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    Bloomberg

    Enbridge Gets Approval for Pipeline Link to Midwest

    (Bloomberg) -- An Enbridge Inc. pipeline that will help ship more Canadian crude to the U.S. Midwest received final approval on Monday, paving the way for construction to start soon on a third key export project for the oil sands after years of delays.Minnesota approved the stormwater pollution plan for Enbridge’s Line 3 pipeline replacement and expansion, the project’s last pending permit, the company said on Monday. Construction is expected to take six-to-nine months on a line that will add 370,000 barrels a day of capacity.Producers in Alberta, which holds the world’s third-largest crude reserves, have seen growth ground to a halt in recent years as a lack of enough export pipelines caused local crude prices to plummet in value. Now, three projects could allow them to ship an extra 1.8 million barrels a day when built.Work is underway on TC Energy Corp.’s Keystone XL after a decade-long saga for approval, though it’s still unclear if U.S. President Elect Joe Biden will maintain an authorization from the Trump administration for the pipeline to cross the border. Meanwhile, the Trans Mountain pipeline expansion to the Vancouver coast is proceeding in Alberta and British Columbia.“Until the barrels are freely flowing, we should take nothing for granted,” Tim McMillan, chief executive officer of the Canadian Association of Petroleum Producers, said by phone.Line 3 could still encounter state and federal legal hurdles, as well as the prospect of protests that slow construction, delaying the start of service until 2022, Height Commentary said in a note last week. Trans Mountain faces fierce opposition in British Columbia, including from indigenous-led protesters.Two years ago, Canadian export pipelines became so congested that heavy Western Canadian Select crude’s discount to benchmark U.S. prices widened to about $50 a barrel, prompting Alberta’s government to impose mandatory output limits. Those curbs were only lifted recently as the Covid-19 pandemic crippled demand for Canada’s oil, temporarily leaving extra space on some pipelines.(Corrects first deckhead on construction timeline)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Asian Stocks, U.S. Futures Climb; Dollar Dips: Markets Wrap
    Business
    Bloomberg

    Asian Stocks, U.S. Futures Climb; Dollar Dips: Markets Wrap

    (Bloomberg) -- Asian stocks and U.S. futures traded higher Tuesday as investors shrugged off an overnight slide in equities and once again embraced risk assets after an unprecedented month of gains. The dollar dipped.Shares climbed in Japan, Australia and South Korea. S&P 500 futures advanced after the benchmark dropped the most in more than a week, though still closed out its best month since April. The tech-heavy Nasdaq indexes that trailed in November fared better, touching a record high on Monday, while a gauge of global stocks posted its best month on record. Gold held losses and Bitcoin rallied back to an all-time high.Elsewhere, oil held a decline. The complex OPEC+ meeting that was due to take place on Tuesday to hash out the size of its production cuts next year was rescheduled as “further consultations” were needed first, according to a letter seen by Bloomberg. A meeting on Monday ended without an agreement.Rapid progress toward a coronavirus vaccine has given investors confidence to price in a return to normalcy and faster economic growth, helping lift shares of companies that were hardest hit by the pandemic. An MSCI index of global stocks jumped 12% in November, its biggest monthly gain on record.“I feel pretty confident that portfolios should be positioned for continued good performance from equity markets as we head into 2021,” Chris Iggo, chief investment officer for core investments at AXA Investment Managers, said in a note.Meanwhile, shares of Moderna Inc. surged 20% on Monday after the company said it plans to request clearance for its coronavirus vaccine in the U.S. and Europe.These are some key events coming up:The Reserve Bank of Australia holds a policy meeting on Tuesday.Federal Reserve Chairman Jerome Powell testifies before Congress on Tuesday and Wednesday.The U.S. employment report on Friday is expected to show more Americans headed back to work in November, though at a slower pace than last month.Here are some of the main moves in markets:StocksS&P 500 futures rose 0.5% as of 9:07 a.m. in Tokyo. The S&P 500 Index dipped 0.5%.Topix index rose 0.8%.Australia’s S&P/ASX 200 Index rose 0.6%.South Korea’s Kospi index rose 1%.Hong Kong’s Hang Seng Index contracts fell 0.4% earlier.CurrenciesThe yen traded at 104.36 per dollar, down 0.1%.The offshore yuan ticked up 0.1% to 6.5794 per dollar.The Bloomberg Dollar Spot Index dipped 0.1%.The euro was at $1.1938, up 0.1%.BondsThe yield on 10-year Treasuries gained less than one basis point to 0.85%.Australia’s 10-year bond yield rose two basis points to 0.92%.CommoditiesWest Texas Intermediate crude slid 0.1% to $45.27 a barrel.Gold was at $1,778.85 an ounce, around the weakest in five months.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • China’s Fight With Australia Risks Backfiring as Biden Era Nears
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    Bloomberg

    China’s Fight With Australia Risks Backfiring as Biden Era Nears

    (Bloomberg) -- China’s economic offensive against Australia is partly designed to warn countries against vocally opposing Beijing’s interests, particularly with Joe Biden looking to unite U.S. allies. Yet it’s already showing signs of backfiring.China last week imposed anti-dumping duties of up to 212% on Australian wine, the latest in a slew of measures curbing imports from coal to copper to barley. Tensions escalated further on Monday after a Chinese Foreign Ministry official tweeted a fake photo of an Australian soldier holding a knife to the throat of an Afghan child.Australian Prime Minister Scott Morrison quickly called on China to apologize for the “repugnant” tweet. China’s Foreign Ministry, in turn, questioned whether he lacks “a sense of right and wrong” and said overall ties deteriorated because Australia “took wrong measures on issues bearing on China’s core interests.”To Beijing, the attacks on Australia are meant to deter others like Canada, the European Union and Japan from joining a U.S.-led campaign to counter China’s rise. Communist Party officials see Morrison’s government as one of their most vocal critics, and an easy target: China accounts for about 35% of Australia’s total trade, three times more than the next highest country, Japan. Australia accounts for less than 4% of China’s commerce.“It is only natural that China wants to sound some precautionary alarm” to warn countries off building an anti-China alliance, said Zhu Feng, professor of international relations at Nanjing University. “After all, confrontation is the least wanted by the world now.”China is betting that most Western countries will avoid provoking Beijing and risking the kind of trade retaliation Australia is suffering, particularly with their economies weighed down by the pandemic. At the same time, it has sought to strengthen ties with Japan, South Korea and nations in Southeast Asia, in part by offering more trade, investment in 5G networks and access to Covid-19 vaccines.Yet China’s moves are adding to worries about its use of economic coercion, and could end up pushing middle powers closer to the U.S. camp. President-elect Biden has vowed to rebuild relationships with allies damaged by Donald Trump’s “America First” policies, which in turn would make it more palatable for some allies to align more closely with his administration.“Biden is planning is to resume U.S. international policy after a four-year hiccup,” said Jeff Moon, the U.S.’s assistant trade representative for China for part of the Obama administration, adding that the scope of China’s actions against Australia was “breathtaking.”“The leverage is to work together,” he added. “That is what they most fear, and they see that coming.”While it’s still unclear how exactly that would work, several key groupings including the Quad -- the U.S., Japan, Australia and India -- as well as Five Eyes -- the U.S., Australia, U.K., Canada and New Zealand -- have been revived in recent years. New initiatives have also been floated, including one that would give countries an alternative to Huawei Technologies Co. for 5G networks and another that would find alternative supply chains to China.The Wall Street Journal reported in November that the Trump administration was formulating a joint retaliation plan that would allow the West to push back against the kind of economic coercion China is inflicting on Australia. The European Union also plans to call on the U.S. to seize a “once-in-a-generation” opportunity to forge a new global alliance that would counter China, the Financial Times reported Monday, citing a set of draft policy proposals.For its part, the Trump administration is continuing to pressure China with moves to prevent some of its biggest companies from accessing American technology. Senior officials have also stepped up visits to Asia ahead of the planned inauguration for Biden on Jan. 20: Following a visit to Japan in November, National Security Adviser Robert O’Brien said leaders in Tokyo saw the Quad as a “game changer.”“China against any individual country, including quite powerful countries like South Korea or Thailand or even Japan, China would be dominant,” said Malcolm Rifkind, a former British foreign secretary. “But in the real world when you have such a situation, your potential victims join up to ensure a collective and coordinated response.”‘Weak Link’While China has adopted a more aggressive “Wolf Warrior” diplomacy epitomized by the Afghan tweet on Monday, it has also used different levels to punish countries that step out of line. Earlier this year the Communist Party-backed Global Times newspaper said China should deliver “public and painful” retaliation to the U.K. for banning Huawei but avoid a full-fledged confrontation because it saw Britain as the “weak link” in the Five Eyes.In a phone call with his EU counterpart Josep Borrell last week, Chinese Foreign Minister Wang Yi also signaled the bloc should think twice before strengthening ties with the incoming Biden administration, as the two sides look to complete an investment treaty by the end of the year. “Strategic autonomy is a necessary character for staying independent,” Wang said, adding that it involves “opposing man-made ‘decoupling’, opposing confrontation among different blocs and a new ‘Cold War.’”Australia, on the other hand, has faced China’s unabashed wrath ever since Morrison’s government called for Beijing to allow independent investigators into Wuhan to discover the origins of Covid-19. Chen Hong, director of the Australian Studies Centre at East China Normal University who said he had his visa to Australia revoked this year because he was labeled a national security risk, said Australia’s actions differentiated it from New Zealand, which maintained relatively good ties with Beijing.“Australia has been purposefully echoing the Washington’s anti-China policy and coordinated with Trump’s strategic intentions,” Chen said.Allies GalvanizedStill, in an early sign that Beijing’s Afghan tweet may have galvanized some of Australia’s partners into responding, New Zealand Prime Minister Jacinda Ardern said on Tuesday that her own diplomats had directly registered concern with Chinese authorities over the “unfactual post.” Lawmakers in the U.K. also condemned China’s actions, with former Conservative party leader Iain Duncan Smith urging Britain to do more to stand with Australia, the Sydney Morning Herald reported. In Canberra, Australian officials have said Morrison’s government is speaking out for its own interests regardless of the U.S. on issues like China’s increasing grip over Hong Kong and assertiveness in the South China Sea. Morrison himself has also sought to portray Australia as stuck in the middle of the U.S. and China -- a view also shared by Singapore Prime Minister Lee Hsien Loong, who said in an interview in November that many nations in Asia aren’t keen to join an anti-China bloc.Even after he called on China to apologize for the Afghan tweet on Monday, Morrison again sought to restart talks with Beijing without conditions.“Countries around the world are watching this, they are seeing how Australia is seeking to resolve these issues and they are seeing these responses,” Morrison told reporters on Monday. “This impacts not just on the relationship here, but with so many other sovereign nations not only in our own region, but like-minded countries around the world.”The spat has only hardened attitudes toward China within Australia, to the point where even business groups have stopped pushing for warmer ties, according to Natasha Kassam, a former Australian diplomat who worked in China and is now a research fellow at the Sydney-based Lowy Institute. At the same time, she said, it’s “impossible to imagine” China apologizing to Australia.“While there may be an emboldening of countries in the region responding to China,” she said, “it’s equally likely that a number of countries will see the way in which Australia’s export industry has been punished and think twice about making their own criticisms.”(Updates with New Zealand, UK reaction in 18th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.