2023-11-16 04:39

MUMBAI, Nov 16 (Reuters) - The Indian rupee is expected to open lower on Thursday after U.S. retail sales fell less than expected, helping the dollar recover from a plunge fuelled by softer-than-expected inflation data. Non-deliverable forwards indicate rupee will open at around 83.20 to the U.S. dollar compared with its previous close of 83.1425. The rupee had on Wednesday logged its best session in nearly two months. The dollar index inched up to 104.50, Asian currencies dropped 0.2% to 0.6% and the 10-year U.S. Treasury yield was near 4.50%. Rupee will be "back on the defensive after yesterday's mild reprieve" and "we probably see 83.30 are thereabouts revisited", a forex trader said. "The trade data was not particularly helpful (for the rupee)," he added, referring to India's merchandise trade deficit reaching a record high of $31.5 billion in October. U.S retail sales slipped 0.1% month-on-month in October compared to the 0.3% fall expected by economists polled by Reuters. Further, data for September was revised to show sales increasing 0.9% from 0.7% previously. The data indicates "decent resilience" and supports our view that fourth-quarter GDP growth may not be as weak as the consensus is currently predicting, ING Bank said in a note. The dollar drew additional support from comments by Federal Reserve officials. San Francisco Fed President Mary Daly warned against calling time on rate-rising cycle too soon, in an interview to Financial Times on Wednesday. "Daly offered a glimpse into Fed policy thinking in 2024. She reminded markets that the Fed intends to keep rates very restrictive” for an extended period before “normalizing” them," DBS Research said in a note. KEY INDICATORS: ** One-month non-deliverable rupee forward at 83.24; onshore one-month forward premium at 4.25 paisa ** Dollar index up at 104.52 ** Brent crude futures down 0.9% at $80.4 per barrel ** Ten-year U.S. note yield at 4.51% ** As per NSDL data, foreign investors sold a net $112.6 mln worth of Indian shares on Nov. 13 ** NSDL data shows foreign investors bought a net $50.7 mln worth of Indian bonds on Nov. 13 https://www.reuters.com/markets/currencies/rupee-back-under-pressure-after-us-data-helps-dollar-recover-2023-11-16/

2023-11-16 02:14

NEW YORK, Nov 16 (Reuters) - The dollar meandered on Thursday after U.S. jobless claims rose more than expected last week, indicating a cooling labor market that could prompt the Federal Reserve to cut interest rates in early 2024 as it tries to engineer a soft landing. The dollar index , a measure of the U.S. currency against six peers, edged higher 0.08% as a slowing U.S. economy leads the market to perceive the Fed is done raising rates. Conversely, the euro strengthened 0.02% to $1.0848 after it jumped 1.69% on Tuesday, its biggest single-day percentage gain since November 2022. Claims for state unemployment benefits rose 13,000 to a seasonally adjusted 231,000 for the week ended Nov. 11, the Labor Department said. Economists polled by Reuters had forecast 220,000 claims for the latest week. The dollar plunged on Tuesday, also registering its biggest single-day decline in a year, after data on consumer prices came in softer than expected and increased the outlook for many that inflation was quickly decelerating to the Fed's 2% target. The dollar rebounded a touch on Thursday as the market wrestled with the uncertainty of when the Fed might cut its overnight lending rate of 5.25%-5.5%, which is still restrictive to economic growth. "We've long been in the camp of anticipating faster Fed easing than what the market has been pricing in," said Vassili Serebriakov, FX strategist at UBS in New York, adding UBS economists are forecasting a possible rate cut by the end of the first quarter in 2024. "But there is still a number of reasons why the dollar is not going to weaken very quickly, the main one being the growth picture outside of the U.S. is still quite weak," he said. Traders remain confident that rates will not go higher, with futures now pricing 1-in-3 odds for a first reduction by March, according to the CME Group's FedWatch Tool. Karl Schamotta, chief market strategist at Corpay in Toronto, said while markets anticipate a rapid Fed pivot towards rate cuts in 2024, historically speaking for that to occur there has to be a big hit to the economy. "The challenge here is how we reconcile the view of a soft landing with rapid and significant rate cuts in 2024?" he said. "My view would be that at this point, markets are moving too fast ... and as a result, the U.S. dollar could outperform relative to expectations in early 2024." Deutsche Bank strategist Jim Reid on Thursday cited research from his bank's economists that showed in the last two years, this is the seventh occasion on which markets have priced in a swift shift by the Fed to rate cuts. On the previous six, those expectations entirely unwound. "At some point there will be a dovish pivot, and this could be closer than the others to it, but be wary that we've now been to this well seven times in two years," Reid said. Among other major currencies, the Japanese yen strengthened 0.47% at 150.66 per dollar. Earlier in the week the yen slid to a one-year low of 151.92. "As far as dollar-yen is concerned, the market still has a bias to buy the dip in the short run because the volatility hasn't been very high and intervention has not materialized so far," Serebriakov said. Sterling was last trading at $1.2406, down 0.10% on the day. Elsewhere, the Aussie eased 0.6% to $0.6465, while the New Zealand dollar fell 0.85% to $0.5974. The Australian currency failed to draw support from a strong rebound in employment, as traders keyed in on the fact that gains were mostly in part-time labor, while the jobless rate actually ticked higher. https://www.reuters.com/markets/currencies/dollar-holds-ground-macro-data-hints-later-fed-rate-cut-2023-11-16/

2023-11-16 02:13

BUENOS AIRES, Nov 15 (Reuters) - Argentina's Economy Minister Sergio Massa plans to renegotiate the country's loan with the International Monetary Fund (IMF) if he wins the upcoming presidential election, he said Wednesday evening in a TV interview. Massa said that the agreement with the IMF for a $44 billion loan, which made Argentina the organization's the largest debtor, is a key driver of the country's triple-figure inflation. "Argentina has a problem... the program with the IMF, which is inflationary, which needs to be re-discussed," Massa said. "We want to re-discuss the program on the basis of the result of exports," he added. The presidential run-off election is scheduled for this weekend. https://www.reuters.com/world/americas/argentinas-massa-says-will-renegotiate-imf-deal-if-he-wins-election-2023-11-16/

2023-11-16 01:35

SYDNEY, Nov 16 (Reuters) - Australia employment rebounded strongly in October, after a soft patch the previous month, though the jobless rate still ticked higher as more people went looking for work and rapid migration boosted the supply of labour. Figures from the Australian Bureau of Statistics on Thursday showed net employment rose 55,000 in October from September, more than double market forecasts of 20,000. The breakdown showed part-time jobs surged 37,900, which could have been boosted by staff hired for a national referendum that was conducted on Oct. 14. The jobless rate edged up to 3.7%, matching forecasts and largely due to a jump in the participation rate back to an all-time peak of 67%. Record inflows of migrants and students have boosted the supply of labour to meet demand, so while employment was solid at 55,000 the labour force expanded by an even bigger 83,000. Over the year to October, jobs growth of a healthy 2.8% was still not enough to match labour force growth of 3.8%. This expansion of supply means the labour market is not the main driver of inflation and markets see little reason for the Reserve Bank of Australia (RBA) to deliver a follow-up rate hike in December. The central bank last week lifted rates to a 12-year high of 4.35% and left the door open to another move. Yet futures imply only a 7% chance of a rise in December, and are evenly split on whether the tightening cycle is over for good. The labour data hinted at some loosening in the market, with the ABS noting annual growth in hours worked had also dropped to 1.7%, from 5% in the middle of the year. "The recent slowdown in the growth of hours worked may suggest that the labour market is starting to slow, following a particularly strong period of growth," said Bjorn Jarvis, ABS head of labour statistics. Vacancies have also been ticking lower as positions get filled. Job ads on Australia's largest employment site SEEK, fell 5% in October to be 30% below their May 2022 peak, though they remain above pre-pandemic levels. The RBA itself says liaison with firms has found an improvement in labour availability, along with a decline in turnover rates and hiring intentions. All of which has lessened the risk of a price-wage spiral, with data this week suggesting wage growth is near a peak after jumping to an annual 4% in the third quarter. https://www.reuters.com/world/asia-pacific/australia-employment-rebounds-oct-jobless-rate-still-edges-up-2023-11-16/

2023-11-16 00:26

US retail sales fall slightly in October Target jumps on upbeat quarterly profit forecast Disney gains on report ValueAct has taken stake Indexes up: Dow 0.47%, S&P 0.16%, Nasdaq 0.07% Nov 15 (Reuters) - U.S. stocks closed slightly higher on Wednesday, as fresh inflation data reinforced investor hopes that the Federal Reserve is done raising interest rates, while retail stocks were boosted by an upbeat forecast from Target (TGT.N). Shares in Target (TGT.N) surged 17.8% in its biggest one-day percentage gain since August 2019 after the retailer forecast a fourth-quarter profit largely above expectations on easing supply-chain costs. Target's bright outlook lifted shares of other retailers including Macy's (M.N), which rose 7.5%, and Kohl's (KSS.N), which closed up almost 9%. The S&P 500 consumer staples index (.SPLRCS), which includes Target, was the top sector gainer, adding 0.7%. Stocks had rallied on Tuesday after a softer-than-expected consumer price index (CPI) reading boosted optimism that the Fed might be able to avoid raising rates further. Additional data on Wednesday showed the biggest decline in producer prices in 3-1/2 years in October on the back of cheaper gasoline, offering more evidence of easing price pressures. Also on Wednesday, retail sales data showed a smaller-than-expected decline of 0.1% in October, against forecasts of a 0.3% fall, according to economists polled by Reuters. "Those two data points reaffirmed the message from Tuesday that the Fed seems to be navigating the soft landing quite well," said Ronald Temple, chief market strategist at Lazard. After the big move by Wall Street's three major indexes in the previous session, Temple said Wednesday's data "doesn't change the narrative." The Dow Jones Industrial Average (.DJI) rose 163.51 points, or 0.47%, to 34,991.21, the S&P 500 (.SPX) gained 7.18 points, or 0.16%, at 4,502.88 and the Nasdaq Composite (.IXIC) added 9.46 points, or 0.07%, at 14,103.84. The benchmark S&P 500 (.SPX) and tech-heavy Nasdaq (.IXIC) had posted their biggest daily percentage gains in more than six months on Tuesday, after the consumer prices data. Among the S&P 500's 11 major sectors energy (.SPNY) was the biggest decliner, down 0.3%, followed closely by utilities (.SPLRCU). After consumer staples, communications services (.SPLRCL) advanced the most, with a boost from Walt Disney (DIS.N). The entertainment company rose 3% after reports that activist investor ValueAct Capital had acquired a stake. The Russell 2000 (.RUT) index again advanced, after closing 5.4% higher on Tuesday, as the prospect of stalling rate hikes provides particular relief to smaller companies, which are more dependent on floating rate loans. Money market traders have fully priced in odds that the U.S. central bank will keep rates steady in December, as per CME Group's Fedwatch tool. They also see the first rate cut of the cycle kicking off in May 2024. Investors were also watching for the outcome of the first meeting in a year between U.S. President Joe Biden and Chinese leader Xi Jinping on Wednesday, hoping the talks could ease friction between the superpowers on military conflicts, drug-trafficking and artificial intelligence. Further aiding the mood, the U.S. House of Representatives passed a temporary spending bill that would avert a government shutdown, with broad support from lawmakers from both parties. To prevent a shutdown, the Senate and Republican-controlled House must enact a legislation that Biden can sign into law before current funding for federal agencies expires at midnight on Friday. Among individual stocks, retailer TJX's (TJX.N) shares fell 3.3% after it forecast current-quarter profit below Wall Street expectations, signaling spiraling costs weighing on margins. Sirius XM (SIRI.O) shares rallied 6% after Warren Buffett's Berkshire Hathaway (BRKa.N) took a stake in the audio entertainment company. On U.S. exchanges 11.67 billion shares changed hands, above the 11.15 billion average for the last 20 sessions. Advancing issues outnumbered decliners on the NYSE by a 1.36-to-1 ratio; on Nasdaq, a 1.32-to-1 ratio favored advancers. The S&P 500 posted 42 new 52-week highs and no new lows; the Nasdaq Composite recorded 106 new highs and 89 new lows. https://www.reuters.com/markets/us/futures-signal-more-gains-wall-street-eyes-data-biden-xi-meeting-2023-11-15/

2023-11-16 00:08

MEXICO CITY, Nov 15 (Reuters) - Mexico's lower house on Wednesday passed a bill aimed at revamping national stock exchanges, a long-awaited move meant to boost trading following a spate of delistings from the main market in recent years. The bill loosens regulations for companies to go public, speeding up the process and reducing the costs involved, said Mexico's largest market operator, the Bolsa Mexicana de Valores, in a statement. "This will strengthen financial inclusion and access to financing for Mexican companies, especially small- and medium-sized ones," Deputy Finance Minister Gabriel Yorio said on social media platform X. The bill had previously passed in the Senate, and will now be sent to President Andres Manuel Lopez Obrador's desk to be signed into law. Just 138 companies are listed on the Bolsa Mexicana de Valores, which has gone six years without a new listing, barring spin-offs. Meanwhile, the smaller Bolsa Institucional de Valores (BIVA) has seen just one listing in that time. The BMV has bled business in recent years, with former giants such as airline Aeromexico, dairy producer Grupo Lala and retailer Grupo Sanborns taking their operations private. https://www.reuters.com/world/americas/mexican-lawmakers-ok-stock-market-reform-bill-2023-11-16/