Yen set for biggest run of gains in more than 2 years

LONDON, Aug 2 (Reuters) – The yen was on track for its biggest run of gains since the depths of the coronavirus crisis in March 2020, as rising US-China tensions over Taiwan and deepening worries about a global economic slowdown boosted the appeal of safe-haven assets.

Against the dollar, the Japanese currency was on track for a fifth consecutive session of gains on Tuesday, taking its cumulative increase to nearly 4.5% in five trading sessions. In early London trading, the currency was up 0.6% at 130.78 yen, just below a high of 130.40 yen, a level last seen in early June.

Jitters about the impact of an impending visit to Taiwan by US House of Representatives Speaker Nancy Pelosi weighed on stocks and sent investors scurrying into US Treasuries.

The benchmark 10-year Treasury yield fell to 2.516%, its lowest since April, further narrowing the gap between ten-year US debt and equivalent Japanese bonds to 236 basis points (bps), the lowest since early April.

The US economy shrank for a second straight quarter, data released last week showed, intensifying an ongoing debate over whether the country is, or will soon be, in recession, with traders keenly watching for US jobs data on Friday.

“US data releases and the reaction in US yields through the end of this week will be critical as JPY momentum has built a considerable head of steam here,” said John Hardy, head of FX strategy at Saxo Bank.

The Australian dollar fell nearly 1.5% after the Reserve Bank of Australia raised rates by 50 bps to 1.85%, in line with expectations.

The bank said that even though more tightening was expected, it was not on a pre-set path, which some investors interpreted as future policy tightening may not be as aggressive.

China’s offshore yuan touched 6.7957 per dollar, its weakest since mid-May. Some analysts attributed this partly to the tensions around Pelosi’s visit as well as poor economic data from China over the weekend.

The dollar index, which measures the greenback against six peers, rose 0.3% to 105.65.

(Reporting by Saikat Chatterjee; additional reporting by Alun John in HONG KONG; Editing by Mark Potter)

BSP to continue supporting economic recovery despite rate hikes

MANILA, Aug 2 (Reuters) – The Philippine central bank will continue supporting the economy’s recovery despite a planned 25 or 50 basis point rate hike this month, its governor said on Tuesday.

Current policy rates remain accommodative, Bangko Sentral ng Pilipinas Governor Felipe Medalla told a business forum.

Policymakers will meet on August 18 to adjust its reverse repurchase facility rate that is currently at 3.25%.

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

Asian stocks slide with US yields on Pelosi jitters; Aussie drops

TOKYO, Aug 2 (Reuters) – Asia stocks tumbled on Tuesday as jitters about an escalation in Sino-US tension with US House of Representatives Speaker Nancy Pelosi set to begin a trip to Taiwan, adding to fears about the risk of global recession.

US long-term Treasury yields dropped to a four-month low, pulling the US dollar down, amid a bid for safer assets after China threatened repercussions in the event of the visit by Pelosi to the self-ruled island, which China claims as its territory. Crude oil also sank.

Meanwhile, Australian stocks pared declines and the Aussie dollar weakened after the central bank raised the key rate by an as-expected 50 basis points, with markets interpreting changes to the accompanying policy statement as dovish.

Japan’s Nikkei .N225 slid 1.54%, while Taiwan’s stock index dropped 1.87%.

Chinese blue chips tumbled 2.47% and Hong Kong’s Hang Seng lost 2.71%.

However, Australia’s equity benchmark was just 0.23% lower, after an earlier decline of 0.7%

MSCI’s broadest index of Asia-Pacific shares retreated 1.33%.

US e-mini stock futures pointed to a 0.44% lower restart for the S&P 500, which stumbled 0.28% overnight.

“We knew from the onset that (Pelosi’s trip) would be a driver of risk-off sentiment in the region,” said Carlos Casanova, the senior Asia economist at Union Bancaire Privee in Hong Kong.

“There’s going to be a lot of speculation and uncertainty about what the extent of China’s response will be in the short term.”

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 99.27 a barrel on Tuesday after losing almost USD 4 overnight. US West Texas Intermediate futures also eased to USD 93.26, extending Monday’s almost USD 5 slide.

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 off the policy-tightening pedal. The bonds also benefited from safety-seeking demand before Pelosi’s Taiwan visit.

That helped the US dollar slide as low as 130.40 yen JPY=EBS 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 0.51% lower at USD 0.69910, extending a 0.14% retreat following the Reserve Bank of Australia’s policy decision.

It had hit the highest since June 17, at USD 0.7048, in the previous session but that was after bouncing off a 26-month trough at USD 0.66825 in the middle of last month.

“The Aussie has been underperforming other major currencies lately given global growth concerns so it really needed a hawkish surprise to reignite its recovery from 2-year lows,” said Sean Callow, a currency strategist at Westpac in Sydney.

“Instead, it got the RBA leaving the door wide open to slowing the pace of tightening at future meetings, sending AUD back below USD 0.70.”

(Reporting by Kevin Buckland; Additional reporting by Tom Westbrook; Editing by Robert Birsel)

Philippines’ 3.5-year T-bond fetches 5.25% coupon rate

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)

Oil prices fall as weak factory data fuels global demand concerns

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)

Long bonds rally as Pelosi’s expected Taiwan trip rattles sentiment

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)

Gold rallies to four-week high as US yields, dollar slip

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)

Asian stocks slide with oil on recession jitters; dollar drops

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)

Oil prices slip as weak manufacturing data stokes recession fears

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.

Prices have been volatile, as investors weigh tight global supply with fears of a potential global recession.

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.

(Reporting by Stephanie Kelly; Editing by Kenneth Maxwell)

US stocks slip, crude slides as soft data feed recession jitters

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)

2024 Mid-Year Economic Briefing: Navigating the Easing Cycle

Investing with Love: A Mother’s Guide to Putting Money to Work

Investor Series: An Introduction to Estate Planning

Inflation Update: Prices rise even slower in May

Monthly Recap: BSP to outpace the Fed in rate cuts