Philippines’ Marcos pledges tax and investment reforms in national address

MANILA, July 25 (Reuters) – Philippine President Ferdinand Marcos Jr pledged on Monday to make his country a destination for investment and change its tax system, while implementing solid fiscal policy management.

Speaking before Congress in his first state of the nation address, Marcos, who won a May election in a landslide, said the country was targeting 6.5 to 7.5% gross domestic product growth this year. He said growth momentum remained firm but the recovery from the pandemic was still ongoing.

(Reporting by Karen Lema and Neil Jerome Morales; Writing by Martin Petty; Editing by Ed Davies)

Dollar supported by market caution as growth fears dominate

LONDON, July 25 (Reuters) – The dollar held firm in early trading on Monday as traders sought safer assets and braced for a sharp U.S. interest rate hike later this week.

European stock indexes opened in the red, with investors cautious about how company earnings will hold up in the face of a global economic slowdown and high inflation.

One sixth of Europe’s STOXX 600 will report second-quarter results this week, with earnings expected to have grown 22% year-on-year, according to Refinitiv forecasts.

The U.S. Federal Reserve has signalled a 75 basis point rate hike at its July 26-27 meeting, although data last week showing inflation hit 9.1% year-on-year in June raised the possibility of a larger 100 bps hike later this year.

The U.S. dollar strengthened against the Australian and New Zealand dollars during Asian trading, although this move eased as European markets opened. At 0715 GMT, the Australian dollar was flat against the greenback AUD=D3, while the New Zealand dollar was down 0.2% at $0.6242.

Versus the Japanese yen, the dollar was up 0.2% at 136.35.

The dollar index was at 106.760, having last week fallen from the two-decade high of 109.290 it hit in mid-July =USD and analysts expect it to remain in demand.

U.S. economic growth is slowing and inflation is “way too high”, U.S. Treasury Secretary Janet Yellen said on Sunday.

“Recession fears should continue to prevent a solid recovery in risk sentiment, which should incidentally give some extra support to safe-havens (including USD) and may keep the path uneven for high-beta commodity currencies,” wrote ING FX analysts in a note to clients.

The euro was boosted to a two-week high last week by the European Central Bank raising rates for the first time since 2011. But it then fell after disappointing business activity data from France and Germany. On Monday, it was down 0.2% on the day at $1.01930.

ING’s FX analysts said the euro’s moves suggest that expectations around the European Central Bank’s policy plans will be driven more by market data in future, highlighting euro zone inflation data due on Thursday and Friday.

“We think 1.0200 could prove to be an anchor for EUR/USD for the remainder of the summer, but re-testing parity is a tangible risk in the current high-volatility environment,” ING said.

Soaring energy costs and fears of gas shortages in Europe are also weighing on the euro, with Germany largely dependent on Russian gas to fuel its export-led economy.

A survey on Sunday showed that 16% of industrial companies in Germany are cutting production in reaction to soaring energy prices.

Top Western energy companies are expected to see record-breaking profits for the second quarter running.

The British pound was down 0.1% against the dollar at $1.1993 GBP=D3, while euro-sterling was steady at 85.07 pence per euro.

British Foreign Secretary Liz Truss and former finance minister Rishi Sunak set out plans over the weekend in their campaigns to be Britain’s next prime minister.

(Reporting by Elizabeth Howcroft; Editing by Catherine Evans)

Japan bond yields bounce off months-long lows

July 25 (Reuters) – Japanese government bond yields recovered after plunging to their lowest in months on Monday, as investors pared their bets on policy tightening at home and hedged the risk of a global economic slowdown.

The benchmark 10-year JGB yield fell 3.5 basis points to 0.178% in morning trading, its lowest since March 14, before settling at 0.200%.

The five-year yield fell into negative territory, dropping 1 basis point to minus 0.005%.

Yields have dropped steadily since mid-June, when bets that the Bank of Japan will be forced to join its hawkish global peers and tweak its yield-curve-control policy were at their extreme. Ten-year yields breached the BOJ’s target to rise as far as 0.265% in June, forcing the central bank to spend a record amount of yen defending the band.

“We are still holding our short position in JGBs – yields have edged away from the upper band and the yen has had some respite,” said Kellie Wood, deputy head of fixed income for Australia at Schroders.

“However, such relief could be short-lived as sticky and broad-based inflation will likely put a floor under global interest rates, and risks of renewed upward pressure on yields remain,” Wood added. “We maintain our short duration bias for longer maturity JGBs.”

Demand for JGBs heightened as Japan’s Nikkei share average snapped last week’s winning streak after data showed US business activity had contracted for the first time in nearly two years.

“The PMI results contradicted expectations that a shift in demand to services was a reason behind the weakness in goods,” said Toru Moritani, chief market economist at Sumitomo Mitsui Banking Corp.

“The expectations that consumption would bounce back at least for the summer leisure season have also retreated.”

Yields on longer-term notes fell across the board.

The 20-year yield fell 1 basis point to 0.850%, the 30-year yield fell 2.5 basis points to 1.200%, and the 40-year yield fell 1.5 basis points to 1.410%.

The two-year yield was flat at -0.080%.

Benchmark 10-year JGB futures 2JGBv1 rose 0.35 point to 150.1.

(Reporting by Sam Byford and Tokyo markets team;; Additional reporting by Tom Westbrook in Singapore)

Philippines sells $245 million T-bills; 91-day yield down

MANILA, July 25 (Reuters) – Following are the results of the Philippine Bureau of the Treasury’s (BTr) auction of T-bills on Monday:

* BTr awards 13.75 billion pesos ($244.66 million) worth of T-bills, below its 15 billion pesos offer

* Tenders total 38.844 billion pesos

* BTr awards 5 billion pesos of 91-day T-bills at avg rate of 2.273% versus previous auction avg of 2.323%

* BTr awards 5 billion pesos of 182-day T-bills at avg rate of 3.143% versus previous auction avg of 3.083%

* BTr awards 3.75 billion pesos of 364-day T-bills at avg rate of 3.356% versus previous auction avg of 3.258%

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

($1 = 56.20 Philippine pesos)

(Reporting by Enrico Dela Cruz; Editing by Martin Petty)

Oil rises $2 as dollar eases, market wary of Fed

HOUSTON, July 25 (Reuters) – Oil prices rose about USD 2 on Monday, bolstered by supply fears, a dip in the US dollar and early strength in equity markets, but prices seesawed as some worried fuel demand could weaken if the Federal Reserve raises US interest rates too aggressively.

Brent crude futures for September settled up USD 1.95, or 1.9%, at USD 105.15 a barrel, while US West Texas Intermediate (WTI) crude futures rose USD 2, or 2.1%, to settle at USD 96.70 a barrel.

“A slightly weaker US dollar and improving equity markets are supporting oil,” UBS oil analyst Giovanni Staunovo said. After early strength, US stocks moved lower in afternoon trading, with investors cautious about the Fed meeting this week and earnings from several growth companies.

Oil futures have been volatile in recent weeks, pressured by worries that rising interest rates could slow economic activity and fuel demand but supported by tight supply, especially since Russia’s invasion of Ukraine and Western sanctions on Moscow.

“The US and European economies are slowing and with the Federal Reserve set to raise interest rates again this week, traders remain very cautious,” said Dennis Kissler, senior vice president of trading at BOK Financial.

Fed officials have indicated the US central bank would likely raise rates by 75 basis points at its July 26-27 meeting.

China, the world’s second-biggest economy, narrowly missed a contraction in the second quarter, growing just 0.4% year-on-year.

But a steep front-month premium over the second month continues to signal near-term supply tightness. The spread settled at USD 4.82/bbl on Friday, an all-time high when excluding expiry-related spikes in the two previous months.

Libya’s National Oil Corporation (NOC) said it aimed to bring back production to 1.2 million barrels per day (bpd) in two weeks, from around 860,000 bpd.

But analysts expect Libya’s output to remain volatile as tensions remained high after clashes between rival political factions over the weekend.

Prices drew support from “expectations that Russian oil supply will edge lower in the months ahead as widely-expected plans for a price cap on Russian oil may have the opposite effect on oil prices than hoped for,” said Warren Patterson, head of commodities strategy at ING.

The European Union said last week it would allow Russian state-owned companies to ship oil to third countries under an adjustment of sanctions agreed by member states last week aimed at limiting the risks to global energy security.

On Friday, Russian Central Bank Governor Elvira Nabiullina said Russia would not supply oil to countries that imposed a price cap on its oil.

Russia’s Gazprom said flows through Nord Stream 1, Russia’s single biggest gas link to German, would fall to 33 million cubic meters per day, just 20% of capacity, from 0400 GMT on Wednesday.

That could lead to additional switching to crude from gas, supporting oil prices, said Andrew Lipow of Lipow Oil Associates in Houston.

(Additional reporting by Rowen Edwards in London, Yuka Obayashi in Tokyo; Editing by Marguerita Choy and David Gregorio)

Philippines’ Udenna pays debt to stem share slide across its network

MANILA, July 25 (Reuters) – Philippine conglomerate Udenna Corp, owned by a close associate of the country’s former president, said on Monday its subsidiary had paid a debt to avert a default on other loans, helping shares in its related firms to stem huge earlier losses.

Udenna, one of the country’s fastest growing companies, said its subsidiary, a land lease firm at the site of a former US military base, had on Monday paid a USD 4 million liability to a government agency and a consortium of banks.

Under existing loan terms, Udenna’s default in one debt could mean a default in other liabilities.

“Udenna settled the matter today, prior to the mandated deadline, and to the satisfaction of the majority lender and the consortium banks,” it said in a statement.

Udenna’s total liabilities rose by nearly half to 254 billion pesos (USD 4.5 billion) in 2020 from 171 billion pesos in 2019, according to the latest available data from the corporate regulator.

Monday’s debt settlement helped shares in Udenna’s four listed firms to recoup some losses, after DITO CME (DITO) fell as much as 9%, Chelsea Logistics (C) sank 16%, Phoenix Petroleum (PNX) dropped 10% and PH Resorts (PHR) retreated as much as 7.5% in Monday morning trades, versus a 1.6% decline of the wider index.

The broader debt was accumulated during a rapid expansion and acquisition binge by owner Dennis Uy after his hometown ally Rodrigo Duterte won the presidency in 2016. Uy was a key campaign donor.

Over the following four years Udenna quadrupled its portfolio to more than 100 firms, in sectors from gaming, shipping, education and construction to fast food, ferries, tourism, telecoms and sports cars.

Udenna and Uy have insisted they received no preferential treatment from Duterte and complied with all laws.

The company has sold some of the assets, including a controlling stake in a South China Sea gas field, to trim debts.

(Reporting by Neil Jerome Morales; Editing by Ed Davies, Martin Petty)

Gold holds steady on lower yields; Fed rate hike looms

July 25 (Reuters) – Gold prices steadied on Monday, buoyed by lower Treasury yields and a slight pullback in the dollar, while investors braced for a 75-basis-point interest rate hike by the US Federal Reserve this week.

Spot gold was unchanged at USD 1,726.09 per ounce, as of 0646 GMT, after declining 0.3% in early trade. It had hit a more than one-week high on Friday.

US gold futures eased 0.3% to USD 1,722.30 per ounce.

The dollar was down 0.1% against its rivals, making greenback-priced bullion less expensive for buyers holding other currencies, while the benchmark US 10-year Treasury yields hovered near eight-week lows.

“The fall in US yields on the back of global recessionary concerns has underpinned gold,” said Stephen Innes, managing partner at SPI Asset Management.

“Today, we could be seeing a touch of indecision ahead of the Federal Open Market Committee which is likely to underscore the Fed dilemma of fighting inflation at the expense of growth.”

The main focus this week will be on the US central bank’s two-day policy meeting which concludes on Wednesday, and markets are pricing in a 75 bps rate hike.

Last week, the European Central Bank joined its global peers in the fight against soaring inflation as it raised interest rates by 50 bps and is expected to hike rates until inflation falls back to its 2% target.

Although gold is seen as a hedge against inflation, rising interest rates lift bond yields, raising the opportunity cost of holding non-yielding bullion.

Gold prices have dropped more than USD 350, or 16%, since climbing past the USD 2,000-per-ounce level in early March due to the Fed’s rapid rate hikes and the dollar’s recent rally.

Asian stocks lost ground on Monday, retreating from over three-week highs as worries about a global economic downturn sapped risk appetite.

Spot silver XAG= was down 0.2% at USD 18.56 per ounce, platinum XPT= was steady at USD 873.68, and palladium slipped 2.5% to USD 1,979.94.

(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu and Vinay Dwivedi)

Oil falls on concerns expected Fed hike will impact fuel demand

TOKYO, July 25 (Reuters) – Oil fell on Monday, reversing earlier gains but continuing a recent losing streak, on concerns that an expected increase in interest rates in the US, the world’s biggest oil user, may limit fuel demand growth.

Brent crude futures for September settlement dropped 48 cents, or 0.5%, to USD 102.72 a barrel at 0205 GMT, down for a fourth day.

US West Texas Intermediate (WTI) crude futures for September delivery fell 65 cents, or 0.7%, to USD 94.05 a barrel, also down for a fourth day.

“The market tone is likely to remain bearish amid worries that interest rate hikes would slash global fuel demand and that the resumption of some Libyan crude oil output would ease tightness in global supply,” said Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd.

Oil futures have been volatile in recent weeks as traders try to reconcile the possibilities of further interest rate hikes that could limit economic activity, and thus cut fuel demand growth, against tight supply from the disruptions in the trading of Russian barrels because of the Western sanctions amid the Ukraine conflict.

Officials at the US Federal Reserve have indicated that the central bank would likely raise rates by 75 basis points at its July 26-27 meeting.

On the supply side, Libya’s National Oil Corporation (NOC) aims to bring back production to 1.2 million barrels per day (bpd) in two weeks, NOC said in a statement early on Saturday.

The European Union said last week that it would allow Russian state-owned companies to ship oil to third countries under an adjustment of sanctions agreed by member states last week aimed at limiting the risks to global energy security.

However, Russian Central Bank Governor Elvira Nabiullina said on Friday that Russia will not supply oil to countries that decide to impose a price cap on its oil.

(Reporting by Yuka Obayashi; Editing by Christian Schmollinger)

Gold dips as dollar firms, Fed rate hike looms

July 25 (Reuters) – Gold prices slipped on Monday, as an elevated dollar and prospects of an aggressive interest rate hike by the U.S. Federal Reserve this week dented demand for non-yielding bullion.

FUNDAMENTALS

* Spot gold was down 0.2% at USD 1,722.84 per ounce, as of 0110 GMT, after rising to a more than one-week high on Friday.

* U.S. gold futures fell 0.5% to USD 1,718.70 per ounce.

* The dollar rose 0.1% against its rivals, making greenback-priced bullion more expensive for buyers holding other currencies.

* The U.S. central bank will conclude a two-day meeting on Wednesday, and markets are pricing in a 75-basis-point rate hike to combat soaring inflation.

* Although gold is seen as a hedge against inflation, rising interest rates increase the opportunity cost of holding bullion.

* U.S. Treasury Secretary Janet Yellen said on Sunday that the U.S. economic growth was slowing and she acknowledged the risk of a recession, but she said a downturn was not inevitable.

* Last week, the European Central Bank joined its global peers in the fight against soaring inflation as it raised interest rates by 50 bps.

* The European Central bank will raise its interest rates until inflation falls back to its 2% target, President Christine Lagarde said in an interview with Germany’s Funke Mediengruppe published on Friday.

* Spot silver was down 0.6% at USD 18.48 per ounce, platinum dipped 0.6% to USD 868.62, and palladium slipped 1.5% to USD 1,999.94.

DATA/EVENTS (GMT)

0800 Germany Ifo Business Climate New July

0800 Germany Ifo Curr Conditions New July

0800 Germany Ifo Expectations New July

1000 UK CBI Business Optimism Q3

2350 Bank of Japan releases Minutes of Monetary Policy Meetingheld on June 16 and 17

(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu)

Dollar firm as Fed meeting and growth risks dominate

SINGAPORE, July 25 (Reuters) – The dollar was on a firm footing on Monday, as traders brace for a sharp US interest rate hike this week and look for safety as data points to a weakening global economy.

The greenback was up slightly against most majors early in the Asia session, trading at USD 1.0195 on the euro EUR=EBS and steadying Friday losses to buy 136.57 Japanese yen.

The US Federal Reserve concludes a two-day meeting on Wednesday and markets are priced for a 75-basis-point (bp) rate hike, with about a 9% chance of a 100 bp hike.

“Market reaction will turn on how hawkish Chair (Jerome)Powell sounds with his determination to reduce inflation in the face of slowing growth,” said National Australia Bank currency strategist Rodrigo Catril.

US growth data is also due out Thursday, though markets have already been rattled by a slew of soft business indicators in Europe, which snuffed out a rally in risk assets on Friday.

An energy crisis also hangs over the euro, while the trade-sensitive Australian and New Zealand dollars, which made one-month highs on Friday, have backed away.

The Aussie edged about 0.5% lower to USD 0.6892 and the kiwi was down by the same margin to USD 0.6223.

Australian consumer price data is due on Wednesday and a hot number could lend support by ramping up bets on rate hikes, though analysts warned the backdrop was mostly negative.

“The Australian dollar will mainly be a function of the world economic outlook,” said Commonwealth Bank of Australia’s head of international economics, Joe Capurso.

“The darkening outlook suggests the Aussie has more downside than upside risk and can test USD 0.6800 this week.”

Sterling GBP=D3 also slipped on Monday, even as markets reckon on a 60% chance the Bank of England would lift rates by 50 bp next week. It was last down 0.3% to USD 1.1970.

Bitcoin hovered at USD 22.278. The dollar rose 0.4% to buy 0.9641 Swiss francs. The US dollar index sat at 106.840, just below a two-decade high made in mid July at 109.290.

(Reporting by Tom Westbrook; Editing by Shri Navaratnam)

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