2023-12-08 10:42

Dec 8 (Reuters) - Global bond funds saw significant inflows in the seven days to Dec. 6, amid growing expectations of interest rate cuts in the U.S. and Europe and signs of inflation waning. Investors purchased a net $11.57 billion of global bond funds during the period, the most substantial weekly net buying since April 5. Following U.S. Federal Reserve Chair Jerome Powell's cautious remarks on interest rate increases, U.S. bond prices rallied, driving the 10-year Treasury yield which to a three-month low of 4.104% during the week. European bond funds notably drew $11.03 billion, the highest since April 2021, while Asian funds gained $1.33 billion. U.S. funds experienced $2.56 billion in net outflows. Global high yield bond funds attracted $2.38 billion, but government bond funds saw $1.22 billion in outflows. Meanwhile, demand for equity funds cooled as they received just $1.62 billion, the lowest weekly inflow in five weeks. Financial sector equity funds still attracted $897 million, their biggest weekly inflow since July 19. Communication services also saw inflows of $518 million, while the healthcare sector experienced outflows of $414 million. Meanwhile, global money market funds saw substantial demand as they accumulated some $83.71 billion, a seventh straight week of inflows. Elsewhere, data for commodity funds revealed that energy funds had $121 million of net buying, the second weekly inflow in a row. Precious metal funds also witnessed $101 million worth of net buying, after net selling of $469 million previously. Data covering 29,159 emerging markets funds showed investors stayed net sellers of equity funds for a 17th consecutive week, shedding a net $1.96 billion. EM bond funds, however, received $1.57 billion of inflows, after $761 million of outflows a week ago. https://www.reuters.com/markets/rates-bonds/global-markets-flows-graphic-2023-12-08/

2023-12-08 10:27

BEIJING, Dec 8 (Reuters) - China has named veteran banker Zhu Hexin as the head of its forex regulator and deputy governor of its central bank, the country's human resources ministry said on Friday. The appointment of 55-year-old Zhu comes at a time when the world's second-largest economy is struggling to boost growth, fend off risk of financial instability, and stabilise the currency to stem capital outflows. Data in recent weeks pointed to a mixed picture of economic recovery, raising calls for more policy support to sustain growth, though the yuan currency has recouped some losses as the U.S. dollar weakens. Zhu, former chief of state-run financial conglomerate CITIC Group, was appointed as the party chief of the State Administration of Foreign Exchange (SAFE) on Nov. 24. Reuters previously reported Zhu's appointment on Nov. 22, citing sources familiar with the matter. The central bank governor, Pan Gongsheng, will no longer take the post as the head of SAFE. China will spur domestic demand and consolidate and enhance its economic recovery in 2024, the Politburo, a top decision-making body of the ruling Communist Party, was quoted by state media as saying on Friday. The country will continue to implement a prudent monetary policy and proactive fiscal policy in 2024, state media reported the Politburo as saying. https://www.reuters.com/world/china/china-names-zhu-hexin-new-chief-foreign-exchange-regulator-2023-12-08/

2023-12-08 10:08

BEIJING, Dec 8 (Reuters) - China will spur domestic demand and consolidate and enhance the economic recovery in 2024, the Politburo, a top decision-making body of the ruling Communist Party, was quoted by state media as saying on Friday. The government has in recent months unveiled a flurry of measures to shore up a feeble post-pandemic economic recovery that has been held back by a property crisis, local government debt risks, slow global growth and geopolitical tensions. Ratings agency Moody's slapped a downgrade warning on China's credit rating on Tuesday, saying costs to bail out debt-laden local governments and state firms and control its property crisis would weigh on the growth outlook of the world's second-largest economy. Analysts believe the government will have to unveil more stimulus to support the economy, which still faces headwinds. China will continue to implement a proactive fiscal policy, which will be moderately strengthened, and implement a prudent monetary policy, which will be "flexible, moderate, precise, and effective", state media quoted the Politburo as saying. The meeting, which was chaired by President Xi Jinping, also said the country will enhance the consistency of macroeconomic policies, the official Xinhua news agency reported. China will "effectively enhance economic vitality, prevent and resolve risks, improve social expectations, consolidate and enhance the positive trend of economic recovery, continue to promote the effective improvement of quality and reasonable growth of the economy," Xinhua said. "Efforts should be made to expand domestic demand and form a virtuous cycle of mutually promoting consumption and investment. We need to deepen reforms in key areas and continuously inject strong impetus into high-quality development." President Xi said in a meeting with non-Communist Party representatives held on Wednesday that the country's economic recovery is still at a critical stage, Xinhua said in a separate report on Friday. Most analysts believe China's growth is on track to hit the government's target of around 5% this year, but that compares with a COVID-weakened 2022 and activity remains uneven. The Politburo's meeting on economic work is usually a prelude to the annual agenda-setting Central Economic Work Conference, which is expected to be held around mid-December. China's government advisers will recommend a steady growth target for 2024 and more stimulus to the policymakers' meeting. "There is no doubt fiscal policy will take a leading role in 2024," said Bruce Pang, chief economist at Jones Lang Lasalle. Analysts at UBS expect China to set a fiscal deficit target of 3.5%-3.8% of gross domestic product, and a special local government bond quota of around 4 trillion yuan ($560 billion) for 2024, versus this year's 3.8 trillion yuan. The government has launched a slew of policy measures in recent months to shore up a feeble post-pandemic economic recovery impacted by a property crisis, local government debt risks, slow global growth and geopolitical tensions. The central bank has delivered modest interest rate cuts and pumped out more cash in recent months to support growth. In October, China unveiled a plan to issue 1 trillion yuan in sovereign bonds by the end of the year, raising the 2023 budget deficit target to 3.8% of gross domestic product (GDP) from the original 3%. The Politburo also studied plans for anti-corruption work and reviewed regulations on party disciplinary action, Xinhua said. ($1 = 7.1625 yuan) https://www.reuters.com/world/china/chinas-politburo-meets-economic-work-2024-state-media-2023-12-08/

2023-12-08 06:51

NEW YORK, Dec 8 (Reuters) - A gauge of global stocks rose on Friday, on pace for its sixth straight week of gains, while U.S. Treasury yields shot higher after a strong U.S. jobs report forced markets to modify expectations for the timing of rate cuts by the Federal Reserve. U.S. job growth accelerated in November, with the Labor Department's employment report showing nonfarm payrolls increased by 199,000 jobs last month, above the 180,000 estimate of economists polled by Reuters, after rising by an unrevised 150,000 in October. The unemployment rate fell to 3.7% from the near two-year high of 3.9% in October. Ahead of the payrolls report, a string of labor market data this week indicated some softening in the jobs market, while other reports in recent weeks showed a cooling of inflation and led markets to increase expectations the Federal Reserve would have the leeway to cut interest rates as soon as March. Expectations for a March cut of at least 25 basis points (bps) slipped to about 46%, according to CME's FedWatch Tool, down from about 65% on Thursday. "I don't think this gives the Fed the ability to pivot. It's not weak enough," said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management in Boston. "(Fed Chair Jerome) Powell's going to push back on the market's pricing of rate cuts. He's likely to communicate that the Fed's got to stay steady in restrictive territory for the time being." Other data from the University of Michigan showed U.S. consumer sentiment improved much more than expected in December, snapping four straight months of declines, as households saw inflation pressures easing. On Wall Street, stocks closed higher after a choppy session with the S&P 500 closing at its highest level since March 2022, led by a 1.1% gain in energy <.SPNY> shares as oil prices bounced. The Dow Jones Industrial Average (.DJI) rose 130.49 points, or 0.36%, to 36,247.87, the S&P 500 (.SPX) gained 18.78 points, or 0.41%, to 4,604.37 and the (.IXIC) gained 63.98 points, or 0.45%, to 14,403.97. U.S. Treasury yields surged following the payrolls report. The yield on the benchmark U.S. 10-year Treasury note jumped 10 basis points to 4.23%, on track for its biggest one-day gain since Nov. 9. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, shot up by 14.5 basis points, its biggest daily jump since June 29, to 4.725%. European shares closed at their highest since February 2022 with the STOXX 600 (.STOXX) index up 0.80%. MSCI's gauge of stocks across the globe (.MIWD00000PUS) gained 0.29% and was poised for a sixth straight weekly gain, its longest streak in four years. Along with recent economic data, comments from Fed officials, including Chair Jerome Powell, have fueled investor speculation about the timing of the central bank's pivot to a rate cut. The Fed's next policy meeting is on Dec. 12-13, while the next policy announcement from the European Central Bank (ECB) is on Dec. 14. Expectations have also grown the ECB was at or near the end of its rate hike cycle and a cut may be on the horizon. In currencies, the dollar index (.DXY), which tracks the greenback against a basket of six currencies, gained 0.29%, to 103.96 while the euro was down 0.29% on the day at $1.0761. Crude prices bounced after a recent slump but oil benchmarks were on track for a seven-week decline, the longest in five years, after Saudi Arabia and Russia lobbied OPEC+ members to join output cuts. U.S. crude settled up 2.73% at $71.23 per barrel and Brent settled at $75.84, up 2.42% on the day. Gold XAU= fell 1.27% to $2,002.56 an ounce after dropping to $1,994.49, its lowest since, Nov 24, as the dollar and yields climbed following the payrolls report. https://www.reuters.com/markets/global-markets-wrapup-1-2023-12-08/

2023-12-08 06:35

Nonfarm payrolls increase 199,000 in November May seen as likelier start to Fed rate cuts Dollar rises on jobs data, yields firm Dec 8 (Reuters) - Gold retreated back under $2,000 an ounce on Friday as the dollar and Treasury yields strengthened after traders trimmed bets for U.S. interest rate cuts to materialize by March following stronger-than-expected jobs data. Spot gold fell 1.4% to $2,000.49 per ounce by 2:15 p.m. ET (1915 GMT) after hitting a session low of $1,994.49 earlier. Prices were down 3.4% so far for their worst week in ten. U.S. gold futures settled 1.6% lower at $2,014.50. U.S. job growth accelerated in November while the unemployment rate fell to 3.7%, signaling underlying labor market strength that made traders bet that it could take the Federal Reserve until May to deliver the first reduction in a series of interest-rate cuts next year. "Gold has slumped as the U.S. employment report showed strength across the board," said Tai Wong, a New York-based independent metals trader. "This close at lows, $150 below Sunday's all-time high, has shifted the narrative on the Fed meeting. Now, gold bulls are hoping for a friendly Fed result that will prevent a deeper correction, if not a rout." The dollar index (.DXY) firmed 0.7% for the week, making bullion more expensive for overseas buyers, while 10-year Treasury yields rebounded from three-month lows. Traders awaited up-to-date interest rate projections for next year from the Fed policy meeting on Dec. 12-13. "With a great deal of easing already priced into the market, both silver and gold will continue to see periods where convictions could be challenged," Ole Hansen, Saxo Bank's head of commodity strategy, said in a weekly note. Physical gold dealers in India increased discounts to seven-month highs this week to lure customers as record local prices hurt demand. Spot silver lost 3.3% to $23.00 per ounce, eyeing its worst week since October 2022. Platinum gained 1.3% to $919.01, while palladium fell 2.44% to $945.94. Both were set for weekly declines. https://www.reuters.com/markets/commodities/gold-heads-first-weekly-drop-four-ahead-us-jobs-data-2023-12-08/

2023-12-08 06:27

ASTANA, Dec 8 (Reuters) - Steelmaker ArcelorMittal (MT.LU) has sold its Kazakh assets - the Temirtau steel mill and the Aktau pipe plant - for $286 million to a Kazakh state-owned fund, Kazakhstan's industry ministry said on Friday. At the same time, industry minister Kanat Sharlapayev said the government has agreed with local car tycoon Andrei Lavrentyev that he would take over the steel mill. https://www.reuters.com/markets/commodities/kazakhstan-says-close-taking-over-arcelormittal-unit-2023-10-31/