2024-09-12 10:01

A look at the day ahead in U.S. and global markets by Amanda Cooper. The first cut might be the deepest in some cases, but in the case of the Federal Reserve, it would seem not. Wednesday's monthly inflation report showed a surprise tick up in core inflation that was enough to knock expectations for a jumbo half-point cut from the Fed next week on the head. The data showed the core consumer price index rose 0.3% in August from September, compared with forecasts for an increase of 0.2%, and was up 3.2% on an annual basis, in line with economists' predictions. The difference was marginal, but it was enough to give the dollar a leg up against other major currencies and inject a degree of relief into rate-cut loving assets such as stocks that the economy isn't nose-diving as some had feared. Food prices rose last month, while the cost of energy products such as gasoline and electricity fell, which contributed to the headline rate rising 2.5% year on year, its smallest yearly advance since February 2021. Analysts have said for several weeks that the market had got ahead of itself with bets on a 50-basis points (bps) cut at next week's policy meeting and last week's soft employment report drove the chances of a half-point cut to nearly 40% earlier this week. That has snapped right back to 13%, according to the CME's FedWatch tool. The Fed has been more concerned about inflation in stickier parts of the economy, such as wages and the services sector. The central bank's favoured measure is the core personal consumption expenditures index, which is running at a rate of 2.6%, just above the Fed's 2% target. Market-based expectations for medium-term inflation meanwhile, are already there. The five-year breakeven inflation rate - which takes the five-year Treasury note yield and subtracts the current rate of inflation - is already below 2% for the first time since early 2021. Traders still anticipate around 100 bps of cuts by December, but the inflation numbers have cleared up some of the doubt around the immediate issue of September. Fewer rate cuts are usually negative for equities. But tell that to the tech sector, where Nvidia closed up 8.2% and the Nasdaq had its best day in a month (.IXIC) , opens new tab. With the intense focus on the ability of the world's largest economy to generate jobs, Thursday's weekly data on initial jobless claims could spark some volatility. But traders seem a lot more secure in their bets that the first cut from the Fed in four years will not be the deepest. Key developments that should provide more direction to U.S. markets later on Thursday: * ECB interest rate decision * U.S. initial weekly jobless claims Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-09-12/

2024-09-12 09:09

KAMPALA, Sept 12 (Reuters) - The Ugandan shilling was little-changed on Thursday, but was under a little pressure from an uptick in appetite for hard currency by firms in the manufacturing and energy sectors, traders said. At 0840 GMT commercial banks quoted the shilling at 3,715/3,725, compared to Wednesday's close of 3,713/3,723. Sign up here. https://www.reuters.com/markets/currencies/ugandan-shilling-little-changed-under-pressure-2024-09-12/

2024-09-12 07:47

FTSE 100 up 1.1%, FTSE 250 adds 1% Automobile and parts, industrial miners lead gains Fevertree Drinks falls after annual revenue growth forecast trim Sept 12 (Reuters) - London's FTSE 100 hit its highest level in over a week on Thursday, amid broader gains after some clarity around the U.S. Federal Reserve's expected interest rate cut improved risk appetite. The blue-chip FTSE 100 (.FTSE) , opens new tab was up 1.1% by 0715 GMT. The benchmark index is headed for its best day in over a month, if gains hold through close. Automobile and parts (.FTNMX401010) , opens new tab were the biggest gainers with a 2.4% jump. Industrial metal miners (.FTNMX551020) , opens new tab advanced 2% as copper prices hit a one-week high. Energy shares (.FTNMX601010) , opens new tab climbed 1.4%, tracking stronger oil prices amid concerns of Hurricane Francine impacting U.S. output. Most major sub-sectoral indexes traded higher except precious metal miners (.FTNMX551030) , opens new tab that slipped 0.2% despite an uptick in gold prices. Global sentiment also bounced back with Asian markets trading higher after Wall Street closed up overnight on a boost from technology stocks. The U.S. consumer price index data cleared some uncertainty over the magnitude of the Fed's expected rate cut at its meeting next week, with bets largely skewed towards a 25 bps cut. Meanwhile, British property surveyors expect sales to continue to grow in the coming months after a gauge of house prices turned positive for the first time in nearly two years. Investor focus today is on the European Central Bank's policy decision where it is expected to deliver another 25-basis-point trim. A producer prices index reading is also due in the United States. The mid-cap FTSE 250 (.FTMC) , opens new tab was up 1%. Trainline (TRNT.L) , opens new tab was the top gainer on the index with a 10.5% rise after the company said it expects core profit to exceed previous forecast. Fevertree Drinks (FEVR.L) , opens new tab dipped about 6% after the beverage maker cut its annual revenue growth forecast. Sign up here. https://www.reuters.com/world/uk/londons-ftse-100-recovers-us-rate-cut-certainty-helps-sentiment-2024-09-12/

2024-09-12 07:47

NAPERVILLE, Illinois, Sept 11 (Reuters) - Fresh government estimates for the U.S. corn and soybean crops are notorious for jolting the grain market and sometimes changing overall sentiment. That is not the most probable outcome on Thursday as crop pegs are already very large, but corn may have an easier path to potential supply excitement versus soybeans given the recent fundamentals. On average, analysts expect the U.S. Department of Agriculture on Thursday will peg U.S. corn yield at 182.4 bushels per acre, down from 183.1 in August and well ahead of last year’s record of 177.3 bpa. That would be an unusually light change from the August yield, as an adjustment closer to 2 bpa has been seen in the past few Septembers, on average. But the trade rarely suffers a complete miss on the September corn yield, which fell outside the range of guesses just twice in the last two decades. However, analysts are working with a tight margin for error as their corn yield guesses span just 3 bpa, the narrowest for this report in at least two decades. The highest estimate of 183.5 bpa is very close to USDA’s August yield, and this is an area to watch for a possible surprise. U.S. soybean yield is seen unchanged from August at 53.2 bpa. In the last few years, September soy yield varied by about 1 bpa versus August, on average. Analysts have left wiggle room with soy yield given the 2.9-bpa range of estimates, well above average. The top guess of 54.9 offers extra coverage on the high side. It is interesting to note that USDA’s September corn yield has not come in below the average trade guess since 2015. USDA’s soy yields were also above the trade averages in every September from 2013 through 2021, but they were below expectations in the last two years. PRODUCTION FOCUS The trade’s corn and soy yield expectations for Thursday are higher than its pre-August report predictions, suggesting increasing comfort in the huge targets. Recent weather could be an obstacle, however, as last month was the Midwest’s driest August since 2013 and much of the area has remained very dry so far this month. The crops avoided excessive heat this summer, but both this week and next week will feature temperatures well above normal. This could prevent some of the later-planted corn ears from filling kernels to their full potential, possibly shaving yields. USDA last month revised planted and harvested corn and soybean areas, so acreage-driven production surprises might be less likely this month. However, USDA last month unexpectedly increased soybean plantings by 1 million acres versus the June estimate, a move that was abnormally large and directionally atypical. This is an item to monitor on Thursday for any possible changes. CORN VERSUS BEANS Lofty crop expectations reduce the chances that a surprisingly low production number on Thursday could change the bearish market tone, though it might be easier to ignite optimism in corn rather than soybeans. When USDA issued its first official 2024-25 estimates in May, U.S. corn ending stocks were seen rising 4% from 2023-24 and soy stocks were pegged up 31%. But trade estimates for Thursday suggest 2024-25 U.S. soy ending stocks surging 66% on the year versus a more modest 8% increase for corn. Export demand is friendlier for U.S. corn right now versus soybeans. Corn export sales for 2024-25, which began Sept. 1, are on a relatively normal pace. But soybean sales are sluggish compared with USDA’s export targets, putting upward pressure on already ample ending-stock estimates. It is unclear if the agency is prepared to make export cuts at this early stage if the crop size is not reduced. Chicago corn and soybean futures have eased over the last week but remain a bit above last month’s contract lows. Thursday’s data could give traders a feel for whether those lows will hold or if new ones are on the way in the coming weeks. Karen Braun is a market analyst for Reuters. Views expressed above are her own. Sign up here. https://www.reuters.com/markets/commodities/record-yield-pegs-us-corn-soybeans-face-test-thursday-2024-09-12/

2024-09-12 07:43

NEW DELHI, Sept 12 (Reuters) - India wants oil producers group OPEC and its allies to raise oil output as there are countries such as India where fuel demand is rising, the nation's oil secretary Pankaj Jain said on Thursday. The Organization of the Petroleum Exporting Countries (OPEC) and allies, together called OPEC+, last week agreed to delay a planned oil output increase for October and November and said they could further pause or reverse the hikes if needed. India, the world's third biggest oil importer and consumer, imports over 80% of its oil needs from overseas. Fuel demand in India is rising and Jain said the country wanted OPEC and its allies, including Russia, to raise oil output. Asked if India will consider buying more oil from Russia, he said refiners will buy oil from suppliers that offer cheaper rates. India became the top buyer of Russian oil in July, surpassing China. Jain said Indian fuel retailers would consider cutting pump prices of gasoline and gasoil if crude oil prices remained subdued. Sign up here. https://www.reuters.com/business/energy/india-wants-opec-raise-oil-output-oil-secretary-says-2024-09-12/

2024-09-12 07:42

NEW DELHI, Sept 12 (Reuters) - India and China discussed early resumption of direct passenger flights between their two countries, India's Civil Aviation Minister Ram Mohan Naidu Kinjarapu said on Thursday, in an indication that their air travel could recover after four years. Reuters reported in June that China was pressing India to restart direct passenger flights, but New Delhi was resisting as a border stand-off continues to weigh on ties between the Asian rivals. Relations between the nuclear-armed neighbours, who share a largely undemarcated Himalayan border, have been strained since a military clash on their Himalayan frontier in 2020 killed 20 Indian and four Chinese soldiers. Ever since, India has tightened scrutiny of investments from China, banned hundreds of popular apps and severed passenger air routes, although direct cargo flights still connect the world's two most populous nations. Kinjarapu said he met Song Zhiyong, the head of Civil Aviation Administration of China, on the sidelines of the Asia-Pacific Ministerial Conference on Civil Aviation in New Delhi. The two discussed "further strengthening civil aviation cooperation between the two countries, especially promoting early resumption of scheduled passenger flights", Naidu said in a post on X. Restarting direct flights would help both countries, but the stakes are higher for China, where recovery in travel after the COVID-19 pandemic has not been as upbeat as in India's booming aviation sector. Sign up here. https://www.reuters.com/world/asia-pacific/india-china-discuss-early-resumption-passenger-flights-minister-says-2024-09-12/