US STOCKS-Dow futures erase losses after strong Boeing results - Reuters News
25-Apr-2018 09:04:04 PM
- Boeing jumps after upbeat results, profit raise
- Comcast shares drop after $31 bln offer for Sky
- Twitter busiest stock following second profitable quarter
- Futures: Dow up 10 pts, S&P off 7.25 pts, Nasdaq off 10.75 pts
Adds details, updates prices
By Sruthi Shankar
April 25 (Reuters) - Dow Jones Industrial Average futures erased losses on Wednesday after Boeing reported strong results and forecast, but concerns about rising U.S. bond yields and corporate costs continued to weigh on U.S. stocks.
Boeing, the world's biggest planemaker, rose 2.1 percent after it reported a higher-than-expected quarterly profit and raised its full-year forecast for earnings and cash flow.
The blue-chip Dow was on track to open 16 points higher, while the S&P 500 and the Nasdaq were on track for slight losses.
The yield on 10-year U.S. Treasury notes, the benchmark for global interest rates, held above 3 percent after crossing the level for the first time in four years on Tuesday, stoking concerns about higher borrowing rates for companies.
Alphabet's shares fell after the company said it expected a surge in costs on Monday, while Caterpillar noted first-quarter earnings would be the "high water mark" for the year and warned of higher material costs.
Investors are watchful about other companies raising such warnings, as inflation is picking up and the Federal Reserve is in no mood to put the brakes on its own rate-hike program.
"The markets are reacting to yields moving higher," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "The new trading range will continue to cap equities from positively responding to good earnings news."
Reuters data shows that analysts are now estimating 21.1 percent profit growth in the first quarter among the S&P 500 companies, compared with 18.6 percent growth rate at the start of the earnings season.
At 8:41 a.m. ET, Dow e-minis were up 10 points, or 0.04 percent, with 53,518 contracts changing hands. S&P 500 e-minis were down 7.25 points, or 0.28 percent, with 203,956 contracts traded. Nasdaq 100 e-minis were down 10.75 points, or 0.16 percent, on volume of 71,813 contracts.
The CBOE Volatility index, a gauge of short-term stock market volatility jumped to more than 1-week high to 18.56 points.
Comcast fell 1.9 percent after the U.S. cable company submitted a $31 billion offer for pay-TV group Sky, challenging an already agreed but lower takeover bid from Rupert Murdoch's Fox.
Viacom rose 1.23 percent after the media company reported better-than-expected quarterly results.)
Twitter jumped 4.2 percent after reporting its second profitable quarter and topping Wall Street estimates for revenue and monthly active users.
Facebook which is set to report after market closes on Wednesday, was edged up 0.5 percent.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)
UPDATE 6-Oil hovers near $74 a barrel, U.S. bonds, crude supply cast a shadow - Reuters News
25-Apr-2018 07:42:04 PM
- Oil prices in April hit highest levels since Q4 2014
- Brent forward prices are above $70/bbl until end of 2018
- OPEC-led cuts, political risk, strong demand have lifted oil
- But rising U.S. supplies dragging on markets
Updates prices
By Amanda Cooper
LONDON, April 25 (Reuters) - Oil eased on Wednesday, but held in sight of three-year highs reached the previous day, as rising U.S. fuel inventories and production weighed on an otherwise bullish market.
Overall, the environment for oil is bullish. Supplier cutbacks, steady demand growth, geopolitical tensions and a favourable structure in the futures market have attracted record investment in oil this year.
A rise in U.S. government borrowing costs to their highest since 2013 this week has tempered some investor appetite for risk, but analysts said they believed Brent crude may have another attempt at marking new 2018 highs above $75 a barrel.
Weekly data on Tuesday that showed a rise in U.S. crude inventories also subdued the oil price somewhat.
Brent crude oil futures were down 14 cents at $73.72 a barrel at 1128 GMT, some 2 percent below the November 2014 high of $75.47 reached on Tuesday.
U.S. West Texas Intermediate (WTI) futures were down 4 cents at $67.66 a barrel.
"There's a good chance we try again to break $75 again. We still have all the different soundbites on Iran and the May 12 deadline is coming up," Petromatrix strategist Olivier Jakob said, referring to an upcoming date by which the United States has said it will withdraw from a nuclear deal with Iran if the other signatories to the deal do not meet certain conditions.
The prospect of fresh sanctions on Tehran and disruption to the country's oil flows has helped push the oil price to its highest since late 2014 this month.
"Market sentiment is turning increasingly bullish towards the commodity," said Lukman Otunuga, research analyst at futures brokerage FXTM.
Despite this, Otunga said "the sustainability of the rally is a concern" as it was fuelled largely by political risk in the Middle East.
Money managers hold record positions in Brent crude futures and options, lured in by the hefty premium of the front-month June contract over subsequent months that makes it profitable to invest in crude over the longer term.
Because of the tighter market, the forward curve for Brent is now above $70 per barrel until the end of 2018, and prices are above $60 per barrel through 2020.
But the rise in Treasury yields above 3 percent has driven the value of the U.S. dollar to three-month highs, which may pose a threat to a more pronounced rally in the crude price.
Although the oil price and the dollar have moved in tandem for the last few weeks, the two generally tend to trade in the opposite direction, as a stronger dollar encourages non-U.S. investors to sell oil and crude-importing countries to curtail their purchases.
(Additional reporting by Henning Gloystein in SINGAPORE; Editing by David Evans and Louise Heavens)
PRECIOUS-Gold falls on strong dollar and higher U.S. yields - Reuters News
25-Apr-2018 08:32:39 PM
- Dollar index up 0.2 percent
- Palladium down for a third straight day
(Updates prices, adds ETFs)
By Zandi Shabalala
LONDON, April 25 (Reuters) - Gold slumped to a five-week low on Wednesday as the dollar and U.S. Treasury yields jumped on robust U.S. data and signs of an easing in the U.S.-China trade conflict.
The benchmark U.S 10-year Treasury yields rose to 3 percent for the first time in more than four years, reflecting the durability of the U.S. economic expansion after U.S. consumer confidence rebounded in April and new home sales increased more than expected in March.
But higher yields on bonds make gold a less attractive investment because it pays no interest.
Meanwhile, there was a decline in political risk after the United States said it would likely reach a trade agreement with China and that officials from both sides would sit down for negotiations in a few days.
"Recently there has been some optimism that the U.S-China trade war isn't going to be as big of an issue," said Natixis precious metals analyst Bernard Dahdah.
"There is a bit more confidence in the U.S. and that negatively affects gold, naturally, in terms of geopolitics."
Spot gold was down 0.8 percent at $1,319.90 per ounce, as of 1222 GMT, its lowest since March 21. U.S. gold futures dropped 0.8 percent to $1,321.50 per ounce.
The dollar index, which measures the greenback against a basket of currencies, rose 0.4 percent.
World stocks were down for the fifth straight session on Wednesday.
In other geopolitical news, North Korean leader Kim Jong Un is due to hold a summit with South Korean President Moon Jae-In on Friday, and is expected to meet with Trump in late May or early June.
"As traders put geopolitical and trade risk in the rear-view mirror for the time being, how the dollar flourishes and wilts will be the primary driver of near-term gold sentiment," said Stephen Innes, APAC trading head, OANDA.
Gold is often seen as an alternative investment during times of political and financial uncertainty.
But investor appetite has been climbing as holdings in gold exchange traded funds (ETFs) rose to the highest since 2013. [0#ETFHLD=XAU]
"As the Goldilocks market environment draws to a close, investor interest in gold has picked up," said TS Lombard in a note, referring to an economy that is not so hot that it causes inflation, and not so cold that it causes a recession.
In other precious metals, spot silver dropped 1 percent to $16.54 an ounce, and platinum eased 0.8 percent to $918.90 an ounce.
Palladium fell for a third straight session, down 0.9 percent at $966.10 an ounce.
(Additional reporting by Swati Verma in Bengaluru Editing by Hugh Lawson and Alexandra Hudson)
CBOT Trends-Soybeans up 2-4 cents; corn, wheat up 1-3 cents - Reuters News
25-Apr-2018 09:17:29 PM
CHICAGO, April 25 (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
- Technical buying expected to underpin wheat prices after CBOT May soft red winter wheat contract found support overnight at 200-day moving average. Gains kept in check by strong dollar, weak export demand.
- CBOT May soft red winter wheat last traded up 1-1/2 cents at $4.74 per bushel. K.C. May hard red winter wheat was last up 3 cents at $4.95-1/2 and MGEX May spring wheat was 1/4 cent higher at $5.93 a bushel.
CORN - Up 1 to 3 cents per bushel
- Follow-through buying from Tuesday's gains expected after market closed near session highs. CBOT May corn futures rose through 30-day and 50-day averages during overnight trading. Expectations for a speedy planting pace in the coming weeks seen limiting strength.
- CBOT May corn last traded up 1-3/4 cents at $3.83 a bushel.
SOYBEANS - Up 2 to 4 cents per bushel
- Bargain buying seen pushing soybean futures higher after market hit 2-1/2 week low on Tuesday. U.S. President Donald Trump's announcement on Tuesday that the United States would likely reach a trade agreement with China, the world's top buyer of soybeans, lent further support.
- CBOT May soybeans last traded up 3-1/2 cents at $10.25-3/4 per bushel.
(Reporting by Mark Weinraub; editing by Jonathan Oatis)
VEGOILS-Palm closes flat after range-trading on weak export data - Reuters News
25-Apr-2018 07:09:02 PM
- Market previously declined for two consecutive sessions
- Malaysia April 1-25 exports down 0.8-2.5 pct - AmSpec Malaysia, SGS
- Palm prices seen under pressure ahead of data releases - trader
Updates with closing prices
By Emily Chow
KUALA LUMPUR, April 25 (Reuters) - Malaysian palm oil futures ended flat on Wednesday evening, previously charting two earlier sessions of declines, as it traded in a tight range due to lacklustre export data.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange edged up slightly at the midday break, but eased gains to close flat at 2,397 ringgit ($613.04) a tonne at the end of the trading day.
Trading volumes stood at 34,768 lots of 25 tonnes each at the close of trade.
"The market is waiting for leads... But as data starts coming in, palm will be under pressure," said a Kuala Lumpur-based trader.
"The export figures are not encouraging," another trader said.
The traders were referring to export data from independent inspection company AmSpec Agri Malaysia and cargo surveyor Societe Generale de Surveillance (SGS), which was posted earlier in the day.
Exports of Malaysian palm oil products for April 1-25 fell 0.8 percent compared with the corresponding period last month, according to AmSpec.
Meanwhile, SGS reported a 2.5 percent decline for the same duration.
In other related oils, Chicago's July soybean oil contract slipped 0.03 percent, while September soybean oil on China's Dalian Commodity Exchange edged up 0.4 percent.
The Dalian September palm oil contract rose 0.04 percent.
Palm oil is impacted by movements in rival edible oils as they compete for a share in the global vegetable oils market.
(Reporting by Emily Chow; Editing by Sherry Jacob-Phillips and Louise Heavens)
UPDATE 1-China 2018 corn acreage seen down at least 333,000 hectares - Agriculture ministry - Reuters
25-Apr-2018 11:19:57 AM
- Corn acreage to fall almost 1 percent
- Rice planting in north-east also down
- Coarse grains, beans area expanding
- Recent rainfall benefits wheat crop
Adds context, industry details
BEIJING, April 25 (Reuters) - China's 2018 corn planting acreage will fall by more than 5 million mu, or 333,000 hectares, an agriculture ministry official said in a briefing on Wednesday, even as officials have forecast an increase in output for the upcoming crop.
The production decline represents less than 1 percent of China's estimated corn acreage last year, or around 35.4 million hectares.
The decline is part of a push by Beijing to reduce excess stocks of its key grains like corn and rice. In 2016 it said it wanted to reduce corn acreage in areas covering 13 provinces and regions extending from the frozen far northeast, the parched northwest and the desertified southwest by about 3.3 million hectares by 2020.
But many expect corn output will still increase in the coming year, as supportive prices encourage farmers to plant more.
Last week experts forecast a 1 percent increase in output to 218 million tonnes.
Rice planting in the north-east will also fall by 1.4 million mu, or 93,333 hectares, while planted area of coarse grains and legumes will increase by around 1 million mu, or 66,600 hectares, said Pan Wenbo, deputy director of the planting department under Ministry of Agriculture and Rural Affairs.
Overall, planting of summer grain crops is progressing smoothly, Pan told reporters, according to an online broadcast of the briefing.
Growth of winter wheat is also seen as "near normal", said Pan, with plentiful rainfall since April boosting soil moisture ahead of the summer harvest.
(Reporting by Dominique Patton
Editing by Eric Meijer and Kenneth Maxwell)
GRAINS-Wheat extends gains, prices of soybean, corn face pressure from U.S. weather - Reuters News
25-Apr-2018 07:16:53 PM
- Wheat up for second day after Tuesday's one-week low
- Soybeans, corn up but prices seen facing weather pressure
Updates prices, adds quote
By Naveen Thukral and Sybille de La Hamaide
SINGAPORE/PARIS, April 25 (Reuters) - Chicago wheat futures rose for a second session on Wednesday as investors covered short positions and looked for bargains, although plentiful world supplies capped gains.
Soybean and corn prices also gained ground, but both markets expected to remain under pressure as crop-friendly warm weather boosts planting across the U.S. Midwest.
The Chicago Board of Trade most-active wheat contract was up 0.7 percent at $4.87-1/2 a bushel by 1100 GMT. In the previous session, it closed 2 percent higher after hitting a one-week low of $4.67-3/4 a bushel during the trade.
Soybeans added 0.5 percent to $10.39 a bushel and corn gained 0.4 percent at $3.91-1/2 a bushel.
"There is some short-covering and bargain-buying in the wheat market," said one India-based commodities analyst. "People are looking to determine the extent of damage to the U.S. winter crop."
The U.S. winter wheat crop has faced dry weather this year although ample global supplies are expected to keep a lid on prices.
The Black Sea region, a key supplier of wheat to top importing countries, is on track for another year of bumper production.
Corn and soybean prices are expected to be weighed down by forecasts for warmer weather that should allow farmers to pick up the pace of planting of spring crops after a slow start.
The U.S. Department of Agriculture (USDA) said on Monday that 5 percent of the U.S. corn crop was planted, as of Sunday, well behind the five-year average and lagging market expectations. Soybean planting was 2 percent complete.
"Weather conditions on the Corn Belt will be closely monitored in the coming days and could push the market in case of prolonged delay of spring sowings," French consultancy Agritel said in a note.
Concerns about slowing soybean exports continued to hang over the market amid a trade dispute between the United States and top buyer China.
The USDA said on Tuesday morning that private exporters reported the sale of 130,000 tonnes of soybeans to Argentina. There have been no announcements of deals with China in two weeks.
Commodity funds were net buyers of CBOT corn, wheat, soybean and soymeal contracts on Tuesday, traders said, but were net sellers of soyoil futures.
(Reporting by Naveen Thukral and Sybille de La Hamaide
Editing by Joseph Radford and Sherry Jacob-Phillips)
FOREX-Firm bond yields push dollar to 4-month high; euro struggles - Reuters News
25-Apr-2018 08:02:58 PM
- Dollar rises on U.S. yields, euro falls
- Investors focus on ECB meeting
Adds quotes, context, updates figures
By Tom Finn
LONDON, April 25 (Reuters) - The dollar hit a four-month high on Wednesday after a rise in benchmark U.S. Treasury yields above 3 percent rattled some currency bears and led investors to consider whether the greenback was breaking out of a prolonged weak spell.
The U.S. 10-year treasury yield has risen to its highest in more than four years, driven by worries about the growing supply of government debt and inflationary pressures from rising oil prices.
That has caused U.S.-Japan and U.S.-German yield differentials to widen further in the dollar's favour, leaving the yen and the euro lower.
The dollar's performance against a basket of major currencies rose to as high as 91.117 in early London trade, its strongest level since Jan. 12. The dollar index last stood at 91.130, up 0.4 percent on the day.
Analysts on Wednesday saw signs the dollar could be breaking higher after months of relative weakness.
"With the impact on risk appetite of a continued tightening of Fed policy and the possibility that the pace of growth in many countries may moderate... there is evidence to suggest the dollar could strengthen," said Rabobank FX strategist Jane Foley in a note.
But other analysts said net long dollar positions had not risen significantly in recent weeks, despite trade tensions waning.
U.S. first-quarter gross domestic product data due on Friday could determine whether the dollar extends its gains further.
In January, U.S. Treasury Secretary Steven Mnuchin said a lower greenback was "good for us" in a break from previous White House administrations' public stance for a stronger U.S. currency.
A weak dollar is seen helping U.S. exporters to compete abroad but could undermine the greenback's status as the world's top reserve currency.
ECB MEETING
The dollar's gains on Wednesday drove the euro down past the two-month low hit on Tuesday because of concerns that firmer U.S. yields would reduce demand for the region's bonds at a time when hedge funds have amassed record long euro bets.
Investors are focused on whether a European Central Bank monetary policy meeting on Thursday will see the euro-dollar exchange rate break out of its recent tight range.
Analysts say the market needs clarity about the speed of the ECB's monetary tightening cycle before the euro, which rallied at the start of this year before running out of steam in the last two months, breaks higher.
In early 2018 traders bet that synchronised global growth would force the ECB to accelerate monetary policy normalisation.
But the ECB's reluctance so far to signal any shift leaves the "euro's gains against the dollar vulnerable to setbacks", said Commerzbank analyst Thu Lan Nguyen in a note.
Nguyen said the euro-dollar exchange rate continues to be dominated mainly by moves in the U.S. dollar.
The rise in bond yields also weakened Asian emerging market currencies versus the dollar on Wednesday, with the Chinese yuan down and the Indonesian rupiah trading near a two-year low of 13,895 per dollar.
Against the yen, the dollar hit a two-month high of 109.270 yen.
Easing concerns over global political risks weighed on the Japanese currency, market participants said, as the yen tends to attract demand in times of economic uncertainty and market turmoil, and sell off when confidence returns.
(Editing by Gareth Jones)
