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MANILA, Aug 2 (Reuters) – Following are results of the Philippine Bureau of the Treasury’s (BTr) auction for a new issue of 3.5-year T-bonds on Tuesday:
* BTr fully awards 35 billion pesos (USD 632.40 million) at 5.25% coupon rate
* Tenders total PHP 106.323 billion
* Details on the BTr’s website www.treasury.gov.ph
(USD 1 = 55.3450 Philippine pesos)
(Reporting by Enrico Dela Cruz; Editing by Martin Petty)
Aug 2 (Reuters) – Oil prices dropped again on Tuesday as investors absorbed a bleak outlook for fuel demand with data pointing to a global manufacturing downturn just as major crude producers meet this week to determine whether to increase supply.
Brent crude futures fell 77 cents, or 0.8%, to USD 99.26 a barrel by 0421 GMT, while WTI crude futures eased 67 cents, or 0.7%, to USD 93.22 a barrel.
The slide came after Brent futures slumped on Monday to a session low of USD 99.09 a barrel, their lowest since July 15. The US crude benchmark dropped to as low as USD 92.42 a barrel, its weakest since July 14.
“Crude prices tumbled after a wealth of factory activity data suggested the world is headed towards a giant global economic contraction, and on expectations for more oil output following a very good earnings season for oil companies,” said Edward Moya, senior market analyst from OANDA, in a note.
Recessionary concerns were heightened on Monday as surveys from the United States, Europe and Asia showed that factories struggled for momentum in July. Flagging global demand and China’s strict COVID-19 restrictions slowed production.
The price drops also come as market participants await the outcome of a meeting on Wednesday between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+, to decide on September output.
Two of eight OPEC+ sources in a Reuters survey said that a modest increase for September would be discussed at the Aug. 3 meeting. The rest said output is likely to be held steady.
A Fox Business news reporter said Saudi Arabia will push OPEC+ to increase oil production at the meeting.
“The upward momentums of oil prices has been gradually fading … Once the supply and demand situation shows any sign of further deterioration, oil is likely to lead the decline among commodities,” analysts from Haitong Futures said.
Meanwhile the United States on Monday imposed sanctions on Chinese and other firms it said helped to sell tens of millions of dollars’ in Iranian oil and petrochemical products to East Asia as it seeks to raise pressure on Tehran to curb its nuclear program.
Also casting a cloud over the market is the possibility of a visit to Taiwan by US Speaker of the House Nancy Pelosi, despite Beijing’s warnings against it. The visit would mark the first time a high-profile US official has been on the island in over 25 years, which could escalate tensions between the US and China.
(Reporting by Stephanie Kelly and Muyu Xu; Editing by Kenneth Maxwell)
SINGAPORE, Aug 2 (Reuters) – Treasuries rallied in Asia on Tuesday as nervousness that US Speaker Nancy Pelosi’s visit to Taiwan would intensify Sino-US tensions had investors buying safe assets such as bonds.
Longer-dated Treasuries were already well bid since weakening US economic data has markets expecting a slowdown in both US growth and the pace of interest rate hikes.
Benchmark 10-year Treasuries built on those gains, with yields falling as much as 9 basis points to 2.5160%, a four-month low. Twenty-year and 30-year yields also fell a few points before steadying.
Two-year yields held at 2.8260%.
House of Representatives Speaker Pelosi was expected to arrive in Taipei on Tuesday, people briefed on the matter said. China has repeatedly warned against her visit and Asian financial stock markets fell, especially in China.
“The back end is more a pure safe haven,” said ING’s Asia economist Rob Carnell, though adding it was both sentiment and the US economic outlook that were supporting the market.
“Not only have you got peak rate hikes, but you’ve got peak inflation as a theory which has been gathering some pace.”
Last month the Federal Reserve said incoming economic data would be guiding its policy, which investors took to mean that the pace and size of hikes would drop.
US manufacturing activity then dipped to its lowest since June 2020 last month, data released on Monday showed and a slowdown in input price rises offered a hint of a peak in inflation.
(Reporting by Tom Westbrook; Editing by Shri Navaratnam)
Aug 2 (Reuters) – Gold prices notched a four-week high on Tuesday and extended their winning streak to a fifth session, as a dip in the US dollar and Treasury yields boosted demand for the safe-haven metal amid heightened worries over a global economic slowdown.
Spot gold was up 0.2% at USD 1,774.38 per ounce, as of 0402 GMT, after hitting its highest since July 5 at USD 1,780.39 earlier in the session.
US gold futures gained 0.2% to USD 1,790.80 per ounce.
The dollar weakened 0.2% to a near one-month low against its rivals, making greenback-denominated gold less expensive for other currency holders.
Benchmark US 10-year Treasury yields dropped to a four-month low, reducing the opportunity cost of holding non-interest bearing gold.
“Gold could push a little higher towards mid USD 1,800 because the dollar will continue to weaken over the course of August as a lot of the macro numbers in the US are starting to look worse,” said Edward Meir, an analyst with ED&F Man Capital Markets.
“If things continue to deteriorate the Federal Reserve could maybe stop raising rates at some point to let the economy heal and more importantly, in Europe and China, we could start seeing some kind of stimulus spending.”
Factories across the United States, Europe and Asia had struggled for momentum last month, as flagging global demand and China’s strict COVID-19 restrictions slowed production, surveys showed on Monday.
The recent batch of weak US economic readings pointed to a slowdown that could prompt the Fed to be less aggressive in its monetary policy tightening plans.
Gold, which tends to appreciate on expectations of lower interest rates, has gained nearly USD 100 since falling on July 21 to its lowest level in more than one year.
Investors were also keeping watch on possible escalation in Sino-US tension with US House of Representatives Speaker Nancy Pelosi set to begin a visit to Taiwan amid objections from China.
Spot silver fell 0.6% to USD 20.22 per ounce, platinum was up 0.2% at USD 907.98, and palladium rose 0.3% to USD 2,199.67.
(Reporting by Brijesh Patel in Bengaluru; Editing by Rashmi Aich and Sherry Jacob-Phillips)
TOKYO, Aug 2 (Reuters) – Asia stocks continued a decline from Wall Street on Tuesday, and US long-term Treasury yields sank to a four-month low, pulling the US dollar down against the yen and other currencies as investors worried about the risk of global recession.
There were also jitters about an escalation in Sino-US tension with US House of Representatives Speaker Nancy Pelosi set to begin a visit to Taiwan against the objections of China, which regards the self-governed island as a breakaway province.
Australian equities declined amid an uncertain outlook for commodity demand – which also weighed on crude oil prices – while the local dollar hovered near its highest versus its US counterpart since mid-June with the central bank widely expected to deliver a third consecutive half-point interest rate hike later in the day.
The Australian and South Korean .KS11 equity benchmarks suffered losses of about 0.3% each, while Japan’s Nikkei .N225 tumbled 1.17%.
Chinese blue chips .CSI300 dropped 1.06% and Hong Kong’s Hang Seng lost 1.1%.
Taiwan’s stock index slid 1.68%.
MSCI’s broadest index of Asia-Pacific shares retreated 0.8%.
US e-mini stock futures pointed to a 0.31% lower restart for the S&P 500, which stumbled 0.28% overnight.
The week began with China, Europe and the United States reporting weakening factory activity, with that in the US decelerating to its lowest level since August 2020.
That sank crude, with Brent futures edging down to USD 99.74 on Tuesday after losing almost USD 4 overnight. US West Texas Intermediate futures also eased to USD 93.67, extending Monday’s almost USD 5 slide.
“Data releases over the past 24 hours have provided further evidence the global economy is slowing,” National Australia Bank strategist Rodrigo Catril wrote in a note to clients.
“Signs of a slowdown are building” in the United States, while “China’s reopening activity burst is over,” he said.
The benchmark 10-year US Treasury yield fell as low as 2.53% in Tokyo trade, the lowest since April 5, amid wagers the slowdown could spur the US Federal Reserve to ease its foot off the policy-tightening pedal. The bonds also benefited from safety-seeking demand before Pelosi’s Taiwan visit, analysts said.
That helped the US dollar slide as low as 130.595 yen for the first time since June 6. The euro jumped as high as USD 1.0294, a level not seen since July 5.
The Taiwan dollar slipped to its lowest level in more than two years on the weaker side of 30 per US dollar.
Meanwhile, the Aussie was more subdued, retreating 0.26% to USD 0.7009, but after hitting the highest since June 17 at USD 0.7048 in the previous session.
Analysts polled by Reuters expect the Reserve Bank of Australia to hike by 50 basis points both on Tuesday and again at its next meeting in September as it races to rein in inflation.
Market participants also see a half-point bump later as a certainty, and have priced an additional 37 basis points of tightening for the September decision.
(Reporting by Kevin Buckland)
Aug 2 (Reuters) – Oil prices edged lower on Tuesday, extending losses from the previous session, as investors worried about global oil demand following weak manufacturing data in several countries.
Brent crude futures fell 29 cents to USD 99.74 a barrel by 0002 GMT, with WTI crude futures down 22 cents at USD 93.67 a barrel.
The slide came after Brent futures slumped on Monday to a session low of USD 99.09 a barrel, their lowest since July 15. The US crude benchmark dropped to as low as USD 92.42 a barrel, its weakest since July 14.
Prices have been volatile, as investors weigh tight global supply with fears of a potential global recession.
Recessionary concerns were heightened on Monday as surveys from the United States, Europe and Asia showed that factories struggled for momentum in July. Flagging global demand and China’s strict COVID-19 restrictions slowed production.
The price drops also come as market participants await the outcome of a meeting on Wednesday between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+, to decide on September output.
A Fox Business news reporter said Saudi Arabia will push OPEC+ to increase oil production at the meeting.
Two of eight OPEC+ sources in a Reuters survey said that a modest increase for September would be discussed at the Aug. 3 meeting. The rest said output is likely to be held steady.
Meanwhile the United States on Monday imposed sanctions on Chinese and other firms it said helped to sell tens of millions of dollars’ in Iranian oil and petrochemical products to East Asia as it seeks to raise pressure on Tehran to curb its nuclear program.
(Reporting by Stephanie Kelly; Editing by Kenneth Maxwell)
NEW YORK, Aug 1 (Reuters) – Wall Street ended a three-day winning streak and crude prices plunged on Monday as economic data from the US, Europe and China showed demand weakening under inflation pressures, while the looming possibility of recession curbed risk appetite.
All three major US indexes ended the choppy session modestly lower on the first day of August, on the heels of the S&P 500’s and the Nasdaq’s largest monthly percentage gains since 2020.
“It’s a consolidation,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. “Investors are waiting to see if we get follow through or continue it’s downward trend.”
The Institute for Supply Management’s (ISM) purchasing managers’ index (PMI) showed US factory activity decelerated in July to its lowest level since August 2020, but remained in expansion territory and long-running supply restraints appeared to be easing.
The report follows a swath of data from Europe and Asia that showed factory activity slowing or contracting in the face of dampened global demand and persistent inflation.
“There seems to be a comfort level that economy is slowing but demand isn’t going to collapse,” Carlson said. “Is the Fed going to take its foot off the gas pedal and stop raising rates?” That would appear to be what the market is watching.”
“It’s a tug-of-war between those that think the market has already fully discounted the economic slowdown and those that feel it hasn’t,” Carlson added.
The Dow Jones Industrial Average .DJI fell 46.73 points, or 0.14%, to 32,798.4, the S&P 500 .SPX lost 11.68 points, or 0.28%, to 4,118.61 and the Nasdaq Composite .IXIC dropped 21.71 points, or 0.18%, to 12,368.98.
The energy sector pulled European stocks lower after disappointing data from the eurozone and China fueled fears of weakening demand and economic contraction. nL4N2ZD1M5
The pan-European STOXX 600 index lost 0.19% and MSCI’s gauge of stocks across the globe gained 0.06%.
Emerging market stocks lost 0.06%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.11% higher, while Japan’s Nikkei .N225 rose 0.69%.
Crude prices headed lower as global factory data weighed on the demand outlook, and as market participants braced for this week’s meeting of OPEC and other oil producers concerning world crude supply.
US crude fell 4.73% to settle at 93.89USD per barrel, and Brent settled at USD 100.03 per barrel, down 3.94% on the day.
US Treasury yields slid in choppy trading as economic data continued to hint at an impending slowdown which could prompt the Federal Reserve to slow the pace of interest rate increases.
Benchmark 10-year notes last rose 15/32 in price to yield 2.5893%, from 2.642% late on Friday.
The 30-year bond last rose 35/32 in price to yield 2.9206%, from 2.977% late on Friday.
The dollar touched its lowest level against the Japanese yen since June and the dollar index, which measures its performance against a basket of world currencies, was volatile in the wake of the PMI data.
The dollar index fell 0.47%, with the euro up 0.38% to USD 1.0257.
The Japanese yen strengthened 1.20% against the dollar to 131.64, while sterling was last trading at USD 1.2255, up 0.73% on the day.
Gold prices edged higher as the dollar softened, as investors looked to economic data for clues regarding the pace of interest rate hikes from the US Federal Reserve.
Spot gold added 0.4% to USD 1,771.89 an ounce.
(Reporting by Stephen Culp; Additional reporting by Carolyn Cohn in London; Editing by David Holmes, Tomasz Janowski, and Cynthia Osterman)
Aug 1 (Reuters) – Wall Street ended lower after a choppy session on Monday, with declines in Exxon Mobil (XOM) and other energy companies weighing against gains in Boeing (BA) as investors digested the US stock market’s biggest monthly gains in two years.
Stocks gave up some of a strong rally from last week that was driven by bets the Federal Reserve may not need to be as aggressive with interest rate hikes as some had feared.
Also helped by stronger-than-expected second-quarter results, the S&P 500 and the Nasdaq in July posted their biggest monthly percentage gains since 2020.
The S&P 500 bounced between gains and declines on Monday as some investors became more cautious in the wake of that recent rally.
The Federal Reserve says it aims to tame inflation and cool down demand with the interest rate hikes, but some investors and analysts worry that its aggressive moves could drive up unemployment and cripple the economy.
“There are still a lot of questions about whether we are really out of the woods economically, and we probably aren’t,” said Tom Martin, senior portfolio manager at GLOBALT Investments in Atlanta. “We’re not even close on the (economic) effects of the Fed raising interest rates.”
US manufacturing activity slowed-less-than-expected in July, with signs that supply constraints are easing, a report showed.
That data came on the heels of surveys indicating factories across Asia and Europe struggled for momentum in July as flagging global demand and China’s strict COVID-19 curbs slowed production.
Oil prices fell on demand concerns, which in turn weighed on the energy sector. The S&P 500 energy index tumbled and was the deepest decliner among 11 sectors.
Exxon Mobil slid 2.5% and was among the stocks contributing the most to the S&P 500’s decline.
A monthly US jobs report on Friday will be parsed for clues about the Fed’s next moves in its fight against decades-high inflation.
The US central bank has raised interest rates by 2.25 percentage points so far this year and has vowed to be data-driven in its approach toward future hikes.
Boeing Co. (BA) gained 6.1% after Reuters reported the US aviation regulator approved the planemaker’s inspection and modification plan to resume deliveries of 787 Dreamliners.
The S&P 500 is down about 14% in 2022. However, recent quarterly reports have shown companies’ profits were far more resilient than estimated. Of 283 S&P 500 companies that have reported results, 78% have topped profit estimates, as per Refinitiv data. The long-term average is 66%.
The S&P 500 declined 0.28% to end the session at 4,118.59 points.
The Nasdaq declined 0.18% to 12,368.98 points, while Dow Jones Industrial Average declined 0.14% to 32,798.60 points.
US House of Representatives Speaker Nancy Pelosi was set to visit Taiwan on Tuesday. China warned that its military would never “sit idly by” if she visited the self-ruled island claimed by Beijing.
PerkinElmer Inc. (PKI) jumped after the medical diagnostic firm said it will sell some of its businesses along with the brand name to private equity firm New Mountain Capital for up to USD 2.45 billion in cash.
Across the US stock market, declining stocks outnumbered rising ones by a 1.1-to-one ratio.
The S&P 500 posted 5 new highs and 31 new lows; the Nasdaq recorded 68 new highs and 98 new lows.
Volume on US exchanges was relatively light, with 10.3 billion shares traded, compared to an average of 10.8 billion shares over the previous 20 sessions.
(Reporting by Aniruddha Ghosh, Devik Jain and Bansari Mayur Kamdar in Bengaluru, and by Noel Randewich in Oakland, Calif.; Editing by Aurora Ellis)
NEW YORK, Aug 1 (Reuters) – The US Treasury said on Monday it expects to borrow USD 444 billion in the third quarter, more than the May estimate of a USD 182 billion, due to changes in projections of fiscal activity and the estimated impact of redemptions in the Federal Reserve System Open Market Account.
The third-quarter estimate assumes an end-of-September cash balance of USD 650 billion.
It expects to borrow USD 400 billion in privately held net marketable debt in the October to December quarter, assuming an end-of-December cash balance of USD 700 billion.
The Treasury said it issued USD 7 billion in net debt in the second quarter, ending the three-month period with a cash balance of USD 782 billion.
(Reporting by Karen Brettell)
Aug 1 (Reuters) – Global thematic funds are facing heavy outflows this year as investors’ fascination fade with such assets, most of which are closely correlated with economic growth.
Investors had piled into such funds over the past couple of years as they allocated money to high-growth sectors and stocks tied to trending themes such as work-from-home, climate change, and artificial intelligence.
However, growth stocks have slumped this year, due to a rapid rise in interest rates around the world, and that has reduced the demand for thematic funds.
According to Morningstar, thematic funds witnessed a record outflow of USD 6.3 billion in the first half of this year, compared with an inflow of USD 142.9 billion in the same period last year.
Their net assets also dropped to USD 616.9 billion at the end of June, a 24% drop over the past year.
These declines have prompted fund houses to launch just 65 thematic funds in the first half of this year, compared with a record 234 in the same period last year.
“Thematic funds are known to be among the most risky categories of mutual funds, in part because it restricts the opportunities available. It prohibits the fund from investing in stocks that are not related to the theme,” said Richard Gardner, chief executive officer at financial services firm Modulus Global.
“In a bear market, investors tend to be incredibly risk averse. So, it is only natural that thematic funds would see lessened interest.”
POPULAR THEMES
The ETF All-Stars Thematic Composite index, which consists of stocks that align with popular themes such as fintech, sustainability and healthcare innovation, has declined 28.76% this year, compared with the MSCI World index’s fall of 15%.
The Global Robotics Automation index has slumped 26.84% this year, after delivering an average return of 30% in the last three years.
Global cannabis stocks tracker MJ ETF has fallen 46.8% this year.
The Morningstar data showed robotics and automation funds faced USD 1.6 billion worth of outflows in the first half of this year, while fintech and digital economy funds had net sales of about USD 1.3 billion each.
The net assets of cannabis funds declined to USD 1.3 billion at the end of June, a 68% drop over last year, while the assets of fintech funds dropped to USD 8.6 billion, a 60% decline.
Though thematic funds are lucrative investments, investors often tend to pile into them after their initial big run-ups, exiting at losses, some analysts said.
“Since every theme focuses on different aspects, it is possible that some have already lived their time,” said Kunal Sawhney, CEO at independent research firm Kalkine.
A Morningstar report showed that over the past 10 years, nearly 60% of US thematic funds had shuttered, and just 22% survived and outperformed the broader global markets index.
“In 2021, more than two-thirds of thematic funds underperformed the Morningstar Global Markets Index,” Morningstar said. “This is a sharp reversal from their stellar showing in 2020, highlighting the volatility that goes hand in hand with thematic investing.”
(Reporting by Patturaja Murugaboopathy; Editing by Vidya Ranganathan and David Holmes)
