市场消息

WASHINGTON (Reuters) – The U.S. military said two of its warships sailed near islands claimed by China in the South China Sea on Monday, a move that could anger Beijing at a time of tense relations between the world’s two biggest economies.

The South China Sea is one of a growing number of flashpoints in the U.S.-China relationship, which also include a trade war, U.S. sanctions and Taiwan.

President Donald Trump dramatically increased pressure on China to reach a trade deal by announcing on Sunday he would hike U.S. tariffs on $200 billion worth of Chinese goods this week and target hundreds of billions more soon.

The U.S. guided-missile destroyers Preble and Chung Hoon traveled within 12 nautical miles of Gaven and Johnson Reefs in the Spratly Islands, a U.S. military spokesman told Reuters.

Commander Clay Doss, a spokesman for the Seventh Fleet, said that the “innocent passage” was “to challenge excessive maritime claims and preserve access to the waterways as governed by international law.”

The operation was first reported by Reuters.

The U.S. military has a long-standing position that its operations are carried out throughout the world, including in areas claimed by allies, and that they are separate from political considerations.

The operation was the latest attempt to counter what Washington sees as Beijing’s efforts to limit freedom of navigation in the strategic waters, where Chinese, Japanese and some Southeast Asian navies operate.

China claims almost all of the strategic South China Sea and frequently lambastes the United States and its allies over naval operations near Chinese-occupied islands.

Vietnam, the Philippines, Brunei, Malaysia, Indonesia and Taiwan have competing claims in the region.

China and the United States have repeatedly traded barbs in the past over what Washington says is Beijing’s militarization of the South China Sea by building military installations on artificial islands and reefs.

China defends its construction as necessary for self-defense and says it is the United States that is responsible for ratcheting up tensions in the region by sending warships and military planes close to islands Beijing claims.

Last month, China’s navy chief said freedom of navigation should not be used to infringe upon the rights of other countries.

The freedom of navigation operation comes weeks after a major naval parade marking 70 years since the founding of the Chinese navy. The United States sent only a low level delegation to the Chinese navy anniversary events.

WASHINGTON (Reuters) – President Donald Trump dramatically increased pressure on China on Sunday to reach a trade deal, saying he would hike U.S. tariffs on $200 billion worth of Chinese goods this week and target hundreds of billions more soon.

The move marked a major escalation in tensions between the world’s largest economies and a shift in tone from Trump, who had cited progress in trade talks as recently as Friday.

Stock markets sank and oil prices tumbled as negotiations were thrown into doubt.

The Wall Street Journal reported that China was considering cancelling this week’s trade talks in Washington in light of Trump’s comments, which took Chinese officials by surprise.

A less than rosy update from United States Trade Representative Robert Lighthizer, including details that China was pulling back from some previous commitments, prompted Trump’s decision.

“The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” Trump said in a tweet.

U.S. officials did not weigh in on whether China would attend this week’s talks. The White House and the U.S. Trade Representative’s Office declined to comment. China’s commerce ministry did not immediately respond to a request for comment.

“The atmosphere of the negotiations has changed,” said a Chinese official with knowledge of the situation.

Whether the talks would proceed and how they would proceed are issues that are now being re-evaluated, the official told Reuters on condition of anonymity.

“All that depends on the attitude of the United States,” the official said.

The editor of an influential, Chinese state-run newspaper said Vice Premier Liu He was unlikely to go.

“Let Trump raise tariffs. Let’s see when trade talks can resume,” Hu Xijin, editor-in-chief of the tabloid the Global Times, tweeted.

The newspaper is published by the ruling Communist Party’s People’s Daily, but it is not considered an official publication and does not speak for the government.

Chinese media outlets have been told not to independently report on Trump’s overnight tweets or tweet about them, and instead adhere to any report from the official Xinhua news agency, said a source with direct knowledge of the matter.

MARKET TURBULENCE
Global financial markets, which had been expecting news of a trade deal soon, went into a tailspin. U.S. equity futures fell more than 2 percent and stocks across trade-reliant Asia tumbled, with China’s main indexes plunging 5 percent.

“There is still a question of whether this is one of the famous Trump negotiation tactics, or are we really going to see some drastic increase in tariffs,” said Nick Twidale, Sydney-based analyst at Rakuten Securities Australia. If it’s the latter, we’ll see massive downside pressure across all markets.”

Trump said tariffs on $200 billion of goods would increase to 25 percent on Friday from 10 percent, reversing a decision he made in February to keep them at the 10 percent rate thanks to progress between the two sides.

The president also said he would target a further $325 billion of Chinese goods with 25 percent tariffs “shortly,” essentially covering all products imported to the United States from China.

Mindful of his 2020 re-election bid, Trump suggested the measures were not leading to price increases for U.S. consumers. “The Tariffs paid to the USA have had little impact on product cost, mostly borne by China,” he tweeted.

Tariffs on Chinese goods are actually paid to the United States by the companies importing the goods, and most of those companies are U.S.-based. American businesses, while supportive of Trump’s crackdown on China’s trade practices, are eager for the tariffs to be removed, not expanded.

“Raising tariffs means raising taxes on millions of American families and inviting further retaliation on American farmers,” said Christin Fernandez, a spokeswoman for the Retail Industry Leaders Association.

Nevertheless, the president’s aggressive strategy drew rare bipartisan support from U.S. Senate Democratic leader Chuck Schumer, who urged Trump to “hang tough” in a tweet: “Don’t back down. Strength is the only way to win with China.”

One Chinese trade expert said recent signs of resilience in both economies were breeding over-confidence.

“The urgency is gone. So, it’s likely to see a longer trade war,” the expert said, speaking on condition of anonymity citing the sensitivity of the topic.

The trade war resulted in billions of dollars of losses for both sides in 2018, hitting industries including autos, technology – and above all, agriculture, while inflicting collateral damage on export-reliant economies and companies from Japan to Germany.

NOT GETTING CLOSE?
Trump’s move could backfire, said Tai Hui, Asia-Pacific chief market strategist at J.P. Morgan Asset Management.

“As we learnt a year ago, Beijing could be willing to walk away if the U.S. applies negotiation tactics that they don’t agree with. That said, both sides have invested significant time and resources to come this far…”

On Friday, Trump said talks with China were going well.. Treasury Secretary Steven Mnuchin called the round in Beijing “productive,” and one White House official told Reuters that dates were being looked at for a potential meeting between Presidents Trump and Xi Jinping in June.

Last week, industry sources said they believed the talks were in the endgame, but a Trump administration official said aides had told the president that significant hurdles remained.

The increase in U.S. tariffs on Friday would be the first since Trump imposed 10 percent tariffs on $200 billion of Chinese goods in September, coming on top of 25 percent tariffs on $50 billion of goods enacted earlier last year.

Negotiations about tariffs have been one of the remaining sticking points between the two sides. China wants the tariffs to be lifted, while Trump wants to keep some, if not all, of them as part of any final deal to ensure China lives up to its commitments, a White House official said on Sunday.

WASHINGTON (Reuters) – U.S. employers likely maintained a strong pace of hiring in April while steadily increasing wages for workers, pointing to solid economic growth and moderate inflation pressures.

The Labor Department’s closely watched monthly employment report on Friday is likely to support the Federal Reserve’s decision on Wednesday to keep interest rates unchanged and signal little desire to adjust monetary policy anytime soon.

Fed Chair Jerome Powell described the economy and job growth as “a bit stronger than we anticipated” and inflation “somewhat weaker.”

Nonfarm payrolls probably increased by 185,000 jobs last month after rising 196,000 in March, according to a Reuters survey of economists. Early hiring by the government for the 2020 Census and winter storms in the Midwest are wild cards to the forecast.

The anticipated job gains in April would be close to the monthly average of 180,000 in the first quarter and well above the roughly 100,000 needed per month to keep up with growth in the working-age population.

“The labor market is rock solid,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “It is not overheating and it’s perfect for the Fed to keep interest rates on hold.”

Another month of solid job growth will be further evidence that February’s paltry 33,000 increase in jobs was an aberration. It would also effectively put to rest concerns about a recession and diminish expectations of an interest rate cut this year that had been fanned by a brief inversion of the U.S. Treasury yield curve in March.

Job growth remains strong, despite anecdotal evidence of worker shortages in the transportation, manufacturing and construction industries, suggesting some slack still remains in the labor market.

STEADY UNEMPLOYMENT RATE
Steadily rising wages are keeping workers in the labor force and drawing back those who had dropped out. Average hourly earnings are forecast to have risen 0.3 percent in April after edging up 0.1 percent in March. That would lift the annual increase in wages to 3.3 percent from 3.2 percent in March.

Though wage growth is not strong enough to drive up inflation, it is seen sufficient to underpin economic growth as the stimulus from last year’s $1.5 trillion tax cut wanes. The economy grew at a 3.2 percent annualized rate in the first quarter, driven by a surge in exports and inventories, quickening from the October-December period’s 2.2 percent pace.

The unemployment rate is expected to have held steady at 3.8 percent in April as more people searched for work. The jobless rate, around the lowest in nearly 50 years, is close to the 3.7 percent that Fed officials project it will be by the end of the year. Economists say there has been a reduction in the number of people collecting disability benefits, testament to the labor market’s strength.

“Given the recent improvement in economic activity, we expect more workers to be drawn into the labor force,” said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, hit the highest in more than five years in January. Participation has risen especially among the prime-age population, blacks and women.

Some economists expect job growth to slow further this year as fewer workers become available, which will push up wages and lift inflation back to the Fed’s 2 percent target. An inflation measure tracked by the U.S. central bank increased 1.6 percent in the year to March, the smallest gain in 14 months, from 1.7 percent in February.

“We think it will be increasingly difficult to find that many new workers each month,” said Lou Crandall, chief economist of Wrightson ICAP LLC in Jersey City, New Jersey.

Employment at construction sites likely increased for a second straight month in April, but storms in the Midwest could have been a drag on hiring in the weather-sensitive industry. Manufacturing sector payrolls are expected to have rebounded after declining in March for the first time since July 2017.

The industry is being pressured by layoffs in the automobile sector as assembly plants try to cope with declining sales and an inventory overhang. Further gains in government payrolls are expected in April.

LONDON (Reuters) – British Prime Minister Theresa May’s Conservatives and the opposition Labour Party were both punished in a local election by English voters who blame them for the deadlock over Brexit, partial results showed on Friday.

With almost half of English local council vote results declared, the Conservative Party lost 433 councillors and the Labour Party had lost 81 councillors, according to a BBC tally.

The results are another display of how Britain’s 2016 vote to leave the European Union has split the nation beyond traditional party lines, leaving Labour and the Conservatives deeply divided.

But the smaller Liberal Democrats gained, making up losses they suffered in 2015 when voters rejected the party after the coalition government with the Conservatives. Activists said the Liberal Democrats’ clear message that Britain needs a second referendum to break the Brexit impasse had helped turn the tide.

“It just seems voters, period, saying: ‘A plague on both your houses’,” said John Curtice, Britain’s leading polling expert.

“We knew that voters were unhappy with the way that the Conservatives had handled Brexit but looks as though they are also unhappy with Labour’s response to the government’s position on Brexit,” he told the BBC.

The Liberal Democrats won 301 councillors, independent candidates won 215 council seats and Greens, which also backs a second referendum, gained 38, the partial results showed.

Labour sources said their party had little to fear from the results so far, saying it was always going to be a “tough” battle in councils that traditionally favour the Conservatives.

Tough was also the word the Conservatives used to describe the local elections, with some pinning the blame for the party’s bad showing on an impasse in parliament, which has rejected May’s Brexit deal three times.

British politicians and polling experts said the results showed that both major parties were being punished for the chaos surrounding Britain’s delayed exit from the EU and that they were losing their traditional dominance.

BREXIT DELAY
Nearly three years since the United Kingdom voted 52 percent to 48 percent to leave the European Union, there is still no agreement among British politicians about when, how or even if the divorce should take place.

Britain was due to have left the EU on March 29, though May has been unable to get her divorce deal approved by parliament so she has turned to the Labour Party, led by socialist Jeremy Corbyn, to try to court his support.

It is still unclear how the deadlock might be broken, though there has been speculation that May might call a general election, a prospect that Curtice said could end in another hung parliament.

With most of the local councils traditionally loyal to the Conservatives, the governing party was expected to see big losses – something that could fuel calls for May to step down.

“If the Conservative Party doesn’t mend its ways pretty quickly the Conservative Party is going to be toast and it’s quite obvious that the Conservative Party has got to deliver Brexit and that is a Brexit that really is Brexit,” said Conservative lawmaker Bernard Jenkin.

More than 8,000 seats on English councils – administrative bodies responsible for day-to-day decisions on local policy from education to waste management – are up for grabs. Full results are due later on Friday.

There are also some local elections taking place in Northern Ireland on Thursday but none in Wales and Scotland, which operate under a different schedule.

WASHINGTON (Reuters) – Deepening Chinese activities in the Arctic region could pave the way for a strengthened military presence, including the deployment of submarines to act as deterrents against nuclear attack, the Pentagon said in a report released on Thursday.

The assessment is included in the U.S. military’s annual report to Congress on China’s armed forces and follows Beijing’s publication of its first official Arctic policy white paper in June.

In that paper, China outlined plans to develop shipping lanes opened up by global warming to form a “Polar Silk Road” – building on President Xi Jinping’s signature Belt and Road Initiative.

China, despite being a non-Arctic state, is increasingly active in the polar region and became an observer member of the Arctic Council in 2013. That has prompted concerns from Arctic states over Beijing’s long-term strategic objectives, including possible military deployments.

U.S. Secretary of State Mike Pompeo will attend the meeting of the eight-nation Arctic Council in Rovaniemi, Finland, starting on Monday, which comes amid concerns over China’s increased commercial interests in the Arctic.

The Pentagon report noted that Denmark has expressed concern about China’s interest in Greenland, which has included proposals to establish a research station and a satellite ground station, renovate airports and expand mining.

“Civilian research could support a strengthened Chinese military presence in the Arctic Ocean, which could include deploying submarines to the region as a deterrent against nuclear attacks,” the report said.

The Pentagon report noted that China’s military has made modernizing its submarine fleet a high priority. China’s navy operates four nuclear-powered ballistic missile submarines, six nuclear-powered attack submarines and 50 conventionally powered attack submarines, the report said.

“The speed of growth of the submarine force has slowed and (it) will likely grow to between 65 and 70 submarines by 2020,” the report predicted.

The report said China had built six Jin-class submarines, with four operational and two under construction at Huludao Shipyard.

In a January report, the Pentagon’s Defense Intelligence Agency said the Chinese navy would need a minimum of five Jin-class submarines to maintain a continuous nuclear deterrence at sea.

The United States and its allies, in turn, are expanding their anti-submarine naval deployments across East Asia. This includes stepped-up patrols of America’s advanced, sub-hunting P-8 Poseidon planes out of Singapore and Japan.

TAIWAN CONTINGENCY
The expansion of China’s submarine forces is just one element of a broad, and costly, modernization of its military, which U.S. experts say is designed largely to deter any action by America’s armed forces.

Although Beijing’s official defense budget for 2018 was $175 billion, the Pentagon estimated that China’s budget actually topped $200 billion, when including research, development and foreign weapons procurement. It estimated that China’s official defense budget would likely grow to about $260 billion by 2022.

Much of China’s military doctrine is focused on self-ruled Taiwan, which Beijing sees as a renegade province.

On Jan. 2, Xi said in a speech that China reserved the right to use force to bring Taiwan under its control but would strive to achieve peaceful “reunification.”

The Pentagon report outlined a number of potential scenarios that China might take if Beijing decides to use military force on Taiwan, including a comprehensive campaign “designed to force Taiwan to capitulate to unification, or unification dialogue.”

But the U.S. analysis appeared to downplay prospects for a large-scale amphibious Chinese invasion, saying that could strain its armed forces and invite international intervention. It also noted the possibility of limited missile strikes.

“China could use missile attacks and precision air strikes against air defense systems, including air bases, radar sites, missiles, space assets, and communications facilities to degrade Taiwan’s defenses, neutralize Taiwan’s leadership, or break the Taiwan people’s resolve,” the report said.

China has repeatedly sent military aircraft and ships to circle the island on drills in the past few years and worked to isolate Taiwan internationally, whittling down its few remaining diplomatic allies.

It has also strongly objected to U.S. warship passages through the Taiwan Strait, which have greatly increased in frequency in the past year.

Taiwan’s military is significantly smaller than China’s, a gap that the Pentagon noted is growing year by year.

Recognizing the disparity, the Pentagon report noted: “Taiwan has stated that it is working to develop new concepts and capabilities for asymmetric warfare.”

WASHINGTON (Reuters) – Democrats intensified their pressure on President Donald Trump’s administration on Thursday as U.S. House Speaker Nancy Pelosi accused Attorney General William Barr of committing a crime by lying to lawmakers and a key committee chairman threatened to hold Barr in contempt of Congress.

Even as Democratic lawmakers accused the Trump administration of a growing attack on U.S. democracy and the authority of Congress, the White House showed no sign of backing down. White House legal counsel Emmet Flood said in a defiant letter that Trump had the right to tell advisers not to testify to congressional panels on the findings of Special Counsel Robert Mueller’s Russia inquiry.

The dueling statements marked a sharp escalation in the conflict between the White House and Democrats who control the House of Representatives. With Trump seeking re-election next year, Democrats are weighing whether to try to remove the Republican president from office using the impeachment process while pressing forward with demands for information on his taxes, businesses and other topics.

Shortly after Barr refused to appear before the House Judiciary Committee, Pelosi accused him of lying to lawmakers about interactions with Mueller after the special counsel ended a 22-month investigation into Russia’s efforts to interfere in the 2016 U.S. election to boost Trump’s candidacy.

“That’s a crime,” Pelosi, the top Democrat in Congress, told reporters, referring to Barr’s congressional testimony.

Justice Department spokeswoman Kerri Kupec called Pelosi’s allegation “reckless, irresponsible and false.”

Democrats have accused Barr of misleading Congress by testifying in April he was unaware of any concern by the special counsel’s team about Barr’s initial March 24 characterization of the report, an account that led Trump to claim full exoneration. Barr failed to mention a March 27 letter he got from Mueller complaining that Barr’s March 24 account did not “fully capture the context, nature and substance of this Office’s work.”

Judiciary Committee Chairman Jerrold Nadler threatened to hold Barr in contempt of Congress if he does not provide a full, unredacted copy of Mueller’s report and the underlying evidence, as the panel has requested by a subpoena that had a Wednesday deadline. That could potentially lead to legal steps against the top U.S. law enforcement official.

Barr released Mueller’s report on April 18, with some parts blacked out to protect sensitive information.

Several Democrats have called on Barr, whom Trump appointed after firing Jeff Sessions as attorney general, to resign.

Pelosi and other House Democrats previously had cautioned against launching the impeachment process, which would begin in the House but would face long odds of success in the Republican-controlled Senate and could alienate voters ahead of the 2020 presidential election.

But Pelosi said the Trump administration was continuing to ignore congressional subpoenas and noted that Congress launched impeachment proceedings against President Richard Nixon after he resisted similar demands. Nixon resigned in 1974 over the Watergate scandal.

‘OBSTRUCTION OF JUSTICE’
Pelosi said Trump’s “blanket statement that he’s not going to honor any subpoenas is obstruction of justice.”

The White House signaled little appetite to cooperate.

Trump told Fox News in an interview on Thursday he was not inclined to let former White House counsel Don McGahn testify before congressional committees. Nadler has issued a subpoena for McGahn to testify in its investigation of possible obstruction of justice by the president.

Trump told Fox News that McGahn had already spoken to Mueller’s team for 30 hours and allowing him to testify to Congress would open the door to others being called.

“I would say it’s done,” Trump said.

Flood reiterated that point in a letter seen by Reuters, saying Trump’s decision to let advisers cooperate when Mueller was conducting his investigation did not extend to congressional oversight investigations now that the inquiry had been completed.

Flood also said Mueller’s 448-page report suffered from “an extraordinary legal defect” by failing to determine whether Trump had committed the crime of obstruction of justice.

Mueller “instead produced a prosecutorial curiosity – part ‘truth commission’ report and part law school exam paper,” Flood wrote to Barr in a letter dated a day after the report was released.

Democrats have argued Trump waived the right to assert executive privilege – which allows a president to withhold information about internal executive branch deliberations from other branches of government – by allowing advisers to cooperate extensively with Mueller.

Barr canceled his House testimony after clashing with Nadler over the hearing’s format, particularly having staff lawyers question him in addition to committee members. Nadler said he would move forward with a contempt citation as soon as Monday.

“The very system of government of the United States – the system of limited power, the system of not having a president as a dictator – is very much at stake,” Nadler told reporters after a 15-minute committee session held in place of Barr’s appearance.

Democrats have said they may issue a subpoena to try to force Barr to testify.

Barr spent four hours before a Republican-led Senate committee on Wednesday defending his handling of Mueller’s report and justifying Trump’s actions.

The report detailed extensive contacts between Trump’s 2016 presidential campaign and Moscow and the campaign’s expectation that it would benefit from Russia’s actions, which included hacking and propaganda to boost Trump and harm Democratic candidate Hillary Clinton. The report also detailed a series of actions Trump took to try to impede the investigation.

Mueller, a former FBI director, concluded there was insufficient evidence to show a criminal conspiracy and opted not to make a conclusion on whether Trump committed obstruction of justice, but pointedly did not exonerate him. Barr has said he and Rod Rosenstein, the Justice Department’s No. 2 official, then determined there was not enough evidence to charge Trump with obstruction.

CARACAS (Reuters) – Venezuelans heeded opposition leader Juan Guaido’s call to take to the streets on Wednesday in a bid to force President Nicolas Maduro from power, but there was little concrete sign of change in a crisis that increasingly looks like a political stalemate.

Guaido had called for the “largest march” in Venezuela’s history and said on Twitter that “millions of Venezuelans” were in the streets in “this final phase” of his move to oust Maduro.

But by late afternoon, many of the protesters in the capital Caracas had drifted home. National Guards fired tear gas at a hardcore of demonstrators who remained, and one injured demonstrator was carried by others to a first aid truck, Reuters video showed.

Rights organizations said a young woman died in surgery after being shot in the head during a protest in Caracas. Guaido confirmed via Twitter that a woman died after being shot.

The standoff in the South American country increased tensions between the United States and Russia, which accused each other of interference in the OPEC-member nation’s affairs.

Despite Guaido’s calls for the military to support him, the armed forces leadership has so far remained loyal to Maduro, who has been in power since his mentor, the late President Hugo Chavez, died in 2013.

“If the regime thought we had reached maximum pressure, they cannot even imagine,” Guaido told thousands of cheering supporters. “We have to remain in the streets.”

It was unclear what more Guaido can do at this point. The Venezuelan opposition has often staged huge street protests against Maduro but failed to dislodge him despite a deep economic recession and hyperinflation.

Demonstrators said they were prepared for the process of ousting Maduro to last a long time.

“We need to keep going,” said Laila Amezquita, a 52-year-old nurse from Caracas’ downtown Candelaria district. “In three months, Guaido’s been able to do what they have not done in 20 years, and one has to be patient.”

Others are frustrated that nothing has changed more than three months after Guaido, head of the opposition-run National Assembly, invoked the constitution to assume an interim presidency, arguing that Maduro’s 2018 re-election was illegitimate.

Guaido is recognized as Venezuela’s legitimate head of state by the United States, the European Union and others, while Maduro is backed by countries including Russia, China and Cuba.

Those fault lines are increasingly putting Venezuela at the heart of global geopolitical tensions.

U.S. President Donald Trump’s administration has imposed sanctions on the Maduro government and refused to rule out military intervention, although it says it prefers a peaceful transition.

“Military action is possible. If that’s what’s required, that’s what the United States will do,” U.S. Secretary of State Mike Pompeo told Fox Business Network.

The Pentagon appeared to downplay any active preparations to directly intervene in Venezuela, but acknowledged detailed contingency planning.

Russian Foreign Minister Sergei Lavrov told Pompeo on Wednesday that further “aggressive steps” in Venezuela would have grave consequences, Russia’s Foreign Ministry said.

In turn, the United States has accused Moscow of interfering in Venezuela, an ally of Russia since the time of Chavez. Pompeo said Maduro had been expected to flee the country on Tuesday but Russia convinced him to stay, which the Kremlin has denied.

White House national security adviser John Bolton, a foreign policy hawk, said Moscow’s involvement was not welcome.

“This is our hemisphere,” he told reporters outside the White House. “It’s not where the Russians ought to be interfering. This is a mistake on their part. It’s not going to lead to an improvement of relations.”

China called for a political settlement via dialogue.

“We hope parties in Venezuela will proceed from the interests of the country and people, avoid bloody conflicts and restore the country’s stable development momentum as soon as possible,” the foreign ministry said in a statement on Thursday.

TEST FOR GUAIDO
Maduro retains control of state institutions and the loyalty of the armed forces, frustrating Guaido’s bid to assume the day-to-day functions of government, which he says would be a prelude to calling new elections.

Seeking to appeal to Maduro’s traditional base among the working class, Guaido said on Wednesday he would consider a proposal from public workers to call for a series of stoppages leading up to a general strike.

Carlos Alberto, a 70-year-old small-business owner, draped in a Venezuelan flag at the Caracas protest, said: “We are tired of this regime, that has brutally impoverished us. My children and almost all my family have already left Venezuela. … We know that if it’s not today, it will be tomorrow, because this has to end.”

Venezuelan living standards have declined even further in the first several months of the year, with blackouts and water shortages adding to hyperinflation and chronic shortages of food and medicine that have prompted millions to emigrate.

Triple the usual daily number of Venezuelans fled across the border to Brazil on Tuesday, Brazilian government data showed.

Maduro, who says Guaido is a puppet of the United States seeking to orchestrate a coup, also called a march on Wednesday.

In a speech to supporters gathered near the Miraflores presidential palace, Maduro said he recognized the need for “big changes within the Bolivarian revolution.” He did not give details.

Traveling to the pro-Maduro rally, educator Mercedes Martinez called Guaido a “lapdog” and said: “The empire wants to smother us, cut off our head and colonize us. … The people of Venezuela are defending Venezuela.”

(Reuters) – European shares fell on Thursday as investors digested the implications of the U.S. central bank’s neutral message and mixed sets of manufacturing data from the region, while a lift in auto and bank stocks help curtail further losses.

The pan-European STOXX 600 index edged lower by 0920 GMT with Germany’s DAX outperforming as major markets returned from the May Day holiday, except for London’s FTSE 100, which was trading flat.

U.S. Federal Reserve Chairman Jerome Powell disappointed the doves after the central bank’s Wednesday meeting, signaling little appetite to adjust interest rates anytime soon.

“Investors see the need to recalibrate their expectations because the chair said there was no greater bias for a cut or a raise in the near term,” said Ken Odeluga analyst at City Index.

“That was interpreted as somewhat more hawkish than expected given that the market has been pricing in a reduction perhaps as early as this year.”

Later on Thursday, the Bank of England will also decide on rates. No change is likely; investors will be looking for a better picture of the UK economy and clues on Brexit preparations.

The basic resources sector dropped about 1 percent after copper prices fell to their lowest in more than two months, while the retail sector was weighed down by online-only fashion retailer, Zalando, which plans to charge delivery fees for small orders in more markets.

German fashion house Hugo Boss also slipped after reporting a fall in first-quarter earnings.

Andritz was among the biggest decliners on STOXX 600 after the company cut its full-year profit forecast, partly in response to weak car industry demand that hit its metals business.

Helping temper those losses, auto stocks jumped over 1 percent boosted by German carmaker Volkswagen which shrugged off a 1 billion euro legal charge and met first-quarter operating profit forecasts.

GROWTH PANGS
The bank sub-index reversed course to shed earlier losses and turn positive with French lender BNP Paribas providing the biggest boost after its first-quarter net profits beat expectations.

Britain’s Lloyds Banking Group however, fell after giving up hope of a profit-boosting rise in interest rates before 2020. Dutch bank ING Groep also slid after reporting a 6.1 pct decline in first-quarter profits.

Shares in Swiss toilet and plumbing supplies maker Geberit vaulted to the top of STOXX after first-quarter earnings beat expectations.

Growth worries continued to linger with the latest data showing Euro zone factory activity contracted for a third month in April, hurt by weak global demand, with German numbers particularly on the downside.

Earlier in the week disappointing factory numbers from China had gripped markets with investors worrying about sluggish global growth.

Some hope emerged though on the trade front, after reports that United States and China may be nearing a deal that would roll back some of the U.S. tariffs on $250 billion worth of Chinese goods.

WASHINGTON (Reuters) – Attorney General William Barr on Wednesday canceled plans to testify before the House of Representatives about his handling of Special Counsel Robert Mueller’s Russia investigation, further inflaming tensions between U.S. President Donald Trump and Democrats in Congress.

Barr was due to face the Democratic-controlled House Judiciary Committee on Thursday, but pulled out after the two sides were unable to agree on the format for the hearing.

“It’s simply part of the administration’s complete stonewalling of Congress,” Judiciary Committee Chairman Jerrold Nadler told reporters.

Justice Department spokeswoman Kerri Kupec said Nadler’s proposal to have committee lawyers question Barr was “unprecedented and unnecessary,” saying questions should come from lawmakers.

The Justice Department also said on Wednesday it would not comply with a Nadler-issued subpoena seeking an unredacted version of Mueller’s report and underlying investigative files from the probe.

Earlier on Wednesday, Barr spent more than four hours before the Republican-controlled Senate Judiciary Committee where he fended off Democratic criticism of his decision to clear Trump of criminal obstruction of justice and faulted Special Counsel Robert Mueller for not reaching a conclusion of his own on the issue.

In his first congressional testimony since releasing a redacted version of Mueller’s report on April 18, Barr also dismissed Mueller’s complaints that he initially disclosed the special counsel’s conclusions on March 24 in an incomplete way that caused public confusion.

Illustrating tensions between the two men, Barr described as “a bit snitty” a March 27 letter from Mueller in which the special counsel urged him to release broader summaries of his findings – a step Barr rejected. Trump seized on Barr’s March 24 letter to declare that he had been fully exonerated.

Several Democrats on the Senate committee called for Barr’s resignation.

Democrats have accused Barr of trying to protect the Republican president, who is seeking re-election next year. They pressed Barr on why he decided two days after receiving the 448-page document from Mueller in March to conclude that Trump had not unlawfully sought to obstruct the 22-month investigation.

“I don’t think the government had a prosecutable case,” Barr said.

‘ALLEGATIONS NOW PROVEN FALSE’
The report detailed extensive contacts between Trump’s 2016 presidential campaign and Moscow and the campaign’s expectation that it would benefit from Russia’s actions, which included hacking and propaganda to boost Trump and harm Democratic candidate Hillary Clinton. The report also detailed a series of actions Trump took to try to impede the investigation.

Mueller, a former FBI director, concluded there was insufficient evidence to show a criminal conspiracy and opted not to make a conclusion on whether Trump committed obstruction of justice, but pointedly did not exonerate him. Barr has said he and Rod Rosenstein, the Justice Department’s No. 2 official, then determined there was not enough evidence to charge Trump with obstruction.

Barr often appeared to excuse or rationalize Trump’s conduct, asserting that the president may not necessarily have been trying to derail Mueller’s investigation.

Democratic Senator Mazie Hirono told Barr that he had sacrificed a “once-decent reputation for the grifter and liar that sits in the Oval Office.”

Senator Lindsey Graham, the committee’s Republican chairman, rushed to Barr’s defense, telling Hirono: “You’ve slandered this man.”

Trump had been unfairly smeared, Barr said, by suspicions he had collaborated with Russia in the election. “Two years of his administration have been dominated by the allegations that have now been proven false. To listen to some of the rhetoric, you would think that the Mueller report had found the opposite,” Barr said.

Barr was critical of Mueller for not reaching a conclusion himself on whether Trump obstructed the probe.

“I think that if he felt that he shouldn’t go down the path of making a traditional prosecutorial decision, then he shouldn’t have investigated,” Barr said.

Barr was asked about the report’s finding that Trump directed then-White House counsel Don McGahn in June 2017 to tell Rosenstein that Mueller had conflicts of interest and must be removed. McGahn did not carry out the order. Rosenstein had appointed Mueller the prior month.

Barr, appointed by Trump after the president fired his predecessor, Jeff Sessions, seemed to minimize the incident and said Trump believed “he never outright directed the firing of Mueller.” Trump could have presumably appointed someone else to do the job after Mueller was fired, he said.

“We did not think in this case that the government could show corrupt intent,” Barr said.

‘INTENTION WAS VERY CLEAR’
Democrats on the panel were unconvinced.

“I think the president’s intention was very clear. He wanted this to end,” Senator Dick Durbin said.

Under questioning by Democratic Senator Kamala Harris, a 2020 presidential candidate, Barr acknowledged he did not review the investigation’s underlying evidence before deciding to clear Trump of obstruction.

Barr disputed the view that Mueller was handing the baton to Congress for possible impeachment proceedings. “That would be very inappropriate,” Barr said. “That’s not what the Justice Department does.”

The Democratic-controlled House would start any such impeachment effort, but Trump could not be removed from office without approval by a two-thirds majority in the Republican-controlled Senate.

Democrats also accused Barr of misleading Congress, by saying in April that he did not know whether Mueller agreed with his characterization of the report – failing to mention Mueller’s March 27 letter that Barr’s initial summary did not “fully capture the context, nature and substance of this Office’s work.”

Barr testified that Mueller was unhappy with the way the conclusions were being characterized in the media, not his account of the conclusions, although Mueller’s letter did not mention media coverage.

“The letter is a bit snitty,” Barr said, using a word meaning disagreeably ill-tempered, “and I think it was probably written by a member of his staff.”

Several Democrats demanded that Mueller testify before the committee, but Graham ruled that out.

Committee Republicans did not focus on Trump’s conduct but rather on what they saw as the FBI’s improper surveillance during the 2016 race of Trump aides they suspected of being Russian agents, as well as on the Kremlin’s election meddling.

Barr indicated that to him, the matter was closed.

“The report is now in the hands of the American people,” he said. “We’re out of it. We have to stop using the criminal justice system as a political weapon.”