GLOBAL MARKETS-Asia stocks ease, dollar off highs before U.S. payrolls - Reuters News
04-May-2018 03:09:32 PM
Adds spreadbetters, updates with fresh levels throughout
- Asian shares down as markets wait for U.S. payrolls
- Eurozone inflation, U.S. data fail to boost dollar
- Indonesian stocks fall heavily, Argentine peso at record low
By Swati Pandey
SYDNEY, May 4 (Reuters) - Asian shares fell on Friday while the dollar ran into some profit-taking after several weeks of strong gains as financial markets turned their attention to looming U.S. payrolls data for fresh catalysts.
Spread betters pointed to a firm start for European shares although Wall Street was poised for another wobbly day. E-Minis for S&P 500 were off 0.2 percent while London's FTSE futures climbed 0.4 percent.
Regional trading was relatively quieter as Japan was on holiday.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5 percent, and looked set for a third straight weekly loss.
Indonesian stocks led the declines, falling as much as 1.5 percent in early trading before recouping some of those losses. South Korean shares were down 1 percent and Australian shares eased 0.6 percent.
The focus for markets will be on the U.S. jobs data due later in the global day, with the April report likely to underscore labour market strength.
Nonfarm payrolls probably increased by 192,000 jobs last month, according to a Reuters survey of economists, after rising only 103,000 in March.
But it will be the wages figure that analysts will closely watch.
"A further pick-up in the pace of wage gains could be the 'smoking gun' for the Fed to express any shift away from 'roughly balanced' risks to inflation," said Mizuho analyst Vishnu Varathan in a note.
"For now, we expect that reactions may still be subdued given that the runway of evidence remains short; and so the bearish UST and bullish USD trades may not be taking off aggressively just yet."
Investors were also keeping a close watch on U.S.-China trade talks, though analysts said they had little confidence that the U.S. delegation in Beijing, led by Treasury Secretary Steven Mnuchin, will achieve any breakthrough on the tariff standoff between the world's two biggest economies.
Chinese shares stumbled, with the blue-chip index off 0.4 percent and Shanghai's SSE Composite down 0.3 percent.
MARKET BATTLE
Investors were cautious after a largely weak performance on Wall Street on Thursday as some disappointing earnings reports offset strong economic data, while bond yields slid after a surprising slowdown in eurozone inflation.
The U.S. dollar weakened from a recent four-month peak against major currencies during a choppy session, a day after the Federal Reserve ended a policy meeting with no change in rates and a less hawkish statement than investors had anticipated.
Disappointing U.S. company earnings, upbeat data on factory orders and the U.S. trade balance as well as the underwhelming eurozone inflation data made for a challenging trading environment.
"The price action since the FOMC statement indicates a real division of opinion in markets over the U.S. dollar outlook," said Sean Callow, a strategist at Westpac.
The Fed's reminder that its inflation target was symmetric was a clear negative for Treasury yields, and so the U.S. currency's recovery was encouraging for dollar bulls, Callow said.
Yet, the dollar had failed to breach key levels such as 110 versus the yen, $1.20 against the euro and $0.75 versus the Australian dollar, he added.
It was last down 0.1 percent against the yen to 109.1, but was still set for a tiny weekly gain.
"A 13-month low in eurozone inflation should have been a big boost for the dollar index - it was not. The payrolls report may not resolve this market battle," Callow added.
The U.S. dollar had erased all its 2018 losses in the past two weeks on expectations the Fed will continue to raise rates, even as other major central banks around the world, including the European Central Bank, take longer to reduce stimulus.
The dollar index has risen about 1 percent so far this week and is on track for a third straight weekly gain.
The euro took a small dip to be last at $1.1969 and is so far down 1.3 percent this week.
Elsewhere, U.S. crude dipped 4 cents to $68.39 a barrel, while Brent crude down a shade at $73.58.
Gold was slightly higher with spot gold at $1311.8 per ounce.
(Additional reporting by Vidya Ranganathan in SINGAPORE; Editing by Kim Coghill and Jacqueline Wong)
PRECIOUS-Gold extends gain as dollar slips, investors await US jobs data - Reuters News
04-May-2018 12:42:56 PM
- Spot gold may bounce more to $1,326/oz - technicals
- U.S. dollar moves further away from four-month high
- Spot gold heads for third consecutive weekly decline
(Adds quotes, details, updates prices)
By Eileen Soreng
BENGALURU, May 4 (Reuters) - Gold prices rose for a third straight session on Friday as the dollar slipped further from 2018 highs, while investors turned their focus to the upcoming U.S. jobs data for fresh catalysts.
Spot gold had risen by 0.2 percent to $1,313.46 per ounce by 0405 GMT, but was headed for a third consecutive weekly decline.
U.S. gold futures for June delivery rose 0.1 percent to $1,313.90 per ounce.
The dollar eased after Thursday's profit-taking and that helped gold find some support, a Hong Kong-based trader said.
"People are finding some comfort in buying at these levels heading into the weekend with potential risk of these Chinese talks maybe collapsing," he said.
The dollar index was about 0.1 percent lower at 92.367, moving further away from a 2018 peak of 92.834 hit on Wednesday. Asian shares stepped back as financial markets turned their attention to the U.S. payrolls data due later in the day.
"(Gold) Prices seem to be really slow waiting for the nonfarm payroll data," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
The U.S. payrolls report for April is likely to underscore the strength in labour market. Nonfarm payrolls likely increased by 192,000 jobs in April after rising 103,000 in March, according to a Reuters survey of economists.
Meanwhile, a U.S. trade delegation in China has been having very good conversations, U.S. Treasury Secretary Steven Mnuchin said, as he heads into the second and likely last day of the talks in Beijing.
Spot gold is biased to bounce more to a resistance at $1,326 per ounce, as suggested by its a projection analysis and a falling channel, according to Reuters technical analyst Wang Tao.
Holding of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.13 percent to 865.60 tonnes on Thursday.
Among other precious metals, spot silver rose 0.3 percent to $16.46 per ounce.
Platinum was up 0.3 percent at $902.00 per ounce. However, it was on track for a third weekly fall.
Palladium inched up 0.1 percent to $963.00 per ounce.
(Reporting by Eileen Soreng in Bengaluru; Editing by Biju Dwarakanath)
UPDATE 2-Oil prices hold steady as U.S. decision on Iran sanctions looms - Reuters News
04-May-2018 03:22:28 PM
- European powers work to save Iran nuclear accord
- Markets likely skittish up to May 12 deal deadline - ANZ
- WTI at Midland fell to 3-1/2 year low on rising output
Updates prices
BEIJING/SINGAPORE, May 4 (Reuters) - Oil prices were little changed on Friday after rising earlier, as market jitters kicked in over the prospect of geopolitical risks from possible new U.S. sanctions against Iran.
U.S. West Texas Intermediate (WTI) crude futures were trading 15 cents lower at $68.28 per barrel by 0719 GMT. WTI is set for gain of 0.3 percent for the week.
Brent crude oil futures were at $73.37 per barrel, down 25 cents, or 0.3 percent, from their last close after touching a intraday high of $73.80 per barrel in early morning trading. Brent futures for July delivery are set for a weekly drop of 0.5 percent.
Technical analysis from Reuters' Wang Tao showed the market may retest a price support level at $72.39 per barrel after peaking around a resistance at $75.45.
Iran's foreign minister said on Thursday U.S. demands to change its 2015 nuclear agreement with world powers were unacceptable, as a deadline set by President Donald Trump for Europeans to "fix" the deal loomed.
"Current prices reflect a premium for Iran uncertainties. Investors are worried about supplies after Iran took a tough stance in its response to the United States," Wang Xiao, Head of Crude Research with Guotai Junan Futures said, adding prices may fall if expectations for new sanctions ease.
European powers still want to hand Trump a plan to save the Iran nuclear deal next week. But they have also started work on protecting E.U.-Iranian business ties if the U.S. president makes good on a threat to withdraw, six sources told Reuters.
Markets will remain skittish as the May 12 deadline to rectify the deal approaches, ANZ Research said in note.
Iran resumed its role as a major oil exporter in January 2016 when international sanctions against Tehran were lifted in return for curbs on Iran's nuclear program.
Aside from security concerns, growing U.S. crude supplies are capping price gains.
West Texas Intermediate crude for delivery in Midland slid for a fourth day on Thursday to hit its lowest in more than three-and-a-half years. WTI at Midland WTC-WTM traded as much as $14 a barrel below benchmark futures.
Surging production in the Permian basin has continued to outpace pipeline capacity, while local refining issues have exacerbated oversupply in the region, dealers told Reuters.
Multi-year low spot market prices followed U.S. government data that showed a 6.2-million-barrel jump in crude inventories last week.
The United States now produces more crude oil than top exporter Saudi Arabia.
(Reporting by Meng Meng in BEIJING and Henning Gloystein in SINGAPORE
Editing by Kenneth Maxwell and Christian Schmollinger)
VEGOILS-Palm sees strongest gains in 2 weeks on falling stocks forecast - Reuters News
04-May-2018 01:30:35 PM
- Malaysia April stocks seen falling to 6-month low - Reuters poll
- Gains in overnight US soyoil also support palm - Trader
- Malaysia Palm Oil Board to release data on May 10
By Emily Chow
KUALA LUMPUR, May 4 (Reuters) - Malaysian palm oil futures clocked their strongest gain in two weeks in early trade on Friday on expectations of falling inventories, after a sharp decline on Thursday evening and being largely range-bound this week.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 0.2 percent at 2,337 ringgit ($594.35) a tonne at the midday break, its biggest gain since April 20. It earlier fell to a low of 2,324 ringgit, its weakest level since August 2016.
The market, however, fell 1.8 percent for the week so far, in line for a second consecutive weekly decline.
Trading volume stood at 17,156 lots of 25 tonnes each at the midday break.
"The market is up on expectations that end-stocks will drop," said a futures trader in Singapore. "Consumption could also be supported due to Ramadan," he said, referring to the Muslim fasting month which begins in mid-May this year.
Ramadan typically leads to higher usage of palm oil for cooking in Muslim majority regions, which sees devotees break day-long fasts with communal feasting.
Malaysian palm oil inventories at end-April are expected to fall 4.1 percent to 2.23 million tonnes, its lowest in six months, according to a Reuters poll of nine traders, planters and analysts.
Meanwhile, the survey respondents also forecast that April exports will fall 5.5 percent on-month to 1.48 million tonnes, but output will remain flat at 1.57 million tonnes.
Official data for the month of April is scheduled for release by industry regulator the Malaysian Palm Oil Board on May 10 at around 0430 GMT.
Another trader added that overnight gains in U.S. soyoil on the Chicago Board of Trade provided additional support to palm.
The Chicago July soybean oil contract rose as much as 0.7 percent on Thursday, but was last down 0.4 percent on Friday.
In other related oils, the September soybean oil on China's Dalian Commodity Exchange fell 0.3 percent, while the Dalian September palm oil contract declined 0.8 percent.
Palm oil is impacted by movements in rival edible oils as they compete for a share in the global vegetable oils market.
WRAPUP 1-U.S. jobs growth expected to regain momentum in April - Reuters News
04-May-2018 12:01:00 PM
- Nonfarm payrolls forecast to rise 192,000 in April
- Unemployment rate seen falling to 4.0 percent
- Average hourly earnings expected to increase 0.2 percent
By Lucia Mutikani
WASHINGTON, May 4 (Reuters) - U.S. job growth likely accelerated in April after a weather-related slowdown in the previous month, with the unemployment rate expected to drop to near a 17-1/2-year low of 4.0 percent.
The Labor Department's closely watched employment report on Friday is also expected to show steady wage growth, which would add to signs of building inflation pressures and likely keep the Federal Reserve on a gradual path of monetary policy tightening.
The U.S. central bank on Wednesday left interest rates unchanged and said it expected annual inflation to run close to its "symmetric" 2 percent target over the medium term.
Economists interpreted symmetric to mean policymakers would not be too concerned with inflation overshooting the target.
Nonfarm payrolls probably increased by 192,000 jobs last month, according to a Reuters survey of economists. Payrolls rose by 103,000 positions in March, the smallest gain in six months, which economists dismissed as payback after unseasonably mild weather boosted hiring by 326,000 jobs in February.
The anticipated decline in the unemployment rate from 4.1 percent in March would put it at a level last seen in December 2000 and within striking distance of the Fed's forecast for 3.8 percent by the end of this year.
"The high-frequency indicators coming from the labor market continue to look rock solid, there is no real indication that the labor market is slowing down," said Scott Anderson, chief economist at Bank of the West in San Francisco. "From the Fed's perspective we are already at or below full employment."
Average hourly earnings are expected to have risen 0.2 percent last month after a 0.3 percent gain in March. That would leave the annual increase in average hourly earnings at 2.7 percent. While average hourly earnings have suggested only a gradual increase in wage inflation, other measures have been more robust.
The Employment Cost Index (ECI), widely viewed by policymakers and economists as one of the better measures of labor market slack, increased solidly in the first quarter. The ECI report showed wages rising at their fastest pace in 11 years during the period.
SKILLED LABOR SHORTAGE
Even with the annual increase in average hourly earnings still moderate, inflation is flirting with the Fed's target. The Fed's preferred inflation measure, the personal consumption expenditures price index excluding food and energy, was up 1.9 percent year-on-year in March after a 1.6 percent rise in February.
"In an environment where productivity growth is remaining very weak, you actually don't need a particularly large rise in wage growth to be consistent with the Fed's 2 percent inflation target," said Michael Pearce, a senior U.S. economist at Capital Economics in New York.
"We expect faster wage growth will prompt the Fed to raise rates three more times this year."
The Fed hiked rates in March and has forecast at least two more increases for this year.
Economists expect the unemployment rate will drop to 3.5 percent by the end of the year. The economy needs to create roughly 120,000 jobs per month to keep up with growth in the working-age population. Employment gains averaged 202,000 jobs per month in the first quarter.
Some economists, however, caution that April's job growth could come in below expectations, citing declines in measures of manufacturing and services sector employment during the month. More businesses are complaining about shortages of skilled workers.
A consumer confidence survey showed households' assessments of current labor market conditions falling for a second straight month in April. In addition, cold temperatures persisted last month in some parts of the country.
"We have seen historically poor weather, which we expect will act as a temporary headwind to April job growth," said Ellen Zentner, chief economist at Morgan Stanley in New York.
"Weather-sensitive construction and leisure/hospitality jobs in particular will likely be negatively impacted by the weather swing, so we expect those industries to take a meaningful hit."
Still, manufacturing payrolls are expected to have rebounded last month after recording their first drop in eight months in March. Manufacturing employment is forecast rising by 20,000 jobs in April after a gain of 22,000 positions in March.
Government payrolls are seen falling by 2,000 jobs in April.
(Reporting by Lucia Mutikani
Editing by Paul Simao)
GRAINS-Wheat set for biggest weekly gain in 2 months on f'cast of lower U.S. crop - Reuters News
04-May-2018 11:15:20 AM
- Wheat has risen 7.7 pct this week, corn set for 2nd weekly gain
- Expectations of lower U.S. winter crop output underpin prices
- Corn supported by slow pace of U.S. planting due to wet weather
Adds details, quotes
By Naveen Thukral
SINGAPORE, May 4 (Reuters) - Chicago wheat ticked lower on Friday, but the market was set for its biggest weekly gain in two months as a crop tour finds lower yields in parts of U.S. southern Plains which have been hit by dry weather.
Corn was poised for a second weekly gain on support from rains delaying planting in the U.S. Midwest.
The Chicago Board of Trade most-active wheat contract has gained 7.7 percent this week and was on track for its biggest weekly gain since early March.
Wheat on Thursday climbed to its highest since July at $5.39 a bushel.
Corn has jumped more than 2 percent this week, adding to last week's near 6 percent gain, and soybeans were down around 0.5 percent after posting gains of 1.5 percent in the previous week.
"The market is still processing the poor reports coming in from crop scouts in U.S. Hard Red Winter (HRW) wheat regions," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.
"And the markets, ourselves included, are now more confident in forecasts that U.S. HRW production will be modest this year."
Scouts on a Wheat Quality Council crop tour projected the winter wheat yield in Kansas, the top U.S. wheat state, at 37.0 bushels per acre.
The scouts pegged Kansas wheat production at 243.3 million bushels, potentially the smallest crop since 1989, reflecting the impact of drought.
Corn prices are being supported by planting delays in parts of the U.S. Midwest following excessive rains.
The U.S. Department of Agriculture said 17 percent of the U.S. corn crop had been planted by Sunday, behind the five-year average of 27 percent.
In the soybean market, investors are watching for any signs of positive progress at a meeting between U.S and Chinese trade officials.
A breakthrough deal to fundamentally change China's economic policies is viewed as highly unlikely during the two days of talks, though a package of short-term Chinese measures could delay Washington's decision to impose tariffs on about $50 billion worth of Chinese exports.
Heavy rains over recent days in Argentina slowed soybean harvesting in central and southern parts of the Pampas grains belt, while dryness in northern areas allowed rapid harvesting, the Buenos Aires Grains Exchange said on Thursday.
Commodity funds were net buyers of CBOT corn, wheat, soybean and soyoil futures contracts on Thursday and net sellers of soymeal futures, traders said.
PREVIEW-Malaysia's April palm oil stockpiles forecast to fall to a six-month low - survey - Reuters News
04-May-2018 12:43:47 PM
- April end-stocks seen falling to 2.23 mil T -survey
- Output seen flat from previous month at 1.57 mil T -survey
- Exports forecast to dip from 18-month top to 1.48 mil T -survey
- Malaysian Palm Oil Board data due May 10
By Emily Chow
KUALA LUMPUR, May 4 (Reuters) - Palm oil inventories in Malaysia, the world's second-largest producer, are forecast to slide to their lowest in six months, as exports and domestic consumption outpaced production, according to a Reuters poll.
Malaysia's palm oil stockpiles at the end of April are forecast to fall 4.1 percent from March to 2.23 million tonnes, a fourth straight month of declines, according to the median of nine estimates from planters, traders and analysts surveyed by Reuters.
Falling stocks could support benchmark palm oil futures, which have fallen since early April on slowing demand. Palm was up 0.2 percent at 2,337 ringgit ($594.35) a tonne at the midday break on Friday, and has fallen 1.9 percent so far this week.
"Production and imports were lower than exports and domestic consumption, which is expected to rise on biodiesel production," said a Kuala Lumpur-based trader, as gains in the price of gasoil have made it more favourable to use palm oil for biodiesel production.
Palm oil is used in the production of biodiesel, which replaces some petroleum-based diesel in the fuel supply. Rising gasoil prices in recent weeks have made biodiesel more economical. Its price premium over palm widened to $52 per tonne on Friday, its highest in 3-1/2 years.
The rising domestic consumption caused palm inventories to decline despite falling exports. Exports in April are forecast to drop 5.5 percent from March to 1.48 million tonnes, according to the poll.
While key markets like China and Pakistan bought more palm oil, overall demand from top edible oils importer India fell, said Kenanga Research plantations analyst Voon Yee Ping.
"We do not expect strong Indian purchasing to continue, as increased Indian import tariffs come into full effect for the month," Voon said.
India raised import taxes on crude and refined palm oil to their highest levels in over a decade in March to support local farmers by making domestic oilseeds more competitive.)
Meanwhile, April production is forecast to remain flat at 1.57 million tonnes, following a surge in March when output for the month rose its highest since 2000.
"April will see normalizing output," said William Simadiputra, a DBS Vickers analyst. "It will then rise a little in May, catching up on targets before the Eid-Al-Fitr festival holidays," he said, adding that May output should rise to 1.57 million tonnes.
Official data will be released by the Malaysian Palm Oil Board after 0430 GMT on May 10.
The median figures from the Reuters survey imply Malaysian consumption of 225,685 tonnes in April.
Breakdown of April estimates (in tonnes):
| Range | Median | |
| Production | 1,450,000 - 1,684,100 | 1,574,000 |
| Exports | 1,380,000 - 1,500,000 | 1,480,000 |
| Imports | 15,000 - 50,000 | 37,500 |
| Closing Stocks | 2,130,000 - 2,378,700 | 2,229,273 |
* Official stocks of 2,323,458 tonnes in March plus the above estimated output and imports give a total April supply of 3,934,958 tonnes. Based on the median of the exports and closing stocks estimates, Malaysia's domestic consumption in April would be 225,685 tonnes.
($1 = 3.9320 ringgit)
(Reporting by Emily Chow; Editing by Christian Schmollinger)
Weak currency, global trade jitters bolster Brazil soy exports - Reuters News
04-May-2018 02:10:44 AM
By Roberto Samora
SAO PAULO, May 3 (Reuters) - Brazil's soybean exports hit record volumes last month, grain exporter association Anec said on Thursday, citing a weak domestic currency and trade tensions between the United States and China for bolstering business for local farmers.
Brazil's April soybean exports reached 11.63 million tonnes, about 1 million tonnes more than the same month last year, Anec said in a report.
"Evidently, with the strength of the dollar, the producer will free up more beans for export," Sérgio Mendes, head of Anec, said in a telephone interview. Soy contracts are priced in dollars.
Brazilian farmers also stand to gain from a drought in Argentina, the world's third largest producer, and China's slowing purchases of U.S. soy as the two countries trade threats over tariffs, he said.
The fresh figures indicate Brazil is on track to remain the world's most prominent soybean exporter and China's largest supplier of the oilseed.
This year, the country is likely to sell 70 million tonnes of soybeans overseas, a new all-time high, according to consultancy INTL FC Stone.
The South American country will receive an estimated $36 billion in export revenue from the so-called soy complex of soybeans, soy oil and soymeal this year, data from soy crusher association Abiove show.
On Wednesday, the government said Brazilian soybean shipments totaled 10.26 million tonnes in April, close to a record of 10.96 million tonnes exported in May 2017.
Anec data differs from numbers released by the government because they are compiled under different methodologies, Mendes said. The government's foreign trade agency Secex compiles the figures based on reported amounts, while Anec export figures reflect actual shipment data.
For the first four months of the year, Brazil's soy exports rose by 5.4 percent to 29.2 million tonnes, the strongest Jan-April reading in history, Anec said.
The government measure released on Wednesday indicated that Brazilian soybean exports were 23.5 million tonnes over the period.
(Reporting by Roberto Samora; writing by Ana Mano;Editing by Marguerita Choy)
Argentine drought gives way to heavy rains, slowing soy harvest - Reuters News
04-May-2018 04:01:57 AM
BUENOS AIRES, May 3 (Reuters) - Heavy rains over recent days in Argentina slowed soybean harvesting in central and southern parts of the Pampas grains belt while dryness in northern areas allowed for rapid harvesting, the Buenos Aires Grains Exchange said on Thursday.
The showers did not come in time to save thousands of hectares of soybeans from being burned in the drought that had blighted Argentina for November through late April.
Now that the unusually hot, dry weather is over, excessive rains have created soggy conditions in which multi-tonne harvesting combines are getting stuck in the mud as farmers try to bring in their soy and corn crops.
"To date, soybeans are 61.8 percent harvested. The average yield rose to 2.34 tonnes per hectare," the exchange said in its weekly crop report. "Under this scenario, we maintain our final production estimate at 38 million tonnes."
Corn harvesting has begun in most of the Pampas farm belt, which is focused in the central provinces of Buenos Aires, Cordoba, Santa Fe and Entre Rios.
"Nevertheless, rainfalls have hindered the collection of late-planted corn in several parts of the agricultural region," the report said.
As of Thursday it said 32.5 percent of the 2017/18 corn crop had been brought in, with the national average yield at 7.16 tonnes per hectare. The exchange maintained its final commercial corn crop estimate at 32 million tonnes.
(Reporting by Hugh Bronstein; Editing by Lisa Shumaker)
