2023-12-21 05:57

U.S. stock indexes recoup some ground, close near session highs Yen rises after Japan lifts growth forecasts Oil slips after rallying earlier on Red Sea tensions U.S. dollar falls, Treasury yields edge up NEW YORK, Dec 21 (Reuters) - MSCI's global stock index rose on Thursday, recouping some losses from the previous session's late-session sell-off, while oil prices fell and the dollar hit its lowest point in a week on the eve of a key U.S. inflation reading. Oil prices, which rallied earlier in the week due to concerns about shipping disruption in the Red Sea, fell after Angola announced it is leaving the Organization of the Petroleum Exporting Countries (OPEC). On Wednesday, Wall Street suffered its biggest drop since September, and analysts cited hedging activity associated with trading in short-dated options. "Today's market is trying to recover. This has been the hallmark of the latest phase in the market," said Quincy Krosby, chief global strategist, LPL Financial in Charlotte, NC. "We've seen the fear of missing out has been powerful. We've institutional money managers who have to catch up if they've been behind competitors." Investors also reacted positively to Thursday's data which showed third-quarter U.S. economic growth was not as robust as originally stated. Cracks were also appearing in the tight labor market, which the Federal Reserve considers an obstacle to cooling inflation. "The fact that the third-quarter GDP number wasn't revised upward, and in fact was cut, is giving investors comfort that the path the Fed is on, which they enunciated last week, isn't going change any time soon," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. Also, investors were keenly awaiting the Personal Consumption Expenditure (PCE) index report due out on Friday, and appeared to be betting it would confirm easing inflation. If expectations are for a faster decline in inflation than economists have forecast "perhaps you'd want to come in today rather than wait until tomorrow," LPL's Krosby said. After Wednesday's sell-off, traders were cautious heading into the market close. Joe Mazzola, director of trading services education at Schwab said it was important for the S&P to stay above Wednesday's lows as it could bode "well for the end of the week, heading into next week." All three U.S. indexes gained steam to hit session highs late in the trading day. On Wall Street, the Dow Jones Industrial Average (.DJI) closed up 322.35 points, or 0.87%, to 37,404.35. The S&P 500 (.SPX) gained 48.4 points, or 1.03%, to 4,746.75 while the Nasdaq Composite (.IXIC) added 185.92 points, or 1.26%, to end the session at 14,963.87. While the pan-European STOXX 600 index (.STOXX) had closed down 0.21% earlier in the day, MSCI's gauge of stocks across the globe (.MIWD00000PUS) gained 0.72%. The U.S. dollar eased to its lowest point since Dec. 14 against a basket of currencies as the previous session's lift for the U.S. currency faded and traders waited for the U.S. inflation figures and for clues on future Fed policy. The dollar index fell 0.605%, with the euro up 0.59% to $1.1003. The Japanese yen strengthened 0.95% versus the greenback at 142.23 per dollar, while Sterling was last trading at $1.2686, up 0.39% on the day. In U.S. Treasuries, benchmark 10-year notes were up 1.5 basis points to 3.892%, from 3.877% late on Wednesday. The 30-year bond was last up 2.9 basis points to yield 4.0344%, from 4.005%. The 2-year note was last was down 1.5 basis points to yield 4.3537%, from 4.369%. Oil futures settled lower as Angola's move raised questions about OPEC's efforts to support prices by limiting global supplies. U.S. crude settled down 0.44% at $73.89 per barrel and Brent finished at $79.39, down 0.39% on the day. Gold prices gained after U.S. economic data fueled expectations for the Federal Reserve to cut interest rates in March next year. Spot gold added 0.7% to $2,044.30 an ounce. U.S. gold futures gained 0.49% to $2,044.50 an ounce. https://www.reuters.com/markets/global-markets-wrapup-1-2023-12-21/

2023-12-21 05:32

A look at the day ahead in European and global markets from Rae Wee Asian shares stalled on Thursday after a late sharp selloff on Wall Street that left traders scratching their heads. Perhaps investors are shutting up shop for the year, or taking some of their profits off the table before Friday's U.S. inflation data. The Nasdaq 100 (.NDX) is up 51% for the year, despite Wednesday's 1.5% slide. Oil slipped a fraction, but the market remains skittish as shippers scramble to avoid the Red Sea after a wave of attacks. Washington has launched an initiative to improve security at the maritime bottleneck but few practical details have emerged so far. Toyota Motor (7203.T) shares slumped as Japan's transport ministry inspected a subsidiary over safety concerns dating back decades. The juggernaut of market euphoria from last week's dovish shift in the Federal Reserve outlook, meanwhile, rolled on in the rates market, bolstered by a rapid cooling of British inflation. The benchmark 10-year U.S. Treasury yield was last at 3.8622%, near the previous session's five-month low of 3.8470% and down 116 basis points from October's high. The two-year yield , which typically reflects near-term interest rate expectations, was similarly pinned near a seven-month trough. Two-year gilt yields dived more than 18 bps on Wednesday after data showed a far steeper decline in British inflation last month than anticipated. Fed funds futures point to more than 150 basis points of cuts next year , and similar expectations are now emerging around the Bank of England, with more than 100 bps of cuts similarly priced in for that central bank in 2024 . The last big piece of data before Christmas is Friday's U.S. core PCE price index reading - the Fed's preferred measure of underlying inflation, where another slowdown is expected. Key developments that could influence markets on Thursday: - U.S. weekly jobless claims - UK CBI distributive trades (December) https://www.reuters.com/markets/europe/global-markets-view-europe-2023-12-21/

2023-12-21 05:30

MUMBAI, Dec 21 (Reuters) - The Indian rupee fell on Thursday, weighed down by year-end dollar demand from importers and risk aversion spurred by a sharp halt in global equity rallies. The rupee was at 83.25 against the U.S. dollar as 10:50 a.m. IST, down 0.1% from its previous close of 83.17. Dollar demand from importers is likely to stay buoyant heading into year-end, a foreign exchange trader at a state-run bank said. "Mostly people square their positions at this time, hence dollar demand will be there," the trader added. The dollar index dipped slightly to 102.3 after climbing nearly 0.3% overnight on Wednesday, while broader Asian currencies were mostly subdued. The 10-year U.S. Treasury yield fell to its lowest level since July overnight in New York and was last quoted at 3.86%. The 2-year yield also slipped 7 bps to 4.36% and was little changed in Asia hours. The rupee was also pressured by risk aversion as equity rallies spurred by expectations of the Federal Reserve's rate cuts in 2024 faded, with the S&P 500 Index logging its worst session in nearly three months on Wednesday. Domestic benchmark equity indices Nifty 50 (.NSEI) and BSE Sensex (.BSESN) were down slightly on Thursday as well. The rupee will persist in its narrow range with downside likely capped near 83.35 in the near-term, said Gaurang Somaiya, a forex and rates researcher at Motilal Oswal Securities. Investors will also keep a keen eye on statements from Fed officials as they have both signalled and pushed back on rate cut expectations since Friday, Somaiya added. Philadelphia Federal Reserve President Patrick Harker said on Wednesday that while it's important that the Fed starts to lower rates, they "don't have to do it too fast (and) we're not going to do it right away." https://www.reuters.com/markets/currencies/rupee-weakens-year-end-dollar-demand-importers-2023-12-21/

2023-12-21 05:06

U.S. 10-year bond yields near 5-month lows Third-quarter GDP growth trimmed U.S. core PCE data due on Friday Dec 21 (Reuters) - Gold prices gained on Thursday as the dollar retreated after U.S. economic data fueled expectations the Federal Reserve would cut interest rates in March next year. Spot gold was up 0.7% at $2,043.79 per ounce by 2:55 p.m. ET (1955 GMT), eyeing its best session in six. U.S. gold futures settled 0.2% higher at $2,051.30. Data showed U.S. gross domestic product increased at a 4.9% annualized rate last quarter, revised down from the previously reported 5.2% pace, while weekly jobless claims increased slightly. "GDP data came in a bit soft and gold charged up. Market is craving the burgeoning Fed pivot," said Tai Wong, a New York-based independent metals trader. The market expects an 83% chance of a Fed rate cut by March, compared with 79% before the data, according to the CME FedWatch tool. Lower interest rates decrease the opportunity cost of holding non-yielding bullion. The U.S. dollar fell 0.5% and 10-year Treasury yields hovered near a five-month low. The Fed's dovish stance has caused markets to price in several rate cuts in 2024. However, some Fed officials have spoken out against imminent rate cuts. Market focus has now shifted to the U.S. core personal consumption expenditure (PCE) report on Friday. "Gold will continue to maintain price levels above $2,000 and these expectations we have of lowering inflationary pressures will continue to foster the sideways to higher movement in gold," said David Meger, director of metals trading at High Ridge Futures. Silver gained 0.9% to $24.33 per ounce, hitting a 16-day high. Platinum rose 0.4% to $962.82, near a 16-week peak hit last session, and palladium was up 1.3% at $1,211.71. "The fundamental backdrop is stronger for platinum and it should continue to outperform palladium going forward," BofA said in a research note dated Wednesday. BofA expects rising palladium surpluses under its base case next year, with a possibility of prices falling to a low of $500 per ounce if there are no supply cuts. https://www.reuters.com/markets/commodities/gold-prices-rebound-weaker-us-yields-dollar-lift-demand-2023-12-21/

2023-12-21 03:36

WASHINGTON, Dec 20 (Reuters) - The White House said on Wednesday it was working with Mexico's government to resolve issues that led the Biden administration on Monday to close two rail crossings at the Texas-Mexico border used by increasing numbers of migrants to enter the U.S. Dozens of major U.S. agricultural groups on Wednesday urged the U.S. to reopen the crossings, saying the closures of the railroad trade routes were causing steep export losses to U.S. growers. The farm groups said the U.S. Customs and Border Protection agency could reopen the rail bridges with as few as five employees per crossing, challenging the agency's rationale for shutting down the train routes. A White House spokesperson said later on Wednesday that the U.S. was "working closely with the Mexican government in an attempt to resolve this issue, while surging personnel to the region." "We are communicating regularly with industry leaders to ensure we are assessing and mitigating the impacts of these temporary closures," the spokesperson said. The White House also repeated that U.S. Homeland Security Department officials shut down the two crossings to "stop a large movement of migrants coming by rail and to protect the health and safety of its personnel." https://www.reuters.com/world/us/texas-mexico-border-crossing-closed-stop-large-movement-migrants-white-house-2023-12-21/

2023-12-21 03:07

MUMBAI, Dec 21 (Reuters) - The Indian rupee is expected to have a quiet opening on Thursday, following a selloff in U.S. equities and a further drop in U.S. Treasury yields. Non-deliverable forwards indicate the rupee will open nearly unchanged from the previous session's closing of 83.17. The S&P 500 Index had its worst session in nearly three months, while the 10-year U.S. Treasury yield dropped to the lowest since late-July. The "risk off episode has not pulled up the dollar much" and with Asian currencies "mostly quiet", rupee "will not do anything at open", a foreign exchange (FX) trader at a bank said. "The near-term direction has a slight upside bias, but there is honestly nothing here." The plunge in U.S. equities came despite positive news flow in the form of U.S. consumer confidence and existing homes sales. US existing home sales unexpectedly rose in November, and in December consumer confidence improved. The decline in U.S. equities is attributed to an "overbought market," Tina Teng, market analyst at CMC Markets, said. The S&P 500 Index had rallied nearly 14% since November, nearing its all-time high. Despite positive data, U.S. yields declined, which analysts attributed to safe haven demand and drop in inflation to its lowest rate in over two years in November. Investors increased their bets of a rate cut by the U.S. Federal Reserve at the March meeting. The odds of a rate cut at the March meeting are around 80%, according to the CME FedWatch Tool. "Would need to see the follow through to yesterday's price action, but I think there are initial signs that investors are worried about growth outlook," the FX trader said. KEY INDICATORS: ** One-month non-deliverable rupee forward at 83.25; onshore one-month forward premium at 7.5 paise ** Dollar index at 102.32 ** Brent crude futures down 0.5% at $79.3 per barrel ** Ten-year U.S. note yield at 3.86% ** As per NSDL data, foreign investors bought a net $223.6mln worth of Indian shares on Dec. 19 ** NSDL data shows foreign investors bought a net $150.5mln worth of Indian bonds on Dec. 19 https://www.reuters.com/markets/currencies/rupee-supported-by-drop-us-yields-pegged-back-by-risk-aversion-2023-12-21/