Gold slips, set for best week in three on smaller Fed rate-hike bets

Dec 2 (Reuters) – Gold prices eased on Friday ahead of a key US jobs report, but were set for their best week in three as the dollar weakened on prospects of slower US interest rate hikes.

Spot gold fell 0.2% to USD 1,799.80 per ounce, as of 0729 GMT, after hitting its highest since Aug. 10 at USD 1,804.46 earlier in the session. US gold futures were down 0.1% at USD 1,813.30.

Gold prices have risen about 2.5% this week in what would be their second straight weekly gain.

The dollar index held steady but was headed for a weekly loss of about 1%, weighed down by expectation that the peak in US interest rates was on the horizon.

A weaker greenback makes dollar-priced gold less expensive for overseas buyers.

After Fed Chair Jerome Powell’s comment on Wednesday, the dollar corrected heavily and this supported gold’s appeal, said Hareesh V, head of commodity research at Geojit Financial Services in Kochi, India.

“The USD 1,805 level may act as an immediate resistance for gold, a break above which may trigger fresh rallies.”

Earlier this week, Powell had said it was time to slow rate hikes. Rising rates have kept a hold on gold’s traditional status as an inflation hedge this year, as they translate into higher opportunity cost of holding the non-yielding metal.

Investors now await the US Labor Department’s non-farm payrolls data due at 1330 GMT.

“A softer print on wage growth and NFP would be a case of all stars aligned for further dollar weakness and that should further benefit gold. However, an upside surprise in the report may halt gold’s ascend, especially with prices trading near key resistance level,” OCBC FX strategist Christopher Wong said.

Spot silver was flat at USD 22.77, platinum fell 0.1% to USD 1,040.13 and palladium lost 0.5% to USD 1,932.45.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Rashmi Aich and Subhranshu Sahu)

Philippines cbank chief: Likely 25 or 50 bps rate hike in Dec

MANILA, Dec 2 (Reuters) – The Philippine central bank will hike interest rates this month, though the monetary board is likely to be split over whether to raise the policy rate by 25 or 50 basis points, its governor said on Friday in an interview with Bloomberg TV.

Felipe Medalla expressed relief that the USFederal Reserve was likely to scale back its interest rate hikes. On Tuesday, he said the BSP could pause policy tightening by the first quarter next year barring “no major shocks”.

“Certainly we will not do zero and I cannot speak for the rest of the board. But I think the board members will probably be split between whether doing 25 or 50,” he said.

Medalla heads the seven-member monetary board, which will review the BSP’s interest rate settings on Dec. 15 in its last policy meeting of the year.

The BSP has increased its benchmark interest rates by a cumulative 300 basis points since May to battle inflation.

When asked if he thinks the BSP’s key rates will peak in the first half of 2023, Medalla replied: “Yes”.

Fed Chair Jerome Powell on Wednesday said it was time to slow the pace of coming rate hikes, ahead of the US central bank’s Dec. 13-14 meeting, at which a half-point increase is widely expected.

(Reporting by Neil Jerome Morales and Karen Lema; Writing by Enrico Dela Cruz; Editing by Tom Hogue & Simon Cameron-Moore)

Waiting on Beijing

The surprisingly dovish tone of Fed Chair Jerome Powell’s speech on Wednesday is likely to drive world markets until the Fed’s December policy meeting, but for Asia, China’s economic data and government response to the ongoing domestic protests will be no less important.

The IMF, the US Treasury Secretary and the world’s biggest bond fund all chipped in with their views on China on Wednesday, although what investors really want to hear is word from Beijing.

The economic outlook is deteriorating. Chinese business activity is contracting at its fastest pace in six months, official PMI data showed on Wednesday, raising fears about next year. The final reading of the Caixin manufacturing PMI on Thursday is expected to be revised down too.

This is likely to prompt further fiscal and monetary policy easing from the authorities. But will it be enough to relax the COVID-19 restrictions and accelerate the broader reopening of the economy?

As analysts at CrossBorder Capital note, economic momentum in China is slowing again, while investors’ risk appetite remains near 2020 pandemic lows.

The IMF suggests there is scope for a further “gradual, safe recalibration” of Beijing’s zero-COVID policy. This comes a day after IMF Managing Director Kristalina Georgieva said the 4.4% forecast for Chinese growth next year could be cut.

US Treasury Secretary Janet Yellen said China’s zero-COVID policy was a threat to healing global supply chain difficulties, but said she would not give Beijing advice on managing the pandemic.

On the FX front, at least, Beijing may have got an inadvertent and indirect helping hand from the Fed on Wednesday, after Powell’s eagerly-awaited remarks on the economic outlook were deemed to be far more dovish than investors had expected.

The dollar fell almost 1%, and if that weakness is replicated and maintained in the weeks ahead, a renewed slide in the yuan’s exchange rate is one less thing Beijing has to worry about.

Another whoosh in global markets – Wall Street’s three main indices soared 2%-4% on Powell’s comments on Wednesday – won’t do any harm either.

Three key developments that could provide more direction to markets on Thursday:

– China Caixin manufacturing PMI (November, final)

– US PCE inflation (November)

– Fed’s Logan, Bowman, Kashkari, Barr all speak

(Reporting by Jamie McGeever in Orlando, Fla.; Editing by Deepa Babington)

Philippines plans to launch retail dollar bond issue in Q1

MANILA, Nov 30 (Reuters) – The Philippines plans to launch a US dollar retail treasury bond issue in the first quarter of next year, its finance secretary said on Wednesday.

The planned transaction will be the second of its kind, following a USD 1.6 billion five and 10-year offering in 2021.

Finance Secretary Benjamin Diokno told a media forum the government has yet to decide on the size of the issue, and the tenor would at least be five-years.

The onshore offer of an alternative investment product aimed at Filipinos overseas should boost funding for government programs to support the economy’s recovery.

The government traditionally offers retail treasury bonds denominated in local currency, with the most recent in September when it raised 420.45 billion pesos (USD 7.43 billion).

The Philippines, one of Asia’s most-active sovereign bond issuers, is planning to raise around USD 5 billion from offshore bonds next year, roughly the same as this year’s total, National Treasurer Rosalia de Leon told IFR, Refinitiv’s capital markets news service, this month.

Next year, the country will continue to favor US dollar bond sales, while also looking to return to the yen and euro markets, depending on market conditions. The Philippines is also looking at the possibility of issuing its maiden US dollar sukuk, said de Leon.

(USD 1 = 56.5600 Philippine pesos)

(Reporting by Karen Lema; Editing by Ed Davies)

Oil jumps on hopes for easing in China’s COVID controls

TOKYO/SINGAPORE, Nov 29 (Reuters) – Oil jumped on Tuesday, buoyed by hopes that China would relax its COVID-19 controls after rare protests against the country’s zero-COVID strategy over the weekend in big Chinese cities.

Brent crude futures advanced USD 1.4, or 1.7%, and traded at USD 84.57 a barrel at 0645 GMT. US West Texas Intermediate (WTI) crude futures rose USD 1.17, or 1.5%, to USD 78.39 a barrel.

Both benchmarks gained more than USD 2 earlier in the day.

China held a news conference on COVID prevention and control measures at 3 p.m. (0700 GMT) on Tuesday amid record COVID infections and protests in Shanghai and Beijing.

Asian shares also rallied as unsubstantiated rumours swirled that the unrest might prompt a loosening of the COVID restrictions. Similar rumours have caused markets to zig-zag in recent weeks.

The rare street protests in cities across China over the weekend were a vote against President Xi Jinping’s zero-COVID policy and the strongest public defiance during his political career, China analysts said. Beijing has stuck with the zero-COVID policy even as much of the world has lifted most restrictions.

Oil prices are also supported by the expectation that major oil producers would adjust their production plans at the upcoming meeting.

The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, are set to hold a meeting on Dec. 4. Analysts at Eurasia Group suggested in a note on Monday that weakened demand out of China could spur OPEC+ to cut output.

“Although this is merely a guess … not the official statement from the OPEC, it still reflects the near-term market sentiment and is likely to be the turning point of the oil prices,” analysts from Haitong Futures said in a note.

OPEC+ started to lower its output target by 2 million barrels per day (bpd) in November, aiming to shore up oil prices.

Markets are also assessing the impact of an upcoming Western price cap on Russian oil.

Group of Seven (G7) and European Union diplomats have been discussing a cap of between USD 65 and USD 70 a barrel, with the aim of limiting revenue to fund Moscow’s military offensive in Ukraine without disrupting global oil markets. Russia calls its actions in Ukraine “a special operation”.

But EU governments failed to agree on Monday on the cap, with Poland insisting the cap should be set lower than proposed by the G7, diplomats said.

The price cap is due to come into effect on Dec. 5, when an EU ban on Russian crude also takes effect.

(Reporting by Yuka Obayashi in Tokyo and Muyu Xu in Singapore; Editing by Kenneth Maxwell and Gerry Doyle)

Philippines raises USD 407 million via re-issued 2027 T-bond

MANILA, Nov 29 (Reuters) – Following are the results of the Philippine Bureau of the Treasury’s (BTr) auction of re-issued 2027 T-bonds on Tuesday:

* BTr awards 22.969 billion pesos (USD 406.46 million) vs 35 billion pesos offer

* Average yield 6.568%

* Tenders total 65.514 billion pesos

* Bonds were originally issued in 2007

* Details on the BTr’s website

(USD 1 = 56.51 Philippine pesos)

(Reporting by Enrico Dela Cruz)

US recap: EUR/USD’s early gains toward 50% of 2022’s drop rejected, risk-off

Nov 28 (Reuters) – The dollar index recovered from early losses after EUR/USD ran into sellers by the 50% Fibo of 2022’s drop, USD/JPY bottomed by November’s lows and sterling’s rapid recovery from September’s record lows faltered shy of the 200-day moving average, as risk-off flows followed numerous protests against China’s zero-COVID policies.

All of this ahead of this week’s important US and European data and Fed events, topped off on Friday’s by the US non-farm payroll report.

EUR/USD was helped to its 1.0497 EBS Monday high by hawkish comments from Dutch central bank chief Klaas Knot and European Central Bank President Christine Lagarde nL1N32O0FS. This, after board member Isabel Schnabel pushed back on Thursday against calls from many of her colleagues for smaller interest rate increases by the ECB nF9N31S007.

Bunds and other euro zone yields were also boosted by Chinese supply chain concerns.

But Cleveland Fed President Loretta Mester and New York Federal Reserve Bank President John Williams on Monday pushed back on market expectations for rates to peak in mid-2023 and then begin to retreat. And St. Louis Fed President James Bullard said the Federal needs to raise interest rates quite a bit further in order to gain control of inflation.

EUR/USD fell 0.4%, well down from the early gains that failed to reach 1.0500 and the midpoint of 2022’s slide at 1.0511.

With the dollar having retreated so quickly from September’s 20-year peak and so much event risk from US data this week, some consolidation looked in order, as traders, the Fed and ECB become more data-dependent in pacing further rate hikes and QT in the ECB’s case.

Risk-sensitive sterling fell 0.9%, having gone from deeply oversold in September to overbought now. Bearish CBI data also weighed Monday.

USD/JPY fell 0.16%, having rebounded from its earlier drop that tested November’s lows, with a bigger breakdown now dependent on Wednesday and Friday’s event risks.

The yuan and Australian dollar fell 0.5% and 1.1% amid the China COVID concerns.

(Editing by Terence Gabriel; Randolph Donney is a Reuters market analyst. The views expressed are his own.)

Gold slips as dollar regains, Fed officials back higher rates

Nov 28 (Reuters) – Gold prices slipped from a more than one-week high on Monday, as the dollar rose from session lows on hawkish comments from members of the US Federal Reserve reiterating their fight against inflation.

Spot gold fell 0.8% to USD 1,741.35 per ounce by 1:47 p.m. ET (1847 GMT), after hitting its highest since Nov. 18 earlier in the day.

US gold futures settled down 0.8% at USD 1,740.3.

“(The dollar) is just off the high of the day, we saw some US equities selling off and James Bullard seemed to be quite hawkish,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

The dollar turned positive after falling to a near two-week low earlier in the session. A stronger dollar makes greenback-priced metals more expensive for other currency holders.

Fed Presidents James Bullard and John Williams stated that there was a long way to go to fight inflation, with Bullard stating that rates should be held high “throughout next year and into 2024.”

Benchmark US 10-year bond yields also edged up from a near two-month low.

Gold is highly sensitive to rising US interest rates as they increase the opportunity cost of holding non-yielding bullion.

Jerome Powell is due to speak at a Brookings Institution event on Wednesday, on the outlook for the US economy and the labour market.

Also on the radar, US non-farm payroll data for November is due on Friday, which might shift expectations around the Fed’s policy move in December. Traders currently anticipating a 50-basis-point rate hike.

Silver fell 3% to USD 20.94 per ounce.

Demand for silver could be lower amid protests and lockdowns in China as silver is mostly an industrial metal, highlighted Blue Line’s Streible.

Demonstrators and police clashed in Shanghai on Sunday night as protests over China’s stringent COVID-19 measures flared and spread to several cities.

Platinum rose 0.6% to USD 986.68 while palladium fell 0.8% to USD 1,838.53.

(Reporting by Seher Dareen in Bengaluru; Editing by David Evans and Shailesh Kuber)

China’s COVID protests weigh on European shares; Airbus tumbles

Nov 28 (Reuters) – Europe’s STOXX 600 index fell on Monday, in line with a rout in global markets on economic jitters due to rare protests in China against stringent COVID-19 curbs, while shares of Airbus slid 5.7% on a report the planemaker may delay some jet deliveries.

The pan-European index closed 0.7% lower, slipping from last week’s peak which was the highest in more than three months.

Police stopped and searched people at the sites of weekend protests in Shanghai and Beijing, after crowds there and in other Chinese cities demonstrated against stringent COVID-19 measures disrupting lives three years into the pandemic.

China posted record-high COVID-19 infections on Monday, raising worries about the management of the country’s zero-COVID policy and its impact on the world’s second-largest economy.

“A widening of infections could add to supply chain interruptions, with China’s problems spilling into global markets,” Mark Haefele, chief investment officer at UBS Global Wealth Management wrote in a note to clients.

“Social discontent related to zero-COVID adds to execution and implementation risks for the government. We do not expect economic or market headwinds in China to abate significantly over the coming months.”

European oil stocks dipped 1.4% as crude prices, fell on worries about the outlook for the world’s biggest crude importer, while China-exposed automakers and luxury, also slipped.

The benchmark STOXX 600 notched its sixth consecutive weekly gain on Friday, marking a recovery of about 15% from its September lows on hopes that the Federal Reserve will shift to smaller interest rate hike amid signs of cooling US economy.

US jobs data later this week might shift expectations around the Fed’s policy move in December, with traders currently anticipating a 50-basis-point rate hike.

Preliminary reading of euro zone inflation for November is due on Wednesday, with the numbers expected to show a slight cooling from the record levels hit in October.

European Central Bank chief Christine Lagarde said inflation has not peaked and it risks turning out even higher than currently expected, hinting at a series of interest rate hikes ahead.

Credit Suisse’s shares dropped 4.2% to log a record closing low, while the cost of insuring its debt against default rose as the Swiss bank struggled to win over rattled investors following an exodus of client cash and with more litigation on the horizon.

Brenntag SE tumbled 9.7% after the German chemicals distributor said it held preliminary discussions for a potential acquisition with US rival Univar Solutions Inc.

Airbus slid 5.7% after Reuters reported the planemaker may delay planned delivery dates of some medium-haul aircraft in 2023 even as it races to meet delivery targets for 2022 in the face of supply chain and labour problems.

(Reporting by Sruthi Shankar and Devik Jain in Bengaluru; Editing by Uttaresh.V, Sherry Jacob-Phillips and David Gregori)

Japan’s Nikkei slips amid China COVID worries; tech shares slide

TOKYO, Nov 28 (Reuters) – Japan’s Nikkei share average slid for a second straight session on Monday, as protests in China over renewed COVID-19 clampdowns hurt investor sentiment, while tech stocks declined in line with their Wall Street peers.

The Nikkei ended the day down 0.42% at 28,162.83. The index closed 0.35% lower on Friday after hitting a more than two-month high in the session before.

Of the Nikkei’s 225 components, 173 fell, 45 rose and seven closed flat.

The broader Topix sank 0.68%.

Selling in Japanese stocks accelerated after Chinese and Hong Kong equity markets opened sharply lower, with the Hang Seng index tumbling 4.2% at one point. However, both the Nikkei and Topix indexes ended the day well off their lows.

A wave of protests unprecedented under Xi Jinping’s rule has swept China, including clashes with police in Shanghai, after the government doubled down on pandemic restrictions to contain a surge in COVID cases.

“This news is definitely a negative for Japanese stocks, especially the tech sector, which has large exposure to Chinese markets and supply chains,” said Kenji Abe, an equity strategist at Daiwa.

“A slowdown in the Chinese economy will have a big impact on the Japanese stock market.”

Tech stocks were already under pressure after Apple fell sharply on Friday following a report that COVID restrictions would further cut output at its flagship iPhone factory in China. The Philadelphia SE Semiconductor Index also sagged 1.26% on Friday.

Chipmaking equipment makers Tokyo Electron and Advantest dropped 1.56% and 0.54%, respectively.

Startup investor SoftBank Group – which is heavily invested in Chinese tech companies including Alibaba and Didi – slid 0.61%.

Nintendo and Sony slumped 0.89% and 0.78% respectively, also weighed down by a stronger yen that cut the outlook for overseas revenue.

Toyota and Honda fell 1.05% and 0.53%, respectively.

(Reporting by Kevin Buckland; editing by Uttaresh.V and Subhranshu Sahu)

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