Oil retreats on chance of Iran supply boost

MELBOURNE, Aug 9 (Reuters) – Oil prices dipped in early trade on Tuesday on the latest progress in last-ditch talks to revive the 2015 Iran nuclear accord, which would clear the way to boost its crude exports in a tight market.

Brent crude futures fell 27 cents, or 0.3%, to USD 96.38 a barrel at 0027 GMT, paring a 1.8% gain from the previous session.

US West Texas Intermediate (WTI) crude futures declined 24 cents, or 0.3%, to USD 90.52 a barrel, after climbing 2% in the previous session.

“The spectre of a US-Iran nuclear deal continues to hover over the market,” ANZ Research analysts said in a note.

The European Union late on Monday put forward a “final” text to revive the 2015 Iran nuclear deal, awaiting approvals from Washington and Tehran. A senior EU official said a final decision on the proposal was expected within “very, very few weeks”.

“While the details around the timing of the resumption of Iran’s oil exports remain uncertain even if the accord is revived, there is certainly scope for Iran to increase oil exports relatively quickly,” Commonwealth Bank analyst Vivek Dhar said in a note.

He said Iran could boost its oil exports by 1 million-1.5 million barrels per day, or up to 1.5% of global supply, in six months.

“A revival of the 2015 nuclear accord will likely see oil prices fall sharply given that markets probably don’t believe a deal will be reached,” Dhar said.

However, signs that demand may not be dented as much as feared are keeping a floor under the market for now, following stronger-than-expected trade data from China on the weekend and the surprising acceleration in US jobs growth in July.

Traders will be watching out for weekly US oil inventory data, first from the American Petroleum Institute on Tuesday and then the Energy Information Administration on Wednesday.

Five analysts polled by Reuters expect crude stockpiles fell by around 400,000 barrels and gasoline stockpiles declined also by about 400,000 barrels in the week to Aug. 5, while distillate inventories, which include diesel and jet fuel, were unchanged.

(Reporting by Sonali Paul; Editing by Shri Navaratnam)

Wall Street closes little changed on Fed policy fears

Aug 8 (Reuters) – Wall Street closed mostly flat on Monday after blockbuster jobs data last week reinforced expectations the Federal Reserve will crack down on inflation, while a revenue warning from chipmaker Nvidia reminded investors of a slowing US economy.

Stocks retreated from earlier highs as last week’s blowout labor market report was initially seen as a sign the economy could withstand aggressive interest rate hikes by the Fed to tame inflation running at four-decade highs.

Investors now await consumer price data on Wednesday to gauge whether the Fed might ease a bit in its inflation fight and provide better footing for the economy to grow.

“The CPI data will help to confirm if the Fed’s tightening efforts have been successful in starting to tame inflation or if continued Fed tightening is needed,” said Robert Schein, chief investment officer at Blanke Schein Wealth Management.

The Dow Jones Industrial Average rose 29.07 points, or 0.09%, to 32,832.54, while the S&P 500 lost 5.13 points, or 0.12%, to 4,140.06 and the Nasdaq Composite dropped 13.10 points, or 0.1%, to 12,644.46.

Volume on US exchanges was 11.01 billion shares.

The S&P 500 has bounced back 14% from mid-June lows. But signs of inflation running too hot could cement the Fed’s case for aggressive monetary policy tightening.

Anthony Saglimbene, chief market strategist at Ameriprise in Troy, Michigan, said the market was due to pull back at some point as traders test the recent rebound.

“Maybe we can get a little bit higher by year end, but that’s if everything lines up perfectly,” he said, adding that the University of Michigan’s preliminary consumer sentiment survey for August on Friday also will be closely watched.

“That’s the tug of war between these data sets that tell the story about, ‘Hey, are we going to turn into a recession or avoid one?'”

US rate futures have priced in a 67.5% chance of a 75-basis-point hike at the Fed’s next meeting in September, up from about 41% before the labor market data beat market expectations.

The information technology sector fell 0.9% as chipmaker Nvidia Corp. (NVDA) slid 6.3% after the company said it expects second-quarter revenue to decline 19% from the prior quarter to about USD 6.7 billion, due to weakness in gaming.

The Philadelphia SE Semiconductor index slid 1.6%, while value stocks rose 0.1% to outpace a 0.4% drop in growth.

Tesla (TSLA) rose 0.8% as the US electric-car maker signed contracts worth about USD 5 billion to buy battery materials from nickel processing companies in Indonesia, according to a CNBC report.

Shares of US automakers jumped after the US Senate on Sunday passed a USD 430 billion bill to fight climate change that created a USD 4,000 tax credit for used electric vehicles and provides billions in funding for their production.

Rivian Automotive Inc. (RIVN) rose 6.78%, Ford Motor Co F.N gained 3.14%, General Motors Co. (GM) added 4.16% and Lordstown Motors Corp. (RIDE) advanced 3.17%.

Signify Health Inc. (SGFY) shot up 11.0% on a media report that CVS Health Corp. (CVS) was looking to buy the health technology company.

Palantir Technologies Inc. (PLTR) dropped 14.2% after the data analytics software company lowered its annual revenue forecast as the timing of some large government contracts remained uncertain.

Tyson Foods Inc. (TSN) fell 8.4% after missing quarterly profit expectations.

Advancing issues outnumbered declining ones on the NYSE by a 2.28-to-1 ratio; on Nasdaq, a 1.67-to-1 ratio favored advancers.

The S&P 500 posted eight new 52-week highs and 29 new lows; the Nasdaq Composite recorded 104 new highs and 27 new lows.

(Reporting by Bansari Mayur Kamdar and Aniruddha Ghosh in Bengaluru; Editing by Shounak Dasgupta and Cynthia Osterman)

Safe haven dollar eases as risk appetite lifted by jobs data

NEW YORK/LONDON, Aug 8 (Reuters) – The dollar eased on Monday, giving back some of the gains it made following Friday’s blockbuster U.S. jobs report, as investors looked ahead to Wednesday’s inflation data for more clues about the Federal Reserve’s next steps.

U.S. job growth rose much more than expected in July, data showed on Friday, lifting the employment level above its pre-pandemic mark and calming fears that the economy was in recession. Investors read the data as a indication the Fed could raise interest rates more aggressively to combat inflation.

The upbeat mood carried into Monday, with global stock markets gaining ground.

“We’re seeing some broad dollar weakness because the risk vibe is fairly buoyant,” Erik Bregar, director of FX & precious metals risk management at Silver Gold Bull, said of the safe haven currency.

The dollar index, which measures the greenback against a basket of peer currencies, was at 106.23 at 10.15 a.m. eastern time (1415 GMT), down 0.394%, compared with Friday’s 10-day high of 106.930.

Traders were pricing in a roughly 69% chance of the Fed raising rates by 75 basis points (bps) at its September meeting, according to Refinitiv data IRPR.

Fed Governor Michelle Bowman said on Saturday that the U.S. central bank should consider more 75 bps hikes at coming meetings to bring inflation back down.

“The U.S. dollar has been supported by the combination of stronger U.S. economic data releases and hawkish comments from regional Fed presidents that have encouraged market participants to push back expectations for a dovish policy pivot from Fed,” MUFG currency analysts Derek Halpenny and Lee Hardman said in a note to clients.

Markets are looking ahead to U.S. inflation data for July, which will be released on Wednesday. Analysts polled by Reuters expect annual inflation to have eased to 8.7% in July from 9.1% previously.

High inflation combined with Friday’s labor market reading could push the market to fully price in 75 basis points of Fed hikes for September, according to Tim Graf, head of EMEA macro strategy at State Street.

“If you have both things (jobs growth and inflation) still running very, very hot then it becomes very difficult, I think, to back away from another 75 basis point hike,” he said.

As global stock indexes ticked higher, currencies seen as riskier, such as the Australian and New Zealand dollars, made gains, with the Aussie up 1.12% at $0.69885 and the Kiwi up 0.79% at 0.6293.

The dollar was down 0.33 versus the yen, with the pair changing hands at 134.57.

Euro zone bond yields fell back down after gaining following the jobs data on Friday. Italian bonds appeared to brush off a decision by Moody’s to lower Italy’s ratings outlook.

The euro edged up 0.04% at $1.02005.

“If quiet summer markets prompt renewed interest in the carry trade, the euro will probably be one of the preferred funding currencies,” said ING FX analyst Chris Turner in a client note.

The British pound was 0.41% higher at $1.2122.

Foreign Secretary Liz Truss – who is expected to replace Boris Johnson as prime minister next month – has said she plans to hold a review of the Bank of England’s mandate.

Markets showed little reaction to China announcing fresh military drills in the seas and airspace around Taiwan.

“We’re still in the realm of the political, thankfully, where righteous indignation doesn’t necessarily move markets,” said State Street’s Graf.

(Reporting by Elizabeth Howcroft; Editing by Alex Richardson and Barbara Lewis)

Gold gains as dollar, yields slip; focus on US inflation data

Aug 8 (Reuters) – Gold prices rose on Monday following a pullback in the dollar and U.S. Treasury yields, while investor focus shifted to U.S. inflation data for clues on the Federal Reserve’s rate hike plan.

Spot gold rose 0.8% to $1,787.39 per ounce by 2:25 p.m. ET (1825 GMT). U.S. gold futures also settled up 0.8% at %1,805.2.

The dollar index fell 0.2%, making gold more appealing to other currency holders. U.S. Treasury yields also slipped.

Gold is considered a safe investment amid political tensions and recession worries, but high interest rates tend to dim the appeal for bullion, which pays no interest.

“The market seems to have priced in the shock from the jobs number … however, gold will have a tough time if the Fed is seeing tightening much further,” said Edward Moya, senior analyst with OANDA.

“Foreign investors are going to be looking for alternative investments and gold is an option with the ongoing situation in Taiwan and Ukraine.”

Gold fell on Friday after robust U.S. job growth reinforced expectations that the Fed will continue to raise rates in the next few meetings to slow inflation.

With gold’s gains capped by the potential of more aggressive hikes, the strength of technical support around $1,700 will be tested when the Fed’s next decision is announced, Kinesis Money analyst Rupert Rowling said in a note.

The U.S. consumer price index report due on Wednesday could offer clues on the Fed’s next move.

Spot silver rose 3.7% to $20.60 per ounce, while platinum was up 0.5% to $937.0.

Palladium jumped 5.6% to $2,245.68.

China’s palladium autocatalyst demand was likely to shrink slightly this year, mainly due to lockdowns in Shanghai in the second quarter and the growing market share of “new energy” vehicles, Heraeus Precious Metals said in a note.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Shounak Dasgupta and Krishna Chandra Eluri)

Nasdaq looks to Latin America to replace some lost Chinese IPOs

SAO PAULO, Aug 8 (Reuters) – Latin American companies could replace at least some of the Chinese companies’ initial public offerings (IPOs) that have disappeared from western markets this year, a senior Nasdaq executive said.

Regulators in Beijing and Washington have increased their scrutiny of Chinese companies listed in the United States, and a dispute over access to audit papers could lead to Chinese companies being delisted from U.S. exchanges.

So far, there have been no Chinese listings in the United States this year, down from 29 last year. Four Latin American Companies were listed, down from 20 last year, and 11 companies from countries in Southeast Asia, compared with 19 last year.

Nasdaq’s Global Head of Capital Markets Bob McCooey was in Sao Paulo last week to discuss potential listings with Brazilian companies and joined an investment event hosted by digital broker XP Inc. (XP).

The latest Latam listing was Semantix (SITX), a tech company listed last week on Nasdaq in a business combination with SPAC Alpha Capital. Digital bank Inter & Co. (INTR) migrated from a Brazilian listing to Nasdaq last June.

“Coming to Sao Paulo in 2022 reminds me a lot of my trips to China in 2008. We see the tech ecosystem growing and a lot of new interesting companies,” Bob McCooey said in an interview with Reuters.

In addition to experienced venture capital firms, Latin America is beginning to see serial entrepreneurs that reinvest the proceeds from selling their first companies.

Over the last five years, there were 37 Latin American listings and 159 Chinese listings in Nasdaq.

(Reporting by Tatiana Bautzer; editing by Barbara Lewis)

Euro zone bond yields fall, Moody’s cut Italy’s ratings outlook

LONDON, Aug 8 (Reuters) – Euro zone bond yields fell on Monday, having risen sharply after stronger-than-expected U.S. jobs data at the end of last week, while Italian bonds faced some mild selling pressure after Moody’s lowered Italy’s ratings outlook.

Safe-haven bonds drew some support from geopolitical tensions although analysts warned against reading too much into market moves given thin summer trading conditions.

China’s military announced fresh drills on Monday in the seas and airspace around Taiwan – a day after the scheduled end of its largest ever exercises to protest last week’s visit to Taipei by U.S. House Speaker Nancy Pelosi.

Germany’s 10-year Bund yield was down 6 bps at 0.89%, while French and Dutch 10-year yields were down around 5-6 bps each.

German bond yields rose 15 bps on Friday in their biggest one-day surge since March 2020, after data showed the U.S. economy created 528,000 new jobs in July.

That number stoked expectations for a supersized September U.S. rate hike and pushed up Treasury yields 10-22 basis points (bps).

“It’s a slight reversal of Friday’s move but bear in mind that the next two weeks will be a thin trading environment,” said Mizuho rates strategist Peter McCallum, explaining the fall in euro zone bond yields.

A rise in U.S. interest rate-hike bets for September meanwhile boosted bets for another big rate rise from the European Central Bank next month.

Money markets now price in about a 90% chance of a 50 bps rate rise from the ECB in September, versus a roughly 50% chance a week ago.

Investor morale in the euro zone was essentially unchanged in August from the previous month, with a slight rise too little to stave off recession fears, a survey showed.

Italian bonds underperformed their peers, with 10-year yields around 2 bps higher on the day at 3.04%.

Italy’s closely watched bond-yield gap over Germany was around 213 bps, versus 205 bps late on Friday.

Ratings agency Moody’s cut Italy’s outlook to “negative” from “stable” on Friday, weeks after Prime Minister Mario Draghi’s resignation sparked fresh political uncertainty.

Moody’s said risks to Italy’s credit profile had risen due to political developments and the economic fallout of Russia’s invasion of Ukraine.

S&P Global last month cut its ratings outlook to stable from positive.

“The same rating action by S&P the other week already prepared markets for a less dovish rating dynamics but failed to cause lasting pressure,” said Michael Leister, head of interest rates strategy at Commerzbank.

Data last week showing the ECB had skewed reinvestments from maturing bonds from its PEPP stimulus scheme to Italy was expected to bolster Italian debt.

(Reporting by Dhara Ranasinghe; Editing by Susan Fenton and Emelia Sithole-Matarise)

Gold in tight range as investors wary of big Fed rate hikes

Aug 8 (Reuters) – Gold prices were stuck in a range on Monday, with gains curbed by fears over big rate hikes by the Federal Reserve, while investors stayed on the sidelines awaiting U.S. inflation data later this week.

Spot gold steadied at $1,773.82 per ounce by 0900 GMT, after dropping 1% in the previous session. U.S. gold futures fell 0.1% to $1,789.40.

The main factor against further recoveries in gold is related to the growing pressure that the Fed could adopt an aggressive stance after the solid U.S. labour data, said Carlo Alberto De Casa, external analyst for Kinesis Money.

But, investors are slightly recalibrating their position after the dollar rally on Friday, and “maybe they are still thinking that the peak of inflation is not too far and the pressure on the Fed could slow down,” he added.

Traders currently see a 73.5% probability the Fed continues the pace of 75-basis-point rate hikes for its next policy decision on Sept. 21 to tame soaring inflation after U.S. job growth unexpectedly accelerated in July.

The focus of market participants now shifts to the U.S. consumer price index report due on Wednesday that could offer more clues on the Fed’s rate hike path. Analysts polled by Reuters expect annual inflation eased to 8.7% in July from 9.1% previously.

Higher U.S. interest rates raise the opportunity cost of holding non-yielding bullion.

Another hotter-than-expected CPI print should force bullion bulls to reckon with a Fed that has to persist with more supersized rate hikes over the coming months, and such a narrative should prompt spot gold to unwind more of its recent gains, said Han Tan, chief market analyst at Exinity.

Offering some respite to gold, the U.S. dollar pulled back slightly from its highest since July 28. USD/

Spot silver rose 0.6% to $20.00 per ounce, while platinum fell 0.4% to $928.20.

Palladium rose 1.4% to $2,154.97.

(Reporting by Arundhati Sarkar in Bengaluru; Editing by Shailesh Kuber)

Currencies find breathing space as dollar eases slightly

Aug 8 (Reuters) – Emerging market currencies came off session lows on Monday, as the dollar eased slightly after a strong rally spurred by rising bets of the U.S. Federal Reserve staying aggressive with its monetary policy.

With the exception of the Indian rupee and the Taiwan dollar, most Asian currencies cut almost all session losses. The Chinese yuan inched up, with data showing an unexpected pick-up in exports in July aiding sentiment. Export forecasts from China, however, were clouded by worries about weakening global demand.

Elsewhere, Turkey’s beleaguered lira fell 0.2%, while South Africa’s rand ZAR= climbed 0.5%. Russia’s rouble rose to trade around 60 per dollar.

The greenback fell about 0.2%, but stayed at elevated levels after data on Friday showing strong labour demand in the United States saw bets for another 75 basis points hike by the Fed in September rise to around 70%. Focus now turns to U.S. inflation data due later this week. The headline number is seen having cooled in July.

“There’s still this very precarious risk backdrop,” said Simon Harvey, head of FX analysis at Monex.

“We are still seeing volatility in emerging market space this morning, but it’s not necessarily too indicative of an overall trend just yet,” he said, adding that Monex expects a Fed “pivot,” or the easing of its tightening cycle, in the fourth quarter which could then lend some support to emerging markets.

Despite a stronger euro, Hungary’s forint rose 0.4% to stay at two-month highs, while the Polish zloty climbed 0.3%. Both had a strong week last week, but analysts at ING see some pain ahead.

“We expect both currencies to be weaker this week. We see the forint as more vulnerable, with our target at 399 EUR/HUF and the zloty at 4.75 EUR/PLN for the days ahead,” said Frantisek Taborsky, EMEA FX & FI strategist at ING.

Inflation figures from Hungary, the Czech Republic and Romania will also be eyed this week.

Among stocks, MSCI’s index of emerging market equities .MSCIEF snapped a three-day winning run thanks to losses in Chinese blue-chips and Hong Kong stocks .HSI. But strong gains in India, as well as outside Asia, helped cap losses for the broader index.

(Reporting by Susan Mathew in Bengaluru; editing by Uttaresh.V)

European shares bounce back from US jobs report hammering

Aug 8 (Reuters) – European shares rose on Monday, lifted by cyclical and growth stocks, after clocking falls in the previous week when a strong U.S. jobs report rekindled bets of another aggressive rate hike by the Federal Reserve.

The pan-European STOXX 600 index added 0.5%, steadying after snapping two weeks of gains on Friday.

Economically-sensitive sectors including miners, financial services and autos led the gains on Monday. Growth-oriented technology stocks advanced 1.2%.

Focus shifts to a key inflation data from the world’s biggest economy later in the week. Global stock markets were spooked on Friday after data showed a large increase in U.S. employment, denting hopes that the Fed might let up in its series of rate hikes aimed at taming surging inflation.

After ending July with gains of over 7%, the STOXX 600 has struggled this month to extend the momentum on worries over dour economic data, rising geopolitical tensions and fears that higher interest rates could tip the economy into a recession.

“Lower savings by households are supporting consumer spending, the eventual outcome could be a soft landing but the risk remains of a slump,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

“Against this uncertain backdrop, investors should ensure a robust portfolio that can perform in various outcomes. We prefer defensives such as healthcare as well as quality income, and value stocks.”

Meanwhile, the European healthcare sector missed out the broader rally, up 0.1%, after the U.S. Senate on Sunday passed a bill intended to lower drug prices among other things.

Other defensive stocks, including European utilities and real estate, added around 1% each.

French utility company Veolia rose 1.9% as it confirmed it would sell Suez’s UK waste business to Australia’s Macquarie Group Ltd for around 2.4 billion euros ($2.4 billion).

Siemens Energy, which supplies equipment to the power industry, fell 2.5% as it warned of a deeper-than-previously-expected net loss in 2022 from charges due to the restructuring of its business in Russia.

Richemont asked shareholders to reject a candidate from Bluebell Capital Partners as a representative of ordinary shareholders and against the person’s election to the luxury group’s board at its upcoming annual general meeting. Shares rose 0.7%.

Italian stocks lagged their European peers after global ratings agency Moody’s cut the country’s outlook to “negative” from “stable” on Friday.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila)

Air traffic around Taiwan returning to normal despite new Chinese drills

Aug 8 (Reuters) – Air traffic around Taiwan is gradually returning to normal after airspace surrounding the island reopened, Taiwan’s Ministry of Transportation and Communications said on Monday, although China later announced fresh military drills in the area.

China last week deployed scores of planes and fired live missiles near the island during military exercises sparked by U.S. House of Representatives Speaker Nancy Pelosi’s visit to Taiwan.

The drills led some airlines to cancel flights to Taipei and to alter flight paths between Southeast Asia and Northeast Asia to avoid the affected area.

Beijing-issued notices to airmen (NOTAM) had declared temporary danger areas for airlines to avoid during the exercises that encircled much of Taiwan. The final NOTAM covering a section of airspace east of the island expired on Monday at 0200 GMT and was not extended.

China’s military announced fresh drills in the seas and airspace around Taiwan on Monday, but no specific location was provided, no new NOTAM was issued and there were no signs on flight tracking service FlightRadar24 of airlines adjusting routings.

Taiwan’s transportation ministry earlier said most scheduled flights to and from the island had continued to operate during the Chinese military exercises that began on Aug. 4, averaging around 150 departures and arrivals per day.

The number of flights transiting through the airspace its controllers manage is gradually returning to normal after the final NOTAM was lifted, the ministry added in the statement on its website.

Some foreign airlines that typically used the airspace had instead flown alternative routes through areas managed by Japan and the Philippines during the drills, the ministry said last week.

Korean Air Lines Co. Ltd., which had cancelled flights to Taipei on Friday and Saturday and rerouted others to avoid the affected area, said on Monday that it had resumed normal flight operations.

Philippine Airlines said it would return its flights to and from Taipei to their normal routings after using alternative flight paths during the last four days of drills.

Korean Air and Philippine Airlines said they had not made any changes to their flight plans after the new Chinese announcement.

“However, we are ready to make adjustments to our Taipei operations, if necessary,” Philippine Airlines President Stanley Ng said in a statement.

Japan’s ANA Holdings Inc 9202.T said it had resumed normal routings despite the new Chinese announcement because no fresh NOTAM had been issued.

Temporary airspace closures and route changes during major military exercises occur regularly around the world.

This situation was unusual in that China’s exercises bisect Taiwan’s claimed 12 nautical miles (22 kilometres) of territorial waters – something Taiwanese officials say challenges the international order and amounted to imposing a blockade of its sea and airspace.

(Reporting by Jamie Freed in Sydney and Donny Kwok in Hong Kong; additional reporting by Ben Blanchard in London, Heekyong Yang in Seoul, Satoshi Sugiyama in Tokyo and Neil Jerome Morales in Manila; Editing by Raju Gopalakrishnan and Sam Holmes)

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