Sept 15 (Reuters) – Oil prices edged upwards in early Asian trade on Thursday, as supply concerns and a looming rail stoppage in the United States, the world’s biggest crude consumer, supported markets.

Brent crude futures rose 38 cents, or 0.4%, to $94.48 a barrel by 0013 GMT, while U.S. West Texas Intermediate crude rose 46 cents, or 0.5%, to $88.94. The dollar index slipped 0.14% on Wednesday, dialing back the previous session’s gains, lifting demand for dollar-denominated commodities such as crude oil from holders of other currencies.

The International Energy Agency (IEA) said Wednesday it expects widespread switching from gas to oil for heating purposes, saying it will average 700,000 barrels per day (bpd) in October 2022 to March 2023 – double the level of a year ago. That, along with overall expectations for weak supply growth, also helped boost the market.

The increasing likelihood of a U.S. rail stoppage due to an ongoing labor dispute is also adding support to the market. Three unions are negotiating for a new contract that could affect rail shipments, which are important for crude and product deliveries.

TotalEnergies SE (TTEF.PA) cut production at its 238,000 barrel-per-day (bpd) Port Arthur, Texas, refinery because of the planned shutdown of two sulfur recovery units (SRUs) on Wednesday, said sources familiar with plant operations.

Reporting by Laura Sanicola; Editing by Michael Perry

NEW YORK, Sept 13 (Reuters) – The dollar index rallied on Tuesday and the S&P 500 tumbled 4% while Treasury yields surged after data showed U.S. consumer prices rising faster than expected in August, prompting bets for more aggressive Federal Reserve rate hikes.

Oil futures also lost ground after the Labor Department data on Tuesday showed that declining gasoline prices in August were offset by gains in rent and food costs. The Consumer Price Index gained 0.1% last month versus expectations for a 0.1% decline and after being unchanged in July. Wall Street’s equity indexes saw their deepest one-day percentage declines since June 2020.

This was a sharp reversal after the major stock indexes had rallied on Monday and in the previous week as investors had bet Tuesday’s data would show an easing in inflation and provide a path for the Fed to ease its policy tightening. But by Tuesday’s close, the prospects of more aggressive tightening were instead fueling investor fears about the economy.

“As the day went on it seems that there’s growing concern about the upcoming Fed meeting, concern that the Fed may make a more hawkish move than earlier anticipated,” said Greg Bassuk, chief executive of AXS Investments in New York.

“What grows from that is the greater likelihood the economy could be tipped into a recession.” The Dow Jones Industrial Average (.DJI) fell 1,276.37 points, or 3.94%, to 31,104.97; while the S&P 500 (.SPX) declined 177.72 points, or 4.32%, to 3,932.69; and the Nasdaq Composite (.IXIC) tumbled 632.84 points, or 5.16%, to 11,633.57.

“Moderating inflation is key to higher equity prices and at the moment inflation is running hot. That implies volatility will remain more the norm than the exception into year-end.” said Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis. “It clearly suggests the Fed next week will deliver more of the same and remain unwavering in their pursuit to tame inflation.”

MSCI’s gauge of stocks across the globe (.MIWD00000PUS) shed 3.39% in its biggest daily decline since June 13 after the index had risen in the previous four sessions. “This was another disappointment. It’s the old Charlie Brown analogy. Every time we’re ready to kick the ball, it’s moved away from us.” said Mona Mahajan, senior investment strategist at Edward Jones.

In currencies the dollar index rose 1.534% in its biggest one-day percentage gain since March 19, 2020, with the euro down 1.46% to $0.9971 on Tuesday.

The Japanese yen weakened 1.17% versus the safe-haven greenback at 144.52 per dollar, while Sterling was last trading at $1.1499, down 1.54% on the day. FRX Meanwhile, U.S. Treasury yields surged and a recession warning – the yield curve inversion – widened after the inflation data also bucked bond investor expectations.

Benchmark 10-year notes last fell 14/32 in price to yield 3.4157%, from 3.362% late on Monday. The 2-year note last fell 10/32 in price to yield 3.7434%, up from 3.571% in the previous session. The gap between yields on two- and 10-year notes , seen as a recession harbinger, was just under -33 basis points.

“It really comes down to how sticky inflation remains,” said Mauricio Agudelo, senior fixed income portfolio manager at Homestead Funds Advisers. “It’s a battle that the Fed will continue to fight and they will have to continue pressing, unfortunately at the risk of breaking something.”

Oil prices swung lower after the inflation data and renewed COVID-19 curbs in China, the world’s second-largest oil consumer, also weighed on crude prices. Oil is generally priced in U.S. dollars, so a stronger greenback makes it pricier to holders of other currencies. U.S. crude settled down 0.54% at $87.31 per barrel and Brent settled at $93.17, down 0.88% on the day.

The climbing dollar also put pressure on gold prices. Spot gold dropped 1.3% to $1,702.39 an ounce while U.S. gold futures fell 1.45% to $1,705.00 an ounce.

Additional reporting by Herbert Lash and Caroline Valetkevitch in New York, Marc Jones in London, Yoruk Bahceli in Amsterdam; Editing by Louise Heavens, Nick Zieminski and Jonathan Oatis

New York, Sept 12 (Reuters) – Wall Street equity indexes closed higher on Monday as some investors bet that August data would show easing U.S. inflation while others were encouraged by news that Ukraine had made progress against Russia in a war that has hurt the global economy.

After falling to its lowest level in more than two weeks the dollar pared some losses against a basket of currencies a day ahead of the closely watched U.S. consumer price index data with some investors hoping slowing price increases will slow the Federal Reserve’s aggressive interest rate hikes.

U.S. Treasury yields, after falling earlier, were higher in afternoon trading as bond investors were also eagerly awaiting consumer price data. Consumer price data due on Tuesday is expected to show headline inflation rose 8.1% year-over-year in August versus 8.5% in July. Core CPI, which exclude food and energy prices, is expected to show a rise of 6.1% versus 5.9% in July.

If inflation decreases the market is hoping this “translates into smaller rate hikes” after the September Federal Open Market Committee (FOMC) meeting, said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “Because of that you’re seeing a risk-on type of mentality today,” Pavlik said. “The market has now fully priced in a 75 basis point hike for September” but it is hoping the next one is 50 basis points, he added.

The Dow Jones Industrial Average (.DJI) rose 229.63 points, or 0.71%, to 32,381.34, the S&P 500 (.SPX) gained 43.05 points, or 1.06%, to 4,110.41 and the Nasdaq Composite (.IXIC) added 154.10 points, or 1.27%, to 12,266.41. The pan-European STOXX 600 index (.STOXX) had closed up 1.76% while MSCI’s gauge of stocks across the globe (.MIWD00000PUS) was up 1.26%.

European stocks had risen after Moscow on Saturday abandoned its main bastion in northeastern Ukraine, in a sudden collapse of one of its principal frontlines.

“Markets rallied overnight in a follow-through from Friday. You have stories about Ukraine making progress. Ultimately a move beyond the war is a positive for everybody. Obviously, it still remains to be seen but it’s helping fuel the optimism,” said Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.

In currencies, the euro also reacted positively to Ukraine’s advances, extending gains that started last week after a European Central Bank (ECB) rate hike announcement. The dollar index fell 0.368%, with the euro up 0.75% to $1.0114.

The Japanese yen weakened 0.21% versus the greenback at 142.85 per dollar, while Sterling was last trading at $1.1677, up 0.78% on the day. Sterling briefly fell to its lowest level since early 2021 against a robust euro on Monday, while news that Britain’s economy grew less than expected in July highlighted a weak growth outlook. read more

Most Latin American currencies rallied on Monday, with Brazil’s real hitting two-week highs, as a broad retreat in the dollar boosted risk appetite globally.

Benchmark 10-year notes last fell 10/32 in price to yield 3.3577%, from 3.321% late on Friday. The 30-year bond last fell 30/32 in price to yield 3.5094%, from 3.456%. Oil prices settled higher on Monday, shaking off expectations for weaker demand as concerns about supply mounted heading into the winter.

U.S. crude settled up $0.99 at $87.78 per barrel and Brent finished at $94.00, up 1.25% or $1.16 on the day. Spot gold added 0.6% to $1,725.73 an ounce. U.S. gold futures gained 0.67% to $1,728.10 an ounce.

Additional reporting by Herbert Lash in New York, Samuel Indyk in London, Wayne Cole in Sydney; Editing by Bernadette Baum, David Evans and Andrea Ricci

SYDNEY, Sept 12 (Reuters) – Asian share markets made cautious gains on Monday on hopes a key reading on U.S. inflation will show some cooling, while the U.S. dollar was restrained by the risk of higher European interest rates and Japanese intervention.

Holidays in China and South Korea made for slow trading, while traders were unsure about what implications Ukraine’s surprising success against Russian forces might have. MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 0.2%, having bounced modestly from a two-year low hit last week. Japan’s Nikkei (.N225) added another 0.9%, after rallying 2% last week.

Wall Street looked to extend Friday’s bounce and S&P 500 futures edged up 0.1%, while Nasdaq futures gained 0.2%. Bulls are hoping Tuesday’s reading on U.S. consumer prices will hint at a peak for inflation as falling petrol prices are seen pulling down the headline index by 0.1%. The core is forecast to rise 0.3%, though some analysts see a chance of a softer report.

“Arguably, with the economy having contracted through the first half, and household discretionary spending capacity under significant pressure, we are due a modest downside surprise,” said economists at Westpac. “As such, we forecast +0.2% for core and -0.2% for headline,” they added. “If achieved though, it should not be assumed that October and beyond will see repeats, with volatility likely to persist.”

A soft number might revive speculation the Federal Reserve will only hike by 50 basis points this month, though it would likely have to be very weak to have a real impact given how stridently hawkish policy makers have been recently. The market currently implies an 88% chance the Fed will hike by 75 basis points.

BofA global economist Ethan Harris fears that by focusing on actual inflation to determining when to stop, central banks may go too far. The bank has lifted its target for the federal funds rate to a range of 4.0-4.25%, with a 75bp hike in September and smaller rises thereafter.

“For investors, this means more pressure on interest rates, more weakness in risk assets and further upside for the super-strong dollar,” said Harris. “In our view, these trends only turn when markets price the full fury of central bank hikes and we are not quite there yet.”

For now, the dollar has run into some profit taking from a market that is very long of the currency after a month of sustained gains. So rapidly has the dollar risen on the yen that Japanese authorities are becoming increasingly vocal in protesting their currency’s decline, sparking speculation of intervention and putting pressure on the Bank of Japan to moderate its policy of yield curve control.

Japan’s government must take steps as needed to counter excessive declines in the yen, a senior government official said on Sunday, after it hit its weakest level against the dollar in 24 years. That was enough to see the dollar hold at 142.67 yen and off last week’s top of 144.99.
The dollar index stood at 108.820 , having reached as high as 110.790 last week. The euro inched up to $1.0067 , and away from its recent trough of $0.9865.

It was helped in part by a Reuters report that European Central Bank policymakers see a growing risk that they will have to raise their key interest rate to 2% or more to curb record-high inflation despite a likely recession. Analysts at ANZ noted the dollar over the past month was up roughly 9% against the euro and the Chinese yuan, 12% against the British pound and 19% against the yen.

“The rampant USD is causing strain in developing countries, which are finding imports priced in USD more expensive,” they said in a note. “With Fed speakers using every opportunity to hammer home a hawkish message and quantitative tightening looming, the USD is not about to dramatically turn.” The ascent of the dollar combined with high bond yields has been a drag for gold, which was hovering at $1,718 an ounce after hitting a low of $1,690 last week.

Oil prices have also been trending lower amid concerns about a global economic slowdown, though cuts to supply did prompt a 4% bounce on Friday. Early Monday, Brent was down 36 cents at $92.48, while U.S. crude eased 45 cents to $86.34 per barrel.

Reporting by Wayne Cole; Editing by Himani Sarkar

As tributes pour in for Queen Elizabeth II, attention is being focused on ‘Operation London Bridge,’ the U.K.’s reported plans for what happens following the monarch’s death.

The Queen died peacefully at her Balmoral home in Scotland on Thursday, the Royal Family said in a statement. She was 96.

In 2017 The Guardian reported that plans for what happens after the death of the Queen are known by the code word “London Bridge.” The first plans date back to the 1960s and have been refined over the subsequent decades, it said.

Last year Politico obtained documents, which it said detail the “London Bridge” plans in granular detail. The day of the Queen’s death is known internally as “D-Day,” according to the report, with subsequent days leading up to the funeral know as “D+1,” “D+2,” “D+3,” and so forth. The Queen’s funeral is expected to be held 10 days after her death, according to the report.

The Accession Council, a group of privy counselors, or advisors to the sovereign, is usually convened within 24 hours of a monarch’s death. The Council “is customarily held at St James’s Palace to make formal Proclamation of the death of the Monarch and the accession of the successor to the throne,” according to its website.

Politico reports that the Accession Council will meet at St. James’s Palace on the morning after the Queen’s death. The U.K. Parliament will also meet to agree on a message of condolence, according to the report, with parliamentary business then suspended for 10 days.

On D+2, the Queen’s coffin will return to Buckingham Palace, Politico reports. Also citing the London Bridge plan, the Guardian reported in 2017 that, in the event of the Queen’s death at Balmoral, her coffin would be transferred to Holyroodhouse Palace in Edinburgh before being transported back to London on the Royal Train. Politico reports that there is also a contingency plan in place to transport her coffin back to London by plane.

On the morning of D+3, King Charles will reportedly receive Parliament’s message of condolence at Parliament’s historic Westminster Hall, before embarking on a tour of the U.K.

On D+5 the Queen’s coffin will reportedly be taken from Buckingham Palace to Westminster Hall. She will then lie in state for three days, according to Politico. Dating back to the 11th century, the cavernous Westminster Hall is the oldest part of the Palace of Westminster, which houses the U.K. Parliament. In February 1952 the Queen’s father, King George VI, also lay in state at Westminster Hall.

Throughout this time, the U.K. will also be making plans to host heads of state and dignitaries from across the world for the queen’s funeral, as well as orchestrating plans for the throng of people expected to flood London for the historic event.

A state funeral will be held at Westminster Abbey on D+10, according to Politico, with two minutes’ silence being observed across the U.K. at midday. The Independent reports that the London Stock Exchange LSEG, +0.76% will close on the day of the Queen’s funeral, along with most U.K. banks. The queen will be buried at Windsor Castle’s King George VI Memorial Chapel, according to Politico.

By James Rogers

SYDNEY, Sept 5 (Reuters) – Asian shares slipped on Monday while the euro took a fresh spill after Russia shut a major gas pipeline to Europe, leading some governments there to announce emergency measures to ease the pain of soaring energy prices.

The euro was down 0.4% at $0.9908 and looking likely to test its recent 20-year low of $0.99005 as markets priced in more risk of a European recession. Germany announced plans to spend 65 billion euros ($64.7 billion) on shielding customers and businesses from rising costs, while Finland and Sweden offered liquidity guarantees to keep power companies open.

Oil prices jumped along with the whole energy complex as a holiday in U.S. markets made for thin trading conditions. News of more coronavirus lockdowns in China only added to the jittery mood.
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) eased 0.1%, and Japan’s Nikkei (.N225) was off 0.3%.

Wall Street fared better as S&P 500 futures edged up 0.3% and Nasdaq futures 0.2%, though EUROSTOXX 50 futures were expected to open lower. The energy crisis is an added complication for the European Central Bank (ECB) as it meets this week to consider how much to raise interest rates.

“Europe is faced with a dire energy outlook, with numerous anecdotes of firms cutting back production,” said Tapas Strickland, head of market economics at NAB.

“The ECB will undoubtedly decide to hike rates this week,” he added “Markets are close to fully pricing in a 75bp hike after numerous ECB officials said they were leaning that way, though there is still likely to be a debate around 50 v 75.” Central banks in Canada and Australia are also expected to raise interest rates this week, while Federal Reserve Chair Jerome Powell and several other policy makers will make appearances and are likely to sound hawkish on inflation.

While the August U.S. jobs report showed some welcome signs of cooling in the labour market, investors are still leaning toward a hike of 75 basis points from the Fed this month. The two-year U.S. Treasury yield did fall almost 12 basis points on Friday and futures were trading flat on Monday amid general risk aversion.

The shift to safety again benefited the U.S. dollar, which hit another two-decade high on a basket of major currencies at 110.040. The dollar was firm at 140.50 yen , just short of Friday’s 24-year top of 140.80.

Sterling was struggling at $1.1481 , after diving as deep as $1.1458 and levels last seen in March 2020 at the start of the pandemic. “We now expect the EUR/USD and GBP/USD rates to reach $0.90 and $1.05 respectively next year as the economic slowdown and the terms of trade shock hitting the region take their toll,” said Jonas Goltermann, a senior economist at Capital Economics.

British foreign minister Liz Truss said on Sunday she would set out immediate action in her first week in power to tackle rising energy bills and increase energy supplies if she is, as expected, appointed prime minister on Monday. The strong dollar kept gold flat at $1,709 an ounce . Oil prices were supported by expectations gas prices would leap in Europe later in the day.

“Ultimately, Germany would need to cut natural gas consumption by 15% to keep gas storage facilities from running empty,” said analysts at ANZ. “Gas rationing looks very likely, as even at 95% full, storage would only last 2.5 months.”

OPEC+ is meeting on Monday and is likely to keep oil output quotas unchanged for October, although some sources would not rule out a small production cut to bolster prices that have slid due to fears of an economic slowdown. Brent was up $1.54 at $94.56, while U.S. crude rose $1.38 to $88.25 per barrel.

Reporting by Wayne Cole; Editing by Shri Navaratnam

sources : https://www.reuters.com/markets/europe/global-markets-wrapup-1-pix-2022-09-05/

SYDNEY (Reuters) – Asian shares were mixed and the dollar stood tall on Friday ahead of a key U.S. jobs report as investors braced for more aggressive rate hikes from the Federal Reserve, while commodities took an overnight dive amid new China lockdowns.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) remained largely unchanged in early Asia trade, but was headed for its worst weekly performance in seven with a drop of 3%, as rising expectations of hawkish global rate hikes hit risky assets.

Japan’s Nikkei (.N225) and Chinese bluechips (.CSI300) were mostly unchanged, Hong Kong’s Hang Seng index (.HSI) eased 0.2% and South Korea (.KS11) gained 0.5%. All eyes are now on U.S. August nonfarm payroll data due on Friday.

Analysts expect 285,000 jobs were added last month, while unemployment hovered at 3.5%. Investors may not like a strong number if it supports a continuation of aggressive rate hikes from the Fed, which could further boost the U.S. dollar and spur a sell-off in bonds.

Futures markets have priced in as much as a 75% chance the Fed will hike by 75 basis points at its September policy meeting, compared with a 69% probability a day earlier.

The dollar index , which measures the greenback against a basket of six major currencies, stood near its 20-year high at 109.55 on Friday. It eased slightly against the Japanese yen after notching a 24-year peak against the rate-sensitive currency in the previous session. The dollar was up 0.7% for the week.

“Markets broadly continue to absorb that central banks’ ‘whatever it takes’ to lower inflation message means much slower global economic growth,” said Tobin Gorey, agriculture strategy director at the Commonwealth Bank in a note. “And China’s weakening economy is an amplifying special factor in that scenario.”

On Thursday, the southwestern Chinese metropolis of Chengdu announced a lockdown of its 21.2 million residents, while the technology hub of Shenzhen also rolled out new social distancing rules as more Chinese cities tried to battle recurring COVID outbreaks.

Analysts at Nomura said what is becoming more concerning is that COVID hotspots in China are shifting away from remote regions and cities to provinces that matter much more to China’s national economy.

“We maintain the view that China will keep its zero-COVID policy until March 2023, when the (leadership) reshuffle is fully completed, but we now expect a slower pace of easing of the zero-COVID policy after March 2023,” Nomura said.

Oil prices tumbled 3% overnight before recovering some ground on Friday but were on track to post their worst weekly drop in four on fears COVID-19 curbs in China and weak global growth will hit demand.

Brent crude futures rose 1.3% to $93.56 a barrel on Friday while U.S. West Texas Intermediate (WTI) crude futures were up by a similar margin. Overnight, the U.S. S&P 500 index (.SPX) climbed 0.3%, while the Nasdaq Composite (.IXIC) finished down 0.3%.

In Europe, fears of a recession are on the rise, with a survey showing on Thursday that manufacturing activity across the euro zone declined again last month as consumers feeling the pinch from a deepening cost of living crisis cut spending. Treasury yields eased slightly ahead of potentially strong payrolls data.

The yield on benchmark two-year notes hovered at 3.5117%, a touch lower than its 15-year high of 3.5510%, while the yield on 10-year bonds stood at 3.2609%, compared with its previous close of 3.2650%. Gold was slightly higher. Spot gold was traded at $1697.59 per ounce.

Reporting by Stella Qiu; Editing by Sam Holmes

Sources : https://www.reuters.com/markets/europe/global-markets-wrapup-1-pix-2022-09-02/