2024-05-15 05:53

U.S. CPI data due at 1230 GMT Platinum hits near one-year peak Fed's Powell expects inflation to ease May 15 (Reuters) - Gold prices edged up on Wednesday, taking support from a weaker US dollar and lower Treasury yields, while investors awaited US consumer inflation data that could offer clues on how soon the Federal Reserve can cut interest rates. Spot gold rose 0.2% to $2,363.23 per ounce, as of 1155 GMT. U.S. gold futures rose 0.4% to $2,369.00. The U.S. consumer price index data is due at 1230 GMT. Core inflation in April is seen rising 0.3% month-over-month, down from 0.4% the prior month, based on a Reuters poll. "The focus of the financial markets is firmly set on the US consumer price index after yesterday's producer price data, seemed to have taken some of the heat off the US dollar and treasury yields, and offered support to gold," said Ricardo Evangelista, senior analyst at ActivTrades. The dollar fell 0.2% against a basket of currencies to hit a nearly two week low, making gold less expensive for other currency holders. Benchmark 10-year Treasury yields hit a more than one month low. Gold prices rose nearly 1% on Tuesday even as data showed that U.S. producer prices increased more than expected in April. Fed Chair Jerome Powell said he expects U.S. inflation to continue declining through 2024 and noted it was unlikely the central bank would have to raise interest rates again. "If the CPI starts to come down a little bit, it will be positive for gold as it is in a fantastic position to capitalize on that dynamic considering its resilience to this point," said Kyle Rodda, a financial market analyst at Capital.com. Last week's lacklustre labour market data has increased expectations for rate reductions by September. Spot silver rose 0.7% to $28.78 per ounce, palladium gained 1.1% to $988.19 and platinum climbed 1.4% to $1,045.70, hitting a near one-year high. Sign up here. https://www.reuters.com/markets/commodities/gold-prices-flat-us-inflation-data-takes-centre-stage-2024-05-15/

2024-05-15 05:40

LONDON, May 15 (Reuters) - Two wars and high borrowing costs have trimmed expected growth in countries covered by the European Bank for Reconstruction and Development (EBRD), the bank said in a semi-annual report released on Wednesday. The EBRD, which covers economic trends across emerging Europe, central Asia, the Middle East and Africa, still expects economic growth of 3% across the 40 or so countries it covers, above 2.5% in 2023. But that forecast is 0.2 percentage points lower than in its September report. "This year is going to be better. But of course there is a lot of uncertainty," EBRD Chief Economist Beata Javorcik told Reuters. "The sad news is that our countries of operation are now affected by a fallout of not one, but two wars: the war in Ukraine and the war in Gaza." The downward revision is due in part to slower-than-expected growth in central Europe and the Baltic states, a knock-on effect from Germany's weak growth. Gaza spillovers and slowing reform progress in Egypt are also hindering economic expansion in the southern and eastern Mediterranean, the EBRD said, lowering projected growth there to 3.4% in 2024 and 3.9% in 2025. Egypt's Suez Canal revenue has fallen, while a drop in tourism to Lebanon and Jordan "may prove lasting", the bank said. Meanwhile, geopolitical shifts are impacting investment flows, with China's share of foreign direct investment into EBRD regions spiking to 39% in 2023 from less than 10% in 2022 - with Egypt, Morocco and Serbia benefiting. BRIGHT SPOTS, DISAPPEARING PEACE DIVIDEND Javorcik said Poland and Croatia stood out, with growth expected to accelerate in both to 2.9% in 2024 as inflation moderates and Croatia's tourism revenues jumps 40% from pre-COVID levels. But high borrowing costs are making growth tough; the median yield on 5-year government bonds in the EBRD region increased by three percentage points between early February 2022 and early April 2024. Fallout from the war in Ukraine is also straining budgets through rising defence spending. "We see the peace dividend essentially disappearing as countries are planning and spending more on defense," Javorcik said. Sign up here. https://www.reuters.com/business/finance/conflict-high-borrowing-costs-clip-growth-ebrd-regions-report-says-2024-05-15/

2024-05-15 05:28

Major U.S. stock indexes hit record closing highs Cryptocurrencies also rise Treasury yields fall to more than 5-week lows after CPI NEW YORK, May 15 (Reuters) - Global stock markets rose to record highs while U.S. Treasury yields and the U.S. dollar fell on Wednesday as data showed U.S. consumer prices rose less than expected in April, suggesting inflation has resumed a downward trend in the second quarter. The CPI report raised expectations that the Federal Reserve will cut interest rates two times this year. The Dow and S&P 500 registered record closing highs for the first time since March 28 and the Nasdaq posted a record closing high for the second session in a row, while the MSCI world stock index (.MIWD00000PUS) New Tab, opens new tab was also set for a second straight record high close. Europe's main share index (.STOXX) New Tab, opens new tab notched a record high as well. The U.S. Bureau of Labor Statistics said its consumer price index rose by 0.3% in April, below expectations for an increase of 0.4%, while on an annual basis, CPI was up 3.4%, in line with forecasts and below the previous month's 3.5% rate. Investors do not anticipate any rate hikes in 2024, but they have had to dial back expectations for rate cuts, given the persistence of inflation. CPI "was a good report," said Oliver Pursche, senior vice president and adviser at Wealthspire Advisors in Westport, Connecticut. "As we've been talking about, progress is being made on the inflation front, but it is uneven. So I don't think this changes the Fed's trajectory or plan, but it should give investors and consumers confidence that we're moving in the right direction," Pursche added. Fed funds futures traders are now pricing in 52 basis points of cuts this year, up from 45 basis points on Tuesday, with the first 25 basis-point cut likely in September. On Tuesday, data showed U.S. producer prices increased more than expected in April. Minneapolis Fed President Neel Kashkari on Wednesday reiterated his view that he is unsure how restrictive monetary policy is right now, and that borrowing costs should stay where they are as U.S. central bankers take stock of inflation. The Dow Jones Industrial Average (.DJI) New Tab, opens new tab rose 349.89 points, or 0.88%, to 39,908.00, the S&P 500 (.SPX) New Tab, opens new tab gained 61.47 points, or 1.17%, to 5,308.15 and the Nasdaq Composite (.IXIC) New Tab, opens new tab gained 231.21 points, or 1.40%, to 16,742.39. MSCI's gauge of stocks across the globe was up 7.89 points, or 1.00%, to 793.77 and hit an intraday record high. The STOXX 600 (.STOXX) New Tab, opens new tab index rose 0.59%. U.S. Treasury yields fell to more than five-week lows after the CPI report. Benchmark 10-year yields were last down 9 basis points at 4.356% and reached as low as 4.340%, the lowest level since April 5. The dollar fell against major currencies after the CPI report. The dollar index , which measures the greenback against a basket of major currencies including the yen and the euro, fell to a fresh one-month low at 104.30, and was last 0.66% lower at 104.35. One of the dollar's biggest declines was against the yen as it weakened 0.96% to 154.94. The drop would likely keep at bay currency intervention by the Bank of Japan and other authorities, said Marvin Loh, senior global macro strategist at State Street in Boston. In cryptocurrencies, bitcoin gained 7.17% to $66,045.00. Ethereum rose 4.51% to $3,021.3. U.S. crude gained 61 cents to settle at $78.63 a barrel and Brent rose 37 cents to settle at $82.75 per barrel. Spot gold climbed over 1% to $2,386.63 per ounce. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-05-15/

2024-05-15 04:45

MUMBAI, May 15 (Reuters) - The Indian rupee was mildly stronger on Wednesday, aided by gains in most Asian currencies ahead of a key U.S. inflation report which is expected to influence investor expectations of when the Federal Reserve will begin to cut policy rates. The rupee was at 83.49 against the U.S. dollar as of 10:05 a.m. IST, marginally higher than its previous close at 83.51. The dollar index was down 0.1% at 104.9, while most Asian currencies rose. The offshore Chinese yuan was up nearly 0.2%, while the Philippine peso was up 0.4%, leading gains. Mild dollar sales from foreign banks also aided the rupee in early trading, a foreign exchange trader at a state-run bank said. "Dips (on USD/INR) are mostly shallow and then too you see demand from importers. Don't expect it to move below 83.45," the trader added. The rupee has also been under pressure as foreign investors have remained net sellers of Indian equities over most trading sessions in May, having sold about $3 billion of equities so far. U.S. producer prices rose more than expected in April, data showed on Tuesday, but underlying components of producer prices that feed into the consumer price index (CPI) came in lower, raising expectations of a soft U.S. CPI print on Wednesday. Economists polled by Reuters expect the closely watched core CPI to rise by 0.3% in the month, down from 0.4% in March. Investors are currently pricing in a nearly 65% chance of a Fed rate cut in September, according to the CME's FedWatch tool. U.S. CPI data is unlikely to shift the rupee out of its prevailing range, but a soft print may trigger mild appreciation in the currency, Dilip Parmar, a foreign exchange research analyst at HDFC Securities said. Sign up here. https://www.reuters.com/markets/currencies/rupee-inches-up-foreign-banks-dollar-sales-uptick-asia-fx-2024-05-15/

2024-05-15 04:34

A look at the day ahead in European and global markets from Ankur Banerjee European bourses are poised to keep the rally going ahead of the always important U.S. CPI data after comments from Fed Chair Jerome Powell reassured investors that the next move from the U.S. central bank was unlikely to be a hike. Powell called Tuesday's higher-than-expected producer price report 'mixed' rather than 'hot' because prior data was revised lower. Though Powell's comments largely restated those made at his press conference after the Fed's last meeting, it was enough for stocks to surge, with Asian shares (.MIAPJ0000PUS) New Tab, opens new tab at their highest in 15 months and Nasdaq (.IXIC) New Tab, opens new tab closing at a record high. The pan-European STOXX 600 (.STOXX) New Tab, opens new tab also closed at a record high on Tuesday and futures indicated the index was set for a higher open. Traders are now pinning their hopes on the Fed starting its easing cycle in September although it will depend on the inflation report, which is expected to show CPI rose 0.3% month-on-month in April, down from a 0.4% growth the previous month, according to a Reuters poll. Meanwhile, earnings season continues with luxury company Burberry (BRBY.L) New Tab, opens new tab and Dutch bank ABN Amro (ABNd.AS) New Tab, opens new tab leading the lineup for the day. Meme stocks are soaring like it's 2021, with retail investor darlings GameStop (GME.N) New Tab, opens new tab and AMC (AMC.N) New Tab, opens new tab surging this week, tripling GameStop's market capitalisation to about $18 billion. Robinhood (HOOD.O) New Tab, opens new tab hit $5 billion in equities trading on Tuesday, its CEO Vlad Tenev tweeted, underscoring the demand and perhaps the return of the meme stocks mania. All it took were some social media posts, which did not mention any company names, from "Roaring Kitty" Keith Gill, credited with sparking the so-called Reddit rally in January 2021 with bullish calls on GameStop. Key developments that could influence markets on Wednesday: Economic events: France April CPI data; Euro zone Q1 flash GDP Earnings: ABN Amro Bank, Allianz, Burberry and Merck KGaA Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-05-15/

2024-05-15 02:51

MUMBAI, May 15 (Reuters) - The Indian rupee will likely be comforted on Wednesday by a decline in U.S. Treasury yields ahead of the key U.S. inflation data that will provide cues on the Federal Reserve's interest rate path this year. Non-deliverable forwards indicate rupee will open marginally higher to the U.S. dollar, from 83.51 in the previous session. The rupee has been holding a narrow range in recent days, circling the 83.50 handle. A handful of traders reckon that the Reserve Bank of India has been lining up dollar offers on the interbank order matching system to prevent the rupee from slipping to an all-time low of 83.5750. "I can understand that because of the RBI that upside (on USD/INR) beyond 83.50 is difficult. However, how is that the dips too are practically non-existent," a forex trader at a bank said. "It will be one more day of nothing," The 10-year U.S. Treasury yield was down to 4.44% and the dollar index slipped below 105 before the U.S. consumer inflation data. Economists polled by Reuters expect the core consumer price index to rise 0.3% month-on-month in April. U.S. equities advanced on Tuesday and futures on the S&P 500 Index were up in Asia. Ahead of the consumer inflation print, data showed U.S. producer prices increased more than expected in April. However, the March print was revised to show a 0.1% decline against a 0.2% increase. Fed Chair Jerome Powell said the April producer prices report was more "mixed" than "hot," considering that prior data was revised lower while the April's data came in higher than expected. U.S. consumer inflation figures will tell us whether the country has taken further steps in the disinflation process, or if prices remain too sticky for the Fed to cut, ING Bank said. "The latter seems more likely." KEY INDICATORS: ** One-month non-deliverable rupee forward at 83.56; onshore one-month forward premium at 8 paisa ** Dollar index down at 104.96 ** Brent crude futures up 0.6% at $82.9 per barrel ** Ten-year U.S. note yield at 4.44% ** As per NSDL data, foreign investors sold a net $525.9 mln worth of Indian shares on May 13 ** NSDL data shows foreign investors sold a net $113.1 mln worth of Indian bonds on May 13 Sign up here. https://www.reuters.com/markets/currencies/rupee-may-see-relief-dip-us-yields-ahead-inflation-print-2024-05-15/