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MANILA, Sept 9 (Reuters) – The Philippines posted a record high trade deficit of USD 5.93 billion in July, as the value of imports increased at double-digit pace while exports contracted, government data showed on Friday.
Imports rose 21.5% from a year earlier to USD 12.1 billion, while exports fell 4.2% to USD 6.2 billion, the Philippine Statistics Authority said
(Reporting by Neil Jerome Morales and Enrico Dela Cruz; Editing by Martin Petty)
SINGAPORE, Sept 9 (Reuters) – The dollar took a breather from its surging rally on Friday as markets digested yet more hawkish Fed speak, while the euro hung on to parity, helped by an outsized rate hike from the European Central Bank.
Currency moves overnight were calmer for once even as Federal Reserve Chair Jerome Powell reaffirmed the central bank’s aggressive stance against inflation, which reinforced the greenback’s dominance.
The euro was up 0.52% at USD 1.0050, inching away from its two-decade trough of USD 0.9864 hit earlier in the week as speculators took profits on crowded short positions.
The ECB on Thursday raised its key interest rates by an unprecedented 75 basis points and promised further hikes to come in its fight against inflation, even as the bloc is likely heading towards a winter recession and gas rationing.
The single currency is on track for a 0.9% weekly gain, snapping three straight weeks of decline, but has nonetheless fallen more than 10% this year.
Meanwhile, sterling was last up 0.43% to USD 1.1547, reversing its losses from the previous session.
The pound fell overnight after news that Queen Elizabeth, Britain’s longest-reigning monarch and the nation’s figurehead for seven decades, died peacefully on Thursday at the age of 96.
The US dollar index was down 0.25% to 109.25, just off a 20-year top of 110.79.
“Effectively, the ECB and Powell kind of cancel each other out, so there was sort of volatility, but at the end, not much happened in that sense,” said Rodrigo Catril, a currency strategist at National Australia Bank.
“I think the market now is starting to look towards next week, US CPI, and I think to some extent, that will set the tone in terms of what to expect from the Fed.”
Against the Japanese yen, the dollar was last down 0.29% to 143.69, but is up nearly 3% on the week, the largest weekly gain since June.
The yen fell to a 24-year low this week as the policy divergence between the Bank of Japan’s ultra-dovish stance and the rest of the world, particularly the Fed, proved too stark to be ignored.
Japan’s top currency diplomat said on Thursday that the country is ready to take action in the market and will not rule out any options to address “clearly excessive volatility” seen in the yen.
Officials from the Ministry of Finance, the Bank of Japan (BOJ) and the Financial Services Agency (FSA) met the same day to discuss the slide.
“The arguments from the BoJ that a lower currency is net beneficial for the economy starts to ring hollow when the cost of living is still rising, given those energy prices that have been exacerbated by a much weaker yen,” said NAB’s Catril.
The Australian and New Zealand dollars also made early gains in Asia trade, recovering from dips overnight.
The Aussie was up 0.55% to USD 0.6788, while the kiwi was up 0.47% to USD 0.6084, though the two antipodean currencies were on track for another weekly loss.
(Reporting by Rae Wee; Editing by Lincoln Feast)
Sept 8 (Reuters) – Wall Street’s main indexes posted gains on Thursday mainly lifted by financial institutions and healthcare companies, as investors digested hawkish remarks from policymakers that cemented bets of a large interest rate hike later this month.
Indexes bounced back and forth in a choppy trading as concerns over Federal Reserve’s next steps to tame a surging inflation remain.
“There’s just a lot of uncertainty and I think people aren’t going to really make up their minds for longer than five minutes or five seconds, you know, until there’s a little bit more clarity or light at the end of the tunnel,” said Grace Lee, an equity income senior portfolio manager at Boston-based Columbia Threadneedle Investments.
Money market traders see 87% odds that the Fed will hike rates by 75 basis points at this month’s meeting.
Bank of America, Barclays and Jefferies said they now see a 75-basis points interest rate hike. Before Barclays had said it could be a 50- or 75-basis point increase, while Bank of America and Jefferies were betting on a 50-basis point rise.
Federal Reserve Chair Jerome Powell said the central bank is “strongly committed” to bringing inflation down and needs to keep going until it gets the job done.
Chicago Fed President Charles Evans joined his fellow policymakers in saying that reining in inflation is “job one.”
Investors are also awaiting the US August inflation report next week for fresh clues on whether the Federal Reserve will hike rates by half or three-quarters of a percentage point at the next policy meeting due Sept. 20-21.
Worries over aggressive monetary tightening across the globe stalled equity markets on Thursday after the European Central Bank hiked interest rates by an unprecedented 75 basis points and signaled further hikes.
Meanwhile, data showed the number of Americans filing new claims for unemployment benefits fell last week to a three-month low, underscoring the robustness of the labor market even as the Fed raises interest rates.
With increasing odds of another outsized rate hike, both the rate-sensitive S&P 500 bank index and the S&P 500 healthcare sector rose 2.8% and 1.8%, respectively.
The healthcare sector was boosted by news that Regeneron Pharmaceuticals Inc’s anti-blindness treatment Eylea was shown to work as well when given at a higher dose at a longer interval between injections. The drugmaker’s shares jumped 18.8%.
“People are embracing safety. Healthcare is a very safe sector and it’s still fairly cheap, the same way with the broader financial sector,” said Lee.
The Dow Jones Industrial Average rose 193.24 points, or 0.61%, to 31,774.52, the S&P 500 gained 26.31 points, or 0.66%, to 4,006.18 and the Nasdaq Composite added 70.23 points, or 0.6%, to 11,862.13.
GameStop Corp surged 7.4% after the video game retailer reported a smaller-than-expected quarterly loss.
American Eagle Outfitters Inc. tumbled 8.7% after the apparel maker missed second-quarter profit estimates and said it would pause quarterly dividend as it fortifies its finances against a hit from inflation.
Volume on US exchanges was 10.19 billion shares, compared with the 10.37 billion average for the full session over the last 20 trading days.
On Wednesday, Wall Street’s main indexes climbed the most in about a month as bond yields retreated after a recent surge that was driven by expectations of higher interest rates. Still, the benchmark S&P 500 is down over 16% year-to-date.
Advancing issues outnumbered declining ones on the NYSE by a 1.34-to-1 ratio; on Nasdaq, a 1.48-to-1 ratio favored advancers.
The S&P 500 posted 7 new 52-week highs and 8 new lows; the Nasdaq Composite recorded 37 new highs and 153 new lows.
(Reporting by Carolina Mandl, with additional reporting by Sruthi Shankar, Ankika Biswas and Anisha Sircar in Bengaluru; Editing by Saumyadeb Chakrabarty, Maju Samuel, Vinay Dwivedi and Aurora Ellis)
Sept 8 (Reuters) – The dollar index eased slightly on Thursday, shedding gains that followed hawkish comments from Fed Chair Jerome Powell as weakness associated with the ECB’s historic 75bp rate hike reappeared in late trading.
Markets are pricing in a third straight 75-bp Fed hike at the Sep. 21 meeting, but broad profit-taking on overbought dollar positions is part of the mix ahead of next week’s key US CPI and retail sales reports.
EUR/USD’s initial rise following the ECB hike came as there was some doubt whether the ECB would hike rates 50bp or 75bp, which sent 2-year bund yields up 31.8bp versus a 4bp rise in 2-year Treasury yields.
EUR/USD ran into sellers by the falling 21-day moving average on Powell’s comments and traders remain wary about the euro zone’s economic prospects compared to the US
The ECB shifted its 2023 GDP forecast sharply lower and inflation forecast higher. The EU and UK are scrambling to provide fiscal relief to offset the surge in energy costs since the pandemic receded and Russian energy supplies were throttled.
The Fed is less constrained since the US is a major energy producer and natgas exporter. Even after the 75bp hike to 0.75%, the ECB is well behind the Fed’s current 2.5% policy rate, with a third 75bp hike expected on Sept. 21.
Before then attention will be on next week’s US CPI and retail sales reports and energy-related issues.
EUR/USD recovered to about flat, but below its high of 1.0030 on EBS near the falling 21-DMA at 1.0038. The 47bp narrowing of the 2-year bund-Treasury yield spreads since August’s lows offers some support, as does broader consolidation of dollar gains since Wednesday’s peak.
That peak seemed timed by USD/JPY’s 24-year high Wednesday at 144.99 on EBS that was buttressed somewhat by broadening Japanese warnings about the yen’s rapid retreat.
USD/JPY was up 0.2% Thursday, but well within Wednesday’s 142.75-144.99 range. The BOJ’s negative interest rates and yield curve control leave the yen vulnerable. But the overbought USD/JPY may need US CPI and retail sales data to keep strong Fed hike expectations intact to overcome 145 and FX intervention unease.
Sterling was modestly lower amid choppy trading as the market onboarded UK plans for papering over the looming energy crisis as the BoE finally got some yield competition from the ECB, as well as news that Queen Elizabeth died.
The Australian dollar’s early slip on RBA comments opening the door on slower rate hikes diminished as other central banks will eventually indicate the same.
(Editing by Burton Frierson; Randolph Donney is a Reuters market analyst. The views expressed are his own.)
Sept 8 (Reuters) – Gold prices slipped on Thursday after comments from Federal Reserve Chair Jerome Powell cemented expectation around a 75-basis-point rate hike at its upcoming policy meeting.
The Fed is “strongly committed” to controlling inflation but there remains hope it can be done without the “very high social costs” involved in prior inflation fights, Powell said.
Spot gold fell 0.4% to USD 1,711.05 per ounce by 1:44 p.m. ET (1744 GMT), after hitting a more than one-week high earlier in the session.
US gold futures also settled down 0.4% at USD 1,720.20.
“Powell’s comments are entirely consistent with the Jackson Hole Conference, he’s not pushing back against market pricing for a 75 basis point increase coming at the September meeting,” said Daniel Ghali, commodity strategist at TD Securities.
“There’s a lot of buying support because of this technical range around USD 1,700. But, we’re expecting this level to break in the near term.”
Fed fund futures are now pricing in a 85% chance of a 75-basis-point rate hike by the Fed at its Sept. 20-21 policy meeting.
Gold is highly sensitive to rising US interest rates, as these increase the opportunity cost of holding non-yielding bullion.
Data showed the number of Americans filing new claims for unemployment benefits fell last week to a three-month low, underscoring the robustness of the labor market.
In the wake of Powell’s comments, the dollar earlier rose to hover near its recent peak, making gold more expensive for other currency holders.
Earlier in the day, the European Central Bank raised its key interest rate by an unprecedented 75 basis points and signalled further hikes, prioritising the fight against inflation.
Spot silver was steady at USD 18.51 per ounce, platinum rose 1.5% to USD 879.50 and palladium was up 4.7% at USD 2,139.41.
(Reporting by Brijesh Patel in Bengaluru; Editing by Krishna Chandra Eluri and Shinjini Ganguli)
MANILA, Sept 8 (Reuters) – The Philippine senate launched an investigation on Thursday to identify culprits behind large-scale phishing scams where millions of text messages have been sent to mobile users to try and steal passwords for fraudulent transactions.
The country’s two biggest telecoms providers have said they blocked more than 1 billion spam and suspicious text messages between them this year. PLDT (TEL) and Globe (GLO) have assured their combined 156 million mobile subscribers that cybercriminals have not breached their security systems.
Senator Grace Poe, who heads the senate’s public services committee, called for tighter measures against cybercriminals.
“This is a staggering number of messages that prey upon the vulnerable like those who are unemployed, in need of money or are just unfamiliar with these schemes,” Poe said.
Consumers have reported a surge in phishing attempts during the pandemic as people relied heavily on mobile devices for shopping and food delivery orders and banking.
Poe said it was time for lawmakers to revive a bill, vetoed last year by then President Rodrigo Duterte, that would require SIM card buyers to register with network providers to prevent scams and misinformation. nL3N2WD0NO
Phishing attacks use text messages or emails to lure users into sharing passwords or other sensitive information by inviting them to click on dubious links. There was no available data on Philippine consumers’ losses from phishing.
(Reporting by Neil Jerome Morales; Editing by Kanupriya Kapoor)
Sept 8 (Reuters) – European shares rose on Thursday led by gains in bank stocks after the European Central Bank delivered its biggest-ever interest rate hike to combat inflation, which is running at a half-century high and approaching double-digits.
The ECB raised its benchmark lending rate by 75 basis points, as widely expected, and promised further hikes in an effort to bring inflation back towards the central bank’s 2% medium-term target. nAPN0PLBH7 nL1N30F0AA
“We see today’s decision in favor of the larger step as a signal to markets that the central bank is serious about regaining its inflation-fighting credentials and that is it willing to accept costs in terms of lower growth to ensure price stability,” Morgan Stanley economists wrote in a note.
“September was likely the best moment for the ECB to send this signal, given the expected slowdown ahead.”
The pan-European STOXX 600 index ended a volatile session 0.5% higher, with banks rising 2.3% as the ECB abandoned the two-tier system for the remuneration of excess reserves.
“As rates have gone into positive territory the banks will make more money on lending,” said Sumit Kendurkar, senior trader at Optiver in Amsterdam.
“Previously the ECB used to compensate them for lending at negative interest rates and now that is not going to happen but at the same time they will not be penalized for making more money on the positive rates, which has been taken very positively by investors.”
The basic resources sector added 1.5%, attempting to recover from declines of more than 2% after disappointing China trade data on Wednesday added to worries about metals demand.
The STOXX 600 is down over 0.4% so far this week and is set to end its fourth week in the red as investors fret about soaring energy prices and a cost of living crisis in the wake of Russia’s stoppage of gas flow to Europe through a major pipeline.
European retailers shed 1.6%, with Swedish retailer H&M HMb.ST and Zara-owner Inditex falling after U.S. peer American Eagle Outfitters Inc. missed second-quarter profit estimates late on Wednesday.
Associated British Foods slid 7.6% after it warned of lower profit next year, as its Primark fashion business struggles with rising costs and surging inflation hits demand.
Atos dropped 15.1% to the bottom of STOXX 600 index, after Goldman Sachs downgraded the French IT consulting company to “sell”, saying its weak financial profile and low visibility foretells a long way to recovery.
(Reporting by Shreyashi Sanyal, Sruthi Shankar, Shashwat Chauhan and Devik Jain in Bengaluru; Editing by Rashmi Aich, Krishna Chandra Eluri and Jane Merriman)
LONDON, Sept 8 (Reuters) – The euro was hovering above Tuesday’s two-decade low on Thursday as investors awaited a policy decision from the European Central Bank (ECB) and comments from the head of the Federal Reserve for insight on the path for global monetary tightening.
The ECB is expected to raise rates by 75 basis points (bps), taking its deposit rate above zero for the first time since 2012, but the option of a smaller 50 basis point hike hasn’t been ruled out.
“We expect the ECB to only do 50 basis points today, instead of the consensus view of 75,” said Chris Turner, head of markets at ING. “If that’s the case, we think euro-dollar probably corrects back down to about USD 0.99.”
By 0747 GMT, the euro was trading down 0.3% at USD 0.99795, holding above its lowest level since late 2002 of USD 0.9864 as Europe’s energy crisis keeps the single currency under pressure and the dollar reigns as the Fed reiterates its commitment to bring inflation down to target.
Fed Chair Jerome Powell is scheduled to participate in a discussion at 1310 GMT — overlapping with ECB chief Lagarde’s post-decision press conference — with Fed officials soon due to enter into a blackout period prior to the central bank’s Sept. 20-21 meeting.
Recent Fed rhetoric has continued to be hawkish overall.
Boston Fed President Susan Collins said on Wednesday that bringing inflation back down to 2% is the Fed’s “Job One,” while Vice Chair Lael Brainard said tight monetary policy will continue “for as long as it takes to get inflation down.”
Money markets lay 79% odds that the Fed will hike by another 75 basis points at this month’s meeting, which would increase the fed funds rate to 3.0% to 3.25%.
The US dollar index , which measures the currency against six major counterparts, edged up 0.1% lower to 109.82, after hitting a peak at 110.79 on Wednesday, a level not seen since June 2002.
Sterling weakened 0.4% to USD 1.1486, heading back toward the previous day’s 37-year low of USD 1.1407, ahead of new British Prime Minister Liz Truss’s announcement on her plans to tackle soaring energy bills.
Japan’s yen showed some resilience on Thursday, trading little changed at 143.77 per dollar, after reaching a 24-year low of 144.99 in the previous session.
The yen has been a particular victim of recent dollar strength, partly due to its sensitivity to rising long-term US yields as hawkish Fed bets ramped up and the Bank of Japan remains the holdout dovish central bank.
“Ongoing depreciation pressure on the yen has raised the probability of a change in policy (from the Bank of Japan) later this year,” Goldman Sachs analysts said in a research note.
“If the BoJ drops YCC (yield curve control), rate differentials vs the U.S. should stop widening, and the rise in USD/JPY should pause or reverse.”
Officials from Japan’s Finance Ministry, Bank of Japan and Financial Services Agency are meeting today to discuss global financial markets, the Ministry of Finance (MOF) said.
Meanwhile, the Aussie fell 0.5% to USD 0.67345, earlier tumbling as low as USD 0.6713, after RBA Governor Lowe said in a speech “the case for a slower pace of increase in interest rates becomes stronger as the level of the cash rate rises.”
(Reporting by Samuel Indyk in London, additional reporting by Kevin Buckland in Tokyo
Editing by Raissa Kasolowsky)
TOKYO, Sept 8 (Reuters) – Asian stocks rode a global rally on Thursday, making broad gains as oil prices steadied at lower levels not seen since before Russia’s invasion of Ukraine, though China was an exception as weak data signalled more pressure on the COVID-hit economy.
Futures markets pointed to the rally extending in Europe later in the session, despite an expected ECB rate hike and worries about an energy crisis. Euro Stoxx 50 futures rose 0.4% and FTSE futures edged up 0.09%.
Japan’s Nikkei share average .N225 jumped 2.18%, breaking through the 28,000 psychological barrier for the first time this month as domestic exporters saw boosts from the weaker yen.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.57%, while Australia’s S&P/ASX 200 .AXJO gained 1.63%.
Chinese blue chips fell 0.12%, however, after the release of worse-than-expected trade data on Wednesday and an extension of the lockdown in the city of Chengdu that demonstrated no let-up in the country’s strict zero-COVID policy.
“Today for Asia it’s really a story of whether zero-COVID will continue to impact the Chinese economy, which will of course have a spillover effect in terms of imports,” said Gary Ng, senior economist at Natixis in Hong Kong.
Hong Kong’s Hang Seng index fell 0.35%.
All three major Wall Street indices made significant gains overnight as bond yields eased.
Markets are awaiting a speech by Federal Reserve Chairman Jerome Powell later in the day for signs of any let-up in the central bank’s hawkish approach to tackling inflation.
“I think Powell will signal that the decision for September hasn’t been made yet, but the Fed will remain data dependent,” NatWest Markets analyst Jan Nevruzi wrote in a note.
CME Group’s Fedwatch tool currently shows that expectations for a third successive 75-basis-point interest rate hike are at about 76%, up from 69% a week ago.
“The markets will probably adopt a wait-and-see approach in the short run,” said Ng. “Whether it’s 50 or 75 basis points will be important, but the most important thing is really about whether inflation can peak, and what is the rate hike path of the Fed going forward?”
The yen was hovering just below 144 per dollar after weakening almost as far as 145 overnight. The dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was up slightly at 109.73.
The euro EUR slipped 0.19% to USD 0.99885, after hitting a 20-year low of USD 0.9864 earlier in the week. The European Central Bank is widely expected to raise rates by 75 basis points (bps) later on Thursday (1215 GMT) to fight runaway inflation.
Oil prices recovered slightly from an overnight plunge but remained below USD 90 a barrel for the first time since early February on worries about global recession risks. US crude ticked up 0.88% to USD 82.66 a barrel, while Brent crude rose 0.85 to USD 88.75 per barrel.
Spot gold prices fell 0.15% to USD 1,715.07 an ounce, and leading cryptocurrency bitcoin was last down 0.29% at USD 19,326.00.
(Reporting by Sam Byford; Editing by Kim Coghill)
Sept. 8 (Reuters) – Gold prices dipped on Thursday, as resilient dollar held close to recent highs, while cautious investors awaited comments from US Federal Reserve Chair Jerome Powell and interest rate decision by the European Central Bank later in the day.
Spot gold inched 0.1% lower to USD 1,716.59 per ounce by 0609 GMT, after rising nearly 1% on Wednesday.
US gold futures were little changed at USD 1,728.00.
The dollar index held steady near a two-decade high touched in the previous session.
“A lot of eyes are glued to what Powell will say tonight and whether there’s any view on what the Fed will do at the end of the month,” said Brian Lan, managing director at Singapore-based dealer GoldSilver Central.
Gold hasn’t really regained its shine as a safe-haven with liquidations seen in exchange traded funds (ETFs) and many investors are on the sidelines because of the Fed raising interest rates, Lan added.
Powell will participate in a discussion at Cato Institute conference later in the day, which could be his final public comments before the Sept. 20-21 policy meeting.
Fed officials said on Wednesday they still are not convinced that the worst of the US inflation scare has passed, hinting at continuation of the central bank’s aggressive rate hikes.
The Fed is expected to lift its policy rate by another 50 or 75 basis points this month.
Investors were also expecting a hefty rate increase from the ECB to combat soaring inflation at its policy decision at 12:15 GMT, followed by President Christine Lagarde’s news conference at 12:45 GMT.
Elsewhere, platinum fell 0.4% to USD 863.02 per ounce, and palladium dropped 0.3% to USD 2,037.47.
Silver was little changed at USD 18.5143.
(Reporting by Eileen Soreng and Arundhati Sarkar in Bengaluru; Editing by Sherry Jacob-Phillips and Rashmi Aich)
