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US STOCKS-Wall St set to open flat after U.S.-North Korea summit - Reuters News

12-Jun-2018 09:10:42 PM

• U.S. consumer prices for May rise in line with expectations
• Twitter jumps after J.P. Morgan PT hike
• Telsa gains after Keybanc raises Model 3 delivery est
• Futures: Dow off 3 pts, S&P and Nasdaq up 1 pt each

By Sruthi Shankar

June 12 (Reuters) - U.S. stock futures were flat on Tuesday after the historic U.S.-North Korea summit failed to impress investors, who turned their focus to the Federal Reserve's two-day policy meeting.

President Donald Trump and North Korean leader Kim Jong Un pledged to work toward complete denuclearization of the Korean peninsula, while Washington committed to provide security guarantees for its old enemy.

But they gave few other specifics in a joint statement signed at the end of their summit in Singapore, and several analysts cast doubt on how effective the agreement would prove to be in the long run at getting North Korea to give up its cherished nuclear weapons.

"Markets are skeptical," said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts. "This is more of a case of 'we'll believe it when we see it', rather than actually reacting."

The U.S. Federal Reserve is widely expected to raise interest rates by a quarter percentage point at the policy meeting, which begins on Tuesday.

Investors are focused on how the U.S. central bank characterizes its monetary policy as borrowing costs return to more normal levels, while also looking for hints if the Fed is going for three or four rate hikes this year.

"The market would take two more in stride. The last time, the Fed was pretty evenly split (on three or four rate hikes). There would be a shift, but only a shift at the margins, which would be interpreted as a sign of the economy continuing to strengthen."

U.S. consumer prices rose marginally in May amid a slowdown in the pace of increases in the cost of gasoline, pointing to moderate inflation pressures.

The Labor Department said Consumer Price Index increased 0.2 percent following a similar gain in April, while the core CPI, which strips out the volatile food and energy components, rose to 2.2 percent, year-over-year. Both were in line with economists' estimates polled by Reuters.

With inflation flirting with the Fed's 2 percent target, policymakers have in recent days signaled they would not be too concerned if it overshot the target.

By 8:48 a.m. ET, Dow e-minis were down 3 points, or 0.01 percent. S&P 500 e-minis were up 1 points, or 0.04 percent and Nasdaq 100 e-minis were up 1 points, or 0.01 percent.

Among stocks, Twitter rose 3.0 percent in premarket trading after J.P. Morgan raised its price target by $11 to $50.

Tesla surged 3.4 percent after Keybanc raised its estimates for Model 3 deliveries for the second quarter and full-year.

Shares of AT&T Inc rose 0.9 percent ahead of a landmark ruling, due after the closing bell, that will determine if it can buy Time Warner Inc

(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva)

 

 

 

UPDATE 9-Oil eases; OPEC cites uncertain market outlook for 2018 - Reuters

12-Jun-2018 07:57:50 PM

• Volatility subsides as caution builds over OPEC meeting
• OPEC cites uncertain market outlook in second half of 2018
• Rising supplies from top producers cap market
• OPEC, non-OPEC producers meet on June 22-23 in Vienna

By Amanda Cooper

LONDON, June 12 (Reuters) - Oil prices eased on Tuesday, paring earlier gains, although volatility subsided to its lowest in three weeks, as investors prepared for a key meeting of the OPEC producer group next week.

Crude remained in a tight trading range, in line with the broader financial markets, which were largely unruffled by a U.S.-North Korea summit aimed at the denuclearisation of the Korean peninsula.

The Organization of the Petroleum Exporting Countries released its monthly report on Tuesday, in which it cited the high degree of uncertainty hanging over the global oil market this year.

Brent crude futures fell 29 cents to $76.17 a barrel by 1143 GMT, while U.S. West Texas Intermediate crude futures eased 12 cents to $65.98.

"The market has been rangebound for two weeks and that is likely to remain the case," Ole Hansen, senior manager at Saxo Bank, said.

OPEC, together with partners including Russia, has cut oil output by 1.8 million barrels per day (bpd) since January 2017 in an effort to boost the market.

Volatility in oil prices has subsided due to caution around the group's meetings scheduled for June 22-23, at which it will decide on future supply policy.

With U.S. sanctions threatening to cut Iranian exports and the potential for more declines in Venezuelan production, OPEC kingpin Saudi Arabia and Russia have indicated they would be willing to raise output to make up for any supply shortfall.

Russian production reportedly climbed to 11.1 million bpd in early June.

In the United States, output has risen by almost a third in the last two years, to a record 10.8 million bpd.

Top exporter Saudi Arabia - which has so far led OPEC's efforts to withhold supplies - is also showing signs of raising production.

OPEC said on Tuesday the outlook in the second half of the year is highly uncertain even though the oil producer group's figures show a global glut is gone, suggesting exporters will be in no rush to fully relax output curbs next week.

"Recently, crude oil futures have lost some momentum amid uncertainty as traders prepare for potentially more supply returning to the market," the group said.

"I feel that if they would like to be a responsible swing producer for the global oil market, based on their (demand) numbers, they should increase production by at least 1 million bpd from the current level," PVM Oil Associates strategist Tamas Varga said.

 

(Additional reporting by Henning Gloystein in SINGAPORE; Editing by Dale Hudson/David Evans)

 

 

 

UPDATE 1-OPEC cautious on oil outlook despite end of global glut - Reuters News

12-Jun-2018 07:39:20 PM

By Alex Lawler

LONDON, June 12 (Reuters) - OPEC said on Tuesday the oil market outlook in the second half of the year is highly uncertain even though the producer group's figures show a global glut has ended, suggesting exporters will be in no rush to relax output curbs at a meeting next week.

OPEC, Russia and other non-OPEC producers have been cutting output since January 2017 to get rid of excess supply and boost prices. The deal's main goal was to reduce oil inventories in developed nations to that of the five-year average.

In a report on Tuesday, OPEC said inventories in those nations in April fell to 26 million barrels below the five-year average. That's down from 340 million barrels above the average in January 2017.

With oil prices hitting $80 a barrel this year, the highest since 2014, Saudi Arabia and Russia are discussing raising OPEC and non-OPEC oil production. The producers meet on June 22-23 in Vienna to set policy.

Still, OPEC in the report was cautious on the outlook for the rest of 2018, citing a faster-than-expected rise in non-OPEC oil production and the chances of global demand weakening.

"Recently, crude oil futures have lost some momentum amid uncertainty as traders prepare for potentially more supply returning to the market," OPEC said.

"While oil demand in the U.S., China and India shows some upside potential, downside risks might limit this potential going forward."

The report said OPEC members were still cutting more than needed under the supply deal, even though output in May rose and top exporter Saudi Arabia is boosting supply.

OPEC output climbed by 35,000 barrels per day to 31.87 million bpd, OPEC said. Saudi Arabia reported to OPEC its own output rose back above 10 million bpd.

 

(Editing by Jason Neely and Dale Hudson)

 

 

 

PRECIOUS-Gold locked below $1,300 as market braces for Fed meeting - Reuters News

12-Jun-2018 08:12:22 PM

• Fed rate decision due at 1800 Wednesday
• Investors seeking clues on Fed policy outlook
• European, Japanese central banks also meet this week
• Little reaction from U.S.-N.Korean agreement

By Peter Hobson

LONDON, June 12 (Reuters) - Gold prices remained locked just below $1,300 an ounce on Tuesday as investors waited for clues on the pace of U.S. interest rate rises from a Federal Reserve meeting this week.

A Fed statement and press conference expected from 1800 GMT on Wednesday could push gold out of the tight range of around $1,290-$1,305 in which it has been trapped since mid-May.

Gold is highly sensitive to interest rates because higher rates push up bond yields, making non-yielding gold less attractive, and tend to strengthen the dollar, increasing the cost of gold for buyers using other currencies.

Investors expect the Fed to increase rates on Wednesday but will be looking for hints at future policy. A more aggressive stance on monetary tightening would hurt gold.

"We are waiting for the FOMC," said Saxo Bank analyst Ole Hansen, referring to the Fed's policy committee.

Gold prices have tended to fall ahead of previous rate rises but recover afterwards, he said. "We're still erring towards the potential for a move higher here."

Spot gold was down 0.1 percent at $1,297.95 an ounce at 1202 GMT, while U.S. gold futures for August delivery were 0.1 percent lower at $1,301.70 an ounce.

U.S. bond yields had edged higher and the dollar was flat against a basket of major currencies.

 

Adding to the wait-and-see mood for gold were expectations that the European Central Bank will signal a winding down of its vast bond-buying programme at a meeting on Thursday. This would likely help gold by boosting the euro and weakening the dollar.

Japan's central bank will also meet on June 14-15.

Gold did not react strongly to a pledge by the leaders of the United States and North Korea to work toward complete denuclearisation of the Korean peninsula.

The joint statement signed at the end of a summit in Singapore gave few details on how this goal would be achieved.

Gold is traditionally used as a safe place to invest money during times of uncertainty, and growing tensions over Korea have added to demand.

In other precious metals, silver was down 0.3 percent at $16.84 an ounce after hitting a seven-week high of $16.95 on Monday.

Platinum was 0.3 percent higher at $906.80 an ounce and palladium was down 0.4 percent at $1,017.91 an ounce.

 

(Reporting by Karen Rodrigues and Swati Verma in Bengaluru; Editing Susan Fenton and Louise Heavens)

 

 

 

UPDATE 1-VEGOILS-Malaysian palm oil slides to near two-year low - Reuters News

12-Jun-2018 07:04:03 PM

By Kanupriya Kapoor

JAKARTA, June 12 (Reuters) - Malaysian palm oil futures dropped more than 1 percent to their lowest in nearly two years on Tuesday, weighed down by the government's decision to maintain an export tax for July and due to lacklustre demand.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange dropped 1.44 percent to 2,326 ringgit ($583.25 per tonne by the close of trade, the lowest since August, 2016.

Prices dropped as low as 2,323 ringgit during the day and trading volumes stood at 59,383 lots of 25 tonnes each.

Malaysia, the world's second-largest palm oil producer, kept its crude palm oil export tax at 5 percent in July. The tax was resumed in May, after a four-month hiatus to increase demand and boost prices.

"Going forward the market is very concerned about demand, because it's not picking up as it should. Production is also supposed pick up and that will put further pressure on inventories and prices," said David Ng of Phillip Futures.

Malaysia's exports of palm oil, an ingredient used in goods ranging from soap to chocolate, between June 1 and June 10 stood at 324,947 tonnes, down 20 percent from the same period a month earlier.

Palm oil prices track the performances of other edible oils, as they compete for a share in the global vegetable oils market.

On the Dalian Commodity Exchange, the September soybean oil contract dropped 0.66 percent, while the July soybean oil contract on the Chicago Board of Trade was also down 0.23 percent.

 (Editing by Sherry Jacob-Phillips/David Evans)