Russia's war on Ukraine is Europe's biggest threat and worry: EU foreign policy chief
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CNA
42 minutes ago
- CNA
Oil falls as OPEC+ proceeds with September output hike
LONDON :Oil prices dropped on Monday after OPEC+ agreed to another large output hike in September, though traders remained wary of further sanctions on Russia. Brent crude futures fell 85 cents, or 1.2 per cent, to $68.82 a barrel by 0846 GMT, and U.S. West Texas Intermediate crude declined 82 cents, or 1.2 per cent, to $66.51 a barrel. Both contracts closed about $2 lower on Friday. The Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, agreed on Sunday to raise oil production by 547,000 barrels per day for September, the latest in a series of accelerated output hikes to regain market share. The move, in line with market expectations, marks a full and early reversal of OPEC+'s largest tranche of output cuts, amounting to about 2.5 million bpd, or about 2.4 per cent of world demand. Analysts at Goldman Sachs expect that the actual increase in supply from the eight OPEC+ countries that have raised output since March will be 1.7 million bpd, because other members of the group have cut output after previously overproducing. Investors also continued to digest the impact of the latest U.S. tariffs on exports from dozens of trading partners. Still, investors remain wary of further U.S. sanctions on Russia, as Trump has threatened to impose 100 per cent secondary tariffs on Russian crude buyers as he seeks to pressure Moscow into halting its war in Ukraine. "In the medium term, oil prices will be shaped by a mix of tariffs and geopolitics. Any price jump triggered by energy sanctions is expected to be ephemeral," PVM analyst Tamas Varga said. At least two vessels loaded with Russian oil bound for refiners in India have diverted to other destinations following new U.S. sanctions, trade sources said on Friday and LSEG trade flows showed. This puts about 1.7 million bpd of crude supply at risk if Indian refiners stop buying Russian oil, ING analysts said in a note.
CNA
an hour ago
- CNA
Dollar steadies after US jobs rout, Swiss franc lower
LONDON :The U.S. dollar found some support on Monday after Friday's dismal U.S. jobs report and President Donald Trump's firing of a top statistics official battered the currency and prompted investors to ramp up bets of imminent Federal Reserve rate cuts. Data on Friday showed U.S. employment growth undershot expectations in July while the nonfarm payrolls count for the prior two months was revised down by a massive 258,000 jobs, suggesting a sharp deterioration in labour market conditions. "The report itself was perhaps not that weak but the revisions were extremely significant," said Mohamad Al-Saraf, FX strategist at Danske Bank. "We have a hard time seeing how the Fed cannot lower rates at the September meeting." Adding to headwinds for markets, Trump fired Bureau of Labor Statistics (BLS) Commissioner Erika McEntarfer the same day, accusing her of faking the jobs numbers. An unexpected resignation by Fed Governor Adriana Kugler also opened the door for Trump to make an imprint on the central bank much earlier than anticipated. Trump has been at loggerheads with the Fed for not lowering interest rates sooner. The barrage of developments dealt a one-two punch to the dollar, which sank more than 2 per cent against the yen and roughly 1.5 per cent against the euro on Friday. The greenback recovered some of its losses on Monday, last trading 0.3 per cent higher at 147.91 yen. Still, it was down about 3 yen from its peak on Friday. The euro fell 0.2 per cent to $1.1561, while sterling was little changed at $1.3276. Trump said on Sunday he will announce a candidate to fill an open position at the Fed and a new BLS head in the next few days. Against a basket of currencies, the dollar edged up 0.2 per cent to 98.88, after sliding more than 1.3 per cent on Friday. The dollar rose 3.4 per cent in July, its biggest monthly gain since a 5 per cent jump in April 2022 and first monthly rise of the year, as markets became more at ease with Trump's trade policy and economic data had remained resilient in the face of tariffs. TREASURY YIELDS DROP AS FED CUT BETS MOUNT The two-year Treasury yield fell to a three-month low of 3.659 per cent on Monday as traders heavily upped bets of a Fed cut in September, while the benchmark 10-year yield strayed not too far from a one-month low at 4.2434 per cent. Markets are now pricing an almost 90 per cent chance the Fed will ease rates next month owing to the weaker-than-expected jobs data, with just under 60 basis points worth of cuts expected by December, implying two quarter-point cuts and a 40 per cent chance of a third. "Market reactions to Friday night's events were swift and decisive," said Tony Sycamore, a market analyst at IG. "Equities and the U.S. dollar tumbled, along with yields." In other currencies, the dollar strengthened over 0.5 per cent against the Swiss franc after Trump hit the country with some of the highest tariffs as part of the White House's global trade reset. The euro rose 0.3 per cent against the franc. "We saw the franc weakening a lot after the announcement," Danske Bank's Al-Saraf said. "If these tariffs were to be sustained, the relative downside for the Swiss economy will be quite big." The Swiss cabinet will hold a special meeting later on Monday to discuss the next steps, and said it remains open to revising its offer to the United States.
CNA
an hour ago
- CNA
Stocks rise as investors cling to hopes for US rate cuts
SYDNEY/LONDON :Global stocks rose on Monday, boosted by the prospect of lower interest rates, after a weak U.S. jobs report prompted a dramatic re-assessment of the rate outlook and ignited concern over the reliability of U.S. economic data. Friday's U.S. July nonfarm payrolls report missed expectations and revised the figures for May and June sharply lower, sparking a selloff on Wall Street and denting the dollar. By Monday, with the chance of a September rate cut from the Federal Reserve at 85 per cent, some stability returned to the broader market, allowing Europe's STOXX 600 to rise 0.6 per cent in morning trading. The dollar edged up against a basket of six other major currencies. Downward revisions in the payrolls report left the three-month average of jobs growth at 35,000 from 231,000 at the start of the year. "I guess the biggest takeaway from all that is the net revision. We've all seen poor NFP prints in the past, that we can explain away as a 'one-off', but such a chunky net downward revision suggests that this could well be a more pronounced weakening in labour market conditions that is underway," Pepperstone market strategist Michael Brown said. President Donald Trump's decision to fire the head of Labor Statistics in response added an extra layer of nervousness over the credibility of U.S. economic data. News that Trump would get to fill a governorship position at the Fed early added to worries about the politicization of interest rate policy. "It opens the prospect of broader support on the Fed Board for lower rates sooner rather than later," Ray Attrill, head of FX research at NAB, said. "Fed credibility, and the veracity of the statistics on which they base their policy decisions, are both now under the spotlight." Markets have essentially already eased for the Fed, with two-year Treasury yields down almost 25 basis points on Friday in the biggest one-day drop since August last year. DOLLAR DENTED Wall Street futures rose 0.6-0.7 per cent, suggesting some recovery after Friday's washout that drove the S&P 500 down 1.6 per cent and the Nasdaq down 2.2 per cent. The dollar, which fell 1.4 per cent on Friday in its biggest one-day fall since April, rose broadly, leaving the euro down 0.2 per cent at $1.156 and the pound softer at $1.327 ahead of Thursday's Bank of England meeting, at which it is expected to cut rates by a quarter point. The Swiss franc took a beating, leaving the dollar up 0.6 per cent as markets reopened in Zurich after a public holiday on Friday, when Trump announced a 39 per cent tariff on Swiss imports. The dollar was also up 0.4 per cent against the yen at 148 , having shed an eye-watering 2.3 per cent on Friday. In commodity markets, gold was little changed at $3,358 an ounce , having climbed more than 2 per cent on Friday, while oil prices extended their latest slide as OPEC+ agreed to another large rise in output for September.
