U.S. Futures Rebound After China’s Yuan Fix Tempers Concerns By Bloomberg



(Bloomberg) — U.S. stock-index futures rebounded, erasing earlier declines, after China’s central bank set its currency fixing stronger than expected.

S&P 500 Index futures contracts expiring in September rose as much as 0.7% as of 1:06 p.m. in Tokyo as the yuan steadied. contracts ascended 0.6% while those on the added 0.5%.

S&P 500 futures recovered after falling as much as 1.9% after the Trump administration formally labeled China a currency manipulator. The move exacerbated trade worries after China’s central bank on Monday allowed the yuan to fall in retaliation for new U.S. tariffs.

U.S. futures gained after the People’s Bank of China set its daily reference rate at 6.9683 per dollar on Tuesday. That compared with an estimated 6.9871, according to the average of forecasts by 19 traders and analysts in a Bloomberg survey.

“As soon as 7 broke on the CNY, the obvious reaction by the Trump administration was to call China a currency manipulator,” said Nader Naeimi, AMP Capital’s head of dynamic markets in Sydney. “But I don’t know how you can call someone a currency manipulator when all they have done has been to keep the currency from depreciating.”

Naeimi said it’s possible that the market is in for a global stock selloff that’s as bad as the one seen during the fourth quarter of last year. “Seasonals are turning negative as well. We are seeing breakdowns across most market bellwethers across FX, equity and bond markets,” he said.

The S&P 500 suffered its biggest rout of the year Monday and bonds rallied as investors fretted about the escalating trade war. More than $700 billion was wiped from the value of U.S. equities, with the S&P 500 Index plunging 3% and all but 11 companies on the gauge trading lower. The Cboe Volatility Index surged about 40%.

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.



Dollar steadies as strong U.S. inflation tempers chance of aggressive Fed rate cut By Reuters


© Reuters. Dollar steadies as strong U.S. inflation tempers chance of aggressive Fed rate cut

By Shinichi Saoshiro

TOKYO (Reuters) – The dollar was steady on Friday, having regained some traction against its peers after stronger-than-expected U.S. inflation data tempered the prospect of an aggressive Federal Reserve interest rate cut later this month.

The core U.S. consumer price index excluding food and energy components rose 0.3% in June, the largest increase since January 2018, data on Thursday showed.

The signs of a pick-up in underlying inflation, along with separate data on weekly jobless claims showing the labor market remained solid, curbed financial market expectations of a more aggressive 50 basis point cut at the Fed’s July 30-31 meeting.

Markets are still fully priced for a quarter percentage point cut as U.S. policymakers seek to support a slowing economy.

The dollar was little changed at 108.490 yen after rebounding from a low of 107.860 plumbed on Thursday in response to dovish comments from Fed Chairman Jerome Powell, which had revived the chance of a 50 basis-point cut.

“The dollar bounced back as the strong U.S. CPI got the market to question the Fed’s view on prices and whether inflation was really as weak as projected,” said Takuya Kanda, general manager at Gaitame.Com Research Institute.

“Expectations for a 50 basis point cut had risen after Powell’s comments but were lowered again by the CPI. Until the Fed’s meeting later this month, the prospect of a 50 basis point cut will continue ebbing back and forth on each major data release.”

The () against a basket of six major currencies stood little changed at 97.081 after retracing much of its losses on Thursday, when it had briefly stooped to a six-day low of 96.795.

The euro () was flat at $1.1254, having pulled back from a high of $1.1285 scaled on Thursday prior to the U.S. inflation data..

The Australian dollar dipped 0.05% to $0.6972 after gaining 0.2% the previous day.

The U.S. Treasury 10-year yield (), which often dictates the direction of the dollar, was at 2.134% after jumping 8 basis points overnight on the strong U.S. inflation data and a weak 30-year bond auction.

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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Asia stocks retreat after Fed tempers aggressive rate cut expectations


TOKYO (Reuters) – Asian stocks retreated on Wednesday and the dollar inched up from three-month lows after Federal Reserve officials tempered expectations in the markets for aggressive monetary easing.

FILE PHOTO: A man is reflected on an electronic board showing a graph analyzing recent change of Nikkei stock index outside a brokerage in Tokyo, Japan, January 7, 2019. REUTERS/Kim Kyung-Hoon

Fed Chair Jerome Powell on Tuesday said the central bank is “insulated from short-term political pressures,” pushing back against U.S. President Donald Trump’s demand for a significant rate cut. Powell, however, said Fed policymakers are wrestling with questions on whether uncertainties around U.S. tariffs, Washington’s conflict with trading partners and tame inflation require a rate cut.

Separately, St. Louis Fed President James Bullard told Bloomberg Television he does not think the U.S. economy is dire enough to warrant a 50-basis-point cut in July, even though he pushed to lower rates last week.

Equity markets have rallied this month, with Wall Street shares advancing to record highs, after the Fed was seen to have opened the door to possible rate cuts as early as next month at is policy-setting meeting last week.

According to latest data from CME Group’s FedWatch program, federal funds futures implied that traders saw a 27% chance of the Fed lowering rates by half a percentage point in July, compared to 42% on Monday.

Trump said on Twitter on Monday that the Fed “doesn’t know what it is doing,” adding that it “raised rates far too fast” and “blew it” given low inflation and slowing global growth.

Tracking overnight losses on Wall Street, Australian stocks dipped 0.15%, South Korea’s KOSPI shed 0.1% and Japan’s Nikkei retreated 0.6%.

The Shanghai Composite Index edged down 0.15% and Hong Kong’s Hang Seng lost 0.1%.

MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.2%.

“While Powell’s comments do not alter expectations that the Fed will ease sooner or later, they do leave a slightly negative impact on equities,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

“The focus is now on the G20 summit. Market expectations for a meaningful breakthrough being achieved in U.S.-China trade talks are quite low, so any signs of an improvement could bode well for risk sentiment.”

The United States hopes to re-launch trade talks with Beijing after Trump and his Chinese counterpart Xi Jinping meet in Japan during the G20 summit on Saturday but Washington will not accept any conditions on tariffs, a senior administration official said on Tuesday.

The two sides could agree not to impose new tariffs as a goodwill gesture to get negotiations going, the official said, but it was unclear if that would happen.

The dollar index against a basket of six major currencies was up 0.15% at 96.289, extending modest overnight gains.

The index had bounced back from 95.843 on Tuesday, its lowest level since March 21, following comments from the top Fed officials.

The dollar added 0.2% to 107.385 yen after a rebound from a near six-month low of 106.780.

The greenback had sunk to the six-month trough as the yen, a perceived safe haven, had drawn bids in the face of brewing U.S.-Iran tensions.

The euro slipped 0.05% to $1.1357 after being nudged off a three-month peak of $1.1412.

U.S. crude oil futures advanced nearly 2% to touch a four-week high of $59.03 per barrel after data showed a decline in U.S. crude stocks. [O/R]

The U.S. data helped underpin a crude market already buoyed by worries over potential U.S.-Iran conflict.

Spot gold slipped from a six-year high of $1,438.63 an ounce after the comments from Fed officials trimmed expectations for a rate hike in July.

Gold was last down 0.65% at $1,413.69 an ounce, headed to snap a six-day winning streak. The precious metal was still up 8.5% so far this month. [GOL/]

Editing by Shri Navaratnam and Sam Holmes



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Asia stocks slip after Fed tempers aggressive rate cut expectations By Reuters


© Reuters. FILE PHOTO: A man is reflected on an electronic board showing a graph analyzing recent change of Nikkei stock index outside a brokerage in Tokyo

By Shinichi Saoshiro

TOKYO (Reuters) – Asian stocks slipped on Wednesday and the dollar pulled back from three-month lows after Federal Reserve officials tempered expectations in the markets for aggressive monetary easing.

Fed Chair Jerome Powell on Tuesday said the central bank is “insulated from short-term political pressures,” pushing back against U.S. President Donald Trump’s demand for a significant rate cut. Powell, however, said Fed policymakers are wrestling with whether uncertainties around U.S. tariffs, Washington’s conflict with trading partners and tame inflation require a rate cut.

Separately, St. Louis Fed President James Bullard told Bloomberg Television he does not think the U.S. economy is dire enough to warrant a 50-basis-point cut in July, even though he pushed to lower rates last week.

Equity markets have rallied this month, with Wall Street shares advancing to record highs, after the Fed was seen to have opened the door to possible rate cuts as early as next month at is policy-setting meeting last week.

According to CME Group’s FedWatch program, federal funds futures implied that traders saw a 27% chance of the Fed lowering rates by half a percentage point in July, compared to 42% on Monday.

Trump said on Twitter on Monday that the Fed “doesn’t know what it is doing,” adding that it “raised rates far too fast” and “blew it” given low inflation and slowing global growth.

Tracking overnight losses on Wall Street, Australian stocks dipped 0.15%, South Korea’s shed 0.1% and Japan’s retreated 0.6%.

MSCI’s broadest index of Asia-Pacific shares outside Japan was a shade lower.

“While Powell’s comments do not alter expectations that the Fed will ease sooner or later, they do leave a slightly negative impact on equities,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

“The focus is now on the G20 summit. Market expectations for a meaningful breakthrough being achieved in U.S.-China trade talks are quite low, so any signs of an improvement could bode well for risk sentiment.”

The United States hopes to re-launch trade talks with Beijing after Trump and his Chinese counterpart Xi Jinping meet in Japan during the G20 summit on Saturday but Washington will not accept any conditions on tariffs, a senior administration official said on Tuesday.

The two sides could agree not to impose new tariffs as a goodwill gesture to get negotiations going, the official said, but it was unclear if that would happen.

The against a basket of six major currencies stood at 96.177, holding to modest gains made the previous day.

The index had bounced back from 95.843 on Tuesday, its lowest level since March 21, following comments from the top Fed officials.

The dollar was steady at 107.160 yen after a rebound from a near six-month low of 106.780.

The greenback had sunk to the six-month trough as the yen, a perceived safe haven, had drawn bids in the face brewing U.S.-Iran tensions.

The euro was little changed at $1.1368 after being nudged off a three-month peak of $1.1412.

oil futures edged up to a four-week high of $58.87 per barrel after data showed a decline in U.S. crude stocks. [O/R]

slipped from a six-year high of $1,438.63 an ounce after the comments from Fed officials trimmed expectations for a rate hike in July. Gold last traded at $1,418.18 an ounce.



UAE, keen to maintain safe-haven image, tempers tanker attack response By Reuters


© Reuters. FILE PHOTO: A technical staff is seen at the Port of Fujairah

By Alexander Cornwell and Stanley Carvalho

DUBAI (Reuters) – The United Arab Emirates, though a prominent foe of Iran in the Middle East’s power struggles, has tempered its reaction to attacks on oil tankers off its coast in an effort to protect its reputation as a safe and stable business hub.

While its close ally Saudi Arabia unleashed a barrage of tweets accusing their mutual enemy of ordering drone strikes on its oil installations on Tuesday, the UAE held off blaming anyone for Sunday’s attacks pending an investigation.

Abu Dhabi pledged restraint and de-escalation during what it called a “difficult situation” caused by Iranian behavior in the region.

Iran has distanced itself from the attack, which no-one has claimed. Yemen’s Iran-aligned Houthis said they carried out the drone strike on Saudi oil pumping stations.

The divergent approach by two crude-exporting heavyweights illustrates the complexities of dealing with Iran, which they see as a destabilizing force in the region.

Both have lobbied the United States to isolate Tehran, and the two spearhead a military coalition backing Yemen’s internationally recognized government against the Houthis.

“Sometimes you need to be diplomatic, we can’t destroy our economy’s reputation. Others are looking to shake our reliability,” said a UAE oil source when asked why the initial UAE statement mentioned commercial vessels and not oil tankers.

It was Saudi Arabia’s energy minister who revealed that two Saudi tankers had been attacked.

As Washington and Tehran spar over sanctions and the U.S. military presence in the region, the UAE is balancing curtailing Iran with protecting its economic interests as the Middle East’s tourism, financial and trading hub.

A Western diplomat said the UAE was taking a guarded approach because it does not want “trouble at its doorstep”.

“The UAE is far more pragmatic and strategic, and has more to lose. Saudi Arabia is the bigger concern for Iran so there is messaging coming out,” said another diplomat.

BUSINESS HUB

Western diplomats said the UAE, where expatriates are a majority of the population, shared Riyadh’s goals but unlike the kingdom has a diversified economy more exposed to regional shocks.

“UAE authorities are trying to find a fine balance because this a business hub. You don’t want to prick the bubble,” said a Dubai-based banker handling marine and energy business. “The right sounds are being made…no alarm bells.”

Dubai, which lacks the oil wealth of the political capital Abu Dhabi, is more vulnerable. It has been pinched by a Saudi-led boycott on Qatar and U.S. sanctions on Iran, for which Dubai was a traditional trade hub. Free zones also depend on unfettered access to Gulf maritime routes.

The emirate, whose economy is focused on tourism and international business services, is suffering a property downturn and a slowdown in retail as it gears up to host the World Expo trade fair in 2020.

“It doesn’t pose many risks to Abu Dhabi…but a substantial risk to Dubai, which relies on international businesses and real estate buyers feeling safe there,” said Steffen Hertog, associate professor at London School of Economics.

“Just tanker incidents are unlikely to affect tourism and business though; it would probably take an attack involving civilian casualties to substantially shift the mood,” he added.

Analysts say the attacks appear designed to test the resolve of Washington and its Gulf allies without triggering war by exposing weaknesses in the security of a key oil-shipping route.

If push comes to shove the UAE has deep enough pockets to bail out the economy for months or years, said Jon B. Alterman, director of the Middle East programme at CSIS.

“In the view of many Emirati officials, the threat from Iran is serious and enduring. If it takes a little bit of pain to get to a more secure place, they’re willing to make that investment.”