2025-03-20 05:54
Gold hits record high of $3,057.21/oz Traders pricing in 69 bps of US rate easing this year Gold could hit $3,500 by year-end, says Citi March 20 (Reuters) - Gold prices eased on Thursday after hitting a record high earlier in the session, but retained a bullish outlook driven by potential rate cuts signalled by the Federal Reserve and continuing geopolitical and economic uncertainties. Spot gold was down 0.3% at $3,038.79 an ounce by 11:38 a.m. EDT (1538 GMT) due to profit-taking, after hitting a record high of $3,057.21. Sign up here. U.S. gold futures settled 0.1% higher at $3,043.80 per ounce. "Speculators are trying to take advantage of the market and take some profit off the table ... I think anytime gold sets a high, we see a little bit of resistance," said Alex Ebkarian, chief operating officer at Allegiance Gold. "Gold is not even acting as a safe-haven asset yet to retail investors because technically we're not in a recession. We are seeing the slowdown in the economy and that could very well create a further uncertainty and more desire for safe-haven assets." Federal Reserve Chair Jerome Powell said on Wednesday that Trump's initial policies, including extensive import tariffs, may have slowed U.S. economic growth and increased inflation. Trump, meanwhile, criticized the Fed's decision to hold rates, despite projections for two quarter-percentage-point rate cuts by year-end due to weakening economic growth and higher inflation. Traders are pricing in 69 basis points of easing this year from the Fed — at least two rate reductions of 25 bps each, with a cut in July fully priced in — LSEG data showed. "In our bull case, we see gold prices reaching $3,500 per ounce by year-end, underpinned by much higher hedging/investment demand on fears of US hard landing/stagflation," analysts at Citi said in a note. At least 91 Palestinians were killed and dozens wounded in Gaza airstrikes after Israel resumed bombing, ending a two-month ceasefire, said the enclave's health ministry. Gold acts as a hedge against uncertainty and tends to do well in a low-interest-rate environment. Spot silver fell 1.2% to $33.41 an ounce, platinum fell 1.1% to $982.0. Palladium slipped 1.3% to $946.5. https://www.reuters.com/markets/commodities/gold-climbs-record-high-fed-signals-two-rate-cuts-2025-2025-03-20/
2025-03-20 05:33
A look at the day ahead in European and global markets from Rae Wee With the Federal Reserve's policy meeting out of the way, the central bank spotlight now turns to some of its European counterparts - the Bank of England, the Swiss National Bank and the Riksbank - with rate decisions due later today. Sign up here. The BoE, at centre stage, is widely expected to keep rates on hold as it monitors the economic impact of U.S. President Donald Trump's tariff onslaught and the British government's imminent tax hike for employers. With UK inflation stuck stubbornly above its 2% target, the BoE has cut borrowing costs by less than the European Central Bank and the Fed since last summer, contributing to the country's sluggish growth rate. Ahead of that, investors will get UK wage data to chew on. Expectations are for pay growth across the whole economy, excluding bonuses, to have held steady at an annual 5.9% rate in the three months to January. The Riksbank is similarly expected to stand pat on rates on Thursday, while economists see the SNB cutting its main policy rate by a quarter percentage point and holding it there until at least 2026. Trump weighed in on Fed policy on Wednesday, saying the central bank would be better off cutting rates "as U.S. tariffs start to transition (ease!) their way into the economy", just hours after it left rates unchanged. Fed Chair Jerome Powell said the Trump administration's initial policies, including extensive import tariffs, appear to have tilted the U.S. economy towards slower growth and at least temporarily higher inflation, even as policymakers still projected two rate cuts this year. Despite the risks to the U.S. economic outlook, investors chose to latch on to the prospect of further Fed easing ahead, sending stocks in Asia higher on Thursday. Europe, meanwhile, looked set for a mixed open, with EUROSTOXX 50 futures up 0.07% but FTSE futures down 0.14%. Geopolitics also remained prominent on investors' radar. Israel's military said it intercepted a missile launched from Yemen early on Thursday as hostilities with the Houthis intensified. Trump has threatened to punish Iran over its perceived support for the Yemeni militant group. The escalation of tensions in the Middle East sent oil prices higher on Thursday, with Brent crude futures up 0.55% and U.S. crude futures gaining 0.46%. But capping those gains was the prospect of a return of Russian supply to the market, after Ukrainian President Volodymyr Zelenskiy said a halt to energy strikes in the war with Russia could be established quickly. Trump and Zelenskiy agreed on Wednesday to work together to end Russia's war with Ukraine, in what the White House described as a "fantastic" one-hour phone call. Key developments that could influence markets on Thursday: - Bank of England, Swiss National Bank, Riksbank policy decisions - UK wage data (January) https://www.reuters.com/markets/europe/global-markets-view-europe-2025-03-20/
2025-03-20 03:29
SHANGHAI, March 20 (Reuters) - Global investment banks have raised their projections for China's economic growth and turned less bearish on the Chinese currency after early signs of economic recovery, though concerns over escalating trade disputes with the U.S. persist. Beijing rolled out fresh stimulus measures this week to boost domestic consumption and pledged support for stock and property markets, while maintaining its 2025 economic growth target at about 5%. Sign up here. China's yuan has strengthened around 1% against the U.S. dollar so far this year, reaching 7.23 per dollar on Thursday, after a 2.8% loss in 2024. Here is a summary of some forecasts for the China's gross domestic product and currency. GDP FORECASTS: DOLLAR/YUAN LEVELS: KEY QUOTES ** Citi "The path out of deflation is visible, but still relatively narrow at this moment. It hinges on capacity control, property stabilization, and consumption recovery. "The trade dispute with the U.S. could be a wild card as well, representing risks on both sides. Nevertheless, we are seeing positive early signals accumulating and feel comfortable to call for a shift in supply-demand conditions sooner than later." ** ANZ "The authorities appreciate the critical role of asset price reflation to combat the balance sheet recession. "We estimate that China's 300 billion yuan ($41.54 billion) (worth of) trade-in program announced at the National People's Congress will likely add another 1 trillion yuan to retail sales." ** RBC Capital Markets "Letting the exchange rate weaken would be the most natural reaction to U.S. protectionism. On the flipside, Beijing is fearful that currency depreciation could trigger domestic financial instability, so there will be no easy resort to a weak FX policy. A broad dollar downturn would ease the upside pressure on USD/CNY." ** Goldman Sachs "Given the People's Bank of China's (PBOC) reaction function so far, we think Chinese policy makers will primarily rely on other tools to offset the potential adverse growth impact from U.S. tariffs, as opposed to relying heavily on the FX lever, with the risk that the renminbi could even move stronger as an outcome of the mooted Presidential summit later in the year." https://www.reuters.com/world/china/global-banks-raise-chinas-growth-forecast-ease-bearish-yuan-views-2025-03-20/
2025-03-20 02:52
March 19 (Reuters) - U.S. President Donald Trump told Breitbart News in an interview on Wednesday that he believes India will probably be lowering the tariffs it imposes on American goods. "I believe they're going to probably going to be lowering those tariffs substantially, but on April 2, we will be charging them the same tariffs they charge us," he was quoted as saying. Sign up here. https://www.reuters.com/world/us/trump-says-he-believes-india-will-be-lowering-tariffs-us-breitbart-reports-2025-03-20/
2025-03-20 02:30
March 19 (Reuters) - U.S. President Donald Trump on Wednesday said the Federal Reserve would be better off cutting rates "as U.S. tariffs start to transition (ease!) their way into the economy", on the day the central bank kept rates unchanged. The Trump administration's initial policies, including extensive import tariffs, appear to have tilted the U.S. economy towards slower growth and at least temporarily higher inflation, Federal Reserve Chair Jerome Powell said earlier. Sign up here. https://www.reuters.com/markets/us/trump-says-fed-would-be-better-off-cutting-rates-tariffs-transition-into-economy-2025-03-20/
2025-03-20 00:42
Employment falls 52,800 in February, versus forecasts for rise of 30,000 Fewer older workers returned to work, participation retreats from record Jobless rate still low at 4.1%, investors raised bet for a May cut SYDNEY, March 20 (Reuters) - Australian employment unexpectedly fell in February to end a strong run of impressive gains, in a sign that the red-hot labour market could be finally loosening a little, although the jobless rate stayed low. The soft headline result sent the Australian dollar 0.4% lower to $0.6334, while three-year government bonds extended an earlier rally to be up 7 ticks at 96.29, the highest in more than a week. Sign up here. Swaps still imply a scant chance - about 10% - of a rate cut on April 1, but a move in May is now priced at 78%, up from 70% previously, as the strength in the labour market was thought to be a hurdle for more policy easing. Figures from the Australian Bureau of Statistics on Thursday showed net employment fell 52,800 in February from January, when it rose by a downwardly revised 30,500. That compared with forecasts for a 30,000 rise. Annual jobs growth pulled back sharply to just 1.9% from 3.5% the previous month, although that is still in line with long-running averages. The participation rate, which hit a record high of 67.2% in January, slumped to 66.8%. The jobless rate, however, stayed at 4.1%, matching market expectations. The ABS noted fewer older workers returned to work in February, contrary to expectations that more people would return after the New Year holidays. Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia, noted the fall in workers close to retirement age is more likely to be a withdrawal of labour supply from the market, rather than a signal of less demand. "This looks like a sideways move for the labour market, which remains in a tight position," said Langcake. Measures of underemployment and underutilisation even fell a little, but hours worked did drop 0.4%. The Reserve Bank of Australia cut interest rates last month for the first time in four years, but cautioned further easing could not be guaranteed given the surprisingly strong labour market could risk stoking inflation. The central bank has forecast core inflation, which slowed to 3.2% in the fourth quarter, to bottom out at 2.7% later this year, above the midpoint of its target range of 2-3%. The main inflationary effect of strong employment is typically through rising wages, but wage growth moderated to a two-year low in the last quarter. "RBA has been obsessing over the danger of wages surging from a strong job market, now it seems they shouldn't have been so worried," said Sean Callow, senior FX analyst at ITC Markets. Analysts at ANZ, however, said they do not think one weak print would have a material impact on the RBA's thinking on rates. "Labour market fundamentals remain solid, with an overall robust trend in employment growth, a low unemployment rate and an elevated level of job advertisements," they said in a note to clients. https://www.reuters.com/markets/australia-employment-posts-surprise-fall-feb-jobless-rate-steady-41-2025-03-20/
