Author: Reuters

(Reuters) -OpenAI CEO Sam Altman is working to secure approval from the U.S. government for his new AI chips venture, which could potentially raise national security and antitrust concerns, Bloomberg News reported on Friday.

Altman, who is reportedly working on a new business that could boost global chip manufacturing, has told potential investors and partners that he cannot move forward without a green light from Washington, the report said, citing people familiar with the matter.

He also met with Commerce Secretary Gina Raimondo and was working to arrange meetings with other officials in an effort to get them on board with his business plan that could be partly financed from the Middle East, the report said.

OpenAI did not respond to a request for comment, while the Department of Commerce declined to comment on “individual conversations”.

Altman has been in talks with investors and chip companies in the United States, Middle East and Asia for his new venture.

(Reporting by Yuvraj Malik in Bengaluru; Editing by Shweta Agarwal)

By Caroline Valetkevitch

NEW YORK (Reuters) – U.S. Treasury yields jumped and the U.S. dollar edged up while global stock indexes were mixed to near flat on Friday after data showed U.S. producer prices increased more than expected in January, adding to the view that any interest rate cuts by the Federal Reserve are not imminent.

The producer price index for final demand rose 0.3% last month after declining by a revised 0.1% in December, the Labor Department’s Bureau of Labor Statistics said. Economists polled by Reuters had forecast the PPI rebounding 0.1% following a previously reported 0.2% drop.

A U.S. consumer prices reading earlier this week was also stronger than expected.

The yield on benchmark U.S. 10-year notes rose 5.3 basis points to 4.293%, from 4.24% late on Thursday.

The greenback also gained after the data. Against the yen, the dollar climbed 0.5% to 150.57 yen.

The dollar/yen has been trading near levels that have been typically seen as potential catalysts for official intervention.

Bank of Japan Governor Kazuo Ueda said on Friday that monetary policy would most likely remain accommodative, even after ending negative interest rates, echoing recent reassurances from BOJ officials that have weighed on the yen.

The dollar was last up 0.17% versus the yen at 150.16. The dollar index gained 0.06% at 104.32, with the euro up 0.01% at 1.0772.

“A number like this, it definitely pushes off the Fed for another month or two,” said Tom di Galoma, co-head of global rates trading at BTIG in New York, referring to the PPI data.

On Friday, market expectations the Fed will start cutting rates in June were dialed back, with CME’s FedWatch Tool now showing a 69.9% chance for a cut of at least 25 basis points, down from the nearly 90% in the prior session.

On Wall Street, the Dow Jones Industrial Average fell 42.15 points, or 0.11%, to 38,730.97, the S&P 500 gained 0.03 points to 5,029.76 and the Nasdaq Composite lost 23.60 points, or 0.15%, to 15,882.57.

MSCI’s gauge of stocks across the globe rose 2.22 points, or 0.30%, to 752.77. The STOXX 600 index rose 0.62%.

Earlier on Friday, Japan’s benchmark Nikkei rallied to a 34-year high and was on the cusp of eclipsing the all-time peak reached during the heyday of the nation’s bubble economy in the 1980s.

Figures on Thursday showed that Japan and Britain slipped into recession at the end of last year.

With the dollar gaining, gold has been under pressure this week. Gold eased on Friday and was on course for a second straight weekly fall.

Spot gold was down 0.3% to $1,997.87 per ounce.

U.S. crude gained 0.19% to $78.18 a barrel and Brent rose to $82.92 per barrel on the day.

(Reporting by Caroline Valetkevitch; additional reporting by Amanda Cooper in London and Stella Qiu in Sydney and Chuck Mikolajczak in New York. Editing by Sam Holmes, Gerry Doyle, Nick Macfie, Susan Fenton and Deepa Babington)

By Gram Slattery

WASHINGTON (Reuters) -Republican presidential contender Nikki Haley slammed Donald Trump on Friday for maintaining an amiable relationship with Vladimir Putin, after Russian officials said opposition leader Alexei Navalny died in a prison colony on Friday.

“Donald Trump continues to side with Vladimir Putin – a man who kills his political opponents, holds American journalists hostage, and has never hidden his desire to destroy America,” Haley said in a statement.

Trump has praised Putin on and off for years, calling the Russian leader a “genius” in 2022 for his decision to invade neighboring Ukraine, igniting a war that is still raging.

The 47-year-old lawyer, whose death was reported by the Russia prison service, rose to prominence more than a decade ago by speaking publicly about what he said was the vast corruption and opulence among the “crooks and thieves” who ran Putin’s Russia.

Many Western leaders accused the Kremlin of murder regarding Navalny. They produced no evidence, but Putin’s enemies have a history of dying under opaque circumstances.

A representative for Trump’s campaign did not respond to a request for comment.

Biden’s reelection campaign on Friday released a new minute-long advertisement blasting Trump for wanting to “walk away” from NATO and accusing him of giving “Putin and Russia the green light to attack America’s allies.”

Over the weekend, the former president drew swift rebukes from Western leaders for saying that he would encourage Putin to invade NATO member states that were not spending enough on defense.

Haley’s comments come as she has ratcheted up her criticism of Trump, in a bid to eat into the former president’s overwhelming lead in all national and state-level primary polls. In recent weeks, she has unleashed acid attacks on his character and his mental competency, and blasted him for cozying up to dictators.

In a separate post on X, formerly Twitter, Haley blamed Putin for Navalny’s death and took another jab at Trump.

“Putin did this,” she wrote. “The same Putin who Donald Trump praises and defends.”

(Reporting by Gram Slattery; additional reporting by Trevor Hunnicutt; editing by Ross Colvin and Jonathan Oatis)

By Gertrude Chavez-Dreyfuss and Stefano Rebaudo

NEW YORK/MILAN (Reuters) – The U.S. dollar edged higher on Friday after data showed producer prices in the world’s largest economy came in higher than expected, affirming expectations the Federal Reserve will hold off the start of its interest rate-cutting cycle to the middle of the year, or even later.

The U.S. currency’s gains were higher following the producer price index (PPI) data, but have since come off ahead of a long holiday weekend.

Tuesday’s report showed the PPI gained 0.3% in January, up from forecasts of a 0.1% rise. On a year-on-year basis, the PPI increased 0.9%, compared with expectations of a 0.6% rise.

The PPI data followed a stronger-than-expected consumer price index (CPI) as well last month, suggesting the Fed would be in no rush to cut rates.

The dollar index, a gauge of the greenback’s value against six major currencies, was on track for a fifth straight week of gains. It was last up 0.1% at 104.32. On the week, the index rose 0.2%.

“Year to date, the dollar has been stronger. But if you consider the strong jobs, inflation, and GDP (gross domestic product) numbers, you could make the argument that the U.S. dollar should be way higher than it is,” said Eugene Epstein, head of structuring for North America at Moneycorp in New Jersey.

“I just see sideways trading or a slow grind higher for the dollar as a more likely scenario,” he added.

Fed funds futures have priced in no rate cut in March and a 74% chance of easing at the June meeting, according to LSEG’s rate probability app. That was more than 80% on Thursday.

Two weeks ago, markets had expected the first rate cut to happen in May. Futures are also pricing in about three rate cuts of 25 basis points each this year, down from about five cuts two weeks earlier.

Against the yen, the dollar rose 0.2% to 150.22 yen. The currency pair has touched 150 the last few days, putting the market on high alert to possible Japan intervention to weaken the yen.

The Japanese currency, which is highly sensitive to U.S. rates, was down 6% against the dollar this year as investors pare back their expectations of rate cuts from the Fed.

Finance Minister Shunichi Suzuki said that while a weak yen has merits and demerits, he was “more concerned” about the negative aspects of a weak currency.

A separate report showed that U.S. single-family homebuilding dropped in January, likely due to harsh weather, but a rise in permits for future construction suggested a rebound is likely in the coming months.

Single-family housing starts, which account for the bulk of homebuilding, dropped 4.7% to a seasonally adjusted annual rate of 1.004 million units last month.

“With the Fed likely cutting rates by the end of the year and demand resilient, the housing activity should stay supported,” Citi’s U.S. economics team wrote in a research note.

The U.S. consumer sentiment survey was also released on Friday, but the currency market showed little reaction.

U.S. consumer sentiment was little changed in February while one-year inflation expectations inched up.

The University of Michigan’s preliminary reading on the overall index of consumer sentiment came in at 79.6 this month, compared with 79.0 in January. Economists polled by Reuters had forecast a preliminary reading of 80.0.

The survey’s reading of one-year inflation expectations edged up to 3.0% this month from 2.9% in January.

The euro was flat at $1.0771.

(Reporting by Gertrude Chavez-Dreyfuss in New York and Stefano Rebaudo; Editing by Alison Williams and Jonathan Oatis)

By Daniel Wiessner

(Reuters) – Amazon.com has joined rocket maker SpaceX and grocery chain Trader Joe’s in claiming that a U.S. labor agency’s in-house enforcement proceedings violate the U.S. Constitution, as the retail giant faces scores of cases claiming it interfered with workers’ rights to organize.

Amazon in a filing made with the National Labor Relations Board (NLRB) on Thursday said it plans to argue that the agency’s unique structure violates the company’s right to a jury trial.

The company also said that limits on the removal of administrative judges and the board’s five members, who are appointed by the president, are unconstitutional.

The filing came in a pending case accusing Amazon of illegally retaliating against workers at a warehouse in the New York City borough of Staten Island, where employees voted to unionize in 2022. Amazon, which has faced more than 250 NLRB complaints alleging unlawful labor practices across the country in recent years, has denied wrongdoing.

SpaceX is making similar claims against the board in a lawsuit filed last month, one day after the labor board accused the company of firing eight engineers for criticizing CEO Elon Musk in a letter to company executives.

Trader Joe’s raised the arguments later in January at a hearing in an NLRB case, and two Starbucks baristas seeking to dissolve their unions have challenged the board’s structure in separate lawsuits.

An NLRB spokeswoman declined to comment.

The board’s general counsel issues complaints against employers alleging violations of federal labor law. Those cases are heard first by administrative judges and then the five-member board, whose decisions can be appealed in federal court.

The growing number of challenges to the labor board make it more likely the issue will reach the U.S. Supreme Court, whose conservative majority has signaled its skepticism of other U.S. agencies’ in-house proceedings, said Seth Goldstein, a lawyer who represents unions in the Amazon and Trader Joe’s cases.

Goldstein said the pending cases also could embolden other employers to refuse to bargain with unions on the belief that courts will strip the NLRB of its enforcement powers.

“I’m very concerned that this is going to cause real problems in collective bargaining for both new and established unions,” said Goldstein, a partner at law firm Julien Mirer Singla and Goldstein in New York.

(Reporting by Daniel Wiessner in Albany, New York; editing by Jonathan Oatis)

By Alex Lawler

LONDON (Reuters) -Oil steadied on Friday as slowing demand forecast by the International Energy Agency (IEA) offset support from geopolitical tensions and optimism that the U.S. Federal Reserve might cut interest rates sooner rather than later this year.

On Thursday, the IEA said global oil demand growth was losing momentum and trimmed its 2024 growth forecast, in contrast to the view held by the Organization of the Petroleum Exporting Countries (OPEC).

Brent crude futures were down 17 cents, or 0.2%, at $82.69 a barrel at 1500 GMT. U.S. West Texas Intermediate crude futures rose 59 cents, or 0.8%, to $78.62 with the nearby March contract expiring on Tuesday. The April contract rose 20 cents, or 0.3%, to $77.79.

“There was a tentative attempt to recover yesterday morning, but hopes were shattered after the IEA published its updated supply-demand outlook,” said Tamas Varga of oil broker PVM.

Crude climbed over 1% on Thursday as a larger-than-expected drop in U.S. retail sales prompted hopes the Fed will soon start cutting rates, which could be positive for oil demand.

But U.S. producer prices increased more than expected in January amid strong gains in the costs of services, which could amplify worries that inflation was picking up.

“Hopes for U.S. rate cuts provided support on Thursday, but investors are now adjusting their positions ahead of a long (holiday) weekend in the U.S.,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.

Meanwhile, Middle East tensions persist, with the growing risk of a wider conflict in the region supporting prices.

Gaza’s largest functioning hospital was under siege on Friday in Israel’s war with Islamist group Hamas, as warplanes struck Rafah, the last refuge for Palestinians in the enclave, officials said.

On Thursday, Hezbollah said it fired dozens of rockets at a northern Israeli town in a “preliminary response” to the killing of 10 civilians in southern Lebanon, the deadliest day for Lebanese civilians in four months of cross-border hostilities.

“I would expect the latest gains from an increased Mideast risk premium to stick, especially going into the weekend,” said Vandana Hari, founder of oil markets analysis provider Vanda Insights.

(Additional reporting by Natalie Grover in London, Mohi Narayan in New Delhi and Yuka Obayashi in Tokyo; editing by David Evans, Jason Neely and Jonathan Oatis)

By Alex Lawler

LONDON (Reuters) -Oil slipped about 1% on Friday as slowing demand forecast by the International Energy Agency (IEA) offset support from geopolitical tensions and optimism that the U.S. Federal Reserve might cut interest rates sooner than later this year.

Brent crude futures were down 81 cents, nearly 1%, at $82.05 a barrel at 1155 GMT.

U.S. West Texas Intermediate crude futures fell 68 cents, also roughly 1%, to $77.35 in muted trade with the contract set to expire on Tuesday. The more active April contract slipped 74 cents, also about 1%, to $76.85.

On Thursday, the IEA said global oil demand growth was losing momentum and cut its 2024 growth forecast slightly, in contrast to the view held by the Organization of the Petroleum Exporting Countries (OPEC).

“There was a tentative attempt to recover yesterday morning, but hopes were shattered after the IEA published its updated supply-demand outlook,” said Tamas Varga of oil broker PVM.

Both contracts climbed over 1% on Thursday as a larger-than-expected drop in U.S. retail sales prompted hopes the Federal Reserve will soon start cutting interest rates, which could be positive for oil demand.

A producer inflation report expected later on Friday should also help inform the fate of U.S. interest rates.

“Hopes for U.S. rate cuts provided support on Thursday, but investors are now adjusting their positions ahead of a long weekend in the U.S.,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.

Meanwhile, Middle East tensions persist, with the growing risk of a wider conflict in the region supporting prices.

Gaza’s largest functioning hospital was under siege on Friday in Israel’s war with Islamist group Hamas, as warplanes struck Rafah, the last refuge for Palestinians in the enclave, officials said.

On Thursday, Hezbollah said it fired dozens of rockets at a northern Israeli town in a “preliminary response” to the killing of 10 civilians in southern Lebanon, the deadliest day for Lebanese civilians in four months of cross-border hostilities.

“I would expect the latest gains from an increased Mideast risk premium to stick, especially going into the weekend,” said Vandana Hari, founder of oil markets analysis provider Vanda Insights.

(Additional reporting by Natalie Grover in London, Mohi Narayan in New Delhi and Yuka Obayashi in Tokyo; Editing by Susan Fenton and David Evans)

By Amanda Cooper

LONDON (Reuters) – Global shares rose for a third day on Friday, thanks to a lift from Japan’s Nikkei closing at another 34-year peak and a buoyant Wall Street, after a big fall in U.S. retail sales revived chances of a June rate cut.

This week’s data releases have added to the belief among investors that the U.S. economy at least is holding up well enough not to merit any immediate rate cuts, which has kept the dollar at its highest in three months and set gold on course for its largest weekly drop this year.

Wall Street rattled to another robust close on Thursday, after data showed a surprisingly large drop in U.S. consumer spending, which revived the chances of the Fed cutting rates by June.

The upbeat mood carried into Asia, where the Nikkei closed at its highest since 1989 and then into Europe, with the STOXX 600 hitting its highest since January 2022.

“Everyone is still in this massive ‘dip-buying mode’ that they’ve been in pretty much all year,” Michael Brown, a strategist with broker Pepperstone, said.

“Any dips are lasting 12 hours at most, before the buyers come in and just scoop it up,” he said.

U.S. futures pointed to an upbeat start to trading later in the day. Nasdaq futures were up 0.5%, while those on the S&P 500 futures gained 0.2%.

The dollar recovered some poise after a swift sell-off on Thursday to trade 0.2% higher against the yen, which has been wallowing at its weakest since November at levels that have been typically seen as potential catalysts for official intervention.

Bank of Japan Governor Kazuo Ueda said on Friday that monetary policy would most likely remain accommodative, even after ending negative interest rates, echoing recent reassurances from BOJ officials that have weighed on the yen.

“The dollar/yen has sort of consolidated around the 150 level, so that’s providing support (to Nikkei). There’s the corporate reform still going through, so the exporters will continue to do well,” said Tony Sycamore, market analyst at IG.

WEAK DATA, STRONG CONFIDENCE

Figures on Thursday showed that Japan and Britain slipped into recession at the end of last year, and U.S. retail sales last month fell much more than expected. But the upshot of that could be relatively looser monetary policy.

“I think the demand picture is certainly starting to fracture in some of the developed market economies,” said Sycamore. “So it does bring forward the idea of rate cuts.”

Overnight, data showed U.S. retail sales fell by 0.8% in January, the sharpest drop in 10 months. Meanwhile, UK data on Friday showed a big improvement in retail sales in January, but this did little to prop up the pound.

Markets moved to fully price in a rate cut from the Fed in June, reversing some of the price action after a stronger-than-expected U.S. inflation report prompted traders to give up bets for early rate relief.

Treasury yields edged up after an overnight dip. The yield on benchmark 10-year notes rose 2 basis points to 4.264% ahead of producer price data later in the day.

With the dollar in the ascendant, gold has been under pressure this week. The spot price is heading for a weekly fall of nearly 1%, its biggest weekly decline since late December.

Gold, which has traded consistently above $2,000 an ounce for most of the past two months, was flat at $2,005.

Oil prices fell on Friday after jumping the previous session. The International Energy Agency on Thursday flagged slowing demand growth this year.

Brent crude eased 0.9% to $82.11 a barrel, while U.S. futures fell 0.7% to $77.43.

(Additional reporting by Stella Qiu in Sydney. Editing by Sam Holmes, Gerry Doyle and Nick Macfie.)

By Alex Lawler

LONDON (Reuters) -Oil slipped on Friday as a forecast of slowing demand by the International Energy Agency offset support from geopolitical tensions and hopes that the U.S. Federal Reserve might cut interest rates sooner than expected.

Weighing on sentiment, the IEA said on Thursday that global oil demand growth was losing momentum and it trimmed its 2024 growth forecast, in contrast to the view held by the Organization of the Petroleum Exporting Countries (OPEC).

“There was a tentative attempt to recover yesterday morning, but hopes were shattered after the IEA published its updated supply-demand outlook,” said Tamas Varga of oil broker PVM.

Brent crude futures were down 53 cents, or 0.6%, at $82.33 a barrel at 0915 GMT. U.S. West Texas Intermediate crude futures fell 33 cents to $77.70.

Both contracts climbed over 1% on Thursday as a larger-than-expected drop in U.S. retail sales prompted hopes the Federal Reserve will soon start cutting interest rates, which could be positive for oil demand.

“Hopes for U.S. rate cuts provided support on Thursday, but investors are now adjusting their positions ahead of a long weekend in the U.S.,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.

Tension in the Middle East provided continued support, with analysts saying the risk of a wider Middle East conflict could continue to guide crude prices.

Israeli forces said on Thursday they had raided the biggest functioning hospital in Gaza, while Hezbollah said it fired dozens of rockets at a northern Israeli town in a “preliminary response” to the killing of 10 civilians in southern Lebanon, the deadliest day for Lebanese civilians in four months of cross-border hostilities.

“I would expect the latest gains from an increased Mideast risk premium to stick, especially going into the weekend,” said Vandana Hari, founder of oil markets analysis provider Vanda Insights.

(Additional reporting by Mohi Narayan in New Delhi and Yuka Obayashi in Tokyo; Editing by Susan Fenton)

By Brigid Riley

TOKYO (Reuters) -Japan’s benchmark Nikkei rallied to 34-year highs on Friday and was on the cusp of eclipsing the all-time peak reached during the hey days of the nation’s bubble economy in the 1980s. The index blew past the post-economic bubble era record of 38,188.74, putting it on course to surpass the life-time peak of 38,957.44 reached in December 1989. The Nikkei share average finished the day up 0.86% at 38,487.24. So far, the index is up 14.0% for the year.

“The speed (at which the Nikkei is rising) is faster than I had expected, but I think it’s justified” given fundamental improvements such as corporate governance reform, said Kenji Abe, an analyst at Daiwa Securities.

Of the index’s 225 constituents, 190 advanced and just 34 declined.

The broader Topix closed up 1.27% at 2624.73.

Japan’s stock market was buoyed by a strong day on Wall Street overnight, with the Nikkei index’s heavyweights climbing.

Toyota Motor gained 0.95%, Fast Retailing was up 1.08% and Recruit Holdings rallied 4.0%.

Semiconductor equipment manufacturer Tokyo Electron, which had been in negative territory for a while, also picked up during the day, eking out a modest 0.4% gain.

Entertainment company Bandai Namco Holdings Inc was the best performer, up 8.05% after taking a tumble the previous day.

In sectors, the oil and coal products Topix subindex rallied 3.96% to come out on top after a brief jump in oil prices overnight.

On the broader economic front, investors were assessing Thursday’s gross domestic production report showing Japan unexpectedly slipped into a recession at the end of last year, and how that will affect the Bank of Japan’s (BOJ) monetary policy outlook.

BOJ Governor Kazuo Ueda told Japan’s parliament on Friday that the central bank will examine whether to maintain its various monetary easing measures, including negative interest rates, when its 2% inflation target comes into sight.

(Reporting by Brigid RileyEditing by Shri Navaratnam)