2024-02-05 06:18

Copyrighted Image by: Reuters. Investing.com-- Gold prices fell in Asian trade on Monday, extending losses from the prior week as a mix of strong labor market data and hawkish Federal Reserve signals saw markets dial back expectations for early interest rate cuts. The yellow metal fell sharply from highs above $2,050 an ounce, as the prospect of higher-for-longer interest rates heralded more near-term pressure. The dollar shot up to a near two-month high on Monday, while Treasury yields also advanced in Asian trade. In contrast, spot gold fell 0.4% to $2,031.60 an ounce, while gold futures expiring in April fell 0.3% to $2,047.75 an ounce by 00:27 ET (05:27 GMT). Gold loses ground after nonfarm payrolls, Powell comments Losses in gold were initially triggered by a substantially stronger-than-expected nonfarm payrolls reading for January, which showed continued resilience in the world’s largest economy- which gives the Fed more headroom to keep rates higher for longer. Then, Fed Chair Jerome Powell said in a late-Sunday interview that the bank will remain prudent in considering any monetary loosening this year, and that resilience in the U.S. economy gives it more room to keep rates higher for longer. His comments largely reiterated the Fed’s stance that it was in no hurry to begin loosening policy, and saw traders further scale back bets on early interest rate cuts. The CME Fedwatch tool showed traders having now almost entirely negated bets on a March rate cut, and were sharply paring bets on a May rate cut. Several analysts also said that they only expect the bank to begin trimming rates by June. The prospect of higher-for-longer interest rates bodes poorly for gold, given that higher rates push up the opportunity cost of buying bullion. Still, the yellow metal has seen some support in recent sessions from increased safe haven demand, especially amid a worsening conflict in the Middle East. Gold has so far largely retained the $2,000 an ounce level, and spot prices are still within sight of record highs hit in late-2023. Copper buoyed by Chilean supply concerns Among industrial metals, copper prices rose slightly on Monday, amid concerns over potential supply disruptions in Chile, stemming from deadly wildfires in the South American country. Copper futures expiring in March rose 0.3% to $3.8293 a pound. Chile is the world’s largest producer of copper, with any potential disruptions in supply from the country serving to potentially tighten global copper markets. But the worst of the forest fires appeared to situated well away from the country's biggest copper mines, raising questions over just how much supply disruption would come from the fires. Any further gains in copper were also held back by persistent concerns over slowing demand in top importer China, as the country struggles with a sluggish post-COVID economic recovery. https://www.investing.com/news/commodities-news/gold-prices-slide-as-dollar-surges-on-easing-rate-cut-expectations-3292243

2024-02-05 04:59

Copyrighted Image by: Reuters. Investing.com-- Most Asian currencies weakened on Monday, while the dollar steadied at a near two-month high as strong labor market data and hawkish signals from the Federal Reserve saw traders reconsider bets on early interest rate cuts. Regional currencies were reeling from steep losses on Friday after U.S. nonfarm payrolls data read much higher than expected for January, pointing to continued resilience in the labor market. Fed Chair Jerome Powell said in a late-Sunday interview on CBS 60 Minutes that resilience in the U.S. economy gave the Fed more headroom to keep monetary policy steady for the time being. He also flagged a largely data-driven approach to any potential rate cuts. Powell’s comments came just days after the Fed offered similar signals during its first meeting of 2024, and spurred extended gains in the dollar and Treasury yields. The dollar index and dollar index futures both rose 0.1% in Asian trade, and were at their highest levels since early-December. The CME Fedwatch tool showed investors pricing in an even lower chance of a rate cut in March, while traders also slashed expectations for a cut in May. Several analysts said they now only expect the central bank to begin trimming rates by June. This scenario bodes poorly for Asian units, given that high U.S. rates diminish the appeal of high-yield, risk driven assets. Persistent concerns over China also dented regional currencies, after a private survey showed Chinese service sector activity grew less than expected in January. The yuan fell 0.1%, although further losses in the currency were stemmed by a stronger midpoint fix and signs of currency market intervention by the People’s Bank. Chinese inflation data due this Thursday is expected to offer few positive signals on the economy, before the week-long Lunar New Year holiday. The Australian dollar fell 0.1%, as data showed a smaller-than-expected fall in the country’s trade surplus through December. But focus in Australia was largely on a Reserve Bank meeting this Tuesday. While the central bank is expected to keep rates steady amid falling inflation, traders will be looking out for any cues on the RBA’s plans to begin cutting interest rates this year. The Japanese yen was flat on Monday, supported by purchasing managers index data showing the services sector grew more than expected in January. But the yen traded just above a two-month low, having clocked steep losses on Friday as traders looked to higher-for-longer U.S. rates. The South Korean won was among the few outliers for the day, rising 0.3%, while the Indian rupee tread water before a Reserve Bank of India meeting due later this week. The Singapore dollar fell 0.2% following weak retail sales data for December. https://www.investing.com/news/forex-news/asia-fx-weakens-dollar-strong-as-traders-price-out-early-rate-cuts-3292202

2024-02-05 02:23

Copyrighted Image by: Reuters. Investing.com -- Oil prices cut losses to settle higher Monday, as fresh supply concerns following wave of retaliatory U.S. strikes against Iranian-backed militias in the Middle East helped offset a rise in the dollar on expectations that the Federal Reserve is likely to keep interest rates higher for longer. By 14:30 ET, the U.S. crude futures contract settled 0.7% higher at $72.78 a barrel, while the Brent contract added 0.9% to $77.99 per barrel. US strikes renew supply risk premium in oil prices The US launched more retaliatory airstrikes against Iran-backed militias in Iraq, Syria and Yemen over the weekend, in response to the deadly drone strike carried about by Iran-allied militants. The U.S. also warned that it intends to take further retaliatory measures, raising fears of a wider conflict in the oil-rich Middle East and the potential of crude supply disruptions. The move renewed the supply risk premium in oil prices that had cooled somewhat following hopes, albeit slim, of an Israel-Hamas ceasefire. "Reports of a ceasefire agreement between Israel and Hamas emerged over the weekend, however US National Security Advisor, Jake Sullivan, said agreement isn’t imminent," ANZ Research said in a note. Dollar strength keeps lid on oil prices The dollar jumped Monday after Federal Reserve Chair Jerome Powell reiterated in an interview with CBS news show "60 Minutes" aired on Sunday, that the central bank is not likely to slash borrowing costs in the near-term. Instead, Powell said that the Fed will seek clearer signs of easing inflation and a cooling labor market before unwinding policy. A stronger dollar makes oil, priced in the U.S. dollars, more expensive and less attractive to foreign buyers. The remarks curb investor optimism for an early rate cut, with the odds of March cut dropping to 18% from a peak of 80% in December. https://www.investing.com/news/commodities-news/oil-prices-inch-up-after-bruising-week-gaza-ceasefire-rate-cuts-in-focus-3292145

2024-02-02 14:30

Copyrighted Image by: Reuters On Monday, Compass Point, a financial research firm, provided insights into the latest developments in the cryptocurrency market. Bitcoin (BTC) and Ethereum (ETH) prices have remained relatively stable since the firm's last report, with Bitcoin recovering to near $43,000 after a dip below $40,000. This rebound is attributed to an influx of stablecoins to exchanges and a reduction in Bitcoin balances on these platforms, suggesting investors may be purchasing to hold for the long term. Grayscale Bitcoin Trust (GBTC) experienced approximately $5.6 billion in outflows, which may have contributed to selling pressure, yet this trend appears to be slowing down. Interestingly, Bitcoin ETFs have collectively seen inflows of around $1.5 billion. BlackRock (NYSE:BLK)'s Bitcoin Trust (IBIT) in particular reported higher volumes compared to GBTC. Bitcoin miners' stocks have shown little movement or declined due to a drop in hash price, which is affected by lower transaction fees and an increase in the hash rate. Additionally, the upcoming halving event, which reduces the reward for mining new blocks, is being factored into their prices. Despite these challenges, Compass Point maintains a positive outlook on Core Scientific (NASDAQ:CORZ), considering the stock to be significantly undervalued at 1.25x EV/EBITDA based on their CY25 estimates. The firm expects Core Scientific to recover from the initial selling pressure post-bankruptcy. Coinbase (NASDAQ:COIN) also received a favorable assessment, with a "Buy" rating and a price target of $200. Compass Point believes that concerns regarding Coinbase losing market share due to the emergence of ETFs are exaggerated. The firm notes that Coinbase has gained market share through January, with average daily volumes exceeding both their own and consensus estimates. The increase in the market cap of USD Coin (USDC), which is up roughly 10% year-to-date, is seen as a positive sign for Coinbase's interest income. Looking ahead, Compass Point anticipates the cryptocurrency market to move sideways or slightly higher in the coming weeks before potentially resuming an upward trend in CY24. The firm also suggests that any perceived weaknesses in U.S. banks could benefit Bitcoin prices, drawing a parallel to market dynamics observed in March 2023. InvestingPro Insights As Coinbase (NASDAQ:COIN) garners a "Buy" rating from Compass Point with a price target of $200, current InvestingPro data and tips provide additional context to investors considering the stock. According to real-time metrics, Coinbase has a market capitalization of $30.85 billion. Despite the company's significant presence in the market, the data reflects that Coinbase is currently trading at a high Price / Book multiple of 5.21, indicating that the stock may be priced richly in relation to the company’s net assets. Moreover, the company has not been profitable over the last twelve months, with a negative P/E ratio of -40.96, adjusted to -25.69 in the last twelve months as of Q3 2023. InvestingPro Tips highlight that Coinbase's stock price movements have been quite volatile, with a substantial 52.42% return over the last three months and a 42.6% uptick over the last six months, yet it has fared poorly over the last month with a -17.8% return. These fluctuations underscore the stock's unpredictable nature in the short term. Additionally, analysts do not anticipate the company will be profitable this year, which may be a critical consideration for investors seeking near-term returns. For investors intrigued by these insights, there are additional InvestingPro Tips available, which could further inform investment decisions. The InvestingPro subscription is now on a special New Year sale with a discount of up to 50%. Use coupon code SFY24 to get an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 to get an additional 10% off a 1-year InvestingPro+ subscription. These tips offer a more comprehensive understanding of Coinbase's financial health and market potential, which could be invaluable in making a well-informed investment choice. https://www.investing.com/news/cryptocurrency-news/analysts-sees-potential-in-core-scientific-and-coinbase-amid-crypto-trends-93CH-3291434

2024-02-02 06:10

Copyrighted Image by: Reuters. Investing.com-- Gold prices steadied near a two-week high on Friday, crossing key levels as unwavering bets on interest rate cuts by the Federal Reserve weighed on the dollar, with nonfarm payrolls data due later in the day set to provide more cues. The yellow metal largely brushed off signals from the Fed that interest rate cuts will come later than expected this year, instead capitalizing on losses in the dollar and moving closer towards 2024 peaks. But gains in gold prices cooled on Friday as markets hunkered down before the payrolls data, which is largely expected to factor into the Fed’s plans for interest rates. Spot gold rose 0.1% to $2,056.20 an ounce- crossing the $2,050 level for the first time in two weeks, while gold futures expiring in March rose 0.1% to $2,073.35 an ounce by 00:47 ET (05:47 GMT). The two were also up about 1.9% this week, and were set to snap two straight weeks of losses. Gold’s recovery also comes after a rough start to 2024, with the yellow metal falling 1.2% as markets began steadily pricing out expectations for a March interest rate cut. Markets position for May rate cut as payrolls data looms While the Fed largely shot down expectations for a rate cut in March, the CME Fedwatch tool showed traders were now pricing in the possibility of a 25 basis point cut in May- which benefited bullion prices. The central bank is also expected to cut rates at least four more times after May, according to Goldman Sachs analysts. While U.S. rates are expected to remain high in the near-term, the prospect of an eventual decline in rates- which was also flagged by Fed Chair Jerome Powell at a meeting earlier this week- bodes well for bullion prices. Still, the Fed has given no clear indication on the timing and scope of its planned rate cuts, and has presented a largely data-driven approach to any rate cuts. To this end, nonfarm payrolls data due later on Friday is expected to largely factor into the Fed’s outlook. The central bank has signaled that a cooling labor market will also be considered when cutting interest rates. Friday’s data is expected to show some cooling in the labor market through January. But the reading has consistently surprised to the upside. Copper prices dip, head for weekly losses on China woes Among industrial metals, copper prices fell on Friday and were set to end the week lower, amid persistent concerns over a sluggish economic recovery in top importer China. Copper futures expiring in March fell 0.5% to $3.8342 a pound, and were down 0.3% this week. Losses in copper were driven chiefly by underwhelming purchasing managers index data from China, with official data showing that manufacturing activity remained in contraction through January. This fed into concerns over a demand slowdown in the country. https://www.investing.com/news/commodities-news/gold-prices-steady-at-2050-as-dollar-slides-before-nonfarm-payrolls-data-3290773

2024-02-02 05:00

Copyrighted Image by: Reuters. Investing.com-- Most Asian currencies kept to a tight range on Friday, while the dollar was headed for a negative week ahead of key U.S. nonfarm payrolls data, which is expected to provide more cues on the path of U.S. interest rates. The data comes just a few days after the Federal Reserve kept interest rates steady and shot down expectations for an interest rate cut in March. But Fed Chair Jerome Powell struck a somewhat optimistic note on the U.S. economy, which drove investors into risk-driven assets despite the prospect of higher-for-longer interest rates. This saw traders sell off the dollar after a short-lived bounce. The dollar index and dollar index futures were flat in Asian trade on Friday, and were set to lose about 0.4% this week. This trade aided most Asian currencies, with the Australian dollar- which is a key indicator of risk appetite towards Asian markets- rising 0.4%. The Aussie recovered from an over one-month low ahead of a Reserve Bank of Australia meeting next week, where the central bank is widely expected to keep interest rates steady. Producer and consumer inflation readings released this week showed that while Australian inflation was easing, it still remained well above the RBA’s target range. Losses in the dollar offered some relief to Asian currencies after a bruising start to 2024, with most regional units logging steep losses in January. The Japanese yen was flat after largely lagging its regional peers in January. But the yen found some resilience in recent sessions amid growing conviction that the Bank of Japan was close to moving away from its ultra-dovish policies this year. The South Korean won rose 0.2% as data showed consumer inflation grew slightly less than expected in January, while the Singapore dollar traded sideways. The Indian rupee was among the better performers this week, recovering sharply from near record lows after the ruling BJP party unveiled a surprisingly conservative annual budget, which bodes well for India’s bloated fiscal deficit. The Chinese yuan was flat following a stronger-than-expected midpoint fix from the People’s Bank of China. Losses in the yuan were held back by reported intervention in currency markets by the PBOC, after a series of underwhelming purchasing managers index readings for January. The readings indicated that an economic recovery in China showed little signs of improving in the first month of 2024. Markets look to May rate cut as nonfarm payrolls approach After the Fed largely downplayed bets on a March interest rate cut, traders began pricing in a 25 basis point cut in May. The CME Fedwatch tool showed traders pricing in an over 60% chance for a May rate cut, with analysts also expecting the Fed to cut interest rates at least four more times after May. While such a scenario bodes well for risk-driven Asian currencies, the Fed has given no indication that it will trim rates by a wide margin in 2024. The central bank reiterated that its plans to cut rates will be largely dictated by the path of inflation, which has so far remained sticky. Nonfarm payrolls data is expected to provide more cues on the labor market. The Fed has also cited a cooling labor market as one of the major factors to drive interest rate cuts. https://www.investing.com/news/forex-news/asia-fx-muted-dollar-nurses-weekly-losses-ahead-of-nonfarm-payrolls-3290743