2024-04-14 21:47

April 15 (Reuters) - A look at the day ahead in Asian markets. Asian markets are set to open on the defensive on Monday, with heightened tensions in the Middle East spurring strong demand for safe-haven assets like the dollar, gold and U.S. Treasuries at the expense of stocks and local currencies. Investor sentiment was already veering towards the negative following the U.S. bank earnings-driven equity market slump on Friday - JP Morgan shares had their biggest fall in almost four years and world stocks lost the most in six months. U.S. stock futures are pointing to another steep decline at the open on Monday, so it's likely Asian bourses will follow suit. Oil prices, which hit a six-month high on Friday, are likely to make further gains on Monday. In such a febrile environment local Asian economic indicators and events are likely to take a back seat. Monday's calendar is pretty light, with only Indian trade and wholesale price inflation data, and Japanese machinery orders on tap. China's first-quarter GDP on Tuesday and Japanese consumer price inflation figures on Friday are the two economic indicators from Asia that could most move local markets this week. But for Monday at least, investors will be focused on reducing risk and playing it safe, and in that regard, there could be some big movement in the Japanese yen. The yen is traditionally seen as a 'safe-haven' asset that does well in times of heightened risk aversion, boosted by large repatriation flows from Japanese investors and short covering from currency traders using the yen to fund carry trades. And there is a large short position to cover - the yen is at a 34-year low below 153.00 per dollar and the latest U.S. futures market data show hedge funds' net short yen position is the biggest in 17 years. To the surprise of many, Japanese authorities have not yet intervened to stop the rot, despite the near-daily warnings from officials that "excessive volatility is undesirable" and that Tokyo stands ready to respond to sharp currency swings. Perhaps Tokyo has not yet intervened because the yen's slide is fully justified on "fundamental" grounds - U.S. yields and implied rates are rising faster than their Japanese equivalents because U.S. growth and inflation rates are higher than Japan's. The strong dollar and recent spike up in U.S. bond yields, however, pose potentially significant problems for Asia. They represent a tightening of financial conditions and make servicing dollar-denominated debt more expensive. A sharp fall in Treasury yields as investors scramble to reduce risk in their portfolios due to intensifying geopolitical tensions is unlikely to offer much comfort. Here are key developments that could provide more direction to markets on Monday: - India trade (March) - India wholesale price inflation (March) - Japan machinery orders (February) Get a look at the day ahead in European and global markets with the Morning Bid Europe newsletter. Sign up here. https://www.reuters.com/markets/europe/global-markets-view-asia-graphic-pix-2024-04-14/

2024-04-14 21:03

CAIRO, April 14 (Reuters) - British security firm Ambrey said on Sunday that Israel Defence Forces (IDF) intercepted an Unmanned Aerial Vehicle (UAV) near Eilat, stating that it assessed the UAV was launched from Yemen. Ambrey said it also observed unprecedented levels of Automatic Identification Systems (AIS)interference off Eilat and neighbouring Aqaba, Jordan, on Sunday. "These were due to electronic warfare counter-measures," the statement said. "A Sa'ar 6-class corvette successfully intercepted a UAV that approached Israeli territory from the southeast using the 'C-Dome' Defense System earlier this evening," the IDF posted on X. Israel used its seaborne missile defence system for the first time on Tuesday to shoot down a drone approaching from the Red Sea that had set off sirens in the port city of Eilat, the military said. Eilat has been a frequent target for launches by Iran-backed Houthis in Yemen as a show of support for Hamas, the Palestinian group that rules Gaza and is also backed by Iran. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/world/middle-east/ambrey-says-israel-intercepted-uav-launched-yemen-2024-04-14/

2024-04-14 20:04

April 14 (Reuters) - Iran warned Israel and the United States on Sunday of a "much larger response" if there is any retaliation for its mass drone and missile attack on Israeli territory on Saturday, as Israel said "the campaign is not over yet". Iran launched explosive drones and missiles at Israel in retaliation for a suspected Israeli attack on its consulate in Syria on April 1, a first direct attack on Israeli territory that has stoked fears of a wider regional conflict. Below are analysts' quotes on how financial markets are likely to react to developments. JANE FOLEY, HEAD OF FX STRATEGY, RABOBANK, LONDON "Outside of gold and oil prices, asset prices have been pre-disposed to play down geopolitical news in recent months. This suggests that Israel’s success in repelling Iranian missiles will be taken as a reason to reduce risk aversion at the start of the trading week." "That said, there has been a clear increase in geopolitical risks connected with the Middle East meaning plenty of scope for volatility in the coming weeks and months." MICHAEL PURVES, HEAD OF TALLBACKEN CAPITAL ADVISORS “If oil keeps going higher from here, it actually makes U.S. bond fundamentals a bit worse by keeping inflation higher for longer and making the Fed’s propensity to cut rates even less.” “An offsetting factor is that whatever happens, there’s going to be nervousness and that’s going to keep bonds from selling off too much more.” “We’ve had a lot priced into the U.S. equity market already. On the one-hand, there was a risk-on condition going into the year and risks will ultimately get bought. “But ultimately, why not book some profits when the newsflow is so uncertain?” SAMY CHAAR, CHIEF ECONOMIST LOMBARD ODIER, GENEVA “The newsflow is about Iran and Israel, so that is going to be most of (what people will be discussing Monday), but we are still in an environment where we haven’t yet digested the U.S. inflation news and what that means for the Fed, and will they be able to cut rates. “We came into this weekend of geopolitical stress in the aftermath of the CPI report. It is a fragile market environment in the short term, but after a fantastic period, so it is only fair that there’s a bit of vulnerability." TINA FORDHAM, FOUNDER AND GEOPOLITICAL STRATEGIST, FORDHAM GLOBAL FORESIGHT, LONDON "The scale of Iran's attack on Israel and the launch from inside Iran as well as via proxies is significant. In terms of the market reaction, we started to see commodity prices moving higher on Friday. "Over the next few days, we are waiting for Israel's response -- this is the biggest attack on Israel in decades. The risk of a regional war has increased meaningfully. The question becomes does Israel seek to broaden the conflict? That is the wild card. "I think oil will open higher. Also signs that Iran wants to enact a soft blockade of the Strait of Hormuz is a concern, as this means there are potential both supply chain disruptions and higher oil prices. We have entered a dangerous period ahead of the U.S. elections." NICK FERRES, CHIEF INVESTMENT OFFICER, VANTAGE POINT ASSET MANAGEMENT, SINGAPORE "I am not going to be an “armchair general” and pretend that I have an edge on how the escalation will play out. From our perch, the more important news for markets last week was the trend re-acceleration in consumer price inflation and the implication for the path of future short term interest rates. "Moreover, disappointment in the detail of the results from JPM and Wells on Friday. In that context, as we have noted for some time, risk compensation in equities is poor in outright terms and relative to Treasuries. We had already reduced our net long equity exposure ahead of this over the past two weeks.” BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MILWAUKEE, WISCONSIN "The key is whether Iran will consider this retaliation a measured and final response, unless Israel decides to escalate. In 2020, Iran considered its response to the U.S.’s killing of General Soleimani a measured and equitable response. If it stays tit-for-tat instead of escalating, then we will likely see a sigh of relief across equities even if oil prices, gold, the dollar and bonds all embed a risk premium to reflect the conflict." The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/business/likely-market-reaction-after-iran-attacks-israel-2024-04-14/

2024-04-14 18:38

LONDON, April 14 (Reuters) - CME Group has suspended from its platform aluminium produced in Russia from April 13, the exchange said on Sunday, after the United States and Britain imposed new sanctions on Moscow for its invasion of Ukraine. The U.S. Treasury Department and the British government on Friday banned the 147-year old LME and the Chicago Mercantile Exchange (CME) from accepting new Russian production of aluminum, copper and nickel produced from April 13. On its website the CME listed Russian aluminium brands New Tab, opens new tab that could no longer be on warrant - a title document conferring ownership - for delivery against its contracts. "Aluminum from these brands produced prior to April 13, 2024, will continue to be eligible for warranting and delivery against the exchange’s aluminum futures contract," the CME said. "All participants must ensure their participation in delivery against the exchange’s aluminum futures contract complies with local laws and regulations, including applicable economic sanctions." The CME told Reuters on Saturday that it does not disclose the origin or brands of the eligible or registered metal it has in store and said this was consistent across all of its physically delivered markets. On Friday, a UK official said London expected any market disruption to be short-lived and that the government had consulted with colleagues in the U.S. as well as with the LME, the Bank of England and the Financial Conduct Authority to minimise any impact. The announcement of the ban by the U.S. and Britain was made after trading was closed for the weekend. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/commodities/cme-bans-russian-origin-aluminium-after-us-uk-impose-new-sanctions-2024-04-14/

2024-04-14 17:37

April 14 (Reuters) - A Saudi Arabian delegation, led by foreign minister Prince Faisal bin Farhan bin Abdullah, will visit Pakistan on Monday and Tuesday as part of efforts to boost economic cooperation, Pakistan's foreign ministry said in a statement on Sunday. The visit takes place to expedite follow-up on the understanding reached between Pakistani Prime Minister Shehbaz Sharif and Saudi Crown Prince Mohammed bin Salman during their recent meeting in Makkah Al Mukarramah to enhance economic cooperation between the two countries, the foreign ministry said. Sharif met with the crown prince last week and discussed expediting a planned $5 billion investment package, which cash-strapped Pakistan desperately needs to shore up its current account deficit and signal to the International Monetary Fund that it can continue to meet requirements for foreign financing that has been a key demand in previous bailout packages. Pakistan has lately also been trying to secure Saudi investment in industries ranging from agriculture to mines, minerals and aviation. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/world/asia-pacific/saudi-foreign-minister-visit-pakistan-monday-2024-04-14/

2024-04-14 14:39

BENI, Democratic Republic of Congo, April 14 (Reuters) - At least 12 people were killed and more than 50 are still missing after heavy rain caused a ravine to collapse onto a river in southwest Democratic Republic of Congo, a local official and a civil society leader said on Sunday. The landslide occurred around midday on Saturday in Dibaya Lubwe commune in Kwilu province. It sent a cascade of clay and debris down to the banks of the Kasai River, where a boat was docking and people were washing clothes. Interim provincial governor Felicien Kiway said 12 bodies had been pulled from the rubble so far, including nine women, three men and a baby. "Around 50 people are missing but we are continuing to search through the clay," he said, adding that chances of finding survivors were thin as the incident had occurred 12 hours prior. The coordinator of a local civil society group, Arsene Kasiama, said the landslide also fell on people shopping at a market. He gave a death toll of 11, with seven seriously injured survivors and more than 60 people still missing. Poor urban planning and weak infrastructure across Congo make communities more vulnerable to extreme rainfall, which is becoming more intense and frequent in Africa due to warming temperatures, according to climate experts. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/world/africa/dr-congo-landslide-kills-least-12-more-than-50-still-missing-2024-04-14/