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Dollar Slumps on Fed Bets as European Stocks Retreat With Oil

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Dollar

The dollar weakened versus all of its major peers and gold jumped the most in two weeks as prospects for a U.S. interest-rate hike this year remained subdued. Equities declined in Europe and Asia as oil retreated.

The Bloomberg Dollar Spot Index sank to its weakest since June ahead of U.S. reports on housing starts, inflation and industrial output. The Stoxx Europe 600 Index fell the most in two weeks as U.S. stock index futures declined. Japanese shares led losses in Asia as the yen climbed toward 100 per dollar. Crude snapped a three-day surge before American stockpiles data and nickel fell following its biggest jump of the month. U.K. government debt gained before the Bank of England conducts a bond-buying auction.

The dollar is losing ground and global equities are near a one-year year high as lackluster data in the world’s biggest economies fuel speculation the Federal Reserve will refrain from raising interest rates amid monetary easing in Asia and Europe. The probability of a U.S. interest-rate increase in 2016 is below 50 percent and the greenback has lost ground versus 15 of 16 major peers in the past month.

“The yen is being driven by the dollar’s weakness, spurred on by increasing expectations the Federal Reserve won’t raise rates this year,” said Nicholas Teo, a strategist at KGI Fraser Securities in Singapore. “If the Fed doesn’t move this year, there’s a risk of steeper moves next year. That’s very dangerous.”

U.S. data on Tuesday are forecast to show consumer prices were unchanged in July from the previous month, while housing starts were at about the same level as in June and industrial output gains slowed. The U.K. will also report on consumer-price growth, which will be the first hard data on how the economy performed in the month following the country’s June 23 vote to leave the European Union.

Currencies

The yen strengthened 0.9 percent to 100.33 versus the greenback as of 8:12 a.m. London time, while Bloomberg’s dollar index sank 0.4 percent.

“The yen could test the 100 mark due to further softening of the dollar,” said Ray Attrill, co-head of foreign-exchange strategy at National Australia Bank Ltd. in Sydney. “A sustained break of that level would up the pressure on the BOJ to take steps at its September meet to support it.”

The MSCI Emerging Market Currency Index climbed to its highest since June 2015 as South Korea’s won strengthened 0.9 percent and the currencies of Malaysia, Hungary and Poland gained at least 0.4 percent.

The pound rose 0.1 percent to $1.2893, after a Monday close of $1.2880 that was the weakest since June 1985. The currency has lost more than 2 percent this month versus the dollar, the worst performance among major currencies.

Stocks

The Stoxx Europe 600 Index declined 0.6 percent, slipping for a third day.
Linde AG jumped 4.4 percent after it was reported to have held merger talks with Praxair Inc., a deal that would create the world’s largest supplier of industrial gases.

Futures on the S&P 500 were 0.2 percent lower, after the U.S. benchmark ended the last session at a record high. Asset managers in the U.S. are favoring stocks over Treasuries, while active equity funds are the most bullish since 2008, according to Bank of America Corp.

The MSCI Asia Pacific Index of shares fell 0.2 percent, extending Monday’s retreat from a one-year high. Japan’s Topix index slid 1.4 percent and the Shanghai Composite Index retreated from its best close since January. Hong Kong’s Hang Seng Index was little changed near a nine-month high.

Bank of Guiyang Co. soared by the 44 percent daily limit on its first day of trading in Shanghai even after a spate of warnings that the nation’s bad loans are understated and lenders may need bailouts in coming years. Jet Airways India Ltd. declined for a sixth day in Mumbai after reporting a 54 percent drop in first-quarter profit.

Oil fell 0.8 percent to $45.37 a barrel in New York as the market weighed expectations for U.S. stockpiles rising further from a record against speculation that informal OPEC talks next month may revive discussions to freeze output. It jumped 10 percent over the last three trading sessions as Saudi Arabia indicated it’s prepared to discuss stabilizing the market. U.S. crude inventories probably increased by 900,000 barrels, rising for a fourth week and keeping supplies above the five-year average for this time of year.

Most industrial metals slipped after an index of the main contracts traded on the London Metal Exchange posted the biggest gain in two weeks on Monday. Nickel dropped 1.5 percent in London, after climbing 2 percent in the last session, and zinc was down 0.3 percent.

Gold added 0.7 percent, buoyed by expectations U.S. interest rates won’t be raised anytime soon. Platinum gained more than 1 percent.

Bonds

The U.K.’s 10-year yield declined one basis point to 0.52 percent, near a record low, before the Bank of England seeks to buy 1.17 billion pounds ($1.5 billion) of debt due in more than 15 years as part of its expanded quantitative-easing program. The central bank fell short of achieving a similar target at last week’s bond-buying auction, spurring gains in longer-dated gilts.

The yield on U.S. Treasuries due in a decade fell three basis points to 1.53 percent. Rates on similar-maturity debt in Germany and Japan decreased by about one basis point to minus 0.09 percent and minus 0.10 percent, respectively.

Noble Group Ltd.’s dollar-denominated bonds fell for a second day after the Singapore-listed commodity trader’s debt rating was cut two levels by Moody’s Investors Service, which said liquidity could come under pressure over the next 12 months amid weaker-than-expected profitability. The notes due 2020 fell to 77.26 cents on the dollar, giving a yield of 15.52 percent.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Government

EFCC Finally Arrests Okorocha After Hours of Siege, Gives Reason 

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Okorocha

The Economic and Financial Crimes Commission (EFCC) has finally arrested the All Progressives Congress’ presidential candidate and former governor of Imo State, Rochas Okorocha after laying siege on his residence for hours. 

Security operatives attached to the EFCC had surrounded the residence of the former governor earlier on Tuesday and before they finally arrested him late in the evening. 

Investors King can confirm that lots of gunshots and tear gas canisters were fired to disperse angry supporters of the lawmaker who tried to resist the arrest before he was finally arrested.

According to an official of the anti-graft agency, Okorocha will be taken to the headquarters of the commission where he will be until May 30 when he will be arraigned in court.

In an official statement obtained by Investors King, signed by the EFCC spokesperson, Wilson Uwujaren, “the move to arrest Okorocha was followed by the refusal of the former governor to honour invitations after jumping the administrative bail earlier granted him by the Commission.

EFCC had on January 24, 2022, filed a 17-count criminal charge bordering on diversion of public funds and properties to the tune of N2.9bn against Okorocha.

“The case was assigned to Honourable Justice Inyang Ekwo of the Federal High Court, Abuja but attempts to arraign Senator Okorocha was twice stalled owing to the absence of the ex-governor who evaded service of processes”.

EFCC added that at the last adjourned date, March 28th 2022, Justice Ekwo, before adjourning until May 30th, 2022, had warned that it was “the last adjournment I shall grant in this matter”.

“In the circumstances, the Commission is left with no option but to effect the arrest of Senator Okorocha and bring him to trial”, the statement had read. 

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Russia Halts Supply of Gas to Finland, Disagrees on Payment Mode 

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Russia’s majority state-owned multinational energy corporation, PJSC Gazprom, on Saturday, halted gas exports to one of its neighbouring countries, Finland, in the latest escalation of an energy payments dispute with Western nations.

A statement released by Finland’s gas system operator, Gasgrid said: “Gas imports through Imatra entry point have been stopped.

“Starting from today, during the upcoming summer season, Gasum will supply natural gas to its customers from other sources through the Balticconnector pipeline”. 

Investors King gathered that majority of the European supply contracts are denominated in Euros or Dollars and Moscow already cut off gas to Bulgaria and Poland last month after they refused to comply with the new payment terms.

Imatra is the entry point for Russian gas into Finland and even though majority of the gas used in Finland comes from Russia, gas only accounts for about five per cent of its annual energy consumption.

Gazprom Export has requested that European countries pay for Russian gas supplies in Russian currency (roubles) because of sanctions imposed over Moscow’s invasion of Ukraine, but Finland refuses to do so.

Gazprom Export, on Friday, said: “flows would be cut because Gasum had not complied with the new Russian rules requiring settlement in roubles.”

Earlier on Friday, the Finnish state-owned gas wholesaler, Gasum had said the Russian Gazprom warned that flows would be halted from 04:00 GMT on Saturday morning.

The decision is coming at a time when Finland and Sweden announced that they were going to join the North Atlantic Treaty Organisation (NATO) military alliance, a decision inspired by Russia’s invasion of Ukraine.

Last week, the  Finish Prime minister, Sanna Marin had said: “When we look at Russia, we see a very different kind of Russia today than we saw just a few months ago.

“Everything changed when Russia attacked Ukraine. And I personally think that we cannot trust anymore that there will be a peaceful future next to Russia.”

Marin noted that joining NATO is “an act of peace [so] that there will never again be war in Finland in the future”.

According to Swedish leader Andersson, “to ensure the safety of Swedish people, the best way forward is to join NATO together with Finland”.

The announcements were met with support from leaders in almost all NATO nations.

US Secretary of State, Antony Blinken told reporters that the United States would strongly support the NATO application by either Sweden or Finland should they choose to formally apply to the alliance.

Investors King recalls that Russia had in April, announced the suspension of gas supply to Poland and Bulgaria on the same payment disputes. 

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FG Resumes Conditional Cash Transfer Programme Across Six Local Govt. In Kebbi

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NAIRA - Investors King

The Federal Government has resumed the Conditional Cash Transfer (CCT) programme in Kebbi State, commencing with a payment of N9.24bn to 76,107 CCT beneficiaries.

The National Coordinator of the programme, Hajiya Halima Shehu, made the announcement during a state visit to Governor Atiku Bagudu in Birnin Kebbi.

“As at now, payment to CCT beneficiaries is ongoing in the state. A total number of 76,107 beneficiaries across six local government areas of Bagudu, Danko, Wasagu, Dandi, Jega, and Shanga, will be receiving the payment. The beneficiaries will be receiving 26 months of payment circles, starting from January to February 2020.

“The payment will be in two batches of those 60,000 beneficiaries for four payment cycles, using the virtual account. The second batch has 70,107 beneficiaries for nine payment cycles through the debit cards. The total amount for the two batches in the state, according to Shehu, was over N9.24 billion.

“The Federal Government of Nigeria, in partnership with the World Bank in 2016, designed and developed a safety net programme for Nigeria under the platform of National Social Safety Net Programme (NASSP).

“One of the components of NASSP is the national conditional cash transfer office responsible for implementing the household uplifting- conditional cash transfer to the poor and the vulnerable households across the country,” she said.

Shehu commended the governor for providing her an audience and the chance to update him on the commencement of payments and the state’s successful implementation of the program.

Responding, Gov. Bagudu, represented by his Deputy, Alhaji Samaila Yombe-Dabai, thanked the Federal Ministry of Humanitarian Affairs, Disaster Management and Social Development, headed by Hajiya Sadiya Umar-Farouq, for actualising the programme in the state.

“I assure you that the state government will do all it takes to support the success of the programme in the state.

“We are looking forward to getting more local governments to be involved in the cash transfer programme,” Bagudu said.

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