Stock markets jump as US inflation cools

NEW YORK -- Stock markets bounced on Wednesday as data showed US inflation cooled more than expected in June, raising hopes that the Federal Reserve will soon end its cycle of interest rate hikes.

The dollar fell against other major currencies while oil prices jumped, with the international benchmark, Brent North Sea crude, breaching the $80-per-barrel mark.

The Fed and other central banks have been raising borrowing costs in efforts to bring down consumer prices, which jumped as countries emerged from the Covid-19 pandemic and soared further following Russia's invasion of Ukraine last year.

Official data on Wednesday showed the US consumer price index (CPI) rose 3.0 percent from a year ago last month, down from 4.0 percent in May, coming in slightly lower than analysts expected.

While Fed officials have signaled that further rate increases are likely needed to bring inflation back to their two percent target, the June CPI report heightens market doubts about the number of additional increases needed down the line.

The Fed paused its aggressive monetary tightening at its last gathering in June but Chair Jerome Powell has warned that two more hikes were probably needed by the end of the year.

Futures markets still expect a Fed rate hike in July, but not in September.

"The Fed is extremely likely to raise interest rates by another 25 basis points but there's a good chance that it could now be the last," Craig Erlam, analyst at trading platform OANDA, told AFP.

"We're seeing progress across the board at this point, albeit more slowly than many will have hoped, but there's no longer a necessity for the Fed to be so aggressive," Erlam said.

CMC Markets analyst Michael Hewson said that the latest data make clear that "further rate hikes beyond July will be a big ask, and probably won't happen, hence today's US dollar weakness."

Nevertheless, Fed officials would likely continue to adopt a hawkish tone, he said, in order to keep market expectations in line.

Dollar sags

Wall Street stocks spent the entire session in positive territory, with the S&P 500 winning 0.7 percent, while European markets extended earlier gains following the US inflation data.

London equities had already climbed after the Bank of England announced that all major UK retail lenders passed stress tests to assess their resilience to economic shocks.

The pound rose above $1.30 for the first time since April 2022 while the euro also advanced to multi-month highs.

Higher interest rates make a currency attractive to investors looking for higher returns.

Asian equities have meanwhile enjoyed a broadly positive week so far after China signaled a long-running crackdown on the tech sector was nearing an end, while officials also pledged help for ailing real estate developers.

That was followed by reports of further growth-boosting measures and data showing new loans in China had picked up in June thanks to a central bank interest rate cut.

Optimism is now building for more announcements aimed at kickstarting the world's number two economy as its post-Covid recovery sputters.

Agence France-Presse

Global stocks fall as Euro hits new 20-year low

NEW YORK, United States - Global stocks were down Tuesday as the euro dove to a new two-decade low against the dollar and traders waited nervously for news on the next US interest rate hikes.

The single currency tumbled to $0.9901, but later clawed back losses as the greenback was hit by poor US economic data.

The dollar had strengthened this week against other currencies ahead of a speech Friday by US Federal Reserve chief Jerome Powell, as markets speculate that the central bank will continue tighten its monetary policy.

Higher interest rates boost the American currency as they make dollar-denominated debt more attractive to investors.

But the euro also has been weighed down by a gloomy outlook for the eurozone economy as Russia's war in Ukraine has sent energy prices soaring.

The unit plunged below parity with the dollar Monday on recession fears to plumb the lowest levels since 2002, when it first came into physical circulation.

In the latest blow, S&P Global's closely watched monthly composite purchasing managers' index (PMI) showed that eurozone economic activity fell for the second month in a row in August.

'Investors are bracing' 

Wall Street indices ended mostly lower, with the Dow Jones falling 0.5 percent.

With the Jackson Hole central banking symposium this week, the focus is on what Fed chief Powell says about plans to tackle high prices, with many fearing officials could send the economy into recession.

"I think that investors are bracing for some hawkish commentary from Fed chair Powell this coming week," said Jack Ablin of Cresset Capital.

European equities and Asian markets also slid amid stubborn worries about the Fed's movements.

US natural gas prices meanwhile hit a fresh 14-year high on Tuesday at $10.028.

But across the Atlantic, European natural gas prices fell, although they remain elevated on fears of a halt to Russia's gas deliveries. The Dutch TTF Gas Futures contract stood at 268.45 euros down from Monday.

Gas had spiked to record peaks in March after key producer Russia launched its invasion of neighboring Ukraine.

That has sparked surging domestic energy bills, fueling decades-high inflation that has prompted tighter monetary policy around the world.

Moscow's maneuvers have hit the single currency hard because the bloc relies heavily on imported Russian gas, said Societe Generale analyst Kit Juckes. 

Fears increased after Russia's Gazprom said Friday the Nord Stream pipeline would be closed for maintenance at the end of the month, cutting Europe's crucial gas deliveries.

"The euro's problem is... the threat from continued squeezing of gas supplies and the cost of replacing Russian gas," Juckes said.

Oil prices -- which have fallen for weeks as recession worries hit demand expectations -- rebounded after Saudi Arabia suggested OPEC and other major producers could cut output citing "volatility" in crude markets.

Key figures at around 2030 GMT

New York - Dow: DOWN 0.5 percent at 32,909.59 points (close)

New York - S&P 500: DOWN 0.2 percent at 4,128.73 (close)

New York - Nasdaq: UNCH at 12,381.30 (close)

EURO STOXX 50: DOWN 0.2 percent at 3,652.52 (close)

London - FTSE 100: DOWN 0.6 percent at 7,488.11 (close)

Frankfurt - DAX: DOWN 0.3 percent at 13,194.23 (close)

Paris - CAC 40: DOWN 0.3 percent at 6,362.02 (close)

Tokyo - Nikkei 225: DOWN 1.2 percent at 28,452.75 (close)

Hong Kong - Hang Seng Index: DOWN 0.8 percent at 19,503.25 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,276.22 (close)

Euro/dollar: UP at $0.9973 from $0.9943 Monday

Pound/dollar: UP at $1.1835 from $1.1767

Euro/pound DOWN at 84.25 pence from 84.98 pence

Dollar/yen: DOWN at 136.7710 yen from 137.48 yen

West Texas Intermediate: UP 3.7 percent at $93.74 per barrel

Brent North Sea crude: UP 3.9 percent at $100.22

Agence France-Presse

Dollar shines, euro droops as Omicron spreads while Fed hawks circle

TOKYO - The US dollar hovered near the highest since July of last year against major peers on Monday after a Federal Reserve official signaled a first pandemic-era interest rate hike could come as early as March.

The euro sank with the British pound after the Netherlands went into lockdown on Sunday and Britain's health minister declined to rule out the chance of further restrictions before Christmas amid the rapid spread of the Omicron coronavirus variant.

The dollar index, which measures the currency against six major peers, stood at 96.629, not far from the peak at 96.938 reached last month.

The World Health Organization said on Saturday that the number of Omicron cases is doubling in 1.5 to 3 days in areas of the world with community transmission, but noted that much remains unknown about the variant, including the severity of the illness it causes.

On Friday, Fed Governor Chris Waller said an interest rate increase will likely be warranted "shortly after" the bank ends its bond purchases in March.

"Waller gave the (dollar index) a tailwind on Friday," which is now eyeing a new high, but "positioning is skewed long in USDs, so the prospect of position squaring into year-end is elevated," Chris Weston, head of research at brokerage Pepperstone in Melbourne, wrote in a client note.

"While central bank actions are the real issue, headlines on Omicron could be seen as the smoking gun for position squaring."

The greenback, which tends to attract demand as a safe haven, touched its highest since Dec. 15 against the euro, sterling and the risk-sensitive Australian dollar.

The dollar slipped though against fellow haven currency the yen, but still near the middle of the trading range of the past three weeks.

Ten-year US Treasury yields, to which the dollar-yen pair are often closely correlated, languished near a two-week low reached Friday. 

Earlier on Friday, New York Fed president John Williams told CNBC that the Fed will gain "optionality" to raise rates in 2022 by ending bond purchases by March.

Money markets price about 50-50 odds of a quarter point hike by March.

-reuters-

Stocks dip, oil slides and havens shine as growth nerves nag

SYDNEY, Australia - Stock markets slipped on Thursday and safe havens such as government bonds, gold and the yen were supported in Asia, as a hint of uneasiness crept in over the outlook for interest rates and growth, particularly outside of the United States.

Oil prices skidded to a six-week low on concern about a supply overhang and the prospect of China, Japan and the United States dipping into their fuel reserves, with Brent futures last at $79.77, more than 8 percent off last month's three-year high.

The risk-sensitive Australian dollar also fell to a six-week trough of $0.7256.

Japan's Nikkei was down 0.6 percent in early trade. MSCI's broadest index of Asian shares outside Japan dropped 0.5 percent and S&P 500 futures were flat after the index eased a little bit overnight.

The mood was softest in Hong Kong where concern over the earnings outlook weighed on tech stocks and an almost 5 percent drop in heavyweight Alibaba dragged the Hang Seng about 1 percent lower.

"We do seem to have stalled somewhat as we head into the year end," said Jun Bei Liu, a portfolio manager at Tribeca Investment Partners in Sydney.

"Investors perhaps are just taking a bit of pause," she said, in the wake of a strong US results season, but as inflation and China's slowdown loom as macroeconomic headwinds.

The yen, a safe-haven asset which has also lately been sensitive to oil prices, had its sharpest one-day jump against the dollar in three months on Wednesday while gold rose almost 1 percent and Treasuries rallied along the curve.

Gold rose a further 0.1 percent to $1,869 an ounce in Asia on Thursday. The yen edged up to 113.94 per dollar.

Benchmark 10-year Treasury yields were steady in Tokyo at 1.5889 percent after falling about 5.5 basis points overnight.

The day ahead is quiet on the calendar, with appearances from central bankers in Australia, the United States and Europe and US jobless claims data the highlights.

BIG DOLLAR

Against the backdrop of apparent caution is a surging US dollar, as US data has turned surprisingly strong just as doubts have arisen over the outlook for other major economies.

On Wednesday figures showed a jump in building permits and the backlog of house construction rose to a 15-year high - underscoring strong demand on the heels of a better-than-expected retail sales report on Tuesday.

By contrast Europe is grappling with a fourth wave of COVID-19 cases and fresh restrictions to curb it, while the central bank is pushing back on pressure to raise rates.

The euro has recovered from a trip below $1.13 on Wednesday but remains shaky at $1.1325 and is braced for its worst month on the dollar since June when the Federal Reserve had surprised investors with a hawkish shift in tone.

Currency traders are also assessing a sharp downdraft in the Aussie/yen cross, often a barometer of market sentiment. It fell through its 200-day moving average on Tuesday and has lost almost 4 percent in a dozen sessions.

"You've got the perfect storm there for bears," said Matt Simpson, senior analyst at brokerage City Index. "Fundamentally and technically Aussie/yen looks pretty good with lower oil prices."

(Reporting by Tom Westbrook in Sydney Editing by Shri Navaratnam)

-reuters-

Asia shares mostly lower amid rising coronavirus cases, Washington turmoil

NEW YORK - Asian stocks were mostly lower on Tuesday, tracking Wall Street declines as political turmoil in Washington and rising coronavirus cases worldwide weighed on sentiment ahead of the start of the quarterly earnings season.

Political uncertainty dominated trading as House Democrats introduced a resolution to impeach U.S. President Donald Trump, accusing him of inciting insurrection following a violent attack on the Capitol last week.

Several big tech giants, including Twitter Inc, Amazon.com Inc , Alphabet Inc, Facebook Inc and Apple Inc, have taken actions against Trump and his network of supporters, as concerns mounted over the risk of continued violence.

Twitter’s stock tumbled 6.4 percent on Monday after the micro-blogging site permanently suspended Trump’s account last Friday.

Investors also kept an eye on the continued spread of the coronavirus globally as cases surpassed 90 million on Monday, according to a Reuters tally.

“The weakness was led by tech and I think the banning of Trump’s account by Twitter and Amazon stepping up against Parler all brought a renewed focus on increased regulation and reining in on tech,” said Thomas Hayes, chairman of Great Hill Capital in New York.

Japan’s Nikkei slipped 0.48 percent, South Korea’s KOSPI fell 0.91 percent and Hong Kong’s Hang Seng index futures lost 0.54 percent.

Defying the broader selloff, Australia’s S&P/ASX 200 rose 0.24 percent.

On Wall Street, the Dow Jones Industrial Average fell 0.29 percent, the S&P 500 lost 0.66 percent and the Nasdaq Composite dropped 1.25 percent.

Investors are expecting guidance on the extent to which executives see a rebound in 2021 earnings and the economy from results and conference calls from JP Morgan, Citi and Wells Fargo Friday.

Meanwhile, longer-term Treasury yields were at their highest since March before new long-dated supply coming this week and on speculation of more U.S. fiscal stimulus as Democrats will have control of Congress and the White House.

“People are optimistic to see the yield curve steepening and it could help spreads and net interest margins for banks,” Hayes said.

Benchmark 10-year notes last fell 11/32 in price to yield 1.1443 percent, from 1.107 percent late on Friday.

The spread between the two-year and 10-year Treasury yields brushed against 100 basis points to hit its steepest since July 2017.

The climb in yields in turn offered some support to the dollar, which rose to its highest in over two weeks against a basket of currencies.

The U.S. dollar index rose 0.256 percent, with the euro down 0.54 percent to $1.2152. The Japanese yen weakened 0.24 percent versus the greenback at 104.20 per dollar, while Sterling was last trading at $1.3516, down 0.35 percent on the day.

Crude oil prices fell, hit by renewed concerns about global fuel demand amid tough coronavirus lockdowns across the globe, as well as the stronger dollar.

U.S. crude recently fell 0.1 percent to $52.19 per barrel and Brent was at $55.61, down 0.68 percent on the day.

Safe-have spot gold dropped 0.2 percent to $1,844.27 an ounce. Silver fell 1.70 percent to $24.94.

-reuters-

World stocks drop, gold surges as coronavirus fears trigger flight for safety

SYDNEY -- Global shares and oil extended losses on Monday while safe-haven gold soared as the spread of the coronavirus outside China accelerated with infections jumping in South Korea, Italy and the Middle East, in a worrying new development in the outbreak.

South Korea put the country on high alert after the number of infections surged to over 600 with six deaths. In Italy, officials said a third person infected with the flu-like virus had died, while the number of cases jumped to above 150 from just three before Friday.

Iran, which announced its first 2 cases on Wednesday, said it had confirmed 43 cases and eight deaths, with most of the infections in the Shi'ite Muslim holy city of Qom. Saudi Arabia, Kuwait, Iraq, Turkey and Afghanistan imposed travel and immigration restrictions on the Islamic Republic.

In a sign of panic, E-minis for the S&P 500 dropped 1 percent in early Asian trades while Nikkei futures slipped more than 1 percent too.

Australia's benchmark index slid 1.6 percent while New Zealand was down about 1 percent. South Korea's KOSPI index fell 2.2 percent.

That left MSCI's broadest index of Asia-Pacific shares outside Japan off 0.7 percent to 541.48, the lowest since Feb. 5. Japanese markets were closed for a public holiday.

"It promises to be an interesting session here in Asia, with the bears back wrestling a bit more of a say here, and gold and bond bulls feeling pretty good about their exposures," said Chris Weston, head of research at broker Pepperstone.

"The news flow from the weekend has changed the game somewhat, where the focus is much more on the threat of an outbreak outside of China."

The virus has killed 2,442 people in China, which has reported 76,936 cases, and slammed the brakes on the world's second largest economy.

It has spread to some 28 other countries and territories, with a death toll of around two dozen, according to a Reuters tally.

Investors fretted over the mounting economic toll from the virus, betting on more monetary policy action from central banks. In response, US Fed fund futures surged signalling more rate cuts later this year.

While markets had largely brushed aside fears of long-term economic damage from the virus, a steady drip of new cases in countries beyond China has kept concerns alive.

On Friday, US stocks were beaten down by concerns about the virus and after data showed American business activity stalled in February, signaling a contraction for the first time since 2016.

US chipmakers fell sharply last week as a flash reading of the IHS Markit services sector Purchasing Managers' Index dropped to its lowest level since October 2013. The manufacturing sector also clocked its lowest reading since August.

The dollar fell for a second straight session on Monday against the yen to be last at 111.48.

The Australian dollar, considered a liquid proxy for China plays, was down 0.4 percent as it languished near an 11-year low.

The euro eased a tad to $1.0836.

That left the dollar index slightly higher at 99.430.

Analysts expect the Korean won to slump against the dollar as one of the favorite risk proxies for investors.

The won has fallen more than 4.5 percent on the dollar so far this year. It was last unchanged at 1,206.87

"Whether this proves to be a driver of more mainstream FX pairs, such as AUDJPY and AUDUSD is yet to be seen, although AUDUSD looks the better short on the weekly chart," Pepperstone's Weston said.

Oil prices slid as investors fretted about crude demand being pinched by the impact of the coronavirus outbreak, while leading producers appeared to be in no rush to curb output.

Brent crude slumped 2.8 percent, or $1.63, to $56.87 a barrel while US crude dropped 2.6 percent, or $1.4, to $51.97 a barrel.

US gold futures climbed 1.2 percent at $1,668.6 an ounce. Spot gold jumped to a seven-year high of 1,678.58 after marking its biggest weekly gain last week since early August.

source: news.abs-cbn.com

Jump in coronavirus cases halts stock rally; dollar gains

NEW YORK/LONDON -- The dollar rose and global equity markets slumped on Thursday after a new methodology that boosted the coronavirus death toll in China unnerved investors, curbing a rally that had lifted US and European stocks to a series of record peaks.

Chinese officials said 242 people died in Hubei province on Wednesday, the biggest daily rise since the virus emerged in the provincial capital of Wuhan in December.

More than 14,000 new cases were reported in the province on Thursday, up from 2,015 new cases nationwide a day earlier, due to a change to include results from quicker computerized tomography (CT) scans that reveal lung infections, rather than relying just on laboratory tests to confirm cases.

The jump in reported cases halted a rally that lifted Wall Street's 3 main gauges, indexes for pan-regional European shares, Germany's DAX and Canada's S&P/TSX index.

Investors sought safety in US assets, pushing the yield on the 10-year US Treasury note lower as the euro plunged to a more than two-year low against the dollar. The euro fell to a four-and-a-half-year low against the Swiss franc.

The United States is expected to weather the economic impact of the virus better than the euro zone.

The chief economist of AXA Investment Managers, Gilles Moec, said the impact of the virus could be part of a "perfect storm" for Europe that hurts the economy for months before being compounded by a heated trade battle with the United States.

"We started with the premise that this virus would be worse than SARS and that has now become consensus," Moec said. "So attention turns to who is hit the hardest, and Europe is among the usual suspects and Germany in particular, given China is its biggest export market. So the reaction of the exchange rate is probably rational."

The dollar index rose 0.05 percent, with the euro down 0.3 percent at $1.0838.

Europe's main markets followed Asia into red, while stocks on Wall Street traded slightly lower to little changed.

MSCI's gauge of stocks across the globe shed 0.25 percent and its emerging markets index lost 0.42 percent.

The pan-European STOXX 600 index lost 0.02 percent.

The FTSE 100 in London slid 1.1 percent, derailed by steep falls in heavyweights Barclays and utility Centrica , along with the jolt to risk sentiment from the rise in coronavirus cases in China.

On Wall Street, the Dow Jones Industrial Average fell 128.11 points, or 0.43 percent, to 29,423.31. The S&P 500 lost 5.51 points, or 0.16 percent, to 3,373.94 and the Nasdaq Composite dropped 13.99 points, or 0.14 percent, to 9,711.97.

While the jump in reported coronavirus cases was unsettling, markets in Asia took the news in stride.

MSCI's broadest index of Asia-Pacific shares outside Japan snapped 2 days of 1 percent gains to close 0.1 percent lower as most markets across the region posted modest declines.

Oil prices rose, shrugging off bearish reports that cut demand forecasts for this year on the back of the coronavirus outbreak. China is the world's biggest oil importer.

Paring losses from earlier in the session, Brent crude rose 55 cents to settle at $56.34 a barrel, while U.S. West Texas Intermediate added 25 cents to settle at $51.42 a barrel.

Benchmark 10-year notes last rose 4/32 in price to push its yield down to 1.6139 percent. The yield earlier touched 1.568 percent.

US gold futures settled up 0.5 percent at $1,578.80 an ounce.

There was drama for Brexit-bound British markets.

The sudden resignation of the British finance minister Sajid Javid caused a jump in both sterling and British government bond yields amid bets that his replacement, the 39-year-old Rishi Sunak, will beef up spending.

Javid's departure, coming less than a month before he was due to deliver his first budget and after just 204 days on the job, made him the shortest-serving chancellor of the exchequer since 1970.

"I suspect he (Sunak) is likely to do whatever Boris Johnson tells him to do," said Nomura economist George Buckley. "I don't know what that means for the public finances and fiscal policy, but I doubt it will mean tighter fiscal policy."

source: news.abs-cbn.com

World stocks hit record ahead of US-China trade deal

NEW YORK -- Bond yields edged higher while a gauge of global equity markets hit a record high on Monday, lifted by optimism over the planned signing this week of a US-China trade deal and hopes the start of the US corporate earnings season will not disappoint.

Gold prices fell almost 1 percent ahead of the signing at the White House on Wednesday of the Phase 1 trade deal and as a de-escalation in US-Iran tensions in the Middle East reduced bullion's safe-haven appeal.

US and euro zone government bond yields rose as the trade deal marks a major step in ending a dispute that has cut global growth and boosted demand for such safe-haven assets as bonds, gold and currencies like the Japanese yen and Swiss franc.

MSCI's gauge of stocks across the globe gained 0.51 percent, topping a record set on Friday, while emerging market stocks rose 0.96 percent. The benchmark S&P 500 and tech-heavy Nasdaq composite indexes also hit all-time and closing highs on Wall Street.

The United States is planning to lift its designation of China as a currency manipulator, Bloomberg reported, citing people familiar with the matter, a move that added to the positive mood among investors.

Middle East tensions rose after the United States killed a top Iranian general on Jan. 2 in Baghdad, knocking global stocks off a rally spurred in late 2019 on hopes a trade deal would be signed. Markets have rebounded as both Tehran and Washington desisted from further escalation after Iran retaliated for the killing with a missile attack on US troops in Iraq.

Investors are waiting for corporate results that start in earnest this week with large US banks, including Citigroup Inc , JPMorgan Chase & Co and Wells Fargo & Co, due to report on Tuesday. Excluding energy, fourth-quarter earnings growth estimates are 1.9 percent, according to Refinitiv.

"It's put up or shut up time," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey. "We've priced in a big rally, we expect growth and now it's time to see it. If we have a good earnings season, then it will be great."

Saluzzi said, however, that he would not be surprised if US equities enter a "bit of a correction" despite a strong economic outlook, as they trade at almost 19 times expected earnings in 2020.

"Everything's humming along," he added. "With that said, it doesn't take much to bang down on a market that is fully valued and had quite a run. Let's not kid ourselves."

The Dow Jones Industrial Average rose 83.28 points, or 0.29 percent, to 28,907.05. The S&P 500 gained 22.78 points, or 0.70 percent, to 3,288.13 and the Nasdaq Composite added 95.07 points, or 1.04 percent, to 9,273.93.

Facebook Inc, Microsoft and Apple Inc provided the biggest lift both to the S&P 500 and Nasdaq composite.

The pan-European STOXX 600 index lost 0.18 percent.

Renault SA fell to a six-year low after a media report said Japan's Nissan Motor Co Ltd had accelerated secret contingency planning for a potential split from the French carmaker.

Other European automobile stocks also fell after China's top auto body reiterated predictions that sales were likely to shrink for the third consecutive year in 2020.

US government bond prices fell, with the price of the 10-year Treasury note down 4/32 to push its yield up to 1.8406 percent.

Yields on 10-year German bunds rose to -0.19 percent, while yields on the German two-year government bond hit a nine-month high ahead of the signing of the US-China trade deal.

In currency markets, the offshore Chinese yuan hit a 5-1/2-month high and the yen dropped to a 7-1/2-month low as sentiment rose on the trade outlook.

The dollar index rose 0.03 percent, with the euro up 0.13 percent to $1.1134. The yen weakened 0.44 percent versus the greenback at 109.94 per dollar.

Oil prices fell about 1 percent as Middle East tensions eased and investors turned their focus to lackluster seasonal demand following a bearish US report last week of a large increase in gasoline stocks.

Brent crude settled down 78 cents at $64.20 a barrel, while West Texas Intermediate crude slid 96 cents to settle at $58.08 a barrel.

Gold, considered a safe haven during political and economic turmoil, rose last week to an almost seven-year peak of $1,610.90 an ounce after a US drone strike killed a top Iranian commander in Baghdad and Iran launched missiles against US troops in Iraq in retaliation.

US gold futures settled down 0.6 percent at $1,550.60 an ounce. 

source: news.abs-cbn.com

Adidas fears 'everybody will lose' in US-China currency war

FRANKFURT AM MAIN - German sportswear maker Adidas warned Thursday that "everybody will lose" if a currency war ignites between China, the United States, and other countries, while reporting continued strong earnings in its second quarter.

American tariffs on Chinese goods -- with another $300 billion in imports targeted by President Donald Trump last week -- are less harmful to the brand with the three stripes than a potential exchange rate battle, chief executive Kasper Rorsted said.

"What is much more severe is that we start to have a currency war between China, the US and the rest of the world, that's going to be a situation where everybody will lose," he told journalists in a telephone conference.

Since the tariffs announcement, Beijing has allowed the yuan to sink below a seven-to-the-dollar lower bound its central bank had previously defended, prompting the US Treasury Department to cry currency manipulation.

"Currency war will over time slow the economy down," Adidas chief Rorsted predicted, as well as imposing a "severe impact" on global businesses like the shoes and sportswear maker.

Weaker exchange rates against the euro would batter Adidas' sales and profitability through the conversion into its home currency, as the US and Chinese markets combined account for 45 percent of revenue.

SPRINTING AHEAD

For now, the Bavarian group says its strong growth continued into the second quarter, seeing its biggest problems in overcoming bottlenecks in its supply chain.

Net profit at the Bavarian group added 34 percent over April-June 2018, reaching 531 million euros ($595 million) to beat analysts' forecasts.

Revenues grew by 4.7 percent to 5.5 billion euros, making for an operating profit up 8.6 percent at 643 million euros.

Sales at the flagship Adidas brand were up four percent thanks to its "sport inspired" streetwear, while its "performance" sportswear fell back in comparison with 2018's football World Cup-powered revenues.

Long-struggling American subsidiary Reebok returned to growth in sales in the second quarter, adding three percent thanks to its "classics" line.

The unit also returned to profitability, Rorsted said.

Adidas' online direct sales business grew 37 percent, while in its different regions only China saw double-digit growth.

North America picked up the pace of sales expansion as the group managed to overcome supply bottlenecks for in-demand products, while sales in Europe held steady.

Adidas' closely-watched gross margin increased 1.2 percentage points, to 53.5 percent, a slower pace than in the previous quarter.

"Higher air freight costs to mitigate the supply chain shortages and a less favorable pricing mix" weighed on profitability, the group said.

Looking ahead, the group stuck to its 2019 forecasts for sales growth between five and eight percent, adjusted for currency effects.

Its gross margin should increase to 52 percent and net profit come in between 1.88 and 1.95 billion euros.

source: news.abs-cbn.com

Global stocks mostly rise after solid US data, earnings

NEW YORK -- Global stocks mostly rose on Thursday on more benign statements from the United States about trade and a batch of solid economic data and corporate earnings.

Investors took solace in reports from Wednesday that the Trump administration would hold off for 6 months on imposing tariffs on auto imports.

The gains also came after US data showed better-than-expected housing construction and a dip in US jobless claims, while Dow members Walmart and Cisco Systems both rallied after solid earnings reports.

Markets largely shrugged off President Donald Trump's announcement effectively barring Chinese telecom giant Huawei from the US market, a move that prompted a warning from Beijing against further harming trade ties.

"The combination of easing trade tensions, upbeat domestic economic numbers, and bullish earnings have boosted investor sentiment," said Gorilla Trades strategist Ken Berman.

Wall Street stocks rose for a third straight session, with the Dow gaining 0.8 percent to 25,862.68, only about 80 points below the close on May 10 prior to Monday's selloff on US-China trade tensions.

Eurozone stock markets were up well over one percent by the close, with London not far behind, mostly thanks to a weak pound.

Oil prices rose against the background of high Saudi-Iran tensions ahead of an OPEC meeting that is to take stock of the cartel's production cut deal.

POUND IS PRESSURED

The dollar was firmer against all its major rivals but the British pound suffered a particularly strong decline amid intense speculation that Prime Minister Theresa May will step down if her next attempt to get parliament to approve her Brexit deal fails, dealers said.

"The pound tumbles as Theresa May looks set to leave in June," said Joshua Mahony, senior market analyst at IG.

"For markets this is ramping up the likeliness of a hard Brexit, as pushes for a more hardline Brexiteer to take over is raising fears that we could see the UK leave the EU without a deal in October," he said.

Boeing jumped 2.4 percent as it announced that it has completed a software upgrade on the 737 MAX, which has been grounded following two crashes. The aerospace giant will now work with regulators to win approval to return the jets to service.

But Tesla Motors fell 1.6 percent after the National Transportation Safety Board said its "Autopilot" software was engaged by a driver who died in a March crash in Florida.

The company also confirmed that its communications director was exiting the company, the latest example of turnover at the electric car maker.

KEY FIGURES AROUND 2100 GMT (5 a.m. Friday in Manila)

New York - Dow: UP 0.8 percent at 25,862.68 (close)

New York - S&P 500: UP 0.9 percent at 2,876.32 (close)

New York - Nasdaq: UP 1.0 percent at 7,898.05 (close)

London - FTSE 100: UP 0.8 percent at 7,353.51 (close)

Frankfurt - DAX 30: UP 1.7 percent at 12,310.37 (close)

Paris - CAC 40: UP 1.4 percent at 5,448.11 (close)

EURO STOXX 50: UP 1.6 percent at 3,338.56 (close)

Tokyo - Nikkei 225: DOWN 0.6 percent at 21,062.98 (close)

Hong Kong - Hang Seng: FLAT at 28,275.07 (close)

Shanghai - Composite: UP 0.6 percent at 2,955.71 (close)

Euro/dollar: DOWN at $1.1174 from $1.1201 at 2100 GMT

Pound/dollar: DOWN at $1.2798 from $1.2845

Dollar/yen: UP at 109.85 yen from 109.60 yen

Oil - Brent Crude: UP 85 cents at $72.62 per barrel

Oil - West Texas Intermediate: UP 85 cents at $62.87 per barrel

source: news.abs-cbn.com

World stocks slip as growth fears linger; euro slides

NEW YORK -- The dollar rose to almost a two-year high against the euro on Thursday on an upbeat US capital goods report, while world equities slid as weak economic data from South Korea and a profit warning from 3M Co renewed concerns about global growth.

New orders for US-made capital goods increased by the most in eight months in March, which combined with worries about the economic health of the euro zone knocked the single currency to its lowest against the greenback since May 2017.

Other data showed the number of Americans filing claims for unemployment benefits last week was the biggest in 19 months, but the trend remains consistent with a strong labor market.

"The dollar is benefiting from strong domestic data, weak data abroad and a slew of dovish central bank meetings," said John Doyle, vice president of dealing and trading at Tempus Inc in Washington.

The euro fell 0.19 percent to $1.1131, while European shares slid after a mixed bag of earnings from the region.

Finnish telecom network equipment maker Nokia tumbled 9 percent, its biggest decline in 18 months. Nokia reported a surprise quarterly loss after it failed to supply 5G telecoms equipment on time.

The pan-European STOXX 600 index closed down 0.21 percent and MSCI's gauge of stock performance in 47 countries shed 0.25 percent.

On Wall Street, strong results from Facebook and Microsoft Corp lifted the tech-heavy Nasdaq to a new intra-day record but were offset by dismal earnings in industrials, including 3M and United Parcel Service Inc .

UPS fell 8.1 percent and the industrial sector slid 2 percent, while Facebook gained 5.8 percent and Microsoft Corp rose 3.3 percent.

The Dow industrials fell 1 percent at one point, dragged down by a 13 percent plunge in 3M shares after the company reported a lower-than-expected quarterly profit, cut its 2019 earnings forecast and said it would lay off 2,000 workers globally.

The Dow Jones Industrial Average fell 134.97 points, or 0.51 percent, to 26,462.08. The S&P 500 lost 1.08 points, or 0.04 percent, to 2,926.17 and the Nasdaq Composite added 16.67 points, or 0.21 percent, to 8,118.68.

Asian markets slid earlier in the day, losing 0.5 percent as South Korea's economy unexpectedly contracted in the first quarter, a reminder of economic fragility outside the United States.

Shanghai's bourse also fell late in the day, losing more than 2 percent on the latest central bank efforts to temper expectations for further monetary policy easing.

Chinese officials also warned of protracted pressure on economic growth, casting a shadow over hopes for a sustained recovery in the world's second-biggest economy.

The dollar index, which measures the greenback versus a basket of six major peers, held near its highest level since May 2017. The index was up 0.1 percent.

The Japanese yen strengthened 0.48 percent versus the greenback at 111.63 per dollar.

The Turkish lira weakened 0.95 percent against the dollar after Turkey's central bank left interest rates unchanged at 24 percent but in a dovish shift dropped a previous reference to possible further tightening if needed to address inflation.

US Treasury yields rose as investors piled into the safe-haven government bonds following a dovish report from Canada's central bank and solid demand at auction for $41 billion of new five-year notes.

Benchmark U.S. Treasury 10-year notes fell 3/32 in price to push yields up to 2.5343 percent.

Oil prices eased after Brent touched $75 per barrel for the first time in nearly six months on the suspension of some Russian crude exports to Europe.

Brent crude futures settled down 22 cents at $74.35 a barrel. U.S. crude fell 68 cents to settle at $65.21.

US gold futures settled unchanged at $1,279.70 an ounce.

source: news.abs-cbn.com

World stocks, oil touch 2019 highs; sterling wobbles

NEW YORK -- Stocks across the globe rose for a seventh straight session on Tuesday despite late selling on Wall Street, while the pound wobbled against the dollar as traders expected European Union officials would allow Britain a delay on Brexit.

Bets that the Federal Reserve will this week reinforce the market view that the US monetary policy tightening cycle is in the rear-view mirror have kept alive the bid on stocks, while the dollar index touched its lowest since March 1.

But trade news weighed on sentiment late in the New York trading session after Bloomberg News reported that some negotiators are worried that China is pushing back against US demands.

"Trade fear has reared its head again with Trump administration concerns (that) China is walking back some of the pledges they've made in negotiations so far," said Chris Zaccarelli, chief investment officer at Alliance in Charlotte.

Investor focus will remain on the Fed on Wednesday, particularly on whether policymakers have sufficiently lowered their interest rate forecasts to align more closely their "dot plot," which shows individual policymakers' rate views for the next three years, with market expectations.

The CitiFX US economic surprise index, which measures economic data against expectations, has been negative for over a month and earlier in March touched its lowest since August 2017.

The Dow Jones Industrial Average fell 26.72 points, or 0.1 percent, to 25,887.38, the S&P 500 lost 0.37 points, or 0.01 percent, to 2,832.57 and the Nasdaq Composite added 9.47 points, or 0.12 percent, to 7,723.95.

The pan-European STOXX 600 index rose 0.57 percent and emerging market stocks added 0.16 percent.

MSCI's gauge of stocks across the globe gained 0.16 percent.

BREXIT OPTIONS

In currency markets, sterling touched $1.3311 after slipping to as low as $1.3241 as traders expected EU officials to give Britain a delay on Brexit negotiations, though the uncertainty kept the market volatile. Sterling was last trading at $1.3264, up 0.07 percent on the day.

"The predominant notion adopted by the market is that as long as the worst-case scenario of hard Brexit is avoided by delaying Brexit, the pound is a buy on dips," Rabobank strategists said in a note.

The dollar index fell 0.12 percent, with the euro up 0.11 percent to $1.1349.

"What we are seeing is the market positioning for potentially a more dovish tone tomorrow," said Minh Trang, senior currency trader at California's Silicon Valley Bank, speaking about expectations of what the Fed's statement will be like on Wednesday.

The Japanese yen was flat versus the greenback at 111.43 per dollar.

Among commodities, oil prices were little changed after hitting 2019 highs, maintaining recent strength on the back of expectations for producer club OPEC to continue production cuts. US sanctions against producers Iran and Venezuela have also supported prices, although traders said the market may be capped by rising US output.

US crude fell 0.07 percent to $59.05 per barrel and Brent was last at $67.67, up 0.19 percent on the day.

"OPEC and non-OPEC producers are determined to get the supply and demand dynamics better into balance, recognizing that US shale production is going to continue to rise," said Andy Lipow, president of Lipow Oil Associates in Houston.

Precious metal palladium, used in things like car catalytic converters, dipped after it topped the $1,600 an ounce mark for the first time on supply concerns.

Palladium last rose 0.76 percent to $1,595.50 an ounce. Prices have nearly doubled since their mid-August lows and have surged more than 25 percent this year.

Spot gold added 0.2 percent to $1,306.31 an ounce. US gold futures gained 0.37 percent to $1,306.30 an ounce.

Copper rose 0.53 percent to $6,459.00 a tonne.

US Treasury yields zigzagged ahead of the Fed's Wednesday statement. Benchmark 10-year notes last fell 4/32 in price to yield 2.614 percent, from 2.601 percent late on Monday.

The 30-year bond last fell 9/32 in price to yield 3.0238 percent, from 3.01 percent late on Monday.

source: news.abs-cbn.com

Global stocks mostly rise on US-China trade talks as dollar gains

NEW YORK -- Global stocks mostly rose Monday as US and Chinese officials in Beijing geared up for crunch trade talks while the dollar gained on the euro for the sixth straight session. 

European and Asian bourses pushed higher at the start of trade talks in Beijing before a March 1 deadline that could lead to additional US tariffs if a deal is not reached.

Deputy US Trade Representative Jeffrey Gerrish led the US side in preparatory meetings ahead of the arrival later in the week of US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

The Chinese delegation will be led by Vice Premier Liu He, who will be joined by central bank Governor Yi Gang.

While the two sides said they made major progress in talks last month in Washington, more recent comments have jarred financial markets, amplifying concerns about how the dispute will affect global growth.

Paris and Frankfurt both gained about one percent after Shanghai and Hong Kong climbed earlier. 

"European stocks have rallied... as traders are hopeful about the next round of trade talks between the US and China," said CMC Markets analyst David Madden.

"Given that both sides are still far apart, there is no guarantee that the discussions will be successful, and dealers' optimism might be wishful thinking."

London's benchmark FTSE 100 rose after an announcement that British economic growth has slowed, weighing on the pound and lifting stocks in multinationals that have earnings in foreign currency.

With Brexit looming next month, the British economy grew by 1.4 percent last year, data showed. That was the lowest level for six years, and down from 1.8 percent in 2017.

US stocks finished a choppy session mixed, with the Dow dipping and the S&P 500 and Nasdaq edging higher.

Adding to the anxiety over trade is uncertainty over US budget talks. Lawmakers in Washington were looking to resolve a budget impasse before Friday or risk another possible government shutdown.

President Donald Trump was scheduled for a campaign-style rally appearance in Texas at which he was expected to amplify his call to build a wall along the Mexican border.

RISING DOLLAR

The US political quagmire did not dim the dollar, which climbed again against the euro and also advanced on the pound and yen.

The dollar's gains on the euro follow a series of weak economic reports last week out of the eurozone. While the US Federal Reserve has shifted to more dovish stance, other major central banks are viewed as even less likely to tighten monetary policy.

"While it's not apparent today, there's a lot to be worried about over the next few weeks," said BK Asset Management's Kathy Lien, who listed US-China trade talks, Brexit, the US budget standoff and potential US tariffs on car imports as among the outstanding issues that could rock foreign exchange markets.

"Each of these events pose a significant downside risk to currencies but they could also lead to be short squeezes if the unexpected happens and they are resolved positively," Lien added. 

KEY FIGURES AROUND 2200 GMT (6 a.m. Tuesday in Manila)

New York - Dow: DOWN 0.2 percent at 25,053.11 (close)

New York - S&P 500: UP 0.1 percent at 2,709.80 (close)

New York - Nasdaq: UP 0.1 percent at 7,307.90 (close)

London - FTSE 100: UP 0.8 percent at 7,129.11 (close)

Frankfurt - DAX 30: UP 1.0 percent at 11,014.59 (close)

Paris - CAC 40: UP 1.1 percent at 5,014.47 (close)

EURO STOXX 50: UP 1.0 percent at 3,165.61 (close)

Hong Kong - Hang Seng: UP 0.7 percent at 28,143.84 (close)

Shanghai - Composite: UP 1.4 percent at 2,653.90 (close)

Tokyo - Nikkei 225: Closed for a public holiday

Euro/dollar: DOWN at $1.1279 from $1.1323 at 2200 GMT Friday

Dollar/yen: UP at 110.37 yen from 109.73

Pound/dollar: DOWN at $1.2859 from $1.2944 

Euro/pound: UP at 87.69 pence from 87.40 pence

Oil - Brent Crude: DOWN 59 cents at $61.51 per barrel

Oil - West Texas Intermediate: DOWN 31 cents at $52.41 per barrel

source: news.abs-cbn.com

World stocks surge on Fed pledge to pause, dollar slips

NEW YORK -- The dollar slid and equities surged on Wednesday, fueled by Boeing and Apple's results and extended after the Federal Reserve pledged to be patient with future interest rate hikes, a change in tone that stock investors interpreted as a buy signal.

The Fed, in its policy statement at the end of a two-day meeting, struck the language from its December policy statement that indicated further rate hikes would be appropriate in 2019. That language had roiled markets amid signs of slower global growth.

US stocks extended gains and bond yields fell as markets got what they were hoping for, said Mohamed El-Erian, chief economic adviser at Allianz in Newport Beach, California. "This marks a full 180 from what the Fed was signaling just a few months ago," he said.

Scott Minerd, global chief investment officer at Guggenheim Partners in Santa Monica, California, said the Fed's pause would further extend the economic expansion, allowing excesses to continue to build and increasing risks of financial instability.

"The Fed refilled the punch bowl and the party goes on. Buy risk assets," Minerd said.

The Fed's policy statement indicates the US central bank will remain on a dovish path, which is very supportive for risk assets, at least on the short term, said Putri Pascualy, managing director for PAAMCO in Irvine, California.

"The back-drop of slowing economic growth on a global basis is the 800 trillion gorilla in the room," Pascualy said.

The MSCI world equity index, which tracks share performance in 47 countries, rose 1.2 percent following gains in Asia overnight. The FTSEurofirst 300 index of leading shares in Europe closed up 0.41 percent.

The Dow Jones Industrial Average rose 434.9 points, or 1.77 percent, to 25,014.86. The S&P 500 gained 41.05 points, or 1.55 percent, to 2,681.05, and the Nasdaq Composite added 154.79 points, or 2.2 percent, to 7,183.08.

Upbeat results from Boeing and Apple late on Tuesday provided investors early relief.

Boeing shares rose 6.25 percent after the world's largest planemaker raised its profit and cash flow expectations for 2019 amid a boom in air travel. Boeing also indicated it had overcome supplier delays that snarled 737 production last year.

Apple results provided some reassurance as the iPhone maker reported sharp growth in its services business. Its shares gained 6.83 percent

Oil prices rose, paring gains of more than 1 percent, as the potential for supply disruptions following US sanctions on Venezuela's oil industry lifted prices.

Stocks listed in London jumped more than 1 percent after British lawmakers late on Tuesday rejected a proposal in Parliament that aimed to prevent a potentially chaotic "no-deal" Brexit, a vote that initially pushed sterling sharply lower.

The exporter-heavy FTSE 100 in London rose 1.45 percent as its components often are boosted by a weaker pound because its multinational companies earn a large portion of their revenue abroad in foreign currency.

Sterling rose 0.04 percent to $1.3071 after sliding about 0.7 percent against the dollar and the euro following parliamentary votes on Brexit.

"The vote is not fundamentally changing the way the market's talking about Brexit," said Hetal Mehta, Legal & General Investment Management senior European economist.

Payrolls processor ADP reported that the US private sector added 213,000 jobs in January, which beat forecasts for gains of 178,000. But the monthly total was lower than the 271,000 jobs added in December.

The dollar index fell 0.39 percent to 95.447. Against the yen, the dollar fell 0.33 percent to 109.02.

The euro gained 0.39 percent to $1.1475.

Benchmark 10-year U.S. Treasury notes rose 6/32 in price to push yields down to 2.6900 percent.

US West Texas Intermediate crude futures gained 92 cents to settle at $54.23, while international Brent crude futures rose 33 cents to settle at $61.65 per barrel.

source: news.abs-cbn.com

Gold hits 8-month high, world stocks mixed on trade caution

NEW YORK -- Gold hit an eight-month high while world stock markets were mixed ahead of further US-Sino trade talks, a raft of technology company results, including Apple's, and a Federal Reserve decision on US interest rates.

The US dollar traded little changed and oil prices rose after Washington slapped sanctions on Venezuela's state-owned oil firm in a bid to curb its crude exports as traders prepared for major events, including a key Brexit vote late in the day.

Sterling fell after British lawmakers rejected most amendments that aimed to keep Britain from leaving the European Union without a deal, reviving worries of a chaotic withdrawal from the trading bloc that would damage the UK economy.

Sterling fell sharply after a brief rise and was down 0.75 percent.

Investors expect the Fed, the US central bank, to show a more cautious stance when policymakers release a statement on Wednesday after a two-day meeting. US economic data in December that was softer than expected and a sharp downturn in financial markets are likely to keep the Fed from raising rates.

Equity markets in Europe rose as investors bid up stocks considered safer during times of economic uncertainty, such as utilities. However, a gauge of global stock performance edged lower as stocks on Wall Street fell amid a ream of mixed earnings reports and caution due to the US-China trade spat.

MSCI's gauge of stocks across the globe was little changed, while the FTSEurofirst 300 index of leading regional shares in Europe closed 0.8 percent higher.

The Dow Jones Industrial Average rose 51.74 points, or 0.21 percent, to 24,579.96. The S&P 500 lost 3.85 points, or 0.15 percent, to 2,640 and the Nasdaq Composite dropped 57.40 points, or 0.81 percent, to 7,028.29.

The information glut this week will make it hard for people to reach a conclusion but the trade talks with China, which begin Wednesday, are the overriding issue for the world economy, said David Kelly, chief global strategist at JPMorgan Funds in New York.

What Washington, and possibly Beijing, fail to understand is that the uncertainty about trade is slowing the global economy, which will show up in East Asian PMI manufacturing data for January to be released on Thursday, Kelly said.

"The biggest tax levy by Washington is an uncertainty tax, and it's the biggest threat to the markets and the economy this year," Kelly said.

Tensions were high after US officials announced criminal charges against China's telecom giant Huawei for violating US sanctions against Iran.

For Asia, the blow was cushioned by promises of more Chinese stimulus but Beijing berated Washington for blocking tactics in its World Trade Organization appeal against US tariffs.

Amid the uncertainty, safe-haven gold broke through $1,310 an ounce in spot prices to reach its highest since last May.

US gold futures settled up 0.4 percent at $1,308.90 per ounce.

Oil price gains were capped by abundant supply and signs of a slowing Chinese economy. Brent crude oil futures rose $1.39 to settle at $61.32 a barrel while US West Texas Intermediate (WTI) crude futures gained $1.32 to settle at $53.31.

Market participants will have catalysts for trading all week, with more than one-fifth of companies on the benchmark S&P 500 index reporting results, including Amazon, Microsoft and Facebook.

Apple Inc reported earnings after the bell and said sales for its fiscal second quarter would most likely be lower than Wall Street expected.

The outlook suggested Apple still faces weak demand for its iPhone, especially in China, the world's biggest smartphone market. But Apple shares rose 4.3 percent in after-hours trading on upbeat comments from Chief Executive Tim Cook.

US Treasury yields fell across maturities as investors anticipated strong demand for $78 billion of new issues on sale later in the day and on data showing US consumer confidence at its lowest since July 2017.

Benchmark 10-year US Treasury notes rose 9/32 in price to push their yield down to 2.7116 percent.

The dollar index rose 0.06 percent, while the euro gained 0.01 percent to $1.1434. The Japanese yen weakened 0.01 percent versus the greenback at 109.33 per dollar.

source: news.abs-cbn.com

Yen soars, Aussie tumbles as fresh growth worries trigger FX 'flash crash'

SINGAPORE -- The yen surged on Thursday through key technical levels as heightened worries about the global economy pushed investors to safe haven-assets in moves exacerbated by thin holiday volumes.

Charging the risk averse mood was Apple Inc's move on Wednesday to cut its sales forecast for its latest quarter, on slowing iPhone sales in China. That followed a series of surveys that showed factory activity weakening across much of Europe and Asia in December.

Market participants fled to the safety of the highly liquid Japanese yen which rose 1 percent versus the dollar on Thursday. In early Asian trade, the dollar tumbled to an intra-day low of 104.96 yen, its lowest since March 2018.

The spike in risk aversion triggered massive stop-loss flows from investors who had held short positions on the yen for months. A lack of liquidity, with Japan still on holiday after the New Year, added to the sharp surge.

Market participants described the move as a "flash crash" in major currencies against the yen, driven primarily by technical, not fundamental, factors.

Longer-term, however, analysts see other reasons for the yen to rise.

"The yen is undervalued and can strengthen both if the dollar weakens across the board, but also if our broadly positive view that the global economy will stabilize at potential growth this year proves to be wrong, the Fed pauses and/or we get a risk-off market correction-as we saw at the end of 2018," said Athanasios Vamvakidis, FX strategist at Bank of America Merrill Lynch.

The Australian dollar, often considered a gauge of global risk appetite, fell to its lowest level since 2009 in early Asian trade to an intra-day low of $0.6776. The Aussie dollar last traded at $0.6931, down 0.74 percent. Weaker-than-expected data out of China, Australia's largest trade partner has taken the shine off the Aussie dollar in recent weeks.

Against the yen, the Aussie dollar fell 1.8 percent to 74.67.

China's economy remains of major concern for markets after a measure of its manufacturing activity shrank for the first time in 19 months in December, hit by the Chinese-US trade war, with the weakness spilling over to other Asian economies.

The dollar index was at 96.77, relatively unchanged from its previous close.

However, analysts expect the dollar to come under pressure in coming months with diminishing prospects for US central bank rate hikes in 2019, which has driven Treasury yields lower.

The yield on US 10-year treasuries fell to 2.63 percent, the lowest in nearly a year on Wednesday.

Federal Reserve chairman Jerome Powell speaks in Atlanta on Jan. 4. Any acknowledgement that growth risks are building and financial conditions tightening is likely to be read by traders as a dovish policy signal.

Elsewhere, sterling fell 0.7 percent to $1.2516 on Thursday.

The euro was down marginally at $1.1340. On Wednesday, the single currency fell 1 percent after data showed manufacturing activity contracted in Spain, France, Italy, and Germany.

source: news.abs-cbn.com

Safe haven support keeps dollar near 19-month high on growth risks

SINGAPORE - The dollar held near a 19-month high on Monday, bolstered by safe-haven buying as heightened concerns of a global economic slowdown reduced appetite for riskier assets such as stocks and Asian currencies.

Weaker-than-expected economic data out of China and Europe and fears of a possible US government shut down spooked investors away from stocks toward safe haven assets such as the greenback and yen.

"The dollar is clearly showing it is attractive during times of market stress," said Ray Attrill, head of currency strategy at NAB.

The dollar index, which gauges its value versus 6 major peers, was little changed at 97.44, below the 19-month high of 97.71 it hit on Friday.

The Australian dollar, whose fortunes are closely tied to China's economy, was marginally lower at $0.7174. It lost 0.3 percent of its value last week as data showed Chinese November retail sales grew at the weakest pace since 2003 and industrial output rose the least in nearly three years, underlining risks to the economy.

The offshore Chinese yuan was flat at 6.9013.

Apart from fears of a global economic slowdown, markets are also focusing on the future trajectory of US monetary policy.

The Federal Reserve is set to raise interest rates by 25 basis points at its Dec. 18-19 meeting. The central bank has lifted rates eight times since December 2015 in a bid to restore policy to more normal settings after having slashed borrowing costs to near zero to combat the financial crisis a decade ago.

With the December hike largely factored in by the market, larger moves in the dollar will be guided by the Fed's forward guidance.

According to their latest projections in September, the median view among the Fed's policymakers was for three rate hikes in 2019. However, interest rate futures used to gauge the probability of further hikes are pricing in only one rate hike in 2019.

Traders believe that higher US borrowing costs will likely hurt US growth momentum and ultimately force the Fed to pause its monetary tightening path.

Recent comments by Fed officials have also been read as dovish by some analysts. Last month, Fed Chairman Jerome Powell said rates were near the range of policymakers' estimates of "neutral" - the level at which they neither stimulate nor impede the economy

"The Fed will most likely move from an auto-pilot mode to being data dependent," added Attrill.

The yen was flat in early Asian trade at 113.36 to the dollar. It strengthened against the euro and sterling last week, reflecting the risk-off mood in the financial markets.

The euro was also little changed at $1.1304, having lost 0.6 percent last week after weaker-than expected data out of France and Germany suggested that economic activity in Europe remains weak.

Sterling remained under pressure in Asian trade, down 0.02 percent at $1.2582. British trade minister Liam Fox said on Sunday talks with the European Union to secure "assurances" for parliament on Prime Minister Theresa May's Brexit deal will take time, with a decision expected in the New Year.

source: news.abs-cbn.com