Asian shares edge up, brush off soft China data

TOKYO - Asian shares edged up on Monday in cautious trade, brushing off soft economic data from China, as investors looked to whether the US Federal Reserve is confident enough to raise interest rates for the first time in a decade.

US stock futures rose 0.4 percent from late US levels in early Asian trade while Japan's Nikkei rose 0.4 percent. MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.3 percent.

Data published at the weekend showed growth in China's investment and factory output missed forecasts in August, raising the chances that China's third-quarter economic growth may dip below 7 percent for the first time since the global crisis.

The data add to expectations that Beijing will respond with more measures to prop up the economy.

"The numbers fit with our view that China will have to roll out more monetary easing," said Fumio Nakakubo, Japan CIO at UBS's wealth management division.

China's output of key industrial commodities including coal and steel weakened in August, as government measures to prevent smog from affecting World War Two commemorations further cut production already lowered by a slowing economy.

Slowing demand from China are likely to keep a tab on commodity prices.

Influential Wall Street trader Goldman Sachs cut its outlook on oil late last week, lowered its 2016 forecast for US crude to $45 a barrel from $57 previously, citing oversupply and concerns over China's economy.

The investment bank said crude could even fall to near $20 a barrel.

In early trade, US crude futures traded at $44.82, up 0.4 percent from last week's close after a 3.0 percent fall last week.

Still trading in most asset classes could be subdued as investors look to whether the US Fed will raise rates at its policy meeting on Sept 16-17.

"It is fair to say that the full spectrum of views is on offer. Clearly this is the most anticipated Fed meeting in a number of years," analysts at ANZ said in a report.

A small majority of forecasters are sticking to their guns and predicting the Federal Reserve will pull the trigger next week on the first US interest rate increase in nearly a decade.

Traders are pricing in smaller chance of a rate hike, however, suspecting the Fed may tread cautiously given the falls in equity markets and commodities in recent weeks.

"We think it is almost 50-50 whether the Fed will raise rates this week but we expect a rate hike by December on the grounds that the US economy is pretty strong," said UBS's Nakakubo.

In the currency market, the dollar was little changed against major currencies.

Against the yen, it traded at 120.67 yen. The euro stood little changed at $1.1342, holding on to last week's 1.8 percent gain. —Reuters

Oil prices down in Asian trade

Singapore – Oil prices fell in Asia Friday after the OPEC oil cartel slashed its longer-term global demand outlook, while a stronger dollar also weighed, analysts said. 

The benchmark US futures contract, West Texas Intermediate for December delivery, dropped 28 cents to $77.63 while Brent crude for December eased 40 cents to $82.46 in late-morning trade.

The Organization of the Petroleum Exporting Countries  estimated in its annual world outlook Thursday that demand for its crude will fall from just above 30 million barrels per day in 2013 to 28.2 million in 2017, before starting to rise again.

The 12-nation group said the United States and Canada are the primary drivers of non-OPEC output
growth, in part due to shale-oil production.

Singapore's United Overseas Bank said "US and global crude prices resumed its decline" after the release of the report, adding to heavy losses earlier this week owing to price cuts by Saudi Arabia.

Prices were also under pressure from the stronger US dollar.

The US dollar bought ¥115.31 in late-morning Asian trade, from ¥115.16 in New York Thursday afternoon. The greenback has surged against the yen since last Friday, when the Bank of Japan ramped up its stimulus program.

A stronger greenback makes dollar-priced commodities like oil more expensive for buyers using weaker currencies, which in turn tends to hit demand and prices.

Investors are also keeping an eye on the release of October non-farm payrolls data Friday that is expected to paint an optimistic picture of the US economy.

Initial jobless claims fell 10,000 to 278,000 in the week ending November 1, the lowest level in 14 years, the US Labor Department said Thursday.

"The very positive weekly jobless claims data reinforced expectations for a potentially strong US October jobs report today which could bring forward rate hike expectations," UOB said. –  Agence France-Presse

source: gmanetwork.com

Oil prices tumble in Asia

SINGAPORE – Oil prices resumed their downward spiral in Asian trade Thursday following another massive sell-off in equities as traders grow increasingly concerned about the global economic outlook, analysts said.

US benchmark West Texas Intermediate (WTI) for November delivery fell 90 cents to a two-year low of $80.88 a barrel in late-morning trade. Brent crude for November retreated 43 cents to $83.35, levels last seen four years ago.

Both contracts have lost more than a fifth of their value since hitting 2014 highs in June.

Markets across Asia sank on Thursday, led by Tokyo, as a disappointing set of US data fanned worries that the effects of a slowdown in China, Europe and Japan are being felt in the world's top economy.

Traders took their lead from New York and Europe, where stocks and the dollar sank.

"WTI and Brent continued to open in red," Phillip Futures said in a market commentary. "With the current bearish conditions for crude oil, we expect this to continue," it said.

A rebound in Asian trade Wednesday failed to gain traction as it was overwhelmed by negative sentiment in the face of waning demand in China, the world's biggest energy consumer, and the eurozone.

Adding to the pain is a supply glut caused by strong US production of shale gas and a return of Libyan oil on to the market after facilities that were closed due to civil unrest resumed operations.

Members of the Organization of the Petroleum Exporting Countries (OPEC) are also maintaining output levels, while slashing prices to gain market share, analysts said.

Investors are awaiting the release later Thursday of weekly US crude inventories -- a closely watched barometer of demand and supply in the world's top oil consuming nation.

Phillip Futures said it expects prices for the US-centric WTI contract to remain supported at $80 for the rest of the day, but it was harder to plot a floor for Brent, which is more linked to the international market. – Agence France-Presse

source: gmanetwork.com

Dollar up against yen as Japan's trade deficit swells

TOKYO – The dollar rose against the yen in quiet Asian trade Monday after data showed Japan's trade deficit quadrupled year on year in March.

The greenback fetched ¥102.63 in Tokyo mid-day trading, up from ¥102.46 Friday, while the euro was up at ¥141.74 from ¥141.46. The single currency also fetched $1.3810, against $1.3812.

Most leading financial markets around the world were closed Friday and Monday for Easter.

The yen faced moderate selling pressure after Japan said early Monday that its trade deficit surged to $14 billion in March, with a weak yen compounding surging imports as consumers rushed to buy ahead of a sales tax rise on April 1.

But the dollar is unlikely to breach ¥103 any time soon as investor sentiment has yet to completely turn the risk-on mode, says Osamu Takashima, chief FX strategist at Citi Bank Japan, in a morning note.

"We don't feel any sign that aggressive yen selling is set to start amid falling volatility," Takashima said.

Eyes are on the release this week of key economic data, including manufacturing activity around the world as well as retail, jobs and housing figures in the United States. – Agence France-Presse

source: gmanetwork.com

Oil prices up in Asian trade

Singapore – Oil prices edged higher in quiet Asian trade Tuesday as dealers hunted bargains while keeping an eye on a supply glut in the United States, analysts said.

New York's main contract West Texas Intermediate (WTI) for December delivery gained four cents to $94.66 a barrel in mid-morning Asian trade, while Brent North Sea crude for December climbed nine cents to $106.32.

"Prices are relatively muted," Teoh Say Hwa, head of investment at Phillip Futures in Singapore, told AFP.

"The minimal movement could be due to investors staying on the sidelines before the release of the weekly EIA (Energy Information Administration) report which would give them more directions relating to the US stockpiles," she said.

Crude inventories in the United States have climbed for the past six weeks, to about 28 million barrels, raising concerns about oversupply in the world's largest economy and top crude consumer.

WTI is trading below the $95 threshold after falling for four consecutive sessions last week under pressure from the build up in crude stockpiles, before rising slightly on Monday.

The EIA will release its weekly inventory report on Wednesday.

Libyan oil production levels also remain in focus, analysts said. The Libyan state oil company said Monday that protesters had maintained their blockade of the main oil facilities in the country, where production has fallen 80 percent since July.

Mohamed al-Harairi, an official at the National Oil Corporation, told AFP exports from Al-Hariga terminal in eastern Libya, which the government had said would resume by Monday, had not gone ahead for logistical reasons.

Protesters demanding jobs have been blocking terminals since late July, causing around $13 billion in losses to Libya's oil-dependent economy, authorities say. – Agence France-Presse

source: gmanetwork.com

Oil rebounds on breakthrough hopes in US budget crisis

Singapore – Oil prices rebounded in Asian trade Thursday on hopes of a possible breakthrough in the US budget crisis after the White House moved to convene meetings with leading members of Congress.

New York's main contract, West Texas Intermediate for delivery in November, was up seven cents at $101.68 in mid-morning trade while Brent North Sea crude for November gained seven cents to $109.13.

WTI declined $1.88 and Brent fell $1.10 New York Wednesday after the latest US crude stockpiles report showed a surprise build-up of 6.8 million barrels, but analysts said developments in Washington remain the main focus.

There are "continued concerns regarding the US budget impasse that would reduce demand for oil in the world's largest oil consumer," said Vanessa Tan, investment analyst at Phillip Futures in Singapore.

President Barack Obama sat down with House of Representatives Democrats on Wednesday, and invited all other lawmakers to the White House to work through budget disagreements that have led to the partial shutdown of the government.

Scenarios for an exit to the shutdown include a short-term government funding bill and a temporary debt ceiling rise, but there have no been consensus on any of these so far.

Failure to lift the debt ceiling by a October 17 deadline will mean the government is unable to pay its bills or service its debts, causing a default that analysts have warned could send the world economy back into recession.

"There is still no clarity as to whether the White House and the Republicans are closer towards a compromise that could result in a continuing resolution or a decision to lift the federal debt ceiling," DBS Bank said in a note.

"For now, a continuing resolution looks more likely if the both parties can move away from (Republican demands to cut Obama's health care law) and work towards spending cuts," it said. – Agence France-Presse

source: gmanetwork.com