2024-08-08 05:59

HOUSTON, Aug 8 (Reuters) - Oil prices settled higher on Thursday for the third consecutive session, after U.S. jobs data eased demand concerns and war in the Middle East helped prices recover from an eight-month low on Monday. Brent crude futures settled up 83 cents or 1.06% to $79.16 a barrel. U.S. West Texas Intermediate crude settled up 96 cents, or 1.28%, to $76.19. Prices were buoyed after data showed the number of Americans filing new applications for unemployment benefits fell more than expected last week, suggesting fears the labour market is unravelling were overblown. "The latest U.S. data on jobless claims indicates still a growing U.S. economy, reducing some of the oil demand concerns," UBS analyst Giovanni Staunovo said. Investors were also digesting a 3.7 million barrel drop in U.S. crude inventories last week, reported by the Energy Information Administration on Wednesday, a drop which far exceeded analysts' expectations and marked a sixth straight weekly decline to six-month lows. Elsewhere, the killing of senior members of militant groups Hamas and Hezbollah last week had raised the possibility of retaliatory strikes by Iran against Israel, stoking concerns over oil supply from the world's largest producing region. "It will spike the price of crude oil if there is an Iranian retaliation on a large scale and I think that is what everyone is most worried about,” said Tim Snyder, chief economist at Matador Economics. Meanwhile, the United Kingdom Maritime Trade Operations (UKMTO) agency said on Thursday it had received a report of an incident 45 nautical miles south of Yemen's Mokha. Iran-aligned Houthi militants have launched attacks on international shipping near Yemen since last November in solidarity with Palestinians in the war between Israel and Hamas. Israeli forces stepped up airstrikes across the Gaza Strip on Thursday, killing at least 40 people, Palestinian medics said, in further battle with Hamas-led militants as Israel braced for potential wider war in the region. Also lending some support, Libya's National Oil Corp. declared force majeure at its Sharara oilfield from Tuesday, a statement said, adding that the company had gradually reduced the field's production because of protests. Analysts at Citi said there was a possibility of a bounce in prices to the low-to-mid $80s for Brent. "Upside risks in the market remain, from still-tight balances through August, heightened geopolitical risks across North Africa and the Middle East, the possibility of weather-related disruptions through hurricane season, and light managed money positioning," Citi said. Sign up here. https://www.reuters.com/markets/commodities/oil-prices-tick-up-sharp-fall-us-crude-inventories-2024-08-08/

2024-08-08 05:55

FRANKFURT, Aug 8 (Reuters) - Uniper on Thursday said a complaint against a Russian court decision requiring the German utility to pay more than 14 billion euros ($15.3 billion) in a legal dispute with former supplier Gazprom (GAZP.MM) , opens new tab was unsuccessful. Uniper said the awarded title allows Gazprom Export to enforce Uniper within and possibly even outside Russia, adding possible foreclosure of assets was a risk. ($1 = 0.9147 euros) Sign up here. https://www.reuters.com/markets/commodities/uniper-appeal-against-russian-court-ruling-fails-asset-foreclosure-possible-2024-08-08/

2024-08-08 05:51

NEW YORK, Aug 8 (Reuters) - The dollar rose on Thursday after new U.S. labor market data showed that unemployment benefits fell more than expected last week, easing fears of an imminent recession. The greenback's rise was most prominent against the yen, following a sharp drop the day before in a volatile week in which investors have had to digest the unwinding of popular carry trades and how Japanese monetary policy might evolve. Initial jobless claims fell to a seasonally adjusted 233,000 for the week ended Aug. 3, the Labor Department said on Thursday, suggesting fears that the labor market is unraveling were overblown. The yen was last down 0.37% at 147.205, having slid 1.6% on Wednesday, after the Bank of Japan's Deputy Governor Shinichi Uchida played down the chance of a near-term hike in interest rates that would typically boost the currency. The sharp moves in the yen pushed the dollar index , which measures the U.S. currency against six others, including the yen, to a weekly high, before backing off. It was last up to 103.21, above Monday's seven-month low of 102.15. Still, market participants were bracing for more volatility. "Regardless of the fact that risk is a bit higher today, the degree of these swings that we're having on a seemingly daily basis, or at least every other day, I don't think is a healthy sign," said Eugene Epstein, head of structured products, North America, at Moneycorp. The yen started the week by scaling a seven-month high of 141.675 per dollar, a far cry from the 38-year lows where it traded in early July, after soft U.S. jobs data last week stoked recession worries and roiled investors. A surprise rate hike from the BOJ last week also forced investors to bail out of carry trades, in which they borrow the yen at low rates to invest in dollar-priced assets for higher returns. This unwinding gave the yen a boost. A summary of opinions voiced at the BOJ's July policy meeting showed on Thursday that some board members cited a need to keep raising interest rates, with one saying they should eventually be increased to at least around 1%. The contrasting opinions from the summary and Uchida on whether the BOJ will continue to raise rates, or pause as a result of market volatility, underscores the delicate task facing the central bank and will likely keep investors skittish. "As the market pulls back from the edge of the brink ... U.S. interest rates have firmed up, and I think this is going to give the dollar/yen a little bit more of a lift," said Marc Chandler, chief market strategist at Bannockburn Global Forex. Some analysts believe this unwinding in the carry trade may have further to run, and is possibly only halfway there, which could add to volatility. Even if the U.S. Federal Reserve does deliver a steep rate cut, as most traders are expecting in September, and the BOJ another increase, there would still be an incentive to use the yen to fund other trades. The Swiss franc , another currency that was used to fund carry trades and that benefited from the unwinding momentum earlier this week, was down 0.47% at 0.866 per dollar, after dropping more than 1% on Wednesday. The euro was down 0.05% at $1.0917, while sterling was up 0.48% at $1.275. Investor focus will now be on the U.S. consumer price inflation report for July due next week, as well as comments by Fed Chair Jerome Powell at the central bank's Jackson Hole Economic Policy Symposium on Aug. 22-24. "Investors need to brace for a bumpy ride," said Vasu Menon, managing director of investment strategy at OCBC. The Australian dollar rose 1.12% to $0.659, while the New Zealand dollar was up 0.25% at $0.601. In cryptocurrencies, bitcoin was up 7.6% to $59,334.95, rebounding after falling below the $50,000 mark on Monday. Ether was last up 9.72% to $2,577.70. Sign up here. https://www.reuters.com/markets/currencies/yen-firms-after-sharp-drop-traders-assess-japans-rate-path-2024-08-08/

2024-08-08 05:41

BENGALURU, Aug 8 (Reuters) - The Reserve Bank of India (RBI) kept its key interest rate unchanged on Thursday, as widely expected, as it continued its efforts to sustainably lower inflation towards its 4% target. The Monetary Policy Committee (MPC), which consists of three RBI and three external members, kept the repo rate (INREPO=ECI) , opens new tab unchanged at 6.50% for a ninth straight policy meeting. All 59 economists in the Reuters poll conducted in late July predicted the central bank would stand pat on rates. COMMENTARY: DEEPAK AGRAWAL, CIO - DEBT, KOTAK MAHINDRA AMC, MUMBAI "Amidst the global volatility in financial and divergent central banker actions, RBI remained calm." "RBI has not taken active measure on liquidity front and intend to continue with VRRR (variable rate reverse repo) auction to suck out surplus liquidity." MADHAVI ARORA, LEAD ECONOMIST, EMKAY GLOBAL, MUMBAI "The fluidity of global Goldilocks narratives, financial markets turmoil and policy repricings found little space in the Governor's speech, thanks to recent easing volatility in the financial markets." "However, noisy food inflation back home, and a still-elusive 4% inflation target formed the base for the RBI decision making." SAKSHI GUPTA, PRINCIPAL ECONOMIST, HDFC BANK, GURUGRAM "The overall tone of the policy was on the hawkish side and expectations of a pivot from the RBI need to be pushed forward for now. We see the case of an October rate cut weaken after Thursday's address." RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE "Policy guidance reinforced that domestic considerations will be prioritised, despite a sharp buildup in rate cut pricing for the US Fed. The RBI MPC retained its cautious tone on inflation, in the face of an anticipated passthrough from perishables price pressures and tariff adjustments." "With domestic demand conditions calling for a focus on inflation, we expect the policy rate to stay on hold for the rest of the year." GARIMA KAPOOR, ECONOMIST, INSTITUTIONAL EQUITIES, ELARA SECURITIES, MUMBAI "Prioritizing price stability to maintain macroeconomic stability amid still healthy domestic growth, MPC decided to remain focused on the withdrawal of accommodation and retained policy repo rate in line with our expectations." "We continue to retain our expectations of a stance change in Q3FY25 followed by a 25 bps rate cut in Q4FY25. The tone remained fairly balanced with reiteration on India's macro and financial stability amid a rise in global volatility lately." UPASNA BHARDWAJ, CHIEF ECONOMIST KOTAK MAHINDRA BANK, MUMBAI "The RBI expectedly kept rates and stance unchanged, with the unambiguous focus being retained on inflation. With growth remaining robust the MPC still has room to hold on to policy stance to get confirmation on the disinflationary trend." "We continue to expect scope for change in stance in the October policy with rate cuts beginning from December. The prospects of simultaneous change in stance and rate cuts could increase depending on how domestic inflation and global environment transitions." Sign up here. https://www.reuters.com/markets/asia/view-indias-central-bank-holds-rates-again-expected-2024-08-08/

2024-08-08 05:40

Analysts turn bullish on ringgit, yuan, baht, and peso Long bets solidify on Singapore dollar Short bets firm on Indian rupee Aug 8 (Reuters) - Analysts have turned bullish on most major Asian currencies for the first time in more than a year, bolstered by rising bets of interest rate cuts by the Federal Reserve and an unwinding of yen-funded carry trades, a Reuters poll found. Bets on the Malaysian ringgit turned bullish for the first time since early February last year, and the view on Chinese yuan also shifted to slightly long for the first time since late April last year, a fortnightly poll of 12 analysts showed. "Growing expectations of Fed's rate cuts ... reduced overall net long USD vs emerging markets Asia FX," said Poon Panichpibool, a markets strategist at Krung Thai Bank. "Still, some impacts from the unwinding of yen carry trade also accelerated the reduction of net long dollar positions." Over last week, odds of a 50 basis points rate cut in September have risen to 70% from 22%, with the chances of cuts later in the year also on the rise, according to CME FedWatch's tool. However, the Fed is not expected to be as generous with rate cuts as the market is expecting, analysts at Goldman Sachs wrote in a client note, adding that the dollar still is and is likely to remain a "high carry currency". "Scope for further downside in USD should be more limited from here, or at least the moves should become more gradual, and risks are skewed towards a modest rebound in the broad USD and therefore USD/Asia," they added. Views on the Malaysian ringgit have been buoyed by the currency's stellar outperformance over the past few weeks, boosted by a host of factors including strong foreign inflows. The currency has appreciated around 6% since mid-July and more than 7% since late February, when it fell to its lowest level since early 1998. Expectations of Fed easing "strengthened the conviction on Malaysian ringgit", drawing large bond flows probably on an unhedged basis to participate in foreign exchange gain, which in turn added to the positive loop, analysts at Maybank wrote. Bullish bets on the Singapore dollar firmed to their highest since February last year. Analysts are favouring the currency due to the city-state's growth and inflation dynamics, coupled with a hawkish stance by its central monetary authority. Elsewhere, analysts turned bullish on the Thai baht and the Philippine peso for the first time in roughly eight months. In contrast, bets on the Indian rupee and the Taiwan dollar remained bearish, with views on the rupee , opens new tab clouded by lingering pressure due to the unwinding of carry trades and sell-off in equities. The Asian currency positioning poll is focused on what analysts and fund managers believe are the current market positions in nine Asian emerging market currencies: the Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso, Malaysian ringgit and the Thai baht. The poll uses estimates of net long or short positions on a scale of minus 3 to plus 3. A score of plus 3 indicates the market is significantly long U.S. dollars. The figures include positions held through non-deliverable forwards (NDFs). The survey findings are provided below (positions in U.S. dollar versus each currency): Sign up here. https://www.reuters.com/markets/currencies/fed-easing-bets-carry-trade-unwind-turn-analysts-bullish-asian-currencies-2024-08-08/

2024-08-08 05:33

NEW YORK/LONDON, Aug 8 (Reuters) - A closely followed global equities index jumped more than 1% on Thursday after lower-than-expected weekly U.S. unemployment claims calmed recession fears, also pushing Treasury yields higher alongside the U.S. dollar. Oil futures registered their third straight day of gains, with growing supply risks in the Middle East offsetting any demand concerns that at the start of the week had pushed prices to their lowest levels since early 2024. The U.S. Labor Department said on Thursday that initial claims for state unemployment benefits fell 17,000 to a seasonally adjusted 233,000 for the week ended Aug. 3, marking the largest drop in about 11 months and falling short of economist expectations for 240,000. The claims data was closely monitored after a weaker-than-expected July jobs report last Friday helped spark Monday's financial market rout that spanned the globe. The sell-off was partly caused by investors being forced to unwind carry trades, where they borrow cheaply in Japan to buy dollars and other currencies to invest in higher yielding assets. The unwind helped trigger a 12% plunge in Japanese stocks on Monday and the S&P 500 (.SPX) , opens new tab followed with a 3% drop. On Thursday, however, Wall Street's swing was bullish. The Dow Jones Industrial Average (.DJI) , opens new tab rose 683.04 points, or 1.76%, to 39,446.49, the S&P 500 (.SPX) , opens new tab gained 119.81 points, or 2.30%, to 5,319.31 and the Nasdaq Composite (.IXIC) , opens new tab gained 464.22 points, or 2.87%, to 16,660.02. Thursday's move was "a very, amplified reaction," to the claims data said Tony Roth, chief investment officer Wilmington Trust in Radnor, Pennsylvania. "It's a lot more importance being ascribed to a single minor data point than you'd typically see. Jobless claims is important but any one reading is minor in a very high-frequency data set. There's a lot of volatility around it." But he said that the latest data was particularly encouraging after the weak July jobs report and a better than expected services sector survey earlier this week. "Today is the second data point we got this week which suggests that the July report last Friday was the aberration," he said. But strategists and money managers suggest that investors should prepare for more volatility with other factors in play besides the typical weakness seen in August and September. "We've U.S. elections, heightened geopolitical tensions in the Middle East and poor seasonality as well as the incoming economic data and the Fed's reaction to it. We're in a period of heightened uncertainty and the market hates uncertainty," said Irene Tunkel, chief U.S. equity strategist at BCA Research. Earlier, Europe's STOXX 600 (.STOXX) , opens new tab index closed up 0.08%. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab rose 11.40 points, or 1.48%, to 782.10. Prior to Thursday's session, the global index had registered 16 daily losses or gains of 1% or more while the S&P 500 has registered 32 such moves so far this year. STRONGER DOLLAR In the currency market, the dollar index , which measures the greenback against a basket of currencies including the yen and the euro, gained 0.09% at 103.20, with the euro down 0.04% to $1.0917. Against the Japanese yen , the dollar strengthened 0.3% to 147.13. Earlier on Thursday, yields on U.S. Treasuries rose after the unemployment claims data fuelled hopes that the U.S. economy would not face an imminent recession. Then muted demand for a 30-year bond auction added to the rise in yields, coming a day after a weak sale of 10-year notes. The yield on benchmark U.S. 10-year notes rose 2.1 basis points to 3.988%, from 3.967% late on Wednesday. The 30-year bond yield rose 1.6 basis points to 4.2775% from 4.261%. The 2-year note yield, which typically moves in step with interest rate expectations, rose 2.9 basis points to 4.0297%, from 4.001% late on Wednesday. In energy markets, U.S. crude settled up 1.28%, or 96 cents at $76.19 a barrel and Brent finished at $79.16 per barrel, up 1.06% on the day. In precious metals, spot gold added 1.78% to $2,423.87 an ounce. U.S. gold futures gained 1.25% to $2,420.50 an ounce. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1pix-2024-08-08/