2024-04-10 00:59

U.S. CPI rises more than expected in March Rate futures price in Fed cuts at Sept meeting, from June Traders on alert for Japan intervention to prop up yen U.S. dollar index hits highest since November NEW YORK, April 10 (Reuters) - The dollar rose across the board on Wednesday, soaring against the Japanese yen to its highest since mid-1990, after U.S. inflation rose more than expected in March, pushing out the expected timing of a first rate cut to September from June. Market participants were also on the alert for any signs of intervention from Japanese authorities to boost the yen. The big move in the yen came after data showed the U.S. consumer price index (CPI) rose 0.4% on a monthly basis in March, compared with the 0.3% increase expected by economists polled by Reuters. On a year-on-year basis, the CPI increased 3.5% versus forecasts of a 3.4% growth. Excluding the volatile food and energy components, core inflation grew 0.4% month-on-month in March, compared with expectations of a 0.3% advance. Annually, it gained 3.8%, versus the estimated 3.7% increase. Following the CPI data, traders slashed bets that the Federal Reserve would cut interest rates in June to 17%, from 57% late on Tuesday, according to the CME's FedWatch tool. They now see the likelihood of an interest rate cut at the September meeting, with a 66% probability, based on prices of rate futures. Fed fund futures have also reduced the number of rate cuts of 25 basis points (bps) this year to under two, or roughly 44 bps, from about three or four a few weeks ago. "The core rate of inflation has accelerated four months in a row. ... Maybe you get some moderation later in the year but given the fact you're starting from a higher rate, you're going to need real weak numbers and more time to be convinced that inflation is trending back down after what appeared to be the case last fall," said Joseph Lavorgna, chief U.S. economist, at SMBC Nikko Securities in New York. "What that means is the timing of Fed easing is going to get pushed out," Lavorgna added. In afternoon trading, the dollar index, which measures the greenback's value against six major currencies, was up 1.07% at 105.20 , on track for its largest daily gain since March 2023. Earlier, it climbed to its highest since November. Minutes of the last Fed meeting released on Wednesday suggested that central bank officials were worried that the progress on inflation slowed and they may have to keep interest rates higher for longer. "The Fed has no reason to cut rates when we are still battling inflation - that's the realization," said Kenneth Mahoney, president at Mahoney Asset Management in Greenwich, Connecticut. The euro, meanwhile, fell 1.06% to $1.0741 , on pace for its biggest one-day fall in about a year. Against the yen, the dollar was last up 0.93% from late Tuesday at 153.15 yen , having touched 153.24, the highest since June 1990. Traders have been on alert for weeks for possible intervention by Tokyo authorities, as even a historic exit from negative rates in Japan has failed to lift the currency. Japan intervened in the currency market three times in 2022, selling the dollar to buy yen, first in September and again in October as the yen slid toward what was then a 32-year low of 152 to the dollar. The yen has been under pressure for years as U.S. interest rates have climbed and Japan's have stayed near zero, driving cash out of yen and into dollars to earn so-called "carry." Yen futures data from CFTC showed non-commercial short positions had climbed to 143,230 contracts in the week ended April 2, the largest since December 2013. "I would say there is a 30% chance of Japanese intervention this month. That move today, that quick move down, it just seems a bad time to fight it," said Adam Button, chief currency analyst at FOREXLIVE. "Japan doesn't want the yen to weaken further, but this is fundamental move of broad U.S. dollar strength. I don't see the argument for fighting this move from Japan right now, it's not a yen move, it's a broad U.S. dollar move," Button added. Keep up with the latest medical breakthroughs and healthcare trends with the Reuters Health Rounds newsletter. Sign up here. https://www.reuters.com/markets/currencies/dollar-sideways-yen-under-watch-ahead-key-cpi-release-2024-04-10/

2024-04-10 00:45

April 10 (Reuters) - Oil prices settled up $1 on Wednesday after three sons of a Hamas leader were killed in an Israeli airstrike in the Gaza Strip, feeding worries that ceasefire talks might stall. Brent crude futures settled up $1.06, or 1.2%, to $90.48 per barrel while U.S. West Texas Intermediate (WTI) crude futures settled up 98 cents, or 1.2%, to $86.21. "The oil market has been and continues to be very reactive to news out of Gaza," said John Kilduff, partner at Again Capital LLC in New York. The Israeli military confirmed carrying out the attack, describing the three sons as operatives in the Hamas armed wing. On Tuesday, Hamas said it was studying an Israeli ceasefire proposal in the more than six-month-old Gaza war but called it was "intransigent" and said it met none of the Palestinian demands. A continuing conflict could drag in other countries, particularly Hamas-backer Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC). Mexico's decision to curb crude exports in order to supply domestic refineries also supported prices and led to record low U.S. imports of Mexican crude in early April. In early trade oil prices fell after U.S. government data showed crude oil and fuel inventories swelled by much more than expected on weak demand and lower oil exports. U.S. crude stocks climbed by 5.8 million barrels in the week ended April 5, more than double the rise of about 2.4 million barrels analysts had expected. Refined products inventories rose unexpectedly with gasoline up by 700,000 barrels and distillate stocks by 1.7 million barrels. The U.S. Energy Information Administration (EIA) data also showed a roughly 2.1 million barrel per day (bpd) drop in oil product supplied, a proxy for fuel demand, and a 2.7 million bpd drop in crude oil exports. "Some of the heat has come out of the rally in crude oil in the early part of this week on hopes of a ceasefire in Gaza and higher U.S. inventories," said Tony Sycamore, a market analyst at IG in Singapore. Separately, the U.S. EIA sharply raised its forecast for crude oil output. It anticipates an increase of 280,000 bpd to 13.21 million bpd in 2024, up from its earlier forecast of a 20,000 bpd increase. The EIA said it expects Brent crude prices to average $88.55 a barrel in 2024, up from a previous forecast of $87, and it upgraded its demand growth forecast for the past two years. "Broadly it reconfirmed an oil market outlook with OPEC+ in good control of the oil market," SEB analyst Bjarne Schieldrop said. OPEC's monthly oil market report will be published Thursday, April 11 and the International Energy Agency's oil market report will be published Friday, April 12. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. https://www.reuters.com/business/energy/oil-steady-us-crude-stock-build-offsets-middle-east-uncertainty-2024-04-10/

2024-04-10 00:13

April 9 (Reuters) - The U.S. military said on Tuesday that it had destroyed an inbound anti-ship ballistic missile over the Gulf of Aden that was launched by Iranian-backed Houthis and likely targeting the MV Yorktown. U.S. Central Command said on the social media site X that there were no injuries or damage reported to U.S., coalition or commercial ships in the incident. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/world/us-military-says-it-destroyed-houthi-missile-likely-targeting-ship-gulf-aden-2024-04-10/

2024-04-09 23:49

April 9 (Reuters) - Nearly 7 million low-income women and children will be able to purchase more fruits and vegetables but less dairy after the U.S. Department of Agriculture finalized changes to a key federal nutrition program on Tuesday. The updates to the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), the first since 2014, were made to better align the program's food packages with the best dietary science, USDA said. "These participant-centered changes will strengthen WIC by ensuring the foods participants receive reflect the latest nutrition science to support healthy eating and the brightest futures," Agriculture Secretary Tom Vilsack said in a statement. WIC participants receive benefits to purchase certain food items depending on age and dietary needs. The USDA proposed changes to the program in November 2022 and received over 17,000 comments, it said. The final provision increases allowances for fruits, vegetables, and seafood, and decreases the amounts of juice, dairy and cheese. It also adds more non-dairy options like plant-based and lactose-free milk. "The National WIC Association applauds USDA for adhering to an independent, science-based review process that led to these stronger standards, and we urge swift implementation," said Georgia Machell, interim president and CEO of the group, in a statement. The changes were criticized by dairy promotion groups. "(The National Milk Producers Federation) is disturbed by the decision to reduce access to the essential nutrients dairy adds to the diet," said Gregg Doud, president and CEO of the group, in a statement. A USDA spokesperson said that the agency expects dairy purchases through WIC to rise by as much as $400 million by 2025 due to projected increased participation, and that WIC participants were typically not redeeming the full volume of milk provided under the earlier allowances. WIC is administered by the USDA and serves 6.6 million pregnant, breastfeeding and postpartum women and children up to age 5. Congress recently expanded the amount of money for WIC after the White House and nutrition advocates warned a budget shortfall put millions of eligible families at risk of being turned away. Get weekly news and analysis on the U.S. elections and how it matters to the world with the newsletter On the Campaign Trail. Sign up here. https://www.reuters.com/world/us/more-produce-less-dairy-low-income-families-under-us-nutrition-program-changes-2024-04-09/

2024-04-09 23:48

WASHINGTON, April 9 (Reuters) - A U.S. appeals court on Tuesday upheld the Environmental Protection Agency's decision to grant California a waiver to set its own tailpipe emissions limits and electric-vehicle requirements. The three-judge panel of the U.S. Court of Appeals for the District of Columbia rejected a legal challenge from 17 Republican-led states and entities that sell or produce liquid fuels. The EPA in March 2022 under President Joe Biden restored California's ability to set its own zero-emission vehicle sales mandate and tailpipe emissions limits through 2025, reversing a 2019 decision by then-President Donald Trump. California Governor Gavin Newsom said the "court sided with common sense and public health against the fossil fuel industry and Republican-led states. This ruling reaffirms California’s longstanding right to address pollution from cars and trucks." Republicans argued the rules gave California an unconstitutional regulatory power denied to other states. The court rejected that argument and said reversing the EPA decision would address state claims if automakers responded by selling fewer EVs or by lowering prices of gas-powered models and said there was no evidence to support that conclusion. In 1993, the EPA approved a waiver of California’s first zero-emission vehicle standard. The EPA in 2022 reinstated a waiver under the Clear Air Act to California that was previously awarded in 2013. The EPA also rejected a Trump-era decision to prohibit other states from adopting the California tailpipe emission standards. The California Air Resources Board (CARB) in August 2022 approved a landmark plan to end the sale of gasoline-only vehicles in the state by 2035 and set yearly, rising requirements for zero-emission vehicles, starting in 2026. In May 2023, CARB asked the EPA to approve a new waiver under the Clean Air Act for the new EV rules beginning in 2026. The Alliance for Automotive Innovation, which represents most major automakers including General Motors (GM.N) New Tab, opens new tab, Volkswagen (VOWG_p.DE) New Tab, opens new tab, Toyota Motor (7203.T) New Tab, opens new tab and others, in February questioned California's EV requirements. The EPA last month finalized stricter tailpipe emissions limits through 2032 that are weaker than it first proposed in early 2023. Automakers will need to sell at least 50% plug-in and electric vehicles by 2030 to meet regulatory targets. Under the initial proposal, they were projected to need to sell 60% EVs by 2030 and 68% by 2032. Trump, who is seeking a return to the White House, has vowed to reverse the EV rules. Stay up to date with the latest news, trends and innovations that are driving the global automotive industry with the Reuters Auto File newsletter. Sign up here. https://www.reuters.com/business/autos-transportation/us-court-upholds-epa-decision-approve-california-electric-vehicle-rules-2024-04-09/

2024-04-09 22:53

Crypto stocks fall mirroring bitcoin prices Moderna rises after positive data on cancer drug Indexes: Dow off 0.02%, S&P up 0.14%, Nasdaq gains 0.32% NEW YORK, April 9 (Reuters) - The Nasdaq and S&P 500 posted modest gains on Tuesday, a day ahead of major inflation data, weighed down by financial stocks as investors braced for major U.S. banks to kick off earnings reporting season on Friday. The tech-heavy Nasdaq Composite Index (.IXIC) New Tab, opens new tab , boosted by chips (.SOX) New Tab, opens new tab, enjoyed a more substantial advance, with the S&P 500 (.SPX) New Tab, opens new tab nominally higher. The blue-chip Dow Jones Industrial Average (.DJI) New Tab, opens new tab closed essentially unchanged. Wednesday's hotly anticipated Consumer Price Index (CPI) is at the top of most investors' minds as they tweak expectations on the timing and extent of the Federal Reserve's rate-cutting phase, following robust economic data such as last Friday's blockbuster employment report. "The markets are nervous about tomorrow's CPI report and buying protection (amid) a growing perception that it could be an uncomfortably high inflation reading," said Michael Green, chief strategist at Simplify Asset Management in Philadelphia. "The market is moving to hedge itself." JPMorgan Chase & Co (JPM.N) New Tab, opens new tab, Wells Fargo & Co (WFC.N) New Tab, opens new tab and Citigroup Inc (C.N) New Tab, opens new tab, due to report results on Friday, were the three constituents in the S&P Banking index (.SPXBK) New Tab, opens new tab to end lower. "The financials kick off first-quarter reporting season and often set the tone," said Bill Northey, senior investment director at U.S. Bank Wealth Management, Billings, Montana. "We are looking to the cyclical areas as an indicator of the health of corporate America." While analysts expect inflation to continue meandering down toward the U.S. central bank's 2% goal, the National Federation of Independent Business reported on Tuesday that small business optimism touched an 11-year low in March, with inflation as the most pressing concern. "The continued deterioration of the small business sentiment index is actually really important," Green added. "It's the same thing that we've seen in the past couple of cycles where the larger companies are well protected while small businesses are under extraordinary pressure." The Dow Jones Industrial Average (.DJI) New Tab, opens new tab fell 9.13 points, or 0.02%, to 38,883.67. The S&P 500 (.SPX) New Tab, opens new tab gained 7.52 points, or 0.14%, at 5,209.91 and the Nasdaq Composite (.IXIC) New Tab, opens new tab added 52.68 points, or 0.32%, at 16,306.64. Nine the 11 major sectors in the S&P 500 closed higher, with real estate (.SPLRCR) New Tab, opens new tab enjoying the largest percentage gains. Financials (.SPSY) New Tab, opens new tab were the biggest laggards. Analysts are expecting aggregate S&P 500 first-quarter earnings growth of 5.0% year-on-year, down from 7.2% at the start of the quarter, according to LSEG. Cryptocurrency and blockchain-related stocks declined, tracking falling bitcoin prices. Exchange operator Coinbase Global (COIN.O) New Tab, opens new tab and software company MicroStrategy (MSTR.O) New Tab, opens new tab dipped 5.5% and 4.8%, respectively. Moderna (MRNA.O) New Tab, opens new tab was a bright spot, jumping 6.2% after the drugmaker's individualized cancer vaccine developed with Merck (MRK.N) New Tab, opens new tab showed promise in an early-stage trial. Alphabet Inc's (GOOGL.O) New Tab, opens new tab shares gained 1.1%, pushing the company closer toward the $2 trillion market cap threshold. Advancing issues outnumbered decliners on the NYSE by a 1.44-to-1 ratio; on Nasdaq, a 1.33-to-1 ratio favored advancers. The S&P 500 posted 13 new 52-week highs and one new low; the Nasdaq Composite recorded 62 new highs and 77 new lows. Volume on U.S. exchanges was 10.31 billion shares, compared with the 10.31 billion average for the full session over the last 20 trading days. 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/us/futures-flat-lead-up-inflation-data-2024-04-09/