2024-01-29 14:28

Copyrighted Image by: Reuters. Investing.com -- Oil prices fell Monday, retreating after early gains as ongoing worries about China's economy stoked fresh demand concerns offsetting a step-up in global geopolitical tensions. By 14:30 ET (19:30 GMT), the U.S. crude futures traded 1.6% lower at $76.78 a barrel and the Brent contract dropped 1.4% to $82.40 a barrel. China economic troubles return as Evergrande ordered to liquidate A Hong Kong court on Monday ordered the liquidation of property giant China Evergrande Group (HK:3333), the world’s most indebted property developer, dealing another blow to investor confidence as China’s ailing real estate sector continues to weigh on its economy. The health of the second largest economy in the world, and major energy market, has been a major concern in the wake of the COVID epidemic which hit China hard. The official GDP figures showed that the Chinese economy grew 5.2% last year. However, strip out deflation, and nominal growth was just 4.2%, which excluding the pandemic-hit growth of 2.7% in 2020, is the lowest annual number since 1976. The China-led demand concerns continued to dominate investor attention, overshadowing fresh geopolitical tensions that threatens to impact crude supplies. Elevated Middle East tensions Tensions remain fraught in the region, especially after a drone attack on U.S. forces in Jordan over the weekend. This attack was by Iran-backed militants, according to the U.S. President Joe Biden, and resulted in the death of three U.S. service members, the first deadly strike against U.S. forces since the Israel-Hamas war erupted. Iran has denied involvement in the attack, but it does raise concerns of a more direct confrontation between the two countries, potentially resulting in regional energy supply disruptions in the oil-rich Middle East. “The conflict in the Red Sea is likely to add shipping costs, transit time and risk premium for some of the crude oil shipments and is likely to support crude oil prices,” said analysts at ING, in a note. Dollar inches higher ahead of Fed meeting The strength in the dollar also weighed on oil prices as investors looked ahead to the Federal Reserve's two-day meeting due Tuesday. A stronger dollar makes oil, priced in the U.S. dollars, more expensive and lessens demands for holders in other currencies. The Fed is widely expected to keep interest rates unchanged on Wednesday, but officials could provide indications that the battle against inflation has progressed sufficiently to begin cutting rates sooner rather than later. There is also a lot of U.S. labor market data to study during the week, culminating with the January jobs report on Friday, with the economy expected to have added 177,000 new jobs, slowing from 216,000 the prior month. Upgrade your decision-making with InvestingPro+! Using discount code “INVEST2024” receive an additional 10% off the InvestingPro+ yearly subscription. Click here and don't forget the discount code. https://www.investing.com/news/commodities-news/crude-oil-slips-lower-on-china-concerns-middle-east-tensions-support-3286049

2024-01-29 09:46

Copyrighted Image by: Reuters Investing.com - The U.S. dollar edged higher in early European trade Monday, retaining support at the start of a week packed with risk events, including a Federal Reserve policy meeting and key employment data. At 04:45 ET (09:45 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 103.362, remaining close to the six-week high of 103.82 it touched last week. Dollar edges higher ahead of Fed meeting The dollar has seen small gains Monday, as the escalating geopolitical tensions in the Middle East after three U.S. service members were killed in an aerial drone attack on U.S. forces in Jordan over the weekend hit risk appetite. Attention this week will squarely be on the Federal Reserve's two-day policy meeting, which concludes on Wednesday. The U.S. central bank is widely expected to keep interest rates unchanged, with investors eagerly awaiting Fed Chair Jerome Powell’s post policy meeting press conference for any indication that officials believe they have progressed enough in their battle against inflation to begin cutting rates sooner rather than later. Markets are currently pricing in a 48% chance of a rate cut in March, the CME FedWatch tool showed, compared with an 86% chance at the end of December. Traders will also watch for a slew of economic data this week, including the widely-watched monthly payrolls report on Friday. The economic calendar also includes data on JOLTS job openings and consumer confidence on Tuesday, followed a day later by a report on private sector payrolls and weekly data on initial jobless claims on Thursday. Euro set for monthly loss In Europe, EUR/USD traded 0.2% lower at 1.0828, with the euro on course for monthly losses of around 2% after the European Central Bank last week held interest rates at a record-high 4% last week. While the ECB reaffirmed its commitment to fighting inflation, regional economic weakness has resulted in traders estimating that the central bank will start cutting interest rates before the summer. “Economists expect that the ECB will want to see the Eurostat wage data release at the end of April, before considering a first move in June,” said analysts at ING, in a note. “However, the market prefers to listen to the ECB doves, the data showing that activity is soggy and that inflation continues to fall further. The latter will receive more support this week in the form of fourth quarter of 2023 eurozone GDP data confirming a technical recession.2 GBP/USD traded 0.1% higher at 1.2708 ahead of the Bank of England's policy meeting later this week. The BoE is expected to keep interest rates on hold on Thursday and while it may drop its long-held warning that it will hike rates again if inflation rebounds it is expected to indicate that rates need to remain restrictive for an extended period. Yuan hands back some gains In Asia, USD/JPY fell 0.3% to 147.78, with the yen gaining slightly but remains on course for an almost 5% decline in January, its weakest monthly performance since June 2022. The Bank of Japan maintained its ultra-loose policy at its meeting last week. USD/CNY traded 0.1% higher to 7.1811, with the yuan retreating slightly ahead of the release of official purchasing managers' index data on Wednesday that is likely to show that the world’s second largest economy remains on a shaky footing. https://www.investing.com/news/forex-news/dollar-edges-higher-ahead-of-fed-meeting-payrolls-3285556

2024-01-26 08:48

Copyrighted Image by: Reuters Investing.com - The U.S. dollar steadied in early European trade Friday after gains on the back of strong U.S. growth data, while the euro retreated in the wake of the latest European Central Bank meeting. At 03:50 ET (08:50 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded flat at 103.372, on course for a small weekly gain after climbing about 0.2% overnight. Fed’s favorite inflation guide due The dollar has generally retained the positive tone generated by Thursday’s advance U.S. GDP estimate, indicating the U.S. economy grew at a 3.3% annualized rate in the last quarter of 2023, overshooting the consensus forecast of 2% growth. The data pointed towards a soft landing for the U.S. economy this year after a period of severe monetary tightening. It also showed inflation pressures subsiding further, putting early Fed rate cuts back on the agenda, but the dollar managed to hold up as yields fell. Later in the session comes the release of PCE price index data, the Fed’s preferred inflation gauge, which could offer more cues on the bank’s plans to cut rates. The data comes just a few days before the Fed’s first meeting in 2024, where the central bank is widely expected to keep rates on hold. Euro on backfoot after ECB meeting In Europe, EUR/USD traded 0.2% lower at 1.0827, with the euro on the backfoot following Thursday’s European Central Bank monetary policy meeting. The ECB kept interest rates unchanged at a record-high 4%, but the central bank recognised that inflation had fallen faster than it expected last autumn, suggesting that the time to start discussing a first rate cut is fast approaching. The euro “lurched lower after President Christine Lagarde said she stood by the comments that she made last week that the ECB could cut this summer,” said analysts at ING, in a note. “The downside for EUR/USD looks open to the 1.0790/1.0800 area now and 1.0875/1.0900 looks like stronger resistance. And risks next week warn that EUR/USD could be a 1.0715/25 story.” Data released earlier Friday showed that the GfK German consumer sentiment index fell to -29.7 points heading into February from a revised -25.4 the previous month, suggesting a sustained recovery for Europe's biggest economy remains some way away. GBP/USD traded 0.1% lower at 1.2693, with the Bank of England set to announce its latest decision on interest rates next week. Yuan hands back some gains In Asia, USD/JPY rose 0.1% to 147.82, with the yen slightly lower as data showed consumer price index inflation in Tokyo fell more than expected in January, heralding a similar trend in countrywide inflation. USD/CNY traded 0.2% higher to 7.1809, with the yuan retreating slightly after earlier gains this week in the wake of the PBOC reducing banking reserve requirements, which inspired some optimism about a Chinese economic recovery. Upgrade your investing with our groundbreaking, AI-powered InvestingPro+ stock picks. Use coupon INVESTPROPLUS24 to get a limited time discount on our Pro+ subscription plans. Click here to find out more, and don't forget to use the discount code when checking out! https://www.investing.com/news/forex-news/dollar-steadies-ahead-of-key-inflation-data-euro-slips-post-ecb-3283764

2024-01-26 05:16

Copyrighted Image by: Reuters. Investing.com-- Gold prices kept to a tight range on Friday and were headed for a second straight week in red as anticipation of more cues on U.S. interest rates kept traders skittish, with key inflation data and a Federal Reserve meeting now in focus. On the other hand, copper prices were headed for a strong weekly performance after top importer China rolled out more stimulus measures, driving up hopes that demand for the red metal will remain strong. China’s stimulus measures saw some improvement in risk appetite which, coupled with a series of record highs on Wall Street, further dented demand for gold. Strength in the dollar- following stronger-than-expected gross domestic product data- also weighed on bullion prices, keeping them firmly within a $2,000- $2,050 trading range established over the past week. Spot gold steadied at $2,021.41 an ounce, while gold futures expiring in February rose 0.2% to $2,021.10 an ounce by 23:46 ET (04:46 GMT). Both instruments were down about 0.3% this week. Still, bigger losses in the yellow metal were held back by some safe haven demand, as the Israel-Hamas war and a growing conflict in the Middle East worsened. PCE inflation, Fed meeting in focus Markets were now awaiting fresh cues on U.S. monetary policy, starting with PCE price index data- the Fed’s preferred inflation gauge- due later on Friday. The reading is expected to reiterate that inflation remained stubborn in December. Sticky inflation, coupled with increasing signs of resilience in the U.S. economy, give the Fed more headroom to keep rates higher for longer. This notion is expected to limit any major upside in gold over the coming months. The Fed is set to meet next week, and is widely expected to keep rates on hold. Markets were also seen pricing in a hold by the central bank during its March meeting, flipping earlier expectations for a 25 basis-point cut. A higher-for-longer outlook for U.S. rates bodes poorly for gold prices, given high rates push up the opportunity cost of investing in the yellow metal. Copper prices ease but set for strong week on China optimism Copper futures expiring in March fell 0.2% to $3.8617 a pound, but were set to add over 2% this week after racing to three-week highs. Gains in copper were fueled chiefly by more monetary stimulus in top importer China, which helped quell concerns over a looming slowdown in demand. But analysts still questioned just how much economic support more monetary stimulus will provide, given that China was grappling with a severe slowdown in consumer and business spending. A post-COVID economic rebound also failed to materialize in 2023, and kept sentiment towards China largely negative. Focus now turns to upcoming purchasing managers index data from the country, due next week, for more cues on the economy. Upgrade your investing with our groundbreaking, AI-powered InvestingPro+ stock picks. Use coupon INVPRO2024 to avail a limited time discount on our Pro and Pro+ subscription plans. Click here to know more, and don't forget to use the discount code when checking out! https://www.investing.com/news/commodities-news/gold-prices-struggle-before-inflation-fed-cues-copper-set-for-strong-week-3283653

2024-01-26 04:13

Copyrighted Image by: Reuters. Investing.com-- Most Asian currencies kept to a tight range on Friday, while the dollar steadied after an overnight bounce following strong economic growth data, with a key inflation reading and a Federal Reserve meeting now in focus. Regional currencies were nursing a muted performance for the week, amid renewed pressure from the dollar as markets began steadily pricing out expectations of early interest rate cuts by the Fed. Signs of resilience in the U.S. economy further boosted the greenback on Thursday, as fourth-quarter gross domestic product data grew more than expected. The dollar index and dollar index futures both fell 0.1% in Asian trade. Markets were now awaiting PCE price index data- the Fed’s preferred inflation gauge- due later in the day, for more cues on the bank’s plans to cut rates. The data comes just a few days before the Fed’s first meeting in 2024, where the central bank is widely expected to keep rates on hold. But any signals on planned rate cuts this year will be in close focus. Asian currencies were nursing a weak start to 2024 on growing doubts over early rate cuts by the Fed. But they saw some support this week as China rolled out more stimulus measures, ramping up hopes for a recovery in the region’s largest economy. Chinese yuan supported by PBOC, PMIs in focus The Chinese yuan fell 0.1% on Friday, but was set for mild weekly gains amid consistent support from the People’s Bank of China. While more monetary stimulus bodes well for the economy, it also presents more headwinds for the yuan, especially as the PBOC flushes the Chinese economy with more currency. To counter this, the PBOC was seen rolling out a string of stronger midpoints this week, while also potentially buying yuan off the open market to support the currency. While the bank’s reserve requirement ratio cut inspired some optimism over China, analysts still questioned just how much support more liquidity will provide, given that consumer and business spending in the country remains weak. Focus is now on key purchasing managers index data due next week for more cues on the Chinese economy. Broader Asian currencies kept to a tight range. The Japanese yen was flat as data showed consumer price index inflation in Tokyo fell more than expected in January, heralding a similar trend in countrywide inflation. The data comes just a few days after the Bank of Japan signaled more progress towards inflation meeting its 2% annual target, which will allow the bank to begin tightening its ultra-loose policy later this year. This notion spurred some strength in the yen. The South Korean won rose 0.1% on Friday, while the Singapore dollar was flat. Regional trading volumes were also held back by holidays in Australia and India. But the Australian dollar firmed slightly in offshore trade. Upgrade your investing with our groundbreaking, AI-powered InvestingPro+ stock picks. Use coupon INVPRO2024 to avail a limited time discount on our Pro and Pro+ subscription plans. Click here to know more, and don't forget to use the discount code when checking out! https://www.investing.com/news/forex-news/asia-fx-muted-dollar-steadies-ahead-of-inflation-fed-test-3283646

2024-01-26 01:19

Copyrighted Image by: Reuters. Investing.com -- Oil prices settled higher Friday to end the week at nearly two-month highs as healthy U.S. economic growth and signs of Chinese stimulus supported the crude demand outlook, prompting bullish bets on crude. By 14:30 ET (19:30 GMT), the U.S. crude futures settled 0.8% higher at $78.01 a barrel and the Brent contract dropped 1.4% to $83.62 a barrel. Demand growth hope from U.S. and China The crude benchmarks are both still on track for their biggest weekly uptick since October, after data on Thursday showed the U.S. economy expanded more quickly than expected in the fourth quarter, suggesting economic resilience in the world’s largest crude consumer. Additionally, data released Friday showed that underlying U.S. price growth rose by 0.2% as expected in December, a rate that many economists believe could help cool inflation back down to the Federal Reserve's target, opening up the potential for early rate cuts. The reading comes just days before the Fed’s first meeting of 2024, where the central bank is widely expected to keep rates at 23-year highs. Elsewhere, China, the world's second-largest oil consumer, announced a deep cut to bank reserve requirements in a bid to spur growth earlier in the week. These positive signals from the world’s two largest economies helped spur some hopes that crude demand will strengthen substantially this year, backing up the views of the major oil industry bodies, OPEC and the IEA, which both forecast improving demand in the coming years. Middle East turmoil persists Persistent concerns over supply disruptions in the Middle East have also aided oil prices this week. The Israel-Hamas war showed little signs of de escalation, while U.S.-led forces also continued to clash with the Iran-aligned Houthi group, which in turn kept up with its strikes on ships in the Red Sea. The World Court on Friday ordered Israel to take all measures within its power to prevent acts of genocide in Gaza, saying it must take measures to improve the humanitarian situation. Adding to the supply issues, official data from the Energy Information Administration released earlier in the week showed that U.S. crude output fell from a record 13.3 million barrels per day two weeks ago to a five-month low of 12.3 barrels per day last week, with production capabilities hit by severe winter weather in parts of the world’s largest producer. Baker Hughes rig count rise Oilfield services firm Baker Hughes Co (NYSE:BKR) reported its weekly U.S. rig count rose to 499 from 497. It was the third straight week that rig counts remained below 500 and followed disruption to production in recent weeks following a cold snap that halted activity. U.S. production fell by an estimates 1 million barrels per day to 12.3 million for the week ended Jan. 19, the energy Information Agency reported earlier this week. Upgrade your investing with our groundbreaking, AI-powered InvestingPro+ stock picks. Use coupon INVESTPROPLUS24 to get a limited time discount on our Pro+ subscription plans. Click here to find out more, and don't forget to use the discount code when checking out! https://www.investing.com/news/commodities-news/oil-prices-steady-near-2mth-high-set-for-strong-week-on-demand-optimism-3283628