U.S. producer prices unexpectedly fall; underlying inflation stabilizing By Reuters



© Reuters. Workers prepare free food for distribution at the Chelsea Collaborative in Chelsea

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. producer prices unexpectedly fell in June as rising costs for energy goods were offset by weakness in services, pointing to subdued inflation that should allow the Federal Reserve to keep pumping money into the economy to arrest a downward spiral.

Still, deflation remains unlikely as the economy battles depressed demand caused by the COVID-19 pandemic. The report from the Labor Department on Friday also showed underlying producer inflation ticked up last month.

Deflation, a decline in the general price level, is harmful during a recession as consumers and businesses may delay purchases in anticipation of lower prices. The economy slipped into recession in February. The Fed is injecting money into the economy through extraordinary measures while the government has provided nearly $3 trillion in fiscal stimulus.

“The message for Fed officials, if they needed convincing at all, is that the worst economy since the Great Depression is keeping inflationary pressures on the back burner for now and that interest rates will need to remain at very low levels for the next few years at a minimum,” said Chris Rupkey, chief economist at MUFG in New York.

The producer price index for final demand dropped 0.2% last month after rebounding 0.4% in May. In the 12 months through June, the PPI declined 0.8%, matching May’s decrease.

Economists polled by Reuters had forecast the PPI would climb 0.4% in June and fall 0.2% on a year-on-year basis.

Excluding the volatile food, energy and trade services components, producer prices rose 0.3% in June. That was the biggest gain in the so-called core PPI since January and followed a 0.1% rise in May. In the 12 months through June, the core PPI edged down 0.1%. The core PPI dropped 0.4% on a year-on-year basis in May, which was the largest annual decrease since the introduction of the series in August 2013.

The Fed tracks the core personal consumption expenditures (PCE) price index for its 2% inflation target. The core PCE price index increased 1.0% on a year-on-year basis in May, the smallest advance since December 2010. June’s core PCE price index data will be released at the end of this month.

Stocks on Wall Street were trading higher. The dollar () fell against a basket of currencies. U.S. Treasury prices rose.

SUPPLY DISRUPTIONS

With a record 33 million people on unemployment benefits, inflation is likely to remain soft. Though businesses have reopened after shuttering in mid-March to slow the spread of COVID-19, new cases of the respiratory illness have surged in large parts of the country, causing uncertainty and curtailing domestic demand. Overseas demand has also tanked.

Gross domestic product is expected to have declined in the second quarter at its steepest pace since the Great Depression.

“COVID caused global demand to collapse, which is ultimately deflationary, but it also caused all kinds of supply disruptions, which are momentarily inflationary,” said Chris Low, chief economist at FHN Financial in New York. “The result is generally falling prices amidst a great deal more price volatility than has become the norm in the past decade. Both were on display in this morning’s PPI”.

In June, wholesale food prices decreased 5.2% after surging 6.0% in May. Wholesale energy prices shot up 7.7% in June after rebounding 4.5% in the prior month. Gasoline prices rose 26.3% after accelerating 43.9% in May. Goods prices gained 0.2% last month after jumping 1.6% in May.

Excluding food and energy, goods prices inched up 0.1% last month after being unchanged in May.

The cost of services dropped 0.3% in June after falling 0.2% in the prior month. Services were weighed down by a 1.8% plunge in margins for final demand trade services, which measure changes in margins received by wholesalers and retailers.

A 7.3% drop in margins for machinery and vehicle wholesaling accounted for 80% of the decline in services last month. There were also decreases in the prices for apparel, jewelry, footwear and accessories.

But prices for hospital inpatient care jumped 0.8% after rising 0.4% in May. The cost of healthcare services gained 0.2%after increasing 0.5% in May. Portfolio management fees advanced 2.2%. That followed a 3.9% rebound in May. Those healthcare and portfolio management costs feed into the core PCE price index.



Oil prices fall on demand concerns from U.S. coronavirus case surge By Reuters



© Reuters. The moon rises behind oil storage tanks in Omsk

By Sonali Paul and Seng Li Peng

MELBOURNE/SINGAPORE (Reuters) – Oil prices fell on Tuesday, erasing earlier gains, on concerns that the surge in coronavirus cases in the United States, the world’s biggest oil user, will limit a recovery in fuel demand.

U.S. West Texas Intermediate (WTI) crude () futures fell 17 cents, or 0.4%, to $40.46 a barrel at 0340 GMT, after earlier rising to as high as $40.79.

Brent crude () futures declined by 19 cents, or 0.4%, to $42.91, after hitting an intraday high of $43.19.

With 16 U.S. states reporting record increases in new COVID-19 case in the first five days of July, according to a Reuters tally, there is mounting concern that public health measures to limit the virus spread will curb fuel demand.

Florida is re-introducing some limits on economic reopenings to grapple with rising cases. California and Texas, two of the most populous and economically crucial U.S. states, are also reporting high infection rates as a percentage of diagnostic tests conducted over the past week.

“The potential for demand destruction as lockdown re-instatement looks more likely are combining with concerns about OPEC+ discipline to weigh on oil prices,” said CMC Markets’s Chief Market Strategist Michael McCarthy in Sydney in an email.

The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia, collectively known as OPEC+, are lowering output by 9.7 million barrels per day (bpd) for a third month in July.

However, those cuts are set to taper to 7.7 million bpd starting next month, adding supply at the same time U.S. fuel demand, especially for gasoline, remains impacted by the COVID-19 outbreak.

“Summer driving demand in the U.S. is low, keeping gasoline demand subdued, and a reintroduction of lockdowns is a major headwind,” ANZ said in a note.

Data from the American Petroleum Institute industry group later on Tuesday and the U.S. Energy Information Administration on Wednesday are expected to show a 100,000 barrel rise in gasoline stockpiles, six analysts polled by Reuters estimated.

The U.S. crude market faces some uncertainties from a court decision on Monday ordering the shutdown of the Dakota Access pipeline, the biggest artery transporting crude oil from North Dakota’s Bakken shale basin to Midwest and Gulf Coast regions, over environmental concerns.

Market sources in the Bakken said the closure of the 570,000-bpd pipeline, while a thorough environmental impact statement is completed, will likely divert some oil flows to transportation by rail.

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Oil prices gain on fall in U.S. crude stockpiles By Reuters



© Reuters. FILE PHOTO: A view shows railroad freight car in Omsk

By Julia Payne

LONDON (Reuters) – Oil prices rose on Thursday as a sharp drop in oil stockpiles outweighed concerns that a spike in U.S. coronavirus infections and revived lockdown measures in California could stall a recovery in fuel demand.

Brent crude () futures were up 21 cents or 0.5% at $42.24 a barrel by 1114 GMT, after rising 1.8% in the previous session.

U.S. West Texas Intermediate (WTI) crude () futures rose 20 cents, or 0.5%, to $40.02 a barrel, adding to a 1.4% rise on Wednesday.

U.S. crude inventories fell 7.2 million barrels from a record high last week, far more than analysts had expected, U.S. Energy Information Administration data showed, as refiners ramped up production and imports eased. [EIA/S]

“Typically a drop in inventories signals a positive development in demand or a negative move in supply. But as supply is fairly stable, the market assumes demand stands strong, despite the new COVID-19 infections and restrictions,” said Louise Dickson, oil markets analyst at Rystad Energy.

“New lockdowns in California would have depressed the market any other day, but yesterday’s EIA inventory report balanced the bad news and prevailed.”

New U.S. COVID-19 cases rose by nearly 50,000 on Wednesday, according to a Reuters tally, in the biggest one-day spike since the start of the pandemic.

California rolled back efforts to reopen its economy, banning indoor restaurant dining in much of the state, closing bars and beefing up enforcement of social distancing and other measures.

Capping gains, however, analysts noted that gasoline stockpiles were higher despite expectations of a fall.

Analysts highlighted worries about the spike in cases in heavily populated U.S. sun belt states, which are among the country’s biggest consumers of gasoline.

Attention will be on U.S. driving activity over the upcoming July 4 holiday weekend and how quickly U.S. producers revive shut-in production, analysts said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



China state firms’ profits fall 52.7% year-on-year in Jan-May: finance ministry By Reuters




BEIJING (Reuters) – Profits at China’s state-owned firms fell 52.7% y/y in Jan-May, according to a statement from the country’s Finance Ministry on Monday, to 663.1 billion yuan ($93.67 billion).

($1 = 7.0794 yuan)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Aussie, yuan fall after White House adviser says China deal ‘over’ By Reuters


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© Reuters. U.S. dollar notes are seen in this picture illustration

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By Hideyuki Sano

TOKYO (Reuters) – The Australian dollar, the and other risk-sensitive currencies tumbled on Tuesday after White House trade adviser Peter Navarro said the trade deal with China is “over”.

Although there were few details on actual policy implications, his comments resurrected fears that already tense relations between United States and China may now worsen and disrupt supply chains and capital flows.

Navarro linked the breakdown in part to Washington’s anger over Beijing’s not sounding the alarm earlier about the coronavirus outbreak.

The Australian dollar lost 0.5% to $0.6874 , erasing earlier gains while the New Zealand dollar fell 0.65% to $0.6440 .

The offshore Chinese yuan dropped 0.35% to 7.0815 per dollar .

“It’s not clear exactly what is over, but today’s market reaction suggests that after riding on optimism on the economy, markets are now ready to test the pessimistic side of the story” said Daisuke Uno, chief strategist at Sumitomo Mitsui (NYSE:) Bank, referring to Navarro’s comments.

Until early Tuesday, risk currencies had been supported and the dollar had been soft as markets clung to hopes of an economic recovery from the pandemic despite rising infections in some parts of the world.

Traders bought into riskier bets as some big cities in North America, such as New York and Toronto, eased lockdowns and reopened their economies, though that came against setbacks elsewhere in the fight to contain the coronavirus.

The World Health Organization (WHO) reported a recordincrease in global novel coronavirus cases on Sunday, with spikes in infections in southern and western U.S. states as well as Brazil.

Against a basket of currencies (), the dollar gained 0.16% to 97.189.

The safe-haven yen was little moved, stuck at 106.96 yen per dollar . The euro slipped a tad to $1.1252 ().

Investors are now looking to European business activity surveys due later in the day.

Economists expect the euro zone composite flash PMI to rise to 42.4 in June from 31.9 last month as European economies gradually reopen.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Oil prices fall on demand concerns as coronavirus cases rise By Reuters



© Reuters. FILE PHOTO: The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County

By Sonali Paul

MELBOURNE (Reuters) – Oil prices fell around 2% on Thursday as a spike in new coronavirus cases in China and the United States renewed fears that people would stay home, stalling a recovery in fuel demand even as lockdowns ease.

U.S. West Texas Intermediate (WTI) crude () futures dropped 2.1%, or 80 cents, to $37.16 a barrel at 0138 GMT, adding to a loss of 42 cents on Wednesday.

Brent crude () futures fell 1.5%, or 61 cents, to $40.10 a barrel. The benchmark contract declined 25 cents on Wednesday.

Worries about fuel demand rose after a surge in coronavirus cases led Beijing to cancel flights and shut schools and several U.S. states, including Texas, Florida and California, reported sharp increases in new cases.

A rise in U.S. crude stockpiles to a record high for a second week in a row also weighed on sentiment, even though U.S. government data showed inventories of gasoline and distillate, which include diesel and , fell.

“People are concerned about the coronavirus resurging in China and crude stockpiles rising,” said Lachlan Shaw, head of commodity research at National Australia Bank (OTC:).

While prices dipped, they are likely to remain in the $35 to $40 band they have been trading in so far in June, with the Organization of the Petroleum Exporting Countries and its allies, a grouping called OPEC+, mostly sticking to promised supply cuts, U.S. shale producers holding back output, and fuel demand gradually improving, analysts said.

OPEC+ compliance with crude production cut commitments in May was 87%, two OPEC+ sources said on Wednesday.

However OPEC warned in a monthly report the market would remain in surplus in the second half of 2020 even as demand improves, as it now expects supply from outside the group to be about 300,000 barrels per day higher than earlier thought.

“OPEC’s dour assessment” added to negative sentiment, ANZ said in a note.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Asian stocks set to fall as Wall St. snaps three-day winning streak By Reuters



© Reuters. A man wearing a protective face mask, following the coronavirus disease (COVID-19) outbreak, is silhouetted in front of a stock quotation board outside a brokerage in Tokyo

By Katanga Johnson

WASHINGTON (Reuters) – Asian stocks were set to dip on Thursday after a choppy Wall Street session as spiking coronavirus cases and prospects of new lockdowns erased earlier confidence about a global economic recovery.

Optimism about a quick economic comeback has been tempered by more global cases of the coronavirus, with an outbreak in Beijing and a rising infections in U.S. states that are reopening their economies.

“A cautious tone has re-emerged in markets amid a quiet night for data,” Tapas Strickland, a director at the National Australia Bank (OTC:), said in a note. “Markets are still trying to grapple with the implications of rising coronavirus infections and hospitalization rates in the southern parts of the U.S. given there is a high bar to re-impose lockdowns.”

Australian S&P/ASX 200 futures were down 0.6%, while {{178|Japan’s Ni () were off 0.02%.

Hong Kong’s Hang Seng index futures () <.hsic1> were down 0.23%.

U.S. Treasury yields edged lower and crude prices fell on concerns over the fresh outbreaks, but drew some support from stimulus measures and positive tests of a drug trial for dexamethasone that could save some critically ill COVID-19 patients.

The dollar rose from early lows as investors wary of wider geopolitical risks sought its relative safety, but pared gains by the session’s end.

Rising tensions between North Korea and South Korea spurred demand for safe-havens, as did clashes between Indian and Chinese troops at a disputed border site.

“This can all change as the market is very sensitive to headline risk,” said Brian Battle, the trading director Performance Trust Capital Partners in Chicago.

“Don’t confuse lack of volatility with stability. The market is very unstable with news of the virus outbreak worsening, which could lead to less global trade. But news of no second coronavirus wave in the U.S. could lead to a smoother recovery.”

On Wall Street, The Dow Jones Industrial Average () fell 0.65% while the S&P 500 () lost 0.36%.

Both U.S. indexes opened modestly higher, waffled throughout the morning and turned positive in afternoon. By the final hour of trading, however, both indexes had slipped.

The Nasdaq Composite (), which continued to trade higher before paring its gains, added 0.15%, by the closing bell.

The pan-European STOXX 600 index () closed up 0.74% while emerging market stocks rose 0.48%.

Oil prices swung in and out of the red amid an increase in U.S. crude inventories.

The () rose 0.11%, with the euro () down 0.05% to $1.1237. The Japanese yen strengthened 0.06% versus the greenback at 106.91 per dollar, while Sterling was last trading at $1.2547, down 0.06% on the day.

Benchmark 10-year notes () yielded 0.7331%, from 0.733% late on Wednesday. The 10-year German Bund () rose 0.7 basis point to yield -0.418. [GVD/EUR]

U.S. crude () recently fell 0.55% to $37.75 per barrel, while Brent () was flat on the day.

U.S. gained 0.05% to $1,730.00 an ounce.



Italy retail sales fall 10.5% m/m in April By Reuters



© Reuters.

Italian retail sales fell 10.5% in April from the month before, data showed on Friday, following a 21.3% fall in March.

National statistics institute ISTAT marginally revised down March’s data from an originally reported 20.5% drop.

Sales fell 26.3% in unadjusted year-on-year terms in April, ISTAT said.

The data are expressed in value terms and are not adjusted for consumer prices, which increased 0.1% in April from the year earlier, based on Italy’s EU-harmonised index (HICP).

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



South Korea May consumer prices fall for first time in eight months By Reuters




SEOUL (Reuters) – South Korea’s annual inflation rate in May fell below zero for the first time since September 2019, data showed on Tuesday, as the coronvirus pandemic continued to weigh on domestic demand and oil prices plunged.

The consumer price index (CPI) slid 0.3% in May from a year earlier, the Statistics Korea data showed, slightly missing a median 0.2% fall tipped in a Reuters survey. It was only the second time the index had turned negative since data releases began in 1965.

The index fell 0.2% in May on a monthly basis, matching the prediction of a 0.2% drop.

The core CPI, however, was unchanged at 0.1% rise from a year earlier.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Hyundai Motor’s May sales fall sharply year-on-year on COVID-19 impact


FILE PHOTO – An employee wearing a mask to prevent contracting the coronavirus disease (COVID-19) waits for custormers next to a Hyundai Motor’s vehicle at Hyundai Motor Studio in Goyang, South Korea, April 21, 2020. REUTERS/Kim Hong-Ji

SEOUL (Reuters) – South Korea’s Hyundai Motor Co (005380.KS) said on Monday its provisional May sales fell 39% year-on-year to 217,510 vehicles globally, as the coronavirus outbreak continued to hit demand in key markets.

Sales were, however, up about 30% from 167,693 vehicles in April.

Its domestic sales rose 5% year-on-year, led by popular models such as the Grandeur sedan and new models such as all-new Elantra and premium brand Genesis’ G80 sedan.

However, overseas sales fell 50% on year due to weak auto demand from slowing economic activities stemming from COVID-19, the automaker said in a statement.

South Korea’s May auto exports fell 54% on year despite the sequential resumption of sales at dealerships in major countries, due to increased inventory from low sales in the previous month and decreased demand in major markets such as the U.S. and Europe, the trade ministry said in a separate statement on Monday.

Hyundai Motor’s sister company Kia Motors (000270.KS) announced provisional May sales of 160,913 vehicles, down 33% from a year ago, while its domestic sales rose 19% on year, overseas sales fell 44%.

Together, they are the world’s fifth-largest automaker.

Reporting by Joyce Lee; Editing by Himani Sarkar and Rashmi Aich



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