Asia FX muted before more rate cues; yen shrugs off intervention fears
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Most Asian currencies moved little on Tuesday as traders awaited more cues on the U.S. economy and interest rates. Regional currencies were still recovering from steep losses against the dollar over the past week. The Japanese yen remained near 34-year highs despite intervention fears. The Bank of Japan is expected to keep rates on hold at its upcoming meeting. The dollar index futures remained close to five-month highs. The Australian dollar rose from near five-month lows. The Chinese yuan and South Korean won remained close to five-month highs. The Singapore dollar was flat, while the Indian rupee hovered below record highs.
#AsiaFx #RateCues #Yen #InterventionFears #Currencies #UsEconomy #InterestRates #BankOfJapan #DollarIndexFutures #AustralianDollar #ChineseYuan #SouthKoreanWon #SingaporeDollar #IndianRupee
Asia FX muted before more rate cues; yen shrugs off intervention fears
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Most Asian currencies moved little on Tuesday as traders awaited more cues on the U.S. economy and interest rates. Regional currencies were still recovering from steep losses against the dollar over the past week. The Japanese yen remained near 34-year highs despite intervention fears. The Bank of Japan is expected to keep rates on hold at its upcoming meeting. The dollar index futures remained close to five-month highs. The Australian dollar rose from near five-month lows. The Chinese yuan and South Korean won remained close to five-month highs. The Singapore dollar was flat, while the Indian rupee hovered below record highs.
#AsiaFx #RateCues #Yen #InterventionFears #Currencies #UsEconomy #InterestRates #BankOfJapan #DollarIndexFutures #AustralianDollar #ChineseYuan #SouthKoreanWon #SingaporeDollar #IndianRupee
Exclusive-China acquired recently banned Nvidia chips in Super Micro, Dell servers, tenders show
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Chinese universities and research institutes acquired high-end Nvidia artificial intelligence chips through resellers, despite the U.S. widening a ban last year on the sale of such technology to China. The servers contained some of Nvidia's most advanced chips, according to tenders fulfilled between Nov. 20 and Feb. 28. The 11 sellers of the chips were little-known Chinese retailers. Nvidia said the tenders specify products that were exported and widely available before the restrictions. The server makers said they complied with applicable laws or would investigate further. The buyers included the Chinese Academy of Sciences, the Shandong Artificial Intelligence Institute, Hubei Earthquake Administration, the Shandong and Southwest universities, a tech investment firm owned by the Heilongjiang provincial government, a state-run aviation research centre, and a space science centre. The transactions show China still has access to advanced chips that U.S. officials say could support AI for military applications. Each purchase was limited to several servers and several dozen banned chips. The tenders did not specify the intended uses. Chinese law requires procuring agencies to check that a supplier can fulfil the tender before it is announced as the winner and a contract is signed.
#China #Nvidia #SuperMicro #Dell #Servers #Tenders
Oil prices recover on tight supply bets even as M.East fears clear
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Oil prices rose in Asian trade on Tuesday as traders priced out the risk premium in crude due to easing tensions over an Iran-Israel war. Despite recent losses, oil prices were still relatively buoyant on expectations of tighter supplies in the coming months. Recent production curbs from Russia and increasing U.S. fuel demand with the spring season were seen as factors contributing to the tightening of oil markets. Brent oil futures rose 0.4% to $87.39 a barrel, while West Texas Intermediate crude futures rose 0.5% to $82.32 a barrel.
#OilPrices #SupplyAndDemand #MiddleEastTensions #IranisraelWar
Oil prices recover on tight supply bets even as M.East fears clear
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Oil prices rose in Asian trade on Tuesday as traders priced out the risk premium in crude due to easing tensions over an Iran-Israel war. Despite recent losses, oil prices were still relatively buoyant on expectations of tighter supplies in the coming months. Recent production curbs from Russia and increasing U.S. fuel demand with the spring season were seen as factors contributing to the tightening of oil markets. Brent oil futures rose 0.4% to $87.39 a barrel, while West Texas Intermediate crude futures rose 0.5% to $82.32 a barrel.
#OilPrices #SupplyAndDemand #MiddleEastTensions #IranisraelWar
China's steel sector has bigger worries than Biden tariff hike
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China's steel sector is facing bigger concerns over faltering local demand and threats of stronger blowback against China's surging steel exports. The state-backed China Metallurgical Industry Planning and Research Institute forecasts a 1.7% drop in China's steel demand this year. While China's steel exports last year climbed more than a third to their highest since 2016, just 598,000 tons of the shipments went to the United States. China is the seventh-largest shipper of steel to the U.S. and the main destinations for China's steel exports are Japan, South Korea, and Middle East countries. Chinese steelmakers and traders are on track to match or surpass last year's exports, with domestic information provider Lange Steel lifting its forecast to more than 100 million tons for 2024 after March shipments beat expectations. China's cheap steel products are also facing complaints from other countries, including India, Mexico, Thailand, and Brazil. Steel consumption in China is expected to shrink again this year due to a protracted property crisis and slowing infrastructure demand growth. Beijing's latest support for the sector is unlikely to fully offset reduced steel consumption from the property sector. Global steel demand is expected to rise 1.7% to 1.793 billion tons this year. Chinese steel exports climbed to 9.89 million tons in March, the highest for a month since July 2016. China's first quarter steel exports averaged $789 per ton, far above local prices averaging 4,145 yuan ($572.30).
#China #SteelSector #Biden #TariffHike #SteelDemand #SteelExports
China's imports of Russian oil near record high in March
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China's imports of Russian oil reached a near-record high in March, with imports from Russia jumping 12.5% on the year to 10.81 million metric tons, or 2.55 million barrels per day (bpd). This is close to the previous monthly record of 2.56 million bpd in June 2023. The increase in imports was due to refiners snapping up stranded Sokol shipments and stockpiling of Russian crude for storage in strategic reserves by state-owned CNOOC. Russia has been China's top oil supplier since 2023, shipping 2.14 million bpd despite Western sanctions and a price cap following the Kremlin's 2022 invasion of Ukraine. Imports from Saudi Arabia, previously China's largest supplier, totaled 6.3 million tons in March, down 29.3% on the same period last year. Imports from Malaysia, a trans-shipment point for sanctioned cargoes from Iran and Venezuela, soared 39.2% on the year to 13.7 million tons. Customs recorded no imports from Iran.
#China #Russia #OilImports #SokolShipments #Cnooc #SaudiArabia #Malaysia #Iran #Venezuela
US State Dept 'fully expects' to finalize new AUKUS trade exemptions in next 120 days
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The U.S. State Department expects to finalize new trade exemptions for the AUKUS defense project with Australia and Britain in the next 120 days. The 2024 National Defense Authorization Act requires President Joe Biden to determine within 120 days whether Australia and Britain have export control regimes comparable to the United States. The State Department statement indicated a delay in a positive determination by Biden, but the legislation requires him to revisit the issue in another 120 days. Senior Republican lawmakers expressed concern about delays in AUKUS if Biden did not grant the exemptions. The Commerce Department is scaling back its export-control requirements for Australia and Britain to foster cooperation under AUKUS. AUKUS's first pillar deals with the supply of nuclear-powered submarines to Australia, while Pillar II calls for more immediate cooperation in high-tech defense items.
#UsStateDepartment #Aukus #TradeExemptions #Australia #Britain #ExportControl #China
Proceeds from Russian assets could fund bond sales, Ukraine's central bank says
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Ukraine and its international partners have discussed bundling future proceeds from frozen Russian assets to back bond sales by the war-ravaged nation. Ukrainian central bank chief Andriy Pyshnyi said that various options were discussed, including using assets in bond issuance. The talks also focused on collateralizing Russian assets instead of seizing them outright. Ukraine is seeking financial aid from its partners and is hopeful for an additional US aid package. The country's $15.6 billion IMF loan program is also being reviewed, with a mission from the global lender set to start working on the fourth review in late May. Ukraine plans to unshackle the hryvnia and allow foreign firms to repatriate dividends and interest payments on debt commitments. The country aims to attract new money, loans, and investments while addressing legacy liabilities.
#Ukraine #Russia #BondSales #FinancialAid #Imf #War
Oil prices jump over 3%, near $90 on reports of explosions in Iran
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Oil prices rose sharply in Asian trade on Friday as tensions in the Middle East came back into focus after Iranian news agencies reported several explosions across the country, indicating potential strikes by Israel. Brent oil futures expiring in June surged nearly 3% to $89.74 a barrel, while West Texas Intermediate crude futures expiring in May jumped 3% to $85.16 a barrel. The explosions were heard in Isfahan in central Iran, in parts of southern Syria, and in parts of Iraq. Israel's potential retaliation marks an escalation in the Middle East conflict, and saw traders racing to reintroduce a risk premium back into oil prices. The location of the explosions, particularly in Isfahan, indicated that Israel may have also targeted Iran's nuclear facilities. Potential Israeli strikes on Iran come nearly a week after Iran launched a missile and drone strike against Israel last week, which was in retaliation for an alleged Israeli strike on an embassy in Damascus.
#OilPrices #MiddleEastTensions #Iran #Israel
Yen crumbles under towering dollar and US Treasury yields
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The yen struggled to break away from a 34-year low on Friday and was headed for a weekly decline, while the dollar hovered near a five-month high alongside U.S. Treasury yields as traders heavily scaled back bets for a slew of U.S. rate cuts this year. The euro was eyeing its sharpest weekly fall in about four months, pressured in part by a resurgent greenback and expectations that the European Central Bank (ECB) could begin easing rates in June, likely ahead of the Federal Reserve. The yen was last marginally higher at 153.17 per dollar, languishing near a 34-year trough of 153.32 per dollar hit in the previous session on the back of a surge in U.S. Treasury yields, which the dollar/yen pair tends to closely track. Japanese Finance Minister Shunichi Suzuki said on Friday authorities were analysing not just recent yen levels but factors that are driving the currency's moves, adding to the slew of verbal intervention from authorities in recent weeks in a bid to stem the yen's decline. Elsewhere, sterling dipped 0.01% to $1.2553 while the euro last bought $1.0726, pushing some distance away from a two-month low hit in the previous session. The single currency was on track for a weekly loss of more than 1%, after the ECB on Thursday held interest rates at a record high, as expected, but signalled it could start lowering them as soon as June. Futures now point to just about 40 basis points worth of easing from the Fed this year, down from roughly 60 bps at the start of the week. The benchmark 10-year yield was last at 4.5784%, flirting with a five-month peak of 4.5930% hit in the previous session. The two-year yield, which typically reflects near-term rate expectations, eased slightly to 4.9482%, after pushing above 5% for the first time since November on Thursday. The renewed dollar strength also weighed on the Australian and New Zealand dollars, which each fell 0.02%. The yen crumbled under the towering dollar and U.S. Treasury yields, while the euro faced its sharpest weekly fall in four months. Japanese authorities are analyzing factors driving the yen's decline, and verbal intervention has been used to stem the currency's slide. The European Central Bank (ECB) is expected to begin easing rates in June, ahead of the Federal Reserve. The benchmark 10-year U.S. Treasury yield flirted with a five-month peak, and futures now indicate a reduced expectation of rate cuts from the Fed this year. The Australian and New Zealand dollars also weakened against the dollar.
#Yen #Dollar #UsTreasuryYields #Euro #EuropeanCentralBank #FederalReserve #InterestRates #Inflation #ExchangeRates
Between the US and a hard place, Germany's Scholz reheats China ties
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German Chancellor Olaf Scholz is visiting China to strengthen ties amid tensions with the US and EU. German companies are seeking fairer access to the Chinese market, which they believe still favors local firms. China, on the other hand, will likely urge Germany not to support EU measures against Chinese goods. The visit is also overshadowed by the possibility of Donald Trump returning to the White House and his threat to increase trade tariffs on all countries. Scholz is expected to discuss China's support for Russia's wartime economy and the need for Europe to position itself between the US and China. German businesses have expressed concerns about discrimination in the Chinese market and China's subsidies for its firms. Efforts by Germany to diversify from China have been patchy, and measures to curb the use of Huawei equipment have not materialized. Scholz's visit is seen as a positive sign by China, as trust between the two sides is lacking. The EU faces a dilemma as it could benefit from cheap Chinese products but risks damaging its own industries. German companies insist on open markets, as losing the Chinese market would be more costly than import tariffs on Chinese goods.
#Germany #China #Trade #Economy #OlafScholz #Us #Eu
Hot Inflation Data Quashes the Chances of a June Fed Rate Cut
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US inflation came in at 0.4% MoM for the third consecutive month, more than double the rate needed to bring inflation down to 2% YoY. Expectations for a June Federal Reserve interest rate cut have collapsed. US core consumer price inflation came in at 0.4% MoM, above the 0.3% consensus. The details show the 0.4% MoM core increase was 0.359% to three decimal places. The strength was caused by the supercore services, which rose 0.65% MoM with medical care services jumping 0.6% MoM and transport services increasing 1.5% MoM. Given this situation, a June rate cut is not happening, barring a rapid reversal of fortunes for the economy. July is also doubtful, meaning September is the more probable start point of any easing, which would limit the Fed to a maximum of just three rate cuts this year.
#UsInflation #FederalReserve #InterestRateCut
Bank of Canada Leaves the Door Open to a June Cut
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The Bank of Canada has left the target for the overnight rate at 5% and is continuing with its policy of quantitative tightening. However, there are subtle dovish shifts in the bank's commentary that suggest they are open to a June rate cut if inflation and unemployment continue with their current momentum. The bank expects growth to pick up in 2024 and for inflation to move below 2.5% year-on-year in the second half of 2024. Governor Tiff Macklem stated that a June rate cut is within the realm of possibilities. The pricing of a June rate cut has receded, but if the unemployment situation continues to soften and inflation moderates, the bank is likely to carry through with a June rate cut. The Canadian dollar is facing downside risks, and the proximity to a rate cut in Canada contrasts with the hawkish stances of other central banks. The short-term outlook for USD/CAD is driven by the USD leg, and the widening gap between USD and CAD rates should help build a floor for USD/CAD as high as 1.3600. A move to 1.3750/1.3800 in the coming weeks is possible.
#BankOfCanada #InterestRate #Inflation #Unemployment #RateCut #CanadianDollar
https://uk.investing.com/analysis/bank-of-canada-leaves-the-door-open-to-a-june-cut-200604834
Gold prices rebound after CPI-driven losses, record highs close
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Gold prices rebounded in Asian trade after U.S. inflation data dragged the yellow metal off record highs. The yellow metal fell sharply in U.S. trade after consumer price index data showed U.S. inflation grew more than expected in March. Gold rebounded in Asian trade due to signs of persistent economic weakness in China. Spot prices of gold rose 0.5% to $2,345.31 an ounce, while gold futures expiring in June rose 0.6% to $2,362.10 an ounce. The outlook for gold is clouded by the prospect of higher U.S. interest rates. Major central banks in Asia and other emerging markets have been increasing their gold holdings in recent months. Other precious metals also recovered from overnight losses. Copper prices rose from overnight losses, although gains were limited by weak economic data from China.
#GoldPrices #Cpi #Inflation #China #SafehavenDemand #CentralBankBuying
British equities open higher with US inflation data in focus
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London stocks opened higher, with the FTSE 100 index up 0.6% and the FTSE 250 index up 0.5%. Oil and gas company shares rose 1% due to uncertainty over Middle East supplies. Investors are focused on the release of US consumer price data for insights into the Federal Reserve's interest rate-cut trajectory. UK investors are also monitoring the European Central Bank's monetary policy meeting and Britain's GDP figures. Shares of (LON:) climbed 1% as the country's biggest retailer forecasted increased profit in the new financial year.
Asia FX treads water, dollar flat amid US inflation angst
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Most Asian currencies moved little on Wednesday as anticipation of key U.S. inflation data dissuaded any big bets. The Japanese government's potential intervention in currency markets kept traders on their toes, as the yen remained close to its weakest level in 34 years. The dollar index futures hovered around the 104 level as focus remained on upcoming inflation data for March. The reading is expected to show that inflation remained sticky in March, which gives the Federal Reserve less impetus to begin cutting interest rates. The minutes of the Fed's March meeting are also due on Wednesday. Markets were on edge over any potential currency market intervention by the Japanese government, especially as the USD/JPY pair remained close to the 152 level, its highest level since 1990. The Chinese yuan's pair moved little following a strong midpoint fix by the People's Bank of China. However, sentiment towards Chinese markets soured after Fitch Ratings downgraded its outlook on China's credit rating. Broader Asian currencies moved in a flat-to-low range as focus remained on more cues from the U.S.
#AsiaFx #UsInflation #CurrencyMarkets #Dollar #Yen #FederalReserve #JapaneseGovernment #ChineseYuan
US considers easing warnings for Americans traveling to China
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The U.S. is considering easing advisories against its citizens traveling to China, according to Deputy Secretary of State Kurt Campbell. He made the comment at an event hosted by the non-profit National Committee on U.S.-China Relations. Campbell also expressed concerns about the large number of Chinese economic migrants coming to the U.S.