US STOCKS-Futures down slightly as trade, inflation worries persist - Reuters News
01-May-2018 09:08:20 PM
• Pfizer drops as quarterly revenue misses estimates
• Fed begins two-day policy meeting
• Oil slips on worries about Iran sanction
• Futures down: Dow 0.13 pct, S&P 0.04 pct, Nasdaq 0.08 pct
Adds comments, details, updates prices
By Sruthi Shankar
May 1 (Reuters) - U.S. stock index futures were down slightly on Tuesday after disappointing results from Pfizer, while investor concerns about inflation, rising costs and protectionist policies continued.
At 8:45 a.m. ET, Dow e-minis were down 31 points, or 0.13 percent. S&P 500 e-minis were down 1 points, or 0.04 percent and Nasdaq 100 e-minis were down 5.5 points, or 0.08 percent.
Trading volumes could remain light as most financial centers across Europe and Asia were closed on account of May Day.
U.S. equity index futures got some reprieve overnight after President Donald Trump postponed the imposition of steel and aluminum tariffs on Canada, the European Union and Mexico until June 1, and reached agreements for permanent exemptions for Argentina, Australia and Brazil.
The decision comes ahead of Treasury Secretary Steven Mnuchin's highly anticipated trip to China later this week to discuss trade issues.
"You had the tariff news, but that may have already been baked in," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
"It causes the same amount of uncertainty, you had worse-than-expected revenue from Pfizer, and there might be some caution ahead of Apple results."
Pfizer fell 1.3 percent after the largest U.S. drugmaker's quarterly revenue missed estimates. Merck shares also dipped 1.1 percent despite profit beating estimates and the company lifting earnings forecast for the year.
Apple, the world's biggest publicly traded company, comes out with results after market closes on Tuesday. All eyes will be on the earnings report as recent warnings from some chipmakers, on softening demand for iPhones and other top-end models, took a toll on Apple's shares.
The U.S. Federal Reserve begins its two-day monetary policy meeting on Tuesday. Although no change in policy rates is expected, investors will watch for clues on whether three more rate hikes are due for the rest of 2018.
A rally in oil and other commodity prices have raised fears about higher raw material costs. Some companies, including Caterpillar and Procter & Gamble, have flagged such concerns this earnings season.
Oil prices which are near 2014 highs, surged on Monday after Israeli Prime Minister Benjamin Netanyahu presented what he called evidence of a secret Iranian nuclear weapons program.
The prices were slightly down on Tuesday on worries that Trump would pull out of the Iran nuclear deal.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)
UPDATE 5-Oil prices stumble, but Iran sanction fears limit losses - Reuters News
01-May-2018 09:47:14 PM
• Fears grow that U.S. will scrap nuclear deal with Iran
• Strong U.S. dollar weighs on prices
• U.S. crude stocks seen up 1.3 mln bbls; API data due at 2030 GMT
Updates prices, bullets
By Libby George
LONDON, May 1 (Reuters) - Oil prices slid on Tuesday as the dollar remained near a four-month high, but worries that U.S. President Donald Trump will pull out of the Iran nuclear deal underpinned the market.
Brent crude for July delivery was trading 97 cents lower at $73.72 by 1335 GMT. The June contract expired on Monday, settling up 53 cents at $75.17.
U.S. West Texas Intermediate crude for June delivery was 95 cents down at $67.62 a barrel, after settling 47 cents higher on Monday.
Oil prices rose on Monday as Israeli Prime Minister Benjamin Netanyahu presented what he called evidence of a secret Iranian nuclear weapons programme. Tehran has denied ever seeking nuclear weapons.
But analysts said the lack of a smoking gun took some of the heat out of oil prices. Olivier Jakob of PetroMatrix said the announcement "did not bring anything new to the table," and the market therefore shed some of the previous day's gains.
"It shows how much the market has already priced in the expectation that Trump will not extend the waivers," he said.
Trump has given Britain, France and Germany a May 12 deadline to fix what he views as the flaws of the 2015 nuclear deal, or he will reimpose sanctions.
A strong U.S. dollar, which makes oil more expensive to holders of other currencies, also weighed. On Tuesday, the U.S. dollar index versus a basket of other currencies hit its highest since January.
Still, crude prices were within striking distance of a more than three-year high hit in late April, and analysts said the market is sensitive to any developments on Iranian sanctions.
Falling OPEC oil output, which hit a one-year low in April, also supported prices.
Elsewhere, U.S. crude production jumped 260,000 barrels per day (bpd) to a record high of 10.26 million bpd in February, the Energy Information Administration said on Monday.
U.S. crude inventories likely rose by 1.3 million barrels last week, while gasoline and distillate stockpiles fell, a preliminary Reuters poll showed on Monday ahead of data by the Industry group the American Petroleum Institute later in the day.
(Additional reporting by Osamu Tsukimori in Tokyo
Editing by Alexandra Hudson and Louise Heavens)
PRECIOUS-Gold hits six-week low as dollar climbs before Fed meeting - Reuters News
01-May-2018 07:54:53 PM
• Dollar hits 3-1/2-month peak ahead of Fed
• Platinum slides to lowest since mid-December
(Updates prices)
By Jan Harvey
LONDON, May 1 (Reuters) - Gold slid to a six-week low on Tuesday as the dollar strengthened ahead of a U.S. Federal Reserve policy meeting that is being watched for clues on the future pace of interest rate hikes.
The metal also looks vulnerable after breaking through key chart support in the $1,320/1,317 area, its 100-day moving average and a key retracement of its January to March decline, technical analysts said.
Spot gold was down 0.5 percent at $1,307.95 an ounce at 1145 GMT, off an earlier low of $1,307.40, its weakest since March 20. U.S. gold futures for June delivery were 0.8 percent lower at $1,308.60.
The dollar hit a 3-1/2-month high versus the euro ahead of the Fed meeting starting on Tuesday and moved into positive territory for the year against a basket of major currencies, having surged on a recent rally in bond yields.
"Investors are buying dollars and this is adding pressure on gold," ActivTrades analyst Carlo Alberto de Casa said.
"(The)dollar index jumped above 92, while markets are seeing growing chances for a fourth hike in 2018. Almost 50 percent of traders (are) expecting a fourth raise by the end of the year."
While the U.S. central bank is widely expected to stand pat on policy for now, market participants will be closely watching the two-day meet for hints of an interest rate hike in June.
Rising interest rates tend to weigh on gold, as they increase the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced. Ultra-low rates were a key factor driving gold to record highs in the wake of the global financial crisis.
Gold now looks vulnerable to further losses after breaking through key support levels, according to technical analysts, who study past price patterns to predict the direction of trade.
"MACD (moving average convergence-divergence) and momentum indicators highlight downside risk and I remain bearish on gold, targeting 1,304.30, the 200-day moving average," ScotiaMocatta said in a note.
Silver was down 0.4 percent at $16.26 an ounce, while palladium was 1.1 percent lower at $954.47 an ounce.
Platinum was down 0.4 percent at $899.80 an ounce. The white metal used in autocatalysts and jewellery dipped earlier in the session to $892.10, its lowest since Dec. 18. It was the biggest faller among major precious metals last month, sliding 2.7 percent in a third straight monthly loss.
(Additional reporting by Eileen Soreng in Bengaluru; Editing by Dale Hudson)
CBOT Trends-Soy down 2-3 cents, corn up 1-2, wheat steady-down 1 - Reuters News
01-May-2018 09:29:46 PM
CHICAGO, May 1 (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 Tuesday.
WHEAT - Steady to down 1 cent per bushel
• Modestly weaker on technical selling and profit-taking after the CBOT July contract reached $5.14-1/2 in early moves, its highest since mid-March. Traders await results of the Wheat Quality Council's annual Kansas wheat tour, which began scouting fields on Tuesday.
• The CBOT reported no May wheat deliveries and 159 K.C. May wheat deliveries. The MGEX reported 154 May spring wheat deliveries.
• The USDA late Monday rated 33 percent of the U.S. winter wheat crop in good to excellent condition, up from 31 percent a week earlier.
• The USDA said the U.S. spring wheat crop was 10 percent seeded by Sunday, behind the five-year average of 36 percent.
• CBOT July soft red winter wheat last traded down 1/2 cent at $5.10 per bushel. K.C. July hard red winter wheat was last down 3-1/2 cents at $5.34 and MGEX July spring wheat was down 5 cents at $6.10-1/2 a bushel.
CORN - Up 1 to 2 cents per bushel
• Firmer, awaiting direction from U.S. planting weather. Market supported by worries about dry conditions stressing Brazil's second-crop corn.
• The USDA late Monday said the U.S. corn crop was 17 percent planted by Sunday, roughly in line with trade expectations but behind the five-year average of 27 percent.
• The CBOT reported 576 deliveries against May corn futures, with the Term house account issuing 555 lots and no clear commercial stoppers.
• CBOT July corn last traded up 1-1/2 cents at $4.02-1/4 a bushel.
SOYBEANS - Down 2 to 3 cents per bushel
• Lower on technical selling and follow-through momentum from Monday's downturn.
• The USDA late Monday said the U.S. soybean crop was 5 percent planted, matching the five-year average.
• Deliveries against CBOT May soybeans totaled 145 contracts. The CBOT reported 52 May soymeal deliveries and 265 May soyoil deliveries.
• CBOT July soybeans last traded down 3 cents at $10.45-1/2 per bushel.
(Reporting by Julie Ingwersen)
REFILE-FOREX-Dollar turns positive for 2018 ahead of Fed meeting - Reuters News
01-May-2018 06:03:34 PM
Refiles to remove extra word from headline
• Dollar index up in 2018; euro back to Jan lows
• Market liquidity lower because of public holidays
• Swedish crown, pound, fall heavily
By Tommy Wilkes
LONDON, May 1 (Reuters) - The U.S. dollar surged on Tuesday into positive territory for 2018 and broke past key levels against several currencies as a divergence between growth and the interest rate outlook versus other countries spurred investors to chase the currency higher.
Traders said relatively illiquid markets because of holidays across much of Europe and parts of Asia had exacerbated moves on Tuesday but that dollar bulls, at least in the short-term, were in the ascendency for a currency that until two weeks ago had struggled.
The dollar, traded against a basket of major currencies, rose 0.4 percent to 92.221, the highest since Jan. 11 and higher than where it started the year.
Against the euro, which has been knocked by weaker-than-expected economic data and growing doubts about when the European Central Bank will normalise its monetary policy, the dollar gained 0.4 percent.
That left the single currency at $1.2029 and more than five cents from its February highs.
The dollar also pushed past key levels against the Australian dollar, the Swedish crown, Swiss franc and the British pound.
"It seems that the dollar is still in demand. Given the positive sentiment and the lack of liquidity, it doesn't take much for the dollar to move higher," said Valentin Marinov, Head of G10 FX Strategy at Credit Agricole.
Marinov noted that price action later in the week when the Federal Reserve gives its monetary policy decision and crucial U.S. jobs data is published will be a better gauge of whether investors are prepared to push the dollar much higher.
Most analysts had been negative on the dollar this year, predicting that a splurge in U.S. government borrowing and a U.S. administration keen on a weaker currency would dent the dollar at the same time as investors flocked back to the euro zone.
Most still believe the dollar will weaken over the medium to long term, however, with the euro and yen seen as the main beneficiaries.
But the U.S. economy has shown signs of strength in 2018 few other developed economies can match while geopolitical tensions, including around a U.S.-China trade spat, have subsided in recent weeks to support the greenback.
"The key U.S. dollar driver has been the divergence between economic data in the U.S. and the rest of the world, and U.S. data continues to look comparatively robust" Morgan Stanley said.
While markets don't expect a change in interest rates from the Fed at the conclusion of a meeting on Wednesday, analysts will be watching for any change in language.
BNY Mellon strategists said that if the Fed drops any cautionary comments on its inflationary outlook, then it would signal a growing confidence among policymakers that inflation has firmed up enough for an increase in forecasts.
Bond markets are expecting roughly three rate hikes until the end of the year.
Markets are also focused on Friday's April U.S. non-farm payrolls report, which could provide further signs of strength.
With the dollar rallying, there were several casualties on Tuesday. The Swedish crown fell more than one percent to 8.8335, its lowest since May last year.
The crown is one of the worst performing major currencies in 2018 as investors bet the Riksbank will be one of the last central banks to rein in its stimulus.
Sterling also skidded more than half a percent, although most of the move was down to more weaker-than-expected economic news.
The dollar rose 0.2 percent to 109.575 yen, its highest since early February.
The New Zealand and Australian dollars also fell, the latter to $0.7507 and its weakest since Dec. 11.
(Additional reporting by Shinichi Saoshiro in TOKYO, Editing by Andrew Heavens, William Maclean)
