市场消息

WASHINGTON (Reuters) – U.S. Attorney General William Barr objects to testifying before the House Judiciary Committee in a closed session dedicated to redacted portions of Special Counsel Robert Mueller’s Russia report, a congressional Democratic aide said on Sunday.

Barr is threatening to skip his planned appearance on Thursday, the aide told Reuters on condition of anonymity.

The committee’s chairman, Democrat Jerrold Nadler, has proposed that Barr’s public testimony be followed by a second round of questioning, where sensitive matters would be discussed behind closed doors and include committee staff lawyers, a House Democratic aide told Reuters.

Barr opposes both stipulations, according to the aide.

The attorney general is also scheduled to testify before the Senate Judiciary Committee on Wednesday.

A Justice Department spokeswoman did not immediately return calls for comment.

The attorney general, a Trump appointee, released a redacted version on April 18 of Mueller’s report on the 22-month investigation into Russian interference in the 2016 presidential race.

The report here detailed a series of actions by Trump to impede the probe, but did not make a conclusion on whether those actions constituted the crime of obstruction. It also concluded that Trump and his campaign had not engaged in criminal conspiracy with Moscow.

Nadler has subpoenaed the Justice Department for the full report.

The House of Representatives panel’s Republicans sided with Barr, saying Democrats’ demands were unreasonable. “Democrats have yet to prove their demands anything but abusive and illogical in light of the transparency and good faith the attorney general has shown our committee,” they said in a statement.

The Democratic aide said there was precedent for committee staff to question Cabinet-level officials and Senate-confirmed officials, citing political scandals including the Watergate break-in of the 1970s and the Iran-Contra scandal of 1987.

SHANGHAI/HONG KONG (Reuters) – Asian shares climbed on Monday, with markets in Europe poised to track their gains, after strong U.S. first-quarter economic growth and data showing profits at Chinese industrial firms grew for the first time in four months.

Still nagged by uncertainty over the outlook for the global economy, investors were awaiting a meeting of the U.S. Federal Reserve this week and Chinese factory data for further clues on policy direction in the world’s biggest economies.

In early European trade for index futures, London’s FTSE was 0.2 percent higher while Germany’s DAX edged up 0.1 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.5 percent, rebounding from its biggest weekly drop in more than a month last week.

Chinese blue-chips jumped over 1 percent after losing 5.6 percent last week, leading Shanghai shares to an intraday high in afternoon trade.

Australian shares were down 0.4 percent after hitting an 11-year closing high on Friday, while Seoul’s KOSPI was up 1.4 percent.

Japan’s financial markets are closed for a long national holiday this week, but Nikkei 225 futures in Singapore was 0.9 percent higher.

Monday’s gains follow data showing U.S. gross domestic product grew at a faster 3.2 percent annualized rate in the first quarter.

In China, fresh data showed industrial profits grew in March after four months of contraction, but analysts said sentiment remained fragile. Economists polled by Reuters expect factory activity in the world’s second largest economy to grow at a steady but modest pace in April.

“Investors are still looking for direction in terms of growth, but at the same time there is still quite a lot of uncertainty” on U.S.-China trade and the U.S. dollar, said Joanne Goh, equity strategist at DBS Bank in Singapore.

“A strong U.S. dollar doesn’t really bode well for Asian markets,” she added.

In contrast with weakness in Asian markets last week, Wall Street ended Friday on a high note, propelled by the GDP figures.

The Dow Jones Industrial Average rose 0.31 percent to 26,543.33 and the Nasdaq Composite added or 0.34 percent to 8,146.40.

The S&P 500 gained 0.47 percent to 2,939.88, its second record closing high for the week.

Stephen Innes, managing partner at SPI Asset Management, said that despite stronger-than-expected earnings helping to lift markets, he saw investors’ positioning on the S&P becoming “overly extended”.

“We have flipped from a state where it is a stock rally no one wants to take part in, to a frenzied paced splurge where hedge funds and investors alike continue to chase markets like greyhounds to the mechanical rabbit,” he said in a note.

While the strong U.S. GDP data helped to ease fears of an imminent recession, investors noted that it was driven by a smaller trade deficit and a large accumulation of unsold merchandise, as consumer and business spending slowed sharply.

The March reading for core personal consumption expenditures (PCE), the Fed’s favored inflation measure, is due later on Monday. The central bank’s Federal Open Market Committee (FOMC) will announce its policy decision on Wednesday, with Chairman Jerome Powell expected to balance the strong domestic growth data against persistent concerns over the global outlook.

Markets will also be looking to global factory activity surveys this week, particularly official and private readings on Chinese manufacturing which will both be released Tuesday.

SEARCHING FOR STIMULUS
Chinese firms return to profit growth in March fueled doubts over how much more stimulus Beijing can roll out without risking a rapid build-up in debt and potential asset bubbles.

“The hope that there will be more stimulus coming out from China probably is diminishing,” said Goh at DBS.

“So if the FOMC confirms that the Fed continues to be quite dovish about the outlook for interest rates, I think investors will quite like that,” she said.

With Japan on an extended break, currency markets were calm ahead of the FOMC meeting and U.S. jobs numbers. The dollar was pretty much flat against the yen at 111.61, and the euro was up 0.09 percent to $1.1158.

The dollar index, which tracks the greenback against a basket of six major currencies, turned 0.04 percent lower to 97.970.

U.S. crude dipped 0.65 percent at $62.89 a barrel, continuing lower after U.S. President Donald Trump on Friday pressured the Organization of the Petroleum Exporting Countries to raise crude production to ease gasoline prices.

Brent crude fell 0.61 percent to $71.71 per barrel.

Spot gold was down 0.1 percent, trading at $1,284.73 per ounce.

Reuters – During initial tests of their 8.1-metre (27-foot) tall reusable rocket, Chinese engineers from LinkSpace, a start-up led by China’s youngest space entrepreneur, used a Kevlar tether to ensure its safe return. Just in case.

But when the Beijing-based company’s prototype, called NewLine Baby, successfully took off and landed last week for the second time in two months, no tether was needed.

The 1.5-tonne rocket hovered 40 metres above the ground before descending back to its concrete launch pad after 30 seconds, to the relief of 26-year-old chief executive Hu Zhenyu and his engineers — one of whom cartwheeled his way to the launch pad in delight.

LinkSpace, one of China’s 15-plus private rocket manufacturers, sees these short hops as the first steps towards a new business model: sending tiny, inexpensive satellites into orbit at affordable prices.

Demand for these so-called nanosatellites — which weigh less than 10 kilogrammes (22 pounds) and are in some cases as small as a shoebox — is expected to explode in the next few years. And China’s rocket entrepreneurs reckon there is no better place to develop inexpensive launch vehicles than their home country.

“For suborbital clients, their focus will be on scientific research and some commercial uses. After entering orbit, the near-term focus (of clients) will certainly be on satellites,” Hu said.

In the near term, China envisions massive constellations of commercial satellites that can offer services ranging from high-speed internet for aircraft to tracking coal shipments. Universities conducting experiments and companies looking to offer remote-sensing and communication services are among the potential domestic customers for nanosatellites.

A handful of U.S. small-rocket companies are also developing launchers ahead of the expected boom. One of the biggest, Rocket Lab, has already put 25 satellites in orbit.

No private company in China has done that yet. Since October, two — LandSpace and OneSpace — have tried but failed, illustrating the difficulties facing space start-ups everywhere.

The Chinese companies are approaching inexpensive launches in different ways. Some, like OneSpace, are designing cheap, disposable boosters. LinkSpace’s Hu aspires to build reusable rockets that return to Earth after delivering their payload, much like the Falcon 9 rockets of Elon Musk’s SpaceX.

“If you’re a small company and you can only build a very, very small rocket because that’s all you have money for, then your profit margins are going to be narrower,” said Macro Caceres, analyst at U.S. aerospace consultancy Teal Group.

“But if you can take that small rocket and make it reusable, and you can launch it once a week, four times a month, 50 times a year, then with more volume, your profit increases,” Caceres added.

Eventually LinkSpace hopes to charge no more than 30 million yuan ($4.48 million) per launch, Hu told Reuters.

That is a fraction of the $25 million to $30 million needed for a launch on a Northrop Grumman Innovation Systems Pegasus, a commonly used small rocket. The Pegasus is launched from a high-flying aircraft and is not reusable.

NEED FOR CASH

LinkSpace plans to conduct suborbital launch tests using a bigger recoverable rocket in the first half of 2020, reaching altitudes of at least 100 kilometres, then an orbital launch in 2021, Hu told Reuters.

The company is in its third round of fundraising and wants to raise up to 100 million yuan, Hu said. It had secured tens of millions of yuan in previous rounds.

After a surge in fresh funding in 2018, firms like LinkSpace are pushing out prototypes, planning more tests and even proposing operational launches this year.

Last year, equity investment in China’s space start-ups reached 3.57 billion yuan ($533 million), a report by Beijing-based investor FutureAerospace shows, with a burst of financing in late 2018.

That accounted for about 18 percent of global space start-up investments in 2018, a historic high, according to Reuters calculations based on a global estimate by Space Angels. The New York-based venture capital firm said global space start-up investments totalled $2.97 billion last year.

“Costs for rocket companies are relatively high, but as to how much funding they need, be it in the hundreds of millions, or tens of millions, or even just a few million yuan, depends on the company’s stage of development,” said Niu Min, founder of FutureAerospace.

FutureAerospace has invested tens of millions of yuan in LandSpace, based in Beijing.

Like space-launch startups elsewhere in the world, the immediate challenge for Chinese entrepreneurs is developing a safe and reliable rocket.

Proven talent to develop such hardware can be found in China’s state research institutes or the military; the government directly supports private firms by allowing them to launch from military-controlled facilities.

But it’s still a high-risk business, and one unsuccessful launch might kill a company.

“The biggest problem facing all commercial space companies, especially early-stage entrepreneurs, is failure” of an attempted flight, Liang Jianjun, chief executive of rocket company Space Trek, told Reuters. That can affect financing, research, manufacturing and the team’s morale, he added.

Space Trek is planning its first suborbital launch by the end of June and an orbital launch next year, said Liang, who founded the company in late 2017 with three other former military technical officers.

Despite LandSpace’s failed Zhuque-1 orbital launch in October, the Beijing-based firm secured 300 million yuan in additional funding for the development of its Zhuque-2 rocket a month later.

In December, the company started operating China’s first private rocket production facility in Zhejiang province, in anticipation of large-scale manufacturing of its Zhuque-2, which it expects to unveil next year.

STATE COMPETITION

China’s state defence contractors are also trying to get into the low-cost market.

In December, the China Aerospace Science and Industry Corp (CASIC) successfully launched a low-orbit communication satellite, the first of 156 that CASIC aims to deploy by 2022 to provide more stable broadband connectivity to rural China and eventually developing countries.

The satellite, Hongyun-1, was launched on a rocket supplied by the China Aerospace Science and Technology Corp (CASC), the nation’s main space contractor.

In early April, the China Academy of Launch Vehicle Technology (CALVT), a subsidiary of CASC, completed engine tests for its Dragon, China’s first rocket meant solely for commercial use, clearing the path for a maiden flight before July.

The Dragon, much bigger than the rockets being developed by private firms, is designed to carry multiple commercial satellites.

At least 35 private Chinese companies are working to produce more satellites.

Spacety, a satellite maker based in southern Hunan province, plans to put 20 satellites in orbit this year, including its first for a foreign client, chief executive Yang Feng told Reuters.

The company has only launched 12 on state-produced rockets since the company started operating in early 2016.

“When it comes to rocket launches, what we care about would be cost, reliability and time,” Yang said.

($1 = 6.7032 Chinese yuan renminbi)

SEOUL (Reuters) – North Korean leader Kim Jong Un told Russian President Vladimir Putin peace and security on the Korean peninsula depended on the United States, warning that a state of hostility could easily return, North Korean media said on Friday.

Kim’s remarks, at talks with Putin in Vladivostok on Thursday, will likely add to pressure on the United States to be more flexible on a North Korean demand for an easing of international sanctions.

A second summit between Kim and U.S. President Donald Trump in Vietnam in February collapsed with no progress on a U.S. demand that the North give up its nuclear program and a North Korean demand for an easing of sanctions.

The North Korean leader has said he would wait until the end of the year for the United States to be more flexible.

“The situation on the Korean peninsula and the region is now at a standstill and has reached a critical point where it may return to its original state as the U.S. took a unilateral attitude in bad faith at the recent second DPRK-U.S. summit talks,” North Korea’s KCNA reported Kim as saying.

The Democratic People’s Republic of Korea (DPRK) is North Korea’s official name.

“The DPRK will gird itself for every possible situation.” KCNA quoted Kim as saying.

The U.S. State Department did not immediately respond to a request for a comment.

William Hagerty, the U.S. ambassador to Japan, told a Washington think-tank that Kim’s contact with Russia and China was part of an effort to seek relief from international sanctions.

“The fact you see Kim Jong Un meeting with Vladimir Putin underscores the fact that the sanctions are working and the sanctions are putting extreme economic pressure on the North Korean regime,” Hagerty said.

“What we see is an outreach to try to find a way to deal with it. There is a much simpler way to deal with it and that is to denuclearize,” he said.

He said it was important the international community enforced U.N. sanctions against North Korea that were imposed because of its nuclear and missile programs.

SECURITY GUARANTEES
On Friday, Kim joined officials to lay a wreath at a navy memorial at Vladivostok bay.

The first face-to-face talks between Putin and Kim, held on an island off the Russian Pacific city, did not appear to yield any major breakthrough.

The two discussed ways to promote strategic communication and tactical collaboration in the course of ensuring peace and security on the Korean peninsula and beyond, KCNA said.

Putin said he thought a deal on North Korea’s nuclear program was possible and the way to achieve it was to move forward step by step to build trust.

But any U.S. security guarantees to North Korea might need to be supported by other nations involved in previous six-way talks on the issue, Putin said.

Russia was for years a participant in six-party talks aimed at persuading North Korea to give up its nuclear program. The talks, which included the two Koreas, the United States, China and Japan, have not been held since 2009.

“They only need guarantees about their security. That’s it. All of us together need to think about this,” Putin told reporters after talks with Kim, referring to North Korea.

Such guarantees would have to be international, legally binding, and vouch for North Korea’s sovereignty, Putin said.

Russia and North Korea agreed to increase cooperation in various areas and Kim invited Putin to visit North Korea, and he accepted, KCNA said. No date was announced.

“North Korea seems to be trying to expand its negotiating position with the U.S.,” said South Korea’s ambassador to the United States, Cho Yoon-je, according to the Yonhap news agency.

“The U.S. continues to send a message to North Korea through channels at every level that it is open to dialogue … The expectation seems to be that the North may respond once the Chairman Kim Jong Un’s diplomatic schedule is completed.”

WASHINGTON (Reuters) – The U.S. economy likely maintained a moderate pace of growth in the first quarter, which could further dispel earlier fears of a recession even though activity was driven by temporary factors.

The Commerce Department’s gross domestic product (GDP) report to be published on Friday at 8:30 a.m. EDT (1230 GMT) is expected to sketch a picture of an economy growing close to potential, mostly reflecting the impact of an ebbing boost from a giant fiscal stimulus and past interest rate increases.

Gross domestic product probably increased at a 2.0 percent annualized rate in the first quarter as a burst in exports, strong inventory stockpiling and government investment in public construction projects offset slowdowns in consumer and business spending, according to a Reuters survey of economists.

With global growth still sluggish, the surge in exports is likely to reverse and the inventory build will probably need to be worked off, which could curtail production at factories. That could restrain growth in the second quarter.

The economy grew at a 2.2 percent pace in the October-December period. Growth has stepped down from a peak 4.2 percent pace in the second quarter of 2018, when the White House’s $1.5 trillion tax cut package jolted consumer spending.

Economists estimate the speed at which the economy can grow over a long period without igniting inflation at between 1.7 and 2.0 percent. The economy will mark 10 years of expansion in July, the longest on record.

“The economy remains solid, but we anticipate a slowing in the pace of growth in the medium term as the tailwinds from fiscal stimulus fade and the headwinds of tighter monetary policy take hold,” said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

The economy stumbled at the turn of the year, with a batch of weak economic reports suggesting first-quarter GDP growth as low as a 0.2 percent rate. The soft data stream stoked fears of a recession that were also exacerbated by a brief inversion of the U.S. Treasury yield curve.

Some of the weak data, especially retail sales, were blamed on a 35-day partial shutdown of the federal government, which hurt confidence and delayed processing of tax refunds. Since the shutdown ended on Jan. 25, economic data have mostly perked up, leading to a sharp upgrading of first-quarter GDP estimates.

“Slower, but moderate economic growth is continuing and we might see some slight acceleration as we head into second quarter,” said Sung Won Sohn, an economics professor at Loyola Marymount University in Los Angeles.

WEAK DOMESTIC DEMAND
The improvement in the economy’s fortunes has been mirrored by strong corporate profits for the quarter.

Some economists caution that growth could surprise on the downside because of a seasonal quirk. The so-called residual seasonality has tended to understate economic growth in the first quarter. Though the government said last year it had addressed the methodology problem, economists believe residual seasonality has not been entirely eliminated from the data.

A surge in exports and weak imports are expected to have sharply narrowed the trade deficit in the first quarter. Trade is believed to have added more than one percentage point to GDP after being neutral in the fourth quarter.

Trade tensions between the United States and China have caused wild swings in the trade deficit, with exporters and importers trying to stay ahead of the tariff fight between the two economic giants.

The trade standoff has also had an impact on inventories, which are expected to have increased in the first quarter at their strongest pace since 2015. Part of the inventory build is related to weak demand, especially in the automotive sector.

Inventories are expected to have contributed a full percentage point to first-quarter GDP after adding one-tenth of a percentage point in the October-December period.

Excluding trade and inventories, the economy is expected to have expanded at a roughly 1.6 percent rate in the first quarter. Economists said Federal Reserve officials were likely to focus on this growth measure.

The Fed recently suspended its three-year monetary policy tightening campaign, dropping forecasts for any interest rate hikes this year. The U.S. central bank increased borrowing costs four times in 2018.

“The composition of the data will not look favorably on domestic economic activity, nor provide a positive forward look at current quarter activity,” said Joe Brusuelas, chief economist at RSM in New York. “Policymakers will likely look past this growth report when formulating rate policy.”

Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, is expected to have slowed significantly from the fourth quarter’s 2.5 percent rate. Economists said the government shutdown was the main factor behind the anticipated deceleration in spending.

A moderation is also expected in businesses spending on equipment because of the delayed impact of sharp drops in oil prices toward the end of 2018 and fading depreciation provisions in the 2018 tax bill. Supply chain disruptions caused by Washington’s trade war with Beijing were also seen crimping business investment.

(Reuters) – A federal judge in Washington state on Thursday blocked a Trump administration rule that would prohibit taxpayer-funded family planning clinics from referring patients to abortion providers.

The preliminary injunction bars enforcement nationwide of a policy that was due to go into effect on May 3 over the vehement objections of abortion supporters who have decried it as a “gag rule” designed to silence doctor-patient communications about abortion options.

“Today’s ruling ensures that clinics across the nation can remain open and continue to provide quality, unbiased healthcare to women,” Washington state Attorney General Bob Ferguson said in a statement announcing the decision.

Washington state was a named plaintiff in the case challenging restrictions proposed by the U.S. Health and Human Services Department (HHS) to its Title X program subsidizing reproductive healthcare and family planning costs for low-income women.

Neither the White House nor HHS immediately responded to requests from Reuters for comment.

The ruling by U.S. District Judge Stanley Bastian in Yakima, in eastern Washington, capped a hearing in which oral arguments were presented by both sides.

“There is no public interest in perpetuating unlawful agency action,” Bastian wrote in his ruling.

Bastian also wrote that the “Plaintiffs have presented reasonable arguments that indicate they are likely to succeed on the merits.”

He said that the plaintiffs “are likely to suffer irreparable harm in the absence of a preliminary injunction.”

A federal judge in Oregon earlier this week said he intended to grant a preliminary injunction in a similar but separate lawsuit brought by 20 states and the District of Columbia. Two more lawsuits challenging the Title X restrictions are pending in California and Maine.

The restrictions are aimed at fulfilling Republican President Donald Trump’s campaign pledge to end federal support for Planned Parenthood, an organization that provides abortions and other health services for women under Title X.

Congress appropriated $286 million in Title X grants in 2017 to Planned Parenthood and other health centers to provide birth control, screening for diseases and other reproductive health and counseling to low-income women.

The funding is already prohibited from being used for abortions, but abortion opponents have long complained that the money in effect subsidizes Planned Parenthood as a whole.

Planned Parenthood provides healthcare services to about 40 percent of the 4 million people who rely on Title X funding annually, and the organization has argued that community health centers would be unable to absorb its patients.

Under the new rule, clinics that receive Title X funding would be barred from referring patients for abortion as a method of family planning. The regulation also would require financial and physical separation between facilities funded by Title X and those providing abortions.

Abortion opponents have argued the plan would not ban abortion counseling but would ensure that taxpayer funding does not support clinics that also perform the procedure.

China’s powerful military is considered to be a master at concealing its intentions. But there is no secret about how it plans to destroy American aircraft carriers if rivalry becomes war.

At November’s biennial air show in the southern city of Zhuhai, the biggest state-owned missile maker, China Aerospace Science and Industry Corporation Ltd, screened an animation showing a hostile “blue force,” comprising an aircraft carrier, escort ships and strike aircraft, approaching “red force” territory.

On a giant screen, the animation showed a barrage of the Chinese company’s missiles launched from “red force” warships, submarines, shore batteries and aircraft wreaking havoc on the escort vessels around the carrier. In a final salvo, two missiles plunge onto the flight deck of the carrier and a third slams into the side of the hull near the bow.

The fate of the ship is an unmistakable message to an America that has long dominated the globe from its mighty aircraft carriers and sprawling network of hundreds of bases. China’s military is now making giant strides toward replacing the United States as the supreme power in Asia. With the Pentagon distracted by almost two decades of costly war in the Middle East and Afghanistan, the Chinese military, the People’s Liberation Army (PLA), has exploited a period of sustained budget increases and rapid technical improvement to build and deploy an arsenal of advanced missiles.

Many of these missiles are specifically designed to attack the aircraft carriers and bases that form the backbone of U.S. military dominance in the region and which for decades have protected allies including Japan, South Korea and Taiwan.

Across almost all categories of these weapons, based on land, loaded on strike aircraft or deployed on warships and submarines, China’s missiles rival or outperform their counterparts in the armories of the United States and its allies, according to current and former U.S. military officers with knowledge of PLA test launches, Taiwanese and Chinese military analysts, and technical specifications published in China’s state-controlled media.

China has also seized a virtual monopoly in one class of conventional missiles – land-based, intermediate-range ballistic and cruise missiles.

Under the Intermediate-Range Nuclear Forces Treaty, a Cold War-era agreement aimed at reducing the threat of nuclear conflict, the United States and Russia are banned from deploying this class of missiles, with a range between 500 and 5,500 kilometers (3,418 miles). But Beijing, unrestrained by the INF Treaty, is deploying them in massive numbers.

This includes so-called carrier killer missiles like the DF-21D, which can target aircraft carriers and other warships underway at sea at a range of up to 1,500 kilometers, according to Chinese and Western military analysts. If effective, these missiles would give China a destructive capability no other military can boast. China’s advantage in this class of missiles is likely to remain for the foreseeable future, despite U.S. President Donald Trump’s decision in February to withdraw from the treaty in six months.

China is also making rapid strides in developing so-called hypersonic missiles, which can maneuver sharply and travel at five times the speed of sound (or even faster). Currently, the United States has no defenses against a missile like this, according to Pentagon officials.

China’s Ministry of National Defense and China Aerospace Science and Industry Corporation did not respond to questions from Reuters about Beijing’s missile capabilities. The U.S. Indo-Pacific Command and the Pentagon had no comment.

China’s growing missile arsenal hasn’t yet been proven in a real-world clash, and some Chinese officials play down their advances. But under the Trump administration, Washington has come to view China as a rival determined to displace the United States in Asia. This modern-day missile gap, the administration believes, is emerging as one of the biggest dangers to American military supremacy in Asia since the end of the Cold War. The Pentagon is now scrambling for new weapons and strategies to counter the PLA’s rocket arsenal.

“We know that China has the most advanced ballistic missile force in the world,” said James Fanell, a retired U.S. Navy captain and former senior intelligence officer with the U.S. Pacific Fleet. “They have the capacity to overwhelm the defensive systems we are pursuing.”

Fanell was sidelined by the Pentagon ahead of his 2015 retirement, after warning about the Chinese build-up at a time when President Barack Obama was seeking cooperation with Beijing. Today, Pentagon policy hews more closely to his views that China intends to displace the United States as Asia’s dominant power.

Chinese military brass agree they can now keep American carriers at bay. Six people in China interviewed by Reuters, including retired PLA officers and a person with ties to the Beijing leadership, said China’s enhanced missile capability was a great leveler and would serve to deter the United States from getting too close to Chinese shores.

“We cannot defeat the United States at sea,” a retired PLA colonel said in an interview. The United States has 11 aircraft carriers and China has just two. “But we have missiles that specifically target aircraft carriers to stop them from approaching our territorial waters if there were conflict.”

A person with ties to the Chinese leadership who once served in the military had a similar message: “If U.S. aircraft carriers come too close to our coastlines in a conflict, our missiles can destroy them.” […]

April 25 (Reuters) – European shares fell on Thursday, weighed down by energy stocks and Nokia shares while investors parsed through a mixed bag of earnings in the region amid lingering concerns for the eurozone economy.

The pan-European STOXX 600 index fell 0.4 percent by 0730 GMT after the benchmark index’s eight session rally stalled on Wednesday.

Among the biggest drags was Finnish telecom network equipment maker Nokia which slid 10 percent after the company reported a surprise quarterly loss citing hard competition in its core networks business.

Nokia shares dragged the tech index lower after its 4 percent surge in prior session.

Switzerland’s biggest bank UBS advanced after its first-quarter results surpassed analyst expectations. This follows a surprise profit from its smaller rival Credit Suisse on Wednesday.

Britain’s Barclays slipped after reporting a 10 percent drop in the quarterly profit, as tough market conditions caused a drop in earnings at its under-pressure investment bank.

Swedbank fell 3 percent after posting an estimate-beating first-quarter profit but the Swedish lender admitted to previous shortcomings in combating money laundering.

The banking index shed 0.6 percent broadly as Germany’s benchmark 10-year government bond yield held below zero percent, a day after a disappointing German Ifo sentiment survey exacerbated growth concerns in the region.

Sainsbury’s slipped 6 percent after Britain’s competition regulator blocked the retailer’s proposed 7.3 billion pound ($9.4 billion) takeover of Walmart owned Asda.

On the other end of the index, heavyweight Bayer rose after the drug and farming supplies company posted a 45 percent gain in quarterly core earnings on the back of seed maker Monsanto’s acquisition.

ASM soared 7 percent to the top of the pan-regional index after the semiconductor company beat first-quarter targets. Meanwhile Germany’s Dialog Semiconductor rose more than 1 percent after forecasting higher than anticipated profits in the first quarter.

German payments company Wirecard extended a rally from the previous session as it reiterated its profit forecast for 2019. (Reporting by Medha Singh and Agamoni Ghosh in Bengaluru Editing by Raissa Kasolowsky)

NEW YORK (Reuters) – The United States must be prepared for consequences if it tries to stop Iran from selling oil and using the Strait of Hormuz, Iran’s Foreign Minister Mohammad Javad Zarif warned on Wednesday, while also offering to negotiate prisoner swaps with Washington.

The United States on Monday demanded buyers of Iranian oil stop purchases by May or face sanctions, ending six months of waivers which allowed Iran’s eight biggest buyers, most of them in Asia, to continue importing limited volumes.

“We believe that Iran will continue to sell its oil. We will continue to find buyers for our oil and we will continue to use the Strait of Hormuz as a safe transit passage for the sale of our oil,” Zarif told an event at the Asia Society in New York.

Reinforcing Supreme Leader Ayatollah Ali Khamenei’s stance, Zarif warned: “If the United States takes the crazy measure of trying to prevent us from doing that, then it should be prepared for the consequences.” He did not give specifics.

Oil prices hit their highest level since November on Tuesday after Washington’s announcement.

When asked if the U.S. pressure campaign on Tehran was aimed at sparking further negotiations or regime change, Zarif said: “The B team wants regime change at the very least.” He described the B Team as including Israeli Prime Minister Benjamin Netanyahu and Trump’s national security adviser John Bolton.

“It is not a crisis yet, but it is a dangerous situation. Accidents … are possible. I wouldn’t discount the B team plotting an accident anywhere in the region, particularly as we get closer to the election. We are not there yet,” Zarif said referring to the November 2020 vote for U.S. president.

Zarif suggested possible cooperation with the United States to bring stability to Iraq and Afghanistan, a priority for both Tehran and Washington.

He also said he was willing to swap British-Iranian aid worker Nazanin Zaghari-Ratcliffe, who has been detained in Iran since 2016, for an Iranian woman detained in Australia for the past three years on a U.S. extradition request.

“I feel sorry for them, and I have done my best to help,” Zarif said of Zaghari-Ratcliffe. “But nobody talks about this lady in Australia who gave birth to a child in prison. … I put this offering on the table publicly now – exchange them.”

Later, in an interview with Reuters, Zarif backed off from a possible prisoner swap for the two women saying the Zaghari-Ratcliffe case was a separate issue, which he was discussing with the British government.

“The offer that I made was people who have been in prison either in the United States or elsewhere in the world on American request,” he said, “But the Iranian-British woman is a separate case.”

Zarif told Reuters he was proposing “a serious dialogue” with the United States on a possible prisoner swap.

At the Asia Society, Zarif said Iran proposed a possible prisoner swap deal to the U.S. administration six months ago, but had not yet had a response from Washington.

“All these people that are in prison inside the United States, on extradition requests from the United States, we believe their charges are phony. The United States believes the charges against these people in Iran are phony. Let’s not discuss that,” he said.

“Let’s have an exchange. I’m ready to do it and I have authority to do it,” Zarif said.