2024-09-16 00:48

Markets await decision on US Fed interest rate cut More than 12% of crude output in Gulf of Mexico still offline Poor August data stokes China demand worries NEW YORK, Sept 16 (Reuters) - Oil prices rose on Monday as the ongoing impact of Hurricane Francine on output in the U.S. Gulf of Mexico offset persistent Chinese demand concerns ahead of this week's U.S. Federal Reserve interest rate cut decision. Brent crude futures for November settled at $72.75 a barrel, up $1.14, or 1.59%. U.S. crude futures for October settled at $70.09, up $1.44, or 2.1%. "We've still got the remnants of the storm," said Matt Smith, lead oil analyst at Kpler. "The impact is more on the production side than on refining. Therefore, it leans a little bit bullish." More than 12% of crude production and 16% of natural gas output in the U.S. Gulf of Mexico remained offline in the aftermath of Hurricane Francine, the U.S. Bureau of Safety and Environmental Enforcement (BSEE) said on Monday. Overall, however, the market remained cautious ahead of the Federal Reserve's interest rate decision on Wednesday. Traders are increasingly betting on a Fed rate cut of 50 basis points (bps) rather than 25 bps, as shown by the CME FedWatch , opens new tab tool that tracks Fed fund futures. Lower interest rates typically reduce the cost of borrowing, which can boost economic activity and lift demand for oil. "A quarter-percent Fed rate cut could heighten traders' concerns about the pace of oil demand growth," Clay Seigle, an oil market strategist, said in an email. The market may see conflicting trends if the Fed delivers a more aggressive rate cut, Seigle said. "Bulls will feel more confident about resilient oil demand with a soft landing, while bears pushing spreads into contango will welcome reduced physical carrying costs," Seigle said. Contango is when front-month contracts are cheaper than future months. Weaker Chinese economic data over the weekend dampened market sentiment, with the low-for-longer growth outlook in the world's second-largest economy reinforcing doubts over oil demand, IG market strategist Yeap Jun Rong said in an email. Industrial output growth in China, the world's top oil importer, slowed to a five-month low in August while retail sales and new home prices weakened further. China's oil refinery output also fell for a fifth month as weak fuel demand and export margins curbed production. Brent and WTI each gained about 1% last week but remain comfortably below their August averages of $78.88 and $75.43 a barrel, respectively, after a price slide around the start of this month driven in part by demand concerns. Sign up here. https://www.reuters.com/markets/commodities/oil-prices-inch-up-fed-rate-cut-outlook-2024-09-16/

2024-09-16 00:20

Tech stocks weigh on Nasdaq but S&P, DJI gain Treasury yields fall to two-year low Futures imply 59% chance of outsized Fed rate cut NEW YORK, Sept 16 (Reuters) - Tech stocks dragged on U.S. indexes and the dollar touched a more than one-year low against the yen on Monday as all eyes looked to a Federal Reserve meeting later this week that is expected to usher in a hotly anticipated easing cycle. Expectations have grown that the Federal Reserve could cut interest rates by as much as half a point - more than previously expected - in a bid to keep the economy on course for a soft landing, while managing slowing jobs growth and moderating inflation. The decision is slated for Wednesday. Rate-sensitive tech stocks dipped, pulling down the Nasdaq Composite (.IXIC) , opens new tab. Nvidia (NVDA.O) , opens new tab and Apple (AAPL.O) , opens new tab shed more than 2% each, hampered by a pessimistic report on demand for the iPhone. The S&P 500 (.SPX) , opens new tab nonetheless eked out a slight gain on the day. Away from growth plays, the blue-chip Dow Jones Industrial Average (.DJI) , opens new tab hit an intraday record high. XTB research director Kathleen Brooks said markets would look past the size of any rate cut on Wednesday to understand the Fed's rationale. "If the Fed does start by cutting 50 bps, but at the same time reiterates that it is doing so to preserve the economy's soft landing, this is stock-market positive. If it sounds like the Fed has to panic-cut interest rates because of some gray cloud on the horizon, then expect stocks to sell off," she said. The dollar index , which measures the greenback against a basket of currencies, fell 0.33% at 100.69. Against the Japanese yen , the dollar sagged 0.13% at 140.63. Investors also digested news from Sunday of a second assassination attempt on Republican presidential candidate Donald Trump. Shares in his Trump Media & Technology (DJT.O) , opens new tab company reversed early gains to trade down more than 3% by the market close. Restrictions on sales of Trump Media shares by the former president and other company insiders will be lifted within the next 10 days, though Trump said Friday he will not sell his shares. The Dow rose 0.55%, to 41,622.08, the S&P 500 gained 0.13%, to 5,633.09 and the Nasdaq Composite dropped 0.52%, to 17,592.13. The S&P last week posted its strongest weekly performance this year. Hopes for a big rate cut by the Fed have been boosting stocks for months. Some of the glow lingered in MSCI's All-World index (.MIWD00000PUS) , opens new tab, which rose 0.20%, to 828.55. TREASURY YIELDS HIT LOWS Yields on short-dated U.S. debt hit their lowest level in two years at one point on Monday. The return on the rate-sensitive two-year note was last 1.7 basis points lower on the day, continuing a slide this month. Benchmark 10-year yields shrank for a second straight session, shedding 3.1 basis points to 3.618%, from 3.649% late on Friday. Traders are placing a 59% chance of a half-point cut at the Fed's meeting on Wednesday, up from 30% a week ago, futures show. The odds narrowed sharply after media reports revived the prospect of more aggressive easing. Central banks in Japan and the UK also meet this week, with both expected to stand pat for now, while a packed data schedule includes U.S. retail sales and industrial production. The Bank of England is expected to leave rates on hold at 5.00% when it meets on Thursday, though markets have priced in a 31% chance of another cut . On Friday, it is the Bank of Japan's turn. The BoJ is widely expected to hold steady, though it may lay the groundwork for a further tightening in October. Lower Treasury yields played in to the yen's strength against the dollar. The euro stayed higher, underpinned by the prospect of more rate cuts from the European Central Bank, keeping a lid on the currency at $1.1200. Gold also felt the effects of lower borrowing costs, adding 0.22% to $2,582.39 an ounce, near an all-time peak of $2,588.81. Oil prices rose as the effects of Hurricane Francine kept nearly a fifth of crude oil production in the Gulf of Mexico offline. Brent crude futures settled $1.14 higher at $72.75 a barrel. U.S. crude clocked in at $70.09 per barrel, $1.44 higher on the day. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-09-16/

2024-09-16 00:13

Markets brace for likely first rate cut since March 2020 Traders pricing in more than 60% chance of a 50 bps cut Retail sales and other economic show stronger US economy Pound Sterling weakens as BOE set to hold rates NEW YORK, Sept 17 (Reuters) - The U.S. dollar strengthened against most major currencies on Tuesday following better-than-expected retail sales data that seemed to support a less aggressive stance by the Federal Reserve, which is widely expected to deliver its first interest rate cut in more than four years. Commerce Department data showed on Tuesday that U.S. retail sales unexpectedly rose 0.1% in August, suggesting that the economy remained on solid footing through much of the third quarter. The Fed's Federal Open Market Committee will give its interest rate decision at the conclusion of its meeting on Wednesday after which Chair Jerome Powell will hold a press conference. The last Fed rate cut was in March 2020 during the COVID-19 pandemic. "I think like all the markets at this point are hostage to this FOMC meeting tomorrow," said Marvin Loh, senior global market strategist at State Street in Boston. "Retail sales were okay. It certainly doesn't show that there should be an imminent rush to have supersized cuts and it would be somewhat unprecedented for the Fed to really panic in rate cuts given where the market is at this point." Against the yen , the dollar rose 0.87% to 141.830 after initially weakening following the retail sales data. The euro was down 0.10% to $1.112125, not far from the year's high of $1.1201. Against the Swiss franc, the dollar was up 0.15% to 0.8460. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, gained 0.199% at 100.90. Fed funds futures show the chance of a 50 basis point rate cut stood at 63%, against 30% a week ago, while the chances of a 25 basis point cut was at 37%. The odds have narrowed sharply after media reports revived the prospect of a more aggressive easing. Other economic data on Wednesday appeared to provide support for the Fed to be less aggressive in cutting rates. U.S. business inventories, a key component of gross domestic product, posted a better-than-expected gain of 0.3% in July while factory output rebounded in August. "Overall, the market is pricing in numerous rate cuts over the next several months and there are those voices that suggest that maybe the market has gotten ahead of itself," said Axel Merk, president and chief investment officer at Merk Investments in Pal Alto, California. The Bank of Japan is expected to keep policy steady on Friday but signal that further interest rate hikes are coming, perhaps turning the next meeting in October into a live one. The Bank of England is also expected to retain interest rates at 5% when it meets on Thursday, although markets have priced in a nearly 36% chance of another cut. Sterling - the best performing G10 currency this year with a 3.41% rise on the dollar - has risen thanks to signs of resilience in Britain's economy and stickiness in inflation. It was last down 0.37% at $1.31665. Chinese markets are closed for the Mid-Autumn Festival break until Wednesday, though the yuan was up 0.16% at 7.1090 in offshore trade. The Canadian dollar was up 0.04% at $1.35935. The Australian and New Zealand dollars bought $0.67595 and $0.61900 respectively. In cryptocurrencies, bitcoin gained 5.00% to $60,544.00. Ethereum rose 3.29% to $2,349.00. Sign up here. https://www.reuters.com/markets/currencies/currencies-listless-markets-waffle-over-fed-rate-cut-2024-09-16/

2024-09-15 23:55

SHANGHAI, Sept 16 (Reuters) - The normally-bustling financial hub of Shanghai was brought to a standstill on Monday as residents sheltered at home to wait out the worst of Typhoon Bebinca. The Category 1 storm, which made landfall in Shanghai on Monday morning, is the most powerful tropical cyclone to directly hit the city in more than seven decades. Packing top wind speeds of 151 kph (94 mph) near its eye, Bebinca landed in the city of nearly 25 million around 7:30 a.m. (2330 GMT), state media reported, the strongest storm to strike Shanghai since Typhoon Gloria in 1949. Rain lashed the city and strong winds felled more than 10,000 trees across Shanghai as more than 400,000 people were evacuated from at-risk homes in Bebinca's path. More than 56,000 rescue workers were deployed and, by early afternoon only one injury had been reported as a result of the storm, according to state media reports. More than 1,400 flights from the city's two airports and over 570 passenger trains have been cancelled since Sunday evening, disrupting the travel plans of many people on the move over the Mid-Autumn Festival holiday, a three-day public holiday in China. Parks and businesses were closed as four districts in Shanghai upgraded weather alerts to the highest possible level, some metro train services were disrupted and highways and elevated roads were also closed to traffic or had special speed restrictions in place. Resorts in Shanghai, including Shanghai Disney Resort, Jinjiang Amusement Park and Shanghai Wild Animal Park, have been temporarily closed and many ferries halted. By early Monday afternoon, the eye of the storm had crossed from Shanghai to the neighbouring Jiangsu province, though rains were expected to continue in China's financial capital throughout the rest of the day. Shanghai is rarely subject to direct hits from strong typhoons that generally make landfall further south in China. Yagi, a destructive Category 4 storm, roared past southern Hainan province last week. Sign up here. https://www.reuters.com/world/china/typhoon-bebinca-lands-shanghai-strongest-storm-hit-city-since-1949-2024-09-15/

2024-09-15 22:34

NEW YORK, Sept 15 (Reuters) - U.S. stock futures and the dollar were little changed on Sunday after Republican presidential candidate Donald Trump was safe following what the FBI said appeared to be an assassination attempt outside Trump's golf course in West Palm Beach, Florida. Secret Service agents engaged a gunman in some bushes near the property line of the golf course and fired at least four rounds of ammunition, law enforcement officials said during an afternoon press conference. S&P 500 e-minis were down 0.04%. The Dollar Index , which measures the U.S. currency's strength against six major peers, was down 0.03% to 101.07. Bitcoin was 0.7% lower on the day at $59,445. Trump has positioned himself as a pro-cryptocurrency candidate. While there was little market reaction to the news, analysts said the incident had the potential to spur volatility. "Foreign exchange rates could experience turbulence in the coming hours as news of a second assassination attempt lands amid thin trading volumes," said Karl Schamotta, chief market strategist at payments company Corpay in Toronto. Asset classes and sectors seen benefiting from a second Trump term received a boost earlier this year after Trump survived in an assassination attempt in Pennsylvania on July 13. The so-called "Trump trade," however, came under pressure last week after a closely watched debate between Trump and Vice President Kamala Harris left betting markets pegging a stronger likelihood of a Harris win in November. "Perhaps we may see some look to get back into the 'Trump Trade' if this sees Trump receive a boost in the polls like we saw after the earlier assassination attempt - boosting both equities, and the dollar," said Michael Brown, senior research strategist at online broker Pepperstone, in London. "That said, with the FOMC looming large on Wednesday, conviction among market participants will likely be lacking until we hear from Powell & Co," he said. Betting markets logged little reaction to the incident on Sunday, with Harris' odds in PredictIt's 2024 presidential general election market at 56 cents, while Trump's odds were at 47 cents. The Federal Reserve is in focus as uncertainty swirls over how much the U.S. central bank will cut interest rates at its -Sept. 17-18 monetary policy meeting and the pace at which it will reduce borrowing costs in coming months. "The dollar could yet climb on a modest recovery in the 'Trump trade,' but any effect should be relatively modest in scale," Corpay's Schamotta said. Sign up here. https://www.reuters.com/markets/us/stock-futures-dollar-steady-after-fbi-says-it-is-investigating-another-2024-09-15/

2024-09-15 21:53

MANACAPURU, Brazil, Sept 15 (Reuters) - Severe droughts across Brazil's Amazon rainforest region are drastically altering residents' lives as mobility is hampered by record-low levels on upper stretches of the Amazon River. In the town of Manacapuru, near state capital Manaus, the drought has impacted navigation on the Solimoes River, which turns into the Amazon River just downstream and is a vital lifeline for transporting all kinds of goods in and out of the town. Boats stranded on sandbanks have become a common sight, hindering the transport of local goods such as fish, bananas, and cassava, as well as disrupting the logistics for bringing in basic items like food and water from outside. "We anchored the boat here, and it was stuck on dry land the next day. We had no way to move it,” said fisherman Josue Oliveira. Calling the situation critical, fisherman Francisco da Silva noted that the water has already started to turn green, a sign it may soon become unsafe to drink. "We'll have to drink it anyway," he said, adding that getting supplies from other areas will no longer be possible with the river drying up. "Nothing will get through." According to the National Center for Monitoring and Early Warning of Natural Disasters (Cemaden), the current drought is the most intense and widespread Brazil has experienced since records began in 1950. A weak rainy season in the north-central region has made the situation worse with rising atmospheric temperatures, and land-use changes that have replaced forest areas with pastures. On Sunday, Brazil's Supreme Court authorized lifting spending restrictions on wildfires and drought in the Amazon and Pantanal regions, as the country grapples with the economic impacts of the climate events. Sign up here. https://www.reuters.com/world/americas/brazils-amazon-drought-disrupts-residents-lives-2024-09-15/