2024-06-17 05:44

NEW YORK, June 17 (Reuters) - The dollar slipped against the euro on Monday, as the common currency recovered from the more than one-month lows hit last week amid political turmoil in Europe. The euro was up 0.25% to $1.07305 on Monday, after touching a six-week low of $1.066775 last week following news of a snap parliamentary election in France. European markets have been under pressure after President Emmanuel Macron called for the snap election after his ruling centrist party was trounced by Marine Le Pen's eurosceptic National Rally in the European Parliament elections. Investors have been contemplating the risk of a budget crisis at the heart of the euro area, as far-right and leftist parties gain momentum ahead of the French election, pressuring Macron's centrist administration. Le Pen sought to allay some of those fears over the weekend, saying she would not seek Macron's resignation and that she is "respectful of institutions," in an interview with Le Figaro. Even after the French financial markets endured a brutal sell-off late last week, European Central Bank policymakers have no plans to discuss emergency purchases of French bonds, five sources told Reuters. "As French markets have begun to stabilize a bit since last week, the euro has responded with a slight touch of recovery," Helen Given, FX trader at Monex USA in Washington, said. But Given said the trend remained in favor of the dollar. "If U.S. retail sales come in weaker than expected tomorrow, as most data for the U.S. has been in the last few sessions, we could see a more substantial turnaround, but the underlying dynamic for the pair is driven very heavily by geopolitics at the moment," she said. U.S. import prices fell for the first time in five months in May. The unexpectedly benign report from the Labor Department on Friday, combined with other recent data showing tame inflation readings, has helped keep a September interest rate cut by the Federal Reserve on the table. The dollar index , which tracks the U.S. currency against a basket of six others, was 0.2% lower at 105.35. The Fed published updated projections last week that showed the median forecast from all 19 U.S. central bankers was for a single interest rate cut this year. Philadelphia Fed President Patrick Harker said on Monday that if his economic forecast plays out, the Federal Reserve would be able to cut its benchmark interest rate once this year. The pound rose 0.15% to $1.2707 on Monday, though it remained close to the one-month low of $1.26575 touched in the previous session as traders await a policy meeting by the Bank of England this week. Britain's inflation pressures still appear too hot for the Bank of England to cut rates at its meeting on Thursday, with a majority of economists polled by Reuters forecasting the first cut would not come until Aug. 1. The yen remained pinned near a 34-year low against the dollar after the Bank of Japan on Friday pushed cuts to bond buying amounts. The dollar was last up 0.2% to 157.73 yen. Traders remain on watch for signs that Japanese authorities might intervene to prop up the yen. "All the fundamentals for the pair are in the favor of USD at the moment, and though some volatility does remain, the general trajectory has been more steady than we saw in March and April," Monex's Given said. "I'd expect to see rhetoric from currency officials heat up around the 160 mark, but as it stands now it would take a lot for BoJ officials to finance another intervention - at a point, it might no longer be worth it," she said. The Mexican peso slipped 0.4% on Monday on concerns about the fallout from judicial reforms proposed by President-elect Claudia Sheinbaum, while other currencies in Latin America weakened as U.S. Treasury yields rose on stronger-than-expected data. Sign up here. https://www.reuters.com/markets/currencies/dollar-firm-euro-wallows-near-recent-lows-market-braces-china-data-2024-06-17/

2024-06-17 04:44

LAUNCESTON, Australia, June 17 (Reuters) - The world's biggest crude importer has had a soft start to the year. China added more than 1 million barrels per day (bpd) of crude oil to stockpiles in May as soft imports were outweighed by even weaker refinery processing volumes. A total of 1.08 million bpd was added to China's commercial or strategic inventories in May, up from 830,000 bpd in April, according to calculations based on official data. Over the first five months of 2024, China boosted stockpiles by 790,000 bpd from the same period in 2023, and the pace of inventory builds is accelerating, rising from 700,000 bpd in the first four months of the year. The surge in crude flowing into storage, coupled with a decline in oil imports in the first five months of the year, undermines expectations that China's crude demand will grow strongly in 2024. China doesn't disclose the volumes of crude flowing into or out of strategic and commercial stockpiles, but an estimate can be made by deducting the amount of crude processed from the total of crude available from imports and domestic output. The total crude available to refiners in May was 15.33 million bpd, consisting of imports of 11.06 million bpd and domestic output of 4.27 million bpd. The volume of crude processed by refiners was 14.25 million bpd, leaving a surplus of 1.08 million bpd to be added to storage tanks. Refinery throughput dropped from 14.30 million bpd in April and from 14.60 million bpd in May last year. May was also the second consecutive month that refinery processing declined from the same month a year earlier. For the first five months of the year refineries processed 301.77 million metric tons, according to data released on Monday by the National Bureau of Statistics, up 0.3% from the same period in 2023. However, converting the refinery processing to barrels per day shows a rate of 14.49 million bpd in the January to May period, which is actually down from the 14.54 million bpd in the same period last year, which was one day shorter because of the leap year in 2024. BETTER SECOND HALF? Crude oil imports were 11.0 million bpd in the first five months of the year, down 130,000 bpd or 1.2% from the same period in 2023. Refinery processing has dropped by 50,000 bpd, and 790,000 bpd has been added to inventories. There are some temporary factors behind some of the weak outcomes, such as several major refineries undergoing scheduled maintenance in May, but it's hard to escape the conclusion that so far this year China's oil demand is falling well short of expectations. The Organization of the Petroleum Exporting Countries (OPEC) is still forecasting that China will drive global oil demand growth in 2024, accounting for 720,000 bpd of the world total increase of 2.2 million bpd. While OPEC's June monthly report does show the producer group is expecting a stronger second half in China, it also shows that the first half is running well behind expectations. OPEC forecast China's oil demand growth at 570,000 bpd in the second quarter, which would require a surge in June imports, given the soft outcomes in April and May. While OPEC remains bullish on China's demand, other forecasters are more circumspect, with the International Energy Agency expecting demand growth of around 500,000 bpd in 2024. Even this more modest forecast will require a strong second half, and will be reliant on China's economy not only gaining momentum, but doing so in areas that boost the consumption of refined products. This means construction will have to ramp up to boost diesel demand, air travel will have to continue to recover to lift jet fuel sales, and manufacturing will need to strengthen to increase demand for petrochemicals. A stronger Chinese economy remains likely in the second half, but the question is whether it will be strong enough to allow for the bullish expectations for oil demand to be correct. The opinions expressed here are those of the author, a columnist for Reuters. Sign up here. https://www.reuters.com/business/energy/china-continues-lift-crude-oil-stockpiling-amid-weak-refinery-runs-russell-2024-06-17/

2024-06-17 04:39

June 17 (Reuters) - The Biden administration is ready to release more oil from the U.S. strategic stockpile to stop any jump in petrol prices this summer, the Financial Times reported on Monday. Senior Biden adviser Amos Hochstein told the newspaper that oil prices are "still too high for many Americans” and he would like to see them “cut down a little bit further”. Hochstein, speaking to the FT said that the U.S. would "continue to purchase into next year, until we think that the Strategic Petroleum Reserve (SPR) has the volume that it needs again to serve its original purpose of energy security" The Energy Department this year has been buying about 3 million barrels of oil per month for the SPR after selling 180 million barrels in 2022 following Russia's invasion of Ukraine. The move was an effort to curb gasoline prices that spiked to more than $5.00 a gallon, but it also reduced the reserve to its lowest level in 40 years. Earlier this month, Energy Secretary Jennifer Granholm told Reuters that the U.S. could hasten the rate of replenishing the SPR as maintenance on the stockpile is completed by the end of the year. Sign up here. https://www.reuters.com/business/energy/us-ready-reopen-oil-stockpile-if-petrol-prices-surge-again-ft-reports-2024-06-17/

2024-06-17 04:35

CANBERRA, June 17 (Reuters) - Highly pathogenic avian influenza has spread to a seventh poultry farm near Melbourne, the government of Australia's Victoria state said on Monday. Six of the properties have an H7N3 flu strain and a seventh has an H7N9 strain, it said. Neither is the H5N1 type of avian flu that has infected billions of wild and farmed animals globally and raised fears of human transmission. "Restricted and control areas are in place surrounding all infected premises," Victoria's agriculture department said in a statement. The infected properties include six egg farms and a duck farm. Around 1 million chickens, roughly 5% of Australia's egg-laying flock, have been or will be killed at affected farms to contain the virus, the government said last week. There has not yet been any shortage of eggs, though some retailers have put in place limits on purchases. Before the latest cases, the first of which was reported last month, Australia had experienced nine outbreaks of highly pathogenic avian influenza since 1976, the government says. All were contained and eradicated. Authorities say duck and chicken eggs and meat remain safe to eat. Sign up here. https://www.reuters.com/business/healthcare-pharmaceuticals/bird-flu-spreads-seventh-australian-poultry-farm-2024-06-17/

2024-06-17 04:33

A look at the day ahead in European and global markets from Wayne Cole. A muted start to the week in Asia with Chinese data too mixed to provide much momentum as political uncertainty in Europe lurks in the background. At least Chinese retail sales topped forecasts with a rise of 3.7% on the year, likely boosted by the May holidays, but industrial output and fixed-asset investment both underwhelmed. Also worrying was data showing home prices fell at the fastest pace in a decade in May, highlighting the continued strains in the property sector. The People's Bank of China (PBOC) kept its one-year rate unchanged, dashing some speculation of a cut following surprisingly soft bank lending data. China's official Financial News on Monday reported there was still room to lower rates, but there were internal and external constraints on policy. EUROSTOXX 50 futures did bounce 0.5% after last week's drubbing, but the fallout of the snap French election kept the euro pinned at $1.0700 . It was notable that no less than five European Central Bank sources stressed to Reuters that the institution was not planning any emergency buying of French bonds, knowing the market will be pushing for exactly that. The howls for help will only get louder should the spread of French bond yields over bunds widen to 100 basis points, which seems inevitable. The pressure was also acute against the safe-haven Swiss franc, where the euro was just off a four-month low at 0.9528 francs . It has now shed 4% in just three weeks and has investors wagering the Swiss National Bank (SNB) will be forced to cut rates at its meeting on Thursday. Futures imply a 74% chance of a cut to 1.25%, up from 40% a week ago. At least there's the football to offer a distraction. Key developments that could influence markets on Monday: - ECB President Christine Lagarde visits company Pasqal in France. ECB Vice President Luis de Guindos speaks, along with ECB chief economist Lane - Fed June Empire State survey - NY Fed President John Williams speaks, as well as Fed's Harker and Cook Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-06-17/

2024-06-17 00:43

Global shares rise after back-to-back declines US yields climb after sharp weekly drop Multiple Fed speakers due this week NEW YORK, June 17 (Reuters) - A gauge of global stocks rose for the first time in three sessions on Monday, powered by a rally in U.S. equities, while U.S. Treasury yields climbed after a sharp drop in the prior week as investors awaited comments from Federal Reserve officials. On Wall Street, U.S. stocks slowly gained steam after a sluggish start to the session to send the Nasdaq Composite and S&P 500 to record highs, led by gains in technology <.SPLRCT> and consumer discretionary (.SPLRCD) New Tab, opens new tab shares. Economic data showed manufacturing activity in the New York region improved in June, but remained in contraction territory with a reading of negative 6. Investors will closely eye retail sales data for May on Tuesday for signs of consumer health. "There really isn't an appetite to be a real seller right now because there is a perception that momentum is going to continue, and stocks are going to continue winning," said Daniela Hathorn, senior market analyst at Capital.com. "The fact that the rally has been driven mostly by a select few stocks, that would mean that the pullback could be even deeper." The Dow Jones Industrial Average (.DJI) New Tab, opens new tab rose 188.94 points, or 0.49%, to 38,778.10, the S&P 500 (.SPX) New Tab, opens new tab gained 41.63 points, or 0.77%, to 5,473.23 and the Nasdaq Composite (.IXIC) New Tab, opens new tab gained 168.14 points, or 0.95%, to 17,857.02. Goldman Sachs raised its year-end S&P 500 price target to 5,600 from the prior 5,200, while Evercore ISI lifted its price target to 6,000 from 4,750. U.S. equities had pushed to record levels last week following several inflation readings that indicated price pressures may be ebbing, even as the Federal Reserve adjusted its economic projections to only include one rate cut for the year. In Europe, stocks edged higher, with banks and technology stocks rebounding from losses last week after markets were startled by political uncertainty in France. The STOXX 600 (.STOXX) New Tab, opens new tab index closed up 0.09%, while Europe's broad FTSEurofirst 300 index (.FTEU3) New Tab, opens new tab rose 2.52 points, or 0.12% MSCI's gauge of stocks across the globe (.MIWD00000PUS) New Tab, opens new tab rose 3.53 points, or 0.44%, to 800.79, bouncing from earlier lows and following two straight sessions of declines. FED OFFICIALS U.S. Treasury yields rose, with the 10-year note coming off its biggest weekly drop of the year in response to inflation data that boosted hopes the Fed would be able to cut rates by at least 25 basis points in September. Markets are currently pricing in a 61.5% chance for a 25 basis point cut in September, according to CME's FedWatch Tool New Tab, opens new tab, down from about 70% in the prior session. The yield on benchmark U.S. 10-year notes rose 6.8 basis points to 4.281%. "The Empire State helped a little bit, but it's more than that," said Stan Shipley, managing director and fixed income strategist at Evercore ISI in New York. "Yields came down a lot last week and so some people are taking profits here." Investors will hear from a host of Fed officials this week, including Governor Lisa Cook later on Monday. Philadelphia Fed President Patrick Harker said on Monday the central bank would be able to cut rates one time this year should his forecast play out. Central banks in Australia, Norway and Britain are all expected to leave their interest rates unchanged at meetings this week, though the Swiss National Bank could ease given the recent strength of the Swiss franc. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, fell 0.19% at 105.34, with the euro up 0.29% at $1.0731. Against the Japanese yen , the dollar strengthened 0.22% at 157.71, while sterling strengthened 0.14% at $1.27. U.S. crude settled up 2.4% to $80.33 a barrel and Brent rose to end at $84.25 per barrel, up 2% on the day, building on the prior week's gains as investors turned more optimistic on demand growth in the months ahead. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-06-17/