2024-05-07 06:40

NEW YORK, May 7 (Reuters) - The U.S. dollar rose against most currencies on Tuesday, steadily gaining ground throughout the day as investors digested the latest comments from Federal Reserve officials about the possible path of interest rates. Minneapolis Federal Reserve President Neel Kashkari said at a Milken Institute conference that stalled inflation, kept higher in part by housing market strength means the central bank will need to hold borrowing costs steady for an "extended period," and possibly all year. Kashkari did, however, also say it is still possible the Fed could cut if inflation being to cool again. The comments came on the heels of remarks from Fed officials on Monday that seemed to lean toward indicating the central bank's next move would be to lower interest rates. "There isn't any consistent trend here other than what we've seen and that does not point to lower rates as much as various people in the market certainly and maybe even some people in the Fed itself would like," said Joseph Trevisani, senior analyst at FX Street in New York. The dollar index gained 0.26% to 105.42, on track for its first consecutive daily gain in nearly a month, with the euro down 0.18% at $1.0749. The greenback strengthened against the Japanese yen for a second straight session as expectations of large interest rate differentials continued, even after new warnings from Japanese officials about their willingness to prop up their currency. Japan's top currency diplomat Masato Kanda said the country may have to take action against any disorderly, speculative-driven foreign exchange moves, signaling the Bank of Japan remained ready to intervene in the market after two suspected interventions of possibly almost $60 billion last week. "The big action last week and a little bit before was the BOJ, which has achieved some success, but there's nothing really to go on right now, so things are just sort of sitting still," said Trevisani. Against the Japanese yen , the dollar strengthened 0.55% to 154.73 after tumbling more than 3% last week, its biggest weekly percentage drop since early December 2022. Following last week's Fed policy meeting and softer-than-expected U.S. jobs report, market expectations for two rate cuts this year have increased, with expectations for a cut of at least 25 basis points in September currently at 64.5%, according to CME's FedWatch Tool New Tab, opens new tab. With a light economic calendar this week, highlighted by the consumer sentiment reading from the University of Michigan on Friday, a host of Fed officials are due to speak, including Fed Governors Lisa Cook and Michelle Bowman later in the week. The Australian dollar fell against the greenback after the Reserve Bank of Australia kept rates steady and held back from taking a hawkish stance, although RBA Governor Michele Bullock cautioned inflation risks were on the upside, signaling policy was unlikely to be eased anytime soon. The Australian dollar weakened 0.53% versus the greenback at $0.6589 after falling as low as 0.6587 on the day. Sterling weakened 0.46% to $1.2503 ahead of the Bank of England's policy announcement on Thursday, where interest rates are expected to be kept unchanged. Sign up here. https://www.reuters.com/markets/currencies/yen-eases-despite-intervention-threat-aussie-steady-before-rba-2024-05-07/

2024-05-07 06:37

May 7 (Reuters) - Key Asian markets witnessed modest foreign outflows in April, driven by a rise in U.S. Treasury yields, as traders expect the Federal Reserve to keep interest rates elevated for longer to combat inflationary pressures. Data from stock exchanges in Taiwan, India, Indonesia, Vietnam, the Philippines, Thailand, and South Korea revealed that foreign investors sold a net $2.54 billion in regional equities last month, the largest monthly net outflow since November 2023. These outflows, however, pale in comparison to the roughly $18.57 billion in net foreign inflows seen during the first quarter. "Higher Treasury yields on a pushback in Fed's rate cuts, geopolitical tensions in the Middle East and higher oil prices were looked upon as potential reasons for profit-taking," said Yeap Jun Rong, market strategist at IG. Taiwan stocks saw $2.23 billion in foreign outflows last month, ending a five-month streak of consecutive inflows. Foreign investors withdrew $1.14 billion from Indonesian equities, $1.04 billion from Indian markets, and $190 million from Vietnamese stocks. Conversely, South Korea and the Philippines attracted foreign inflows of $1.79 billion and $162 million, respectively. "Korean equities as a whole should remain sensitive to the global AI/semiconductor investment theme," said Jason Lui, head of APAC equity and derivative strategy, BNP Paribas. "In our view, we are still in the cyclical rebound stage for memory pricing." U.S. Fed Chair Jerome Powell left interest rates steady last week, and flagged that rate cuts could be postponed due to persistent inflation in the first quarter. The renewed optimism over U.S. rate cuts pushed Asian shares to 15-month highs on Tuesday, with some analysts betting on a rebound in foreign demand for regional equities in May. "With these headwinds seeing some signs of cooling and the U.S. earnings season delivering yet another quarter of stellar outperformance, dip buyers are seen stepping in to hold the fort into the month of May," IG's Jun Rong said. Sign up here. https://www.reuters.com/markets/asia/asian-stocks-face-modest-foreign-outflows-april-2024-05-07/

2024-05-07 05:26

May 7 (Reuters) - India's fuel consumption, a proxy for oil demand, rose by 6.1% year-on-year to 19.858 million metric tons in April, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed on Tuesday. Sign up here. https://www.reuters.com/business/energy/indias-april-fuel-use-rises-61-year-on-year-2024-05-07/

2024-05-07 05:22

HANOI, May 7 (Reuters) - Affiliates of Vietnam's state oil firm PetroVietnam have made two new oil findings with combined initial reserves of 100.5 million barrels of crude oil, its exploration and production arm PVEP said on Tuesday. The discoveries are essential for the oil industry of Vietnam, which has been struggling to raise its crude oil output due to shrinking proven reserves, amid rising fuel demand. Drilling at the R79 well in the Rong Field in the Block 09-1 off southeast Vietnam found initial reserves of 16.5 million barrels of crude oil, PVEP said in a statement. The field is operated by Vietsovpetro, a Vietnam-Russia joint venture. The other finding was at BA-1X well at Bock PM3 CAA off southern Vietnam, with initial reserves of 84 million barrels, said PVEP, which holds a 30% stake in the block. Production at BA-1X started on May 5 at 2,100 barrels per day. Vietnam's crude oil output in the first four months of this year fell 3.6% from a year earlier to 2.78 million metric tons, according to government data. Sign up here. https://www.reuters.com/business/energy/petrovietnam-announces-new-oil-discoveries-with-initial-reserves-1005-mln-2024-05-07/

2024-05-07 04:57

NEW YORK, May 7 (Reuters) - Wall Street pared earlier gains on Tuesday after equity markets elsewhere rallied as investors parsed when and by how much the Federal Reserve cuts interest rates this year, while a resurgent dollar helped weaken the yen further. MSCI's gauge of global stock performance (.MIWD00000PUS) New Tab, opens new tab closed up 0.30% and European shares ended at record closing peaks. Benchmark Treasury yields softened, but the dollar rose on the prospect of stronger U.S. growth and potentially higher rates than other developed economies. "It's a quiet day, the major averages are flat, and there's some profit taking," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. "The focus remains on the Fed, but the Fed is pretty clear that there's little that's happening any time soon." A weaker-than-expected U.S. jobs report on Friday following the prior week's GDP reading, which showed the slowest growth in nearly two years, provoked a dovish pivot among investors regarding how soon and by how much the Fed cuts rates. Traders are now pricing in 44 basis points of Fed rate cuts by the end of 2024, with a first cut possibly in September, according to LSEG's rate probability app. Traders had recently priced in just one cut due to sticky inflation data. But potentially stalled progress on inflation means monetary policy may be less restrictive than officials believe, Minneapolis Fed President Neel Kashkari said in an essay that raises the possibility that prices are "settling" at a level above the Fed's 2% target. "It's not that we don't think that inflation is going to come down. We just don't think that in view of having had three top-side prints on inflation, that we're going to get comfort with inflation that quickly," said Thierry Wizman, global FX and interest rates strategist at Macquarie in New York. "It's going to take more than one print, maybe even more than two prints of low inflation before the Fed is comfortable, and that just means that there's not going to be enough time potentially this year to squeeze in two rate cuts." On Wall Street, the Dow Jones Industrial Average (.DJI) New Tab, opens new tab rose 0.08%, the S&P 500 (.SPX) New Tab, opens new tab gained 0.13% and the Nasdaq Composite (.IXIC) New Tab, opens new tab dropped 0.1%. Upbeat earnings from the financial sector as well as optimism the European Central Bank cuts rates as early as next month lifted stocks in Europe. The pan-regional STOXX 600 index (.STOXX) New Tab, opens new tab closed up 1.14%. Germany's DAX (.GDAXI) New Tab, opens new tab surged 1.4%. Emerging market stocks rose 0.14%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) New Tab, opens new tab closed 0.26% higher, while Japan's Nikkei (.N225) New Tab, opens new tab rose 1.57%. The dollar reversed an early drop and was last higher against a basket of world currencies, strengthening against the yen even after new warnings from Japanese officials about their willingness to prop up their currency. The dollar index (.DXY) New Tab, opens new tab rose 0.3%, with the euro down 0.14% to $1.0753. The Japanese yen weakened 0.49% versus the greenback at 154.68 per dollar, while sterling was last trading at $1.2508, down 0.42% on the day. Longer-dated Treasury yields slipped as traders focused on absorbing $125 billion in new supply this week, while a parade of Fed officials is lined up to speak on prospects for a 2024 policy pivot. The yield on the benchmark 10-year note fell 3 basis points to 4.459%, while the two-year note's yield, which reflects interest rate expectations, rose 0.6 basis points to 4.828%. Oil prices closed slightly lower on signs of easing supply concerns. U.S. crude fell 0.13% to settle at $78.38 per barrel, while Brent settled down at $83.16 per barrel. Gold slipped, giving up the previous session's gains, as traders remained focused on the prospect for Fed rate cuts. U.S. gold futures settled 0.3% lower at $2,324.20 per ounce. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-05-07/

2024-05-07 04:54

CAIRO, May 7 (Reuters) - The United Kingdom Maritime Trade Operations (UKMTO) said on Tuesday two explosions were reported in the proximity of a merchant vessel 82 nautical miles south of Yemen's Aden. UKMTO reported that the vessel and all crew are safe and that authorities are investigating. The Houthi militia that controls the most populous parts of Yemen and is aligned with Iran have staged attacks on ships in the waters off the country for months in solidarity with Palestinians fighting Israel in Gaza. Authorities were investigating the incident, UKMTO said in an advisory note sent by e-mail. The Houthi militants have launched repeated drone and missile strikes in the Red Sea, Bab al-Mandab Strait and Gulf of Aden since November. That has forced shippers to re-route cargo on longer and more expensive journeys around southern Africa and stoking fears the Israel-Hamas war could spread and destabilise the Middle East. Sign up here. https://www.reuters.com/world/middle-east/ukmto-receives-report-maritime-incident-south-yemens-aden-2024-05-07/