Dollar index near 19-month high on safe-haven bid amid global growth worries

Weaker-than-expected economic data from China and Europe and fears of a possible U.S. government shutdown spooked investors away from stocks toward the greenback and yen. The dollar index, which gauges its value versus six major peers, was little changed at 97.44, below the 19-month high of 97.71 it hit on Friday. The Federal Reserve is set to raise interest rates by 25 basis points at its two-day meeting that opens Tuesday. However, interest rate futures used to gauge the probability of further


Weaker-than-expected economic data from China and Europe and fears of a possible U.S. government shutdown spooked investors away from stocks toward the greenback and yen. The dollar index, which gauges its value versus six major peers, was little changed at 97.44, below the 19-month high of 97.71 it hit on Friday. The Federal Reserve is set to raise interest rates by 25 basis points at its two-day meeting that opens Tuesday. However, interest rate futures used to gauge the probability of further
Dollar index near 19-month high on safe-haven bid amid global growth worries Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-17
Keywords: news, cnbc, companies, global, high, dollar, rate, bid, likely, near, trade, markets, economic, amid, safehaven, rates, index, data, fed, growth, worries, interest


Dollar index near 19-month high on safe-haven bid amid global growth worries

The dollar held near a 19-month high on Monday, bolstered by safe-haven buying as heightened concerns of a global economic slowdown reduced appetites for riskier assets such as stocks and Asian currencies.

Weaker-than-expected economic data from China and Europe and fears of a possible U.S. government shutdown spooked investors away from stocks toward the greenback and yen.

“The dollar is clearly showing it is attractive during times of market stress,” said Ray Attrill, head of currency strategy at NAB in Sydney.

The dollar index, which gauges its value versus six major peers, was little changed at 97.44, below the 19-month high of 97.71 it hit on Friday.

The Australian dollar, whose fortunes are closely tied to China’s economy, was marginally lower at $0.7174. It lost 0.3 percent of its value last week as data showed Chinese November retail sales grew at the weakest pace since 2003 and industrial output rose the least in nearly three years, underlining risks to the economy.

The offshore Chinese yuan was flat at 6.8974.

Apart from fears of a global economic slowdown, markets are also focusing on the likely trajectory of U.S. monetary policy.

The Federal Reserve is set to raise interest rates by 25 basis points at its two-day meeting that opens Tuesday.

The central bank has lifted rates eight times since December 2015 in a bid to restore policy to more normal settings after having slashed borrowing costs to near zero to combat the financial crisis a decade ago.

With the hike largely factored in by the market, larger moves in the dollar will be guided by the Fed’s forward guidance.

According to their projections in September, the median view among the Fed’s policymakers was for three rate hikes in 2019. However, interest rate futures used to gauge the probability of further hikes are pricing in only one hike in 2019.

“Any content that speaks to the difference between market pricing of one interest rate rise in 2019 versus previous Fed indications of three rises is very likely to move markets,” Michael McCarthy, Sydney-based chief markets strategist at CMC Markets, said in a note.

Traders believe that higher U.S. borrowing costs will likely hurt U.S. growth momentum and ultimately force the Fed to pause its monetary tightening path.

Recent comments by Fed officials have also been read as dovish by some analysts. Last month, Fed Chairman Jerome Powell said rates were near the range of policymakers’ estimates of “neutral” – the level at which they neither stimulate nor impede the economy.

“The Fed will most likely move from an auto-pilot mode to being data dependent,” said Attrill.

The dollar gained 0.1 percent over the yen in Asian trade to trade at 113.48. Interest rate differentials between the U.S. and Japan make the dollar a more attractive bet than the yen, according to some analysts.

The Bank of Japan has a meeting on Dec. 19-20, at which policy is expected to remain highly accommodative as inflation remains well below the its target.

The euro was also little changed at $1.1310, having lost 0.6 percent last week after weaker-than-expected data out of France and Germany suggested that economic activity in Europe remains weak.

Sterling remained under pressure in Asian trade, down 0.02 percent at $1.2582. British trade minister Liam Fox said on Sunday talks with the European Union to secure “assurances” for parliament on Prime Minister Theresa May’s Brexit deal will take time, with a decision expected in the new year.


Company: cnbc, Activity: cnbc, Date: 2018-12-17
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Fed meeting could be pivotal for stock market looking for ‘knight in shining armor’

The Fed is expected to raise interest rates Wednesday by a quarter point, and the pressure is on for Fed Chairman Jerome Powell to sound dovish — but not too dovish. Fed officials are also expected to revisit their fed funds rate forecasts and roll back some of the rate hikes expected in the next several years. “Equities are hoping that the Fed is almost done or [for] signals that they’re going to pause. Robert Sluymer, technical strategist at Fundstrat, said key for the stock market will be how


The Fed is expected to raise interest rates Wednesday by a quarter point, and the pressure is on for Fed Chairman Jerome Powell to sound dovish — but not too dovish. Fed officials are also expected to revisit their fed funds rate forecasts and roll back some of the rate hikes expected in the next several years. “Equities are hoping that the Fed is almost done or [for] signals that they’re going to pause. Robert Sluymer, technical strategist at Fundstrat, said key for the stock market will be how
Fed meeting could be pivotal for stock market looking for ‘knight in shining armor’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-14  Authors: patti domm, adam jeffery
Keywords: news, cnbc, companies, stock, meeting, knight, armor, week, stocks, rate, dovish, market, pivotal, economy, theyre, fed, think, looking, shining, expected


Fed meeting could be pivotal for stock market looking for 'knight in shining armor'

The Fed may not be able to turn the tide for the stock market in the week ahead, but it could soothe some of the wild volatility that has been crushing stocks since October.

The Fed is expected to raise interest rates Wednesday by a quarter point, and the pressure is on for Fed Chairman Jerome Powell to sound dovish — but not too dovish. Fed officials are also expected to revisit their fed funds rate forecasts and roll back some of the rate hikes expected in the next several years.

“Equities are hoping that the Fed is almost done or [for] signals that they’re going to pause. I think it’s too premature for them to do that,” said George Goncalves, head of fixed income strategy at Nomura. “The Fed was a little too optimistic for next year, and now they’ve got to come down. The recent price action is almost an overshoot on the bearish side.”

The Fed should tweak its economic forecast, and it could note that it has concerns about global growth. Powell is also expected to hold a briefing, where he could discuss Fed officials’ concerns about the impact of trade wars and possibly financial conditions.

There has been some speculation the Fed could hold off on a rate hike Wednesday, but it is widely expected to move forward and use its forecast and dovish tone to ease market fears that it is moving too aggressively.

“Is the change in tone going to be enough to jump-start this market that only reacts to bad news? It may well be. It may be the pivot point,” said Art Hogan, chief market strategist at B. Riley FBR.

Some strategists said if the Fed sparks a rally, there’s a chance stocks could find a near-term bottom.

Robert Sluymer, technical strategist at Fundstrat, said key for the stock market will be how it trades coming out of the Fed meeting. “I think it’s huge,” he said. “A tremendous number of stocks have been selling off through 2018. You have a lot of weak stocks, but they’re also deeply oversold from an intermediate standpoint. … My guess is coming out of the Fed you’re going to see some relief from that.”

Sluymer said the market is testing the lows of its 2018 trading range. The S&P 500 closed at 2,599, off 1.9 percent Friday and 1.2 percent for the week. It is now down 2.8 percent for the year.

“I think the markets want way too much out of the Fed. Market participants want a knight in shining armor,” said Goncalves. Goncalves said Nomura expects the Fed to eliminate one of the rate hikes in its collective forecast for next year, taking it to two instead of three on its so-called “dot plot.”

Trade-war worries and the Fed’s interest rate hikes have topped the list of what’s scaring risk markets and sending buyers into safe havens like Treasurys. On Friday, stocks plunged after a surprise slowing of consumer and industrial data in China, even though U.S. retail sales were strong and economists upped their outlook for fourth-quarter growth to 3 percent.

But the U.S. economy is expected to grow at a slower pace next year, and the Fed is expected to emphasize its policy decisions will be dependent on data. Economists expect growth to fall from about 3 percent to 2.4 percent next year, according to CNBC/Moody’s Analytics rapid GDP update.

“If the Fed sounds overtly too dovish, it sounds like they’re trying to appease the equity market. If they end up being too dovish they run the risk of having us wonder what they know that we don’t know,” said Goncalves.

Patrick Palfrey, equity strategist at Credit Suisse, said the economic outlook and earnings expectations are still solid but the global economy has weakened somewhat and the market has to adjust. “If you look at valuations in the sell-off, what the market is pricing at the moment is a recession, an economic recession or a profit recession. The question is when you look at ISM or the pace of job gains, the question is are they recessionary? And the answer is no,” Palfrey said.

Goncalves said the Fed will be careful not to be too fearful about the economy. “The economy is not yet at a point where you can say clearly that we’re heading for a downfall,” he said.

Besides the Fed in the week ahead, there are a few earnings reports, including Oracle on Monday, Micron and FedEx on Tuesday, and Nike on Thursday.

Economic reports include homebuilders sentiment on Monday, home sales Wednesday and personal income and durable goods Friday.


Company: cnbc, Activity: cnbc, Date: 2018-12-14  Authors: patti domm, adam jeffery
Keywords: news, cnbc, companies, stock, meeting, knight, armor, week, stocks, rate, dovish, market, pivotal, economy, theyre, fed, think, looking, shining, expected


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With Fed expected to slow rate hikes, markets raise stakes for Europe’s next move

After spending 2.6 trillion euros, the ECB is expected to end the plan and perhaps clarify when it might begin to raise its still-negative interest rates. It is on track to raise rates starting in the second half of next year. The ECB meeting comes a week ahead of the Federal Reserve’s December meeting, where it is expected to raise interest rates one-quarter point. ECB President Mario Draghi speaks at 8:30 a.m. “Draghi is pinning his hopes on their labor market,” Chandler said.


After spending 2.6 trillion euros, the ECB is expected to end the plan and perhaps clarify when it might begin to raise its still-negative interest rates. It is on track to raise rates starting in the second half of next year. The ECB meeting comes a week ahead of the Federal Reserve’s December meeting, where it is expected to raise interest rates one-quarter point. ECB President Mario Draghi speaks at 8:30 a.m. “Draghi is pinning his hopes on their labor market,” Chandler said.
With Fed expected to slow rate hikes, markets raise stakes for Europe’s next move Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-12  Authors: patti domm, jasper juinen, bloomberg, getty images
Keywords: news, cnbc, companies, raise, expected, say, rates, rate, stakes, markets, hikes, europes, ecb, chandler, market, yield, president, slow, fed


With Fed expected to slow rate hikes, markets raise stakes for Europe's next move

The Fed looks set to shift into a lower gear when it comes to rate hiking, and now markets want to make sure Europe’s central bankers aren’t going to drive too fast as they approach the off ramp for their own easy money program.

The European Central Bank meets Thursday and is expected to declare the official end of its quantitative easing program, launched in March 2015 to save the economy from deflationary forces and the residual effects of the European debt crisis.

After spending 2.6 trillion euros, the ECB is expected to end the plan and perhaps clarify when it might begin to raise its still-negative interest rates. It is on track to raise rates starting in the second half of next year.

The ECB meeting comes a week ahead of the Federal Reserve’s December meeting, where it is expected to raise interest rates one-quarter point. But the future expectations for the Fed have changed dramatically in the last several weeks, with economists no longer expecting an automatic quarter-point hike in March given market turbulence and signs of slower growth.

Futures markets have priced in less than one hike for next year, after next week’s widely expected hike.

The Fed has forecast three hikes for 2019, but Fed watchers say it could reduce its forecast based on recent dovish comments from Fed officials and a more tempered view of the economy for next year.

“It’s one of the most extreme sentiment shifts I’ve seen with no data to support it. It’s just that the equity market has gone down. I think the Fed wants to say we’re going to be more data dependent and they certainly don’t want to rule out March,” said Jens Nordvig, CEO of Exante Data.

That shift in Fed expectations raises the stakes for the ECB, which has to downgrade its own view of the economy but not so much to raise doubts about its exit from QE.

It also comes at a difficult time for Europe, as Italy struggles with its budget, and France’s president strained his own budget by upping payouts to pensioners and low income workers, in an effort to end violent ‘yellow vest’ protests. Compounding Europe’s problems too is the awkward and unclear path the United Kingdom will take to leave the European Union.

“There are a lot of moving parts,” said Marc Chandler, chief market strategist at Bannockburn Global Forex. Chandler said the ECB will also lower its inflation forecast.

“Every time the ECB met this year, the euro has fallen, except in September, and that’s probably because at every meeting, the economy’s been weakening,” said Chandler. He said the market is looking for clarity on when the ECB plans to raise rates and how it plans to handle its balance sheet as debt rolls off. One option would be to extend the maturities of some debt, like Italy or France, he added.

ECB President Mario Draghi speaks at 8:30 a.m. ET, following the ECB statement at 7:45 a.m. ET.

“Draghi is going to say monetary policy needs to remain very accommodative,” said Chandler, adding the ECB president may also say risks remain balanced because of labor market strength.

“Draghi is pinning his hopes on their labor market,” Chandler said.

Europe’s low yields have made U.S. yields more attractive to some investors, and the spread between the German 10-year bund and the U.S. 10-year yield is the widest in decades. The German bund yield Wednesday was about 0.28 to the U.S. yield of 2.91 percent.


Company: cnbc, Activity: cnbc, Date: 2018-12-12  Authors: patti domm, jasper juinen, bloomberg, getty images
Keywords: news, cnbc, companies, raise, expected, say, rates, rate, stakes, markets, hikes, europes, ecb, chandler, market, yield, president, slow, fed


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Dollar little changed after biggest weekly loss in three months

The dollar consolidated losses on Monday after posting its biggest weekly drop in more than three months last week as weak U.S. data undercut expectations of more interest rate increases in the world’s biggest economy. But weak data in recent weeks has clouded the currency’s prospects for next year. Against a basket of currencies, the dollar was flat after falling 0.8 percent last week, its biggest weekly drop since late August. In London, Theresa May faces an internal revolt against her Brexit


The dollar consolidated losses on Monday after posting its biggest weekly drop in more than three months last week as weak U.S. data undercut expectations of more interest rate increases in the world’s biggest economy. But weak data in recent weeks has clouded the currency’s prospects for next year. Against a basket of currencies, the dollar was flat after falling 0.8 percent last week, its biggest weekly drop since late August. In London, Theresa May faces an internal revolt against her Brexit
Dollar little changed after biggest weekly loss in three months Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-10
Keywords: news, cnbc, companies, changed, week, months, loss, biggest, rate, expectations, data, little, vote, weekly, dollar, weak, plenty


Dollar little changed after biggest weekly loss in three months

The dollar consolidated losses on Monday after posting its biggest weekly drop in more than three months last week as weak U.S. data undercut expectations of more interest rate increases in the world’s biggest economy.

Widening interest rate differentials between the United States and the rest of the world, driven by a confident U.S. Federal Reserve, has fuelled an unlikely dollar rally this year. But weak data in recent weeks has clouded the currency’s prospects for next year.

U.S. non-farm payrolls increased by 155,000 jobs last month, below a median forecast of 200,000 jobs, and the wage increase was weaker than expected, even though its annual rise remained near the highest level in almost a decade.

Apart from weak data, some Fed policymakers have struck a cautious tone about the economic outlook, possibly flagging a turning point in its monetary policy and lowering the expectations of U.S. rate hikes priced into money markets.

Futures markets are now pricing in only a 44 percent chance of a U.S. rate increase next year compared with nearly 80 percent last Monday as the U.S. bond yield curve has flattened.

“Fed fund expectations are dropping like a stone and that is a big obstacle for the dollar, though there is plenty of event risk out there this week that will give plenty of thought for dollar bears,” said Ulrich Leuchtmann, an FX strategist at Commerzbank in Frankfurt.

Against a basket of currencies, the dollar was flat after falling 0.8 percent last week, its biggest weekly drop since late August.

The euro led gains, rising 0.34 percent at $1.1470 though market traders said currency markets will be in a wait-and-watch mode.

French President Emmanuel Macron will address the country at 2000 Paris time (1900 GMT) on Monday as he seeks to “yellow vest” anti-government protesters that have wreaked havoc in Paris during the weekend.

In London, Theresa May faces an internal revolt against her Brexit deal before a vote in the parliament on Tuesday. May plans to push ahead with the vote, but senior lawmakers in her own party put pressure on her to go back to Brussels and seek a better offer.

A rejection could throw plans for Britain’s exit into turmoil and leave her own political future hanging in the balance. Against the dollar, the British pound was flat at $1.2720.


Company: cnbc, Activity: cnbc, Date: 2018-12-10
Keywords: news, cnbc, companies, changed, week, months, loss, biggest, rate, expectations, data, little, vote, weekly, dollar, weak, plenty


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Job growth falls short of expectations in November: 155,000 payrolls created vs 198,000 estimate

Job growth slowed in November amid fears that economic growth is losing steam. Nonfarm payrolls increased by 155,000 for the month while the unemployment rate again held at 3.7 percent, its lowest since 1969, the Labor Department reported Friday. Economists surveyed by Dow Jones had been expecting payroll growth of 198,000 and the jobless rate to hold steady. A separate gauge that includes discouraged workers and those holding part-time jobs for economic reasons, sometimes called the real unempl


Job growth slowed in November amid fears that economic growth is losing steam. Nonfarm payrolls increased by 155,000 for the month while the unemployment rate again held at 3.7 percent, its lowest since 1969, the Labor Department reported Friday. Economists surveyed by Dow Jones had been expecting payroll growth of 198,000 and the jobless rate to hold steady. A separate gauge that includes discouraged workers and those holding part-time jobs for economic reasons, sometimes called the real unempl
Job growth falls short of expectations in November: 155,000 payrolls created vs 198,000 estimate Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-07  Authors: jeff cox
Keywords: news, cnbc, companies, created, workers, 03, 198000, fell, vs, short, unemployment, falls, lowest, earnings, rate, expectations, estimate, payrolls, economic, rose, job, growth


Job growth falls short of expectations in November: 155,000 payrolls created vs 198,000 estimate

Job growth slowed in November amid fears that economic growth is losing steam.

Nonfarm payrolls increased by 155,000 for the month while the unemployment rate again held at 3.7 percent, its lowest since 1969, the Labor Department reported Friday. Economists surveyed by Dow Jones had been expecting payroll growth of 198,000 and the jobless rate to hold steady.

Average hourly earnings, a closely watched sign of whether inflation pressures are building, again rose at a 3.1 percent pace from a year ago. The monthly earnings gain of 0.2 percent fell short of estimates for a 0.3 percent increase. The average work week edged lower by 0.1 hours to 34.4 hours.

Stock futures turned positive following the weak report as traders bet it may mean the Federal Reserve is less aggressive next year on rate hikes.

A separate gauge that includes discouraged workers and those holding part-time jobs for economic reasons, sometimes called the real unemployment rate, rose from 7.4 percent to 7.6 percent.

The unemployment rate for African-Americans fell 0.3 percent to 5.9 percent, tied for its lowest on record.

WATCH: Why you may not be feeling a boost in wages


Company: cnbc, Activity: cnbc, Date: 2018-12-07  Authors: jeff cox
Keywords: news, cnbc, companies, created, workers, 03, 198000, fell, vs, short, unemployment, falls, lowest, earnings, rate, expectations, estimate, payrolls, economic, rose, job, growth


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If the Fed doesn’t raise rates this month, the market could panic, Cramer says

The Federal Reserve could cause “panic” on Wall Street if it reneges on its widely anticipated December interest rate hike, CNBC’s Jim Cramer said Friday. “Because he’s promised a rate hike, [Fed Chair Jerome Powell] risks stirring a wave of fear if he doesn’t tighten,” Cramer said as stocks fell on weaker-than-expected jobs results and trade worries. “It would be wrong to tighten, but if he doesn’t give us a full quarter-point rate hike, it will cause a panic,” the “Mad Money” host said. In fai


The Federal Reserve could cause “panic” on Wall Street if it reneges on its widely anticipated December interest rate hike, CNBC’s Jim Cramer said Friday. “Because he’s promised a rate hike, [Fed Chair Jerome Powell] risks stirring a wave of fear if he doesn’t tighten,” Cramer said as stocks fell on weaker-than-expected jobs results and trade worries. “It would be wrong to tighten, but if he doesn’t give us a full quarter-point rate hike, it will cause a panic,” the “Mad Money” host said. In fai
If the Fed doesn’t raise rates this month, the market could panic, Cramer says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-07  Authors: elizabeth gurdus
Keywords: news, cnbc, companies, rates, month, doesnt, cramer, wrong, fed, raise, trade, investors, interest, market, tighten, panic, rate, hike


If the Fed doesn't raise rates this month, the market could panic, Cramer says

The Federal Reserve could cause “panic” on Wall Street if it reneges on its widely anticipated December interest rate hike, CNBC’s Jim Cramer said Friday.

“Because he’s promised a rate hike, [Fed Chair Jerome Powell] risks stirring a wave of fear if he doesn’t tighten,” Cramer said as stocks fell on weaker-than-expected jobs results and trade worries. “Investors will start presuming that something must be wrong, very wrong, that things are worse than they thought.”

But even if the central bank decides that it’s worth taking a more data-dependent approach after the weaker jobs data, its chief has put himself in a difficult position with his recent statements, Cramer said.

“No one wants the Fed to tighten going into a slowdown, especially when we might be in a tariff war around the globe. People want the Fed to be flexible. Thanks to his previous comments, though, Powell’s in a lose-lose situation,” he said, pointing to Powell’s remarksthat interest rates were “just below” where they should be.

“It would be wrong to tighten, but if he doesn’t give us a full quarter-point rate hike, it will cause a panic,” the “Mad Money” host said. “I hate to say it, Mr. Powell, but, here goes: I told you so.”

In fairness, Cramer said he “totally” understood why the Fed would raise interest rates this month, citing still-strong Purchasing Managers’ Index reports, healthy retail sales and close-to-full employment.

“The fact is, though, the economy’s slowing and the stock market sure shows it. […] That’s why it’s so skittish,” he explained. The major averages have endured drastic intraday swings this week as investors fretted about a host of economic pressures, including but not limited to the U.S.-China trade dispute.

Earlier this week, a “yield curve inversion” between the three- and the five-year Treasury yields also set off warning bells on Wall Street and spurred a sharp sell-off in stocks.

“Maybe a creative Fed chief could square that circle by holding off on a rate hike, but maybe selling some of the long-term bonds that they’ve been sitting on since the financial crisis — a different kind of tightening that would fix the inverted yield curve situation,” Cramer said. “Although, … ideally, you don’t want any tightening and the Fed would simply sit tight.”

All things considered — including the S&P 500 index turning negative for the year — investors should prepare for more market swings in the coming weeks, the “Mad Money” host warned.

“I think we’re going to have to slog through these volatility sessions for a bit, as there are all sorts of difficult crosscurrents here” including U.S.-China trade relations and the weakness in shares of stock market bellwether Apple, he said.

“And, of course, an errant Federal Reserve that’s backed itself into a corner when it comes to the next rate hike,” he added. “Get used to these crosscurrents, because this is the new normal, at least for now.”


Company: cnbc, Activity: cnbc, Date: 2018-12-07  Authors: elizabeth gurdus
Keywords: news, cnbc, companies, rates, month, doesnt, cramer, wrong, fed, raise, trade, investors, interest, market, tighten, panic, rate, hike


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Gold inches higher as dollar dips amid risk aversion

Gold edged higher on Thursday as growing risk aversion weighed on the dollar, while palladium held ground at a premium to the bullion. Spot gold was up 0.2 percent at $1,239.86 per ounce, as of 0429 GMT, while U.S. gold futures were 0.2 percent higher at $1,244.9 per ounce. “Markets are trying to consolidate, trying to push up higher for now,” said Benjamin Lu, a commodities analyst with Phillip Futures. The dollar declined against the safe-haven yen as a spike in risk aversion pressured equitie


Gold edged higher on Thursday as growing risk aversion weighed on the dollar, while palladium held ground at a premium to the bullion. Spot gold was up 0.2 percent at $1,239.86 per ounce, as of 0429 GMT, while U.S. gold futures were 0.2 percent higher at $1,244.9 per ounce. “Markets are trying to consolidate, trying to push up higher for now,” said Benjamin Lu, a commodities analyst with Phillip Futures. The dollar declined against the safe-haven yen as a spike in risk aversion pressured equitie
Gold inches higher as dollar dips amid risk aversion Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-06  Authors: getty images
Keywords: news, cnbc, companies, palladium, dollar, meeting, higher, analyst, dips, yields, hike, gold, rate, aversion, inches, ounce, risk, amid, lu


Gold inches higher as dollar dips amid risk aversion

Gold edged higher on Thursday as growing risk aversion weighed on the dollar, while palladium held ground at a premium to the bullion.

Spot gold was up 0.2 percent at $1,239.86 per ounce, as of 0429 GMT, while U.S. gold futures were 0.2 percent higher at $1,244.9 per ounce.

“Markets are trying to consolidate, trying to push up higher for now,” said Benjamin Lu, a commodities analyst with Phillip Futures.

A balance between a host of factors such as a rate hike by the U.S. Federal Reserve in December, uncertainty about trade tensions between Washington and Beijing, and a flattening yield curve has helped create a premium for the bullion, Lu added.

Fed policymakers will gather at a Dec. 18-19 meeting, at which the central bank is widely expected to raise interest rates.

“Although a rate hike is already priced in, markets will be closely watching the meeting for clues on rate hike timings in 2019,” said Lukman Otunuga, a research analyst at FXTM, adding that: “if the meeting echoes a similar message to (Chairman Jerome) Powell’s dovish shift, gold has the potential to shine into 2019.”

The dollar declined against the safe-haven yen as a spike in risk aversion pressured equities and U.S. Treasury yields. The spread between the two-year and five-year Treasury yields inverted this week and the two-year/10-year spread was at its flattest in more than a decade amid a sharp fall in long-term rates.

“An yield curve inversion indicates higher borrowing cost in short term, so for safe-haven assets in the longer run it’s going to be very positive,” Phillip Futures’ Lu said.

Spot gold may test a resistance at $1,245 per ounce, a break above which could lead to a gain into a range of $1,253-$1,258, according to Reuters technical analyst Wang Tao.

Meanwhile, palladium continued to be more valuable than gold after outshining the yellow metal for the first time since 2002 on Wednesday, with prices soaring by around 50 percent in less than four months to record levels.

Spot palladium rose 0.1 percent to $1,245.00 per ounce, hovering near its record high hit in the previous session.

The market now awaits Friday’s U.S. non-farm payrolls data for November, which is expected to show unemployment remains at 3.7 percent.

“Investors are seen adopting a cautious stance ahead of the U.S. jobs report which could offer insight over the health of the U.S. labour force,” said FXTM’s Otunuga.

Amongst other metals, silver fell 0.7 percent to $14.41 per ounce, while platinum extended losses into a third session, declining 0.7 percent to $795.00 per ounce.


Company: cnbc, Activity: cnbc, Date: 2018-12-06  Authors: getty images
Keywords: news, cnbc, companies, palladium, dollar, meeting, higher, analyst, dips, yields, hike, gold, rate, aversion, inches, ounce, risk, amid, lu


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Markets are turning up the heat on the Fed to dial back rate hikes

Futures markets Thursday pointed to a 68 percent probability of an increase before 2018 ends. That’s still high, but it’s the lowest chance since late August, when the stock market was experiencing some minor choppiness. The latest adjustment has come as the market worries over the prospects of economic growth after a robust year. Markets are thus expecting the Fed to alter its projections for three rate hikes in 2019 and another one or two in 2020. While pricing in the strong chance of a Decemb


Futures markets Thursday pointed to a 68 percent probability of an increase before 2018 ends. That’s still high, but it’s the lowest chance since late August, when the stock market was experiencing some minor choppiness. The latest adjustment has come as the market worries over the prospects of economic growth after a robust year. Markets are thus expecting the Fed to alter its projections for three rate hikes in 2019 and another one or two in 2020. While pricing in the strong chance of a Decemb
Markets are turning up the heat on the Fed to dial back rate hikes Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-06  Authors: jeff cox, adam jeffery
Keywords: news, cnbc, companies, fed, chance, markets, dial, rate, worries, pricing, heat, hikes, market, end, economic, range, turning


Markets are turning up the heat on the Fed to dial back rate hikes

Futures markets Thursday pointed to a 68 percent probability of an increase before 2018 ends. That’s still high, but it’s the lowest chance since late August, when the stock market was experiencing some minor choppiness. The likelihood also dipped to around 69 percent in mid-November as Fed officials were busy walking back some of the hawkish talk from central bank Chairman Jerome Powell in early October.

The latest adjustment has come as the market worries over the prospects of economic growth after a robust year. Movement in the bond market is pointing to some worries ahead, as shorter-dated yields are marginally ahead of longer-dated counterparts, often a sign of a slowdown ahead.

Markets are thus expecting the Fed to alter its projections for three rate hikes in 2019 and another one or two in 2020. In fact, there’s nearly a 50-50 chance indicated that by December 2019, the Fed will take back one of its increases and end up in the same range as the end of 2018.

“The Fed will stop hiking and will lower forward guidance, but, given the level of rates, the transition period that has begun will continue both in the US and elsewhere in the world,” Blitz said. “Markets will consequently stabilize but remain volatile while traditional economic guideposts will prove less valuable. Risks abound.”

While pricing in the strong chance of a December hike, implied pricing in the market shows a funds rate of just 2.6 percent by the time 2020 rolls around. That translates to a target range of, at most, 2.5 percent to 2.75 percent, or one more from the 2.25 percent to 2.5 percent range that a December move would bring.


Company: cnbc, Activity: cnbc, Date: 2018-12-06  Authors: jeff cox, adam jeffery
Keywords: news, cnbc, companies, fed, chance, markets, dial, rate, worries, pricing, heat, hikes, market, end, economic, range, turning


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Australia’s economy slows, debt-laden consumers a deadweight

The news came as fears of a possible slowdown in the U.S. economy and the Sino-U.S. tariff slugged world shares and threatened future business investment. The gloomy report provides another blow to Australia’s center-right government, which is already lagging in polls ahead of a likely election in May. Wednesday’s report on gross domestic product (GDP) showed the economy expanded 0.3 percent in the third quarter, half of what economists had expected. Annual GDP rose by a still-respectable 2.8 pe


The news came as fears of a possible slowdown in the U.S. economy and the Sino-U.S. tariff slugged world shares and threatened future business investment. The gloomy report provides another blow to Australia’s center-right government, which is already lagging in polls ahead of a likely election in May. Wednesday’s report on gross domestic product (GDP) showed the economy expanded 0.3 percent in the third quarter, half of what economists had expected. Annual GDP rose by a still-respectable 2.8 pe
Australia’s economy slows, debt-laden consumers a deadweight Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-05  Authors: the trinity, getty images
Keywords: news, cnbc, companies, low, australias, report, sent, consumers, trillion, rba, rate, deadweight, pretty, debtladen, quarter, economy, slows, growth


Australia's economy slows, debt-laden consumers a deadweight

Australia’s economy slowed more than expected last quarter as consumers reacted to tepid wage growth by shutting their wallets, a disappointing outcome that sent the local dollar sliding as investors pushed out the chance of any rate hike.

The news came as fears of a possible slowdown in the U.S. economy and the Sino-U.S. tariff slugged world shares and threatened future business investment.

The gloomy report provides another blow to Australia’s center-right government, which is already lagging in polls ahead of a likely election in May.

Wednesday’s report on gross domestic product (GDP) showed the economy expanded 0.3 percent in the third quarter, half of what economists had expected.

Second-quarter growth was unrevised at 0.9 percent.

Annual GDP rose by a still-respectable 2.8 percent to A$1.8 trillion ($1.32 trillion), but confounded expectations in a Reuters poll for a 3.3 percent increase.

The figures also imply growth in the year to June was 3 percent, rather than the originally report 3.4 percent.

The data will not be welcomed by the Reserve Bank of Australia (RBA), which predicts growth of around 3-1/2 percent this year and next.

“The RBA forecasts are now looking pretty optimistic,” said Tom Kennedy, senior economist at JPMorgan.

“You are seeing consumer spending pull back a little bit… There’s not that much cash out there for consumers to spend to their discretion,” he added.

“Wage growth is low and the household savings rate is also pretty low. You overlay that with the fact that housing is slowing means the wealth effect… is no longer supporting consumption.”

The disappointing set of numbers sent the Australian dollar on a dive to $0.7295 from a high of $0.7355 touched earlier in the day. It was last own 0.4 percent at $0.7310.


Company: cnbc, Activity: cnbc, Date: 2018-12-05  Authors: the trinity, getty images
Keywords: news, cnbc, companies, low, australias, report, sent, consumers, trillion, rba, rate, deadweight, pretty, debtladen, quarter, economy, slows, growth


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Merrill Lynch says it’s bearish on the market until it sees the ‘Big Low’

The stock market slide won’t turn around in 2019 until rate hike expectations for the Federal Reserve stop rising and earnings estimates for companies by analysts stop falling, according to Bank of America Merrill Lynch Global Research. “We expect to turn tactically bullish once peak rate and trough EPS expectations signal ‘The Big Low.'” In Asia, the Shanghai Composite is trading in a bear market, down 26 percent from its 52-week high. During the first three quarters of 2018, S&P 500 earnings j


The stock market slide won’t turn around in 2019 until rate hike expectations for the Federal Reserve stop rising and earnings estimates for companies by analysts stop falling, according to Bank of America Merrill Lynch Global Research. “We expect to turn tactically bullish once peak rate and trough EPS expectations signal ‘The Big Low.'” In Asia, the Shanghai Composite is trading in a bear market, down 26 percent from its 52-week high. During the first three quarters of 2018, S&P 500 earnings j
Merrill Lynch says it’s bearish on the market until it sees the ‘Big Low’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-12-05  Authors: fred imbert, samxmeg, getty images
Keywords: news, cnbc, companies, fed, sp, 2019, trough, earnings, bank, expectations, sees, lynch, market, big, merrill, low, rate, bearish, stocks


Merrill Lynch says it's bearish on the market until it sees the 'Big Low'

The stock market slide won’t turn around in 2019 until rate hike expectations for the Federal Reserve stop rising and earnings estimates for companies by analysts stop falling, according to Bank of America Merrill Lynch Global Research.

“The ‘Baby Bear’ market on Wall St that began in 2018’Q1 not yet over,” Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch Global Research, said in a note to clients. “We expect to turn tactically bullish once peak rate and trough EPS expectations signal ‘The Big Low.'”

Markets around the world have been increasingly volatile this year. The S&P 500 entered a correction in October, falling 10 percent from an all-time high hit on Sept. 21. In Asia, the Shanghai Composite is trading in a bear market, down 26 percent from its 52-week high.

Two of the main culprits for the wild ride on Wall Street have been worries about tighter monetary policy from the U.S. central bank and fears that corporate profits growth will slow down.

The Fed has raised rates three times in 2018 and is expected to hike once more later this month. The central bank also expects to raise rates twice in 2019. Rate-hike fears were somewhat quelled last week after Fed Chairman Jerome Powell said the central bank’s benchmark rate was “just below” neutral, hinting at fewer rate hikes down the road. But BofAML expects the Fed to hike four times in 2019, Hartnett said.

Corporate earnings have grown sharply this year. During the first three quarters of 2018, S&P 500 earnings jumped by at least 25 percent on a year-over-year basis. Fourth-quarter earnings are also expected to be strong. However, the growth rate is likely to slow down as a boost from lower corporate taxes in the U.S. fades. Globally, PMIs and a weaker export cycle in Asia point to earnings growing by less than 5 percent in 2019 from more than 15 percent in 2018, according to Hartnett.

“We believe asset prices will find their low once rate expectations peak and EPS expectations trough,” Hartnett said. “A rally in emerging-market currencies, the KOSPI (Korea Composite Stock Price Index), copper, [and] global industrial stocks would confirm China/global EPS expectations at a trough; a rally in REITs, homebuilders & semiconductor stocks would confirm Fed rate expectations peaking.”

Hartnett says investors should buy next year the iPath S&P 500 VIX Short-Term Futures ETN (VXX), which rises along with the Cboe Volatility Index (VIX) futures, as a way to benefit from the continuing volatility. The instrument has risen 31.7 percent in value this year, handily outperforming the S&P 500.

He also advises investors buy into Brazilian, Russian, Indian and Chinese stocks while shorting the popular FAANG trade, which is made up of Facebook, Amazon, Apple, Netflix and Google-parent Alphabet. The strategist also recommends buying the SPDR S&P Homebuilders ETF (XHB).

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Company: cnbc, Activity: cnbc, Date: 2018-12-05  Authors: fred imbert, samxmeg, getty images
Keywords: news, cnbc, companies, fed, sp, 2019, trough, earnings, bank, expectations, sees, lynch, market, big, merrill, low, rate, bearish, stocks


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