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Showing posts from July, 2019

EU FX | Dollar hits two-year high after Federal Reserve cuts interest rates by a quarter point as expected

2 minutes A trader shows U.S. dollar notes at a currency exchange booth. Akhtar Soomro | Reuters The dollar index hit a two-year high on Wednesday as the Federal Reserve cut interest rates after Fed Chairman Jerome Powell said the 25-basis-point cut was not the same as the beginning of a lengthy rate cutting cycle. The dollar index rose 0.42% to 98.46 in afternoon trading, its highest level since May 2017 when the dollar index hit a high of 98.891. Some were expecting the Fed to leave the door open for further cuts or even a 50 basis point cut after Wednesday’s meeting, so the less dovish stance sent U.S. stocks to session lows and the dollar index to a more than two-year high. “The Fed signaled that it is going to be data dependent but markets were priced for a more dovish outlook which the Fed did not deliver on, said Collin Martin, director of fixed income at the Schwab Center for Financial Research in New York. “Markets were

Bonds Yields Report on Wednesday 31, July 2019 | 10-year yield declined after Fed cuts rates, calls reduction a 'midcycle adjustment'

Thomas Franck 3-4 minutes U.S. government debt yields whipsawed on Wednesday after Federal Reserve Chair Jerome Powell said that the central bank’s quarter-point rate cut was simply a mid-cycle “adjustment.” The Fed decided at its two-day July meeting to cut its benchmark overnight lending rate by one quarter point to a target range of 2% to 2.25%. The central bank also said it would stop reducing the size of its balance sheet, which consists of bonds and mortgage-backed securities it purchased following the 2008 financial crisis. Wednesday marked the first cut to the federal funds rate since December 2008. At around 4:04 p.m. ET, the yield on the benchmark 10-year Treasury note , a benchmark for auto loans, mortgages and other lending, settled lower to trade at 2.013%. The 2-year Treasury yield, more sensitive to changes in Fed policy, rose 2 basis points to 1.872%. Bond yields move inversely to prices. “We’re thinking of it essentially as a mid-cycle

Wall Street Closing Report on Wednesday 31, 2019 | Dow drops 300 points in worst day since May after Powell hints rate cut not the start of a trend

Fred Imbert 4-5 minutes Stocks dropped on Wednesday as Federal Reserve Chair Jerome Powell dampened hopes for further rate cuts later this year. The Dow Jones Industrial Average traded 250 points lower after falling as much as 478 points at one point. The S&P 500 and Nasdaq Composite  both dropped 0.7%. The Fed cut rates by 25 basis points, matching market expectations. The central bank cited  “ global developments ” along with “muted inflation” as reasons for easing monetary conditions. However, Powell told reporters in a news conference following rate decision that the central bank’s rate cut was a “ mid-cycle adjustment , ” hinting that further rate cuts later this year are not a sure thing. “That refers back to other times when the FOMC has cut rates in the middle of a cycle and I’m contrasting it there with the beginning of a lengthy cutting cycle. That is not what we’re seeing now, that’s not our perspective now,” Powell s

Monetary Policy I Powell says Fed will never move rates because of political factors or to prove its independence

Yun Li 2 minutes Jerome Powell, chairman of the U.S. Federal Reserve, speaks during a news conference following a Federal Open Market Committee meeting in Washington, D.C., on Wednesday, June 19, 2019. Andrew Harrer | Bloomberg | Getty Images Federal Reserve Chairman Jerome Powell said the central bank's rate decision was not a result of political pressure. "We never take into account political considerations. There's no place in our discussions for that. We also don't conduct monetary policy in order to prove our independence," Powell spoke at a press conference on Wednesday. The Fed dropped the target range for its overnight lending rate to 2% to 2.25%, or 25 basis points from the previous level, marking the first rate cut since December 2008. President Donald Trump has been putting increasing pressure on the central bank, even calling for it to deliver a 50 basis point cut just a day ahead of the Fed an

Energy I Oil Price Report on Wednesday 31, July 2019 I Oil rises 0.9% after Federal Reserve cuts interest rates a quarter point

2-3 minutes Jean-Paul Pelissier | Reuters Oil prices rose Wednesday after Federal Reserve chair Jerome Powell said the central bank will lower interest rates by 25 basis points as expected. Brent crude futures rose 46 cents to $65.18 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose 53 cents to $58.58 a barrel. U.S. crude inventories fell by 8.5 million barrels in the week ended July 26, the Energy Information Administration said on Wednesday. Analysts expected a decrease of 2.6 million barrels. “The report was bullish due to the large crude oil inventory drawdown and strong demand from refiners and drivers,” said John Kilduff, partner at Again Capital Management. “Refiners are running at very high rates, and gasoline demand remains quite high, as the summer driving season persists.” Libya’s Sharara oilfield, the country’s largest, shut after a problem on Tuesday with a valve on the pipeline linking it to the Za

Gold Price Report on Wednesday 31, 2019 I Gold heads for third monthly gain but dips after Fed cuts interest rates

2-3 minutes Gold bars at the Austrian Gold and Silver Separating Plant in Vienna, Austria. Leonhard Foeger | Reuters Gold prices fell on Wednesday but were still heading for a third straight monthly gain. The precious metal extended the day's losses slightly after the Federal Reserve voted to cut interest rates by a quarter point for the first time in over a decade, a highly-anticipated but widely-expected move. Spot gold fell as much as 1% following the Fed's decision but quickly recovered most of the loss, down just 0.3% at $1,426.31 an ounce. U.S. gold futures were down 0.4% at $1431.30 an ounce. Investors were expecting an interest rate cut by the Fed, as well as by other leading central banks, which would cut the opportunity cost of holding non-yielding gold. The expectation has the precious metal on track for a 1.5% gain for July. "The metal looks strong for now. In the recent time it has been supported by falling governme

Europe Markets Closing Report on Wednesday 31, 2019 | European stocks climb as investors await Fed decision

Elliot Smith 3-4 minutes European stocks traded higher Wednesday afternoon as investors awaited an interest rate decision from the U.S. Federal Reserve. The pan-European Stoxx 600 climbed 0.3%, with the majority of sectors and major bourses in positive territory. The FTSE 100 in London was the outlier in Europe, slipping around three quarters of one percent as the pound moved away from recent lows. European Markets: FTSE, GDAXI, FCHI, IBEX TICKER COMPANY NAME PRICE CHANGE %CHANGE VOLUME FTSE FTSE 100 FTSE 7586.04 -60.73 -0.79 574041822 DAX DAX DAX 12205.93 58.69 0.48 58613620 CAC CAC CAC 5529.57 18.50 0.34 44854599 The Fed is widely expected to cut interest rates by a quarter point — which would be the central bank’s first rate cut in over a decade — and the anticipation of monetary easing has supported risk asset prices worldwide. Trade is also on investors’ minds, after U.S. President Donald Trump took to Twitter to

Stocks making the biggest moves premarket: GE, Spotify, Garmin, Humana, Apple & more

Peter Schacknow 4-5 minutes Check out the companies making headlines before the bell: General Electric – GE reported adjusted quarterly profit of 17 cents per share , 5 cents a share above estimates. Revenue also beat forecasts, and the company boosted its full-year outlook. GE saw ongoing weakness in its power business, but aviation, oil and gas, and renewable energy revenue grew. Separately, GE announced the impending departure of CFO Jamie Miller , who will stay on until a replacement is found. Spotify – The music streaming service posted a wider-than-expected loss for its latest quarter, but revenue exceeded estimates. Spotify also reported a 29% jump in monthly active users and a 30% increase in premium subscribers compared to a year ago, although some subscriber metrics were below analysts’ forecasts. Garmin – The GPS device maker beat estimates by 15 cents a share, with adjusted quarterly profit of $1.16 per share. Revenue

Employment Cost Index Summary

7-9 minutes NEWS RELEASE BUREAU OF LABOR STATISTICS U.S. DEPARTMENT OF LABOR TRANSMISSION OF MATERIAL IN THIS RELEASE IS EMBARGOED UNTIL USDL-19-1386 8:30 a.m. (EDT) Wednesday, July 31, 2019 Technical information: (202) 691-6199 • ncsinfo@bls.gov • www.bls.gov/ect Media contact: (202) 691-5902 • pressoffice@bls.gov EMPLOYMENT COST INDEX – June 2019 Compensation costs for civilian workers increased 0.6 percent, seasonally adjusted, for the 3-month period ending in June 2019, the U.S. Bureau of Labor Statistics reported today. Wages and salaries increased 0.7 percent and benefit costs increased 0.5 percent from March 2019. (See tables A, 1, 2, and 3.) Civilian Workers Compensation costs for civilian workers increased 2.7 percent for the 12-month period ending in June 2019 compared with an increase of 2.8 percent in June 2018. Wages and salaries increased 2.9 percent for the 12-mont

Opinion I Monetary Policy I The Fed's credibility is at stake as it looks to cut rates under pressure from a vocal president

Jeff Cox 6-7 minutes If the Federal Reserve fulfills expectations and cuts interest rates Wednesday, it will have to convince the public it is doing so to preserve economic growth and not kowtowing to a very vocal president who is demanding looser monetary policy. The Federal Open Market Committee and Chairman Jerome Powell have a delicate balance to strike if they approve what markets are betting is a 25 basis point easing. If the committee presents a reasoned approach to why a cut is necessary just seven months after hiking, it has the potential to execute the move seamlessly. But if the perception emerges that policymakers are merely looking to mollify President Donald Trump , then the central bank’s credibility, and its veil of political independence, could be torn asunder, resulting in damage that could take years to fix. After all, the economic signs in the U.S. look good. GDP rose a better-than-expected 2.1% in the second

Company Shares | General Electric shares jump 5% beats low earnings expectations as cash flow stabilizes

Michael Sheetz 2-3 minutes General Electric  shares rose after reporting second-quarter earnings on Wednesday, as its key metric of industrial cash flow stabilizing faster than the company previously forecast. GE reported adjusted earnings of 17 cents a share, down 6% from the same quarter last year but above the 12 cents a share anticipated by analysts surveyed by Refinitiv. The company also reported lower revenue of $28.83 billion compared to its previous second quarter, which was also a hair above the $28.68 billion analysts surveyed by Refinitiv expected. The company also said its industrial free cash flow for the second quarter was a negative $1 billion. GE’s metric of industrial free cash flow is closely watched by investors, as it shows what money the company has left over after paying for operating expenses and capital spending. Especially in the case of GE, industrial free cash flow is used as a gauge of efficiency. Shares

VoA Video | Democratic Debate Features Clash Between Moderates and Progressives

Asia Market Closing Report on Wednesday 31, 2019 | Asia stocks fall as investors await Fed rate decision, Hong Kong closes early ahead of typhoon

Eustance Huang 5-6 minutes Stocks in Asia slipped on Wednesday as investors awaited the U.S. Federal Reserve’s announcement of its decision on interest rates. Meanwhile, markets in Hong Kong closed early as the city braces itself for a tropical storm. The Nikkei 225 in Japan slipped 0.86% to close at 21,521.53, with shares of index heavyweight Fast Retailing declining 1.96%. The Topix index also fell 0.66% to end its trading day at 1,565.14. Shares of Sony surged 5.31% after the company posted a record first-quarter profit on Tuesday. Mainland Chinese stocks slipped on the day, with the Shanghai composite shedding 0.67% to 2,932.51 and the Shenzhen component falling 0.77% to 9,326.61. The Shenzhen composite also declined 0.681% to 1,571.30. In Hong Kong, the Hang Seng index closed early for the day as a tropical cyclone signal was raised to its third highest level. The index fell 1.31% to 27,777.75 as shares of life insurer AIA

Politics | Trump’s Racially Divisive Attacks Stoke Base Yet Pose 2020 Risks

By Justin Sink 7-9 minutes Donald Trump has long tested the line between keeping his loyal base outraged and aggrieved while preventing mainstream Republicans from bolting his coalition, but his attacks on minority lawmakers risk upsetting the balance and imperiling his re-election. The president has kept controversy over his racially divisive attacks at a high boil into a third week by leveling criticism at Representative Elijah Cummings, the House Oversight chairman, who represents a majority-black Maryland district Trump called a “disgusting, rat and rodent infested mess.” For good measure, Trump heaped insults on civil rights activist Al Sharpton after he traveled to Baltimore to defend Cummings, calling him a “con man” who was “looking for a score” and “hates whites.” Al

Before The Bell | Dow futures higher as investors anticipate first Fed rate cut in a decade

Sam Meredith 2-3 minutes U.S. stock index futures were higher Wednesday morning, as market participants braced for the outcome of the Federal Reserve ’s meeting later in the session. At around 03:30 a.m. ET, Dow futures rose 70 points, indicating a positive open of more than 66 points. Futures on the S&P and Nasdaq were both slightly higher. The U.S. central bank is widely expected to cut interest rates for the first time since the financial crisis more than a decade ago. Market expectations point to a quarter-point rate cut. The Fed is set to deliver its decision at 2:00 p.m. ET, with Chairman Jerome Powell scheduled to hold a press conference at 2:30 p.m. ET. The projected move from the Fed has supported risk asset prices worldwide in recent days. However, trade war concerns have resurfaced to cap gains. President Donald Trump said in a series of tweets Tuesday that Beijing is not keeping its promise of buying more U.S. agr

EU FX | Dollar stalls ahead of Fed meeting

3 minutes The dollar lacked direction on Tuesday as traders held off on making big moves ahead of the Federal Reserve meeting concluding Wednesday, at which policymakers are expected to cut interest rates for the first time since the financial crisis by 25 basis points. The move would be a so-called insurance cut to protect the U.S. economy from global uncertainties and trade pressures, in contrast to interest rate cuts by countries facing more imminent risks. Markets will be watching the Fed’s forward guidance for clarity on whether the committee sees the cut as a one-off or as the beginning of a rate-cutting cycle. “The market is on hold waiting for the FOMC meeting tomorrow. That is expected to be the next driver of price action at a general level,” said Shahab Jalinoos, global head of foreign exchange strategy at Credit Suisse in New York. The euro hovered on Tuesday around the 26-month low it reached last week of $1.110. Although

US Bonds Closing Report on Tuesday 30, 2019 | Treasury yields fractionally higher ahead of Fed meeting

Elliot Smith 2 minutes U.S. government debt yields edged higher on Tuesday morning with traders awaiting a monetary policy decision from the Federal Reserve, which at its July meeting is expected to cut to interest rates for the first time in over a decade. U.S. Markets Overview: Treasurys chart TICKER COMPANY YIELD CHANGE %CHANGE US 3-MO U.S. 3 Month Treasury 2.095 -0.013 0.00 US 1-YR U.S. 1 Year Treasury 1.985 -0.003 0.00 US 2-YR U.S. 2 Year Treasury 1.846 -0.004 0.00 US 5-YR U.S. 5 Year Treasury 1.842 0.008 0.00 US 10-YR U.S. 10 Year Treasury 2.058 0.003 0.00 US 30-YR U.S. 30 Year Treasury 2.579 -0.004 0.00 At around 12:03 p.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was fractionally above the flatline at around 2.068%, while the yield on the 30-year Treasury bond rose to 2.588%. Market focus is largely attuned to the Federal Open Markets Committee (FOMC) meeting next wee

How Did The World Share Markets Close on January 30, 2019

                                      ASIA Asia markets inch higher ahead of trade talks; Bank of Japan keeps interest rates steady Eustance Huang 4-5 minutes Stocks in Asia Pacific edged up on Tuesday as investors awaited developments from U.S.-China trade talks this week in Shanghai. The Bank of Japan also opted to keep monetary policy steady. The Nikkei 225 in Japan rose 0.43% to close at 21,709.31, with shares of index heavyweight Fanuc jumping 3.14%. The Topix index added 0.45% to finish its trading day at 1,575.58. Over in mainland China, the Shanghai composite added 0.39% to close at 2,952.34, while the Shenzhen component rose 0.48% to finish its trading day at 9,399.10. The Shenzhen composite gained 0.452% to close at 1,582.07. Hong Kong’s Hang Seng index pared losses from Monday to bounce back in early trade following yesterday’s press conference, when Beijing reiterated their firm support for the city’s embattled lead