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Dollar and global shares rise as markets anticipate Fed rate cuts
The dollar and global shares were mostly up on Thursday as traders awaited a Fed rate cut. U.S. stock prices ended mostly higher after a choppy session. The benchmark S&P and Nasdaq gained, while the Dow finished slightly lower. Consumer staples and healthcare stocks, as well as materials, suffered the biggest losses. Industrials, technology, and communications services, however, saw gains. The Dow Jones Industrial Average dropped 0.07%. The S&P 500 rose by 0.11%. And the Nasdaq Composite increased by 0.22%. STOXX 600 in Europe was up 0.45%, and is still on track for a modest gain each week. The FTSE 100 in London was up 0.19%, while the DAX in Germany gained 0.32%. MSCI's global stock index rose by 0.24%. Japanese stocks rose sharply following an auction of government debt that attracted strong demand from investors. This helped set the tone for a broader equity market. The Nikkei rose 2.33%. After a 5% drop in stocks in late November, they have recovered and are trading near their all-time highs, said Michael Farr, CEO of investment advisory firm Farr, Miller & Washington, in Washington. On Thursday, data appeared to allay fears of a rapid deterioration of the U.S. labour market. Last week, the number of Americans who filed new claims for unemployment benefits dropped to a three-year low. The number of Americans filing new applications for unemployment benefits fell to a more than three-year low last week, at 191,000. This came after the U.S. Private Payrolls Data posted its largest drop in over two-and-a half years and following a service sector survey that showed activity remained steady in November despite hiring slowing. Markets may be disappointed if they reduce rates by a quarter point, then pause. This is what every Fed speaker said. Farr added that if they do not cut rates and instead say we will wait until the next Fed meeting, then markets would be disappointed. Fed funds futures have a 90% probability of a quarter point cut at the Fed's meeting on December 10. This is up from an 83.4% possibility a week earlier, according to CME Group's FedWatch. The dollar index (which tracks the U.S.'s currency performance against six other currencies) was slightly up by 0.17%, easing previous losses and poised for an end to nine consecutive sessions of declines. Brent crude futures rose 0.94%, to $63.26. U.S. crude, however, gained 1.22%, to $59.67. US 10-YEAR BOND YIELD IS UP The yield of the 10-year Treasury Bond in the United States was up by 4.2 basis points to 4.1%. The Financial Times reported that on Wednesday, bond investors expressed concern to the U.S. Treasury about Kevin Hassett's potential to aggressively reduce interest rates in order to match President Donald Trump’s preferences. Farr stated that the Trump administration had chosen to announce the President's choice of a new Fed Chairman in a way that would be perceived - whether correctly or incorrectly - as more dovish during this meeting, to appear to be an antidote for the message. The government debt sale in Japan attracted the highest demand for more than six year, helping to calm investor nerves over the long-term financial health of the country, which has stoked fears about similar concerns about other economies. Dollar was down by 0.08% to 155.11 yen, heading towards its biggest weekly gain in two months. The yen was given a boost by a report that said the Bank of Japan would likely raise interest rates this December, and the government is expected to tolerate the decision. In Hong Kong, offshore trading, the yuan weakened a bit, resulting in a dollar gain of 0.21%, or 7.071 yuan. On Wednesday, the Chinese currency reached its highest level in over a year against the dollar. After a recent run of hot metals, precious metals have cooled. After hitting a record-high of $58.98 an ounce on Tuesday, gold was unchanged at $4,208.66 per ounce. Silver fell by 2.32% to reach $57.12 per ounce.
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Gold stable as rising yields offset dollar weakening; PCE data is in focus
Gold prices remained largely unchanged Thursday as rising U.S. Treasury rates offset the support provided by a weaker US dollar. Meanwhile, markets were waiting for Friday's U.S. Inflation data to get clues about Federal Reserve policy ahead of their December meeting. By 1833 GMT, spot gold had risen 0.1% to $4210.49 an ounce. U.S. Gold Futures for February closed 0.2% higher, at $4243.00 per ounce. Edward Meir, Marex analyst, said: "Higher yields keep a little cap on gold's upside. The general dollar index provides some support." The benchmark 10-year U.S. Treasury rates rose while the U.S. Dollar Index hit a low of one month, making gold more accessible to overseas buyers. The latest data on Thursday shows that the number of new U.S. unemployment benefits claims fell to 191,000 in the past week, which is lower than it has been for over three years. This figure was also well below what economists had predicted at 220,000. ADP's report on Wednesday showed that private payrolls in the United States fell by 32,000 during November. This was the largest drop in over two and half years. Over 100 economists surveyed by predicted that the Federal Reserve would reduce its key rate by 25 basis point at its policy meeting on December 9-10, as it seeks to support the cooling labor market. Gold is a non-yielding asset that benefits from lower interest rates. Investors will be watching the Federal Reserve’s preferred inflation indicator, the Personal Consumption Expenditures report (PCE), due this Friday. Meir said that the markets will remain relatively unchanged between now and next Monday. As for gold, we are likely to be in a trading range which is fairly uneventful. Silver fell 2.6%, to $56.96, after reaching a record-high of $58.98. The metal has risen by about 97.3% in this year due to a structural shortage, market liquidity concerns and its inclusion on the U.S. Critical Minerals list. Palladium fell 1.4% to 1,440.57, while platinum dropped 1.7% to $1642.67. (Reporting and editing by Anmol Chhoubey, Bengaluru. Krishna Chandra Eluri, Maju Samuel.
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Stocks in the UK rise as industrials and financials gain momentum
Investors analyzed corporate updates and economic statistics ahead of next week's U.S. Federal Reserve rate decision. The blue-chip FTSE 100 closed up 0.2%, while the midcap FTSE 250 gained 0.3%. After the Russia-Ukraine talks broke down, aerospace and defence stocks gained 2.5% for the third session in a row. Rolls-Royce gained 2.6% and BAE Systems about 2.6%. Investment banks and brokerages rose by 2.2%. The investment firm 3i Group topped the FTSE 100 index with a 5.1% increase. Personal goods rose by 2.8%, with Burberry gaining 3% as HSBC increased the price target for the stock. Diageo fell 3.9% as UBS cut its target price and downgraded their stock. Pharma stocks fell by almost 1%. AstraZeneca dipped 1.3%. SSP Group rose 11.3% after airport outlet operator SSP said that it expected annual profits at the upper end of their forecasts. AJ Bell AJBA.L dropped 7.6% after the Investment Platform You can also read about the warnings below. The budget will add complexity and costs to the landscape of individual savings accounts, according to Mr. Frasers, the sportswear and fashion retailer, fell by 2.7% reported A 2.8% decline in the first-half profits. A survey revealed that British Construction activity contracted Last month, the highest rate since May 2020. In the run-up to Rachel Reeves annual budget, on November 26, other surveys revealed similar concerns regarding investment, hiring and demands. Calastone data shows that British investors sold shares worth 3 billion pounds during November, the sixth consecutive month in which they have sold net. The number of Americans who filed new claims for unemployment benefits in the U.S. dropped to its lowest level in over three years last week.
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US Defense Agency's push to stockpile Cobalt is paused as the price soars
A DLA spokesperson said on Thursday that the U.S. Defense Logistics Agency intends to continue purchasing cobalt as part of the National Defense Stockpile, but it is reassessing the strategy. There is no set date for reissuing this tender. The agency will likely pay more for any purchases of cobalt, as the prices have risen by 50% since the initial tender in August. The DLA has not stockpiled cobalt in over 30 years. Cobalt is essential to the United States' national security and industrial strength as global competition for strategic minerals increases. The U.S. also wants to reduce its reliance on China. China dominates the processing of metals used in missiles, aerospace components, magnets for communications and radars and guidance systems. DLA is currently reviewing its cobalt acquisition strategy. DLA's spokesperson confirmed that the requirement was still valid and the agency still intended to buy the material for its National Defense Stockpile. The agency has not set a date to reissue the solicitation. The original tender announced on August 19, with offers due to be submitted by August 29, went through several changes before being cancelled in October. Cobalt is currently priced at $24 per lb, or $52,910 per metric ton. This compares to $16 alb, or $35,275 for a ton back in August. Since February, when exports were banned by the top producer Democratic Republic of Congo, prices have been rising. Congo has since implemented quotas but producers still wait for approval from the government to resume exports. In its original offer, the agency detailed their plans to buy 16.49 million pounds or 7,480 tons of cobalt over a period of five years for the National Defense Stockpile. The initial offer was only from three companies: Vale's Port Colborne, Long Harbour and Sumitomo metal mining plants in Canada; Glencore's Nikkelverk operations in Norway; and Japan's Sumitomo. Sources in the cobalt industry say that the DLA wanted companies to commit to a fixed price for the five-year period, which didn't take into account the possibility of price fluctuations. This could lead to producers suffering losses. (Reporting and editing by Kirovan Donovan; reporting by Pratima Dasai)
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US allows transactions with Lukoil fuel stations outside Russia until late April
The Trump administration allowed transactions on Thursday with Lukoil outside of Russia, with a small waiver from sanctions imposed by the U.S. in October because the company's revenue is used to support Moscow's war against Ukraine. A posting on the Treasury Department website stated that the transactions for approximately 2,000 stations in Europe, Central Asia and the Middle East, as well as the Americas were authorized until April 29, 2026. In October, President Donald Trump imposed sanctions against Lukoil, one of Russia's largest oil companies. This triggered a rush of buyers to buy its assets, estimated at $22 billion. These were the first sanctions imposed by the United States directly on Russian entities during Trump's second tenure. The Treasury Department has cleared companies to speak to Lukoil about purchasing foreign assets until December 13, but specific deals will require approval. Lukoil operates about 200 gas stations under its own brand in New Jersey, Pennsylvania, and New York. Lukoil operates over 300 stations in Romania and around 600 in Turkey. It is also one of the largest retail players in Moldova, Bulgaria and Turkey. (Reporting Timothy Gardner, Bhargavacharya, Katharine Jack; Editing Bernadettebaum)
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OPEC oil production slips in November despite an agreed-uplift, survey finds
A survey on Thursday found that OPEC oil production fell in November despite an OPEC+ deal to increase production in the month due to unavailability in some members. This brought the supply of the group even further below their target. According to the survey, the Organization of the Petroleum Exporting Countries (OPEC) pumped 28,40 million barrels of oil per day in October, a decrease of 30,000 barrels per days from the total for October. Nigeria and Iraq recorded the largest declines. OPEC+ - a grouping of OPEC, Russia and its allies - has slowed down the rate of monthly production increases due to concerns about an oversupply. Many members are close to their capacity limits, and some have been given extra cuts in order to compensate for an earlier overproduction. This will limit the impact of any further increases. According to an agreement between eight OPEC+ member countries covering November output, five of the OPEC-members - Algerian, Iraqi, Kuwaitian, Saudi Arabian and UAE - had to increase output by 85,000 bpd, before the effects of compensation cuts totaling 140,000 bpd. The survey indicates that the actual increase of the five is 40,000 bpd. Iraq's exports were lower, according to the data and sources in this survey, because of pipeline maintenance. A fire at the Yoho platform in Nigeria and the subsequent shutdown of that platform led to a drop in shipments. Many outside sources estimate the output of Iraq and the UAE higher than those countries themselves. Other estimates, like those from the International Energy Agency (IEA), say that they pump significantly more than the quotas. The survey aims at tracking supply on the market. It is based upon flow data provided by financial group LSEG and other companies who track flows such as Kpler. Information was also provided by sources from oil companies, OPEC, and consultants. Ahmad Ghaddar contributed additional reporting. Mark Potter edited the article.
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As markets consider rate cuts, stocks are higher and the dollar's losing streak will continue.
The dollar fell and was poised to lose its 10th consecutive day against a basket major currencies, fueled by expectations of a U.S. interest rate cut. The benchmark S&P500 was flat in the early morning trade, after two sessions of gains. The biggest losses were in healthcare, consumer discretionary, and materials stocks, while real estate and financials were on the rise. The Dow Jones Industrial Average dropped 0.09%. The S&P 500 slipped 0.06%. And the Nasdaq Composite fell 0.14%. STOXX 600 in Europe was up by 0.42%, and is still on track for a modest gain each week. The FTSE 100 index in London was up 0.16%, while the DAX in Germany gained 0.45%. MSCI's global stock index rose by 0.18%. Japanese stocks rose sharply following an auction of government debt that attracted strong demand from investors. This helped set the tone for a broader equity market. The Nikkei rose 2.33%. Michael Farr, CEO of investment advisory firm Farr, Miller & Washington, in Washington, said: "After a 5% drop in stocks in late November, they have recovered and are trading near their pre-pullback highs." BIG DROP IN US PAYROLLS DATA POST The gains were made after the U.S. data on private payrolls posted its biggest drop in over two and a half years. Also, a survey conducted in the services sector showed that activity in November was stable while hiring decreased. Markets may be disappointed if they reduce rates by a quarter point, then pause. This is what every Fed speaker said. Farr added that if they do not cut rates and instead say we will wait until the next Fed meeting, then markets may be disappointed. Fed funds futures have a 90% probability of a quarter point cut at the Fed's meeting on December 10 compared to an 83.4% a week earlier, according CME Group’s FedWatch tool. According to LSEG, the dollar index tracks the performance of the U.S. dollar against six other currencies. It was down 0.08% last day and is on track for its 10th consecutive daily decline. This will be the longest losing streak since at least 1970. The yield on the US Treasury 10-Year Bond has increased by 3.4 basis points The yield of the 10-year Treasury Bond in the United States was at last up 3.4 basis point to 4.092%. The Financial Times reported Wednesday that bond holders had voiced concerns to the U.S. Treasury about Kevin Hassett's potential to aggressively reduce interest rates in order to match President Donald Trump’s preferences. Farr stated that the Trump administration had chosen to announce the President's choice of a new Fed Chairman in a way that would be perceived - whether correctly or incorrectly - as more dovish during this meeting, to appear to be an antidote for the message. The government debt sale in Japan attracted the highest demand for more than six year, helping to calm investor nerves over the long-term financial health of the country, which has stoked fears about similar concerns about other economies. The dollar is down by 0.28% to 154.8 yen, and the yen is on track for its biggest weekly gain in two months against the U.S. dollar. A report that said the Bank of Japan is likely to increase interest rates in December, with the government tolerating such a move, citing sources within the government familiar with deliberations. In Hong Kong, offshore trading, the yuan weakened a bit, resulting in a dollar gain of 0.18%, or 7.070 yuan. On Wednesday, the Chinese currency reached its highest level against dollar in over a year. After a recent run of hot metals, precious metals have cooled. Silver fell 2.4%, to $57.03 per ounce after reaching a record high on Tuesday of $58.98. Gold dropped 0.28%, at $4,195. Brent crude rose 0.06% to $62.71 per barrel.
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Gold stable as rising yields offset dollar weakening; PCE data is in focus
Gold prices were mostly unchanged on Thursday as rising U.S. Treasury rates offset support from the weaker dollar. Markets awaited Friday's U.S. Inflation data to get clues about Federal Reserve policy ahead of their December meeting. As of 1611 GMT, spot gold rose 0.1% to $4.211.19 an ounce. U.S. Gold Futures for February Delivery rose by 0.3% to $4,243.70 an ounce. Edward Meir, Marex analyst, said: "Higher yields keep a little cap on gold's upside. The general dollar index provides some support." The benchmark 10-year U.S. Treasury rate rose by 1%. Meanwhile, the U.S. Dollar Index hit a new low for a month, making gold more accessible to overseas buyers. The latest data on Thursday shows that the number of new U.S. unemployment benefits claims fell to 191,000 in the past week, which is lower than it has been for over three years. This figure was also well below what economists had predicted at 220,000. ADP's report on Wednesday showed that private payrolls in the United States fell by 32,000 during November. This was the largest drop in over two and half years. Over 100 economists surveyed by predicted that the Federal Reserve would reduce its key rate by 25 basis point at its policy meeting on December 9-10, as it seeks to support the cooling labor market. Gold is a non-yielding asset that benefits from lower interest rates. Investors will be watching the Federal Reserve’s preferred inflation indicator, the Personal Consumption Expenditures report (PCE), due on Friday. Meir said that the markets will remain relatively unchanged between now and next Monday. As for gold, we are likely to be in a trading range which is fairly uneventful. Silver fell 2.5%, to $56.99, after reaching a record-high of $58.98. The metal has risen by 97% in this year due to a structural shortage, market liquidity concerns and its inclusion on the U.S. Critical Minerals list. Palladium fell 1.8% to $1433.50, while platinum dropped 1.1% to $1652.17.
Dollar and global shares rise as markets anticipate Fed rate cuts
The dollar and global shares were mostly up on Thursday as traders awaited a Fed rate cut. Wall Street stocks, however, were mostly flat following a series of economic reports.
After two sessions of gains in the U.S., stocks fell after choppy trading. The benchmark S&P 500 was down. Consumer discretionary, healthcare and consumer staples stocks suffered the greatest losses. Industrials, communications and energy advanced.
The Dow Jones Industrial Average dropped 0.19%. The S&P 500 fell 0.10%. And the Nasdaq Composite declined 0.03%.
STOXX 600 in Europe was up 0.45%, and is still on track for a modest gain each week. The FTSE 100 index in London was up 0.19%, while the DAX index in Germany gained 0.32%. MSCI's global stock index rose by 0.23%. Japanese stocks rose sharply following an auction of government debt that attracted strong demand from investors. This helped set the tone for broader equity markets. The Nikkei rose 2.33%.
Michael Farr, CEO of investment advisory firm Farr, Miller & Washington, said that after a 5% drop in stocks in late November, they have recovered and are trading near their all-time highs. On Thursday, data appeared to allay fears of a rapid deterioration of the U.S. labour market. Last week, the number of Americans who filed new claims for unemployment benefits dropped to a three-year low. The number of Americans filing new applications for unemployment benefits fell to a more than three-year low last week, at 191,000. This came after the U.S. Private Payrolls Data posted its largest drop in over two-and-a half years and following a service sector survey that showed activity remained steady in November, while hiring slowed.
Markets may be disappointed if they reduce rates by a quarter point, then pause. This is what every Fed speaker said. Farr added that if they do not cut rates and instead say we will wait until the next Fed meeting, then markets would be disappointed.
Fed funds futures have a 90% probability of a quarter point cut at the Fed's meeting on December 10. This is up from an 83.4% possibility a week earlier, according to CME Group's FedWatch.
The dollar index (which tracks the U.S.'s currency performance against six other currencies) was slightly up by 0.08%, easing previous losses and poised for an end to nine consecutive sessions of declines.
Brent crude futures rose 0.94%, to $63.26, while U.S. Crude futures climbed 1.22%, to $59.67.
US 10-YEAR BOND YIELD IS UP At the last check, the yield on a 10-year Treasury Bond in the United States was up 5.2 basis point at 4.11%. The Financial Times reported that on Wednesday, bond investors expressed concern to the U.S. Treasury about Kevin Hassett's potential to aggressively reduce interest rates in order to align himself with President Donald Trump.
Farr stated that the Trump administration had chosen to announce the President's choice of a new Fed Chairman in a way that would be perceived - whether correctly or incorrectly - as more dovish during this meeting, to appear to be an antidote for the message.
The government debt sale in Japan attracted the highest demand for more than six-years, helping to calm investor nerves over the long-term finances of the country, which have caused similar concerns about other economies. The dollar last fell 0.16% to 154.97 yen. This is the largest weekly gain for the U.S. currency against the yen in more than two months. The yen was also boosted by a report that said the Bank of Japan would likely raise interest rates next month, with the government tolerating such a move. Three government sources who are familiar with these discussions were cited.
In Hong Kong, offshore trading, the yuan weakened a bit, with the dollar gaining 0.17% to 7.069 yuan. On Wednesday, the Chinese currency reached its highest level in over a year against the dollar. After a recent run of hot metals, precious metals have cooled. After hitting a record-high of $58.98 Tuesday, gold was unchanged at $4,207.88 per ounce. Silver fell 2.54%, to $56.98, an ounce. Reporting by Chibuike Oguh and Gregor Stuart Hunter in New York; Editing by Ed Osmond, Lisa Shumaker
(source: Reuters)