By Ankur Banerjee

SINGAPORE (Reuters) -The U.S. dollar wobbled near a three-month peak as expectations the Federal Reserve is unlikely to cut rates aggressively this year take hold, while the Australian dollar rose after the central bank said it could not rule out another rate hike.

The Reserve Bank of Australia (RBA) on Tuesday left rates unchanged at a 12-year high of 4.35%, as expected, after its February meeting, but cautioned that a further increase in interest rates might be needed to tame inflation.

Investors have steadily moved to push back bets for the first rate cut from the RBA to August, rather than June, with economists polled by Reuters also expecting the central bank to stay steady on rates well into the second half of this year.

The Aussie rose 0.44% to $0.65115 after the decision, inching away from the 2-1/2 month low of $0.6469 it touched on Monday. The New Zealand dollar was 0.23% higher at $0.6069.

“It totally makes sense for the RBA to retain hawkish bias, given the pushback to easing expectations we have seen lately from the Fed, ECB and other major central banks,” said Charu Chanana, head of currency strategy at Saxo in Singapore.

“Bearish AUD picture remains intact, given the lags in RBA pricing compared to that of the Fed, as well as the broader downbeat China picture.”

Meanwhile, the dollar index, which measures the U.S. currency against six rivals, eased a bit to 104.32, having touched 104.60 on Monday, its highest since Nov. 14. The index is up 3% for the year so far after dropping 2% in 2023.

Data on Monday showed U.S. services sector growth picked up in January as new orders increased and employment rebounded, indicating a strong start to the year for the economy. The data followed a blowout jobs report last week.

The string of robust U.S. economic data has quashed any lingering hopes of early and steep interest rate cuts by the Fed, with Fed Chair Jerome Powell and other policymakers also pushing back against the notion.

Traders have been scaling back rate cuts bets since the beginning of the year and are currently pricing in only a 16% chance of a cut in March, the CME FedWatch tool showed, compared with a 69% chance at the start of the year.

They are also now pricing in 115 basis points (bps) of cuts this year, compared with around 150 bps of easing anticipated in early January.

“There may still be a bit of room to scale back (more) but it’s likely limited given that the disinflation trend in the US is becoming more entrenched and that labour market tightness is gradually easing,” said Christopher Wong, a currency strategist at OCBC in Singapore.

In other currencies, the euro was little changed at $1.0750, while sterling last fetched $1.25495, up 0.11% on the day but remained close to the seven-week low it hit on Monday.

The pound’s fall on Monday came despite some upbeat economic data. Figures showed that the unemployment rate was likely much lower late last year than previously thought, which could push out British rate cuts too.

“The tighter than expected UK labour market supports our view that interest rate cuts are still some way off,” said Kristina Clifton, FX strategist and economist at Commonwealth Bank of Australia in a note.

“We expect the first cut in August versus current market pricing for the June cut.”

The Japanese yen was stronger on the day at 148.44 per dollar, but not far off a two-month low of 148.90 it touched on Monday.

Japan’s real wages fell for a 21st straight month though at a slower pace, while household spending dropped for a 10th consecutive month, showing inflation outpaced wage recovery and continued to weigh on consumer spending.

(Reporting by Ankur Banerjee in Singapore; Editing by Sonali Paul and Jamie Freed)

By Stephanie Kelly and Trixie Yap

(Reuters) -Oil prices inched up in early Tuesday trade as investors waited to see whether a Middle East trip by top U.S. diplomat Antony Blinken will bring a halt to the Gaza war, which has raised concerns about supplies from the major producing region.

Brent crude futures rose 20 cents to $78.19 a barrel at 0452 GMT, while U.S. West Texas Intermediate crude futures climbed 20 cents to $72.98. Both contracts gained nearly 1% on Monday, rising for the first time in four sessions.

“The signs of de-escalation in the Middle-Eastern crisis are missing and continue to extend some support to ailing oil prices,” said Phillip Nova senior market analyst Priyanka Sachdeva.

Blinken met Saudi Arabia’s de-facto ruler on Monday. Palestinians hope the visit will clinch a truce before a threatened Israeli assault on Rafah, a border city where about half the Gaza Strip population is sheltering.

The ceasefire offer, delivered to Hamas last week by Qatari and Egyptian mediators, awaits a reply from militants who say they want more guarantees it will bring an end to the four-month-old war.

The United States continued its campaign against Iran-backed Houthis in Yemen, whose attacks on shipping vessels have disrupted global oil trading routes.

Concerns about the demand outlook however limited price gains.

Analysts said expectations of “higher for longer” interest rates in the United States, and beyond, would likely cap consumption, as are indications that China’s economy continues to struggle with meaningful growth.

CMC Markets analyst Leon Li also said it would be “difficult to return to previous highs” given that the a run of strong economic indicators out of the United States would likely lose steam.

“Layoffs are still increasing. This means that in the long term, the (oil) demand will decline,” Li said.

On the supply side, market participants are awaiting industry data due later on Tuesday on U.S. crude stockpiles. Five analysts polled by Reuters estimated on average that crude inventories rose by about 2.1 million barrels in the week to Feb. 2.

BMI analysts said in a client report that they expect the market will remain broadly balanced over the course of the year and that oil prices would gain a moderate 3.4%.

“However, we see risks to the outlook both to the upside and the down, due to considerable uncertainties surrounding the strength of the global economy, the fallout from the unfolding Red Sea crisis and the evolution of OPEC+ policy, amongst other things,” they added.

(Reporting by Stephanie Kelly and Trixie Yap; Editing by Miral Fahmy)

By Ankur Banerjee

SINGAPORE (Reuters) -The U.S. dollar was steady near a three-month peak on Tuesday on rising expectations the Federal Reserve is unlikely to cut rates aggressively this year, while the Australian dollar gained after the central bank said it could not rule out another rate hike.

The Reserve Bank of Australia left rates unchanged at a 12-year high of 4.35%, as expected, after its February meeting, but cautioned that a further increase in interest rates might be needed to tame inflation.

Investors have steadily moved to push back bets for the first rate cut from the RBA to August, rather than June, with economists polled by Reuters also expecting the central bank to stay steady on rates well into the second half of this year.

The Aussie rose 0.35% to $0.6505 after the decision, having touched a two-and-a-half month low of $0.6469 on Monday. The New Zealand dollar was 0.19% higher at $0.60665.

“It totally makes sense for the RBA to retain hawkish bias, given the pushback to easing expectations we have seen lately from the Fed, ECB and other major central banks,” said Charu Chanana, head of currency strategy at Saxo in Singapore.

“Bearish AUD picture remains intact, given the lags in RBA pricing compared to that of the Fed, as well as the broader downbeat China picture.”

Meanwhile, the dollar index, which measures the U.S. currency against six rivals, was at 104.38, having touched 104.60 on Monday, its highest since Nov. 14. The index is up 3% for the year so far after dropping 2% in 2023.

Data on Monday showed U.S. services sector growth picked up in January as new orders increased and employment rebounded, indicating a strong start to the year for the economy and comes after a blowout jobs report last week.

The string of robust U.S. economic data has quashed any lingering hopes of early and steep interest rate cuts by the Fed, with Fed Chair Jerome Powell and other policymakers also pushing back against the notion.

Traders have been scaling back rate cuts bets since the beginning of the year and are currently pricing in only a 15% chance of a cut in March, the CME FedWatch tool showed, compared with a 69% chance at the start of the year.

They are also now pricing in 115 basis points (bps) of cuts this year, compared with around 150 bps of easing anticipated in early January.

“There may still be a bit of room to scale back (more) but it’s likely limited given that the disinflation trend in the US is becoming more entrenched and that labour market tightness is gradually easing,” said Christopher Wong, a currency strategist at OCBC in Singapore.

In other currencies, the euro was little changed at $1.0747, while sterling last fetched $1.2546, up 0.08% on the day but remained close to the seven-week low it hit on Monday.

The pound’s fall on Monday came despite some upbeat economic data. Figures showed that the unemployment rate was likely much lower late last year than previously thought, which could push out rate cuts there, too.

“The tighter than expected UK labour market supports our view that interest rate cuts are still some way off,” said Kristina Clifton, FX strategist and economist at Commonwealth Bank of Australia in a note.

“We expect the first cut in August versus current market pricing for the June cut.”

The Japanese yen was a tad stronger on the day at 148.61 per dollar, but not far off a two-month low of 148.90 it touched on Monday.

Japan’s real wages fell for a 21st straight month though at a slower pace, while household spending dropped for a tenth consecutive month, showing that inflation outpaced wage recovery and continued to weigh on consumer spending.

(Reporting by Ankur Banerjee in Singapore; Editing by Sonali Paul)

By Neil Jerome Morales and Mikhail Flores

MANILA (Reuters) – The Philippine central bank reinforced its hawkish stance on Tuesday despite slower annual inflation in January, as policymakers remain wary that the El Nino impact could lift consumer price growth above its target in the second quarter.

The consumer price index rose 2.8% in January, the least since October 2020, the Philippine Statistics Authority said, from a 3.9% gain in December. That was below the 3.1% forecast in a Reuters poll, and was the second consecutive month that the pace of price increases fell within the central bank’s 2% to 4% target range.

Core inflation, which strips out volatile food and energy costs, slowed to 3.8% in January from 4.4% in the previous month.

“The balance of risks to the inflation outlook still leans significantly towards the upside,” the Bangko Sentral ng Pilipinas (BSP) said in a statement, citing upside risks that could potentially stem from higher food prices due to El Niño, and an increase in the cost of transport, electricity and oil.

The central bank, which is set to meet on Feb. 15 to review interest rates, said it “deems it necessary to keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes evident.”

The latest data showing easing price pressures should bode well for the consumption-driven economy which grew 5.6% in 2023, below the government’s 6.0% to 7.0% target for that year as soaring inflation undermined domestic demand.

The BSP has raised its benchmark interest rate by 450 basis points since May 2022 to rein in inflation, including an off-cycle hike in October last year. However, it kept the rate steady at 6.5% at its final two policy meetings of 2023.

Domini Velasquez, chief economist at China Banking Corp, said she does not expect the BSP to hike rates at its February meeting but underlined the need for non-monetary measures to tamp down on food prices, especially the cost of the national staple, rice.

Rice inflation, which accelerated to a 14-year high of 22.6% in January, “is becoming a concern,” Velasquez said.

(Reporting by Neil Jerome Morales and Mikhail Flores; Editing by Kanupriya Kapoor, Christopher Cushing & Shri Navaratnam)

By Ankur Banerjee

SINGAPORE (Reuters) – The U.S. dollar was perched near a three-month peak on Tuesday, buoyed by elevated Treasury yields, on growing expectations that the Federal Reserve is unlikely to cut interest rates aggressively this year.

The dollar index, which measures the U.S. currency against six rivals, was at 104.42, having touched 104.60 on Monday, its highest since Nov. 14. The index is up 3% for the year so far after dropping 2% in 2023.

Data on Monday showed U.S. services sector growth picked up in January as new orders increased and employment rebounded, indicating a strong start to the year for the economy and comes after a blowout jobs report last week.

The string of robust U.S. economic data has quashed any lingering hopes of early and steep interest rate cuts by the Fed, with Fed Chair Jerome Powell and other policymakers also pushing back against the notion.

Traders have been scaling back rate cuts bets since the beginning of the year and are currently pricing in only a 15% chance of a cut in March, the CME FedWatch tool showed, compared with a 69% chance at the start of the year.

They are also now pricing in 115 basis points (bps) of cuts this year, compared with around 150 bps of easing anticipated in early January.

“There may still be a bit of room to scale back (more) but it’s likely limited given that the disinflation trend in the US is becoming more entrenched and that labour market tightness is gradually easing,” said Christopher Wong, a currency strategist at OCBC in Singapore.

Investor focus in Asia will be on the policy decision from the Reserve Bank of Australia later in the day, with the central bank widely expected to stand pat on rates, leaving comments from Governor Michele Bullock in the spotlight.

Investors have moved to push back bets for the first rate cut from the RBA to August, rather than June, with economists polled by Reuters also expecting the central bank to stay steady on rates well into the second half of this year.

The Australian dollar was little changed at $0.64835 ahead of the decision, loitering around its lowest since Nov. 17.

In other currencies, the euro was up 0.02% at $1.0743, while sterling last fetched $1.254, up 0.06% on the day but remained close to the seven-week low it hit on Monday.

The pound’s fall on Monday came despite some upbeat economic data. Figures showed that the unemployment rate was likely much lower late last year than previously thought, which could push out rate cuts there, too.

“The tighter than expected UK labour market supports our view that interest rate cuts are still some way off,” said Kristina Clifton, FX strategist and economist at Commonwealth Bank of Australia in a note.

“We expect the first cut in August versus current market pricing for the June cut.”

The Japanese yen strengthened 0.07% to 148.56 per dollar, hovering around a two-month low of 148.90 it touched on Monday.

Japan’s real wages fell for a 21st straight month though at a slower pace, while household spending dropped for a tenth consecutive month, showing that inflation outpaced wage recovery and continued to weigh on consumer spending.

(Reporting by Ankur Banerjee in Singapore; Editing by Sonali Paul)

By Stephanie Kelly

(Reuters) – Oil prices were little moved in early trading on Tuesday, as market participants assessed a visit to the Middle East by U.S. Secretary of State Antony Blinken to discuss a ceasefire offer in the region.

Blinken met Saudi Arabia’s de-facto ruler on Monday. Palestinians hope the visit will clinch a truce before a threatened Israeli assault on Rafah, a border city where about half the Gaza Strip population is sheltering.

The ceasefire offer, delivered to Hamas last week by Qatari and Egyptian mediators, awaits a reply from militants who say they want more guarantees it will bring an end to the four-month-old war.

Brent crude futures were down 2 cents at $77.97 a barrel as of 00:01 GMT, while U.S. West Texas Intermediate crude futures edged down 3 cents to $72.75. Both contracts gained nearly 1% on Monday, rising for the first time in four sessions.

The United States continued its campaign against Iran-backed Houthis in Yemen, whose attacks on shipping vessels have disrupted global oil trading routes.

In Russia, two Ukrainian drones struck the largest oil refinery in the country’s south on Saturday, a source in Kyiv told Reuters. It was the latest in a series of long-range attacks on Russian oil facilities, which has reduced Russia’s exports of naphtha, a petrochemical feedstock.

Market participants awaited industry data due later on Tuesday on U.S. crude stockpiles. Five analysts polled by Reuters estimated on average that crude inventories rose by about 2.1 million barrels in the week to Feb. 2.

(Reporting by Stephanie Kelly; Editing by Edwina Gibbs)

MANILA (Reuters) – Philippine annual inflation was at 2.8% in January, versus the previous month’s 3.9%, the statistics agency said on Tuesday.

Economists in a Reuters poll had forecast annual inflation of 3.1% in January, within the central bank’s 2.8% to 3.6% projection for the month.

(Reporting by Neil Jerome Morales and Mikhail Flores; Editing by Kanupriya Kapoor)

By Lisa Richwine

LOS ANGELES (Reuters) -Pop superstar Taylor Swift set another record on Sunday, winning the Grammy award for album of the year for an unprecedented fourth time as women dominated the music industry’s top honors.

Swift also announced from the Grammys stage that she would release a new album in April.

The 34-year-old won album of the year for “Midnights,” eclipsing music legends Frank Sinatra, Paul Simon and Stevie Wonder, who each claimed the prize three times.

Swift said she was thrilled by the honor and gushed about the fulfillment she feels from writing and singing songs. “It makes me so happy,” she said. “All I want to do is keep doing this.”

Earlier, Swift claimed the prize for best pop vocal performance and used the moment to announce that she will release “The Tortured Poets Department” on April 19.

“I want to say thank you to the fans by telling you a secret that I’ve been keeping from you for the last two years,” Swift said as she disclosed the new album, which was made available for pre-sales during the Grammys telecast.

Swift, who is about to jet to Tokyo to resume the world’s highest-grossing concert tour, was among the women who swept the major Grammy awards on Sunday.

Billie Eilish claimed song of the year for “What Was I Made For?,” a ballad written for the “Barbie” movie soundtrack.

“As a woman, it feels a lot of the time like you’re not being seen,” Eilish told reporters backstage. “I feel that this makes me feel very seen. Sometimes it feels really good to have somebody tell you ‘good job.’”

Miley Cyrus, winner of her first two Grammys on Sunday, landed the record of the year honor for her empowerment anthem “Flowers.”

“This award is amazing,” Cyrus said, “but I really hope that it doesn’t change anything because my life was beautiful yesterday.”

Best new artist went to R&B and pop singer Victoria Monet, who thanked her mom, “a single mom raising this really bad girl.”

Winners were chosen by the musicians, producers, engineers and others who make up the Recording Academy. The group has worked to diversify its membership in recent years by inviting more women and people of color to its ranks.

SZA, who went into the night as the most-nominated artist, won three trophies including best R&B song for “Snooze.”

“I came really, really far,” she said. “I can’t believe this is happening, and it feels very fake.”

Indie rock band boygenius, a band formed by musicians Phoebe Bridgers, Lucy Dacus and Julien Baker, also claimed three awards.

JONI MITCHELL, BILLY JOEL PERFORM

Comedian Trevor Noah, back for a fourth stint as host, opened the show on CBS by joking that it was “the only concert that starts on time.”

Folk singer Joni Mitchell performed for the first time at the Grammys, singing “Both Sides Now” from a chair and sporting blonde braids and a beret, with Brandi Carlile playing guitar beside her.

In a tribute to the many musicians and industry executives who passed away in the last year, Stevie Wonder played “For Once In My Life” to honor the late Tony Bennett who sang along from a video.

Annie Lennox sang “Nothing Compares 2 U” in a tribute to Sinead O’Connor, and Fantasia Barrino honored Tina Turner with her version of “Proud Mary,” backed by singers in shiny gold and silver fringed outfits.

Jon Batiste played “Ain’t No Sunshine” and “Lean On Me” in a tribute to Clarence Avant, known as “the Godfather of Black music.”

Near the start of the show, country star Luke Combs sang his cover hit “Fast Car,” alongside the original singer and writer of the 1988 song, Tracy Chapman.

Toward the end, Billy Joel performed his new single “Turn The Lights Back On,” his first original song in 17 years.

In accepting the Dr. Dre Global Impact Award, rapper Jay-Z aired some Grammy grievances, including the fact that his superstar wife Beyonce had never won album of the year despite having earned more Grammys than anyone else.

“I don’t want to embarrass this young lady,” Jay-Z said as Beyonce watched from the audience. “But she has more Grammys than anyone and never won album of the year. So even by your own metrics, that doesn’t work.”

(Reporting by Lisa Richwine and Danielle Broadway; Editing by Mary Milliken, Stephen Coates and Neil Fullick)

By Michael Holden and Muvija M

LONDON (Reuters) -King Charles has been diagnosed with a form of cancer and will postpone public engagements to undergo treatment, Buckingham Palace said on Monday, but added he remained “wholly positive” about the scare less than 18 months into his reign.

Charles, 75, who became king in September 2022 following the death of his mother Queen Elizabeth, has begun a series of treatments, the palace said, adding he was looking forward to returning to fulltime duties as soon as possible.

The cancer revelation comes after Charles spent three nights in hospital last month where he underwent a corrective procedure for a benign enlarged prostate.

The palace said a separate issue of concern had been spotted during that hospital stay, but did not given any further details beyond saying tests had revealed the king had a “form of cancer”.

“No further details are being shared at this stage, except to confirm that his majesty does not have prostate cancer,” the palace said.

“Throughout this period, his majesty will continue to undertake State business and official paperwork as usual.”

As such, Charles will continue to have meetings with Prime Minister Rishi Sunak, while his wife Queen Camilla will continue with her engagements.

SMILING

On Sunday, the king gave no indication of the diagnosis when he was pictured smiling and waving to onlookers as he attended a church service with Camilla.

It was his first public outing since he and his daughter-in-law Kate left the same London hospital a week ago where they had both undergone planned treatments.

Kate, the Princess of Wales and wife to heir to the British throne Prince William, spent two weeks at the London clinic following abdominal surgery for an unspecified but non-cancerous condition.

She will not be returning to royal duties until after Easter. William, who has been looking after their three children as she recovers, will carry out his first public engagement since her operation on Wednesday.

While the royals usually closely guard details of their health, regarding it as a private matter, Charles has been open about his recent treatment.

“His Majesty has chosen to share his diagnosis to prevent speculation and in the hope it may assist public understanding for all those around the world who are affected by cancer,” Buckingham Palace said.

Sunak sent his best wishes to the King on X. “I have no doubt he’ll be back to full strength in no time and I know the whole country will be wishing him well,” he said.

BIDEN CONCERN

The leaders of Australia and Canada, where Charles is also head of state, expressed their best wishes and hopes for the king to make a speedy recovery, while U.S. President Joe Biden said he was concerned by the news and planned to call Charles later.

“Navigating a cancer diagnosis, treatment, and survivorship takes hope and absolute courage,” Biden said. “Jill and I join the people of the United Kingdom in praying that His Majesty experiences a swift and full recovery.”

The monarch told his immediate family personally about his cancer diagnosis, and Prince Harry, his younger son, will travel to the UK to see him in the coming days, a source close to the Duke of Sussex said.

Harry now lives in California with his American wife Meghan and their two children after the couple stepped down from royal duties in 2020.

After waiting longer than any heir in British history to become king, Charles’ first year on the throne was dominated by his coronation – Britain’s biggest ceremonial event for generations, full of pomp and pageantry.

While before he became sovereign there were suggestions that the long-time environmental campaigner would bring a radical overhaul of the monarchy, Charles has generally followed in the style of his mother, while trying to add some of his own touches.

Polls suggest most Britons have a favourable view of his reign so far, although younger generations appear much less enthusiastic about the royal family in general.

Prior to his recent health issues, the biggest shadow over the royals was the ongoing fallout between his son Harry and the rest of his family, most notably Harry’s elder brother Prince William.

Ingrid Seward, editor-in-chief of Majesty Magazine, said that for Charles, a workaholic who often worked until midnight on his papers, his recent health issues would mean he would have to take it more slowly now.

“His body will tell him he has to, and Camilla certainly will,” she said. “I think he’s mentally exhausted since the death of the queen. It’s been non-stop for him since then.”

While Queen Margrethe II of Denmark abdicated last month in favour of her son King Frederik X after 52 years on the throne, Seward said there was no chance Charles would follow suit.

“Absolutely not, 100% no,” she said.

(Reporting by Michael Holden, Muvija M and William James; Writing by Kate Holton and Michael Holden; Editing by Hugh Lawson and Rosalba O’Brien)

By Yoruk Bahceli

(Reuters) – Inflation and the U.S. presidential election will be the biggest drivers of global markets this year, while liquidity challenges are a growing focus, according to traders surveyed by JPMorgan.

Some 27% of traders see inflation as having the biggest impact, followed by 20% for the November election, the survey published on Tuesday showed.

Bonds and equities rallied late last year on hopes that slowing inflation would prompt hefty central bank rate cuts this year. But those bets have been scaled back, with Friday’s blowout U.S. jobs data prompting the biggest sell-off in U.S Treasuries since September.

Markets are bracing for further volatility as the U.S. presidential election looms, with former president Donald Trump’s victory in the New Hampshire Republican primary bringing him closer to a rematch with Democrat President Joe Biden.

JPMorgan’s Global Head of Digital Markets Eddie Wen said greater focus this year on macro and risk events may create short-term volatility, with particular focus on the release of U.S. monthly jobs and inflation numbers.

Recession fears, which topped last year’s survey, fell to third place at 18% as economic growth beats expectations, the survey said.

War in Europe, where Russia’s invasion of Ukraine heads into its third year, and the Middle East, where the Hamas-Israel conflict is watched for signs of escalation, followed at 14%.

Traders expected volatile markets to remain their top trading challenge, but the share of respondents putting it in first place dropped 18 percentage points from last year to 28%.

Liquidity availability neared the top of the list of trading challenges at 24%, up from 22% last year, while access to liquidity remained traders’ biggest market structure concern.

Chi Nzelu, global head of macro e-Trading at JPMorgan, said as electronic trading grows in prominence, having consistent access to liquidity across a breadth of providers was becoming more important to investors.

“They want to know that it will continue to be reliable even in shock times, which has broadly been the case across different markets in recent years,” he said.

Traders in credit markets and cash equities named liquidity availability as their top challenge.

“The market structure within the credit markets is becoming more complicated,” said Wen.

“There are more trading platforms to support trading of corporate bonds alongside the emergence of portfolio trading, bloc trading, larger trades, all now becoming more electronic over time.”

This meant selecting the best way to execute trades was becoming a key question for investors, he said.

(Reporting by Yoruk Bahceli; editing by Dhara Ranasinghe and)