2024-01-12 09:25

Copyrighted Image by: Reuters. Investing.com - The U.S. dollar steadied in early European trade Friday, as investors digested mixed U.S. consumer inflation data and the potential impact on future Federal Reserve rate cuts. At 04:25 ET (09:25 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded flat at 102.022, down from Thursday's high of 102.76 but well ahead of the five-month low of 100.61 hit in December. Dollar slips after CPI release U.S. consumer prices edged 0.3% higher in December, data released Thursday showed, up an annual 3.4%, ahead of expectations for a 0.2% gain and 3.2% rise, respectively. However, the dollar received little support from this as ‘core’ CPI, which excludes volatile food and energy prices, fell again, suggesting underlying inflation remains in retreat. Fed officials have tried to play down the likelihood of early interest rate cuts, with Cleveland Fed President Loretta Mester saying on Thursday that the latest CPI figures means that it would likely be too soon for the central bank to cut its policy rate in March. However, the majority of traders still expect the Fed to begin cutting rates as soon as March. “A March rate cut is still over 60% priced in, and we still see short-term vulnerability for risk assets from a hawkish repricing,” said analysts at ING, in a note. Attention now turns to the release of U.S. producer prices later in the session, with PPI expected to rise 0.1% on the month in December, an annual rise of just 1.3%. Sterling gains on U.K. GDP growth In Europe, GBP/USD rose 0.1% to 1.2775 after data released earlier Friday showed that Britain's economy grew slightly more strongly than expected in November, with the country’s gross domestic product rising 0.3% on the month, beating forecasts for a 0.2% expansion. Industrial and manufacturing production both expanded in November, after sharp retreats the prior month, raising hope for the country’s economy, one of the weakest in Europe. EUR/USD edged 0.1% higher to 1.0975, with French and Spanish inflation data confirmed at 3.7% and 3.1%, respectively, on an annual basis. “EUR/USD was rejected at the 1.1000 key resistance level,” ING said, and “we now expect some more days of rangebound trading, with some modest downside risks.” Yuan benefits from Chinese data Elsewhere, USD/CNY fell 0.1% to 7.1622, after Chinese inflation and trade data signaled some signs of recovery in Asia’s largest economy in December. CPI inflation rose slightly month-on-month, while exports grew more than expected. USD/JPY traded 0.2% lower to 145.02, after recovering sharply against the dollar on Thursday. Markets still expect the Bank of Japan to reiterate its ultra-dovish stance later this month. https://www.investing.com/news/forex-news/dollar-slips-lower-after-mixed-cpi-data-sterling-helped-by-gdp-growth-3273183

2024-01-12 09:25

Copyrighted Image by: Reuters. NEW YORK - The financial industry is witnessing a significant milestone with the launch of Bitcoin spot Exchange-Traded Funds (ETFs), marking a notable shift in the regulatory landscape. The Securities and Exchange Commission's (SEC) recent approval has led to a flurry of activity in the market, with major financial institutions such as Invesco, Fidelity, and BlackRock (NYSE:BLK) quickly entering the competitive fray. BlackRock's Bitcoin spot ETF, known as IBIT, saw a remarkable trading volume at its debut, with $7.5 million shares traded. The industry's enthusiasm was further evidenced by the substantial inflow of capital from pension funds and insurance companies, which contributed to a striking $500 million on the first day of trading. Bitcoin itself reacted to the news, with its price momentarily spiking to $49,000, before settling at a slightly lower figure of $46,000. This movement reflects the market's anticipation of supply pressures following the ETFs' launch. https://www.investing.com/news/cryptocurrency-news/bitcoin-spot-etfs-launch-to-500-million-opening-day-inflow-93CH-3273184

2024-01-12 08:47

Copyrighted Image by: Reuters. NEW YORK - VanEck, an investment management firm, has announced the launch of its VanEck Bitcoin Trust (HODL), a spot Bitcoin exchange-traded fund (ETF), starting with an initial allocation of $72.5 million. This move comes amid comments from the SEC Chairman, Gary Gensler, highlighting the volatility and speculative nature of Bitcoin as it gains a greater presence in mainstream investment portfolios. The ETF is designed to track the price of Bitcoin directly, and its launch has been anticipated by investors seeking to leverage the potential of the cryptocurrency market within a regulated framework. Chairman Gensler's words serve as a caution to those investing in Bitcoin, reminding them of the inherent risks associated with its price fluctuations. As Bitcoin continues to weave its way into the fabric of the investment landscape, the SEC's attention to the asset underscores the importance of investor awareness and due diligence in the face of such speculative investments. https://www.investing.com/news/cryptocurrency-news/vaneck-debuts-spot-bitcoin-etf-with-725-million-allocation-93CH-3273167

2024-01-12 05:51

Copyrighted Image by: Reuters. Investing.com-- Gold prices rose on Friday as an escalation in the Middle East crisis ramped up safe haven demand, which also helped the yellow metal gain despite stronger-than-expected U.S. inflation data. U.S. and British forces launched a series of strikes against the Iran-aligned, Houthi group in Yemen, in response to the group’s attacks on ships in the Red Sea. The move also marked a widening in the Israel-Hamas war, which was seen as a key motivator of recent Houthi aggression. The move ramped up safe haven demand for gold, given that increased geopolitical risks usually drive investors towards more traditional havens. It also helped bullion prices firm despite a stronger U.S. inflation reading. Spot gold rose 0.3% to $2,034.78 an ounce, while gold futures expiring in February shot up nearly 1% to $2,038.80 an ounce by 00:14 ET (05:14 GMT). US inflation surprises to the upside, but rate-cut bets persist While gold prices saw some strength on Friday, they were still set to end the week marginally lower, amid uncertainty over the path of U.S. interest rates. Consumer price index data showed on Thursday that U.S. inflation grew slightly more than expected in December, which, coupled with recent resilience in the labor market, gives the Federal Reserve less impetus to begin cutting interest rates early. But traders appeared to have largely maintained their bets on early interest rate cuts by the Fed, at least according to the CME Fedwatch tool. The tool showed traders pricing in an over 70% chance for a 25 basis point cut in March, up from the 64% chance seen before the CPI data. ING analysts said the trend “simply looks wrong,” while several Fed officials also reiterated that bets on early rate cuts were overly optimistic. While the central bank is still expected to cut interest rates eventually this year, the timing of the move will be contingent on easing inflation and a cooling labor space. The dollar found little support after the CPI reading, which helped keep gold prices steady. The yellow metal is also expected to benefit from a lower rate environment, given that high rates increase the opportunity cost of investing in bullion. Copper prices steady, but China imports weaken Among industrial metals, copper prices saw some strength on Friday, but were nursing losses for the week amid concerns over top importer China. Copper futures expiring March rose 0.2% to $3.7988 a pound, and were down 0.2% this week- their third straight week in red. Chinese economic data offered somewhat mixed cues to markets. CPI inflation rose slightly while exports grew more than expected in December, presenting some green shoots in the world’s largest copper importer. But China’s copper imports declined in December, amid high inventory levels and increased local production of the metal. Concerns over a slowdown in copper demand, particularly as the Chinese economy weakens, were a key weight on copper prices in recent weeks. Focus now turns to fourth-quarter Chinese gross domestic product data, due next week. Upgrade your investing with our groundbreaking, AI-powered InvestingPro+ stock picks. Use coupon INVSPRO2024 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-rise-as-meastdriven-safe-haven-demand-offsets-cpi-shock-3273009

2024-01-12 04:36

Copyrighted Image by: Reuters Investing.com-- Most Asian currencies tread water on Friday, while the dollar saw little strength as traders looked to U.S. interest rate cuts this year despite a stronger inflation reading for December. Some positive data from China also helped sentiment towards the region, as Chinese exports grew more than expected, while consumer price index (CPI) inflation picked up slightly in December. The Chinese yuan rose 0.1%, while the Australian dollar- which has heavy trade exposure to China, added 0.3%. The Japanese yen firmed 0.3% after recovering sharply against the dollar on Thursday. Markets still expect the Bank of Japan to reiterate its ultra-dovish stance later this month. Other data also pointed to sustained weakness in the Japanese economy, with the country’s current account falling more than expected in November. Dollar steadies, takes little support from stronger CPI The U.S. dollar took little support from overnight data that showed U.S. CPI inflation grew slightly more than expected in December which, coupled with recent signs of resilience in the labor market, gives the Fed less impetus to begin trimming rates early. The dollar index and dollar index futures fell 0.1% each in Asian trade after ending Thursday’s session unchanged. But traders appeared to have increased their bets that the Fed will begin cutting rates by as soon as March, at least according to the CME Fedwatch tool. The tool showed traders pricing in a 70.2% chance for a 25 basis point cut in 2024, up from the 64.7% chance seen a day ago. Bets for an early rate cut persisted even as several Fed officials pushed back against such expectations, given that inflation remained sticky and well above the central bank’s 2% annual target. “We are halfway through January, and markets are still pricing in a 70% chance of a March Fed cut. That simply looks wrong,” analysts at ING wrote in a note. They noted that increased caution over the conflict in the Middle East and the upcoming Taiwan elections may be driving the seemingly abnormal moves in financial markets. Chinese economic data shows some green shoots Chinese inflation and trade data signaled some signs of recovery in Asia’s largest economy in December. CPI inflation rose slightly month-on-month, while exports grew more than expected. But the country still faces an uphill battle in reaching pre-COVID levels of economic activity, as an economic rebound largely failed to materialize in 2023, despite the lifting of anti-COVID measures. While the yuan rose on Friday, it was still nursing losses from 2023 and the first week of 2024. The currency had weakened in recent sessions despite a series of strong midpoint fixes by the people’s bank. Focus is now on fourth-quarter Chinese gross domestic product data, due next week, for clearer signals on the economy. Broader Asian currencies were muted. The South Korean won and Singapore dollar both weakened slightly, while the Indian rupee weakened back above the 83 level against the dollar. Indian CPI inflation data is also due later on Friday. The Taiwan dollar was flat before the 2024 presidential elections this Saturday, which are expected set the tone for relations with Beijing over the coming years. Upgrade your investing with our groundbreaking, AI-powered InvestingPro+ stock picks. Use coupon INVSPRO2024 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-dull-as-ratecut-bets-persist-despite-sticky-cpi-3272994

2024-01-12 01:21

Copyrighted Image by: Reuters. Investing.com -- Oil prices soared Friday following missile strikes by the United States and Britain on Houthi targets in Yemen, raising fears of an escalation of the conflict in the Middle East. By 09:10 ET (14.10 GMT), the U.S. crude futures traded 2.5% higher at $73.85 a barrel and the Brent contract climbed 2.4% to $79.25 a barrel. Both benchmarks were on course for a second straight weekly rise. Crude soars after strikes against Houthi The United States and Britain carried out the strikes in retaliation for attacks by the Iran-backed group on shipping in the Red Sea, with the move aimed at protecting the shipping routes through this key region. This followed Iran seizing a tanker with Iraqi crude destined for Turkey on Thursday, which added to market concerns about the Israel-Hamas war widening into a broader conflict in the Middle East affecting oil supplies from the region, especially those moving through the critical Strait of Hormuz. Several major shipping operators have decided to steer clear from the region, disrupting supplies on the key route between Europe and Asia. “More than 20m b/d of oil moves through the Strait of Hormuz, which is equivalent to around 20% of global consumption. So clearly, more significant disruptions to oil flows in this region will be much more alarming for markets,” said analysts at ING, in a note. U.S. producer prices fall These gains were helped by the release of data showing U.S. producer prices unexpectedly fell 0.1% on the month in December, suggesting lower inflation in the months ahead. This raised hopes that the Federal Reserve will start cutting interest rates in the first quarter of this year, adding to economic activity in the largest economy, and also the biggest energy consumer, in the world. This contrasted with Thursday’s data showing U.S. consumer prices increased more than expected in December. Data released earlier Friday showed that China's exports grew at a faster pace in December, up 2.3% from a year earlier, suggesting global trade is slowly turning a corner. Citi cuts Brent price forecasts However, despite the recent gains, worries about the overall health of the market still exist, especially after top exporter Saudi Arabia slashed the prices of oil sales to Asia and parts of Europe earlier in the week. Citi Research on Friday cut its 2024 Brent price forecast by $1 to $74 per barrel and slashed 2025 forecast by $10 to $60 per barrel, citing oversupply concerns. The bank added that recent activity in the Red Sea causing further tension in the Middle East could see near-term upside to the risk premium. https://www.investing.com/news/commodities-news/oil-prices-jump-nearly-2-after-us-airstrikes-against-houthis-3272952