WRAPUP 1-U.S. weekly jobless claims rise; mid-Atlantic factory activity picks up - Reuters News
17-May-2018 09:13:34 PM
By Lucia Mutikani
WASHINGTON, May 17 (Reuters) - New applications for U.S. jobless benefits increased more than expected last week, but the number of Americans on unemployment rolls fell to its lowest level since 1973, pointing to diminishing labor market slack.
Other data on Thursday showed a pickup in factory activity in the mid-Atlantic region this month, with manufacturers saying they were asking for higher prices for their products. Tightening labor market conditions and firming inflation bolster expectations the Federal Reserve will raise interests rates next month.
Initial claims for state unemployment benefits rose 11,000 to a seasonally adjusted 222,000 for the week ended May 12, the Labor Department said. Claims data for the prior week was unrevised. Economists polled by Reuters had forecast claims rising to 215,000 in the latest week.
The labor market is viewed as being close to or at full employment, with the jobless rate near a 17-1/2-year low of 3.9 percent. The unemployment rate is within striking distance of the Fed's forecast of 3.8 percent by the end of this year. The U.S. central bank raised rates in March and forecast at least two more hikes for this year.
U.S. Treasury yields were little changed after the data. U.S. stock index futures were trading lower while the dollar was slightly higher against a basket of currencies.
The four-week moving average of initial claims, viewed as a better measure of labor market trends as it irons out week-to-week volatility, fell 2,750 to 213,250 last week, the lowest level since December 1969.
The claims data covered the survey period for the nonfarm payrolls portion of May's employment report.
SHRINKING LABOR MARKET SLACK
The four-week average of claims fell 18,250 between the April and May survey periods, suggesting solid job growth. Nonfarm payrolls increased by 164,000 jobs in April after rising by 135,000 in March. Job gains are slowing as employers struggle to find skilled workers.
There were a record 6.6 million unfilled jobs in March, according to government data published last week.
The claims report also showed the number of people receiving benefits after an initial week of aid declined 87,000 to 1.71 million in the week ended May 5, the lowest level since December 1973. The four-week moving average of the so-called continuing claims dropped 39,750 to 1.77 million, also the lowest level since December 1973.
Declining continuing claims underscore tightening labor market conditions and support economists' expectations that wage growth will accelerate in the second half of the year.
In a separate report on Thursday, the Philadelphia Fed said its manufacturing business outlook survey's current general activity index rose about 11 points to a reading of 34.4 in May. Manufacturers in the mid-Atlantic region reported hiring more workers this month. The survey's employment index rose to a seven-month high.
A measure of prices paid by factories in the region fell, but the survey's prices received index rose to its highest reading since February 1989.
(Reporting by Lucia Mutikani
Editing by Paul Simao)
US STOCKS-Wall St set to open lower as bond yields rise, Cisco weighs - Reuters News
17-May-2018 09:08:20 PM
Updates prices, adds investor comment
By Medha Singh
May 17 (Reuters) - Wall Street was on pace to open lower on Thursday, weighed down by U.S. Treasury yields hitting fresh seven-year highs and Cisco's disappointing forecast, while looming Sino-U.S. trade talks added to the jitters.
Ten-year U.S. government Treasury yield, a key driver of global borrowing costs, hit a high of 3.1 percent as more expensive oil pointed to faster inflation and followed some upbeat U.S. retail sales numbers.
Oil prices hit $80 per barrel for the first time since November 2014 on concerns that Iranian exports could fall due to renewed U.S. sanctions and reduce supply in an already tightening market.
"There's a lot of chatter that the 10-year is somehow going to explode to the upside, that's why its getting everybody's attention," Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh.
"There is a lot of worry out there that might be reflected in the market ... and trade is the icing on the cake."
The United States and China will resume negotiations over the next two days to resolve their differences over trade, and officials from both sides have recently signaled that they are looking for a deal.
Japan is considering tariffs on U.S. exports worth $409 million in retaliation against U.S.-imposed steel and aluminum import tariffs, according to media reports.
Shares of Cisco, a component of all three major U.S. indexes, fell 3.9 percent in premarket trading after the company's disappointing forecast indicated its transition to a software-focused business was a work in progress.
At 8:46 a.m. ET, Dow e-minis were down 37 points, or 0.15 percent. S&P 500 e-minis were down 5.75 points, or 0.21 percent and Nasdaq 100 e-minis were down 36.75 points, or 0.53 percent.
Walmart rose 1.7 percent after the retailer posted a rebound in its U.S. e-commerce business and beat profit and revenue expectations.
However, J.C. Penney Co tumbled 10.4 percent after its same-store sales missed estimates and the company warned its could post a loss this year.
J.C. Penney's results come a day after fellow department store operator Macy's strong report helped drive the small-cap Russell 2000 index to a record high.
Coca-Cola rose 0.8 percent after Barclays upgraded the stock to "overweight."
NetEase dropped 8.8 percent after the Chinese internet company's first-quarter profit missed Wall Street estimates.
On the economic front, data showed new applications for U.S. jobless benefits increased more than expected last week, but the number of Americans on unemployment rolls fell to the lowest since 1973, pointing to diminishing labor market slack.
(Reporting by Medha Singh in Bengaluru; Editing by Anil D'Silva)
UPDATE 6-Oil hits $80, highest since Nov 2014, on Iran concerns - Reuters News
17-May-2018 07:24:36 PM
Updates prices
By Ron Bousso
LONDON, May 17 (Reuters) - Oil prices hit $80 a barrel on Thursday for the first time since November 2014 on concerns that Iranian exports could fall due to renewed U.S. sanctions and reduce supply in an already tightening market.
Brent crude futures reached an intraday high of $80.18. They were up 58 cents at $79.86 as of 1110 GMT.
U.S. West Texas Intermediate (WTI) crude futures were up 57 cents at $72.06 a barrel, also their highest since November 2014.
President Donald Trump's decision this month to withdraw the United States from an international nuclear deal with Iran and revive sanctions that could limit crude exports from OPEC's third-largest producer has given strong tailwind to oil prices.
France's Total on Wednesday warned it might abandon a multi-billion-dollar gas project in Iran if it could not secure a waiver from U.S. sanctions, casting further doubt on European-led efforts to salvage the nuclear deal.
A rapid decline in Venezuela's crude production has further roiled markets in recent months.
"The geopolitical noise and escalation fears are here to stay," said Norbert Rücker, head of macro and commodity research at Swiss bank Julius Baer. "Supply concerns are top of mind after the United States left the Iran nuclear deal."
Global inventories of crude oil and refined products dropped sharply in recent months due to robust demand and production cuts by the world's top producing countries.
Oil stocks were expected to drop further as the peak summer driving season nears, offsetting increases in U.S. shale output, said analysts at Bernstein.
"While the sharp rise in U.S. production and rig count has raised questions on the sustainability of inventory draws through 2018, we believe that inventories will continue to draw as we enter the summer driving season in 2018," they said.
Several banks have in recent days raised their oil price forecasts, citing tighter supplies and strong demand.
EVERYTHING BULLISH?
But high oil prices could hit consumption, the International Energy Agency warned on Wednesday, lowering its global oil demand growth forecast for 2018 to 1.4 million from 1.5 million barrels per day (bpd).
Asia's demand is at record highs and with rising prices its crude could cost $1 trillion this year, about twice what it paid during the market lull of 2015/2016.
The IEA said global oil demand would average 99.2 million bpd in 2018, although U.S. bank Goldman Sachs said consumption would cross 100 million bpd "this summer".
Leading production increases is the United States, where crude output has soared by 27 percent in the last two years to a record 10.72 million bpd, putting it within reach of top producer Russia's 11 million bpd.
(Additional reporting by Henning Gloystein in Singapore; Editing by Dale Hudson and Jason Neely)
PRECIOUS-Gold slides to fresh 2018 low as dollar strengthens - Reuters News
17-May-2018 08:02:02 PM
(Updates prices)
By Jan Harvey
LONDON, May 17 (Reuters) - Gold slid to a fresh low for the year on Thursday as another rise in U.S. bond yields and concerns over political risk in Italy held the dollar index near its 2018 peak.
The precious metal has fallen more than 2 percent this week on gains in the U.S. currency and a rise in U.S. 10-year Treasury yields to seven-year highs. Higher yields increase the opportunity cost of holding non-yielding assets such as bullion.
Spot gold was down 0.2 percent at $1,288.25 an ounce by 1145 GMT, off an earlier 4-1/2 month low of $1,285.41 an ounce. U.S. gold futures for June delivery were down $4.00 at $1,287.50.
The dollar has climbed nearly 4 percent this quarter on expectations that the Federal Reserve will lift U.S. interest rates further this year to curb inflation, at a time when other central banks are still keeping monetary policy loose.
"I expect further weakness in gold prices because I think the dollar can rise a bit further," ABN Amro analyst Georgette Boele said.
"Gold prices are mainly driven by the U.S. dollar and then U.S. yields ... our year-end 10-year U.S. Treasury forecast stands at 3.2 percent, with three more Fed rate hikes."
The euro remains under pressure, hovering near a five-month low on concerns that political developments in Italy could cause wider disruption in the common currency bloc.
Political uncertainty arising out of North Korea after Pyongyang threatened to pull out of a meeting with the United States was likely to limit downside for gold, analysts said. But that was not enough to offset dollar strength.
From a technical perspective, gold prices were looking vulnerable to further losses after breaking below key chart levels this week, according to analysts who study past price moves to determine the future direction of trade.
"Gold has eroded key support, namely the 200-day moving average, the $1,302.74 March low and the 50 percent retracement (of the December-to-January rally)," Commerzbank said in a note on technicals. "We have been forced to neutralise our outlook as the market is now on the defensive."
Among other precious metals, silver was up 0.3 percent at $16.40 an ounce, having touched its lowest in two weeks at $16.17 in the previous session.
Platinum was down 0.2 percent at $885.60 an ounce, off an earlier five-month low of $880.50, while palladium was 0.2 percent lower at $981.80 an ounce.
(Additional reporting by Apeksha Nair in Bengaluru Editing by David Goodman and Edmund Blair)
VEGOILS-Palm rises on bargain-hunting, weaker ringgit - Reuters News
17-May-2018 08:49:36 PM
Updates with closing prices, quote
By Emily Chow
KUALA LUMPUR, May 17 (Reuters) - Malaysian palm oil futures recovered from a one-week low on Thursday and ended trading higher on the back of bargain-buying and a weaker ringgit, its currency of trade.
Gains in the Chicago Board of Trade soyoil also lent support to the market, said traders.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was up 0.8 percent at 2,432 ringgit ($613.06) a tonne at the close of trade. Earlier in the session, it hit the lowest since May 8 at 2,399 ringgit.
Trading volume stood at 45,537 lots of 25 tonnes each at the on Thursday evening.
"A weaker ringgit is seen supporting the market," said a Kuala Lumpur based trader, as a weaker ringgit typically makes palm oil cheaper for holders of foreign currencies.
The ringgit fell 0.1 percent on Thursday evening to 3.9670 per dollar. It has lost 0.5 percent since the start of the week.
Traders said the market rose earlier on bargain hunting gains in U.S. soyoil but lacked bullish news for long-term support.
"We're seeing some bargain-hunting, but it seems like the market has no supportive news to push it higher," said a futures trader in Kuala Lumpur.
Demand for Malaysian palm oil has waned in recent weeks, according to export data from industry players.
Exports in the first half of May fell 13.7 percent-14.9 percent from a month earlier, showed data from inspection company AmSpec Agri Malaysia and cargo surveyor Societe Generale de Surveillance.
The demand slowdown could be attributed to Malaysia's resumption of a crude palm oil export tax, which was set at 5 percent for May following four months of suspension, said traders.
In related oils, the Chicago July soybean oil contract was up 0.5 percent on Thursday.
Palm oil is impacted by movements in rival edible oils as they compete for a share in the global vegetable oils market.
CBOT Trends-Wheat up 7 to 10 cents, corn up 1-2, soybeans up 4-5 - Reuters News
17-May-2018 09:25:58 PM
CHICAGO, May 17 (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 Thursday.
WHEAT - Up 7 to 10 cents per bushel
CORN - Up 1 to 2 cents per bushel
SOYBEANS - Up 4 to 5 cents per bushel
(Reporting by Julie Ingwersen)
FOREX-Euro falls towards 5-month lows on Italian concerns and U.S. bond yield rise - Reuters News
17-May-2018 07:52:39 PM
By Tommy Wilkes
LONDON, May 17 (Reuters) - The euro fell towards a five-month low on Thursday as investors fretted about the demands of populist parties likely to form Italy's next government and as a fresh rise in U.S. Treasury bond yields underpinned demand for the dollar.
The euro has slumped six cents from more than $1.24 in the space of three weeks after a huge dollar rally. Investors are betting that U.S. interest rates will need to rise further to curb inflation while other central banks are postponing monetary tightening.
That has forced investors who took big positions against the dollar anticipating it would fall in 2018 to rush to unwind and cover their positions, pushing the greenback even higher.
Some analysts say the market remains complacent about the possibility of a rising dollar, which also notched up a four-month high against the Japanese yen on Thursday as 10-year Treasury yields approached their highest since 2011.
The euro slid 0.2 percent to $1.1787, slightly above the $1.1763 2018 low it hit on Wednesday.
"This sense of a market that is not particularly well prepared for a euro decline is supported by the benign valuations still evident in the pricing of six-month and 12-month implied volatility," BNY Mellon analysts said in a note, referring to prices of a measure of expected swings in the value of the euro.
The dollar index rose 0.1 percent to 93.502, below its 2018 high of 93.632.
The euro is also suffering from reports Italy's anti-establishment 5-Star Movement and the anti-immigrant League, which are working to draft a coalition programme, may ask the European Central Bank to forgive 250 billion euros of debt.
But broader Italian markets held up better on Thursday as investors played down the broader impact on euro zone political stability and questioned whether the Italian parties would really follow through on such plans.
"The sheer outlandishness of some leaked plans helped ease investor concerns a bit. The would-be coalition's denials that leaked draft policies were ever concrete plans also helped smooth markets," said Ken Odeluga, an analyst at City Index.
Sterling gave up earlier gains after the UK government dismissed a media report that Britain wanted to stay in the European Union's customs union after Brexit.
The dollar rose to its strongest versus the Japanese yen since Jan. 23, up 0.3 percent on the day at 110.70 yen.
The Australian dollar added 0.1 percent to $0.7524 after gaining 0.6 percent overnight, buoyed by a rise in prices of commodities such as copper. Other commodity-linked currencies like the Canadian dollar also advanced.
Volatile emerging market currencies, the biggest losers from the dollar's recovery, took another beating.
Rising Treasury yields have enhanced the dollar's appeal and raised global borrowing costs. For emerging markets with current account deficits that means higher costs and the risk of fund outflows and their currencies declining further, analysts say.
The Indonesian rupiah recovered from its weakest since October 2015 after the central bank raised its interest rate for the first time since 2015 to boost the fragile currency.
Brazil's real dropped to a two-year low against the dollar overnight
The Turkish lira and Argentine peso, which have been at the heart of the emerging market selloff, both slumped again but traded above record lows hit earlier in the week.
(Editing by Catherine Evans)
US STOCKS-S&P, Nasdaq climb on retail, chip gains - Reuters News
16-May-2018 11:59:04 PM
Changes comment, adds details, updates prices
By Medha Singh
May 16 (Reuters) - Wall Street edged higher on Wednesday, helped by gains in retail and chip stocks, while investors weighed the impact of rising bond yields.
Investors are worried about a faster rise in interest rates as the U.S. 10-year Treasury yield hovered near seven-year high on signs that the U.S. economy is on a stronger footing in the second quarter.
"Higher rates are going to present headwind to equity markets. Even with strong economic data, strong earnings, the markets are still flat year to date," said Michael James, managing director of Institutional Equity Trading at Wedbush Securities in Los Angeles.
"The question remains what multiples are people willing to pay for equities in this higher rate environment."
The retailing index was boosted by a 9 percent surge in Macy's shares after the department store operator reported strong quarterly results and lifted its full-year profit forecast.
Shares of rivals Kohl's and Nordstrom were up about 1 percent each.
"You had pretty solid numbers from Macy's and it has been an early trigger for outperformance in the retail space today," James said.
At 11:19 a.m. EDT the Dow Jones Industrial Average was down 1.75 points, or 0.01 percent, at 24,704.66, the S&P 500 was up 4.36 points, or 0.16 percent, at 2,715.81 and the Nasdaq Composite was up 24.80 points, or 0.34 percent, at 7,376.43.
Micron rose 4.3 percent after RBC Capital Markets began coverage of the stock with an "outperform" rating.
The Philadelphia SE semiconductor index rose 1 percent.
Advancing issues outnumbered decliners for a 1.43-to-1 ratio on the NYSE and for a 1.60-to-1 ratio on the Nasdaq.
The S&P index recorded 10 new 52-week highs and three new lows, while the Nasdaq recorded 83 new highs and 31 new lows.
(Reporting by Medha Singh in Bengaluru; Editing by Anil D'Silva)
UPDATE 7-Oil slips as dollar gains, demand shows signs of weakening - Reuters News
16-May-2018 11:41:37 PM
Recasts throughout, changes byline, updates dateline previous LONDON
By Ayenat Mersie
NEW YORK, May 16 (Reuters) - Oil prices slipped on Wednesday, as a strengthening dollar overshadowed a U.S. crude inventory report that showed domestic crude stocks falling more than expected.
Brent crude futures were down 31 cents at $77.43 a barrel by 11:17 a.m. EDT (1517 GMT), while U.S. crude futures fell 30 cents to $71.01 a barrel.
The dollar firmed to nearly a five-month high against a basket of other major currencies on Wednesday. A stronger greenback makes it more expensive to buy dollar-denominated commodities like oil.
"The only reason why we're not seeing higher prices from here today is the strength of the U.S. dollar," said Tariq Zahir, managing member at Tyche Capital Advisors.
U.S. crude stocks fell last week as exports hit a new one-week record, while inventories of both gasoline and distillates fell, the Energy Information Administration said.
Crude inventories fell by 1.4 million barrels in the week to May 11, compared with analysts' expectations for a decrease of 763,000 barrels.
"All in all, the report is bullish. Oil stocks fell across the board and in some cases more than expected, whilst rising exports point to healthy demand for U.S. crude," Commerzbank analyst Carsten Fritsch said.
Physical crude markets are sagging under the weight of unsold barrels of oil, while the 50 percent rise in oil prices in the last year is encouraging major companies such as ExxonMobil, Royal Dutch Shell, Chevron, BP and Total to increase output.
Spot crude oil cargo prices are at their steepest discounts to futures prices in years as sellers struggle to find buyers for West African, Russian and Kazakh cargoes, while pipeline bottlenecks trap supply in West Texas and Canada.
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 in 2018 to 1.4 million barrels per day, 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 Amanda Cooper in LONDON and Henning Gloystein in SINGAPORE; Editing by Mark Potter and Paul Simao)
PRECIOUS-Gold steadies after biggest tumble since 2016 - Reuters News
16-May-2018 10:27:55 PM
(Updates prices)
By Peter Hobson
LONDON, May 16 (Reuters) - Gold prices steadied on Wednesday after 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 $1,300-an-ounce mark.
Spot gold was flat at $1,289.86 an ounce by 1417 GMT, having gone as low as $1,286.20, its weakest since Dec. 27.
U.S. gold futures for June delivery were 0.1 percent down at $1,289.20.
"Rising U.S. bond yields and a stronger dollar were factors behind gold's decline below the $1,300 level, said National Australia Bank economist John Sharma.
"The slight pick-up suggests there might have been some opportunistic buying on the part of investors."
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 ABN AMRO analyst Georgette 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 could reconsider attending a planned summit between Kim Jong Un and U.S. President Donald Trump next month.
"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 up 0.4 percent at $16.30 an ounce after falling 1.6 percent on Tuesday.
Platinum eased by 0.2 percent to $891.40 and palladium gained 0.3 percent to $984.97.
(Additional reporting by Apeksha Nair and Eileen Soreng in Bengaluru
Editing by Jane Merriman and David Goodman)
17-May-2018 01:12:47 AM
ROTTERDAM, May 16 (Reuters) - Soymeal on the European meals and feeds market dropped substantially on Wednesday on the back of a strong dollar and because of technical weakness in CBOT soymeal futures.
South American soymeal was offered between $4 and $11 a tonne down from Tuesday. A strong dollar weighed on products priced in that currency.
Rapemeal was offered between unchanged and three euros per tonne lower. Easier rapeseed futures took their cue from weaker CBOT soybean futures. Lower soymeal prices and lack of demand also weighed, while a strong dollar, which underpins euro-priced products, limited losses.
"Recent volatility and uncertainty which the direction the market will move in the near future discourages players from doing business at the moment," one broker said.
(Reporting by Karel Luimes; Editing by Elaine Hardcastle)
17-May-2018 12:16:10 AM
CHICAGO, May 16 (Xinhua) -- Chicago Board of Trade (CBOT) agricultural commodities traded mixed on Wednesday morning, with soybean futures dropping sharply on uncertainty of China-U.S. trade consultations.
July corn was 1.5 cents lower at 3.985 U.S. dollars per bushel as of 1550 GMT, July wheat was 1.25 cents higher at 4.9475 dollars, July soybean was down 14 cents at 10.0475 dollars.
Wheat futures were higher on adverse weather globally. The drought in the U.S. Southern Plains is severe with much of hard red winter wheat belt suffering from an exceptional or extreme drought, according to the U.S. Drought Monitor.
As for international market, showers are slated to fall across the winter corn areas of South America through the weekend. Black Sea winter wheat areas will receive near normal rain over the next 10 days with dryness deepening a drought across Australia. The Canadian Prairies are turning parched and will have to be closely monitored.
Copyright (c) 2018 Xinhua News Agency
FOREX-Dollar extends rally to five-month high; euro weak - Reuters News
16-May-2018 10:22:56 PM
Recasts, updates rates, adds new comments, changes dateline from LONDON
By Saqib Iqbal Ahmed
NEW YORK, May 16 (Reuters) - The dollar extended its rally against a basket of currencies on Wednesday to touch a five-month high, supported by relatively strong U.S. economic data in recent days, while the euro was hit by reports that a likely future Italian government would seek debt forgiveness from European creditors.
The dollar index, which measures the greenback against a basket of six other currencies, was up 0.14 percent at 93.352, after rising as high as 93.632, its highest since December 19.
The greenback has risen about 1.6 percent this month, boosted by a view that the Federal Reserve will outpace most major central banks in policy normalization.
"There's been some improved sentiment on conditions in the U.S. compared with other parts of the world," said Sireen Harajli, foreign exchange strategist at Mizuho in New York.
U.S. factory output rose in April, although new estimates of manufacturing and overall industrial production showed less growth in prior months than initially believed.
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.
Euro zone inflation slowed in April, European statistics agency Eurostat said on Wednesday, confirming an earlier flash estimate and adding to the headache of European Central Bank policy makers seeking to phase out monetary stimulus.
Japan's economy contracted more than expected at the start of this year, suggesting growth has peaked after the best run of expansion in decades, unwelcome news for a government struggling to get traction for its reflationary policies.
"Essentially, the dollar is stronger mostly because the rest of the world is not," said Harajli.
The euro was 0.25 percent lower against the greenback at $1.1807, its lowest since December, 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 ($294.18 billion) of debt.
"The reaction that we saw in the market definitely reflects the investor sentiment about that," she said.
The euro was 0.4-percent lower against the Swiss franc, after dropping to a five-week low of 1.1772 francs. The Swiss franc typically attracts capital in times of uncertainty.
Against the yen, the dollar was down 0.11 percent at 110.22 yen, but still close to the highest it has been since early February.
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.
Sterling fell towards its lowest point of the year against the dollar amid fresh worries about Britain's Brexit negotiations and relatively modest UK wage growth, but pared losses to trade little changed on the day at $1.3495.
(Reporting by Saqib Iqbal Ahmed Editing by Nick Zieminski)
US STOCKS-Wall St to open flat on rising U.S. yields, N. Korea worries - Reuters News
16-May-2018 09:09:20 PM
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
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
(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
CORN - Up 1 to 2 cents per bushel
SOYBEANS - Down 5 to 7 cents 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
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
| Contract | Month | Last | Change | Low | High | Volume | |
| MY PALM OIL | JUN8 | 2403 | -28.00 | 2397 | 2422 | 1015 | |
| MY PALM OIL | JUL8 | 2411 | -22.00 | 2402 | 2424 | 9830 | |
| MY PALM OIL | AUG8 | 2415 | -22.00 | 2406 | 2427 | 12934 | |
| CHINA PALM OLEIN | SEP8 | 5066 | -18.00 | 5034 | 5092 | 311032 | |
| CHINA SOYOIL | SEP8 | 5740 | -44.00 | 5720 | 5778 | 379490 | |
| CBOT SOY OIL | JUL8 | 30.92 | -0.20 | 30.9 | 31.09 | 6218 | |
| INDIA PALM OIL | MAY8 | 653.30 | -4.70 | 652.20 | 657 | 770 | |
| INDIA SOYOIL | MAY8 | 751.6 | -3.20 | 750.6 | 753 | 8890 | |
| NYMEX CRUDE | JUN8 | 71.20 | -0.11 | 70.85 | 71.34 | 116430 | |
| 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
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.
EMERGING LOSERS
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)
