Asian shares rise on dovish Fed chair, oil up as hurricane batters Louisiana

HONG KONG - Asian shares started the week with gains and the dollar was not far off two-week lows after US Federal Reserve Chairman Jerome Powell struck a more dovish tone than some investors expected in long-awaited speech on Friday.

Oil prices rose, meanwhile, after energy firms suspended production as Hurricane Ida slammed into the U.S.' southern coast.

Japan's Nikkei rose 0.9 percent soon after the bell, and MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.32 percent in early trading before Chinese markets had opened.

Australia climbed 0.39 percent and Korea's Kopsi gained 0.54 percent.

U.S. stock futures, the S&P 500 e-minis, were barely moved, up 0.04 percent.

Investors had been waiting to see whether Powell, who was speaking at a symposium in Jackson Hole, Wyoming, would give a clear indication of his views on timing of the central bank's tapering of asset purchases or hiking interest rates to start removing monetary stimulus.

However, in his prepared remarks, he offered no indication on cutting asset purchases beyond saying it could be "this year", causing the S&P 500 and the Nasdaq to close last week at new record highs.

The next big event on traders' calendars is U.S. nonfarm payroll figures for August due to be published Friday, as Powell has suggested an improvement in the labor market is one major remaining prerequisite for action.

"A strong payrolls print could instigate a debate for a September tapering start," Rodrigo Catril, senior FX strategist at NAB, said in a note.

The absence of a timetable for tapering caused U.S. benchmark Treasuries and the dollar to slip, and both trends continued on Monday morning in Asia.

The yield on benchmark 10-year Treasury notes was 1.3054 percent compared with its U.S. close of 1.312 percent, and the dollar index which measures the greenback against a basket of currencies was around a two week low.

Investors in China, in contrast, are watching data this week to see whether they will indicate policymakers are more likely step up easing measures.

Purchasing manager surveys for manufacturing and services are both due this week, with traders waiting to see whether a trend towards slowing growth will continue, a shift that has not been helped by recent localized movement restrictions to cope with an increase in cases of the Delta variant of the new coronavirus.

"We expect both the manufacturing and services PMIs to moderate in August, given the widespread Delta variant and strict lockdown," said Barclays analysts in a note.

"With slowing growth momentum and dovish signals from the (People's Bank of China) meeting this week, we expect more easing, but still at a measured pace"

Oil was also in focus after energy firms suspended 1.74 million barrels per day of oil production in the U.S. Gulf of Mexico as Hurricane Ida slammed into the Louisiana coast as a Category 4 storm.

U.S. crude rose 0.86 percent to $69.34 a barrel. Brent crude rose 1.25 percent to $73.38 per barrel.

Gold was slightly higher, with the spot price gold was traded at $1,817.7863 per ounce, up 0.07 percent.

(Editing by Lincoln Feast.)

-reuters

Asian shares near all-time peak, oil heads to $60 on economic revival hopes

SYDNEY - Asian shares hovered near record highs on Monday while oil edged closer to $60 a barrel on hopes a $1.9 trillion COVID-19 aid package will be passed by US lawmakers as soon as this month just as coronavirus vaccines are being rolled out globally.

MSCI’s broadest index of Asia-Pacific shares outside Japan was last up 0.2 percent at 717.2, not far from last week’s record high of 730.6.

Japan’s Nikkei climbed 0.3 percent while Australian shares advanced 0.5 percent led by technology and mining shares.

E-mini futures for the S&P 500 rose 0.3 percent in early Asian trading.

Hopes of a quicker economic revival and supply curbs by producer group OPEC and its allies pushed oil to its highest level in a year as it edged near $60 a barrel.

Global equity markets have scaled record highs in recent days on hopes of faster economic revival led by successful vaccine rollouts and expectations of a large US pandemic relief package.

On Friday, the Nasdaq and S&P 500 hit all-time highs on stronger-than-expected corporate results in the fourth quarter and as companies were on track to post earnings growth for the first quarter instead of a decline.

The rallies came even as US data painted a dour picture of the country’s labor market with payrolls rising by 49,000, half of what economists were expecting.

The weak report spurred the push for more stimulus, underscoring the need for lawmakers to act on President Joe Biden’s $1.9 trillion COVID-19 relief package.

Biden and his Democratic allies in Congress forged ahead with their stimulus plan on Friday as lawmakers approved a budget outline that will allow them to muscle through in the coming weeks without Republican support.

US Treasury Secretary Janet Yellen predicted the United States would hit full employment next year if Congress can pass its support package.

“That’s a big call given full employment is 4.1 percent, but one that will sit well with the market at a time when the vaccination program is being rolled out efficiently in a number of countries,” said Chris Weston, Melbourne-based chief strategist at Pepperstone.

In currencies, the US dollar came off a four-month high against the Japanese yen to be last at 105.39 following the weak jobs report.

The euro edged up slightly after rising 0.7 percent on Friday to a one-week high of $1.2054. It was last at $1.2044.

The risk-sensitive Australian dollar held near a one-week high at $0.7678.

In commodities, Brent crude and US crude climbed 52 cents each to $59.86 and $0.57.37 respectively.

US gold futures were up 0.2 percent at $1,817 an ounce.

-reuters

Dog eats money, US Treasury pays owner

A Montana man who pieced together the remnants of five $100 bills eaten by his one-eyed dog last year is sporting a $500 check he says he received this week from the US Department of the Treasury to replace the digested funds.

Wayne Klinkel said his dog Sundance, a golden retriever, sniffed the wad of bills out of a car cubby space while waiting for Klinkel and his wife to return from lunch, and the canine made the currency his lunch.

Klinkel, a graphic designer from Helena, Montana, who works for the local newspaper, the Independent Record, said he found Sundance had left nothing uneaten but one intact dollar bill and a small piece of a single $100 note.

"He's been notorious for eating paper products," Klinkel said about Sundance. "I knew right away what had happened."

Klinkel rescued Sundance as a puppy from a shelter 12 years ago and the dog later lost his left eye to surgery.

For days after the December incident, Klinkel followed Sundance around in the snow, collecting his droppings in a plastic bag, he said.

Klinkel kept the bag of doggy mess frozen in the cold outside his house, and after weeks of hesitation, he went forward with his plan for retrieving the soiled cash by thawing the droppings in a bucket of soapy water.

Using an old metal mining screen and a hose, he separated the $100 bill pieces from the rest of the matter, then washed and began to assemble the tiny paper fragments.

"It was sort of like putting the puzzle pieces back together," Klinkel said.

He then took the taped bills to a local bank and the Federal Reserve in Helena but was turned away, he said. Klinkel was eventually directed to the US Department of Treasury's Mutilated Currency Division, where he mailed the digested bills with a notarized letter on April 15.

"There was no guarantee I was going to get anything back," Klinkel said.

The Treasury Department offers reimbursement for some proven cases of damaged currency, and a standard claim can take up to two years to be processed, according to the department's website.

"When mutilated currency is submitted, a letter should be included stating the estimated value of the currency and an explanation of how the currency became mutilated," the website says.

Klinkel said he didn't hear a word from the department until Monday, when he received a crisp $500 check in the mail from the Mutilated Currency Division to replace Sundance's midday snack six months prior.

The Independent Record, the paper that employs Klinkel, has posted a picture on its website of Sundance with the check dangling from its mouth.

An operator with the US Department of Treasury on Thursday said department representatives were furloughed and unavailable for comment on Klinkel's reimbursement.

source: interaksyon.com

Forex reserves resumed climb in July, BSP says

MANILA - The Philippines' foreign exchange reserves likely resumed their increase this month with the appreciation of the US dollar, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said today.

“It’s because of the foreign exchange operations,” Tetangco said, adding that the appreciation of the US dollar against other currencies such as the Japanese yen and euro also supported the rise in the Philippines' gross international reserves (GIR). The country's hoard of US dollars accounts for 60 percent of its foreign exchange reserves.

“It could to the extent that you have non-dollar reserves – such as yen and euro. If the value of US dollar went up against these currencies, it would have an effect in the dollar value of the GIR but it would be small,” Tetangco said.

He said the BSP would continue to look for opportunities to diversify its reserves, adding that the Chinese yuan can become a candidate if it becomes a convertible currency.

“There are certain criteria for a currency to be part of reserve. This is based on the International Monetary Fund (IMF) definition of international reserve, which is that the currency should be convertible,” Tetangco said.

The Philippines' GIR stood at $81.6 billion at end-June, or $0.4 billion lower than the $82 billion at end-May. At this level, reserves remain adequate to cover 11.8 months worth of imports of goods and payments of services and income.



Alternatively, the reserves would allow the country to pay 8.3 times over its short-term external debt based on original maturity and six times based on residual maturity, which includes portions of the principal maturing in the next 12 months.

The slight decline in reserves last June was due mainly to revaluation adjustments on the BSP’s gold holdings arising from the decrease in the price of gold in the international market. Also pulling down GIR were payments for maturing foreign exchange obligations of the national government.

The BSP forecast reserves hitting $86 billion by yearend, up from last year's $83.8 billion. An ample GIR helps prop up the peso and keep domestic inflation at bay.

The country's economic managers last week revised their exchange rate forecast to a range of P41-43 for every dollar, lower than their previous estimate of P43-45. The peso yesterday settled at 43.23 against the greenback.

Inflation has averaged 2.9 percent in the first six months of the year, or below the lower end of the BSP's full-year target range of 3-5 percent.

source: interaksyon.com

BSP to revise upwards forex reserves forecast

MANILA - The Bangko Sentral ng Pilipinas will revise upwards this year's forecast for the country's gross international reserves.

On the sidelines of the Philippine Economic Briefing, BSP Governor Amando M. Tetangco Jr. said the revision forms part of the central bank's review of its balance of payments assumptions.

The country's foreign exchange reserves climbed to $80.8 billion in the first eight months of the year, well above the BSP's full-year forecast of $78 billion.


At end-July, the Philippines' BOP surplus already hit $4.498 billion, higher than the full-year forecast of $2.6 billion.

The review of the central bank's BOP assumptions comes as the Philippines enjoys huge inflows of foreign portfolio investment - so-called "hot money" - brought about by the weakness in advanced economies, leading investors to search for yields higher than are available in those markets.

The BSP registered hot money inflows of $1.3 billion last month, 41.8 percent lower than in July and 6.6 below that in August of last year. Portfolio outflows reached $868 million, resulting in net inflows of $387 million last month, 60 percent lower than the $963 million in July and 1.7 percent below the $394 million in August 2011.

The strong foreign fund inflows has caused the peso to hit four-year highs against the US dollar.

With a report from Krista Angela M. Montealegre

source: interaksyon.com