Wednesday, May 16, 2018

Stock & Commodities Related News.

US STOCKS-Wall St to open flat on rising U.S. yields, N. Korea worries - Reuters News

16-May-2018 09:09:20 PM

  • North Korea says may have to "reconsider" summit
  • Macy's jumps after results, lifts other department stores
  • AMD, Micron rise after brokerage actions
  • Futures down: Dow 0.08 pct, S&P 0.06 pct, Nasdaq 0.03 pct

Adds comment, adds details, updates prices

By Medha Singh

May 16 (Reuters) - Wall Street was set to open little changed on Wednesday as investors assessed the impact of a surge in bond yields, while growing doubts about the U.S.-North Korea summit also weighed.

North Korea threw next month's summit between Kim Jong Un and President Donald Trump into doubt, threatening weeks of diplomatic progress by saying it may reconsider if Washington insists it unilaterally gives up its nuclear weapons.

The country's threat to cancel the June 12 summit in Singapore adds to the jitters in the market, which is already dealing with China-U.S. trade tensions and inflation concerns.

The Dow Jones Industrial Average and the Nasdaq recorded their biggest one-day percentage drop in three weeks on Tuesday after strong retail sales data stoked inflation worries.

"Traders are looking for some stability coming off of the sharp decline yesterday," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

"(They are) looking for a little more visibility coming from the trade front with China even as concern over inflation keeps rearing its head."

At 8:47 a.m. ET, Dow e-minis were down 19 points, or 0.08 percent. S&P 500 e-minis were down 1.75 points, or 0.06 percent and Nasdaq 100 e-minis were down 2.25 points, or 0.03 percent.

The U.S. 10-year Treasury yield spiked above the key 3 percent level to its highest since July 2011 on Tuesday after the retail data. It was last at 3.0613 percent.

Federal funds futures implied that traders saw a 54 percent chance that the U.S. Federal Reserve would raise rates for a fourth time by year-end.

Macy's 6.9 percent jump after reporting a much better-than-expected rise in same-store sales in the first quarter, helped shares of other retailers. J. C. Penney, Kohl's and Nordstrom were all up more than 2.5 percent to 3.5 percent.

Micron rose 2.1 percent in premarket trading after RBC Capital Markets began coverage with "outperform" rating, while AMD gained 1.7 percent after a rating upgrade at Susquehanna.

(Reporting by Medha Singh in Bengaluru; Editing by Anil D'Silva)




UPDATE 6-Oil drops as demand shows signs of weakening - Reuters News

16-May-2018 09:29:54 PM

  • U.S. crude stocks rise by 4.9 mln bbl to 435.6 mln bbl -API
  • Physical spot cargoes trade at discount to financial crude
  • Production by oil majors rising - S&P Global Ratings

Updates prices

By Amanda Cooper

LONDON, May 16 (Reuters) - Oil fell on Wednesday ahead of an anticipated rise in U.S. crude inventory that could provide more evidence that demand may be slowing in spite of ongoing crude output cuts by producer group OPEC and imminent U.S. sanctions against Iran.

Brent crude futures were last down 65 cents at $77.78 a barrel by 1147 GMT, while U.S. crude futures fell 32 cents to $70.99 a barrel, leaving the spread between the two just shy of a 2015 high of $7 a barrel.

Physical crude markets are sagging under the weight of unsold barrels of oil, while the 50-percent rise in the oil price in the last year is encouraging major companies such as ExxonMobil, Royal Dutch Shell, Chevron, BP and Total to increase output.

"Aggregate production - both actual and projected - is growing for the majors," S&P Global Ratings said in a report published on Tuesday.

Spot crude oil cargo prices are at their steepest discounts to futures prices in years as sellers are struggling to find buyers for West African, Russian and Kazakh cargoes, while pipeline bottlenecks trap supply in west Texas and Canada.

The bottleneck in North America likely contributed to a 4.9 million barrel rise in U.S. crude oil inventories, to 435.6 million barrels, that the private American Petroleum Institute reported on Tuesday.

"The API inventory data in the U.S. fits with ... a topping pattern – or at least a decent pause – for oil prices at the moment," said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

Official U.S. government fuel storage data is due for release by the Energy Information Administration (EIA) later on Wednesday.

"A similar reading from EIA today could relieve some of the upward pressure on prices and trigger some near-term profit taking," Craig Erlam, senior market strategist at OANDA said.

With renewed U.S. sanctions looming against OPEC-member Iran and oil demand strong, analysts said crude markets will likely remain tight for much of the year.

Stronger oil prices are also spilling into other markets.

"A rising oil price brings upside price risk to all commodities," Morgan Stanley said in a note this week.

The International Energy Agency on Wednesday warned global demand is likely to moderate this year, as the price of crude nears $80 a barrel and many key importing nations no longer offer consumers generous fuel subsidies.

In its monthly report, the Paris-based IEA cut its forecast for global demand growth to 1.4 million barrels per day for 2018, from a previous estimate of 1.5 million bpd.

"On balance, the report is tending more to the negative side. Demand for oil has been revised downwards for the second half of the year from April," PVM Oil Associates strategist Tamas Varga said.

(Additional reporting by Henning Gloystein in SINGAPORE; Editing by Alexandra Hudson and Mark Potter)




PRECIOUS-Gold extends losses after biggest tumble since 2016 - Reuters News

16-May-2018 08:37:45 PM

  • Dollar hits 2018 peak
  • U.S. bond yields slip from highs
  • Gold fell 1.7 pct on Tuesday
  • Technicals suggest further losses

(Recasts, updates prices)

By Peter Hobson

LONDON, May 16 (Reuters) - Gold prices continued to lose ground on Wednesday, falling to their lowest since December as the dollar rallied to 2018 highs and U.S. bond yields sat near multi-year peaks.

The metal had suffered its biggest single-day loss since November 2016 when it fell 1.7 percent on Tuesday after strong U.S. retail sales data sent the dollar and yields soaring.

Gold's declines were accelerated by technical selling as it crashed below its 200-day moving average and the psychologically significant level of $1,300 an ounce.

By 1227 GMT spot gold was down 0.2 percent at $1,287.61 an ounce, having gone as low as $1,286.20, its weakest since Dec. 27.

U.S. gold futures for June delivery were 0.3 percent down at $1,287.

"The most important driver (for gold) is the dollar and yields," said ABN AMRO analyst Georgette Boele.

A stronger dollar hurts gold by making it more expensive for holders of other currencies, while higher bond yields make non-yielding bullion less attractive to investors.

The strong U.S. retail data also suggested that the Federal Reserve will be confident about raising U.S. interest rates. That is bad for gold because higher rates push up bond yields and tend to boost the dollar.

Gold is likely to fall to $1,275 by the end of June and $1,250 by the end of the year as U.S. yields and the dollar strengthen, said Boele. That is below the $1,310-$1,360 range gold has inhabited since January.

"It held up for so long on such a high level. Now you are below $1,300 and the 200-day moving average; people who hold long positions are a little bit nervous," she said.

Technical and momentum indicators suggested that gold could fall to about $1,278, ScotiaMocatta analysts said. Fibonacci support for the metal was at $1,287, they added.

Gold is traditionally used as a safe place to park assets during times of uncertainty, but investors largely disregarded news that North Korea had called off high-level talks with South Korea on Wednesday, less than a month before a planned summit between Kim Jong Un and U.S. President Donald Trump.

"There are lot of geopolitical risks, but people are just used to it. Therefore it has not become a big driver for gold," said Argonaut Securities analyst Helen Lau.

In other precious metals, silver was down 0.2 percent at $16.20 an ounce after falling 1.6 percent on Tuesday.

Platinum eased by 0.3 percent to $890.60 and palladium lost 0.3 percent to $979.20.


(Additional reporting by Apeksha Nair and Eileen Soreng in Bengaluru
Editing by Jane Merriman and David Goodman)




METALS-Copper steady amid strong Chinese data, dollar - Reuters News

16-May-2018 08:41:33 PM

Updates prices

By Zandi Shabalala

LONDON, May 16 (Reuters) - Copper was steady on Wednesday following two losing sessions as a stronger dollar offset upbeat Chinese home sales data.

Benchmark copper on the London Metal Exchange was traded at a steady $6,808 after falling by more than 1 percent on Tuesday. Copper, used in power and construction, is down 1.8 percent so far this week.

"We have had some decent data from Chinese new home sales which were the strongest growth for about six months and that's pretty positive," said ING analyst Oliver Nugent.

"For the most part the likes of copper are bouncing from the sell-off yesterday but (it's) very sideways trading."


CHINA: China's new home prices rose in April with an increasing number of smaller cities driving broader growth, pointing to a resilient construction market which is a key industry for industrial metals.

DOLLAR: The dollar index added 0.3 percent to trade at its highest in 2018, capping gains in commodities priced in the greenback.

NORTH KOREA: North Korea cancelled high-level talks with Seoul, denouncing military exercises between South Korea and the United States, breaking from several months of easing relations on the peninsula. This weighed on risk sentiment.

INVENTORIES: Headline copper stocks in LME-approved warehouses sit at 290,825 tonnes after falling 525 tonnes. This is slightly higher than the January low touched last week.

ALUMINIUM STOCKS: Aluminium stocks held at three major Japanese ports rose about 9 percent to 267,100 tonnes by the end of April from the previous month, trading house Marubeni Corp said on Wednesday.

LITHIUM: China's Tianqi Lithium is nearing a deal to buy a 24 percent stake in Chile's Sociedad Quimica Y Minera, one of the world's biggest lithium producers, for about $4.3 billion.

RUSAL INSIGHT: On April 23, the U.S. Treasury eased restrictions on billionaire Oleg Deripaska's aluminium company Rusal. Instead of barring Rusal from international markets, which is what the United States originally intended to do, the Treasury suggested it might lift the sanctions altogether.

U.S.-CHINA TRADE: The United States is seeking to make a trade deal with China, White House economic adviser Larry Kudlow said as bilateral talks between the world's two economic powerhouses resume in Washington this week.

BAUXITE: Operations at Societe Miniere de Boke's bauxite mine in Guinea have restarted following a nearly two-week strike that caused a halt in production of the aluminium ore, the company's managing director said on Wednesday.

OTHER METALS: LME aluminium was down 0.6 percent at $2,312 per tonne in official rings, lead was bid 0.6 percent lower at $2,333, zinc was flat at $3,062, tin was down 0.4 percent to $20,800 while nickel was bid 0.2 percent higher at $14,450.


(Additional reporting by Manolo Serapio Jr.; Editing by Jon Boyle)




CBOT Trends-Wheat up 1-3 cents, corn up 1-2, soybeans down 5-7 - Reuters News

16-May-2018 09:24:46 PM

CHICAGO, May 16 (Reuters) - Following are U.S. trade expectations for the resumption of grain and soy complex trading at the Chicago Board of Trade at 8:30 a.m. CDT (1330 GMT) on Wednesday.


WHEAT - Up 1 to 3 cents per bushel

  • Wheat heading higher for a second session on technical buying after Tuesday's two-week low, and worries about dryness in the northern U.S. Plains and Canadian spring wheat areas as well as Australia.
  • The association of German farm cooperatives on Wednesday forecast that Germany's 2018 wheat crop will fall 2.0 percent on the year to 23.98 million tonnes.
  • CBOT July soft red winter wheat last up 3-1/4 cents at $4.96-3/4 per bushel. K.C. July hard red winter wheat last traded up 3-1/4 cents at $5.13 and MGEX July spring wheat was up 4-1/4 cents at $6.10-1/2 a bushel.

CORN - Up 1 to 2 cents per bushel

  • Corn headed higher on technical buying, spillover strength from wheat and nervousness about a slow planting pace in the northern U.S. Midwest.
  • China is expected to grow less rice and corn this year while increasing planting of soybean and other grains, local media citing the country's agricultural ministry reported.
  • CBOT July corn last up 1-3/4 cents at $4.04 a bushel.

SOYBEANS - Down 5 to 7 cents per bushel


  • Soybeans lower in rangebound trade as the market awaits news about U.S. trade negotiations with China, the world's biggest soybean buyer. The CBOT July contract stayed inside of Tuesday's trading range in early moves.
  • The price of Brazilian soybeans being offered for export has dropped below U.S. cargoes in the face of slowing Chinese demand for prompt shipments.
  • CBOT July soybeans last down 6-3/4 cents at $10.12 per bushel.


(Reporting by Julie Ingwersen)




VEGOILS-Palm oil falls nearly 1 pct on weaker related oils, slow demand - Reuters News

16-May-2018 07:04:08 PM

  • Palm charts first decline in three days
  • Market also down on output gains, to trade sideways - trader
  • Malaysia June CPO export tax kept at 5 pct - govt circular

Updates with closing prices

By Emily Chow

KUALA LUMPUR, May 16 (Reuters) - Malaysian palm oil futures edged down on Wednesday, their first decline in three days, tracking weaker related oils and due to slowing export demand.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was down 0.9 percent at 2,414 ringgit ($608.83) a tonne at the close of trade, its sharpest daily fall in nearly two weeks.

Palm had earlier jumped to a one-month high on Monday tracking a weaker ringgit following the election defeat of a coalition that ruled the country for six decades.

It ended Monday 1.5 percent higher, while continuing gains on Tuesday as well.

Trading volume stood at 38,942 lots of 25 tonnes each at Wednesday's close.

"Palm is lower today on last night's soyoil and also the weaker Dalian," said a Kuala Lumpur-based trader, referring to the overnight decline in soyoil on the U.S. Chicago Board of Trade and China's Dalian Commodity Exchange.

Another trader added that she expected the market to trade sideways due to several factors.

"The market is holding on a weak ringgit and a slower-than-expected increase in production," she said, as a weaker ringgit typically supports palm by making it cheaper for holders of foreign currencies.

"But palm demand is expected to slow also as its spread against soyoil does not make it competitive. Malaysia's crude palm oil export tax is also there."

Palm oil shipments from Malaysia, the world's second largest exporter, fell 13.7-14.9 percent in the first half of May versus the corresponding period in April, data from inspection company AmSpec Agri Malaysia and cargo surveyor Societe Generale de Surveillance showed on Tuesday.

Traders said the demand slowdown could be attributed to Malaysia's resumption of a crude palm oil export tax, which was set at 5 percent in May following four previous months of suspension.

Malaysia announced on Wednesday it will keep its crude palm oil tax rate at 5 percent in June.

In other related oils, the Chicago July soybean oil contract declined 0.4 percent on Tuesday and was last down 0.6 percent on Wednesday.

Meanwhile, the September soybean oil on China's Dalian Commodity Exchange was down 0.8 percent and the Dalian September palm oil contract fell 0.4 percent.

Palm oil is affected by movements in rival edible oils as they compete for a share in the global vegetable oils market.


Palm, soy and crude oil prices, as of 1045 GMT







































































Palm oil prices in Malaysian ringgit per tonne

CBOT soy oil in U.S. cents per pound

Dalian soy oil and RBD palm olein in Chinese yuan per tonne

India soy oil in Indian rupee per 10 kg

Crude in U.S. dollars per barrel


($1 = 3.9650 ringgit)

($1 = 67.8525 Indian rupees)

($1 = 6.3755 Chinese yuan)



(Reporting by Emily Chow; Editing by Sunil Nair and Adrian Croft)




FOREX-Euro slides below $1.18 on Italy debt concerns and dollar jump - Reuters News

16-May-2018 08:29:16 PM

  • Dollar index hits new 2018 high; euro below $1.18
  • Strong U.S. consumer spending data boosts yields, dollar
  • Reports Italian parties seeking debt forgiveness hits euro
  • Emerging markets currencies face renewed selling pressure

Adds quote, updates figures

By Tom Finn

LONDON, May 16 (Reuters) - The euro slumped to a five-month low on Wednesday after reports that a likely future Italian government would seek debt forgiveness from European creditors and as the dollar resumed its powerful, month-long rally.

The reversal in fortunes for the dollar, on which most analysts have been bearish, has been a big jolt for foreign exchange markets, forcing rapid unwinding of euro positions and a major sell-off across emerging market currencies.

The euro fell more than half a percent to $1.1767, its lowest since Dec. 18, after reports that Italy's anti-establishment 5-Star Movement and anti-immigrant League may ask the European Central Bank to forgive 250 billion euros of debt.

The single currency had initially shrugged off the news from Italy but succumbed after the dollar began rallying again.

"Once an Italian government is formed the market will be keen to know the details of its fiscal policy. Are they really going to push for this write-off from the ECB? That's a big question mark," Societe Generale FX strategist Alvin Tan said.

The euro fell sharply against the Swiss franc, which typically attracts capital in times of uncertainty. It dropped 0.6 percent to a five-week low of 1.1780 francs.

Some analysts played down the importance of Italian politics for the euro on Wednesday.

Only five percent of Italian government bonds are held by non-EU residents, making the chances of a massive flight of capital unlikely, ADM Investor Services market strategist Marc Ostwald said.

Ostwald said he suspected Asian central bank interventions to support their currencies against the dollar would also mean reducing their euro foreign exchange reserves, in order to keep their portfolios balanced.

The euro had been a top performer in 2018, with traders predicting prolonged dollar weakness because of U.S. trade and budget deficits and euro zone economic strength.

Bets that the Federal Reserve will in fact be an outlier in tightening monetary policy among major central banks and signs the euro zone's economy recovery has peaked has seen the euro slide from three-year highs of above $1.24 in April. The currency is now down 1.8 percent against the dollar in 2018.

The dollar index rose 0.4 percent to 93.625, its highest since Dec. 19.



The dollar has gained since mid-April and clawed back most of its 2018 losses after the reassessment of the path of U.S. monetary policy.

Moves by China and the United States to avoid a full-blown trade war have allowed investors to focus on the yield advantage the United States enjoys.

The U.S. currency got a boost on Tuesday when strong U.S. consumer spending numbers sent 10-year Treasury yields surging to a seven-year peak of 3.095 percent.

"Today could see a repeat of yesterday. Momentum would certainly seem to back a further dollar advance with little to stop U.S. 10-year Treasury yields pushing to 3.20 percent," ING FX strategist Viraj Patel said.

The yen budged only slightly after data showed Japan's economy contracted for the first time in nine quarters during the first quarter of 2018.

Emerging market currencies suffered more losses on Wednesday with the dollar's rise, although the Turkish lira pulled back from record lows after the central bank said it would intervene to stop its slide.

(Reporting by Tom Finn
Editing by Louise Ireland)