GLOBAL FX-
The Federal Reserve’s decision to stop raising interest rates puts a “fundamentally healthy” U.S. economy on track to further growth, Minneapolis Federal Reserve Bank President Neel Kashkari suggested on Sunday.Last week, the Fed discarded a promise to keep raising rates, and instead pledged patience on further policy change. The dovish shift was cheered by financial markets, but sounded to some analysts like a warning of economic weakness ahead.I think we still have room to run in the U.S. economy,” Kashkari said at a town hall at a church in Long Lake, Minnesota.“The U.S. economy is fundamentally healthy,” he added.
And The dollar hovered near a one-week high against the yen on Monday, buoyed by stronger-than-expected U.S. jobs and factory data, although the Federal Reserve’s cautious policy outlook and thinned holiday trade in Asia are likely to cap further gains.
Germany faces a 25 billion euro ($29 billion) budget shortfall by 2023, unless it tightens spending, as tax revenues are set to fall and public sector wages are on the rise, Bild newspaper reported, citing an internal government document.The prospect of budget deficits would represent a dramatic deterioration in the finances of Europe’s biggest economy, which reported a 11.2 billion euro budget surplus last year.The warning came in a report prepared by Finance Minister Olaf Scholz to his ministerial colleagues as they prepare for a regular budget planning discussion.
Asia stocks hovered near four-month highs on Monday after a mixed performance on Wall Street at the close of last week, while the dollar firmed against the yen following strong U.S. job and manufacturing data.MSCI’s broadest index of Asia-Pacific shares outside Japan was almost flat. It had scaled a four-month peak on Friday along with a surge in its global peers.Trade was subdued with many of the region’s markets closed for the Lunar New Year. China’s financial markets are closed all week, while those in South Korea are shut until Thursday.Hong Kong’s Hang Seng, which is trading for only half a day, edged up 0.2 percent.Japan’s Nikkei added 0.5 percent.
Britain’s Brexit minister Stephen Barclay will hold a meeting of a new working group of Conservative lawmakers on Monday seeking to find an alternative plan to avoid a post-Brexit border in Ireland, Prime Minister Theresa May’s office said.Last week lawmakers voted to support May’s Brexit deal if she could agree “alternative arrangements” to replace a controversial Irish border arrangement, known as the backstop.The EU has so far ruled out reopening the exit deal to make any changes to the backstop, an insurance policy that aims to prevent the reintroduction of border controls between EU member Ireland and the British province of Northern Ireland.
The Australian government is due to release on Monday the final recommendations of the independent inquiry that exposed systemic wrongdoing in Australia’s financial sector last year, likely leading to sweeping changes to the country’s banking industry.The big banks, insurers, pension funds and regulators who oversee the financial industry are bracing for a brutal summary of their misdeeds and weaknesses, and a list of tough recommendations including possible criminal charges.
The Royal Commission was a quasi-judicial independent body led by a former high court judge that was tasked by the government, reluctantly at first, with investigating financial sector misconduct following a string of banking scandals.For 11 months its public hearings shocked the country and wiped more than A$60 billion ($43.4 billion) from top financial stocks as investors factored in the prospect of tougher regulation, higher compliance costs and thinner margins.
Russian oil output declined to 11.38 million barrels per day (bpd) in January, or by around 35,000 bpd from the October 2018 level, the baseline for the global oil accord, missing the deal’s target, Energy Ministry data showed.This was down from 11.45 million bpd in December, a record monthly high. In tonnes, oil output reached 48.113 million versus 48.442 million in December.Russian oil pipeline exports in January fell to 4.313 million bpd from 4.496 million bpd in December.Rosneft, the world’s largest oil producer by output, reduced its production by 0.1 percent last month from December, while second-largest Russian oil producer Lukoil saw production cuts of 0.8 percent.Output at Rosneft’s largest unit, RN-Yuganskneftegaz, declined by 0.8 percent after a blaze ripped through Priobskoye oilfield in early January.
Chinese state-owned firms bought at least 1 million tonnes of U.S. soybeans on Friday, a day after high-level bilateral talks yielded progress toward a trade deal and a Chinese commitment to buy more U.S. soybeans.The purchases are slated for shipment between April and July, with a large share expected from U.S. Gulf Coast export terminals.U.S. soybean futures rallied to multi-month highs on Friday on news of renewed demand from the world’s top importer.But the market’s gains were restrained by worries that Chinese purchases will hardly dent massive soybean stockpiles in the United States and around the world. The looming harvest of a large soy crop in Brazil, the world’s top supplier, further capped prices.
Gold prices slipped on Monday as risk aversion waned with the progress in U.S.-China trade talks, while a firm dollar kept the bullion under pressure.Spot gold was down 0.4 percent to $1,312.56 per ounce having hit their highest since April 26 at $1,326.30 on Thursday.U.S. gold futures fell 0.4 percent to $1,317 per ounce.The plunge (from Thursday’s peak) came along with fading enthusiastic for safe-havens, as U.S. and China are moving to close a deal and many uncertainties surrounding the U.S. government shutdown, Brexit, Fed policy were cleared last week.
Crude oil prices edged lower on Monday after sharp gains during the previous session but were supported by expectations of shrinking supply and signs that China-U.S. trade tensions could ease.International Brent crude oil futures on Monday were down 20 cents, or 0.32 percent at 0339 GMT to $62.54 a barrel, after closing up 3.14 percent in the previous session to their highest close since Nov. 21.U.S. West Texas Intermediate (WTI) futures CLc1were at $55.13 per barrel, down 13 cents, or 0.24 percent, from their last settlement. WTI settled 2.73 percent higher in the last session at its highest close since Nov. 19.
Output declines from the Organization of the Petroleum Exporting Countries (OPEC) as they make good on their pact to curb a supply overhang were compounded by falling U.S. oil rig counts and sanctions on Venezuelan oil sales.While Venezuela's output reportedly rose last month, fresh U.S. sanctions on the country could see 0.5 to 1 percent of global supply curtailed.