Dollar idles after tumble from 19-month peak; Aussie firm before RBA

TOKYO - The US dollar nursed its wounds on Tuesday following its biggest drop in nearly three weeks against major peers, as Federal Reserve policymakers allayed investor fears of a very rapid tightening of monetary policy.

The Australian dollar remained firm after its biggest jump in eight months overnight ahead of a Reserve Bank of Australia policy decision later on Tuesday, with expectation building that Governor Philip Lowe will capitulate on his prior conviction that an interest rate rise this year was unlikely.

The dollar index, which measures the greenback against six rivals, ticked 0.05 percent higher to 96.715, barely making a dent in Monday's 0.59 percent tumble. It was at an almost 19-month high of 97.441 at the end of last week, as investors pondered chances the Fed could raise rates by 50 basis points in March.

Trading in Asian hours may be subdued with several markets on holiday for the Lunar New Year.

A chorus of Fed officials on Monday backed a lift-off in rates in March, but spoke cautiously about what might follow.

Money markets price in a quarter-point rise for March, and four more by year-end.

"Recent Fed remarks appeared to push back on the odds of a 50bp rate hike in March," putting the focus on economic data this week for clues on the pace of policy tightening, including the closely watched monthly payrolls report on Friday, TD Securities strategists wrote in a note.

US payrolls are forecast to show a gain of 153,000 jobs for January, down from 199,000 in December, with the unemployment rate holding steady at 3.9 percent, according to a Reuters poll.

Meanwhile, the Aussie was little changed at $0.7067 after soaring 1.06 percent on Monday, its biggest gain since early June.

Australian inflation is surging at the fastest annual pace since 2014, suggesting price pressures are not as benign and transitory as policymakers thought they would be.

"It is impractical and unlikely the RBA can continue to hold a dovish stance," the TD Securities strategists wrote, predicting a hike in August or earlier.

A Reuters poll of economists puts the odds of a first hike in November.

The Bank of England holds its policy meeting on Thursday, with a Reuters poll predicting a second rate hike in less than two months after UK inflation jumped to its highest in nearly 30 years.

The European Central Bank also meets on Thursday. While no policy change is expected, analysts said the Fed's looming rate hikes will narrow the ECB's window for action.

The euro slipped 0.11 percent to $1.12235, following a 0.80 percent jump on Monday.

Sterling was flat at $1.34385 after gaining 0.33 percent in the previous session.

The greenback was little changed at 115.125 yen.

(Editing by Jacqueline Wong)

-reuters

Asian shares mixed as investors look ahead to rate decisions

TOKYO – Asian shares were mixed Tuesday after a day of listless trading on Wall Street, as investors awaited signs on global interest rates.

Japan’s benchmark Nikkei 225 added 0.2% to 21,360.15 in morning trading.

Australia’s S&P/ASX 200 fell 0.5% to 6,618.20, while South Korea’s Kospi inched up 0.1% to 2,021.73.

Hong Kong’s Hang Seng was up nearly 0.1% at 26,703.44, while the Shanghai Composite lost 0.4% to 3,012.03.

On Wall Street, the S&P 500 ended virtually flat as losses in technology and health care stocks outweighed gains in financials and other sectors. The Russell 2000 index of smaller company stocks, which has lagged the S&P 500 this year, outpaced the rest of the market.

Investors are taking a shine to smaller company stocks in hopes that they’ll be better shielded from the fallout of the costly trade war between the U.S. and China than large multinationals.


The S&P 500 inched 0.28 points lower, or less than 0.1%, to 2,978.43. The index, which has finished higher the past two weeks, is within 1.6% of its all-time high set in late July. The Dow Jones Industrial Average rose 38.05 points, or 0.1%, to 26,835.51. The Nasdaq fell 15.64 points, or 0.2%, to 8,087.44. The Russell 2000 climbed 19.06 points, or 1.3%, to 1,524.23.

The broader market has bounced back the past two weeks following volatility brought on by the trade war as Washington and Beijing imposed new tariffs on more of each other’s imported goods. Investors worry the escalation of tariffs may be dampening global economic growth and threatening to nudge the United States into a recession.

Traders are hoping for a deal between the world’s two largest economies and were encouraged last week by news that talks will resume in October.

A mixed bag of economic data has also kept Wall Street focused on central banks and whether they will continue taking measures to shore up economic growth. On Friday, Federal Reserve Chairman Jerome Powell said the central bank doesn’t expect a recession and will take necessary actions to maintain growth.

Economists expect the Fed to cut interest rates when it meets next week.


Separately, the European Central Bank is expected to unveil new monetary stimulus measures on Thursday to help shore up the region’s economy.

“Markets look to be adrift ahead of the slew of events this week including the likes of the European Central Bank where further support for the markets is expected,” said Jingyi Pan, market strategist at IG in Singapore.

“As far as the risk sentiment is concerned, the improvement carries forth from the previous week in anticipation of the various central bank meetings.”

ENERGY:

Benchmark crude oil rose 42 cents to $58.27 a barrel. It rose $1.33 to $57.85 a barrel Monday. Brent crude oil, the international standard, gained 46 cents to $63.05 a barrel.

CURRENCIES:

The dollar rose to 107.39 Japanese yen from 106.96 yen on Monday. The euro strengthened to $1.1046 from $1.1037. /gsg

source: business.inquirer.net

Asian stocks follow Wall Street lower on trade war fears

BEIJING – Asian stock markets on Thursday followed Wall Street lower after President Donald Trump reignited trade fears by saying he could impose more tariffs on Chinese imports.

Benchmarks in Shanghai, Tokyo, Hong Kong and Sydney all declined. Oil rebounded from the previous day’s losses.

Trump alarmed investors by saying he had $325 billion of Chinese imports available for additional tariffs “if we want.” That shook markets that had been reassured by Trump’s agreement with Chinese President Xi Jinping in June to hold off on new trade penalties while they resume negotiations.

The Chinese government warned tariff hikes would “create a new obstacle” in talks on ending their bruising fight over Beijing’s technology ambitions.

Trump’s comment “cast a dark cloud over lingering concerns on trade talk progress,” said Mizuho bank analysts in a report.

The Shanghai Composite Index lost 0.6% to 2,913.49 and Tokyo’s Nikkei 225 tumbled 1.6% to 21,128.12. Hong Kong’s Hang Seng retreated 0.4% to 28,465.17 and Seoul’s Kospi was 0.2% lower at 2,066.94.


Sydney’s S&P-ASX 200 shed 0.3% to 6,655.60 and Taiwan and Southeast Asian markets also retreated. New Zealand gained.

On Wall Street, stocks extended their losses into a second day as railroad operator CSX had its biggest drop in 11 years, pulling other industrial companies down with it. CSX plunged 10.3% after saying it expects this year’s revenue to decline as much as 2%, after previously saying it expected growth.

Banks fell as investors worried lower interest rates will hurt profits. Investors expect the Federal Reserve to cut interest rates for the first time in a decade at their next policy meeting in two weeks.

Corporate earnings reports are getting into full swing this week, and investors have been mostly cautious in their assessments of them. Earnings are still expected to decline for S&P 500 companies in the second quarter.

ENERGY: Benchmark U.S. crude gained 1 cent to $56.79 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 84 cents on Wednesday to close at $56.78. Brent crude, used to price international oils, advanced 17 cents to $63.83 in London. It lost 69 cents the previous session to $63.66.

CURRENCY: The dollar declined to 107.73 yen from Wednesday’s 107.97 yen. The euro gained to $1.1239 from $1.1226./gsg

source: business.inquirer.net

Asian shares mostly lower as investors look to G-20 meeting

TOKYO – Asian shares were mostly lower Wednesday as investors awaited developments on the trade friction between the U.S. and China at the Group of 20 meeting of major economies in Japan later in the week.

Japan’s benchmark Nikkei 225 slipped 0.5% to 21,088.32 in early trading, while Australia’s S&P/ASX 200 inched down nearly 0.1% to 6,652.20. South Korea’s Kospi stood virtually unchanged but a tad lower at 2,121.24.

Hong Kong’s Hang Seng edged up 0.1% to 28,214.56, while the Shanghai Composite inched up less than 0.1% at  2,982.65.

On Wall Street, discouraging economic data and cautionary remarks from the head of the Federal Reserve weighed on the market.

The sell-off marked the third straight loss for the market and the biggest drop this month for the Dow Jones Industrial Average and the S&P 500 index, which hit an all-time high only last week.

In an early afternoon speech, Fed Chairman Jerome Powell noted that the economic outlook has become cloudier since early May amid uncertainty over trade and global growth.

Earlier Tuesday, reports showed a decline in consumer confidence and more weakness in the housing market.

The S&P 500 index fell 27.97 points, or 1%, to 2,917.38.

The Dow dropped 179.32 points, or 0.7%, to 26,548.22. The Nasdaq composite, which is heavily weighted with technology stocks, slid 120.98 points, or 1.5%, to 7,884.72.

The Russell 2000 index of smaller company stocks gave up 9.05 points, or 0.6%, to 1,521.04.

Trade policy remains the biggest source of uncertainty looming over the market. Investors are worried about the trade dispute between the U.S. and China and its potential impact on global economic growth and corporate profits.

Presidents Donald Trump and Xi Jinping will meet this week at the G-20. The world’s two largest economies spent much of the current quarter escalating their trade war and giving global markets jitters over prospects for economic growth.

“To a large extent, any further deterioration in trade relations is expected to guide expectations here so the focus remains up ahead with the G-20,” said Jingyi Pan, market strategist at IG in Singapore.

ENERGY:

Benchmark crude oil rose $1.05 to $58.88 a barrel. It fell 7 cents to settle at $57.83 a barrel Tuesday. Brent crude oil, the international standard, rose 73 cents to $65.01 a barrel.

CURRENCIES:

The dollar rose slightly to 107.46 Japanese yen from 107.03 yen on Tuesday. The euro weakened to $1.1357 from $1.1381. /gsg

source: business.inquirer.net

Trade tensions torpedo oil, US sanctions hammer Russian rouble

SYDNEY — Asian shares were subdued on Thursday after a new round of tit-for-tat tariffs in the US-Sino trade conflict torpedoed oil prices, while the Russian rouble tumbled as the US slapped fresh sanctions on the country.

MSCI's broadest index of Asia-Pacific shares outside Japan barely budged as caution dominated. Japan's Nikkei slipped 0.5 percent, not helped by a shock slump in core machinery orders.

Early Thursday, China's state broadcaster said China must counteract US tariffs and Beijing had the confidence to protect its own interests as well as the means to do so.

China had already announced additional tariffs of 25 percent on $16 billion worth of US imports from fuel to autos. The tariffs will apply to billions of dollars in U.S. gasoline, diesel and other oil products, though not crude.

Analysts at ANZ noted there were also reports President Xi Jinping had asked China's major oil companies to increase domestic output to safeguard the country's energy security.

The oil market took the news hard with selling escalating as major technical levels broke.

US crude was last down 12 cents at $66.82 per barrel, having shed 3.2 percent on Wednesday, while Brent was off 2 cents at $72.26.

On Wall Street, trade-sensitive industrial companies were the biggest drag on the Dow, with declines led by Boeing and Caterpillar Inc.

The Dow fell 0.18 percent, while the S&P 500 lost 0.03 percent and the Nasdaq added 0.06 percent.

More sanctions

In currency markets, the Russian rouble sank after Washington said it would impose fresh sanctions because it had determined that Moscow had used a nerve agent against a former Russian agent and his daughter in Britain.

There were also reports of a new US Senate bill that would impose widespread sanctions on Russia for election meddling.

The rouble duly slid to its lowest since late 2016, with the dollar buying 65.50 roubles having jumped 3.4 percent overnight.

The pound skidded to its lowest against the dollar and euro in almost a year as fears grew Britain might leave the EU without a deal on trade with Brussels.

Traders reported a significant increase in investors hedging against a 'no-deal' Brexit, an event which could send sterling into free fall and hurt the economy by raising trade barriers with the UK's biggest export market.

Sterling was last trading at $1.2877, having dropped 0.4 percent overnight.

The Japanese yen seemed to be catching a bid as a traditional safe haven, with the dollar easing to 110.81 yen after stretching as high as 111.44 on Wednesday.

The euro was relatively steady at $1.1611, while the dollar index was a shade firmer at 95.098.

The New Zealand dollar shed 0.9 percent to a two-year trough at $0.6682 after the country's central bank took a dovish turn, pledging to keep rates at record lows well into 2020.

The Reserve Bank of New Zealand (RBNZ) said rates were likely to be on hold for longer and cut its forecasts for economic growth this year and next. —Reuters

US stock indexes slide in afternoon trading; oil rises

U.S. stocks moved broadly lower in afternoon trading Thursday, giving back the market’s gains from the day before. Financial, industrial and technology stocks were down the most, while phone company and real estate stocks edged higher. Investors were turning their focus to the next wave of corporate earnings reports in the weeks ahead.

KEEPING SCORE: The Dow Jones industrial average slid 105 points, or 0.5 percent, to 19,849 as of 1:28 p.m. Eastern Time. The Standard & Poor’s 500 index lost 10 points, or 0.5 percent, to 2,264. The Nasdaq composite index fell 33 points, or 0.6 percent, to 5,530.

BANK WOES: Banks and other financial companies were down as the yield on the 10-year Treasury note fell. Lower yields mean lower interest rates on loans and lower profits for banks. Cincinnati Financial shed $4.73, or 6.3 percent, to $70.16. PNC Financial Services Group lost $3.02, or 2.5 percent, to $117.76. Zions Bancorporation fell $1.22, or 2.8 percent, to $42.70.

HEFTY CHARGE: Hess slid 4.3 percent after the oil company said it will take a $3.8 billion charge in the fourth quarter. The stock fell $2.68 to $59.16.

UNDERCUT: Mylan fell 1.6 percent on news that rival CVS is now selling a generic version of Mylan’s EpiPen at about a sixth of its price. Mylan’s stock shed 59 cents to $36.70.

RED FLAG: Investors sold shares in KB Home after the homebuilder’s latest margins and outlook for this year fell short of Wall Street’s expectations, overshadowing the company’s improved earnings and sales. The stock slid 35 cents, or 2.1 percent, to $16.25.

ROAD HAZARD: Fiat Chrysler tumbled 16.1 percent on news that the U.S. government is accusing the automaker of violating vehicle emission laws. The Environmental Protection Agency said Thursday that Fiat Chrysler failed to disclose software in some of its vehicles with diesel engines that allows them to emit more pollution than allowed under the Clean Air Act. Shares in Fiat slid $1.69 to $8.78.

RESPLENDENT RISER: Tiffany & Co. was one of the biggest gainers in the S&P 500, rising $3.01 or 3.9 percent, to $80.75.

MARKETS OVERSEAS: In Europe, Germany’s DAX fell 1.1 percent, while France’s CAC 40 slid 0.5 percent despite new data showing eurozone industrial production jumped 1.5 percent in November. Britain’s FTSE 100 was flat. In Asia, Japan’s benchmark Nikkei 225 dropped 1.2 percent. Hong Kong’s Hang Seng dipped 0.5 percent, while Australia’s S&P/ASX 200 slipped 0.1 percent. South Korea’s Kospi bucked the trend to rise 0.6 percent.

ENERGY: Benchmark crude oil was up 78 cents, or 1.5 percent, at $53.03 a barrel in New York. Brent crude, which is used to price oil sold internationally, was up 91 cents, or 1.7 percent, at $56.01 a barrel in London.

BONDS: Bond prices rose. The yield on the 10-year Treasury slipped to 2.33 percent from 2.37 percent late Wednesday.

CURRENCIES: The dollar fell to 114.30 yen from 115.43 on Wednesday. The euro was rising at $1.0637 from $1.0576. The pound, which had been weakening recently amid concern that Britain might break off completely from the European Union’s single market, was moving higher versus the dollar Thursday. The British currency was down to $1.2176 from $1.2208. TVJ

source: business.inquirer.net

Global stock markets mixed as oil price rally fizzles

SEOUL, South Korea — Global stock markets were mixed on Wednesday as investors awaited more policy details from U.S. president-elect Donald Trump. Oil prices retreated, snapping an overnight rally.

KEEPING SCORE: European markets started on a weaker note with Britain’s FTSE 100 down 0.1 percent to 6,783.36. Germany’s DAX lost 0.2 percent to 10,710.68 while France’s CAC 40 was nearly flat at 4,535.83. Futures augured a tepid start on Wall Street with Dow futures down 0.1 percent and S&P futures also dipping 0.1 percent.

ASIA’S DAY: Asian markets finished mostly higher. Japan’s Nikkei jumped 1.1 percent to 17,862.21 and South Korea’s Kospi gained 0.6 percent to 1,979.65. Hong Kong’s Hang Seng index closed 0.2 percent lower at 22,280.53, while China’s Shanghai Composite Index edged 0.1 percent lower to 3,205.06. Australia’s S&P/ASX was nearly unchanged at 5,327.70, while benchmarks in Taiwan and Southeast Asia were mixed.

ANALYST’S TAKE: “International markets showed signs of pausing to wait on evidence of policy specifics before extending moves in the direction of the ‘Trump themes’ of fiscal stimulus and inflation,” Ric Spooner, chief market analyst at CMC Markets, said in a daily commentary.

OIL: Oil prices rallied overnight on hopes that OPEC members would agree to lower output when they meet later this month. They wavered between gains and losses before turning lower again. Benchmark U.S. crude fell 41 cents to $45.40 per barrel in electronic trading on the New York Mercantile Exchange. The contract closed up $2.49, or 5.7 percent, to $45.81 per barrel on Tuesday. Brent crude, used to price international oils, lost 28 cents to $46.67 a barrel in London.

CURRENCIES: The dollar strengthened to 109.46 yen from 108.94 yen while the euro fell slightly to $1.0724 from $1.0731. TVJ

source: business.inquirer.net

Asian stocks lower on renewed worries about banking sector

SEOUL, South Korea—Asian stock markets were lower on Friday as investor sentiment was dented by overnight losses on Wall Street and renewed worries about the health of Deutsche Bank.

KEEPING SCORE: Japan’s Nikkei 225 slumped 1.5 percent to 16,449.84 and South Korea’s Kospi fell 1.1 percent to 2,045.43. Hong Kong’s Hang Seng index sank 1.7 percent to 23,334.07. Australia’s S&P/ASX 200 dropped 0.7 percent to 5,435.90. China’s Shanghai Composite Index was up 0.3 percent to 3,005.86. Stocks in Singapore and other Southeast Asian countries were also lower.

ANALYST’S TAKE: “Risk sentiment waned overnight as worries about global banks weighed on markets,” said Alex Wijaya, senior sales trader at CMC Markets in Singapore. “Stock markets worldwide are rattled by the latest development at Deutsche Bank.”

BANK WOES: US authorities are seeking $14 billion from Deutsche Bank to settle legal claims over its sales of mortgage securities in 2007 and 2008, which helped kick off a global financial crisis. The bank said it had struck a deal to sell a subsidiary and stressed that it was not seeking government help but investors are worried what will happen to Germany’s biggest lender and to the broader financial system if Deutsche Bank runs low on capital. Analysts said the troubles at Deutsche Bank are raising scrutiny over other banks in Europe, which are also in talks regarding mortgage settlement with the US authorities.

CHINA OUTPUT: The Caixin monthly purchasing managers’ index, which is closely watched for insights into China’s economy, ticked up to 50.1 for September from the previous month’s 50.0 reading. The tiny expansion in activity and gains in overall new orders for the third straight month offered a glimmer of hope for the world’s second-largest economy that has been grappling with a prolonged slowdown. But the private survey result was not strong enough to relieve investors outside China.

WALL STREET: US stocks finished lower on Thursday as drug companies and banks absorbed large losses. The Dow Jones industrial average lost 195.79 points, or 1.1 percent, to 18,143.45. The Standard & Poor’s 500 index sank 20.24 points, or 0.9 percent, to 2,151.13. The Nasdaq composite dropped 49.39 points, or 0.9 percent, to 5,269.15.

OIL: Benchmark US crude lost 54 cents to $47.29 per barrel in New York. The contract gained 78 cents, or 1.7 percent, to close at $47.83 a barrel on Thursday. Oil prices surged earlier this week after the nations of OPEC, which collectively produce more than third of the world’s oil, agreed to a small cut in production in a surprise decision Brent crude, the international benchmark, fell 67 cents to $49.14 a barrel in London.

CURRENCIES: The dollar fell to 100.93 yen from 101.16 yen while the euro fell to $1.121 from $1.122./rga

source: business.inquirer.net

Asia stocks advance ahead of Bank of England policy decision

SEOUL, South Korea — Asian stock markets were higher Thursday ahead of the Bank of England’s upcoming announcement of its monetary policy decision.

KEEPING SCORE: After trading lower in the morning session, Japan’s Nikkei 225 finished 1.1 percent higher at 16,254.89. South Korea’s Kospi added 0.3 percent to 2,000.03 and Hong Kong’s Hang Seng index added 0.6 percent to 21,872.54. China’s Shanghai Composite Index edged up 0.1 percent to 2,982.43. Stocks in Taiwan, Singapore, Indonesia and other Southeast Asian markets were higher.

UK WATCH: Bank of England is widely expected to unveil stimulus measures including a rate cut when it announces its monetary policy decision later Thursday after Asian markets close. Some analysts also expect the bank will announce the creation of billions in new money as early indicators since the U.K. referendum to leave the European Union suggest that the economy is contracting at its sharpest rate since 2009. Analysts expected increased volatility in the foreign exchange market ahead of the decision.

ANALYST’S TAKE: “The question is, not so much, if the BoE will ease policy, but rather how the BoE will choose to deliver policy easing,” Mizuho Bank wrote in a daily commentary. If the bank’s decision falls short of market expectations, “there is a risk of markets being disappointed.”

WALL STREET: U.S. stocks edged higher on Wednesday as the big gains in the price of oil boosted energy companies. The Dow Jones industrial average broke a seven-day losing streak and added 0.2 percent to 18,355. The Standard & Poor’s 500 index gained 0.3 percent to 2,163.79. The Nasdaq composite rose 0.4 percent to 5,159.74.

OIL: Benchmark U.S. crude stayed flat at $40.83 per barrel in New York. The contract jumped $1.32, or 3.3 percent, to close at $40.83 on Wednesday after the U.S. government said stockpiles of gasoline shrank by more than 3 million barrels last week. Brent crude, which is used to price international oils, dropped 21 cents to $42.89 a barrel in London.

CURRENCIES: The dollar strengthened to 101.36 yen from 101.28 yen while the euro fell to $1.1134 from $1.1148.

source: business.inquirer.net

British vote on leaving the EU rocks world financial markets

SEOUL, South Korea — World financial markets were rocked Friday by Britain’s unprecedented vote to leave the European Union, with stock markets and oil prices crashing and the pound hitting its lowest level in three decades.

The uncharted, unexpected path of a European Union without Britain sparked the sell-offs, with more jitters expected as global markets try to digest the shock result.

Tokyo stocks plummeted about 8 percent, their biggest fall since 2008, while South Korea’s Kospi tumbled about 3 percent. Britain’s FTSE 100 futures tanked 8.3 percent.

Crude oil prices and US futures also took a big hit. The British pound plummeted more than 10 percent in six hours while the yen surged about 3 percent to the US dollar as investors seeking safety snapped up the Japanese currency.

By early afternoon in Asia, a tally by the BBC showed Britain had voted to leave the 28-nation European Union by about a 52 percent to 48 percent margin.

Japan’s Nikkei 225 plunged 8.3 percent to 14,897.32 while South Korea’s Kospi sank 3.4 percent to 1,918.70. Hong Kong’s Hang Seng index tumbled 4.8 percent to 19,866.20 and Australia’s S&P/ASX 200 fell 3.4 percent to 5,012.20. Stocks in Shanghai, Taiwan, Sydney and Southeast Asian countries were sharply lower.

US futures took a dive. Dow futures fell 3.4 percent and S&P futures nosedived 5 percent.

“Financial markets throughout the night have been chaotic to say the least and this may continue as the day progresses,” said Craig Erlam, senior market analyst at Oanda in London. “All eyes will now be on central banks around the world to see how they respond to these market developments, particularly the Bank of England and the Bank of Japan.”

On Thursday, Wall Street finished with rallies as pre-poll forecasts showed that Britain would keep the EU membership. Asian stock markets opened the day higher but the mood turned sour as results started to show that the “leave” vote would win. As the results increasingly pointed to the EU exit, investors dumped stocks and other risky assets.

The results sent the pound on a wild ride. It rose to its highest point for the year of $1.50 before tumbling more than 10 percent to a low of $1.3303, its lowest level since 1985.

In other currencies, the dollar fell to 101.51 yen from 104.80 yen while the euro weakened to $1.097 from $1.132.

Benchmark US crude plummeted 6.4 percent, or $3.17, to $46.94 per barrel in New York. Brent Crude, the benchmark for international oil price, fell 6.1 percent, or $3.11, to $47.80 per barrel in London.

source: newsinfo.inquirer.net

Global shares mixed after Wall Street slump, oil price rally

KUALA LUMPUR, Malaysia — European stocks were mostly higher Thursday while Asian shares were mixed after a weak session on Wall Street. Tokyo shares rebounded after a weak start as the yen weakened against the U.S. dollar.

KEEPING SCORE: France’s CAC 40 rose 0.2 percent at 4,325.09 and Germany’s DAX gained 0.1 percent to 9,986.52. Britain’s FTSE 100 was nearly flat at 6,158.38. Dow and S&P 500 futures rose 0.4, suggesting a positive start for Thursday trading.

BRITISH FACTOR: A raft of data is due out later Thursday

and traders are watching for further clues on monetary policy from a speech by Bank of England Governor Mark Carney, especially in light of Britain’s referendum on continued EU membership due next month.

TOYOTA PROFIT: Shares in Toyota Motor Corp. fell 1.4 percent after a 6.1 percent drop overnight in New York. On Wednesday, the company projected a 35 percent plunge in profit for the fiscal year through March 2017 as the perks of a favorable exchange rate fade, and it reported a 4 percent drop in profit for January-March on-year. Other exporters can expect similar woes thanks to the yen’s recent gains against the U.S. dollar.

OIL PRICES: Already trading at its highest price in six months, benchmark U.S. crude rose overnight after the government reported a surprise decline of 3.4 million barrels in supplies for last week and a 6 percent reduction in U.S. oil output. U.S. oil gained 1 cent to $46.24 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $1.57, or 3.5 percent, to $46.23 a barrel on Wednesday. Brent crude, the international benchmark, gained 5 cents to $47.65 a barrel. It had jumped $2.08, or 4.6 percent, to $47.60 a barrel in London.

ANALYST VIEWPOINT: “Commodity stocks are among the few positive movers today, following a major oil rally on the back of U.S. evidence consumption is eating into the historically high stock piles of crude,” Michael McCarthy of CMC Markets said in a commentary. “This better demand picture combined with a slightly weaker USD makes energy and materials the sectors du jour.”

ASIA’s DAY: Japan’s Nikkei 225 stock index rose 0.4 percent to 16,646.34, while the Hang Seng index of Hong Kong dropped 0.7 percent to 19,915.46. South Korea’s Kospi lost 0.1 percent to 1,977.49 and Australia’s S&P/ASX 200 fell 0.2 percent to 5,359.30. Taiwan fell but most benchmarks in Southeast Asia rose.

CURRENCIES: The dollar rose to 108.99 yen from 108.40 in the previous session. The euro slipped to $1.1413 from $1.1424. The yen-dollar rate has “slipped back down to 108 levels, as a short-squeeze in the early week abated with no more official talk of intervention yesterday, while markets are also doubting if Japan would intervene in advance of the G7 summit,” Mizuho Bank Ltd. (Singapore branch) said in a commentary. TVJ

source: business.inquirer.net

5 low-cost travel destinations

Who doesn’t want an affordable vacation?  Each year, more and more travelers are looking for places that give them a lot more bang for their buck. Finding places where your well-earned dollars are worth a lot more can really make your vacation truly more enjoyable and exciting.

Here are five countries where a dollar equates to a whole lot more when converted to the local currency:

Indonesia

Dollar exchange rate: USD 1.00 = IDR 13,201.11

A whopping exchange rate means that you really get a whole lot more for your hard-earned cash. From safaris to exotic accommodations and even fine dining at a relaxing rice paddy field, there’s a whole lot of fun experiences you can have with this much moolah.

Cambodia

Dollar exchange rate: USD 1.00 = KHR 4,008.02

Cambodia is a great place to get a lot bang for the money you earn. One dollar can net you enjoyable rides to the many Wat temples and sample a wide variety of the local cuisine and so much more. It’s a great place for sightseeing a lot of history.

South Korea

Dollar exchange rate: USD 1.00 = IDR 1,150.46

Who hasn’t wanted to experience the exciting atmosphere of trendy South Korea? Your dollars are worth a lot more in the country, from enjoying the spicy dishes to buying hip clothes and make-up. Make sure to pack some extra bags to carry your haul when flying back home.

Japan

Dollar exchange rate: USD 1.00 = JPY 108.23

With this great exchange rate, you can now enjoy both the quirky and calm sides of Japan without spending so much. Explore the cultural landscape of modern Japan, from the youthful streets of Shibuya to the electronic paradise that is Akihabara. You’ll be able to encounter many fun and amazing activities when you have the right amount of money in your pocket.

Philippines

Dollar exchange rate: USD 1.00 = PHP 46.15

This exchange rate opens your world to a multitude of fun beaches, exciting island-hopping adventures and a lot more. It’s the perfect escape for people who are looking for an affordable adventure in a tropical land without having to spend too much to enjoy themselves.

Have these dollar exchange rates made you feel like taking your very own inexpensive vacation? Take the time to indulge yourself in low-cost travel to these lands where you will definitely get a whole lot more for your hard-earned money.

Mango Tours is a provider of quality, affordable and convenient travel services that include low-priced airline tickets, customized Philippine and International Tour Packages, Cruises, Land Transfers, and more. Visit www.mangotours.com to know more about its latest promos and travel offers

source: lifestyle.inquirer.net

Global stocks surge as investors welcome Fed assurance

MANILA, Philippines — Global stocks surged Wednesday as investors welcomed the latest signal from the U.S. Federal Reserve that it will move slowly to raise interest rates. Japan’s Nikkei 225 bucked the trend and closed lower.

KEEPING SCORE: Britain’s FTSE 100 rose 1.4 percent in early trading to 6,193.27. Germany’s DAX climbed 1.4 percent to 10,024.07, while France’s CAC 40 gained 1.4 percent to 4,429.74. U.S. futures augured a positive opening on Wall Street, with Dow futures up 0.5 percent to 17,628 and S&P futures rising 0.5 percent to 2,057.

ASIA’S DAY: Tokyo’s Nikkei 225 lost 1.3 percent, closing at 16,878.96, on the continuing strong yen and the trade ministry’s announcement of a 6.2 percent month-on-month drop in industrial production in February. Hong Kong’s Hang Seng index climbed 2.2 percent to 20,803.39. China’s Shanghai Composite surged 2.8 percent to 3,000.65, while South Korea’s KOSPI rose 0.4 percent to 2,002.14. Australia’s S&P ASX 200 was up 0.1 percent at 5,010.30. Southeast Asian markets also rose.

ASIA’S ECONOMY: Softer growth prospects for China and a weak recovery in major industrial economies are expected to push down economic growth in developing Asia to 5.7 percent in 2016 and 2017, below previous projections, according to an Asian Development Bank report released Wednesday. The region’s economy grew 5.9 percent in 2015. The Asian Development Outlook 2016 said China’s economic growth is seen moderating to 6.5 percent this year from 6.9 percent last year and to 6.3 percent next year. Slower exports, a falling labor supply and supply-side reforms are reshaping the world’s second-largest economy toward more domestic consumption and a further reduction in excess industrial capacity, it said.

THE QUOTE: “September is now the only date the markets are pricing with a better than 50 percent probability of a (U.S.) rate hike,” said IG market analyst Angus Nicholson. “A weaker U.S. dollar not only benefits the dollar-denominated price of many commodities, which are a key export for most emerging markets, but it also lowers the burden of U.S. dollar-denominated debt in a range of emerging markets.”

ENERGY: Benchmark U.S. crude gained 71 cents, rising to $39.00 a barrel in electronic trading on the New York Mercantile Exchange. The contract shed $1.11, or 2.8 percent, to $38.28 a barrel on Tuesday. Brent crude, used to price international oils, was up 60 cents at $40.45 a barrel in London.

CURRENCIES: The dollar declined to 112.23 yen from 112.77 yen. The euro rose to $1.1315 from $1.1287. TVJ

source: business.inquirer.net

Global stocks decline ahead of Fed meeting

BEIJING — Global stocks declined Wednesday as investors awaited this week’s U.S. Federal Reserve meeting, expecting possible insights into the state of global growth and future Fed moves.

KEEPING SCORE: In early trading, Britain’s FTSE 100 fell 0.6 percent to 6,136.50, France’s CAC-40 fell 0.5 percent to 4,482.50 and Germany’s DAX shed 0.4 percent to 9,945.74. On Monday, the DAX rose 1.4 percent and the CAC-40 and FTSE both added 0.4 percent. On Wall Street, futures for the Dow Jones industrial average and Standard & Poor’s 500 index both declined 0.4 percent.

ASIA’S DAY: Tokyo’s Nikkei 225 lost 0.7 percent to 17,117.07 and Hong Kong’s Hang Seng declined 0.7 percent to 20,288.77. Sydney’s S&P ASX 200 fell 1.4 percent to 5,111.40 and India’s Sensex retreated 0.9 percent to 24,580.54. Seoul’s Kospi was off 0.1 percent at 1,969.97 and Taiwan, Singapore, Bangkok and Jakarta also fell. The Shanghai Composite Index gained 0.2 percent to 2,864.37 and New Zealand also rose.

WATCHING THE FED: The Federal Reserve’s Federal Open Market Committee meets Tuesday and Wednesday. Investors don’t expect a rate hike but are watching for indications of possible future Fed moves. In December the Fed raised interest rates for the first time in almost a decade, but it left them unchanged in January.

ANALYST’S TAKE: “The most anticipated item on the U.S. economic calendar this week is the FOMC meeting, even though policy will almost certainly be left on hold. With no change in rates, the focus will be entirely on forward guidance,” said Jim O’Sullivan of High-Frequency Economics in a report.

JAPAN CENTRAL BANK: The Bank of Japan left its monetary policy unchanged Tuesday but downgraded its assessment of conditions in the world’s third-largest economy, citing risks from weaker growth in China and other emerging economies and volatility in financial markets, among other factors.

CURRENCY: The dollar slipped to 112.99 from 113.79 yen. The euro edged up to $1.1108 from Monday’s $1.1105.

ENERGY: Benchmark U.S. crude shed 82 cents to $36.36 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.32 on Monday to close at $37.18. Brent crude, used to price international oils, lost 84 cents to $38.69 per barrel in London. On Monday, the contract declined 86 cents to $39.53. TVJ

source: business.inquirer.net

China grapples with contradictions over currency

BEIJING, China — China is struggling to reconcile its push for economic reforms and a freely traded currency with curbing massive outflows of capital sparked by worries over its slowing economy — and a lack of communication is fueling fear.

The thorny problem represents the so-called “impossible trinity”, as China’s ruling Communist Party seeks to control the exchange rate and monetary policy, while at the same time moving to freer capital flows, analysts said.

Around $1.0 trillion left China last year, according to Bloomberg Intelligence. In December alone capital outflow from the country was nearly $160 billion, it said.

The cash hemorrhage reflects growing concern about the economy against a backdrop of volatility in the stock and currency markets, which has led both investors and savers to shed their yuan, also known as the renminbi (RMB).

“The recent flood of capital leaving China has been driven primarily by increased skepticism that the People’s Bank (the central bank) will hold to its pledge to keep the renminbi stable,” said Mark Williams, chief Asia economist at Capital Economics.

At the recent World Economic Forum in Davos, billionaire investor George Soros told Bloomberg TV that the world’s second largest economy, where growth has already slowed to a 25-year low, was heading for more trouble.

“A hard landing is practically unavoidable,” he said, pointing to deflation and excessive debt as a reason for China’s slowdown.

His remarks angered the Chinese media, which accused him of “declaring war” on the currency.

Soros — whose enormous trades are still blamed in some countries for contributing to the Asian financial crisis of 1997 — in the 1990s led speculators in bets against the Bank of England, which unsuccessfully sought to defend the pound’s exchange rate peg.

No policy to devalue
The yuan has retreated against the dollar by 1.3 percent since the start of January, having already slid more than 4.5 percent against the greenback in 2015.

Beijing keeps a grip on currency flows and the yuan can only move up or down against the dollar by two percent daily from a mid-rate set by the People’s Bank of China (PBoC), the central bank.

But after a surprise devaluation last August — a move intended to bring it closer to its market value according to Beijing — the yuan is being dragged down by the vast outflows of capital.

Chinese citizens are allowed to convert the equivalent of $50,000 from the domestic currency under an annual quota, though many seek ways to evade the barrier. A popular method is borrowing the quota of other people, such as family members.

When the PBoC in mid-December signaled a change in the way it manages the yuan’s value by measuring the unit against a basket of currencies instead of pegging it to the dollar, the move increased the level of anxiety.

Bank of America Merrill Lynch said the lack of “clear and transparent” rules for the basket led to confusion in the market. At the same time, the decision by the US Federal Reserve to raise interest rates has put downward pressure on the yuan.

Chinese officials deny plans to devalue the currency, amid fears Beijing is seeking a currency war to help boost its flagging exports.

“The fluctuations in the currency market are a result of market forces and the Chinese government has no intention and no policy to devalue its currency,” Vice President Li Yuanchao told Bloomberg.

But Beijing faces a dilemma, he said. On the one hand, China wants to expand use of the yuan internationally. At the same time, the government needs to ensure the unit remains stable.

Declining reserves

To keep its currency steady, China has been diving into its foreign exchange reserves — already the world’s largest — to buy massive amounts of yuan.

But it is a bitter pill to swallow. China’s foreign exchange reserves fell $108 billion in December — the biggest monthly decline on record — to $3.3 trillion.

“The PBoC has enough reserves to keep selling at December’s rate until mid-2018 but it would presumably throw in the towel before they were all exhausted,” said Williams of Capital Economics.

The central bank has also refrained from loosening monetary policy by cutting reserve requirements — the amount of funds that banks must put aside — on fears of exacerbating the yuan’s depreciation, analysts said.

Some say China will need to devalue the yuan, and have even called on Beijing to move rapidly towards a free float of the currency.

But others believe such a move would reflect poorly on China, which in November received approval from the International Monetary Fund for the yuan to be included in its basket of elite currencies.

“The potential disruption to financial stability outside China, and with the risk of an Asian currency war, would ultimately feedback negatively to China,” said Michala Marcussen, global head of economics at Societe Generale.

source: business.inquirer.net

Dollar nurses losses as euro rallies, commodity currencies surge

SYDNEY/TOKYO  – The dollar nursed broad losses on Wednesday, having suffered its biggest one-day fall in over a year as it came under pressure from many fronts amid oil-fueled gains by commodity currencies.

Buyers snapped up commodity currencies as the oil market extended its recovery and copper prices also surged.

Elsewhere in the market, the euro recovered on hopes that Greece may yet secure a new debt deal.

The euro's rally from Tuesday's low of $1.1312 went as far as $1.1534. It last traded at $1.1470, well off an 11-year trough of $1.1098 set last week.

That contributed to a 0.9 percent slide in the dollar index, its biggest one-day fall since October, 2013. The index last traded at 93.758 after stooping to 93.25 overnight.

In a development that supported the battered euro, Greek Prime Minister Alexis Tsipras sought to reassure international partners that Athens did not want to create divisions in Europe with its call for a new debt accord and said he was open to listening to alternative proposals.

Yet, there was still plenty of uncertainty whether Tsipras will be successful, suggesting the rally in the euro was more about positioning rather than any change in fundamentals, traders said.

Commodity currencies remained in the spotlight with crude oil up about 19 percent over the past four sessions, while copper saw its biggest one-day gain since July 2013. Oil's recovery helped spur a global rally in risk assets.

"It feels a little strange seeing crude oil and equities move in tandem, as higher oil under normal circumstances would slow economic growth. But we just have to go with the flow, and brace for 'risk on' when oil goes up," said Bart Wakabayashi, head of forex at State Street in Tokyo.

"Currencies appear to be at the whim of the oil market. For now oil has become an indicator of risk appetite," he said.

The Australian dollar hovered around 78 US cents, staging an impressive turnaround from a slump to a six year trough of $0.7627.

The short-covering rally followed the Aussie's slump on Tuesday, when the Reserve Bank of Australia (RBA) cut interest rates to a record low 2.25 percent.

The Canadian dollar jumped for a second session to two-week highs of C$1.2353 per US dollar. It last traded at C$1.2428.

Sterling climbed to $1.5198, pulling further away from a near 19-month low of $1.4952 set last month. The British currency had posted its best session in nearly 10 months on Tuesday.

Against the yen, the dollar fared better as US Treasury yields jumped and a rally by Tokyo shares lessened the allure of the safe-haven Japanese currency. The greenback was rose 0.3 percent to 117.95, having recovered from a low of 116.87.

Traders said the dollar's recent rally to multi-year highs against the yen and euro could falter as doubts emerge over whether the Federal Reserve will raise interest rates this year.

"When most central banks across developed and emerging economies are in easing mode, the assumption that the Federal Reserve will raise rates this year is starting to look questionable," said David Absolon, Investment Director at Heartwood Investment Management.

"For Fed policymakers, the external environment and the actions of other central banks are becoming increasingly hard to ignore," he wrote in a note to clients. – Reuters

Peso trades sideways ahead of US debt ceiling deadline

The peso closed barely changed Monday, as investors took on a wait-and-see attitude ahead of the US debt ceiling talks between Democrats and Republicans.

A dollar fetched P43.15 at the close of trading, just a centavo and a half more than the P43.135 it got last Friday. Trading volume totaled $534 million compared with $818.3 million Friday.

“It was a very lethargic trading with low volume,” a trader at a local bank said.

All eyes are on the negotiations in the US Senate on bringing the fiscal crisis to an end, which as of Sunday in Washington showed little signs of progress, Reuters reported.

Failure to break the stalemate before Oct. 17, Thursday, would leave the world's biggest economy unable to pay its bills in the coming weeks.

In a separate interview, a second trader said investors held on to their positions in the face of the uncertainty over what would happened to markets should the US default on its obligations.

“Expectations of the US defaulting is increasing, but a lot of investors are still holding on to dollars – because that's supposedly the safe haven. We're slowly seeing lines get blurred,” she said.

Philippine financial markets will be closed Tuesday in observance of Eidul Adha or the Feast of Sacrifice of Muslims. – VS, GMA News

source: gmanetwork.com