2024-03-01 05:42

NEW YORK, March 1 (Reuters) - The dollar fell against the euro on Friday on weaker than expected U.S. economic data but gained against the Japanese yen after Bank of Japan (BOJ) governor Kazuo Ueda said it was too soon to declare victory on inflation. In cryptocurrencies, bitcoin held just below a more than two-year high reached on Wednesday. U.S. manufacturing slumped further in February, with a measure of factory employment dropping to a seven-month low amid declining new orders. Construction spending, which had been expected to increase, also fell in January. Economists at Goldman Sachs cut their gross domestic product (GDP) estimate for the first quarter by 0.2 percentage points to 2.2% after the data. The dollar has been largely rangebound with traders focusing closely on economic data for any new clues on when the U.S. Federal Reserve is likely to begin cutting interest rates. Marc Chandler, chief market strategist at Bannockburn Global Forex in New York, noted that “the U.S. is the key side of it,” in terms of driving currency moves. The greenback had looked like it was going to break higher in the past few days, but failed after Friday’s turn lower, he added. The dollar was also pulled down in line with shorter-dated Treasury yields on Friday after Fed Governor Chris Waller said he would like the U.S. central bank to address a reset of the balance sheet towards shorter-term Treasury bills that would better match the short-term policy rate that the Fed controls as its key monetary policy tool. The next major U.S. economic release will be February’s employment report due next Friday. The dollar index fell 0.23% to 103.87. The euro gained 0.31% to $1.0837. Data on Friday showed that euro zone inflation dipped last month but underlying price growth remained stubbornly high, adding to the case for the European Central Bank to hold interest rates at record highs a bit longer before starting to ease policy towards mid-year. The euro zone's currency has traded within a range of $1.07 to $1.11 since November as investors struggle to work out when the ECB and the Fed will start cutting rates. "We are seeking out fresh news," said Jane Foley, head of FX strategy at Rabobank, "whether that’s going to come from the ECB (European Central Bank) and a change in expectations, or further alteration of the market’s view about the ability of the Fed to cut even in June." JAPANESE INFLATION IN FOCUS The dollar rose against the yen after BOJ’s Ueda said it was too early to conclude that inflation was close to sustainably meeting the central bank's 2% inflation target and stressed the need to scrutinize more data on the wage outlook. That reversed a move from Thursday when BOJ board member Hajime Takata said that the central bank must consider overhauling its ultra-loose monetary policy, including an exit from negative interest rates and bond yield control. Inflation expectations and the path of BOJ policy will likely depend on negotiations between large firms and unions over wage increases. “If we’re right in expecting wage negotiations are going to lead to more signals that inflation is becoming a little bit more persistent in Japan, then we expect BOJ to exit negative interest rate policy,” said Bipan Rai, North American head of FX strategy at CIBC Capital in Toronto. However, “I feel like it is priced in already”, Rai added. “Beyond there we’re really looking at what sort of tweaking they do to the yield curve control program.” Big firms will settle negotiations on next year's pay with unions on March 13, ahead of the BOJ policy meeting on March 18-19. The dollar was last up 0.09% at 150.10 yen . Sterling rose 0.26% to $1.2655. Bank of England (BoE) chief economist Huw Pill said on Friday he thought the time for a first interest rate cut by the central bank since the coronavirus pandemic remained "some way off." Bitcoin was last up 1.4% at $62,320, after reaching $63,933 on Wednesday, which was the highest since Nov. 2021. https://www.reuters.com/markets/currencies/dollar-steady-traders-ponder-fed-rate-cut-bets-yen-shaky-150dlr-2024-03-01/

2024-03-01 05:33

A look at the day ahead in European and global markets from Vidya Ranganathan. The new month kicks off with Japan's Nikkei Average (.N225) , opens new tab recording a fresh high, on the heels of the S&P 500 (.SPX) , opens new tab and Nasdaq (.IXIC) , opens new tab closing at record highs on Thursday, buoyed by tech stocks linked to AI. Heavyweight chipmaker Nvidia (NVDA.O) , opens new tab was one of the biggest boosts to the benchmark indexes while smaller rival Advanced Micro Devices (AMD.O) , opens new tab also surged. Stock markets are in a fairly buoyant mood after in-line U.S. inflation figures on Thursday helped shape expectations for the timing of Fed interest rate cuts, and not only extended the global equity rally but also pushed U.S. Treasury yields lower. The German DAX (.GDAXI) , opens new tab also hit a fresh all-time high on Thursday, and Europe opens today in anticipation of euro zone flash February PMI numbers that should show euro area inflation, which soared to double-digits in 2022, is moving back towards its 2% target. That's becoming more certain after data this week showed inflation dipped to 2.7% from 3.1% in Germany, to 3.1% from 3.4% in France, and to 2.9% from 3.5% in Spain, with falls driven primarily by energy and food prices. The European Central Bank has kept interest rates at record highs since September. It meets on March 7 and, while no policy change is expected, the bank is likely to acknowledge the improved inflation outlook, which will eventually open the door to rate cuts. A Reuters poll shows the ECB will first cut interest rates in June. Most members of the ECB Governing Council, including President Christine Lagarde, are aligned with the view that more data, especially on the labour market, will be required before cutting the deposit rate from a record high 4.00%. Last week, Lagarde said negotiated wage data from Q1, due in May, will be especially important for the ECB. That makes June the most likely month to consider a first rate cut, an expectation shared by markets and economists. Key developments that could influence markets on Friday: Data: Euro zone PMIs, euro zone CPI, Italy unemployment rate, U.S. Feb ISM manufacturing index, UK house prices Speakers: Fed Atlanta President Raphael Bostic; Fed Board Governor Adriana Kugler Earnings: Daimler Truck Holding (DTGGe.DE) , opens new tab, Pearson PLC (PSON.L) , opens new tab, Aegon Ltd (AEGN.AS) , opens new tab, Rightmove PLC (RMV.L) , opens new tab, Vallourec SA (VLLP.PA) , opens new tab, Virgin Money UK (VMUK.L) , opens new tab Govt debt auctions: UK - reopening of 1-month, 3-month and 6-month debt auctions; Germany - reopening of 7-year and 13-year debt auctions https://www.reuters.com/markets/europe/global-markets-view-europe-2024-03-01/

2024-03-01 05:31

MUMBAI, March 1 (Reuters) - The Indian rupee gained on Friday, aided by the strength of its Asian peers, positive market sentiment following a surprise surge in domestic GDP data and dollar sales by foreign banks, traders said. The rupee was at 82.8550 against the U.S. dollar as of 10:45 a.m. IST, marking a 0.07% increase from its previous session close at 82.9125. The dollar index was at 104.1 after logging a rise of 0.2% increase on Thursday. Most Asian currencies saw a slight uptick, with the Philippine peso leading the gains, rising 0.3%. The dollar-rupee pair was "well-offered," with foreign banks dominating dollar sales in early trading, a foreign exchange trader at a private bank said. India's GDP growth in the October-December quarter far exceeded expectations, with the economy expanding by 8.4%, against the 6.6% anticipated by economists polled by Reuters. The surprise jump in GDP data alongside an in-line U.S. inflation figures further bolstered market sentiment, potentially supporting an upside for the rupee. The positive bias on the rupee persists, though the extent of appreciation will depend on how much the Reserve Bank of India allows the currency to gain, Anindya Banerjee, head of foreign exchange research at Kotak Securities, said. The RBI has likely been buying dollars on days with substantial inflows, limiting the rupee's upside, traders said. The U.S. personal consumption expenditures (PCE) price index rose 0.3% month-on-month in January, data released on Thursday showed. The data for December was revised lower to show the PCE price index gaining 0.1% instead of the previously reported 0.2%. While the inflation data had little impact on expectations of rate cuts by the Federal Reserve, Cleveland Fed President Loretta Mester said on Thursday that three rate cuts over 2024 remain her baseline view, contingent upon continued progress in controlling inflation and a labour market that cools but stays healthy. https://www.reuters.com/markets/currencies/rupee-gains-dollar-sales-by-foreign-banks-uptick-asian-peers-2024-03-01/

2024-03-01 02:54

MUMBAI, March 1 (Reuters) - The Indian rupee is expected to open flat on Friday and remain in a narrow range, caught between the Asian nation's December quarter growth, which exceeded expectations, and the upmove in the dollar index. Non-deliverable forwards indicate the rupee will open little changed from 82.9125 in the previous session. The domestic currency has been in a less then ten paisa range this week on likely dollar buying by the central bank, on one hand, and inflows on the other. The rupee's range this week "has probably been squeezed more, if that was possible", an FX trader at a bank said. "While one can talk about India GDP and U.S. inflation numbers, they hardly matter" from the rupee's point of view, the trader said. India's economy grew at its fastest pace in one-and-half years in the December quarter, blowing past expectations and supporting the view among several market participants that the rupee's medium-term outlook is positive. Meanwhile, the dollar index rose on Thursday following a choppy session. The Fed's favoured measure of inflation supported bets that the U.S. central bank will not cut rates at its March or May meeting. The U.S. personal consumption expenditures (PCE) price index rose 0.3% last month, in-line with expectations. The core PCE increased 0.4%. The data follows the higher-than-forecast print for U.S. January consumer inflation data. "Given the recent performance of U.S. data, the fear was we could get yet another upside surprise," ING Bank said in a note. While Thursday's number "in itself is too hot" for the Fed to contemplate an imminent rate cut, "we have to acknowledge that for six out of the past eight months, we have been tracking below the 0.17% month-on-month rate we need to consistently hit to bring annual inflation back to 2% over time", ING said. KEY INDICATORS: ** One-month non-deliverable rupee forward at 82.99 ** Dollar index at 103.90 ** Brent crude futures at $83.62 ** Ten-year U.S. note yield at 4.28% ** As per NSDL data, foreign investors sold $168 million of Indian shares on Feb. 28 ** NSDL data shows foreign investors bought $102 million of Indian bonds on Feb. 28 https://www.reuters.com/markets/currencies/rupee-caught-between-robust-india-growth-dollar-index-upmove-2024-03-01/

2024-03-01 02:24

NEW YORK, Feb 29 (Reuters) - Federal Reserve Bank of New York President John Williams reiterated on Thursday that the next move for the U.S. central bank is likely to be a cut to its interest rate target. "I do expect us to cut interest rates later this year," Williams said in an appearance in New York at the Citizens Budget Commission 92nd Annual Gala. "I think that makes sense with inflation coming down, the economy being in better balance, that we're going to move interest rates back to more normal levels," the official said, while adding "there's no sense of urgency to do that." "I think we've got monetary policy in good place" and now is really about gaining confidence that inflation is cooling to the 2% target, Williams said. Williams also said he does not see the economy creating conditions that would drive the Fed to hike its interest rate target again. "Based on what I see now we don't need to tighten monetary policy further," Williams said. But he added, "obviously, if the outlook changes, if the economic conditions change pretty significantly, materially, you know, we'd have to, I'd have to rethink that." Williams' remarks largely echoed those of a speech he gave on Long Island on Wednesday. The Fed is widely expected to cut what is now an interest rate target range of between 5.25% and 5.5% later this year, although strong economic activity and an uneven retreat in inflation pressures have cast down on when the policy easing might kick off. Williams said in the appearance that the U.S. economy has been very strong as it bounces back from the coronavirus pandemic and that the current business cycle is quite different than ones seen in the past. He said the economy's resilience has been remarkable. https://www.reuters.com/markets/us/feds-williams-reiterates-rate-cut-likely-later-this-year-2024-03-01/

2024-03-01 02:11

Feb 29 (Reuters) - New York Community Bancorp (NYCB.N) , opens new tab replaced its CEO, reported a fourth-quarter loss that was more than 10 times what it previously stated and disclosed faults in its financial reporting in filings on Thursday that sent its shares tumbling. The bank named Alessandro DiNello, executive chairman of its board, to the additional roles of president and CEO. He succeeded Thomas Cangemi, who the bank said had resigned from those roles on Feb. 23 but will remain on the company's board, according to a regulatory filing. Marshall Lux was appointed presiding director. NYCB's stock sank almost 21% in extended trade to $3.82. The bank said it revised its fourth-quarter loss to $2.7 billion. On Jan. 31, the lender reported a surprise net loss that triggered a broad selloff in regional bank shares and sparked renewed concerns about the health of the industry nearly a year after three regional lenders failed. NYCB on Thursday, in another filing , opens new tab, said it carried out a review in which "management identified material weaknesses in the company's internal controls." The faults "related to internal loan review, resulting from ineffective oversight, risk assessment and monitoring activities," it said. The lender will delay the publication of its annual report because its internal controls over financial reporting were "not effective" when its books were closed in 2023, the filing showed. "These developments are entirely surprising and disappointing," said JP Geygan, a portfolio manager and chief operating officer of Global Value Investment. "We expect the stock to decline, and our concern now would be to understand the issues that led to this and the action the management would be taking to prevent it going ahead," said Geygan, whose company holds a stake in NYCB. NYCB bought some of failed Signature Bank's assets last year. Combined with its 2022 acquisition of Flagstar Bank, the lender's balance sheet swelled above a $100 billion regulatory threshold with stricter capital and liquidity requirements. "The scope and magnitude of the recent leadership changes underscore the challenges facing NYCB as it works through considerable regulatory, credit and overall earnings uncertainty in its new status as an over $100 billion bank," said David Smith, a bank analyst at Autonomous Research. Shares sank to a nearly 27-year low on Feb. 6 after the bank was sued by shareholders. In the proposed class action, investors said the regional bank defrauded them by failing to disclose it would set aside more money for credit losses, and cut its dividend 71% to shore up its balance sheet. While the management changes were unsurprising, "the material weakness is a tough headline," wrote KBW analyst Chris McGratty. Market participants will focus on the company's delayed financial disclosures and strategic update once it finishes reviewing its loan portfolio. "The material weakness is an added layer of uncertainty...we remain on the sidelines," he wrote. https://www.reuters.com/markets/us/ny-community-bank-replaces-ceo-loss-mounts-27-bln-shares-tumble-2024-03-01/