Author: Reuters

By Stella Qiu

SYDNEY (Reuters) – Japan’s Nikkei closed at another 34-year peak on Friday, helped higher by a buoyant Wall Street, while the dollar found its footing after a big fall in U.S. retail sales revived chances of a June rate cut.

The rally in Asia is set to extend to Europe, with EUROSTOXX 50 futures up 0.5%. Nasdaq futures rose 0.2% and S&P 500 futures were flat.

The of the all-time high of 38,957 points, hit in 1989. The index is up 4.3% for the week, the third straight week of gains, bringing the year-to-date gains to a staggering 15%.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9%, helped by a 2.6% jump in Hong Kong’s Hang Seng index after returning from the Lunar New Year holidays. The index was up 1.9% for the week.

Mainland China remained closed on Friday.

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 yen eased 0.2% on Friday to 150.26 per dollar, back above the critical 150 level that could draw possible Japanese intervention to slow the currency’s declines.

“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.

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 the U.S. retail sales fell by 0.8% in January, the sharpest drop in 10 months.

Markets moved to fully price in a rate cut from the Federal Reserve 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.

That cheered Wall Street, with the S&P 500 gaining 0.6%, the Nasdaq Composite up 0.30% and Dow Jones Industrial Average firming 0.9%.

The repositioning in interest rate expectations weighed on the dollar, but it rebounded 0.1% to 104.41 against its peers on Friday, after losing 0.4% overnight.

Treasury yields bounced after dipping overnight. The yield on benchmark 10-year notes rose 2 basis points at 4.2576%, after slipping 3 basis points overnight. It was still up 8 basis points for the week.

Traders are awaiting produce price data later in the day for more clues on Fed policy.

Oil prices were mixed on Friday after jumping the previous session. The International Energy Agency (IEA) on Thursday flagged slowing demand growth this year.

Brent eased 0.1% to $82.81, while U.S. crude edged 0.1% higher to $78.12 per barrel.

The spot gold price was flat at $2,003.09.

(Reporting by Stella Qiu. Editing by Sam Holmes and Gerry Doyle.)

By Mohi Narayan and Yuka Obayashi

NEW DELHI (Reuters) -Oil prices stalled on Friday over a forecast of slowing demand by the International Energy Agency after gaining in the previous session on weak U.S. retail sales data that sparked optimism that the Fed might cut interest rates sooner than expected.

Brent crude futures were down 9 cents, or 0.1%, to $82.77 a barrel at 0342 GMT. U.S. West Texas Intermediate crude futures rose 4 cent to $78.07 a barrel.

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.

The U.S. Commerce Department report showed retail sales dropped 0.8% in January, the biggest fall since February 2023. Economists polled by Reuters had forecast retail sales dipping 0.1%.

“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, noting Feb. 19 is a U.S. holiday.

“While keeping a close eye on interest rate trends, investors will continue to assess whether geopolitical risks in the Middle East will spill over into crude supply chains,” he said, predicting WTI to trade in the $70-$80 range for a while.

Weighing on market sentiment, Paris-based International Energy Agency (IEA), the industrialised world’s energy watchdog, said on Thursday that global oil demand growth was losing momentum and trimmed its 2024 growth forecast, in sharp contrast to the view held by the Organization of the Petroleum Exporting Countries (OPEC).

The IEA’s monthly report said it expects global oil demand to grow by 1.22 million barrels per day (bpd) this year, slightly down from last month’s estimate. OPEC on Tuesday stuck to its much steeper growth forecast of 2.25 million bpd.

In the Middle East, Hezbollah said on Thursday 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.

Meanwhile, Israeli forces said on Thursday they had raided the biggest functioning hospital in Gaza as footage showed chaos, shouting and gunfire in dark corridors filled with dust and smoke.

Analysts said the risk of a wider Middle East conflict could continue to guide crude prices.

“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.

“The impending Israeli offensive in Rafah has the potential to unleash a response from the Houthis, which have been a bit quiet of late in the Red Sea, and other Iran-backed militia in the region,” Hari added.

(Reporting by Mohi Narayan in New Delhi and Yuka Obayashi in Tokyo; Editing by Muralikumar Anantharaman and Miral Fahmy)

By Brigid Riley

TOKYO (Reuters) -Japan’s benchmark Nikkei got off to a roaring start on Friday, hitting 34-year highs 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 38188.74, putting it on course to surpass the life-time high of 38,957.44 reached in December 1989.

The Nikkei share average relinquished some of its early gains but was still up 0.91% at 38,505.89 by the midday close. Of the index’s 225 constituents, 202 advanced while only 21 declined.

“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.

The broader Topix was up 1.26% at 2624.53.

Japan’s stock market was buoyed by a strong day on Wall Street overnight. U.S. stocks closed higher after U.S. retail sales data declined more than expected, feeding hopes the Federal Reserve will start cutting interest rates in coming months.

Among the stocks leading the charge, entertainment company Bandai Namco Holdings Inc rebounded 7.59% after tumbling on Thursday, followed by insurance firm T&D Holdings Inc, up 6.24%, and Rakuten Group Inc gaining 5.96%.

In megacap shares, Toyota Motor gained 1.06%, Fast Retailing was up 0.94% and telecommunications services firm KDDI Corp rallied 2.37%.

A brief jump in oil prices overnight boosted related sectors, with the oil and coal products Topix subindex up 3.76%.

On the broader economic front, investors were also 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 chief Kazuo Ueda appearance before Japan’s parliament on Friday will be closely watched.

(Reporting by Brigid RileyEditing by Shri Navaratnam)

By Yuka Obayashi

TOKYO (Reuters) – Oil prices meandered on Friday as investors pondered slowing demand forecast by an influential group and weak U.S. retail sales data that sparked optimism about U.S. interest rate cuts.

Brent crude futures dropped 11 cents, or 0.1%, to $82.75 a barrel at 0131 GMT. U.S. West Texas Intermediate crude futures rose 1 cent to $78.04 a barrel.

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 in coming months, which could be positive for oil demand.

The U.S. Commerce Department report showed retail sales dropped 0.8% in January, the biggest fall since February 2023. Economists polled by Reuters had forecast retail sales dipping 0.1%.

“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, noting Feb. 19 is a U.S. holiday.

“While keeping a close eye on interest rate trends, investors will continue to assess whether geopolitical risks in the Middle East will spill over into crude supply chains,” he said, predicting WTI to trade in the $70-$80 range for a while.

Weighing on market sentiment, Paris-based International Energy Agency (IEA), the industrialised world’s energy watchdog, said on Thursday global oil demand growth is losing momentum and trimmed its 2024 growth forecast, in sharp contrast to the view held by the Organization of the Petroleum Exporting Countries (OPEC).

The IEA’s monthly report said it expects global oil demand to grow by 1.22 million barrels per day (bpd) this year, slightly down from last month’s estimate. OPEC on Tuesday stuck to its much steeper growth forecast at 2.25 million bpd.

In the Middle East, Hezbollah said on Thursday 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.

Meanwhile, Israeli forces said on Thursday they had raided the biggest functioning hospital in Gaza as footage showed chaos, shouting and gunfire in dark corridors filled with dust and smoke.

(Reporting by Yuka Obayashi; Editing by Muralikumar Anantharaman)

By Stella Qiu

SYDNEY (Reuters) – Japan’s Nikkei charged toward an all-time high on Friday, helped higher by a buoyant Wall Street after a big fall in U.S. retail sales revived the chance of a June rate cut, which in turn weighed on the dollar.

Nikkei surged 1.4% to 38,678 points, just within a whisker of the all-time high of 38,957 points hit in 1989 that marked the peak of Japan’s so called “bubble economy.”

The index is up 4.8% for the week, the third straight week of gains, bringing the year-to-date gains to a staggering 15.6%.

Elsewhere, Asian shares mostly tracked Wall Street higher. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3% and was headed for a 1.4% weekly gain.

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 Tony Sycamore, market analyst at IG. “So it does bring forward the idea of rate cuts.”

“One by one the dominoes are starting to fall. The UK and Japan fell yesterday. Obviously there’s a long way to go for the U.S. to fall into recession because their numbers have been pretty good. Europe you know it could be the next to go. And China’s not great.”

Nomura on Thursday forecast the Nikkei would reach 40,000 points by the end of the year, citing reasons such as an end to deflation in Japan, global investment shifting away from dependence on Chinese equities and improvement in Japanese corporate governance.

Overnight, data showed the U.S. retail sales fell by 0.8% in January, the sharpest drop in 10 months, confounding expectations of a small dip of 0.1%.

Markets moved to fully price in a rate cut from the Federal Reserve 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.

That cheered Wall Street with the S&P 500 gaining 0.6%, the Nasdaq Composite up 0.30% and Dow Jones Industrial Average firming 0.91%.

The repositioning in interest rate expectations weighed on the dollar, which lost 0.4% against its peers overnight and was last at 104.36. Traders are awaiting the produce price data later in the day for more clues on Fed policy.

The yen caught some respite from the dollar’s retreat and was last at 149.9 per dollar. It gained 0.4% overnight to move away from the critically watched 150 level that could invite possible Japanese intervention.

Treasuries recovered some of the losses from the hotter-than-expected CPI figures earlier in the week. The yield on benchmark 10-year notes was little changed at 4.2496%, after slipping 3 basis points overnight. It was still up 6 basis points for the week.

Two-year Treasury yields edged 2 basis points higher to 4.5930% and was up 10 basis points for the week.

Oil prices were mixed on Friday after jumping the previous session. The International Energy Agency (IEA) on Thursday flagged slowing demand growth this year.

Brent eased 0.2% to $82.73, while U.S. crude edged 0.1% lower to $77.98 per barrel.

The spot gold price was flat at $2,003.09.

(Reporting by Stella Qiu. Editing by Sam Holmes.)

WASHINGTON (Reuters) – U.S. import prices increased by the most in nearly two years in January amid rising costs for petroleum and other goods, a trend that if sustained, would be bad news in the fight against inflation.

Import prices jumped 0.8% last month, the largest gain since March 2022, after a revised 0.7% decline in December, the Labor Department’s Bureau of Labor Statistics said on Thursday. Import prices were previously reported to have been unchanged in December. Economists polled by Reuters had forecast import prices, which exclude tariffs, would be unchanged in January.

In the 12 months through January, import prices fell 1.3% after decreasing 2.4% in December. Annual import prices have now dropped for 12 consecutive months, though the pace of decline is slowing. Government data this week showed that consumer prices picked up in January, driven by higher rental costs as well as price increases at the start of the year.

Financial markets have pushed back their interest rate-cut expectations to June from May. Since March 2022, the Federal Reserve has raised its policy rate by 525 basis points to the current 5.25%-5.50% range.

Imported fuel prices rebounded 1.2% in January. That followed a 7.7% plunge in December. The cost of imported food surged 1.5% after dipping 0.1% in the prior month.

Excluding fuels and food, import prices rose 0.7% after being unchanged in December. These so-called core import prices fell 0.6% on a year-on-year basis in January.

Prices for imported capital goods rose 0.4% last month after slipping 0.1% in December. The cost of motor vehicles, parts and engines jumped 0.8% after rising 0.1% in the prior month.

Consumer goods excluding automotives soared 1.1%. Prices of goods imported from China fell 0.3%. They dropped 2.9% on a year-on-year basis in January.

The report also showed export prices rebounded 0.8% after declining 0.7% in December. Export prices fell 2.4% on a year-on-year basis in January after decreasing 2.9% in December.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

By Caroline Valetkevitch

NEW YORK (Reuters) -Global stock indexes advanced, Treasury yields declined and the dollar weakened against the Japanese yen on Thursday after a larger-than-expected drop in U.S. retail sales in January prompted a slight repositioning of expectations for interest rate cuts.

The U.S. Commerce Department report showed retail sales dropped 0.8% last month, the biggest fall since February 2023. Economists polled by Reuters had forecast retail sales dipping 0.1%.

However, winter storms were seen as possible factors affecting the data, with economists noting that a fairly healthy labor market remains supportive for consumer spending.

A separate report showed initial jobless claims fell 8,000 to a seasonally adjusted 212,000 for the week ended Feb. 10, slightly below the 220,000 estimate.

Investors are closely watching economic data for clues on when the Federal Reserve might begin cutting rates.

Bets for an at least 25-basis-point rate cut in May edged up to 40.6%, while odds for June stood at 82%, according to the CME Group’s FedWatch Tool.

A warmer reading of U.S. consumer prices earlier this week prompted traders to cut the chances of a prompt rate cut from the Fed, which lifted the dollar and sparked a sell-off in the fixed income market.

Traders also are once again watching the dollar/yen rate as it topped 150 in the last few days, a critical level that puts the market on alert for possible Japanese intervention to weaken its currency.

The yen strengthened despite unexpectedly weak Japanese gross domestic product figures for the fourth quarter of 2023, which saw the country overtaken by Germany as the world’s third-largest economy.

Against the Japanese yen, the dollar was down 0.41% at 149.94. The dollar index fell 0.38% at 104.28, with the euro up 0.4% at 1.0768.

The yield on the benchmark U.S. 10-year Treasury note fell 3 basis points to 4.234% and was on track for a second straight decline following a jump on Tuesday after the consumer prices reading.

“Clearly the retail sales came in somewhat below expectations and fits with our narrative that this is going to be a slower growth environment as we traverse 2024, but one where we still expect that there will be persistent economic growth, meaning that our base case is avoiding a recession in mid-2024,” said Bill Northey, senior investment director at U.S. Bank Wealth Management in Billings, Montana.

The Dow Jones Industrial Average rose 348.85 points, or 0.91%, to 38,773.12, the S&P 500 gained 29.11 points, or 0.58%, to 5,029.73 and the Nasdaq Composite gained 47.03 points, or 0.30%, to 15,906.17.

MSCI’s gauge of stocks across the globe rose 5.85 points, or 0.79%, to 750.80. The STOXX 600 index gained 0.68%.

Earlier on Thursday, Japan’s Nikkei rallied to its highest level in 34 years, and the stock index now sits just 800 points below its all-time high in 1989 that marked the peak of Japan’s so called “bubble economy.”

Oil prices rose as the U.S. retail data prompted a sell-off in the dollar. U.S. crude gained $1.39 to settle at $78.03 a barrel and Brent rose $1.26 to settle at $82.86. Spot gold was up 0.6% at $2,004.05 per ounce.

(Reporting by Caroline Valetkevitch; additional reporting by Amanda Cooper in London, Ankur Banerjee in Singapore and Chuck Mikolajczak in New York; Editing by Jacqueline Wong, Tomasz Janowski, Susan Fenton and Sandra Maler)

(Reuters) – Federal Reserve Governor Christopher Waller on Thursday laid out the case for the world’s continued reliance on the U.S. dollar and the currency’s dominance in international trade, a key advantage for the U.S. economy on the global stage.

“Recent commentary warning of a possible decline in the status of the U.S. dollar raises concerns about the effects of sanctions against Russia, U.S. political dysfunction, the rise of digital assets, and China’s efforts to bolster usage of the renminbi,” Waller said in remarks prepared for delivery to a conference sponsored by the Global Interdependence Center and the University of the Bahamas in Nassau.

But none of those concerns has translated to a notable decline in the dollar’s “outsized” role in the world economy, he said. Indeed, increased use of digital assets like stablecoins, which are overwhelmingly tied to the dollar, tends to increase the U.S. currency’s international profile, Waller noted.

U.S. adversaries have few alternatives to the dollar, with international investors shy about using China’s currency, for instance, for a range of reasons including lack of confidence in Chinese institutions.

And in times of international stress, investors flock to U.S. Treasuries as a way to stabilize the value of their assets.

“I do not expect to see the U.S. dollar lose its status as the world’s reserve currency anytime soon, nor even see a significant decline in its primacy in trade and finance,” Waller said. “Recent developments that some have warned could threaten that status have, if anything, strengthened it, at least so far.”

(Reporting by Ann Saphir; Editing by Paul Simao)

By Luc Cohen and Jack Queen

NEW YORK (Reuters) -Donald Trump will become the first former U.S. president to stand trial on criminal charges after a New York judge on Thursday set a March 25 trial date and denied his request to dismiss the case, which stems from hush money paid to a porn star.

Justice Juan Merchan’s ruling during a testy hearing in Manhattan means that Trump will stand trial in at least one of the four criminal cases he faces as he pursues the Republican nomination to challenge Democratic President Joe Biden in the Nov. 5 U.S. election.

Trump, 77, had asked Merchan to toss the 34-count felony indictment, which charges him with falsifying business records to cover up the $130,000 payment to porn star Stormy Daniels before the 2016 election. Merchan took less than 10 minutes to deny Trump’s request and confirm the trial date.

Merchan said the trial could last five or six weeks, ending in late April or early May. Trump has pleaded not guilty to the charges brought by Manhattan District Attorney Alvin Bragg, a Democrat.

A guilty verdict would not prevent Trump from running for president or taking office, even if incarcerated. But Reuters/Ipsos polling has found a conviction could erode his support among voters.

Trump attended the hearing, sitting next to his lawyers at the defense table and occasionally conferring with them.

Afterward, Trump repeated his claim that the case is politically motivated.

“They want to keep me nice and busy so I can’t campaign,” Trump said.

‘SEE YOU ON MARCH 25’

Trump’s lawyer Todd Blanche told the judge during the hearing that it would not be fair for him to stand trial while running for president.

“It should not happen in this country,” Blanche said.

Merchan responded, “That’s not a legal argument. I’ll see you on March 25.”

Blanche said he might try to move the trial out of Manhattan, where Trump is likely to face a liberal-leaning jury pool.

A handful of protesters held signs denouncing Trump and shouted “no dictators in the U.S.A.” outside the courthouse.

The case centers on former Trump lawyer Michael Cohen’s $130,000 payment to Daniels – whose real name is Stephanie Clifford – to prevent her from publicly speaking ahead of the 2016 election about a sexual encounter she has said she had with Trump a decade earlier. Trump has denied this occurred.

Cohen pleaded guilty in 2018 to violating federal campaign finance laws and served time in prison.

The trial is set to start before any of Trump’s three other criminal cases. The case is widely seen as less consequential than the others, as it concerns Trump’s conduct before he took office rather than actions he took during and after his presidency that concerned national security and the nation’s democratic system.

Bragg has said Trump’s actions undermined the integrity of the 2016 election, as Trump was trying to cover up information that might have cost him votes.

Trump may effectively have wrapped up the Republican nomination by the time the trial is scheduled to start. He has won the first four state nominating contests, and dozens more will have taken place before the trial date.

Opinion polls show Trump holding a wide lead over his lone remaining primary challenger, Nikki Haley, and effectively tied with Biden. But one in four Republicans and about half of independent voters have indicated they would not vote for Trump if he is convicted in any of his criminal cases, a Reuters/Ipsos poll showed on Tuesday.

IN GEORGIA, ANOTHER HEARING

Trump’s political and legal calendars are increasingly overlapping ahead of his expected rematch with Biden, who defeated him in the 2020 election.

In a separate court hearing on Thursday, Trump’s lawyers asked a Georgia judge to disqualify the prosecutor who charged him and several allies with crimes involving trying to overturn his 2020 election loss in the state. The prosecutor, Fani Willis, has admitted to a romantic relationship with a lawyer on her team.

Trump also faces federal charges in Washington over his efforts to overturn his election loss and in Florida over his handling of classified documents after leaving office. Trump has pleaded not guilty in every case.

Trump, who has pushed to delay his criminal trials until after the November election, would have the power to dismiss the two federal cases if he were to return to the presidency. Trump would not have the authority to pardon himself if convicted on the state charges in New York or to derail the Georgia state prosecution.

Prosecutors in the hush money case have said Trump’s New York-based family real estate company recorded his 2017 reimbursements to Cohen as legal expenses, violating a state law against falsifying business records to conceal another crime. They have said Trump was seeking to cover up federal campaign finance law violations as well as violations of a state law that prohibits promoting a candidacy by unlawful means.

Trump lawyers have argued that he should not face state charges for alleged violations of federal election law. Bragg’s office has said the state law that penalizes falsifying business records applies to both federal and state elections.

(Reporting by Luc Cohen in New York; Additional reporting by Susan Heavey, Gabriel Araujo and Andrew Goudsward; Writing by Andy Sullivan; Editing by Will Dunham and Noeleen Walder)

(Reuters) – General Motors Chief Executive Mary Barra said on Thursday that the automaker was looking at the best path to unlock value at its self-driving unit Cruise.

Shares of GM rose about 2%.

Cruise is an “incredibly valuable asset”, Barra said at an event hosted by Wolfe Research.

The Detroit automaker will focus on relaunching the unit this year, she added while reiterating her support for the unit.

Barra’s comments come one month after GM said it would cut spending by about $1 billion at the money-losing robotaxi unit in 2024. It had said earlier in December that it would slash 24% of its workforce at Cruise.

“As we get further along, (Cruise) is going to be a huge opportunity from a personal autonomous vehicle perspective,” Barra said.

GM is also navigating regulatory scrutiny after one of automated vehicles designed by Cruise hit a pedestrian last year.

(Reporting by Nathan Gomes in Bengaluru and Joseph White in Detroit; Editing by Shilpi Majumdar and Tasim Zahid)