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  1. Energy stocks in the Asia-Pacific region slid on Monday after news that producer cartel OPEC was mulling to increase production triggered oil prices to tank on Friday.

    The S&P/ASX 200 Energy Index was last down 2 percent, at its lowest since April 26. Among the large producers, Beach Energy edged down 4.7 percent, Woodside Petroleum fell 2.7 percent, Santos edged down 2.4 percent and Origin Energy fell 1.9 percent. The decline in energy stocks weighed down the broader S&P/ASX 200 index by 0.4 percent.

    In early trading in Tokyo, the energy sector of the Topix index was the underperformer, falling 3 percent, countering gains from the majority of other sectors and pulling the index into negative territory.

    The pressure on energy stocks came after oil prices ended a gaining streak on Friday, with the Brent crude closing down almost 3 percent on the day after OPEC's de-facto leader, Saudi Arabia, and Russia said that they were mulling to ease curbs on production.

    The option comes amid potential supply disruption risks from Venezuela and Iran, which are both under threat by U.S. sanctions.

    Oil prices also continued to slide on Monday. The international benchmark Brent was off 0.5 percent at $76.04 per barrel and the U.S. WTI, the U.S. benchmark, fell 0.8 percent at $67.34. In recent weeks, both prices have been trading near their highest since late 2014 as the tension over Iran and Venezuela, as well as continued OPEC-led production cuts, propped up prices.


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  2. On Sunday, U.S. President Donald Trump said a U.S. team had entered North Korea to get ready for a proposed summit between him and North Korean leader Kim Jong Un, which Trump withdrew from last week before reconsidering.

    The statement raised hopes that the Singapore summit between the two leaders could still take place despite days of diplomatic up and downs.

    Trump, who called off his face-to-face meeting with Kim, tweeted on Sunday that the US delegation has arrived in the isolated country to make preparations for the summit. He added that he is optimistic about North Korea's economic and financial prospect, claiming his bright vision will come true.

    Aside from the talks, White House spokeswoman Sarah Sanders said a “pre-advanced team” has travelled to Singapore, where the meeting is expected to take place, on Sunday morning to lay the groundwork for logistics.

    Earlier on Sunday, South Korean President Moon Jae-in said he and North Korea's Kim had reached an agreement during an unplanned meeting on Saturday that the North Korea-U.S. summit must take place. The South Korean leader also said that Kim has restated his commitment to the “complete” denuclearization of the Korean peninsula. Moon avoided queries regarding what denuclearization would mean.

    North Korea has been hit with hefty and years of economic sanctions over its nuclear and missiles programs since it began its nuclear testing in 2006. The U.S. has experienced difficulty to curb the country's weapons program, which has become a top security issue for Washington.

    Moon said Pyongyang and Washington may have varying expectations of what denuclearization means and he called on both sides to undertake working-level discussions to resolve their differences.


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  3. Italian Prime Minister-designate Giuseppe Conte has abandoned his efforts to establish a coalition government on Sunday after President Sergio Mattarella vetoed his pick for economy ministry, deepening the country's political upheaval and opening up the prospects for new elections.

    President Mattarella said that he has agreed to all proposals but will not certify the nomination of Paolo Savona, a eurosceptic, to the pivotal economy post. Savona is a vocal critic of the single currency.

    After the announcement of the vetoing of Savona, Mattarella summoned former International Monetary Fund senior official Carlo Cottarelli for a Monday morning meeting- an indication the president may be considering asking him to lead a government of unelected technocrats.

    Leaders of the two parties attempting to form a government, the far-right League and anti-establishment 5-Star Movement, alleged President Mattarella of abusing his power and working under the orders of European powers. Luigi Di Maio, the head of the 5-Star, called for his impeachment.

    The country has been without a working government since elections on March 4. Financial markets were thrown into chaos last week on concerns the mooted coalition would undertake a spending splurge and increase Italy's already massive debt, which is equal to over 1.3 times the country's domestic output.

    After the markets closed on Friday, Moody's said it may downgrade Italy's sovereign debt rating due to the risk that the prospect government would weaken public finances and repeal a 2011 pension reform.


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  4. Russia's energy minister, Alexander Novak, said that a return to the oil production levels that were observed in October 2016, the baseline for the present agreement to reduce production, is one of the options for lifting curbs.

    According to sources, this week, Saudi Arabia and Russia were discussing lifting OPEC and non-OPEC oil output to ease 17 months of strict supply curbs amid worries that a price rally has overextended its course.

    Novak told the media that they have extended the deal until the end of 2018 and that they talked about the mentioned scenario. But he added that a decision will be made in June, referring to the meetings of OPEC and non-OPEC nations in Vienna on June 22-23.

    The present deal came into effect on January 1, 2017, and envisioned global oil producers lowering their amalgamated output by 1.8 million bpd to drain the bloated inventories and to boost oil prices.

    Russia's oil production hit a 30-year peak of 11.247 million bpd in October and it vowed to reduce it by 300, 000 bpd to 10.947 million.

    In March and April of this year, Russia failed to attain full compliance of the deal, producing at a rate of 10.97 million bpd, a 11-month peak.

    Oil prices have rallied to $80 per barrel, levels not observed since late 2014. Russian President Vladimir Putin said on Thursday that the price of $60 is appropriate for Russia.

    Novak was also quoted stating on Saturday that he expected Iran to lower its production by no more than 10 percent as a result of the move by the U.S. to abandon a nuclear deal and reinstate sanctions against Tehran.


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  5. Profits earned by Chinese industrial companies in April increased at their quickest rate in six months, data from the National Bureau of Statistics (NBS) showed, as factories benefited from higher prices and solid demand.

    Profits in April were up 21.9 percent year-on-year to 576 billion yuan ($90.14 billion), the fastest pace since October, bringing gains for the first four months of 2018 to 15 percent. The data suggests that China's industrial sector continues to see solid growth momentum despite clampdowns on pollution and rocky trade relations with the United States.

    Last month's rebound was supported by lower comparison figures for April 2017, higher factory prices and stronger demand, He Ping, head of NBS' industrial division, said.

    April's rebound was driven by the steel, chemicals and automobile industries, said He, as profits for iron and steel processing firms increased 260 percent in April. No industrial sectors recorded year-on-year losses over January to April, the data showed.

    The higher April data should help ease concerns of slowing momentum in China's economy as the country implements tougher pollution controls on “smokestack” industries and cash-strapped regional governments cut back on big investment projects, curbing demand for building materials.

    Profit growth for Chinese industrial companies has weakened from the previous year's solid pace as factory gate price gains softened. In the first four months of 2017, profits were up 24.4 percent.

    China's producer price inflation accelerated to 3.4 percent in April from March but was much lower than 6.4 percent in the year-ago period.

    Profits at China's state-owned firms increased 26.2 percent to 627 billion yuan for Jan-April, compared with a 23.1 percent rise in the first quarter.

    The data includes companies with annual revenues of more than 20 million yuan ($3.13 million) from their main operations.


    The material has been provided by InstaForex Company - www.instaforex.com