Okada Manila casino, at center of ownership dispute, reports better June traffic

MANILA, July 11 (Reuters) – Okada Manila, the Philippine casino at the centre of a bitter drama-filled dispute about its ownership, saw improved business in June, its current management said.

Foot traffic in June climbed 8% from a month earlier and was around 74% of its pre-pandemic level, it said in a statement, also saying that the casino planned to open more shops and add entertainment attractions.

“With the economy and borders opening up, Okada Manila is expected to sustain the momentum,” current management said in the statement as it held its first news conference since it took physical control of the casino on May 31.

Filipino associates of Japanese tycoon Kazuo Okada seized the USD 3.3 billion casino, which is held by Tiger Resort, Leisure & Entertainment, ousting its previous management with the help of private security guards and local police.

The move came after the Philippines’ Supreme Court in April issued a “status quo ante order”, reinstating Okada, who had been ousted in 2017, as CEO of the casino-resort.

Tiger Resort’s ousted board has sued Okada’s group, accusing it of using “brute force and intimidation” in a “violent” takeover of the property and has also appealed the court decision.

Norman Golez, Okada’s lawyer, told the Monday news conference that the May 31 takeover was legal and peaceful.

The ousted board did not have immediate fresh comment on Monday. Tiger Resort is owned by Japan’s Universal Entertainment Corp. which has called the seizure of the casino an “illegal occupation”. Okada was also ousted from Universal’s board in 2017.

Universal has agreed to merge Okada Manila with 26 Capital Acquisition Corp ADER.O, a Nasdaq-listed blank check firm, for some USD 2.5 billion and has extended its deadline for the merger to Sept. 30 in the wake of the takeover.

The SPAC has said it believes Universal will be back in control of Okada Manila soon.

The 44-hectare (108-acre) Okada Manila started operations late in 2016. With 993 suites and villas, 500 table games and 3,000 electronic gaming machines, it is the biggest of four multi-billion-dollar casino-resorts operating in the capital of the Philippines, which has one of Asia’s most freewheeling gaming industries.

(Reporting by Neil Jerome Morales; Editing by Edwina Gibbs)

King dollar delivers hedge funds’ best FX quarter since 2017—McGeever

ORLANDO, Fla., July 11 (Reuters) – Hedge funds had a torrid second quarter, but their faith in the dollar paid off spectacularly.

Industry data provider HFR’s Currency Index, part of the broader Macro (Total) Index, rose 1.76% in June, the biggest monthly rise since March 2020, which brought the April-June increase up to 5.70%.

That was the best quarter since a 5.72% surge in the same period in 2017.

Or put another way, currency strategies tracked by HFR essentially just had their joint-best quarter since the index was launched in 2008. Central to that was funds’ consistent and sizeable long dollar position.

According to Commodity Futures Trading Commission data, hedge funds have been long of dollars against a basket of G10 currencies every week for 51 weeks. The average net long dollar position in the second quarter was worth around USD 15 billion.

Thanks to a widespread belief that the Federal Reserve will raise US interest rates to combat inflation more than other central banks, the dollar went on a tear in Q2.

It is now at its strongest level in 20 years against the euro and a basket of major currencies, and its 6.5% rise on an index basis in April-June was its best quarter since 2016.

The latest CFTC data showed that funds increased their net long dollar position against G10 currencies by USD 2 billion to USD 16 billion in the week through July 4, simply reversing the USD 2 billion reduction from the week before.

This suggests that despite the dollar’s strong gains, lofty position, and a general softening of investors’ expectations for the Fed’s tightening cycle, funds are confident the greenback can climb even higher.

MUFG’s Lee Hardman notes that the stronger-than-expected US employment report for June on Friday and the latest public comments from Fed officials point to another 75 basis point rate hike later this month.

“The dollar strongly regained upward momentum over the past week and we expect this to extend further in the near term,” Hardman wrote in a note on Friday.

The relative weakness of the dollar’s major counterparts, particularly the euro, cannot be ignored though.

CFTC funds increased their net short euro position to 16,852 contracts from 10,596 a week earlier. That is the biggest net short this year and marks the fourth week in a row funds have been net short the euro.

A short position is essentially a bet that an asset will fall in value, and a long position is a bet that it will rise. Funds are now holding a USD 2.16 billion bet on the euro weakening. A month ago, they had a USD 6.8 billion bet on it strengthening.

The flip is paying off.

The euro slumped to a 20-year low of USD 1.0070 last week, close to parity, on fears that the energy crisis will tip the euro zone economy into recession, and that the European Central Bank will struggle to support growth while trying to tame record inflation and rein in widening sovereign bond yield spreads.

Hardman recommends selling the euro at USD 1.0160, targeting a break through parity down to USD 0.9760 soon. It looks like a growing number of hedge funds would be on board with that.

(By Jamie McGeever; Graphics by Jamie McGeever, Saikat Chatterjee, Marc Jones; Editing by Sam Holmes)

China warns Asian nations to avoid being used as ‘chess pieces’ by big powers

JAKARTA, July 11 (Reuters) – China’s foreign minister Wang Yi warned on Monday in a policy speech in the Indonesian capital that countries should avoid being used as “chess pieces” by major powers in a region that he said was at risk of being reshaped by geopolitical factors.

Addressing the Association of Southeast Asian Nations (ASEAN) secretariat in Jakarta, Wang, who was speaking through a translator, said many countries in the region were under pressure to take sides.

“We should insulate this region from geopolitical calculations… from being used as chess pieces from major power rivalry and from coercion,” he said, adding: “The future of our region should be in our own hands.”

Southeast Asia has long been an area of geopolitical friction between major powers given its strategic importance, with countries in the region now wary of being caught in the middle of U.S-China rivalry.

Heightening tensions, China claims almost the entire South China Sea as its territory based on what it says are historical maps, putting it at odds with some ASEAN countries which say the claims are inconsistent with international law.

Wang’s speech comes just days after he attended a G20 foreign ministers’ meeting in Bali and amid intense Chinese diplomacy that has seen him make string of stops across the region in recent weeks.

On the sidelines of the G20, Wang held a five-hour meeting with U.S. Secretary of State Antony Blinken with both describing their first in-person talks since October as “candid”.

Wang said on Monday he had told Blinken both sides should discuss the establishment of rules for positive interactions and to jointly uphold regionalism in the Asia-Pacific.

“The core elements are to support ASEAN centrality, uphold the existing regional corporation framework, respect each other’s legitimate rights and interests in the Asia-Pacific instead of aiming to antagonize or contain the other side,” Wang said.

Responding to a question about Taiwan after his speech, Wang said Washington “by distorting and hollowing out the One China policy, is trying to play the Taiwan card to disrupt and contain China’s development.”

Tensions between Beijing and Taipei have escalated in recent months as China’s military conducted repeated air missions over the Taiwan Strait, the waterway separating the island from China.

China considers Taiwan its “sacred” territory and has never renounced the use of force to ensure eventual unification.

Washington says it remains committed to its One China policy and does not encourage independence for Taiwan, but the United States is required to provide Taiwan with the means to defend itself under its U.S. Taiwan Relations Act.

“The two sides across the (Taiwan) Strait will enjoy peaceful development. But when the one-China principle is arbitrarily challenged or even sabotaged, there will be dark clouds or even ferocious storms across the strait,” Wang said.

(Reporting by Ryan Woo in Beijing; Writing by Kate Lamb; Editing by Ed Davies)

Rampant dollar hits new 24 year peak on the yen

HONG KONG, July 11 (Reuters) – The dollar climbed to a 24-year high on the yen on Monday after Japan’s ruling conservative coalition’s strong election showing indicated no change to loose monetary policies, and global growth fears helped the safe-haven dollar more broadly.

The dollar climbed to as high as 137.28 yen in morning trading, its highest since late 1998. It then pared those gains slightly and was last up 0.6% at 136.93.

The dollar was also firm on the euro, which dropped 0.38% to USD 1.0144 heading back towards a 20-year intraday low hit Friday, leaving the dollar index up 0.4% at 107.3.

“The dollar is strengthening across the board but dollar-yen is leading the move,” said Rodrigo Catril currency strategist at National Australia Bank

He said investors’ move away from riskier assets had been supporting the dollar overall, while, in Japan, Sunday’s election result indicating there would no change to the country’s expansionary economic policy would weigh on the yen.

The Bank of Japan’s (BOJ) policy of keeping Japanese rates pinned down to support the economy, combined with rising US interest rates has been a major factor in the Japanese currency’s recent weakness.

BOJ Governor Haruhiko Kuroda said earlier in the day the central bank “won’t hesitate to take additional monetary easing steps as necessary”.

High inflation – by Japanese standards if not global ones – had led to some public pressure on policy makers to change course, but Catril said this pressure had been reduced by the coalition led by Prime Minister Fumio Kishida’s Liberal Democratic Party (LDP) increasing its upper house seats in Sunday’s election.

The US 10 year yield was last at 3.087% having rallied last week.

GROWTH FEARS

Away from Japan, fears about the global growth outlook, particularly as central banks look to curb runaway inflation, were pushing flows to safe havens.

“The (dollar) could remain expensive until the risks around elevated global inflation, European energy security and China’s growth outlook have been resolved,” said analysts at Barclays in a note to clients.

“This week’s US CPI will be an important piece of the puzzle as the Fed decides between 50 basis points and 75 basis points ahead of the July meeting.”

US CPI data is due Wednesday and markets would likely interpret a high reading as a sign the US Federal Reserve would need to raise rates even more aggressively to combat inflation.

With inflation rampant across much of the world, rate hikes are also expected this week from the Reserve Bank of New Zealand on Tuesday and the Bank of Canada on Thursday.

Energy concerns meant the euro was struggling against more than just the dollar and in early trade Monday was at 0.85 British pence EURGBP= and 139 yen, just above last Friday’s levels when it hit its lowest since late May against both currencies.

In the latest worry for the European economy, the biggest single pipeline carrying Russian gas to Germany starts annual maintenance on Monday. Flows are expected to stop for 10 days, but governments, markets and companies fear the shut-down might be extended due to war in Ukraine.

The other main economic event this week is Chinese second-quarter GDP on Friday, with investors watching for signs of how hard the economy was hit by COVID-19 lockdowns.

Britain will publish its second-quarter GDP data on Wednesday, but attention is more focused on the ruling Conservative party’s choice of their next leader and prime minister.

Sterling was down 0.38% against the stronger dollar at USD 1.1986 on Monday morning, having finished a volatile time last week not far from where it started.

(Reporting by Alun John; Editing by Sam Holmes and Stephen Coates)

Oil drops on China COVID worries

LONDON, July 11 (Reuters) – Oil prices fell on Monday in volatile trade, reversing some gains from the previous session as markets braced for new mass COVID testing in China potentially hitting demand, a concern that outweighed ongoing concerns about tight supply.

Brent crude futures fell USD 1.29, or 1.2%, to USD 105.73 at 0900 GMT, after climbing 2.3% on Friday. US West Texas Intermediate (WTI) crude futures declined by USD 1.78, or 1.7%, to USD 103.01, paring a 2% gain from Friday.

The market was rattled by news that China had discovered its first case of a highly transmissible Omicron sub-variant in Shanghai and that new cases had jumped to 63 in the country’s largest city from 52 a day earlier.

“The market’s just responding to news flow and China has grabbed the most attention so far,” said Commonwealth Bank commodities analyst Vivek Dhar.

Traders were nervous that the discovery of the new sub-variant and the highest number of daily new cases in Shanghai since May could lead to another round of mass testing, which would hurt fuel demand, he said..

“Net long positions in WTI crude futures are now at their lowest level since March 2020, when demand collapsed amid the initial outbreak of COVID-19. This is despite ongoing signs of tightness,” ANZ Research analysts said in a note.

The market remains jittery about plans by Western nations to cap Russian oil prices, with President Vladimir Putin warning further sanctions could lead to “catastrophic” consequences in the global energy market.

Questions also remain about how long more crude will flow from Kazakhstan via the Caspian Pipeline Consortium (CPC). Supply has continued so far on the pipeline, which carries about 1% of global oil, even after it was ordered by a Russian court last week to suspend operations.

(Additional reporting by Sonali Paul; Editing by Bradley Perrett, Christopher Cushing and Louise Heavens)

Gold prices flat as lofty US dollar smothers appeal

July 11 (Reuters) – Gold was flat on Monday, as a towering US dollar put pressure on demand for greenback-priced bullion and pinned it near nine-month lows seen last week.

Spot gold held its ground at USD 1,742.08 per ounce at 0221 GMT. US gold futures dipped 0.2% to USD 1,739.60.

The dollar climbed back towards its highest level in about 20 years hit on Friday, keeping overseas buyers away from gold.

“While gold prices remain below USD 1,753/oz it seems a move down to USD 1,720 is on the cards. Although there is some support around USD 1,730 … given the bearish trend overall, any upside is likely to be a retracement, at best,” said Matt Simpson, senior market analyst at City Index.

Gold marked a fourth straight weekly loss on Friday, having hit its lowest since late-September a few sessions prior, hurt by the dollar’s ascent and bets for steep interest rate hikes gaining traction after healthy US jobs data.

“Gold has had a large move lower, and there comes a point where the market needs to pause for breath. And that’s what we are seeing on gold right now,” Simpson said.

Atlanta Federal Reserve Bank President Raphael Bostic, until recently among the US central bank’s most dovish policymakers, on Friday said he “fully” supports another three quarters of a percentage point interest rate rise at the Fed’s next policy meeting later this month.

Benchmark US 10-year Treasury yields steadied near the previous session’s over one-week high, weighing on gold.

Higher interest rates and bond yields increase the opportunity cost of holding non-yielding bullion.

Meanwhile, Asian shares were mostly under water on Monday as investors braced for a US inflation report that could force another super-sized hike in interest rates.

Spot silver fell 0.4% to USD 19.23 per ounce, and platinum slipped 1.2% to USD 886.50.

Palladium dropped 3% to USD 2,116.89, after rising nearly 10% on Friday.

(Reporting by Bharat Govind Gautam in Bengaluru; Editing by Rashmi Aich and Sherry Jacob-Phillips)

Safe haven dollar stands tall on inflation, energy jitters

HONG KONG, July 11 (Reuters) – The dollar was on the front foot at the start of a week in which US and Chinese data and European energy security were top of mind, as investor concerns about global economic growth offered support to the safe haven currency.

The euro languished at USD 1.01475, having lost 2.3% last week and briefly falling to its lowest since late 2002.

The greenback gained 0.37% on the yen to 136.63 in early trade, not far from a 20-year peak hit last month, leaving the dollar index at 107.29.

“This week’s US CPI will be an important piece of the puzzle as the Fed decides between 50 basis points and 75 basis points ahead of the July meeting.”

The data is due Wednesday and markets would likely interpret a high reading as a sign the US Federal Reserve would need to raise rates even more aggressively to combat inflation.

With inflation rampant across much of the world, rate hikes are also expected this week from the Reserve Bank of New Zealand on Tuesday and the Bank of Canada on Thursday.

Energy concerns meant the euro was struggling against more than just the dollar and in early trade Monday was at 0.85 British pence and 138.48 yen, just above last Friday’s levels when it hit its lowest since late May against both currencies.

The other main economic event this week is Chinese second quarter GDP on Friday, with investors watching for signs of how hard the economy was hit by COVID-19 lockdowns in many cities during the quarter.

Case numbers are edging up slightly again in Shanghai, though much lower than they were, and authorities there and in several cities are scrambling to stamp out new outbreaks.

Britain will publish its second quarter GDP data on Wednesday, but attention is more focused on the ruling Conservative party’s choice of their next leader and prime minister, as candidates throw their hats into the ring, with many promising tax cuts.

Sterling was steady at USD 1.2028 on Monday morning, having finished a volatile time last week not far from where it started.

Bitcoin BTC=BTSP was at USD 20,800 after its latest attempt to break significantly away from around USD 20,000 petered out over the weekend. It has been stuck at around that level for the past month.

(Reporting by Alun John; Editing by Sam Holmes)

Oil mixed as market weighs tight supply against recession jitters

MELBOURNE, July 11 (Reuters) – Oil prices were unsteady on Monday, with Brent trading higher on supply concerns while West Texas Intermediate (WTI) dipped, as traders balanced supply concerns against worries about a recession or China’s COVID-19 curbs hitting demand.

Brent crude futures were up 11 cents, or 0.1%, at USD 107.13 a barrel at 0102 GMT, adding to a 2.3% gain on Friday.

US WTI crude futures however slipped 15 cents, or 0.1%, to USD 104.64 a barrel, paring a 2% gain from Friday.

Trading was thinned by a public holiday in parts of Southeast Asia.

Both contracts posted weekly declines last week as the market was dominated by worries that rising interest rates to curb inflation would spark a recession and dent oil demand.

“Net long positions in WTI crude futures at now at their lowest level since March 2020, when demand collapsed amid the initial outbreak of COVID-19. This is despite ongoing signs of tightness,” ANZ Research analysts said in a note.

Both benchmark contracts traded lower in early trade on Monday then turned positive before trading in different directions.

The latest data on COVID-19 cases in China showed numbers had fallen from the previous day, but concerns remain about the potential for wider lockdowns after a new Omicron subvariant was discovered in Shanghai.

On the supply side, the market remains nervous about plans by Western nations to cap Russian oil prices, with President Vladimir Putin warning further sanctions could lead to “catastrophic” consequences in the global energy market.

Questions also remain about how long crude from Kazakhstan via the Caspian Pipeline Consortium (CPC) will flow for. Supply has continued so far on the pipeline, which carries about 1% of global oil, even after it was ordered by a Russian court last week to suspend operations.

CPC Blend crude oil exports are set to rise to 5.45 million tonnes for August from 4.86 million tonnes in July, a loading schedule showed.

(Reporting by Sonali Paul; Editing by Bradley Perrett)

US expects Biden and Xi will speak in weeks ahead – Blinken

BANGKOK, July 10 (Reuters) – US Secretary of State Antony Blinken said on Sunday the United States expects President Joe Biden and Chinese leader Xi Jinping will have the opportunity to speak in the weeks ahead.

However, when asked at a news conference in Thailand if Biden and Xi might hold a first face-to-face meeting on the sidelines of the G20 summit in Bali in November, Blinken said he could not speak about what might happen in the fall. He said he also could not say who the United States would be sending to the APEC summit in Thailand.

(Reporting by David Brunnstrom; Editing by Raissa Kasolowsky)

Blinken and China’s Wang Yi hold ‘candid’ talks on Ukraine and trade

NUSA DUA, Indonesia, July 9 (Reuters) – US Secretary of State Antony Blinken said on Saturday he had discussed Russian aggression in Ukraine during more than five hours of talks with Chinese Foreign Minister Wang Yi, and raised concerns over Beijing’s alignment with Moscow.

Both diplomats described their first in-person talks since October as “candid”, with the meeting taking place a day after they attended a gathering of G20 foreign ministers on the Indonesian island of Bali.

“I shared again with the state councilor that we are concerned about the PRC’s alignment with Russia,” Blinken told a news conference after the talks, referring to the People’s Republic of China.

He said he did not think China was behaving in a neutral way as it had supported Russia in the United Nations and “amplified Russian propaganda”.

After the meeting, a US official said “neither side held back”.

“We were very open about where our differences are … but the meeting was also constructive because, despite the candor, the tone was very professional,” the official said.

Blinken said Chinese President Xi Jinping had made it clear in a call with President Vladimir Putin on June 13 that he stood by a decision to form a partnership with Russia.

Shortly before Russia’s Feb. 24 invasion of Ukraine, Beijing and Moscow announced a “no limits” partnership, although US officials say they have not seen China evade tough US-led sanctions on Russia or provide it with military equipment.

US officials have warned of consequences, including sanctions, should China offer material support for the war that Moscow calls a “special military operation” to degrade the Ukrainian military. Kyiv and its Western allies say the invasion is an unprovoked land grab.

‘SINOPHOBIA’

Asked about his refusal to hold talks with Russian Foreign Minister Sergei Lavrov at the G20, Blinken said: “The problem is this: we see no signs whatsoever that Russia, at this moment in time, is prepared to engage in meaningful diplomacy.”

Wang exchanged in-depth views on “the Ukraine issue” during Saturday’s talks, according to a statement released by his ministry, without giving details.

He also told Blinken that the direction of US-China relations was in danger of being further led “astray” due to a problem with the United States’ perception of China.

“Many people believe that the United States is suffering from an increasingly serious bout of ‘Sinophobia’,” Wang was quoted as saying.

Wang also said Washington should cancel additional tariffs imposed on China as soon as possible and cease unilateral sanctions on Chinese companies.

US officials had said before the talks that the meeting was aimed at keeping the difficult US-China relationship stable and preventing it from veering inadvertently into conflict.

In late June, US national security adviser Jake Sullivan said US President Joe Biden and China’s Xi were expected to speak again in the next few weeks.

Daniel Russel, a top US diplomat for East Asia under former President Barack Obama who has close contact with Biden administration officials, said ahead of the talks a key aim for the meeting would be to explore the possibility of an in-person meeting between Biden and Xi, their first as leaders.

The United States calls China its main strategic rival and is concerned it might one day attempt to take over the self-ruled democratic island of Taiwan.

Despite their rivalry, the world’s two largest economies remain major trading partners, and Biden has been considering scrapping tariffs on a range of Chinese goods to curb surging US inflation before the November midterm elections.

(Reporting by David Brunnstrom and Stanley Widianto; Additional reporting by Ryan Woo in Beijing; Writing by Ed Davies; Editing by William Mallard, Christina Fincher, and Helen Popper)

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