Latest news with #Pepperstone
Wall Street Journal
2 days ago
- Business
- Wall Street Journal
High Term Premium Seen Supporting Demand for Long-Dated Government Bonds
0621 GMT – Long-end government bonds are expected to find their footing, as a high term premium likely attracts final demand, say Barclays' rates strategists in a note. Debt issuance is expected to gradually shift away from the long end as economic growth moderates, they say. 'The long ends of bond markets have sold off globally, either outright or relative to short-term yields, as investors are demanding a higher term premium to take duration risks amid a myriad of concerns,' they say. These concerns include fiscal sustainability and policy uncertainty in the U.S., the outlook for higher spending in Germany and a structural decline in demand for super-long Japanese government bonds and U.K. gilts, they say. ( 0611 GMT – U.S. Treasury yields decline but remain near recent levels after Wednesday's mixed session, which also saw a soft five-year Treasury note auction, says Pepperstone's Michael Brown in a note. 'For now, it seems that benchmarks are to be stuck in a relatively tight trading band,' the senior research strategist says. Dip buying interest—where investors buy in phases of bond weakness—continues to be seen on any downside, he says. For 10- and 30-year Treasury yields, 4.50% and 5.00% remain the key levels, respectively, Brown says. That said, rallies beyond 4.25% and 4.75%, respectively, seem unlikely, given ongoing jitters over the fragile fiscal backdrop, he says. The 10-year U.S. Treasury yield eases 2.4 basis points to 4.268%, while the 30-year yield is down 3 basis points at 4.810%, according to LSEG. (
CNA
3 days ago
- Business
- CNA
CNA938 Rewind - Stock take today: S&P 500 and Nasdaq rises, oil suffers losses
CNA938 Rewind On the daily markets analysis on Open For Business, Andrea Heng and Hairianto Diman speak with Chris Weston, Head Of Research at Pepperstone.
Al Arabiya
4 days ago
- Business
- Al Arabiya
Middle East assets lead EM rally on Iran ceasefire announcement
Middle Eastern assets led a rebound in emerging markets after the announcement of a ceasefire between Israel and Iran, even amid accusations the truce was already being breached. The Israeli shekel advanced as much as 1.8 percent to the strongest since January 2023 before paring gains. Egypt's dollar bonds rallied the most among emerging and frontier markets and stock markets bounced across the region. More broadly, MSCI's gauge of emerging-market currencies gained 0.7 percent as the dollar weakened. Asian currencies such as the South Korean won and the Philippine peso particularly benefited from the slump in the dollar and the retreat in oil prices. The Egyptian pound strengthened 1.4 percent against the dollar on the offshore market, data compiled by Bloomberg show. Markets pared some gains after Israel accused Iran of breaching the ceasefire, but clung to hopes the truce will remain in place and ease weeks of tensions in the region. Iran's symbolic strikes on US air bases and the subsequent announcement of a ceasefire has allowed investors to draw a line under geopolitical events for the time being, said Michael Brown, senior research strategist at Pepperstone in London. 'Market participants are now able to switch focus away from the distraction of geopolitics, and back toward the fundamental bullish narrative which has been driving things for some time,' Brown said. In stocks, MSCI's index for EM equities jumped 2.4 percent, the most in more than a month, with the Tel Aviv bourse jumping as much as 1.7 percent and gains in much of Asia and developing Europe. In the Gulf, equities in Dubai gained as much as 3.3 percent, the most since Dec. 16, while indexes in Riyadh, Doha and Kuwait joining the rally. 'EM equities could stand to outperform if sentiment continues to markedly improve, and risk appetite remains solid' Brown said. In eastern Europe, Hungary's central bank is expected to hold interest rates steady for a ninth month. Slovenia, meanwhile, is set to sell its first sustainability-linked bond, joining other developing nations that are seeking to raise cash before any re-escalation in tensions with Iran. Mexico on Monday sold $4.5 billion in bonds in a two-part deal, with others including Kazakhstan also preparing debt sales. Provided the truce holds, investor attention should shift to Federal Reserve Chair Jerome Powell, who will testify before Congress later in the day to explain why interest rates will likely remain steady until at least September. 'New catalysts for moves will probably come from outside the Middle East if the truce does appear to hold,' said Eddie Cheung, a strategist at Credit Agricole CIB in Hong Kong. The market may focus back on Powell's testimony as a potential next driver.'
Business Insider
4 days ago
- Business
- Business Insider
A Strait of Hormuz crisis could hit global oil, but China may be less vulnerable than it looks
Rising tensions in the Middle East have reignited fears that Iran could blockade the Strait of Hormuz, a critical oil shipping route. A closure could send shockwaves through global energy markets, including to China, the world's largest oil importer. Much of China's oil has historically come from the Middle East, but analysts say changes in recent years may offer some buffer from any Hormuz-induced issues. "China has been actively diversifying its energy sources and bolstering domestic reserves, which could buffer immediate shocks," Priyanka Sachdeva, a senior analyst at brokerage Phillip Nova, told Business Insider. In the first quarter of 2023, Iran was China's third-largest crude oil supplier, according to Dilin Wu, a research strategist at Pepperstone. Since 2024, China has increasingly leaned on Russia, Saudi Arabia, and Russia for crude. The three countries accounted for 20%, 14%, and 13% of Chinese imports, respectively. Countries are diversifying energy sources Beyond geopolitical risks, Iran's exports to China were troubled before the ongoing conflict in the Middle East. Issues included contract breaches and sanctioned oil stuck at Chinese ports for years. "Chinese firms increasingly view Iran as a 'price-competitive yet high-risk' supplier, prompting a strategic shift toward more stable alternatives like Russia," wrote Wu. Meanwhile, China's broader oil demand is softening due to its slowing economy and a shift toward renewable energy. That dampens the urgency of any short-term supply disruption. In 2023, coal — mostly domestic supplies — accounted for 61% of China's energy mix, according to the International Energy Agency. Meanwhile, oil and natural gas made up 18% and 8% of the country's energy sources. Should the Hormuz experience an extended blockage that strains China's import flows, the East Asian nation could shift to buying more Russian, African, or US oil, said Sachdeva. Other top global economies have also been adjusting their energy strategies to account for uncertainties in geopolitics, wrote Kaho Yu, the head of natural resources at risk intelligence company Verisk Maplecroft. The European Union is phasing out Russian energy despite higher costs and tighter markets. Japan and South Korea are seeking to lock in long-term Qatari liquified natural gas deals for supply stability, even though prices are higher than on the spot market. "The latest Middle East escalation reinforces this shift: energy policy is now shaped as much by geopolitical risk as by price," Ho wrote. Most analysts say they do not think Iran would blockade the Hormuz because it doesn't serve Tehran's interest. "Tehran knows such a move would devastate its own economy, alienate China, its largest crude customer, and risk triggering massive military retaliation," wrote Claudio Galimberti, the chief economist at Rystad Energy.
Business Recorder
4 days ago
- Business
- Business Recorder
Indian rupee set to rally as crude dives on Israel-Iran de-escalation
MUMBAI: The Indian rupee is poised to climb at open on Tuesday as the plunge in crude oil on fading Middle East geopolitical risks improves the outlook for the South Asian nation's trade balance and assets. The 1-month non-deliverable forward indicated an open in the 86.10 to 86.15 range, versus 86.75 in the previous session. Brent prices fell 2% in Asia after U.S. President Donald Trump said Iran and Israel had agreed to a ceasefire. Brent had already slid 7% on Monday when Iran made a token retaliation against a U.S. base. 'With Trump having lent a hand in brokering a peaceful resolution, the prospect of a prolonged conflict with U.S. involvement has been re-priced,' clearing the way to add risk, Chris Weston, head of research at broker Pepperstone, said. Indian Rupee weakens alongside Asian peers, oil pullback cushions losses U.S. equities rose Monday and futures indicated a further rally. The dollar index softened and Asian equities and currencies advanced. 'It is expected that the big opening dip (on USD/INR) will run into buy orders. I do not think 86 will be taken out, though I reckon that positions are on the lighter side and interbank will be on the hunt to put in shorts,' a currency trader at a Mumbai-based bank said. Brent crude is now trading below $70 a barrel — near levels seen before Israel's first strike on Iran. The rupee was at 85.60 prior to that escalation. There is 'definitely' more room for the rupee to rally, a treasury official at a bank said. It's just that large drops on USD/INR tend to 'struggle to hold on'. Meanwhile, Federal Reserve vice-chair Michelle Bowman said the first interest rate cut this year could come as soon as July, further undermining the dollar and boosting risk.
