Latest news with #KennethBroux
Zawya
5 days ago
- Business
- Zawya
Dollar hovers near 3-1/2-year low with market focus on US rate cuts, euro area inflation
The U.S. dollar was just above its lowest level in 3-1/2 years against the euro and sterling on Friday, with traders ramping up bets on deeper U.S. rate cuts, but tempering expectations of an ECB rate cut on higher inflation numbers from France and Spain. The euro got a small uplift in early European trade after data showed French consumer prices rose more than expected in June, while Spain's 12-month EU-harmonised inflation also inched higher. "Hotter French services CPI and Spain core CPI cast doubts on further ECB easing," said Kenneth Broux, head of corporate research FX and rates at Societe Generale. "This week for (the) September meetings we've gone from -20bp to -27bp for the Fed and from -11bp to -13bp for the ECB," said Broux. Meanwhile, the latest U.S. personal consumption expenditures (PCE) data further weighed on the dollar in afternoon trading. U.S. consumer spending unexpectedly fell in May as the boost from the preemptive buying of goods like motor vehicles ahead of tariffs faded, while monthly inflation increases remained moderate. By 1244 GMT, the euro was 0.26% higher at $1.173, just a fraction away from the $1.1745 it hit in the previous session, its strongest level since September 2021. Meanwhile the Swiss franc was last at 0.7971 a dollar, rising to its strongest level in over a decade. With the geopolitical tremors of the Israel-Iran conflict receding after a ceasefire that appeared to be holding, market focus this week has been on U.S. monetary policy, particularly given speculation that U.S. President Donald Trump will announce the next Federal Reserve chair earlier than usual to undermine current Chair Jerome Powell. Powell, whose term ends in May, was also interpreted as being more dovish this week in testimony to U.S. Congress, adding to expectations of more rate cuts. Traders are now pricing in 64 basis points (bps) of easing this year versus 46 bps expected on Friday. "The sooner a replacement is announced for Powell, the sooner he could be perceived to be a 'lame duck'," said Carol Kong, a currency strategist at Commonwealth Bank of Australia. Trump has not decided on a replacement for Powell and a decision is not imminent, a person familiar with the White House's deliberations told Reuters on Thursday. Elsewhere, the yen was unchanged at 144.47 a dollar, while sterling last fetched $1.3745, just below the October 2021 top of $1.37701 touched on Thursday. The dollar index, which measures the U.S. unit versus six other currencies, was lingering near its lowest since March 2022 at 97.114, on course for a 2.3% decline in June, its sixth straight month in the red. The index has dropped more than 10% this year as Trump's tariffs stoke U.S. growth worries, leading investors to look for alternatives. Investors are also looking for signs of progress on new trade deals ahead of the July 9 deadline for Trump's "reciprocal" tariffs as nations scramble to get an agreement over the line. German Chancellor Friedrich Merz said on Thursday the EU should do a "quick and simple" trade deal with the United States rather than a "slow and complicated" one. (Reporting by Ankur Banerjee in Singapore; Additional reporting by Liang-sa Loh and Faith Hung in Taipei; Editing by Jamie Freed, Christopher Cushing, Andrew Heavens and Rachna Uppal)
&w=3840&q=100)
Business Standard
24-06-2025
- Business
- Business Standard
Shares rally, oil slumps as Iran-Israel ceasefire goes into effect
Oil tumbled 3 per cent, global shares surged and the dollar dropped on Tuesday as US President Donald Trump announced a ceasefire between Israel and Iran, a dramatic turnaround after the US bombed Iran's nuclear sites over the weekend. Brent futures had already slid 7per cent on Monday and US shares jumped after Iran made a token retaliation against a US base and signalled it was done for now. With the immediate threat to the vital Strait of Hormuz shipping lane seemingly over, the global benchmark touched its lowest since June 11 and was last at $69.11 a barrel, US crude futures dropped 3.2per cent to $66.32 a barrel. "Investors mostly shrugged at what appeared on the surface a seismic geopolitical event over the weekend and those who kept their nerve and held off from de-risking have so far been proven right," said Kenneth Broux, head of corporate research FX and rates at Societe Generale. Israeli Defence Minister Israel Katz saying he had ordered the military to strike Tehran in response to what he said were Iranian missiles fired in a violation of the ceasefire, did little to disrupt the mood. Iran said it had not violated the ceasefire. Risk assets rallied, with S&P 500 futures up 0.9per cent and Nasdaq futures 1.1per cent higher. Europe's Stoxx 600 gained 1.4per cent, with travel stocks including airlines surging 3.5per cent, while oil and gas names shed 2per cent. Earlier in the day, MSCI's broadest index of Asia-Pacific shares outside Japan jumped 2.2per cent, while Japan's Nikkei rallied 1.1per cent. But the positive news did not spill over into the bond market where the focus instead was on Germany's draft budget, which includes record investment, requiring higher borrowing. The impact was particularly felt on longer dated bonds. Germany's 30-year yield rose 8 basis points to 3.065per cent and its 10-year yield rose 5 bps to 2.60per cent. Those moves rippled across markets, with the US 10-year yield up 2 bps at 4.34per cent and Britain's 10-year yield up 2 bps to 4.51per cent, though increasing bets on US rate cuts this year kept US bonds in check. RATE CUTS APPROACHING? Investors are also keeping a close eye on remarks from Federal Reserve policymakers, who in aggregate have been nervous about giving any signs that rate cuts are imminent. However, Vice Chair for Supervision Michelle Bowman said on Monday the time to cut interest rates was getting nearer as risks to the job market may be on the rise. That followed Fed Governor Christopher Waller saying on Friday he would consider a rate cut at the July 29-30 meeting. Fed Chair Jerome Powell will appear before Congress later on Tuesday and, so far, has been more cautious about a near-term easing. Markets still only imply around a 22per cent chance the Fed will cut at its next meeting on July 30, but a September cut is near-to-fully priced. News of the ceasefire saw the dollar extend an overnight retreat and slip 0.77per cent to 145.0 yen, having come off a six-week high of 148 yen overnight. The euro rose 0.2per cent to $1.1602 on Tuesday, having gained 0.5per cent overnight. The yen and euro benefited from the slide in oil prices as both the EU and Japan rely heavily on imports of oil and liquefied natural gas, while the US is a net exporter. The risk-on mood saw gold prices ease 1.3per cent to $3,323 an ounce. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Gulf Today
24-06-2025
- Business
- Gulf Today
Oil slumps, shares rally on Iran-Israel ceasefire
Oil tumbled nearly 4%, global shares surged and the dollar dropped on Tuesday as markets took heart from a ceasefire between Israel and Iran and shrugged off what US President Donald Trump said were violations by both sides. Brent futures had already slid 7% on Monday and US shares jumped after Iran made only a token retaliation against a US base to an attack over the weekend, and signalled it was done for now. With the immediate threat to the vital Strait of Hormuz shipping lane seemingly over, the Brent benchmark touched its lowest since June 11 and was last at $68.81 a barrel, down 3.7%. US crude futures dropped 3.7% to $65.91 a barrel. 'Investors mostly shrugged at what appeared on the surface a seismic geopolitical event over the weekend and those who kept their nerve and held off from de-risking have so far been proven right,' said Kenneth Broux, head of corporate research FX and rates at Societe Generale. While the ceasefire so far has seemed shaky - Trump said he was 'not happy' with either side for violating the truce, particularly with Israel - risk assets held onto their earlier gains. S&P 500 futures rose 0.8% and Nasdaq futures were 1% higher. Europe's Stoxx 600 gained 1.3%, with travel stocks including airlines surging 3.8%, while oil and gas names shed 2%. Earlier in the day, MSCI's broadest index of Asia-Pacific shares outside Japan jumped 2.2%, while Japan's Nikkei rallied 1.1%. A further sign of the sudden improvement in sentiment is that emerging market countries - from Mexico to Kazakhstan via Turkey - have rushed to issue debt in the past two days, as have many companies. But the positive news did not spill over into the bond market where the focus instead was on Germany's draft budget, which includes record investment, requiring higher borrowing. The impact was particularly felt on longer dated bonds. Germany's 30-year yield rose 8 basis points to 3.06% and its 10-year yield rose 5 bps to 2.60%. Those moves rippled across markets, with the US 10-year yield up 3 bps at 4.35% and Britain's 10-year yield up 2 bps to 4.51% , though increasing bets on US rate cuts this year kept US bonds in check. Investors are also keeping a close eye on remarks from Federal Reserve policymakers, who in aggregate have been nervous in recent months about giving any signs that rate cuts are imminent. However, Vice Chair for Supervision Michelle Bowman said on Monday the time to cut interest rates was getting nearer as risks to the job market may be on the rise. That followed Fed Governor Christopher Waller saying on Friday he would consider a rate cut at the July 29-30 meeting, though Atlanta Fed President Raphael Bostic told Reuters in a story published on Tuesday that the Fed need not cut interest rates with companies planning to raise prices later this year. Fed Chair Jerome Powell will appear before Congress later on Tuesday and, so far, has been more cautious about a near-term easing. Markets still only imply around a 20% chance the Fed will cut at its next meeting on July 30, but a September cut is near to fully priced. News of the ceasefire saw the dollar extend an overnight retreat and slip 0.8% to 144.9 yen, having come off a six-week high of 148 yen on Monday. The euro rose 0.2% to $1.1602 on Tuesday, having gained 0.5% overnight. The yen and euro benefited from the slide in oil prices as both the EU and Japan rely heavily on imports of oil and liquefied natural gas, while the US is a net exporter. The risk-on mood saw gold prices ease 1.4% to $3,319 an ounce. Copper prices hit their highest in almost two weeks on Tuesday as the dollar fell and the yuan strengthened after US President Donald Trump's announcement of a ceasefire between Israel and Iran. Three-month copper on the London Metal Exchange was up 0.7% at $9,730 a metric tone in official open-outcry trading after touching $9,760.50 for its highest since June 11 earlier in the session. Global markets largely ignored signs that the ceasefire could be fragile, with Trump accusing both Israel and Iran of violating the agreement on Tuesday. The metals market's attention was on continuing outflows from copper stocks in LME-registered warehouses, which combined with large holdings of cash copper contracts and warrants - title documents conferring ownership - to inflate premiums for near-term contracts. Reuters
Zawya
16-06-2025
- Business
- Zawya
Dollar steady with focus on Middle East conflict, central bank meetings
The dollar held ground in choppy trading on Monday, as investors monitored the fighting between Israel and Iran for signs that it could escalate into a broader regional conflict and braced for a week packed with central bank meetings. As both Iran and Israel showed no signs of backing off from their attacks, market participants mulled the prospect that Tehran might seek to choke off the Strait of Hormuz - the world's most important gateway for oil shipping. This could raise broader economic risks from disruptions in the energy-rich Middle East. The dollar, which until recently had always been the ultimate safe haven in times of geopolitical or financial turmoil, held at 144.14 Japanese yen after rising nearly 0.4% earlier on Monday. The euro was marginally up at $1.157. The U.S. unit was also steady against the Swiss franc at 0.811, while an index that measures the dollar against six other currencies dipped 0.3% and was last at 98.02. Oil prices fell 1%, following Friday's 7% rally to near six-month highs in the wake of Israel's preemptive strike on Iran. "Obviously oil markets are a bit nervous" given risks around supply disruption, said Kenneth Broux, head of corporate research FX and rates at Societe Generale. Currencies that are positively correlated to risk such as the Australian dollar and the New Zealand dollar were half a percentage point higher, while the oil-exposed Norwegian crown was flat after hitting its highest since early 2023 earlier in the day. On Friday, investors had bought back into the dollar, which has lost more than 9% in value against a basket of six other currencies this year as U.S. President Donald Trump's move to reshape the global trade order heightened economic uncertainty. But analysts were less convinced that the trend could continue until there was more clarity on the tariff front. "Investors have come in and have bought the dip (of other currencies against the dollar)," Broux said. "So for me, the takeaway is that we are still in an environment where investors are more inclined to sell USD. And that's the setup into the FOMC." The U.S. Federal Reserve gives its latest policy decision on Wednesday, with the Israel-Iran conflict adding complexity for policymakers who have been trying to navigate this year's events. Investors remain nervous over Trump's deadline on trade deals due in about three weeks, while agreements with major trade partners including the European Union and Japan are yet to be signed. They will look for progress in any bilateral meetings with the U.S. on the sidelines of a Group of Seven leaders' meeting in Canada. "The G7 no longer represents major event risk for FX but trade talks are likely to feature prominently in the discussions among leaders and progress here would add to the positive risk mood," analysts at Scotiabank said. Meanwhile, sterling, the euro and the Australian dollar gained 0.2% to 0.4% over the Japanese currency. "Excessive rallies in oil prices may dent the attractiveness of the yen as a safe-haven, but a hawkish repricing in Bank of Japan expectations should make up for it," ING FX Strategist Francesco Pesole wrote in a note to clients. CENTRAL BANK MEETINGS Top of the agenda this week is a host of central bank monetary policy decisions, with the spotlight on the Fed. The central bank is widely expected to leave borrowing costs steady, but investors will likely lap up its views on recent data that has broadly indicated softening economic activity even as risks to increasing price pressures stay high. The Bank of Japan is expected to deliver its interest rate decision at the end of its two-day meeting on Tuesday, with traders largely pricing in no change to policy. Expectations are that the central bank could also consider tapering its government bond holdings from the next fiscal year as the Japanese government pushes for more domestic ownership. Central banks in Britain, Switzerland, Sweden and Norway are also slated to unveil their policy decisions this week. (Reporting by Johann M Cherian in Bengaluru and Linda Pasquini in Gdansk; Editing by Jamie Freed, Toby Chopra and Emelia Sithole-Matarise)
Zawya
29-05-2025
- Business
- Zawya
Euro zone bond yields up as investors exit safe havens after court blocks Trump tariffs
Euro zone government bond yields inched up on Thursday, as investors ditched safe havens for riskier assets after a U.S. federal court blocked most of President Donald Trump's sweeping tariffs. Investors moved away from bonds, gold, and safe-haven currencies such as the yen and Swiss franc after the Manhattan-based Court of International Trade ruled on Wednesday that Trump overstepped his authority by imposing across-the-board duties on imports from the United States' trading partners. The Trump administration has appealed the ruling, which does not include sectoral levies, and could seek other legal avenues for Trump to impose tariffs. "(The court ruling) removes some uncertainty, but it adds some," said Kenneth Broux, head of corporate research FX and rates at Societe Generale. Though the news provided a relief boost to stocks and the dollar, he said, the situation nonetheless remained very unpredictable. Germany's 10-year government bond yield, the euro area benchmark, rose 3.5 basis points (bps) to around 2.58%. It fell to around 2.51% on Tuesday, its lowest level since May 8. "What we are seeing is some dispersion in bond markets," Broux said, with the recent rise in yields highlighting not only supply and demand constraints but also fiscal dynamics. Long-term bond yields have risen this month on growing concern about rising debt levels among big economies such as the United States and Japan. German 30-year government bond yields edged up nearly 4 bps to around 3.08%, while the 2-year government bond yield, more sensitive to European Central Bank policy rates, rose 2 bps to 1.82%. Markets have fully priced in a 25-bps interest rate cut from the ECB when it meets next week. They also indicated a deposit facility rate at 1.71% in December, from 1.55% in mid-April. Italy's 10-year yield rose 3 bps to 3.58%, leaving the spread between Italian and German yields around 97 bps. U.S. Treasury yields also rose on the day, with the yield on the benchmark 10-year Treasury note up over 5 bps to 4.533%.
