0.45%. Japan’s Nikkei stock index finished 0.37% higher.

In China’s debt markets, 10-year government bond futures for September delivery, the most-traded contract, rebounded 0.34% on Tuesday having dropped as much as 0.71% the day before, after China’s takeover of a troubled bank sparked concerns of wider financial risks.

“With economic indicators mixed and trade war risks lingering, the bias is still tilted towards loose monetary policy to cushion growth. We think that the rise in longer-term (Chinese) govvie…yields is probably not warranted,” DBS analysts said in a note.

The equity market gains in Asia followed a relatively light session in Europe on Monday, with UK and U.S. financial markets closed for holidays.

European auto shares had rallied after Italian-American carmaker Fiat Chrysler confirmed it had made a “transformative merger” proposal to French peer Renault in a deal that would create the world’s third-biggest carmaker. That sector rally spilled into Asia with Mitsubishi Motors Corp in Japan adding 5.95% and Nissan Motor Co gaining 2.31%.

Shares in Hong Kong-listed Geely Automobile Holdings Ltd jumped 5.47%.​ Provisional results from EU elections also buoyed markets after pro-union parties kept a firm grip on power in elections to the European Parliament. The pan-European STOXX 600 added 0.22%.

“Although Eurosceptic and anti-establishment parties didn’t win as many seats as expected, their influence has increased significantly. This could have implications for the political color of key EU positions,” said Rodrigo Catril, senior FX strategist at National Australia Bank.

“The Parliament composition is also likely to have implications on the priority agenda for future EU reform, particularly with respect to things like immigration, fiscal spending and fiscal union,” he added, noting a decrease in bond yields pointed to continued risk aversion.

The yield on benchmark 10-year German Bunds fell to -0.147% on Monday, its lowest since September 2016.

On Tuesday, U.S. yields were also lower. Benchmark 10-year Treasury notes yielded 2.3097%. The two-year yield touched 2.1724%.

Trade worries remain high on investors’ list of concerns. U.S. President Donald Trump said on Monday that Washington was not ready to make a deal with Beijing but he expected one in the future, while at the same time pressing Japanese Prime Minister Shinzo Abe to even out a trade imbalance with the United States.

The dollar was flat against the yen at 109.50, and fell 0.13% against the euro, with the common currency buying $1.1182.

The dollar index, which tracks the greenback against a basket of six major rivals, was 0.17% higher at 97.782.

In commodity markets, oil prices extended gains after rising more than 1% on Monday on tensions in the Middle East and OPEC-led supply cuts, as well as continuing Russian supply disruptions after a contamination problem discovered last month.

Brent crude 0.29% higher at $70.31 per barrel, having earlier dipped below the $70 mark, and U.S. West Texas Intermediate crude added 1.16% to $59.31 per barrel.

Spot gold was down 0.12% at $1,283.30 per ounce.

Bitcoin, which on Monday touched $8,939.18, its highest in more than a year, was down 0.55% at $8,722.61. The cryptocurrency topped $8,000 for the first time since July 2018 on May 13.

TOKYO (Reuters) – Japan rolled out the red carpet for U.S. President Donald Trump this week, winning Tokyo a brief respite in its trade battle with Washington, but Prime Minister Shinzo Abe faces pressure to deliver concessions after a summer election.

Trump on Tuesday wound up a four-day state visit featuring golf, sumo, a state dinner with Emperor Naruhito and inspections of U.S. and Japanese warships meant to showcase the alliance, but shadowed by a feud over the two-way trade gap.

After his Monday summit with Abe, Trump had said he expected the allies to be “announcing some things, probably in August, that will be very good for both countries” on trade.

On Tuesday, however, Japanese Economy Minister Toshimitsu Motegi said the U.S. leader’s comment probably reflected his hope for quick progress in the trade talks.

“When you look at the exact wording of his comments, you can see that the president was voicing his hopes of swift progress in talks toward something that is mutually beneficial,” Motegi told reporters at a regular cabinet meeting.

Concessions on trade before an upper house election in July could upset Japanese voters, especially farmers, who are important backers of Abe’s Liberal Democratic Party, although consumers might welcome cheaper food products.

Japanese officials have denied that the two countries had agreed to reach a trade deal by August.

Opposition parties said Japanese farmers would be in the line of fire after the poll, adding that Trump had said “agriculture and beef were heavily in play” on Twitter on Sunday.

“Trump’s comments can only be taken to mean that Japan has in fact made major concessions on agriculture and livestock,” Yukio Edano, head of the opposition Constitutional Democratic Party of Japan (CDPJ) told a news conference this week.

“We cannot allow them to fight the upper house election by hiding this,” Japanese media quoted Edano as saying.

NO TIMETABLE FOR TALKS
Washington wants Tokyo to cut tariffs on U.S. farm products to restore their competitiveness after Trump shunned an 11-nation Pacific trade pact. Japan has signaled it might cut the levies to levels in the Trans-Pacific Trade Partnership (TPP).

Some experts saw Trump’s remark that he had “nothing to do” with TPP as suggesting he wanted deeper cuts, while Motegi stressed the two countries had agreed in a September deal that market access steps, or tariff cuts, for farm goods would not exceed those of Japan’s other deals, such as TPP.

Trump has also declared that some imported vehicles and parts posed a national security threat but delayed a decision on imposing tariffs for as long as six months, allowing more time for trade talks with Japan and the European Union.

Japan opposes any limits on its exports, which would violate World Trade Organization rules.

Motegi, who is in charge of trade talks, said his meeting in Tokyo last week with U.S. Trade Representative Robert Lighthizer made clear differences remain, but no timetable has been set for further talks.

Some diplomatic experts said Abe had probably got the best results he could hope for, despite worries over trade and other policies, such as North Korea’s nuclear and missile programs.

“You cannot embrace this President with nuance. If you are going to do it, you might as well embrace him fully,” said Toshihiro Nakayama, a Japan fellow at the Wilson Center in Washington.

“Overall, I would say that it was a successful ceremonial event. What more can you expect?”

SINGAPORE/BEIJING (Reuters) – A tanker carrying Iranian fuel oil in violation of U.S. sanctions has unloaded the cargo into storage tanks near the Chinese city of Zhoushan, according to ship tracking data on Refinitiv Eikon.

The discharging of the nearly 130,000 tonnes of Iranian fuel oil onboard the tanker, the Marshal Z, confirmed by a representative of the oil storage terminal, marks the end of an odyssey for the cargo that began four months ago.

Reuters reported on March 20 that some Iranian fuel oil had managed to evade the United States’ sanctions on petroleum exports by using ship-to-ship transfers involving four different ships, including the Marshal Z, and by using forged documents that masked the cargoes as originating from Iraq.

A second representative from the terminal operator, Zhoushan Jinrun Petroleum Transfer Co, said the cargo could not be Iranian oil, as the terminal had not received official shipments from Iran in at least the past four years. Both Jinrun representatives declined to be identified because of the sensitivity of the matter.

The unloading of the fuel oil comes less than two weeks after U.S. President Donald Trump’s administration stepped up moves to choke off Iran’s oil exports by scrapping waivers it had granted to big buyers of the country’s crude oil including China.

Refined products like fuel oil, mainly used to power ship engines and generate electricity, were not covered by the temporary waivers granted on the sanctions reintroduced in November 2018 as Washington seeks to pressure Iran into abandoning its nuclear and missile programs.

Reuters followed the movements of the Marshal Z since January using ship-tracking data available daily except when the ship was in deep waters and out of range of satellites.

From March 22 until arriving at the Jinrun terminal on the island of Liuheng on May 8, the vessel maintained a constant draught – how deep the ship sits in the water – of 15.9 meters (52 feet), according to the tracking data. That indicated the cargo was not discharged before reaching the terminal, about 30 km (18 miles) south of Zhoushan, near Shanghai.

Jinrun, owned by Herun Group, offers bonded storage at the terminal, according to its website, meaning that fuel can be stored there without clearing Chinese customs and officially entering the country. Herun officials referred questions back to Jinrun.

On May 12, the ship finished unloading the fuel oil as indicated by a change in its draught to 9 meters, and left the terminal, the tracking data showed. The vessel is headed for the waters just outside Singapore, set to arrive on May 21, the data showed.

FROM MALAYSIA TO CHINA
The Marshal Z took on the cargo from a larger tanker off the coast of the United Arab Emirates in January. It transferred the fuel oil to a second tanker, the Libya, off the Malaysian port of Malacca later that month, the ship-tracking data showed.

But potential buyers wary of the U.S. sanctions steered clear of the Marshal Z’s cargo. By March 22, the Marshal Z took the fuel oil back from the Libya and anchored off the Malaysian and Singaporean coasts.

The vessel lingered off Singapore and Malaysia in March and April, the ship tracking data shows, before sailing to Hong Kong and finally to Liuheng island, off the eastern Chinese province of Zhejiang.

“Transparency has been the thorn in the Marshal Z’s hull for quite some time now and owing to the issues regarding the alleged origin of her cargo nobody has been able to touch it,” said Matt Stanley, an oil broker at StarFuels in Dubai.

Reuters was unable to determine the financial terms surrounding the cargo’s unloading, but industry participants said it would likely have been on offer at a lower price to ensure a sale.

“Somebody in China decided that the steep discount this cargo most likely availed … was a bargain too good to miss,” said StarFuels broker Stanley.

Reuters was unable to confirm who purchased the fuel oil cargo carried by the Marshal Z.

Reuters has not been able to determine the owners of the Marshal Z. According to a shipbroker report dated Jan. 28, the tanker was sold to an undisclosed buyer and intended for use as floating storage.

MCALLEN, Texas (Reuters) – Reuters photos taken on Wednesday show adults and children outside the U.S. Border Patrol station for migrants in McAllen, Texas, sleeping on the ground and rigging up makeshift awnings with reflective blankets to shelter from the sun.

The photos, taken from a helicopter, also show people sleeping in a shaded area of a parking lot and crowded around a military tent.

The ground temperature was about 89 Fahrenheit (32 Celsius) when the pictures were taken around midday.

U.S. Customs and Border Protection (CBP) spokesman Richard Pauza referred to testimony by U.S. Border Patrol chief Carla Provost when asked for comment. The Border Patrol is the law enforcement arm of the CBP.

During her May 8 testimony to a U.S. Senate committee, Provost said the agency faced an “unprecedented border security and humanitarian crisis” as Central American migrant families headed north and apprehension numbers went “off the charts.”

U.S. border officers apprehended nearly 99,000 people crossing the U.S. southern border in April, the highest monthly figure since 2007, Provost said.

EMERGENCY FUNDING
According to the Border Patrol website, McAllen Station is responsible for patrolling a 53-mile (85 km) section of the Rio Grande that runs along the U.S.-Mexican border.

“From what we’ve seen at McAllen, people are sleeping on rocks and stones, and without shelter,” said Erika Andiola, chief advocacy officer at the Refugee and Immigrant Center for Education and Legal Services (RAICES), which provides legal services to migrants.

The Border Patrol did not immediately respond to a specific question on why migrants were being held in makeshift conditions by the McAllen Border Patrol station.

The Trump administration on May 1 asked Congress for $4.5 billion in immediate emergency funding, saying a surge in Central American children and families claiming asylum at the U.S. southern border had drained government resources.

The money would come on top of the funding President Donald Trump has redirected to make good on a central pledge of his 2016 election campaign – to build a border wall – ahead of his looming 2020 presidential race.

The emergency funding request would represent a 44% increase in spending for programs that house, feed, transport and oversee record numbers of Central American families seeking asylum, fleeing poverty and violence in their home countries, and straining capacity at migrant shelters in border cities.

This month, the federal government spent $37 million erecting two new temporary shelters in El Paso and Donna, Texas to deal with the crisis.

A number of small border towns have declared emergencies in hopes of receiving government assistance to deal with migrants being diverted to their communities.