Bayer stock slides on shock Monsanto cancer ruling

FRANKFURT -- Shares in German chemicals and pharmaceuticals giant Bayer tumbled in morning trade Tuesday after a US court confirmed a previous cancer damages ruling against subsidiary Monsanto over its herbicide Roundup.

Shares in the Leverkusen-based group lost 7.1 percent by 0830 GMT in Frankfurt (4:30 p.m. in Manila), against a DAX index of blue-chip German shares down 2.1 percent.

Investors were responding to fears that a wave of costly litigation could be about to break on the firm.

Late Monday, a US judge slashed more than $200 million off a damages award against Monsanto, which Bayer bought in June in one of Germany's biggest-ever corporate takeovers.

But the ruling upheld the jury's finding in a lower court that Monsanto should have warned a user about cancer risks from Roundup and confirmed some $78 million in damages.

Roundup contains glyphosate, a chemical campaigners and politicians in the US and Europe argue causes cancer, although Bayer points to scientific studies finding no connection.

With around 8,000 similar cases outstanding in America, financial players now fear similar rulings could end up costing the company billions.

Monday's case was Bayer and Monsanto's first attempt at reversing the judgement in favor of terminally ill school groundskeeper Dewayne Johnson, who was diagnosed with blood cancer non-Hodgkin's lymphoma in 2014.

He won his suit in August against Monsanto, with jurors finding that the company acted with "malice" and that Roundup and professional grade RangerPro contributed "substantially" to his terminal illness.

In a statement, Bayer hailed the reduction in damages as "a step in the right direction".

"But we continue to believe that the liability verdict and damage awards are not supported by the evidence at trial or the law and plan to file an appeal," the group added.

Betting on the future need for industrial agriculture to feed a growing world population, Bayer spent some $63 billion to acquire Monsanto, shedding much of its existing agrichemical business worth 7.6 billion euros ($8.7 billion) to German rival BASF to get the deal approved by EU anti-trust regulators.

source: news.abs-cbn.com

Asian stocks climb as oil crawls up from 10-month low

SINGAPORE - Asian stocks advanced on Thursday as oil prices inched up after hitting a 10-month low overnight on concerns over a supply glut and falling demand, dragging US and European shares lower.

MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2 percent.

Japan's Nikkei and South Korea's KOSPI were flat, while Australian shares rose 0.4 percent.

The Philippine Stock Exchange Index opened little changed at 7,882.54.

Crude oil crept up from multi-month lows hit on Wednesday on concerns over growing US production and reduced Chinese refinery activity.

"The time for contrarian trades in oil is fast approaching, but I would want to see some stability in price and the technicals start to become more convincing," said Chris Weston, chief market strategist at IG in Melbourne.

US crude futures rose 0.3 percent or 13 cents to $42.66 a barrel. They closed down 1.6 percent on Wednesday after touching their lowest level since August.

Global benchmark Brent climbed 0.2 percent or one cent to $44.92. It closed down 2.6 percent on Wednesday after touching a seven-month low.

The resulting decline in oil stocks hit stocks in Europe and on Wall Street overnight.

Britain's FTSE, Germany's DAX and France's CAC 40 closed between 0.3 percent and 0.4 percent lower.

The Dow Jones Industrial Average closed down 0.3 percent, while the S&P 500 was slightly lower. Nasdaq closed up 0.7 percent, lifted by biotech stocks.

Financial stocks also contributed to losses on Wall Street, driven lower by a drop in the Treasury yield curve to its flattest in almost a decade, as investors tried to reconcile a hawkish Federal Reserve with deteriorating inflation measures.

Boston Fed President Eric Rosengren and Fed Vice Chair Stanley Fischer suggested they are concerned less about raising rates too fast or too high than about keeping them too low for too long.

“I think the market may be pricing in a little higher odds of another rate hike before the end of the year, and that is helping drive some of the flattening,” said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.

The yield curve between five-year notes and 30-year bonds flattened to as low as 95.20 basis points, the narrowest since December 2007, on Wednesday and again early on Thursday.

The dollar was marginally lower on Thursday. The dollar index was at 97.523, following Wednesday's 0.2 percent loss.

The greenback bought 111.41 yen.

Sterling retained Wednesday's 0.3 percent gain to trade at $1.268 early on Thursday after the Bank of England's chief economist said he was likely to vote for an interest rate hike this year. Until now, he has been seen as largely supportive of keeping rates low.

The euro was flat at $1.117, holding on to Wednesday's 0.3 percent gain.

Spot gold rose 0.3 percent to $1,250.06 an ounce.

(Reporting by Nichola Saminather; additional reporting by Karen Brettell; Editing by Kim Coghill)

source: news.abs-cbn.com

European shares dip as concern over U.S. politics, Ubisoft weighs

LONDON - European shares fell on Wednesday amid a global pullback in stock markets as worries about political turmoil in the United States led investors to seek safety after a strong run sent regional benchmarks to record highs.

The pan-European STOXX 600 fell 0.3 percent, as major regional benchmarks tracked a global dip in stocks and the dollar as concerns over U.S. President Trump multiplied.

Euro zone blue chips and the bloc's broader index of stocks both dropped 0.6 percent.

Britain's FTSE 100 on the other hand hovered close to its record high hit on Tuesday, outperforming European peers as gains among miners supported it.

Despite their falls on Wednesday, European benchmarks remain near recent highs, having risen sharply as investors pile in to the region on the back of an economic recovery, robust company earnings and voters' rejection of populist parties in elections.

"Markets broke upwards with the disappearance of concerns around the French election. Quite a lot of fast money came in and markets are just pausing now to digest that," said Stephen Macklow-Smith, head of European equities at JP Morgan Asset Management.

Ubisoft Entertainment, the third-biggest global entertainment company, fell 6 percent after it cut its mid-term sales forecast, reporting results near the bottom end of its target range after the close on Tuesday.

Raiffeisen Bank was a bright spot on a negative banking sector, up 3.5 percent after its first-quarter profit jumped more than expected as write-downs shrank.

Lloyds Bank gained 1.9 percent after the British government sold its last remaining shares in the bank, marking the end of an era after one of the largest financial crisis bailouts.

But the Netherlands' largest domestic lender ABN Amro fell 3.2 percent after its results, with traders citing a lower net interest margin and capital ratio, though the headline net income beat expectations at 615 million euros.

Thyssenkrupp was the top European gainer, up 4 percent after Tata Steel agreed the terms of a deal to cut benefits for its British pension scheme, removing a major obstacle to the potential merger of its steel assets with the German steel maker.

Thyssenkrupp's labour boss said the pensions deal does not lessen workers' opposition to a possible merger, however.

Gold miner Fresnillo rose 2.8 percent as the price of the safe-haven asset rose to a two week high.

Tullow Oil gained 2 percent after JP Morgan reiterated its 'overweight' rating on the stock, saying the oil company had improved its funding position, and valuation had returned to more compelling territory.

Norwegian fertilizer maker Yara got a boost from broker Liberum raising it to 'buy' from 'sell', saying prices of urea, a key ingredient in fertilizers, are close to a trough with fewer capacity additions ahead. Trading in Oslo was closed for the day, however, and the market will reopen on Thursday.

European earnings continued to paint a bright picture for the region's equities, with earnings growth for the quarter seen at 19 percent, according to Thomson Reuters data.

(Reporting by Helen Reid, Vikram Subhedar; Editing by Hugh Lawson)

source: news.abs-cbn.com

Asia stocks, dollar subdued after French relief, S.Korea voted eyed

SINGAPORE - Asian stock markets edged down on Tuesday following a flat close on Wall Street, as investors searched for the next catalyst following France's presidential election, while oil inched higher on expectations OPEC supply cuts will be extended.

Financial spreadbetters expect Britain's FTSE 100, Germany's DAX and France's CAC 40 to all open flat.
The South Korean stock market, which finished at a record high on Monday, is closed for Tuesday's presidential election.

Liberal Moon Jae-in is widely expected to win the presidency, following months of leadership vacuum after former President Park Geun-hye was removed on charges of bribery and abuse of power.

The polls opened at 6 a.m. (2100 GMT on Monday) and will close at 8 p.m. (1100 GMT). The winner is expected to be sworn in on Wednesday after the Election Commission releases the official result.

Allies and neighbors are closely watching the election amid escalating tensions over North Korea's accelerating development of weapons since it conducted its fourth nuclear test in January last year. It conducted a fifth test in September and is believed ready for another.

North Korea would be keen to see a Moon victory. Its official Rodong Sinmun newspaper said in a commentary on Monday the time had come to put confrontation behind the Koreas by ending conservative rule in the South.

"South Korean markets had not registered significant risk-off sentiment similar to other economies pre-elections, and this is no surprise," Jingyi Pan, market strategist at IG in Singapore, wrote in a note.

"The largely similar stance on policies by the Presidential candidates provides little chance of surprise as compared to last week's French election. Meanwhile, the filling of the political vacuum could go a long way to benefitting the economy."

The Korean won weakened 0.25 percent on Tuesday, with the dollar buying 1,135.52 won.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.2 percent on Tuesday.

Japan's Nikkei was slightly lower.

China's CSI 300 index retreated 0.3 percent in its sixth straight session of losses amid concerns over tighter financial regulations. Hong Kong's Hang Seng reversed earlier losses to trade up 0.35 percent.

Taiwan stocks pulled back to trade 0.25 percent lower on profit taking after earlier surpassing the 10,000-point mark to hit a two-year high.

The MSCI World index, which touched a record high overnight, dropped about 0.1 percent.

The dollar was flat at 113.285 yen, retaining most of Monday's 0.4 percent gain.

The dollar index was also steady at 99.11.

The euro was steady at $1.0927 after tumbling 0.7 percent on Monday.

"The euro's retreat was driven solely by profit-taking. I think it is going to regain momentum over time," said Yukio Ishizuki, senior currency analyst at Daiwa Securities.

French stocks slumped 0.9 percent overnight, their biggest one-day loss in almost three weeks, as investors took profits following strong gains in the run-up to Sunday's vote that saw the market favorite, centrist Emmanuel Macron, elected president.

Germany's DAX closed 0.2 percent lower, while Britain's FTSE was marginally higher.

On Wall Street, all three major indexes closed flat, holding near recent all-time highs. The CBOE Volatility Index closed at 9.77, its lowest since December 1993.

In commodities, oil market sentiment swung between optimism over statements from major oil-producing countries that supply cuts could be extended into 2018 and lingering concerns over slowing demand and a rise in U.S. crude output.

Us crude inched up 0.1 percent to $46.47 a barrel.

Global benchmark Brent also rose 0.1 percent to $49.39.

Copper remained close to the four-month low touched on Monday after data showed a sharp drop on imports into China, the world's biggest consumer.

London copper slipped 0.1 percent to $5,481.50 a tonne on Tuesday, after falling to as low as $5,462.50 on Monday.

Gold recovered from a seven-week trough touched on Monday. Spot gold rose about 0.1 percent to $1,226.60 an ounce. (Reporting by Nichola Saminather; Additional reporting by Hideyuki Sano; Editing by Eric Meijer and Sam Holmes)

source: news.abs-cbn.com

Global markets: Stocks up, oil slides

NEW YORK - A measure of stocks across major markets globally inched up to a record high on Tuesday, lifted by gains in Europe amid corporate and economic strength, while crude futures tumbled as prices breached key technical levels.

A broad index of European stocks rose to its highest since August 2015, boosted by company earnings and as a survey of factory activity in the euro zone jumped to its highest since April 2011. French blue chips hit their highest in nearly a decade and Germany's DAX set a record high.

Robust results have helped lift share prices across the globe this year, with major U.S. indexes at or near record levels. First-quarter profits of companies on the benchmark S&P 500 index are expected to have risen 13.9 percent, the strongest rise since 2011, according to Thomson Reuters data.

Financial markets in Hong Kong, Japan and South Korea are closed on Wednesday for public holidays.

BP shares rose 1.6 percent after the oil major's first-quarter profit tripled.

Apple shares fell 1.2 percent to $145.75 in extended trading after the iPhone maker reported a surprise fall in iPhone sales.

"The economy is doing better within Europe, but these also tend to be global companies," said Isabelle Mateos y Lago, chief multi-asset strategist at BlackRock.

"The main reason why we are optimistic is because European companies are extremely well plugged in to benefit from the global reflation story, from China and US growth picking up."

The Dow Jones Industrial Average rose 36.43 points, or 0.17 percent, to 20,949.89, the S&P 500 gained 2.84 points, or 0.12 percent, to 2,391.17 and the Nasdaq Composite added 3.76 points, or 0.06 percent, to 6,095.37.

The pan-European STOXX 600 rose 0.75 percent to end at a near 21-month high and MSCI's gauge of stocks across the globe gained 0.27 percent to an all-time high.

The US dollar hit a six-week high of 112.30 Japanese yen as traders anticipated that despite some recent weak data the Federal Reserve would prepare markets for an interest rate increase in June in its statement following a policy meeting this week.

The yen weakened 0.13 percent against the greenback to 111.99 per dollar.

The Fed is expected to hold interest rates steady after its two-day meeting that began Tuesday, as it pauses to examine more economic data, but may hint it is on track for an increase in June.

Traders do not anticipate a hike on Wednesday but are currently forecasting a 65.2 percent chance of a 25-basis-point hike at the Fed's June meeting, according to Thomson Reuters data.

US benchmark 10-year Treasury notes were last up 11/32 in price to yield 2.2874 percent, from 2.327 percent late on Monday, ahead of the Fed statement on Wednesday.

WTI plunged on reports of rising output in the United States and extended losses on technical selling, while Brent crude oil prices fell to the lowest in over five months, erasing all the gains since OPEC agreed to cut production at the end of November.

US crude futures pared losses after data showed a bigger-than-expected inventory draw.

US crude fell 1.84 percent to $47.94 per barrel and Brent was last at $50.77, down 1.46 percent on the day.

Gold touched a three-week low of $1,251.37 an ounce as demand for the safe-haven asset waned. Spot gold was little changed at $1,256.36 an ounce.

source: news.abs-cbn.com

Asia shares shaky as Trump bets keep emerging markets under pressure

TOKYO - Asian shares were on the defensive on Monday, undermined by fears that the strength in the U.S. dollar and rising U.S. bond yields since Donald Trump's election to president could accelerate fund outflows from the region back to U.S. markets.

Asian markets were steady to slightly lower, with Hong Kong's Hang Seng flat, Australian shares down 0.2 percent and South Korea's Kospi falling 0.3 percent.

But Japan's yen-sensitive Nikkei bucked the trend, rising 0.8 percent to hit a 10 1/2-month high, thanks to the weaker yen. European shares were expected to gain, with spread-betters seeing a rise of 0.2 percent in Germany's DAX and Britain's FTSE.

Trump's unexpected election victory has led to a major repricing of assets, with investors rushing to buy U.S. stocks and the dollar, while dumping bonds and emerging market assets.

Trump's plan to expand fiscal spending, including more infrastructure spending, could be a game changer for markets that have long taken a policy mix of fiscal discipline and loose monetary policy for granted.

Under Trump's reflationary policies, the Federal Reserve might have to raise interest rates faster than expected to curtail inflation, making U.S.-dollar based assets more attractive at the expense of emerging nations.

"The markets driven by Trump may be just about to have run their course for now," said Toru Ohara, chief investment officer at Okasan Asset Management.

"A rise in interest rates is, generally speaking, not good thing for stocks, especially for emerging markets. But if you think that U.S. bond yields, which have been falling since 1982, may be bottoming out, that could mean the end of a low-growth/ low-inflation regime," he said.

Heightened uncertainty prompted investors to demand higher premiums for holding long-term U.S. debt, with the 10-year U.S. Treasuries yield accelerating to 2.364 percent by last week from around 1.86 percent before the elections.

It last stood at 2.340 percent, with a rise above its 2015 peak of 2.5 percent seen as having potential to spark a further sell-off as bond prices fall.

To be sure, investors have little idea of the extent that Trump could actually implement his proposals, which include putting tariffs on goods from major trading partners such as China and Mexico, and going ahead with heavy tax cuts that would widen the U.S. fiscal deficit.

Some investors suspect markets will soon have a reality check as differences between the new administration and Congress over some of Trump's policies begin to emerge.

"Next week, we have events that would make investors more sober, such as the OPEC meeting and Italian referendum. By then this Trump-inspired market may have come to an end for now," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

Higher U.S. yields are helping the dollar continue its bull run. The greenback rose to as high as 111.19, its highest level since early June. It last stood at 111.08.

It has risen almost 10 percent from its low of 101.19 hit on Nov 9, when Trump's victory was initially seen as stoking uncertainty and triggering a rush to safer assets such as the yen.

The euro traded $1.0604, having hit a near one-year low of $1.0569 on Friday.

The Australian dollar hit a 4-1/2-month low of $0.7311 while the Chinese yuan fell to an 8 1/2-year low of 6.8992 to the dollar.

The data from the U.S. financial watchdog showed on Friday that in the first week after the U.S. elections speculators barely increased their net long positions in the dollar.

"This suggests the leveraged fund community largely missed out on the dollar rally," analysts at ANZ Research wrote.

Many emerging market currencies remained under pressure on fears investors could bring their money back to the United States. The Malaysia ringgit hit 14-month low while the Philippine peso edged to near its 2008 low.

Oil prices rose in early Monday trade after five-percent gains last week, their first weekly gains in about a month, on growing expectations that OPEC will find a way to cap production.

The Organization of the Petroleum Exporting Countries is moving closer to finalizing its first deal since 2008 to limit output, with most members prepared to offer Iran flexibility on production volumes, ministers and sources said.

Brent crude futures rose 1.3 percent to $47.47 per barrel.

source: news.abs-cbn.com

Global markets: Stocks nudge higher after final US presidential debate

LONDON - Stock markets inched higher but the Mexican peso was mixed after the third and final US presidential debate, which was judged to have given no clear boost to Donald Trump's hopes of winning the White House.

The peso is seen as the chief proxy for market pricing of the Republican candidate's chances in view of his promises to impose tough limits on immigration. It climbed to a six-week high against the dollar in the immediate aftermath of the debate but was down on the day in European trade.

A win for Democrat Hillary Clinton next month - now predicted clearly by polls - is also seen as opening the way for a rise in interest rates, which a number of US Federal Reserve policymakers have all but promised for December.

The peso lost 0.3 percent in morning trade in Europe to 18.567 per dollar. Against a basket of currencies used to measure its broader strength, the dollar was up just under 0.1 percent, close to seven-month highs hit earlier this week.

"The likelihood of Donald Trump becoming president has nose-dived recently to as low as a one in eight probability ... (and) last night's debate has not provided that game-changing moment," said Lee Hardman, a currency strategist with Bank of Tokyo-Mitsubishi in London.

"The reduction in the political risk premium has helped the US dollar to strengthen broadly this month."

New York Fed President William Dudley overnight gave one of the clearest signals yet that the world's largest economy is ready to take another step away from the ultra-low interest rates that have prevailed since the 2008 financial crash.

He said the Fed would move this year if the economy remains on track. Markets now price in a roughly 70 percent chance of a Fed hike in December.

ECB EYED
The European Central Bank, as expected, changed nothing in policy at its own meeting on Thursday. President Mario Draghi's post-meeting news conference (1230 GMT) will be eyed for confirmation that the bank may extend its bond-buying next year but also for more signs of reticence among policymakers about keeping interest rates endlessly in negative territory.

Among the best news for stocks this week has been a series of upbeat results for US banks, driven chiefly by bond, commodity and currency trading, and the European banking index outperformed the main indexes on Thursday.

France's CAC 40 and Germany's DAX were around 0.2 percent higher in morning trade. Britain's FTSE 100 dipped by around 0.1 percent, but the bank index was up by 0.8 percent.

US stock markets were also set to open marginally higher.

Earlier, Asian stock markets had advanced, propelled by strong US earnings and oil prices that are near a 15-month high. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1 percent. Japan's Nikkei extended its gains to 1.1 percent as the yen weakened.

China's CSI 300 was also up 0.1 percent, while Hong Kong's Hang Seng index climbed 0.6 percent.

With 70 companies in the S&P 500 having reported earnings through Wednesday morning, 80 percent have topped expectations. Third quarter earnings are now expected to increase 0.5 percent, according to Thomson Reuters I/B/E/S, which would be the first quarter of growth in five.

Energy shares also contributed to the gains on Wall Street but US crude was down 1.4 percent to $50.88 a barrel on Thursday, after surging 2.6 percent to close at $51.60 the previous session. Brent crude also fell back to $51.92, after climbing 1.9 percent on Wednesday.

"We have quiet commodity markets as the oil price advance pauses, quiet bond markets amid a lack of direction from U.S. data, and stronger Asian equity markets," analysts from French bank Societe Generale said in a morning note.

"(That hasn't) translated into FX strength around the region, but has helped the yen drift a little lower."

source: www.abs-cbnnews.com

Stocks stumble after North Korea nuclear test rattles markets

SINGAPORE/TOKYO - Asian shares extended losses after North Korea conducted its fifth and most powerful nuclear test on Friday, heightening geopolitical tensions in the region at a time when investors are grappling with slowing global growth.

Stocks were already on the back foot when the North Korean news rattled markets, with uncertainty over the prospect of further easing from the European Central Bank pressuring global equities and bonds.

European shares look set to follow Asia lower, with financial spreadbetters expecting Britain's FTSE 100, Germany's DAX and France's CAC 40 to all open down 0.1 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.5 percent after touching a 13-month high on Thursday. The decline shrank gains for the week to 2.5 percent.

Japan's Nikkei closed flat after pulling back earlier on reports of the North Korean nuclear test. It up 0.2 percent for the week.

North Korea's nuclear test set off a blast that was more powerful than the bomb dropped on Hiroshima, with the nation saying it had mastered the ability to mount a warhead on a ballistic missile.

South Korea's KOSPI also extended losses on its neighbor's nuclear activity. After opening 0.7 percent lower, it was last trading down 1.3 percent from Thursday's close.

China's CSI 300 index was 0.25 percent lower, and the Shanghai Composite was down 0.2 percent. They are set for gains of 0.7 percent and 1 percent, respectively, for the week.

China's consumer price inflation slowed to its weakest pace in almost a year in August, missing expectations.

Still, moderating declines in the producer price index added to recent evidence of a steadying economy.

That evidence included data on Thursday showing China's imports rose unexpectedly in August for the first time in nearly two years, suggesting domestic demand may be picking up. Exports also showed signs of improvement, falling less than expected.

Hong Kong was the sole gainer among major Asia ex-Japan markets, with shares up 1.4 percent, extending their weekly advance to 4.2 percent, the most in almost two months. The market has been buoyed by inflows from China as investors bet on gains ahead of the launch of a new cross-border share link.

On Thursday, ECB President Mario Draghi, speaking after the central bank kept its policy on hold as expected, said the ECB was looking at options to continue its money-printing program, but maintained the March end-date for asset purchases.

That disappointed investors who were looking for more immediate action, including an extension or expansion of the current plan, or at least clearer hints of future actions.

"President Draghi's comment that an extension of the current quantitative easing program was not discussed led to a hawkish market interpretation of the meeting," Shane Oliver, head of investment strategy at AMP Capital in Sydney, wrote in a note.

However, inflation levels that remain below target and various other dovish comments from Draghi "indicate that an extension of the quantitative easing program beyond its March 2017 expiry at its December meeting is likely," Oliver added.

Overnight on Wall Street, the S&P 500 lost 0.22 percent, weighed down by a 2.6 percent fall in Apple on disappointment over its latest iPhone, though gains in energy shares offset losses in most other sectors.

German shares bore the brunt of the ECB's let-down, and France also retreated, but shares in Britain and Southern Europe gained.

Global bond markets also took a hit with the 10-year German Bund yield rising to minus 0.055 percent from minus 0.118 percent on Wednesday.

U.S. bond yields also jumped, with the 30-year bond yield rising to one-month highs of 2.328 percent on Thursday. They pulled back slightly to trade at 2.3102 on Friday.

The euro climbed to $1.1328, its highest since Aug. 26, following the ECB meeting before giving up most of its gains to stabilize around $1.1282. It is set for a 1.1 percent rise this week.

The dollar retreated 0.3 percent to 102.145 yen, surrendering some of Thursday's gains resulting from the wider gap between U.S. and Japanese bond yields. It is poised to end the week 1.8 percent weaker.

With the ECB meeting out of the way, the focus now shifts back to the Fed's policy meeting later this month.

"A rate hike in September is highly unlikely," said Hiroko Iwaki, senior bond strategist at Mizuho Securities.

"But unless the Fed sends a message, it will be difficult for them to make the markets price in a rate hike by the end of the year. So they could say something like they will consider a hike in coming months," she said.

Oil prices pulled back after surging more than 4 percent on Thursday to two-week highs on a slump in U.S. Gulf Coast imports to a record low led to a surprisingly large drawdown in U.S. crude stocks.

Brent rose to as high as $50.14 per barrel on Thursday. It pulled back 0.9 percent to $49.54, still up 5.8 percent this week.

U.S. crude climbed as high as $47.75 on Thursday. It retreated 0.8 percent to $47.22, but remained on track for a 6.3 percent advance for the week.

The weakness in the U.S. dollar this week has offered gold a boost. Spot gold has risen 1 percent to $1,337.95 this week, the biggest weekly gain in six weeks.

source: www.abs-cbnnews.com

Most Asia stocks slide on Fed officials' rate comments, dollar firms

SINGAPORE - Most Asian share markets tumbled on Monday while the U.S. dollar added to gains made after Federal Reserve Chair Janet Yellen indicated a U.S. interest rate increase remains on the cards for this year.

European markets also looked set for a weak start, with financial spread betters expecting Germany's DAX to open down 0.7 percent, and the blue-chip Euro Stoxx 50 to begin the day 0.6 percent lower. British markets are closed for a holiday.

MSCI's broadest index of Asia-Pacific shares outside Japan extended losses to 1 percent.

Japan's Nikkei bucked the trend, closing 2.3 percent higher, the biggest one-day gain in three weeks, as the yen weakened against the resurgent dollar.

China's CSI 300 index and the Shanghai Composite slipped 0.2 percent. Hong Kong's Hang Seng shed 0.4 percent.

The case for a U.S. rate hike has strengthened in recent months, with a lot of new jobs being created, and economic growth looks likely to continue at a moderate pace, Yellen said in a speech at the Fed's annual monetary policy conference in Jackson Hole, Wyoming, on Friday.

While Yellen did not give guidance on what the central bank needs to see before raising rates, she said the Fed already thinks it is close to meeting its goals of maximum employment and stable prices. She described consumer spending as "solid" but noted that U.S. business investment was weak and exports hurt by a strong dollar.

Comments by the Fed's No. 2 policymaker, Vice Chair Stanley Fischer, following Yellen's speech also bolstered the case for a hike this year.

Asked on CNBC whether a rate hike in September and more than one policy tightening before year-end should be expected, Fischer said Yellen's comments were "consistent with answering yes" to both questions, albeit still data-dependent.

Among the first data to be scrutinized will be U.S. consumer confidence for August, due on Tuesday; productivity, manufacturing and construction figures on Thursday; and August non-farm payrolls data rounding out the week on Friday.

Global factory activity surveys will also be released on Thursday.

Traders have modestly raised expectations for U.S. rate increases this year, but remain cautious.

The odds of a hike in September rose to 33 percent following the comments, from 21 percent on Thursday, according to CME Group's FedWatch tool. Traders were pricing in a 59.1 percent chance of a hike in December, up from 51.8 percent on Thursday.

"While the move toward another Fed rate hike will likely cause bouts of consternation in investment markets I don’t see the same degree of uncertainty that we saw around last year’s Fed rate hike," Shane Oliver, head of investment strategy at AMP Capital in Sydney, wrote in a note.

"It's clear from the Fed's actions this year that it is aware of global risks, the impact of its own actions on those risks and any potential blow back to the U.S. economy and of the impact of a rising U.S. dollar in doing some of its work for it."

The comments from Yellen and Fischer dragged Wall Street lower at the close.

But they proved a boon for the U.S. currency, with the dollar index, which tracks the greenback against six global peers, jumping 0.8 percent on Friday. It held steady at 95.552 on Monday.

The dollar rose 0.5 percent to a two-week high of 102.34 yen on Monday. That followed gains of 1.3 percent on Friday, its biggest one-day advance in almost seven weeks.

Japanese household spending and retail sales data for July are due on Tuesday. Investors are seeking some sign that Prime Minister Shinzo Abe's massive stimulus programs are having an effect, after figures on Friday showed a decline in consumer prices by the most in three years in July.

The euro was flat at $1.120 after tumbling 0.8 percent on Friday, its biggest one-day slide since July 15.

In commodities, crude prices retreated on the rally in the dollar and concerns about growing output after exports from Iraq in August exceeded July levels.

Iran also said late last week that it would only cooperate in upcoming producer talks in September if other exporters recognized Tehran's right to regain market share lost during international sanctions that were only lifted in January.

U.S. crude futures dropped 1.5 percent to $46.95.

Global benchmark Brent crude retreated 1.2 percent to $49.31.

The stronger dollar also weighed on gold. Spot gold slipped 0.2 percent to $1,318.10, after earlier touching a five-week low.

source: www.abs-cbnnews.com

Asia stocks plummet, yen soars as risk aversion grips markets

HONG KONG - Asian stocks fell the most in more than four months and the Japanese yen jumped on Monday as risky assets took a hammering before key central bank meetings this week and while investors await Britain's stay-or-go referendum on European Union membership.

Further sapping confidence over recent days has been a steady drip of economic data that has highlighted an underpowered world economy despite years of heavy stimulus delivered by central banks.

European shares are set to open lower with spreadbetters expecting Britain's FTSE 100 to open down 0.4 percent, Germany's DAX to slip 0.8 percent, and France's CAC 40 to fall 0.9 percent.

The U.S. Federal Reserve, Bank of England, Swiss National Bank and the Bank of Japan will meet this week. All are expected to hold monetary policy steady against a backdrop of caution heightened by the global impact of a possible Brexit.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.7 percent, its biggest daily drop since Feb. 11. It is down almost 4 percent in the last two sessions.

Japanese stocks led regional losses with the benchmark index falling 3.2 percent in choppy trade.

"There are many long-term investors who have given up on Japanese stocks as there are no structural reforms being delivered. Meanwhile, monetary policy decisions only have short-term effects," said Michiro Naito, executive director at equity derivatives at JPMorgan who recently visited Asian investors.

Net selling by foreign investors from January through May was roughly 4.5 trillion yen ($42.07 billion) in Japanese cash equities, according to exchange data, a stark turn from net purchases of about 2.83 trillion yen in the same period last year.

Investors hunting for bright spots in Asia this year in China and India have also been disappointed by poor data.

Latest data showed China's fixed-asset investment growth cooling to 9.6 percent in January-May from the same period a year earlier, below market expectations, while the statistics bureau said downward pressures still exist in the economy.

"We have downgraded the China market because of the debt problems and we think by the third quarter, growth numbers would start reflecting a broader slowdown," said Francis Cheung, head of China and Hong Kong strategy at CLSA.

Reflecting the bearish sentiment, S&P e-mini futures were down 0.4 percent in Asia after Wall Street marked steep losses on Friday. A shooting spree in Orlando, Florida, in which 50 people were killed and similar number wounded only added to the pessimism.

In currency markets, the mood was one of risk aversion with the Japanese yen rising to a five-week high against the dollar.

The yen was trading at 105.88 per dollar, its lowest since May 3.

The British pound has whipsawed in recent weeks on news related to the June 23 referendum on its EU membership.

Early on Monday, the pound fell to as low as 150.63 yen, its lowest level since August 2013 while the euro fell to 119.16 yen, a level last seen in Feb. 2013.

Two polls on Saturday showed British voters were still divided on whether to stay or go.

"Ahead of the referendum, many look for sterling to underperform and the yen and Swiss franc to outperform," Marc Chandler, global head of currency strategy at Brown Brothers Harriman, said in a note.

"The euro and central and eastern European currencies are vulnerable, while risk assets, in general, are expected to weaken on a Brexit victory," he said.

Crude oil futures extended losses after falling 3 percent on Friday, pressured by the stronger dollar and data showing the U.S. oil drilling rig count rose for the second week in row.

U.S. crude futures fell 1.1 percent to $48.51 a barrel, while Brent slipped 1 percent to $50.03.

Government bonds benefited with the yield on the 10-year Japanese bond marking yet another record low.

Yields on JGBs with maturities out to 15-years were well into negative territory.

Gold rose, hovering close to three-week highs. Spot gold added 0.1 percent to $1,275.16 an ounce.

source: www.abs-cbnnews.com

Asia stocks skid as crude fails to sustain bounce

TOKYO - Asian shares and the dollar surrendered their gains on Thursday as recently volatile crude oil prices seesawed lower, although European shares were still expected to mark opening gains.

Financial spreadbetters predicted Britain's FTSE 100 to open up as much as 1.5 percent. Germany's DAX was seen rising by as much as 1.1 percent, and France's CAC 40 was seen advancing by as much as 1.2 percent.

S&P500 e-mini futures ESc1 were down about 0.6 percent in late Asian trade. On Wall Street overnight, an uptick in U.S. crude oil from 2003 lows helped major indexes pull away from losses of more than 3 percent, but they still finished more than 1 percent lower.

The European Central Bank will take center stage with its regular policy meeting later in the session. Central bank policymakers are expected to hold interest rates steady but highlight increasing risks to growth and inflation, while keeping the door open for further easing measures later this year.

"With last month's December disappointment still fresh in the memory, ECB President Mario Draghi will have to convince the markets that the ECB has a plan, and the ammunition to cope with the further slide in inflationary pressures that is likely to ripple across Europe in the coming weeks," said Michael Hewson, chief market analyst at CMC Markets in London.

Crude oil succumbed to added pressure on prices and its losses continued on Thursday.

The new front-month U.S. March oil futures contract CLc1 was down 0.7 percent at $28.15 a barrel, giving up an earlier rise. Brent crude LCOc1 dropped 0.6 percent to $27.72 in Asian trade.

MSCI's broadest index of Asia-Pacific shares outside Japan erased early solid gains and teetered in and out of negative territory in afternoon trade. It was last down 0.5 percent.

Japan's Nikkei average ended down 2.4 percent, adding to its 3.7 percent plunge in the previous session.

The Shanghai Composite Index slipped 0.9 percent, while China's bluechip CSI300 index was down 0.8 percent. It has lost around 15 percent since the beginning of the year.

David Dai, Shanghai-based investor director at Nanhai Fund Management Co, said fears of a prolonged bear market were, nevertheless, overdone.

"With stocks having fallen so much, much of the risk has been priced in and another free-fall is quite unlikely, although the chance of a sustainable rebound is slim," he said.

The dollar index, which tracks the U.S. unit against a basket of six counterparts, was down about 0.1 percent at 99.013.

The dollar turned back toward a one-year low against its perceived safe-haven Japanese counterpart on Wednesday.

The greenback shed about 0.1 percent to 116.75 yen after falling to 115.97 on Wednesday, undermined by U.S. data.

U.S. consumer prices unexpectedly fell in December, suggesting inflation was more sluggish than the U.S. Federal Reserve believed.

Other Wednesday data showed a drop in housing starts and building permits last month, which led investors to pare expectations of further interest rate hikes this year.

The euro edged up about 0.1 percent to $1.0893, ahead of the ECB meeting later in the session.

source: www.abs-cbnnews.com

Asia shares stage patchy recovery but volatility seen staying high

TOKYO - Asian shares struggled to recover on Thursday with volatility remaining high, while emerging economy and commodity-linked currencies softened as investors worried about the global repercussions of slower growth in China.

Japan's Nikkei rose for the first time in four days, gaining 0.7 percent.

Many Asian bourses also advanced but weakness in Australia and falls in Asian currencies drove MSCI's dollar-denominated broadest index of Asia-Pacific shares outside Japan down 0.2 percent.

European shares are expected to rise, with spread betters looking to gains of up to 0.9 percent in Germany's DAX and Britain's FTSE.

Wall Street stocks also jumped almost 2 percent on Wednesday, which traders saw as a natural move after big falls.

Despite Wednesday's rebound, shares have only recovered about half of the losses seen earlier in the week.

Also helping to boost the market, Apple, the world's largest company by market capitalization, jumped more than 4 percent, in anticipation of its Sept 9 media event where it is expected to unveil new iPhones and potentially a new version of its Apple TV set-top box.

Traders were spared for now from keeping a nail-biting watch on wild Chinese share markets, which are closed for a holiday for the rest of the week.

Still, highlighting the woes of commodity exporters that are suffering from concern about cooling growth in China, the Australian dollar fell 0.3 percent after weak local retail sales.

The Aussie slipped to $0.7020 near its six-year low of $0.6982 touched on Wednesday.

Oil prices also remained volatile after their 25 percent surge late last month from 6 1/2-year lows.

Brent crude last stood at $50.43 per barrel, slipping further from one-month high of $54.32 hit on Monday, though it kept some distance from a 6 1/2-year low of $42.23 hit just one week before that.

HIGH VOLATILITY THE NEW NORM?

While global share prices may be getting some respite, any relief rallies may be brief.

With uncertainty over policy in the United States and China, investors expect trade to remain extremely choppy.

The CBOE Volatility index is still at 26, about twice as high as its usual levels around 12 to 16, even as it has eased from a high over 50 percent hit last week.

A similar gauge for the Japanese share market, the Nikkei volatility index, stood at 36 while that for Europe was at 37 on Wednesday.

"Whenever the VIX has hit 40 in the past, volatility has stayed high for a while. I expect more aftershocks will follow," said Arihiro Nagata, head of derivatives at SMBC Nikko Securities.

In the currency market, the dollar firmed slightly against the yen, in line with the recovery in global share prices, to 120.45 yen. The euro was little changed at $1.1225, ahead of the European Central Bank's policy meeting later in the day, with some traders speculating the bank could drop hints of further easing to keep the euro zone's nascent recovery in shape.

On the other hand, many emerging market currencies remained under pressure, hit by China fears and the prospect of higher U.S. interest rates.

The Brazilian real tumbled to its weakest level since 2002 on Wednesday as expectations of a growing fiscal deficit fed fears that Brazil would lose its investment-grade credit rating.

Emerging market currencies could face more pressure if Friday's U.S. payrolls data reinforce expectations that the U.S. Federal Reserve is on course to raise interest rates in coming months.

On Wednesday, U.S payroll processor ADP reported that private payrolls increased 190,000 last month. While that was below economists' expectations for a gain of 201,000 jobs, it was a step up from the 177,000 positions created in July.

source: www.abs-cbnnews.com