Aurelia Butler

U.S. investors purchased money market funds of $30.88 billion in their first weekly net buying since March 2, Refinitiv Lipper data showed.For a related graphic on Fund flows: U.S. equities, bonds and money market funds, click https://tmsnrt.rs/3IXOw9MThe widely tracked U.S. 2-year/10-year Treasury inverted on Tuesday for the first time since September 2019 as the Fed signalled a willingness to go hard and fast on tightening to curb inflation.The 10-year yields falling beneath 2-year rates is widely seen as a harbinger of economic recession.As investor caution crept in, U.S. equity funds faced outflows worth worth $1.58 billion during the week, compared with inflows of $13.89 billion in the previous week.U.S. investors offloaded value funds worth $5.63 billion in their biggest weekly net selling since mid-Oct., while growth funds also faced withdrawals of $557 million.For a related grapic on Fund flows: US growth and value funds, click https://tmsnrt.rs/36MDYgGAmong U.S. sector funds, tech and industrials received $345 and $224 million respectively in inflows, while real estate funds lost $256 million in outflows.For a related graphic on Fund flows: US equity sector funds, click https://tmsnrt.rs/3Dw8qaJMeanwhile, investors sold U.S. bond funds for a 12th straight week as they pulled out a net $3.86 billion, compared with withdrawals of $1.16 billion in the preceding week.Investors exited U.S. municipal bond funds worth $2.24 billion in a seventh straight week of net selling. Taxable bond funds also witnessed outflows, amounting to $1.71 billion after an inflow in the previous week.U.S. short/intermediate investment-grade funds saw outflows surging to a three-week high of $3.74 billion.Meanwhile, U.S. high yield bond funds received $1.04 billion in their first weekly net buying in four weeks. Loan participation, and inflation-linked funds also lured inflows of $1.18 billion and $815 million respectively.For a related graphic on Fund flows: US bond funds, click https://tmsnrt.rs/3J0gaTz More

(Reuters) -Global bond funds drew their first weekly inflow in about three months in the week ended March 30, as a dip in oil prices tempered some concerns over inflation during the week. According to Refinitiv Lipper, global bond funds received $3.5 billion in the week to March 30, their first weekly inflow since Jan. 5. However, they faced outflows of $108.22 billion in the first quarter of the year, the biggest since the first quarter of 2020. In the week to March 30, European bond funds saw inflows worth $5.77 billion, however, the U.S. and Asian bond funds faced outflows. Global high yield bond funds drew inflows worth $1.3 billion, while government and inflation-linked bond funds received $1.2 billion and $1.1 billion respectively.Global equity funds saw their second successive weekly inflow, receiving $464 million, however, it was much smaller than the previous week’s inflow of $19.67 billion. They received about $70 billion in the first quarter of 2022, compared with $191.45 billion in the fourth quarter of 2021.Among sector funds, tech and industrials led inflows, receiving $974 million and $181 million respectively.Meanwhile, money market funds pulled in $16.5 billion in net buying after two consecutive weeks of outflows. In the commodities sector, investors poured $670 million in precious metal funds, which was their 11th straight week of net buying. Energy funds, on the other hand, faced outflows worth $241 million. Emerging market equity funds attracted $3 billion, their biggest inflow since Feb. 9, while emerging market bond funds received $1.75 billion, after four straight weeks of outflows. More

DETROIT (Reuters) – Major automakers are expected to report on Friday that first-quarter U.S. car and light truck sales fell sharply compared to a year ago, with more uncertainty ahead because of parts shortages, high fuel prices and rising interest rates.J.D. Power and LMC Automotive forecast that January-March U.S. car and light truck sales will decline 18% from a year ago, and predict the annualized sales pace for March will slump to 12.7 million vehicles, down from 17.8 million a year ago.Cox Automotive said earlier this week first quarter U.S. auto sales would be the weakest in a decade.Tesla (NASDAQ:TSLA) Inc could buck the downward trend. The world’s most valuable automaker is expected to report its first quarter deliveries as soon as Friday, and Wall Street had been expecting an improvement from the fourth quarter figure of 308,650 vehicles. However, Tesla has had to shut down production at its Shanghai factory this week to comply with COVID lockdowns.Two years after the first wave of COVID-19 pandemic lockdowns derailed the U.S. economy, automakers are still trying to find their balance. The spike in gasoline prices, propelled by the war in Ukraine, and the worst inflation in 40 years have rattled consumer confidence. Rising rates coupled with high pump prices have often been harbingers of recessions for the auto industry in the past.Consumer intentions to buy a new or used vehicle in the next six months have slumped in March for the second month in a row, and for used vehicles are at the lowest levels in 15 months, according to a survey released by the Conference Board this week.Shortages of semiconductors and other supply chain bottlenecks have left U.S. dealers short of many popular vehicles.At the same time, the job market is strong and demand for new trucks and sport utility vehicles, as well as electric vehicles, are so strong that average vehicle prices are still at near record levels around $47,000, Cox Automotive analysts said this week.Automakers earlier this year predicted sales and production would increase as supply chain bottlenecks eased during the year. The Ukraine conflict and a surge of COVID cases in China have some analysts questioning how much improvement automakers can deliver. More

FRANKFURT (Reuters) – Euro zone inflation surged to 7.5% in March, hitting another record high with months still left before it is set to peak, raising pressure on the European Central Bank to rein in runaway prices even as growth slows sharply. Consumer price growth in the 19 countries sharing the euro accelerated from 5.9% in February, Eurostat said on Friday, far beyond the 6.6% expected, as war in Ukraine and sanctions on Russia pushed fuel and natural gas prices to record highs. Although energy was the chief culprit, inflation in food prices, services and durable goods all came in above the ECB’s 2% target, further proof that price growth is increasingly broad and not merely a reflection of expensive oil. With the ECB having persistently underestimated inflation over the past year, the figure will come as a shock to policymakers, some of whom are already calling for tighter policy to avoid high price growth becoming entrenched. “The inflation data speak for themselves,” Joachim Nagel, president of the German Bundesbank, said on Friday. “Monetary policy should not pass up the opportunity for timely countermeasures.”The central bank governors of Austria and the Netherlands have already called for rate hikes this year, worried that rapid price growth is becoming broad-based, an argument supported by underlying data from Friday’s release.Inflation excluding volatile food and fuel prices, closely watched by the ECB, picked up to 3.2% from 2.9% while a narrower measure that also excludes alcohol and tobacco products jumped to 3.0% from 2.7%.Any cut in Russian gas supplies would also quickly feed through to customers, boosting prices even as governments are putting in place subsidy measures to offset some of the cost. ECB Chief Economist Philip Lane acknowledged that inflation is very high but said there were opposing forces at work and the euro zone central bank should take its time analysing the data.”We have the energy shock, the prospects of second-round effects, pushing up inflation,” Lane told CNBC”On the other hand, the weakening of sentiment, the fact that real incomes will suffer with the high energy prices, especially over a one- to two-year horizon, will have a negative pressure on the inflation outlook.” INFLATION SOARS, GROWTH STAGNATES All this leaves the ECB with a difficult policy dilemma.Its main task is to get inflation to 2% but tightening policy now would risk crashing an economy that is already reeling from the fallout of the war in its neighbour and the lingering impact of the COVID-19 pandemic. The ECB estimates that growth in the first quarter was positive, but barely, while second-quarter growth will be near-zero, as high energy prices dent consumption and hurt corporate investment. High energy prices are traditionally a drag on growth and will thus actually weigh on inflation once the immediate spike passes, raising the risk that price growth will later fall back below target. But the ECB can hardly ignore high inflation, especially since it says the peak is still three to four months away.The euro zone’s labour market is the tightest it has been in decades so wage inflation, a precondition of durable consumer inflation, is already in the pipeline. And ECB inaction would also boost inflation expectations, likely making price growth more permanent. The likely compromise will be for the bank to tighten monetary policy this year, but by the smallest increments. Markets are now pricing in 60 basis points of rate hikes by the end of the year but policymakers have been more cautious, with not a single one calling for moves so large. The risk, however, is that big inflation surprises could force the ECB to tighten more quickly and play catch-up later on. More

SYDNEY (Reuters) – Australia will sign a trade agreement with India on Saturday that will eliminate tariffs on 85% of Australian goods entering India, helping farmers and miners to diversify export markets, Prime Minister Scott Morrison said.The Australia-India Economic Cooperation and Trade Agreement will be signed on Saturday in a virtual ceremony by Trade Minister Dan Tehan and India’s Minister of Commerce & Industry, Piyush Goyal, Australia said in a statement in Friday night. Morrison and India’s Prime Minister Narendra Modi will witness the signing of the interim agreement, and both countries would continue to work towards a full free trade deal.Morrison is expected to call a national election within days, and wanted to secure the trade deal with India, a decade after negotiations between the two countries began, before the election campaign.His government has pushed to diversify export markets to reduce Australia’s reliance on its largest trading partner China, after diplomatic disputes resulted in Beijing sanctioning Australian products including wine, lobster and coal. The deal with India unlocks a market of almost 1.4 billion consumers and would strengthen Australia’s economy, he said.”This agreement opens a big door into the world’s fastest growing major economy for Australian farmers, manufacturers, producers and so many more,” Morrison said in a statement.Tariffs will be eliminated on more than 85% of Australian goods exports to India, worth A$12.6 billion, rising to almost 91% over 10 years.Under the agreement, 96 per cent of Indian goods imports will enter Australia duty-free.Tariffs will be eliminated on fresh Australian rock lobster, sheep meat, wool, copper, coal, alumina, and certain critical minerals and certain non-ferrous metals to India. In a boost for Australia’s wine industry, tariffs will be reduced from 150% to 50% over 10 years for bottles valued over US$5, and reduced to 25% in the same period for bottles valued over US$15. Tariffs of 30% on Australian agricultural produce including avocados, beans, nuts, and berries will be eliminated over seven years. Trade Minister Dan Tehan said the agreement would boost critical minerals trade, professional services, education and tourism, and lay the foundation for a full free trade agreement.The two countries will recognise each other’s professional qualifications and licenses, and Australia will extend visas for STEM students from India who graduate in Australia with first class honours.In 2020, India was Australia’s seventh largest trading partner, with two-way trade valued at A$24.3 billion. “This agreement has been built on our strong security partnership and our joint efforts in the Quad, which has created the opportunity for our economic relationship to advance to a new level,” Morrison said, referring to the security grouping of India, Australia, United States and Japan.Australia exported A$19.3 billion worth of goods to India in 2021, representing 4.2% of Australia’s total exports. More

(Reuters) – Wall Street was set to open higher on Friday, as U.S. jobs grew lesser than expected in March but unemployment rate fell to a new two-year low, underscoring solid momentum in the economy.Futures pared gains but stayed in the positive territory after the Labor Department’s closely watched employment report showed nonfarm payrolls increased by 431,000 jobs last month. Economists polled by Reuters had forecast payrolls increasing 490,000.The jobless rate dropped to 3.6%, the lowest since February 2020, while average hourly earnings increased 0.4% after edging up 0.1% in February. “The data suggests that the labor market is still very strong. The underlying indication is that the economy remains very strong,” Paul Nolte, portfolio manager, Kingsview Investment Management.”The Fed should feel comfortable in raising interest rates at this point, at least initially, without fearing that they are going to dump the economy into a recession.”Traders now see a 72.8% chance of a 50-basis point interest rate hike by the Fed at its May policy meeting. The U.S. central bank last month increased it by 25 basis points for the first time since 2018 and policymakers have signaled readiness for aggressive interest rate hikes to combat decades-high inflation. Rate-sensitive banks such as Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), JPMorgan Chase & Co (NYSE:JPM), Citigroup (NYSE:C), Morgan Stanley (NYSE:MS) and Wells Fargo (NYSE:WFC) & Co rose between 0.7% and 1.3% in premarket trading.The closely watched yield curve between two-year and 10-year notes reinverted after the jobs report.At 08:59 a.m. ET, Dow e-minis were up 114 points, or 0.33%, S&P 500 e-minis were up 11.75 points, or 0.26%, and Nasdaq 100 e-minis were up 30.25 points, or 0.2%. Megacap stocks including Tesla (NASDAQ:TSLA) Inc, Amazon.com (NASDAQ:AMZN), Microsoft Corp (NASDAQ:MSFT), Meta Platforms, and Google (NASDAQ:GOOGL) owner-Alphabet Inc gained between 0.4% and 0.3%.Apple (NASDAQ:AAPL) edged lower after JP Morgan removed the stock from its analyst ‘focus list’. [nFWN2VZ0SD] GameStop Corp (NYSE:GME), which was at the center of a social-media fueled trading frenzy last year, jumped 15.2%, after the videogame retailer said it would seek shareholder approval for a stock split. More

(Reuters) – Gold eased on Friday and headed for a weekly decline as a stronger dollar and higher Treasury yields dented the appeal of zero-yield bullion, while investors also awaited a key U.S. jobs report. Spot gold XAU= was down 0.5% at $1,928.06 per ounce by 1102 GMT. U.S. gold futures GCv1 fell 1% to $1,933.70. “It is in particular the developments in the fixed income markets, with yields rising again”, that are pressuring gold, said Quantitative Commodity Research analyst Peter Fertig. Yields on the benchmark U.S. 10-year Treasury note US10YT=RR rose back above 2.4% on Friday. Higher yields increase the opportunity cost of holding gold, which yields nothing. US/ The U.S. dollar =USD firmed for a second straight session, making greenback-priced gold less appealing. USD/ Gold is on course to end the week about 1.5% lower, having slipped to its weakest since late February earlier this week on signs of progress in peace talks between Russia and Ukraine. Negotiations aimed at ending the five-week war between the countries were set to resume even as Ukraine braced for further attacks in the south and east. (Full Story) “While geopolitical crises do not last forever, we expect the secondary impacts of the Russia-Ukraine crisis to provide a strong level of support for gold prices this year,” analysts at ANZ said in a note. The broader isolation of Russia will see a structural shift in the energy sector, which will be inflationary, while there is also a higher risk of weaker economic growth, particularly in Europe, it added. U.S. non-farm payroll data due at 1230 GMT, which could position the Federal Reserve to hike interest rate by 50 basis points next month, was also on the market’s radar. (Full Story) Spot silver XAG= shed 0.4% to $24.68 per ounce and was set for a weekly dip. Platinum XPT= rose 0.4% to $987.42, while palladium XPD= gained 1.8% to $2,302.50. Both metals were on course for a fourth consecutive weekly loss. More