2024-09-30 10:36

MUMBAI, Sept 30 (Reuters) - The Indian rupee fell on Monday but posted its best month since June, boosted by strong risk appetite following the US Federal Reserve's outsized rate cut and economic stimulus measures in China. The rupee closed at 83.7925, down from its previous close at 83.70, pressured by likely dollar outflows. For the month, the currency logged a near 0.1% rise. The Federal Reserve's 50 basis points cut and a slew of stimulus measures announced by China lifted Asian currencies including the rupee over September. "China's stimulus measures are boosting global risk appetite, adding further downside pressure on the USD," Charu Chanana, head of FX strategy at Saxo said in a note. The dollar index was at 100.3, hovering close to its lowest level since July 2023, and was also on course to log a third consecutive month of decline. The rupee was also helped by strong inflows with overseas investors pouring nearly $11 billion in local stocks and bonds over the month, according to stock depository data, the highest net monthly inflows on record. However, the currency's upside was limited by likely absorption of dollar inflows by the Reserve Bank of India. The country's foreign exchange reserves climbed for the sixth straight week to a record high of $692.3 billion as of Sept. 20. On Monday, dollar demand from custodian banks and importers weighed on the local currency, traders said. Two large foreign banks were spotted bidding for dollar, likely on behalf of custodial clients, a trader at a private bank said. Benchmark Indian equity indices, the BSE Sensex (.BSESN) , opens new tab and Nifty 50 (.NSEI) , opens new tab ended down by nearly 1.5% each, their steepest single day fall in two months. Focus now shifts to remarks from Federal Reserve Chair Jerome Powell due later in the day for possible insights into the future direction of U.S. policy rates. Interest rate futures are currently pricing in 72 basis points of rate cuts over the rest of 2024. Sign up here. https://www.reuters.com/markets/currencies/rupee-logs-best-month-since-june-risk-appetite-improves-2024-09-30/

2024-09-30 10:33

A look at the day ahead in U.S. and global markets from Mike Dolan The final day of another punchy quarter for U.S. stocks has proven a more volatile affair overseas: China's stellar stock (.CSI300) , opens new tab recovery has added another whopping 8% pre-holiday, while Tokyo's (.N225) , opens new tab swoon on the new Japanese prime minister jarred in the other direction. For Wall Street, Federal Reserve Chair Jerome Powell tees up in Nashville later to give his latest steer on the unfolding Fed easing cycle, with soothing August inflation numbers as a welcome backdrop. The rest of the week looks set to be dominated by soundings on the labor market, the upcoming earnings season and the start of the election-edged final quarter. China, however, continues to hold global investors in thrall after last week's sweeping series of monetary stimuli and real estate and stock market props. The hyperactive policy scramble kept going over the weekend, with China's central bank on Sunday telling banks to lower mortgage rates for existing home loans before the end of October. And so on the final trading session before mainland markets close for a four-day national holiday, China's benchmark stock indexes <.CSI300> boomed by more than 8% - making it the best single day in 16 years and the best month in more than a decade. The cumulative surge over the past week has now wiped out both year-to-date and 12-month losses. What for some investors appears like a "whatever it takes" policymaking urgency in Beijing may well be necessary, if dour business survey readings for September were anything to go by. And the yuan , , which had also been lifted by the credit easing and wider stimulus last week, fell back amid repeated reports of dollar buying by state banks. By contrast and perhaps partly reflecting renewed appetite for Chinese stocks, Japan's Nikkei plunged almost 5% on the final day of Q3, with investors seemingly wary of the new prime minister - perceived monetary policy hawk Shigeru Ishiba - and his call for an October election. The yen edged lower by the end of the day - amid some confusion about Ishiba's current stance. Ishiba has been critical of the Bank of Japan's extraordinary stimulus of the previous decade, and his reported choice for finance minister, Katsunobu Kato, called for continued normalisation of monetary policy in May. However, Ishiba told national broadcaster NHK at the weekend that "monetary policy must remain accommodative as a trend given current economic conditions". In Europe, the focus was on the latest sub-target inflation numbers from Germany - adding to similar disinflation in France and Spain - as well as a worrying manufacturing slump and a gathering storm in the auto sector. A win for the Nazi-rooted Freedom Party in Austria's weekend parliamentary elections darkened the mood. European stock benchmarks (.STOXXE) , opens new tab lost almost 1%, although the euro edged higher against a generally weaker dollar. Auto shares (.SXAP) , opens new tab fell 3% after Volkswagen (VOWG_p.DE) , opens new tab compounded recent woes by cutting its 2024 guidance while Stellantis (STLAM.MI) , opens new tab slumped 8% after the French-Italian carmaker slashed annual guidance, citing a worsening of global industry dynamics. The horizon for the sector will hinge in part on the success of the Chinese stimulus alongside any domestic recovery. The upshot for U.S. markets is that stock futures are marginally in the red ahead of Monday's bell, after a quarter that's seen new record highs for the S&P500 (.SX) , opens new tab but a rare outperformance of small caps (.RUT) , opens new tab and the equal-weighted S&P (.EWGSPC) , opens new tab as interest rates start to tumble. With the election coming on to the three-month yearend radar, the VIX volatility gauge (.VIX) , opens new tab popped higher. U.S. Treasury yields nudged up too ahead of Powell's set piece later. Key developments that should provide more direction to U.S. markets later on Monday: * Dallas Fed September manufacturing survey, Chicago Sept PMI * Federal Reserve Chair Jerome Powell speaks in Nashville, Fed Board Governor Michelle Bowman speaks; European Central Bank President Christine Lagarde speaks to European Parliament; Bank of England policymaker Megan Greene speaks * US corporate earnings: Carnival, Precision Optics, Spectra Systems, EnerSys, Repositrak * US Treasury sells, 3-month, 6-month bills Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-pix-2024-09-30/

2024-09-30 08:06

ILA threatens strike, would be first such strike by the union since 1977 Strike could cost the economy an estimated $5 billion a day Strike disputes include pay, terminal automation project issues Biden administration urges negotiations Retailers stock merchandise to avoid holiday disruptions Sept 30 (Reuters) - With U.S. East and Gulf Coast port workers set to strike in less than five hours, a port operator alliance said on Monday it traded new wage offers with the union, raising the outside possibility of a settlement before a halt to container traffic from Maine to Texas. The labor contract between the International Longshoremen's Association (ILA) union representing 45,000 port workers and the United States Maritime Alliance (USMX) employer group expires late on Monday, with negotiations at an impasse over pay. The USMX said in a statement on Monday it had offered to hike wages by nearly 50% and traded new proposals with the union in the last 24 hours and asked for an extension of the current master contract. "We are hopeful that this could allow us to fully resume collective bargaining around the other outstanding issues – in an effort to reach an agreement," USMX said. A strike would cost the U.S. economy roughly $5 billion a day, JP Morgan analysts estimated, as shipments of food, retail goods and other products are disrupted from busy terminals including New York, Baltimore and Houston. The port strike will go ahead starting at 12:01 a.m. ET on Tuesday, the ILA said on Sunday. The union did not immediately respond to a request for comment. A source briefed on the matter said USMX made the new offer earlier, to which ILA responded in a statement calling it "an unacceptable wage package that we reject." If union members do walk off the job, it would be the first coast-wide ILA strike since 1977, affecting ports that handle about half of the nation's ocean shipping. Marine terminals were closing at 5 p.m. ET (2100 GMT) and nearly 100,000 containers will remain stored at the port until the strike is ended, said Rick Cotton, who heads the Port Authority of New York and New Jersey, on Monday. Another 35 ships are expected to arrive at the port over the next week and they will remain at anchor during the strike. U.S. Chamber of Commerce President Suzanne Clark urged President Joe Biden to use his authority to prevent a walkout for 80 days saying it "would be unconscionable to allow a contract dispute to inflict such a shock to our economy." Biden said on Sunday he did not plan to intervene. The White House reiterated on Monday it was not considering using the federal Taft-Hartley Act to halt a strike, which would force workers to go back on the job while negotiations continue. White House Chief of Staff Jeff Zients and top economic adviser Lael Brainard held a meeting with USMX board members on Monday urging them to resolve the dispute fairly and quickly, a White House official said. The union has previously said the strike would not impact military cargo shipments or cruise ship traffic. A strike could stop the flow of everything from food to automobiles at major ports, potentially jeopardizing jobs and stoking inflation weeks ahead of the U.S. presidential election. New York Governor Kathy Hochul said the strike could impact things like automobile imports but the state expects no immediate impact on food suppliers or essential goods. "We're deeply concerned about the impact a strike could have on our supply chains, especially when it comes to critical goods like medical supplies and others," Hochul said. National Association of Manufacturers CEO Jay Timmons said a strike would throw manufacturing supply chains throughout the U.S. into disarray. "Billions of dollars of goods - from food to vehicles to electronics - rely on access to the East and Gulf Coast ports," Timmons said. A short strike could have a limited economic impact given many companies have imported extra goods ahead of a possible work stoppage or shifted more shipments to West Coast ports. But a strike that continues for weeks could have serious economic impacts. "These people today don't know what a strike is," Harold Daggett, the ILA's fiery leader, said in a recent video post. "I'll cripple you. I will cripple you." For months, Daggett has threatened to shut down the 36 ports covered by his union if employers like container ship operator Maersk (MAERSKb.CO) , opens new tab and its APM Terminals North America do not deliver significant wage increases and stop terminal automation projects. The dispute is worrying businesses that rely on ocean shipping to export their wares, or secure crucial imports. Steve Hughes, CEO of HCS International, which specializes in automotive sourcing and shipping, accused the ILA of "holding the entire country over a barrel." HIGH STAKES An ILA strike could wedge labor-friendly U.S. President Joe Biden into a no-win position as Vice President Kamala Harris runs a razor-tight election race against former President Donald Trump. On Friday, Biden administration officials met with the USMX employer group to directly convey "that they need to be at the table and negotiating in good faith fairly and quickly" – a message it had delivered earlier to the ILA. The USMX has accused the ILA of refusing to negotiate. Retailers account for about half of all container shipping volume. Many big retailers rushed in Halloween and Christmas merchandise early to avoid any strike-related disruptions. Walmart (WMT.N) , opens new tab, the largest U.S. container shipper, and membership warehouse club operator Costco (COST.O) , opens new tab say they are doing everything they can to mitigate any impact. But a lot of shippers do not have that flexibility. Onx Homes CEO Ash Bhardwaj has factories in Florida and imports materials used to build homes in the company's planned communities through the Port of Miami. Like other shippers in his position, he was resigned to his fate. "Everyone will have the same problem," Bhardwaj said. Sign up here. https://www.reuters.com/world/us/us-east-coast-port-strike-looms-tuesday-with-no-talks-scheduled-2024-09-30/

2024-09-30 07:31

Bullion up 14% so far for the quarter Gold to rise to $2,900/oz over next 12 months, analyst says Silver set for fourth consecutive quarterly rise Palladium on track for quarterly gain Sept 30 (Reuters) - Gold eased from its recent record high on Monday, but was still set for its biggest quarterly gain in more than eight years on the back of geopolitics and the U.S. Federal Reserve's rate cut. Spot gold was down 0.6% to $2,641.50 per ounce as of 1203 GMT and U.S. gold futures fell 0.2% to $2,663.50. Bullion has risen 14% so far this quarter, its best since January 2016. It is up nearly 6% this month, after reaching a record high of $2,685.42 on Thursday, fuelled by the Fed's half-percentage-point cut, China's initiation of stimulus measures, and escalating conflict in the Middle East. "We look for the next move higher to come from ETF investors, holdings of which are still well below the peak," UBS analyst Giovanni Staunovo said. "Weaker U.S. economic data should allow the Fed to cut further and allow gold to rise to $2,900 per ounce over the next 12 months." Investors are looking ahead this week to U.S. ADP employment statistics and non-farm payrolls data later this week. Speeches from Fed Chair Jerome Powell and Governor Michelle Bowman later in the day could shed some light on the policy outlook. Analysts said bullion's gains on Monday were restricted on some profit-taking and a boost to risk sentiment after Chinese shares were poised for their best day in 16 years. Recent strength in Chinese stocks might suggest a scaling back in gold positions on the fringe, said independent analyst Ross Norman. When risk appetite rises, investors shy away from gold, typically seen as a safe-haven asset in uncertain times. Among other metals, spot silver was down 1.1% at $31.29 per ounce, after hitting a 12-year high last Thursday and is set for quarterly rise of 8%, its fourth consecutive gain. "If monetary policy continues to loosen as expected, this could help silver continue this uptrend," said Kinesis Money market analyst Carlo Alberto De Casa in a note. Platinum shed 1.8% to $982.50. Palladium declined 0.8% to $1,002.25, but was headed for a quarterly gain. Sign up here. https://www.reuters.com/markets/commodities/gold-pulls-back-dovish-fed-sets-it-best-quarter-since-2016-2024-09-30/

2024-09-30 07:06

JOHANNESBURG, Sept 30 (Reuters) - The South African rand slipped on Monday as it took a breather after two weeks of gains following an improvement in investor sentiment towards the currency. At 1527 GMT, the rand traded at 17.25 against the dollar , about 0.8% weaker than its closing level on Friday. An 50 basis point interest rate cut by the Federal Reserve earlier this month, followed by a 25 basis point cut by the South African Reserve Bank (SARB) helped the rand hit repeated 20-month highs against the greenback last week. Improving domestic economic activity coupled with a surprisingly stable coalition government formed over 100 days ago has also boosted the currency, analysts said. The risk-sensitive rand could take direction from a slew of local and U.S. economic data releases this week. "R17.00/USD is a major resistance level... (the rand) will likely require further momentum to convincingly pierce it, driven either by positive data outcomes, or further US interest rate cut surprises, or both," said Annabel Bishop, chief economist at Investec. Key U.S. releases include job openings data on Tuesday and Friday's employment report for September. SARB data on Monday showed a pickup in August private sector credit growth to 4.95% year-on-year (ZACRED=ECI) , opens new tab, a positive sign which may help Africa's most industrialised economy build momentum in the second half of the year. South Africa recorded a trade surplus of 5.63 billion rand ($327.70 million) and budget deficit of 19.40 billion rand in August, figures released by the revenue service and National Treasury, respectively, showed. On the stock market, the Top-40 (.JTOPI) , opens new tab index closed 1.26% lower. The benchmark 2030 government bond was weaker, with the yield up 4.5 basis points at 8.845%. Sign up here. https://www.reuters.com/markets/currencies/south-african-rand-front-foot-with-domestic-data-focus-2024-09-30/

2024-09-30 07:00

Benchmarks fall the most in a quarter in a year Brent posts biggest monthly loss since Nov 2022, WTI since Oct 2023 Israel attacks on Lebanon, Yemen raise wider war fears Oil prices under pressure from OPEC+ cut unwinding Beijing stimulus maybe not enough to buoy demand, analysts say NEW YORK, Sept 30 (Reuters) - Oil prices were little changed on Monday, but posted a 17% loss for the third quarter as fears that a widening conflict in the Middle East could curtail crude supply were overshadowed by waning global demand concerns. Brent crude futures for November delivery, which expired on Monday, fell 21 cents to settle at $71.77 a barrel. Meanwhile, the more actively traded Brent contract for December delivery gained 27 cents to $71.81. The global benchmark posted a 9% drop in September, its biggest monthly decline since November 2022, and after falling a third consecutive month, it slumped 17% in the third quarter, its biggest quarterly loss in a year. West Texas Intermediate (WTI) futures fell a cent to settle at $68.17. The U.S. benchmark tumbled 7% in September in its biggest monthly decline since October 2023, and slumped 16% in its biggest quarterly drop since the third quarter 2023. On Monday, prices were supported by the possibility that Iran, a key producer and member of the Organization of the Petroleum Exporting Countries, may be directly drawn into a widening Middle East conflict. Since last week, Israel has escalated attacks, conducting strikes which have killed Hezbollah and Hamas leaders in Lebanon and hit Houthi targets in Yemen. The three groups are backed by Iran. The market is weighing whether the Middle East conflict will spread in the region, said Tim Snyder, economist at Matador Economics. Oil prices had a muted response to Beijing's announcement last week of fiscal stimulus measures in the world's second-biggest economy and top oil importer. Traders question whether the measures will be enough to boost China's weaker-than-expected demand so far this year. Concerns about rising global crude supplies are also weighing on prices for the month. Oil prices slid last week on a report that Saudi Arabia, which is the de facto leader of OPEC, was preparing to abandon its unofficial price target of $100 a barrel for crude as it prepares to increase output. "We are proceeding on the premise that last week's Saudi decision to ramp up production in December will be an overriding bearish consideration to this market for weeks to come," said Jim Ritterbusch of energy consultancy Ritterbusch and Associates. Data on Monday was not encouraging for demand, showing China's manufacturing activity shrank for a fifth straight month and the services sector slowed sharply in September. The prospect of Libyan oil output recovering also weighed on the market. Libya's eastern-based parliament agreed on Monday to approve the nomination of a new central bank governor, a move that could help end the crisis that slashed the country's oil output. Sign up here. https://www.reuters.com/markets/commodities/oil-prices-rise-middle-east-supply-risks-israel-steps-up-attacks-2024-09-30/