Oil prices slide USD 2 on China demand worries, US midterm elections

Nov 8 (Reuters) – Oil prices fell more than USD 2 on Tuesday in choppy trading on growing worries about fuel demand as COVID-19 outbreaks worsened in top crude importer China, and jitters about the outcome of US midterm elections.

Brent futures for January delivery fell USD 2.56 to USD 95.36 a barrel, a 2.6% loss. US crude fell USD 2.88, or 3.14%, to USD 88.91 per barrel.

“The market is entering today with a certain degree of skepticism surrounding the election… It’s a wait to see what the result is type of a situation here,” said Bob Yawger, director of energy futures at Mizuho in New York.

US stocks also gyrated as market participants bided their time waiting to see whether Capitol Hill is in for a power shift, with Republican gains expected in the midterm elections.

On Monday, both benchmarks hit their highest since August on reports that leaders in China were weighing an exit from the country’s strict COVID-19 restrictions.

But new cases have surged in Guangzhou and other Chinese cities, dimming prospects for fewer restrictions.

“Rising COVID cases in China is on most traders’ radars this morning, as the “on again/off again” news of lockdowns continues,” said Dennis Kissler, senior vice president of trading at BOK Financial.

Gasoline and diesel supplies remain uncomfortably low, he added, limiting the downside for crude prices as most of the United States braces for major cold weather.

US inventories of distillate fuels finished October at their lowest levels for any October since 1951, according to the US Energy Information Administration.

The ICE exchange, home to the Brent benchmark, has increased the initial margin rates for front-month Brent crude futures by 4.92%, making maintaining a futures position more expensive from the close of business on Tuesday.

Market participants, worried high inflation and rising interest rates could spark a global recession, will also watch US consumer price data on Thursday.

The EIA on Tuesday cut its US energy demand outlook for 2023 and forecast US production for next year would be 21% lower than it previously expected.

Oil producer Diamondback Energy also warned that the US shale industry will continue to struggle to expand production at its current pace, with costs of new shale wells likely rising.

US crude stocks rose by about 5.6 million barrels for the week ended Nov. 4, according to market sources citing American Petroleum Institute figures, much higher than the expected 1.1 million barrel rise.

The Energy Information Administration will release its own data at 10:30 a.m. EST (1530 GMT) on Wednesday.

The European Union ban on Russian oil, imposed in retaliation for Russia’s invasion of Ukraine, is set to start on Dec. 5 and will be followed by a halt on oil product imports in February. Moscow calls its actions in Ukraine “a special operation.”

(Reporting by Shadia Nasralla; Additional reporting by Isabel Kua; Editing by David Gregorio, Andrea Ricci and Lincoln Feast)

Wall Street ends higher as investors eye US midterms

Nov 8 (Reuters) – Wall Street ended higher on Tuesday during voting in midterm elections that will determine control of the US Congress, with investors betting on a political stalemate that could prevent major policy changes.

It was the third straight day of gains on the US stock market, leaving the Dow Jones Industrial Average down less than 10% year-to-date.

Helping the blue-chip Dow, shares of drugmaker Amgen Inc rallied to a record high after the company reported positive data related to its cholesterol drug and obesity treatment.

All 435 House of Representative seats and some 35 seats in the Senate are on the ballot, with experts saying there may be days of waiting before it is clear who won certain races. Nonpartisan forecasts and opinion polls suggested a strong chance of Republicans winning a House majority and a tight race for Senate control.

“On balance, financial markets like gridlock. To the extent that change will be slow and evolving, a divided government of course provides that backdrop,” said Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis.

A surprise victory for Democrats, however, could raise concerns about tech-sector regulation as well as budget spending that could add to already-high inflation, according to market strategists.

Investors are also awaiting a key inflation reading due on Thursday, which is expected to show easing in consumer prices and provide further clues on whether the US Federal Reserve could soften its campaign of aggressive interest rate hikes.

Traders are divided about whether the Fed will raise rates by 50 basis points or 75 basis points at the central bank’s meeting in December, according to CME Fedwatch tool.

Cryptocurrency-related stocks including Coinbase Global and Microstrategy tumbled after Crypto giant Binance signed a nonbinding agreement to buy rival FTX’s non-US unit to help cover a “liquidity crunch” at the cryptocurrency exchange.

“Some investors will shoot first and ask questions later, but the good thing is crypto is kind of isolated. They are on their own, they really are not part of the equity market,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

The S&P 500 is up about 7% from its October closing low, but it remains down about 20% in 2022 due to worries that the Fed’s aggressive rate hikes could cripple the US economy.

According to preliminary data, the S&P 500 gained 22.06 points, or 0.58%, to end at 3,828.86 points, while the Nasdaq Composite gained 51.85 points, or 0.49%, to 10,616.37. The Dow Jones Industrial Average rose 340.27 points, or 1.04%, to 33,167.27.

Take-Two Interactive Software Inc slumped after the videogame publisher lowered its annual sales outlook, while ride-hailing firm Lyft Inc tumbled after forecasting current-quarter revenue below Wall Street estimates.

(Reporting by Noel Randewich in Oakland, Calif., and David Carnevali in New York
Additional reporting by Amruta Khandekar, Sruthi Shankar, Devik Jain and Shubham Batra in Bengaluru
Editing by Maju Samuel and Matthew Lewis)

Asian stocks mixed as caution reigns ahead of US midterms

HONG KONG, Nov 8 (Reuters) – Asian shares held recent gains but lost momentum on Tuesday as investors remained cautious ahead of the release of the US inflation data and mid-term elections, which will determine control of Congress.

London and New York are set to open lower with FTSE futures and E-mini futures for the S&P 500 index down 0.55% and 0.18%, respectively, after Wall Street’s buoyant Monday close.

MSCI’s gauge of Asia Pacific stocks outside Japan narrowed gains to rise 0.12% at 0517 GMT.

“The thing to watch … will be the US midterms today and the CPI data tomorrow,” said Redmond Wong, Saxo Markets’ market strategist for Greater China, in a note on Tuesday.

“Markets are expecting the gridlock situation of a divided Congress and moderation in the US CPI. Both are helping the risk-on sentiments.”

Investors had recently placed bets on hopes that China would adjust its zero-COVID policy and reopen the economy soon but that rally proved unsustainable.

Hong Kong’s Hang Seng index .HSI and China’s benchmark CSI300 Index both dropped 1% in the afternoon sessions, wiping out morning gains.

Chinese health officials reiterated their commitment to the zero-COVID policy on Saturday at a press conference.

The policy has weighed on China’s economic activity, with downbeat trade data on Monday providing the latest sign that the world’s second-largest economy is slowing.

“Investors took note (of the fact) that the health officials added that local governments should not unreasonably double down on the implementation and must ensure people’s livelihood and economic activities remain normal,” Wong added.

Australia’s S&P/ASX 200 ended the day 0.36% higher, lifted by financial companies.

Japan’s Nikkei 225 gained as much as 1.44%, hitting an eight-week high, as investors scooped up chips and other technology stocks.

Overnight, the Dow Jones Industrial Average rose 1.31%, the S&P 500 gained 0.96% and the Nasdaq Composite advanced 0.85%.

Analysts said US mid-term elections on Tuesday could impact markets.

Control of the US House of Representatives is at stake in the midterms, with Republicans favoured by nonpartisan forecasters to win control.

“A divided government in Washington is ostensibly bullish for equities,” said Stephen Innes, managing partner of SPI Asset Management in a note.

“Gridlock cross-checks each party’s ‘worst impulses,’ and less activist fiscal policy is conducive to lower market volatility. That could be particularly helpful in 2022 and 2023 to the extent it calms rates volatility, the principal sponsor of this year’s historic cross-asset malaise,” he said.

Oil prices fell as recession concerns and worsening COVID-19 outbreaks in China sparked fears of lower fuel demand, outweighing supply worries.

Brent crude fell 0.32% to USD 97.61 a barrel by 0526 GMT, while US crude fell 0.38% to USD 91.44 a barrel.

Spot gold slipped 0.31% to USD 1,669.4 an ounce as the US dollar gained 0.163%.

(Reporting by Kane Wu; Editing by Ana Nicolaci da Costa and Sam Holmes)

Philippines raises USD 527 mln via 2027 T-bond re-issue

MANILA, Nov 8 (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 30.64 billion pesos (USD 526.82 million) vs 35 billion pesos offer

* Avg yield 7.131%

* Tenders total 41.6 billion pesos

* Bonds were originally issued in 2007

(Reporting by Enrico Dela Cruz)

Oil prices slide as China demand, recession concerns outweigh supply woes

SINGAPORE, Nov 8 (Reuters) – Oil prices slipped on Tuesday as recession concerns and worsening COVID-19 outbreaks in China sparked fears of lower fuel demand, outweighing supply worries.

Brent crude fell 23 cents, or 0.2%, to USD 97.69 a barrel by 0726 GMT, while US West Texas Intermediate (WTI) crude fell 32 cents, or 0.4%, to USD 91.47 a barrel.

Both benchmarks hit their highest since August on Monday amid reports that leaders in China, the world’s top crude importer, were weighing an exit from the country’s strict COVID-19 restrictions.

However, Chinese health officials over the weekend reaffirmed China’s commitment to its strict zero-COVID policy. Also, recent data showed the country’s exports and imports unexpectedly contracted in October.

New coronavirus cases surged in Guangzhou and other Chinese cities, official data showed on Tuesday. The global manufacturing hub is fighting its worst flare-up ever, testing its ability to avoid a Shanghai-style lockdown.

“I think the rolling lockdowns, not to mention doubling down on zero-COVID over the weekend, are not only roiling the long-positioned oil market but they continue to push back the reopening narrative negatively for oil prices,” said Stephen Innes, managing partner at SPI Asset Management.

A firmer greenback also weighed on oil prices. Oil is generally priced in U.S. dollars, so a stronger greenback makes the commodity more expensive to holders of other currencies.

Market participants will be eyeing the US CPI data this week for trading cues, CMC Markets analyst Tina Teng said.

“On the back of sticky inflation and rising interest rates in major western countries, oil futures are still pricing in the possibility of a global economic recession,” said Teng.

“This, along with a slowdown in China fuel demand, are reasons for the pull-back in oil futures prices in the past few months.”

But the near-term fundamentals for oil remain bullish, with the focus returning to supply issues, ANZ Research analysts said in a note.

“The market is facing the deadline for European imports of Russian oil before sanctions kick in,” ANZ added.

US crude oil stocks were expected to have risen by about 1.1 million barrels last week, a preliminary Reuters poll showed on Monday.

The poll was conducted ahead of reports from the American Petroleum Institute due at 4:30 p.m. ET (2130 GMT) on Tuesday, and the Energy Information Administration due at 10:30 a.m. (1530 GMT) on Wednesday.

(Reporting by Isabel Kua; Editing by Himani Sarkar and Kenneth Maxwell)

Gold slips as dollar firms with focus on US inflation data

Nov 8 (Reuters) – Gold prices inched lower on Tuesday, pressured by an uptick in the dollar, and as traders looked ahead to key US inflation figures this week that could influence the Federal Reserve’s rate-hike narrative.

Spot gold was down 0.3% at USD 1,669.84 per ounce by 0723 GMT. Prices hit a three-week peak in the previous session, buoyed by a weaker dollar.

US gold futures fell 0.6% to USD 1,671.10.

The dollar index ticked 0.4% higher, making bullion more expensive for overseas buyers.

While gold managed to close near its three-week high on Monday, it has hit resistance around USD 1,680, potentially spurring some wait-and-see for a greater catalyst to induce an upward break, said IG market strategist Yeap Jun Rong.

The US consumer price index report is due on Thursday.

“A higher-than-expected inflation reading could fan fears of more aggressive rate hikes, which will provide a negative backdrop for non-yielding gold,” Yeap added.

Gold is considered a hedge against inflation, but rising interest rates increase the opportunity cost of holding the asset.

Holdings of SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, fell to 905.48 tonnes on Monday, their lowest since early 2020.

Investor focus is also on the US midterm elections later in the day that will determine control of Congress and could spur moves all over the market. A conclusive result could take days.

“Outflows from gold ETFs are weighing on gold … This in conjunction with persistently high inflation and US midterm elections should see gold under pressure leading into Thursday,” said Michael Langford, director at corporate advisory firm AirGuide.

“The US midterm elections are more likely to see investors repositioning towards higher risk asset classes and reduce exposure to gold.”

Market participants also kept a close tab on any news surrounding COVID-related curbs in top bullion consumer China.

Spot silver was down 0.7% at USD 20.63. Platinum rose 0.1% to USD 980.00 and palladium slipped 0.7% to USD 1,883.63.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Sherry Jacob-Phillips)

Global hedge funds advance in October amid stocks rally

NEW YORK, Nov 7 (Reuters) – Global hedge funds posted a 2% gain in October, helped by a rally in stock markets and a combination of higher inflation and interest rates, data provider HFR said in a statement on Monday.

Equities, event-driven and macro hedge fund indexes went up last month, according to HFR, adding two-thirds of all hedge funds posted gains.

Only macro hedge funds, however, delivered positive returns to investors in the first 10 months of 2022.

“Macro strategies extended strong year-to-date performance as equities reversed intra-month declines, while the US Federal Reserve prepared to raise interest rates to slow generational inflation, with performance led by multi-strategy and commodity-focused exposures,” said HFR.

In October, macro funds rose 0.95%, raising their gains in the year to 11.51%.

Event-driven hedge funds soared 3.7% in October, the highest return among all categories. HFR said distressed assets, activist and special situations exposures drove performance. Still, they are down 4.31% for the year.

Equities hedge funds jumped 2.93%, posting their first gain since August and their highest monthly return this year. In the year they are still negative by 11.28%.

“Hedge funds advanced to begin 4Q, as funds opportunistically navigated both political uncertainties, as well as inflation and interest rate driven volatility, with gains distributed across the universe of both directional and uncorrelated strategies,” said Kenneth J. Heinz, president of HFR.

(Reporting by Carolina Mandl, in New York; Editing by Lincoln Feast.)

Gold near 3-week peak on dollar slide, US inflation data in focus

Nov 7 (Reuters) – Gold prices steadied on Monday near a three-week peak hit in the previous session, buoyed by a weaker dollar, while investors looked forward to US inflation data later this week that could influence the size of Federal Reserve rate-hike.

Spot gold was little changed at USD 1,676.24 per ounce by 1:50 p.m. ET (1850 GMT), after rising more than 3% to its highest since Oct. 13 at USD 1,681.69 on Friday.

US gold futures settled up 0.2% to USD 1,680.5.

“Some weakness in the dollar, yields are ticking down slightly and that’s what’s helping gold and the whole precious metal complex,” said Bob Haberkorn, senior market strategist at RJO Futures.

The dollar extended losses to a more than one-week low, making gold more attractive for other currency holders.

Data on Friday showed US employers hired more workers than expected in October, but a rise in the unemployment rate to 3.7% raised hopes that the US central bank would be less aggressive on rate hikes going forward.

Although gold is seen as an inflation hedge, higher interest rates raise the opportunity cost of holding bullion.

“If they (the Fed) pause or they start to slow down on these rate hikes, gold will benefit and that’s what we saw late last week… people getting in ahead of CPI data.”

The US consumer price index (CPI) report is due on Thursday. Traders are now pricing in 67% odds of a 50-basis point rate hike at the Fed’s meeting in December.

Also on the radar is Tuesday’s US midterm elections, which will determine control of Congress and could spur moves all over the market.

“Gold prices are holding Friday’s strong gains that included a technically bullish weekly high close that is one chart clue that a market bottom is in place,” Jim Wycoff, senior analyst at Kitco Metals, said in a note.

Spot silver fell 0.1% to USD 20.81 per ounce, platinum rose 1.8% to USD 977.96, while palladium was up 1.6% to USD 1,891.39.

(Reporting by Seher Dareen in Bengaluru, Editing by Ed Osmond, Krishna Chandra Eluri and Shailesh Kuber)

Trump-linked stocks rally on possible 2024 presidential run

Nov 7 (Reuters) – Shares of Digital World Acquisition Corp, the blank-check company looking to take Donald Trump’s social media venture public, rallied on Monday over the former president’s possible run for the 2024 presidential election.

Trump is considering launching a third bid for the White House this month, three of his advisers said last week, while media reports over the weekend pointed to a campaign starting before the end of November.

Shares in Digital World Acquisition Corp. (DWAC) jumped more than 24% to USD 21.55, and were set for their best day in nearly a year, bringing down year-to-date losses to 58%.

“The prospect of Donald Trump seizing the political spotlight again appears to have put a rocket under the share price of DWAC amid expectation there could be a sharp increase in users on the former President’s highly controversial social media platform,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

The rally in DWAC, which was also the fifth most trending ticker on retail investor focused social media forum Stocktwits, helped lift shares of other Trump-linked companies.

DWAC on Thursday extended the deadline to Nov. 22. for investors’ approval to complete its merger deal with Trump Media and Technology Group.

This move comes as Americans prepare to vote in the US midterm elections, with analysts expecting Republicans to win control of Congress.

Software developer Phunware Inc. (PHUN), which was hired by Trump’s 2020 presidential reelection campaign to build a phone app, jumped 18.3%.

Rumble Inc. (RUM), a Canadian video platform popular with conservatives, however, slipped 3.5%. Trump’s social media venture Truth Social announced in August it would join Rumble’s new ad platform as its first publisher in August.

Artificial intelligence solutions company Remark Holdings (MARK), which has been linked to the former president on social media sites, gained 8.6%. Reuters could not independently verify the link between Trump and Remark.

(Reporting by Shreyashi Sanyal, Akash Sriram and Anisha Sircar in Bengaluru; Editing by Vinay Dwivedi)

Philippines’ gross foreign reserves at USD 94.1 billion at end-October

MANILA, Nov 7 (Reuters) – The Philippines’ gross international reserves increased slightly to USD 94.1 billion at end-October, from USD 93 billion a month earlier, the central bank said on Monday, citing preliminary data.

The latest forex reserves represents a more-than-adequate external liquidity buffer equivalent to 7.5 months worth of imports of goods and payments of services and primary income, it said in a statement.

(Reporting by Neil Jerome Morales; Editing by Kanupriya Kapoor)

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