Gold slips as dollar firms on rate-hike prospects

Oct 11 (Reuters) – Gold prices inched lower on Tuesday, pressured by gains in the US dollar on prospects of more steep rate hikes, while caution prevailed ahead of key inflation data due later in the week.

Spot gold was down 0.1% at USD 1,665.89 per ounce, as of 0612 GMT, after earlier touching its lowest since Oct. 3. US gold futures dipped 0.1% to USD 1,672.60.

Benchmark US 10-year Treasury yields were just shy of 4%, while the dollar index rose 0.3%, making gold more expensive for buyers holding other currencies.

“It’s a technical level for bond yields and they’re dragging the dollar higher and weighing on gold prices,” said City Index analyst Matt Simpson, adding signals of a global recession from the International Monetary Fund were also driving safe-haven flows into the dollar instead.

“Gold is now stuck in the USD 1,658 to USD 1,676 range,” said Simpson.

After stronger-than-expected US labour data, focus is now on Thursday’s inflation reading, which is expected to remain stubbornly high and reinforce the Federal Reserve’s hawkish rhetoric.

While gold is considered a hedge against inflation and economic uncertainties, rising rates reduce the non-yielding metal’s appeal.

If the US economy, which is still quite resilient, starts softening, gold could see interest, but there have to be definitive signs that the Fed is willing to take its foot off the rate-hike pedal and inflation tapering, said Stephen Innes, managing partner at SPI Asset Management.

Spot silver fell 1.3% to USD 19.39 per ounce and platinum shed 0.3% to USD 896.08. Palladium, meanwhile, rose 0.3% to USD 2,178.26.

Citi analysts said in a note that they were relatively bullish on palladium, citing resilient demand on increasing automotive chip supply availability, automotive supply chain re-stocking and rising Russia supply-shock risks.

Prices of palladium, used in emission-controlling devices in cars along with platinum, have risen about 15% so far this year.

(Reporting by Eileen Soreng, additional reporting by Arpan Varghese in Bengaluru; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)

Oil settles lower on China COVID flare-up, recession fear

Oct 11 (Reuters) – Oil prices settled 2% lower on Tuesday, extending the previous session’s almost 2% decline, as recession fears and a flare-up in COVID-19 cases in China raised concerns over global demand.

World Bank President David Malpass and International Monetary Fund Managing Director Kristalina Georgieva warned on Monday of a growing risk of global recession and said inflation remained a continuing problem.

Brent crude settled down USD 1.90, or 2%, to USD 94.29 a barrel while US West Texas Intermediate crude settled down USD 1.78, or 2%, to USD 89.35.

“There is growing pessimism in the markets now,” said Craig Erlam of brokerage OANDA.

Oil surged early this year, bringing Brent close to its record high of USD 147 as Russia’s invasion of Ukraine added to supply concerns, but prices have slid on economic fears.

US crude oil stockpiles were expected to have risen last week after having fallen the prior two weeks, a preliminary Reuters poll showed on Tuesday.

Fears of a further hit to demand in China also weighed. Authorities have stepped up coronavirus testing in Shanghai and other large cities as COVID-19 infections rise again.

“From an economic perspective, it seems like China’s throwing the baby out with the bathwater by continuing to lock down its population to lower cases,” said John Kilduff, partner at Again Capital LLC in New York.

Oil also came under pressure from a strong dollar, which hit multi-year highs on worries about interest rate increases and escalation of the Ukraine war.

A strong dollar makes oil more expensive for buyers with other currencies and tends to weigh on risk appetite.

Losses were limited, however, by a tight market and last week’s decision by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+, to lower their output target by 2 million barrels per day.

President Joe Biden is re-evaluating the US relationship with Saudi Arabia after OPEC+ announced last week it would cut oil production, White House national security spokesman John Kirby said on Tuesday.

“An undersupply is even looming next year because the production cut is supposed to apply until the end of 2023, according to the OPEC+ decision,” a Commerzbank report said.

(Additional reporting by Alex Lawler; Additional reporting by Isabel Kua; Editing by Paul Simao, Mark Potter and David Gregorio)

Philippines posts record USD 6 billion trade deficit in August

MANILA, Oct 11 (Reuters) – The Philippines posted a trade deficit of USD 6 billion for August, its biggest monthly gap on record, as the value of imports sustained a double-digit pace of growth, while exports contracted, government data showed on Tuesday.

Imports rose 26% from a year earlier to USD 12.4 billion, while exports fell for the second straight month, by 2% to USD 6.4 billion, the Philippine Statistics Authority said.

Ahead of the release of the data, ING senior economist Nicholas Mapa said the trade deficit was likely to test historic lows and “put pressure on the Philippine peso in the near term”.

(Reporting by Neil Jerome Morales and Enrico Dela Cruz; Editing by Kim Coghill and Ed Davies)

Gold pulled 1% lower by strong dollar, big Fed hike bets

Oct 10 (Reuters) – Gold prices fell more than 1% on Monday, as an elevated dollar and solidifying bets for an aggressive interest rate hike from the US Federal Reserve pushed the non-yielding bullion to its lowest in a week.

Spot gold fell 1.4% to USD 1,670.89 per ounce by 13:52 a.m. EDT (1752 GMT) while US gold futures settled down 2% at USD 1,675.2.

Gold has now fallen for a fourth consecutive session, in potentially its worst run since mid-August.

Rising interest rates and a strong US dollar are continuing to pressure gold and are overwhelming any safe-haven demand currently arising from the latest escalation in the Ukraine crisis, said David Meger, director of metals trading at High Ridge Futures.

The dollar climbed to its highest since Sept. 29, making gold priced in the US currency more expensive for overseas buyers.

Fed fund futures are now pricing in a 92% chance of a 75-basis-point hike at the next Fed meeting. Higher interest rates increase the opportunity cost of holding zero-yield bullion.

Russia rained cruise missiles on busy Ukrainian cities on Monday in what the United States called “horrific strikes”, killing civilians and knocking out power and heat with its most widespread air attacks since the start of the war.

“We’re back at USD 1,680 level again … and gold will remain under some downside pressure in the short term,” said Ross Norman, an independent analyst.

Investors now look to key US inflation data due later this week.

The Fed may still be able to lower inflation without a sharp rise in unemployment even as it keeps raising interest rates, Chicago Fed president Charles Evans said on Monday, a rebuttal to arguments the US central bank is pushing the world and the United States towards a potentially sharp downturn.

Spot silver dropped 2.2% to USD 19.66 per ounce, and platinum fell 1.2% to USD 901.06. Palladium gained 0.2% to USD 2,186.03.

(Reporting by Bharat Govind Gautam and Brijesh Patel in Bengaluru; Editing by Tomasz Janowski)

Philippine tycoon postpones USD 474 million prime infrastructure IPO

MANILA, Oct 10 (Reuters) – Philippine tycoon Enrique Razon has delayed to the middle of next year plans to launch an up to 28 billion pesos (USD 474 million) listing for his infrastructure and energy holding firm because of a market downturn, its underwriter said on Monday.

The initial public offering (IPO) of Prime Infrastructure Capital Inc, originally set for October, could have been the Philippines’ largest this year.

“We will wait for the markets to recover,” Eduardo Francisco, president of deal underwriter BDO Capital, told reporters at the sidelines of a media forum.

The earliest an IPO for Prime Infrastructure could occur would be May or June next year, enough time to wait for global economy to rebound, inflation to ease and markets to recover, Francisco said.

Eight companies, mostly small firms, have listed in the Philippine bourse, whose broader index .PSI has fallen 18% and is Southeast Asia’s second worst performer year-to-date.

In June, Prime Infrastructure filed its listing documents with the corporate regulator. It planned to sell up to 1.93 billion shares, including an over-allotment option, at a maximum price of 14.60 pesos each. In Philippine filings, IPO prices are typically set above final selling prices.

Prime Infrastructure planned to use IPO proceeds to finance its energy, water, and waste and sustainable fuels businesses.

Razon, who Forbes says is the second-richest person in the Philippines with a net worth of USD 5.6 billion, built his fortune through global port operator International Container Terminal Services and casino owner Bloomberry Resorts.

(USD 1 = 58.9990 Philippine pesos)

(Reporting by Neil Jerome Morales; Editing by Ed Davies)

China stocks slump to half-year lows as COVID, US crackdown weigh

SHANGHAI, Oct 10 (Reuters) – China stocks tumbled to half-year lows on Monday, dragged by semiconductor giants and consumer firms, as trade resumed after a week-long holiday with the market being dominated by concerns over the latest US crackdown on the chip-making industry, weak economic data and fresh COVID-19 cases.

** The blue-chip CSI 300 Index slumped 2.2% to the lowest level since April 3, and the Shanghai Composite Index lost 1.7% to trade below the key 3,000 points psychological line.

** The Hang Seng Index declined 3%, while the Hang Seng China Enterprises Index plunged 3.2%.

** Global stocks skidded lower after a surprise drop in US unemployment quashed any thought of a pivot on policy tightening ahead of an inflation reading, which is expected to see core prices move higher again.

** China’s domestic COVID-19 situation worsened over the National Day Golden Week, during which holiday tourist trips also went down 18.2% from last year as strict anti-virus rules discouraged movement.

** Consumer staples and tourism companies tumbled 2.8% each, while media shares shed 2.1%, as box office sales plunged over the holiday.

** Furthermore, a private-sector business survey showed on Saturday that China’s services activity in September contracted for the first time in four months.

** An index measuring China’s semiconductor firms tumbled 7.1%, and Shanghai’s tech-focused board STAR Market declined 4.5%.

** The Joe Biden administration published a sweeping set of export controls on Friday, including a measure to cut China off from certain semiconductor chips made anywhere in the world with US equipment, to slow Beijing’s technological and military advances.

** However, Chinese real estate developers rose 1% following the country’s latest measures to prop up the distressed property sector.

** Beijing is ramping up efforts to boost home sales by easing mortgage rate floors, cutting interest rate on provident fund loans and offering individual income tax rebates for home buyers.

** Premier Li Keqiang said China will strive to consolidate its economic recovery as the country’s development faces difficulties and challenges.

** Energy suppliers also jumped 1.9%, as Chinese industry players catched up with global peers’ gains made over the holiday.

** Tech firms listed in Hong Kong tumbled 4%, with food-delivery giant Meituan down 6.7%.

** “Overall valuation in China’s stock market is attractive from a long-term perspective,” said analysts at China Asset Management Co. “Key indexes are bottoming, while a turning point will depend on domestic and overseas policies.”

** They added that once the US inflation data peaked, the Wall Street will likely see a rebound, which can help improve global risk appetite.

(Reporting by Shanghai Newsroom; Editing by Sherry Jacob-Phillips)

German bond yields edge lower as explosions rock Kyiv

LONDON, Oct 10 (Reuters) – German government bond yields edged lower on Monday after blasts rocked the Ukrainian capital Kyiv and other major Ukrainian cities, prompting a move into traditional safe-haven assets such as core government bonds.

Large explosions shook Kyiv and other cities on Monday morning in apparent Russian revenge strikes after President Vladimir Putin declared an explosion on the bridge to Crimea to be a terrorist attack.

Weak services data from China, renewed COVID concerns in the country and a set of new export controls introduced by the Biden administration, including a measure to cut off China from certain semiconductor chips, were also weighing on sentiment, according to Mizuho rates strategist Evelyne Gomez-Liechti.

“The Crimean bridge and the explosions really didn’t fit well with risk sentiment,” Gomez-Liechti said.

“Those are the drivers that have probably hurt sentiment and are driving some strength in the bond markets.”

By 0800 GMT, Germany’s 10-year government bond yield, the euro area’s benchmark, was down 3.5 basis points at 2.16%. Bond yields move inversely to prices.

Germany’s 2-year yield was down 8 bps to 1.783%.

US government bond markets are closed on Monday for the Columbus Day holiday.

Euro zone government bond yields had jumped on Friday after strong US jobs data dampened expectations that the Federal Reserve will slow the pace of interest rate hikes.

Nonfarm payrolls increased by 263,000 last month, the US Labor Department said, above expectations of 250,000 in a Reuters poll.

“The accelerating sell-off on Friday underscores how data-sensitive the market remains,” said Commerzbank rates strategist Rainer Guntermann in a note.

Guntermann highlighted that the unemployment rate declined back to a record low which provides “no evidence for the Fed to slacken the fight against inflation”.

Investors were now bracing for key US inflation data on Thursday this week for clues on the size of the next Federal Reserve rate hike next month.

“I think the bar is very high if you want to see the Fed doing anything less than 75bps,” Mizuho’s Gomez-Liechti added.

Money markets are pricing in an over 85% chance of a fourth consecutive 75 basis-point rate hike at the November meeting, according to Refinitiv data.

European Central Bank (ECB) officials have affirmed their commitment to take inflation back down to target, even in the face of a slowing economy.

France’s Francois Villeroy de Galhau said the central bank is engaged in bringing down inflation to 2% in two to three years from now, while Germany’s Joachim Nagel said on Friday that the next policy meetings must send out “clear signals” on reacting on inflation.

In Britain, the Bank of England said it was ready to increase the size of its daily purchases of government bonds to ensure sufficient capacity ahead of the end of its emergency programme to calm recent turmoil in the gilt market which is due to end on Friday.

Britain’s 10-year gilt yield was up 1.5 bps to 4.25%.

(Reporting by Samuel Indyk, editing by Ed Osmond)

Philippines makes cellphone SIM registration compulsory to fight scams, fraud

MANILA, Oct 10 (Reuters) – Philippines President Ferdinand Marcos Jr on Monday signed into law a measure making cellphone SIM registration compulsory, in a key step towards fighting text scams, bank fraud and misinformation.

The law will require users to furnish full names and identity documents before buying a SIM card, with the aim of preventing criminals from concealing their identities.

“We will finally achieve what has long been overdue, an effective means of regulating the issuance of SIM cards to curb the spread of spam text messages and scams,” Marcos said in a speech.

The Philippines has one of Asia’s highest smartphone penetration rates, at 61% of its population of 110 million. People have relied heavily on mobile devices for shopping, food delivery orders and banking during the pandemic.

Marcos’ predecessor, Rodrigo Duterte, vetoed the legislation because of a now-deleted provision requiring social media users to register their identities and phone numbers.

Under the new law, existing pre-paid users are compelled to register.

The country’s telecoms providers, which have blocked more than 1 billion spam and suspicious text messages this year, welcomed the new measure.

PLDT (TEL) said preparations are underway to comply with the new registration requirements, while Globe Telecom and DITO Telecommunity called for a wider rollout of the national identification system to help verify users.

Thousands of Filipinos have lost small amounts of money to phishing via short messaging services this year, but only a few have filed formal complaints, the information and communications ministry said.

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

Britain’s BoE doubles potential bond buy-backs as emergency plan nears end

LONDON, Oct 10 (Reuters) – The Bank of England sought to ease concerns about this week’s expiry of its program designed to calm turmoil in the government bond market, announcing new safety-net measures including a doubling of the maximum size of its debt buy-backs.

Finance minister Kwasi Kwarteng last month sparked a bond rout with plans for unfunded tax cuts, prompting the BoE to say on Sept. 28 it would buy up to 5 billion pounds (USD 5.53 billion) a day of gilts of at least 20 years duration until Oct. 14.

So far, the BoE has bought far less than the minimum daily limit, but on Monday it said it was taking further steps to ensure the scheme concludes smoothly.

“In the final week of operations, the Bank is announcing additional measures to support an orderly end of its purchase scheme,” the British central bank said in a statement.

Although the maximum auction size was raised to 10 billion pounds in Monday’s operation the BoE bought only 853 million pounds’ worth of debt.

That left its total of bonds acquired since the launch of the emergency program at less than 6 billion pounds, compared with the 50 billion pound maximum it could have bought.

The BoE said in its statement earlier on Monday that it was prepared to deploy unused purchasing capacity in the remaining auctions this week.

The BoE also said it would launch a temporary expanded collateral repo facility to help banks ease liquidity pressures facing client funds caught up in the turmoil, which threatened pension funds.

The liquidity insurance operations would run beyond the end of this week and would accept a wider range of collateral than usual, including corporate bonds.

In a third move, the BoE said it was prepared to support further easing of liquidity pressures facing liability-driven investment funds through its regular Indexed Long Term Repo operations each Tuesday.

The sharp sell-off in British government bonds after Kwarteng’s “mini-budget” sparked a scramble for cash by Britain’s pension funds which had to post emergency collateral in LDIs.

In a move aimed at calming investors’ nerves, Kwarteng said on Monday he would bring forward his medium-term fiscal plan, including an explanation of how the tax cuts will be paid for, to Oct. 31 from Nov. 23, with independent budget forecasts to be published the same day.

The earlier date will allow the BoE to understand the government’s tax and spending plans before it announces its next interest rate decision on Nov. 3.

“You have lots of risk events coming,” Pooja Kumra, senior European rates strategist at TD Securities, said. “Markets will be looking at each and every auction.”

Yields on British 20- and 30-year gilts jumped by nearly 30 basis points on Monday, approaching their levels during the worst of the market rout triggered by Kwarteng’s mini-budget and adding to a recent run of daily increases.

Antoine Bouvet, a strategist at ING, said low take up of the BoE’s facility so far suggested that risk reduction by pension funds had been limited to date, and the central bank wanted to show it could deploy more support.

“The closer we get to Friday the more gilts will sell off,” Bouvet said. “The bigger picture here is that the functioning of the gilt market is still impaired.”

(USD 1 = 0.9035 pounds)

(Additional reporting by Tommy Wilkes, Harry Robertson, Muvija M and Sachin Ravikumar; Writing by William Schomberg; Editing by Catherine Evans)

Philippines partially awards 91-day, 182-day T-bill offers

MANILA, Oct 10 (Reuters) – Following are the results of the Philippine Bureau of the Treasury’s (BTr) auction of T-bills on Monday:

* BTr awards 1.27 billion pesos ($21.53 million) of 91-day T-bills vs 5 billion pesos offer at 3.819% avg yield

* BTr awards 2.695 billion pesos of 182-day T-bills vs 5 billion pesos offer at 4.415% avg yield

* BTr rejects all bids for 364-day T-bills

* Details are on the BTr’s website www.treasury.gov.ph

($1 = 58.99 Philippine pesos)

(Reporting by Enrico Dela Cruz; Editing by Ed Davies)

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