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☆ Dollar sags as Fed bets ebb, debt bill passes; Aussie soars
▼ + stars: | 2023-06-02 | by ( Kevin Buckland | ) www.reuters.com time to read: +3 min

The Australian dollar surged after an increase in the minimum wage stoked bets for the central bank to raise rates again next week. A day earlier, Fed Governor Philip Jefferson had said that "skipping a rate hike at a coming meeting would allow the committee to see more data before making decisions about the extent of additional policy firming." "Maybe they hike in June, maybe in July, or maybe they don't hike any more." Money markets currently see about 29% odds of a hike, down from near 70% earlier in the week. Traders currently lay about one-third odds on a quarter-point rate hike on Tuesday.

Persons: Patrick Harker, Philip Jefferson, Shinichiro Kadota, Christine Lagarde, Joe Biden, Monday's, Ray Attrill, NAB's, Kevin Buckland, Sam Holmes Organizations: U.S, Federal Reserve, Australian, Philadelphia Fed, Barclay, European Central Bank, National Australia Bank, Traders, Thomson Locations: TOKYO, U.S, Tokyo

☆ Dollar sags as chances grow for Fed 'skip,' debt bill passes
▼ + stars: | 2023-06-02 | by ( ) www.cnbc.com time to read: +2 min

Hundred dollar bills are seen in this photo illustraiton in Warsaw, Poland on Sept. 21, 2022. The Australian dollar surged after an increase in the minimum wage stoked bets for the central bank to raise rates again next week. The dollar index, which measures the U.S. currency against six others, has dropped nearly 0.8% this week, its biggest weekly loss since mid-January. Money markets are pricing in a roughly 29% chance of a hike, down from near 70% earlier in the week. The dollar was last up slightly at 138.74 yen.

Persons: Fiona Cincotta, let's, Patrick Harker, Philip Jefferson Organizations: Federal Reserve, Australian, City Index, Philadelphia Fed Locations: Warsaw, Poland, U.S, City

LONDON, June 2 (Reuters) - U.S. manufacturing and freight activity has declined for seven months running, reflected in falling consumption of diesel and other distillate fuel oils as well as industrial electricity sales. Chartbook: U.S. manufacturing and energy useBecause manufacturing output is closely correlated with consumption of distillate fuel oils and industrial electricity use, the downturn is filtering through into significant reductions in energy consumption. Electricity sales to industrial customers also fell in seven of the eight months ending in February 2023, again the most recent data available (“Monthly energy review”, EIA, May 25). Between December 2022 and February 2023, industrial power sales were down more 2.4% compared with a year earlier (14th percentile for all three-month periods since 1980). Only the residual strength of service sector spending has so far prevented the “industrial recession” becoming a whole-economy recession.

Persons: John Kemp, David Evans Organizations: Manufacturers, Institute for Supply Management, “ Petroleum, U.S . Energy Information Administration, U.S, Thomson, Reuters Locations: U.S

☆ Fed 'skip' chatter triggers dollar's biggest weekly fall since January
▼ + stars: | 2023-06-02 | by ( Amanda Cooper | ) www.reuters.com time to read: +4 min

The Australian dollar surged after an increase in the minimum wage there stoked bets for another raise in rates next week. The dollar index , which measures the U.S. currency against six others, has dropped nearly 0.8% this week, its biggest weekly loss since mid-January. Philadelphia Fed President Patrick Harker said on Thursday "it's time to at least hit the stop button for one meeting and see how it goes", referring to the June 13-14 Fed meeting. Money markets are pricing in a roughly 29% chance of a June hike, down from near 70% earlier in the week. Even if a hike doesn't happen next week, markets expect one by autumn.

Persons: Fiona Cincotta, let's, Patrick Harker, Philip Jefferson, Guy Miller, Christine Lagarde, Joe Biden, Monday's, Ray Attrill, Dhara Ranasinghe, Kevin Buckland, Mark Heinrich, Mark Potter, Andrew Heavens Organizations: Federal Reserve, Australian, City Index, Philadelphia Fed, Reuters, Zurich Insurance, European Central Bank, U.S . Senate, National Australia Bank, NAB, Traders, Reserve Bank of Australia, Thomson Locations: U.S, City, April's, London, Tokyo

Fed officials pointed toward a rate hike "skip" at its June 13-14 meeting, giving time for the central bank to assess the impact of its tightening cycle thus far against still-strong inflation data. U.S. manufacturing contracted for a seventh straight month in May as new orders continued to plummet amid higher interest rates, but factories boosted employment to a nine-month high. "We have made clear that we still have ground to cover to bring interest rates to sufficiently restrictive levels," Lagarde said in a speech. Money markets are pricing in an 85% chance of a 25 basis point hike when the ECB meets on June 15. "There's a sort of narrowing interest rate differential ... when the ECB is expected to hike one or two more times and the Fed is more questionable about that."

Persons: Christine Lagarde, Edward Moya, Patrick Harker, payrolls, Lagarde, John Velis, Hannah Lang, Joice Alves, Rae Wee, Andrew Heavens, Will Dunham, Mark Potter, Leslie Adler Organizations: Federal Reserve, Reserve, European Central Bank, Fed, OANDA, Philadelphia Federal, ADP, Institute for Supply Management, ECB, BNY Mellon, Thomson Locations: OANDA . U.S, Washington, London, Singapore

The bill to suspend the $31.4 trillion debt ceiling headed to the Senate, which must enact the measure before a Monday deadline, when the government is expected to run out of money to pay its bills. With signs of progress in the debt ceiling saga, focus will now shift to the Labor Department's closely watched jobs report for May, due on Friday, that will help determine whether the Federal Reserve will stick with its aggressive interest rate-hiking cycle. The odds favoring a pause in rate hikes at the Fed's June 13-14 policy meeting were around 71% after the day's datasets. FEDWATCH"We're at the potential beginning of a soft landing," said David Russell, vice president of Market Intelligence at TradeStation. "When you look at the debt ceiling apparently being resolved, we could be in a situation where we wake up from the nightmare of inflation and the risk of a default to the soft landing."

Persons: Goldman Sachs, Chuck Schumer, Philip Jefferson, David Russell, Shreyashi Sanyal, Shristi, Shounak Dasgupta, Maju Samuel Organizations: Dow, Nasdaq, Federal Reserve, ADP, Senate, Democratic, Labor, Federal, Fed, Market Intelligence, Dow Jones, Salesforce Inc, Goldman Sachs Group Inc, Meta, Inc, Macy's Inc, Dollar General Corp, NYSE, Thomson Locations: Bengaluru

☆ U.S. manufacturing slumps further in May; employment picks up
▼ + stars: | 2023-06-01 | by ( ) www.reuters.com time to read: +2 min

WASHINGTON, June 1 (Reuters) - U.S. manufacturing contracted for a seventh straight month in May as new orders continued to plummet amid higher interest rates, but factories boosted employment to a nine-month high. The Institute for Supply Management (ISM) said on Thursday that its manufacturing PMI fell to 46.9 last month from 47.1 in April. It was the seventh straight month that the PMI stayed below the 50 threshold, which indicates contraction in manufacturing, the longest such stretch since the Great Recession. The persistent weak readings in the PMI support analysts' expectations that the economy will slip into recession this year. That suggests further gains in manufacturing payrolls in May after they rebounded in April.

Persons: Banks, Lucia Mutikani, Chizu Organizations: Institute for Supply Management, PMI, Reuters, Manufacturing, Federal Reserve, Thomson Locations: U.S

☆ Morning Bid: Plotting policy paths for Europe and the US
▼ + stars: | 2023-06-01 | by ( ) www.reuters.com time to read: +2 min

Jefferson said he favoured "skipping" a rate hike at the upcoming meeting and that term has started to displace "pause" among Fed officials. Some Fed watchers believe this conveys a slightly more hawkish nuance. Reuters Graphics Reuters GraphicsBets for ECB tightening have been knocked back, too, most recently by weaker-than-expected CPI data from Germany and France. Traders currently foresee slightly more than 50 basis points of ECB tightening left before an expected peak in January. That's a strong indication that the bill could get through the Senate before the weekend.

Persons: Kevin Buckland, Philip Jefferson, Jefferson, Christine Lagarde, That's, Edmund Klamann Organizations: Graphics Reuters, Traders, Reuters Graphics, U.S . House, Thomson Locations: Germany, France, Hanover, Britain, United States, Asia, Spain, Italy

☆ Firms are bringing production back home because of the Ukraine war, China's slowdown — and TikTok
▼ + stars: | 2023-06-01 | by ( Lucy Handley | ) www.cnbc.com time to read: +8 min

Earnings calls discuss 'reshoring'A number of banks noted mentions of the domestic manufacturing trend in U.S. earnings calls for the most recent quarter. And we have never … got the target right," McRaith told an audience at a supply chain conference organized by software company o9 Solutions in April. Bill McRaith Former chief supply chain officer, PVHMcRaith, a former chief supply chain officer at Tommy Hilfiger-owner PVH , said the apparel industry both over-orders and under-orders stock by about 20% to 25%. If we build an economy based on electrification and batteries, it's going to be really important to control our own supply chain. "If we build an economy based on electrification and batteries, it's going to be really important to control our own supply chain," he told CNBC's "Street Signs Asia" in April.

Persons: Luke Sharrett, Savita Subramanian, Ryan Grabinski, they're, Bill McRaith, McRaith, PVH, Tommy Hilfiger, we've, Shein, Jade Gao, it's, Keith Phillips, Joe Biden, CNBC's, Elon Musk, Phillips Organizations: European Union, Bloomberg, Getty, Bank of America, UBS, Securities, o9 Solutions, CNBC, AFP, U.S ., Reshoring, EV, U.S, EVs Locations: China, Ukraine, U.S, Europe, Brazil, Guangzhou, U.S . U.S, Corpus Christi , Texas, Tennessee, United States

☆ Wednesday, May 31, 2023: Cramer adds to this name in the portfolio
▼ + stars: | 2023-05-31 | by ( Christina Falso | ) www.cnbc.com time to read: 1 min

Wednesday, May 31, 2023: Cramer adds to this name in the portfolioJim Cramer and Jeff Marks discuss how new U.S. manufacturing and employment data are telling two different stories about the state of the economy. Jim breaks down why he added more shares of one name in the portfolio. Finally, Jim and Jeff share what they expect from a Club holding before it reports first-quarter earnings after the closing bell Wednesday.

Persons: Cramer, Jim Cramer, Jeff Marks, Jim, Jeff

☆ China's disappointing rebound could bring in more stimulus, economists say
▼ + stars: | 2023-05-30 | by ( Elliot Smith | ) www.cnbc.com time to read: +5 min

Photographer: Qilai Shen/Bloomberg via Getty Images Qilai Shen | Bloomberg | Getty ImagesChina's much-vaunted economic rebound after its emergence from strict zero-Covid lockdown measures has yet to fully materialize, prompting some economists to speculate that further fiscal stimulus or monetary policy easing could be coming down the pipeline. Data from China's Bureau of Statistics shows that 6 million of the 96 million 16 to 24-year-olds in the urban labor force are currently unemployed. watch nowIn a research note Monday, Capital Economics assessed that, despite losing some momentum, China's economic recovery was still progressing at the start of the second quarter, with scope for further service sector-led improvement. But we do not expect policy rate cut or major fiscal stimulus, barring a precipitous fall in exports in the coming months." Any consensus among economists as to the trajectory of fiscal and monetary policy seems to be unraveling in light of the tenuous recovery.

☆ Italy's Enel to invest more than $1 billion in an Oklahoma solar panel factory
▼ + stars: | 2023-05-22 | by ( ) www.cnbc.com time to read: +2 min

Italy's Enel said on Monday it will invest more than $1 billion in a solar cell and panel factory in Oklahoma, seeking to capitalize on the U.S. push to build a homegrown clean energy manufacturing sector to compete with China. The facility will be among the largest to produce solar equipment in the United States, where most projects are built with imported panels. It is also one of the first U.S. factories to produce silicon-based solar cells on a large scale. The investment is one of the biggest in solar manufacturing since the passage of U.S. President Joe Biden's landmark climate change law, the Inflation Reduction Act (IRA), last year. Enel, which had first said last year it planned to build a U.S. solar factory, selected a site in Inola, Oklahoma, near Tulsa.

☆ Italy's Enel to invest more than $1 bln in Oklahoma solar panel factory
▼ + stars: | 2023-05-22 | by ( Nichola Groom | ) www.reuters.com time to read: +3 min

[1/2] A logo of Italian multinational energy company Enel is seen at the Milan's headquarters, Italy, February 5, 2020. The facility will be among the largest to produce solar equipment in the United States, where most projects are built with imported panels. It is also one of the first U.S. factories to produce silicon-based solar cells on a large scale. The investment is one of the biggest in solar manufacturing since the passage of U.S. President Joe Biden's landmark climate change law, the Inflation Reduction Act (IRA), last year. Enel, which had first said last year it planned to build a U.S. solar factory, selected a site in Inola, Oklahoma, near Tulsa.

☆ An Automaker Has a Stark Warning for the U.K. Car Industry
▼ + stars: | 2023-05-18 | by ( Stanley Reed | ) www.nytimes.com time to read: +1 min

A distress flare has gone up from the beleaguered British car manufacturing industry. The company implied that it might shut down its two plants in Britain, where it employs more than 5,000 people. manufacturing becomes uncompetitive and unsustainable, operations will close,” the company warned in a five-page document published this week. These words resonated across the country on Wednesday, partly because Stellantis plans to play an important role in the electrification of the British auto industry. Stellantis is already the largest producer in Britain of the popular Vauxhall commercial vans.

Speakers from Walmart (WMT.N), Colgate-Palmolive (CL.N), Toyota (7203.T) and other companies will discuss their supply-chain strategies at the Reuters Events supply chain conference in Chicago on Wednesday and Thursday, as inflation and interest rate hikes threaten to tip the economy into recession. "We've still got certain sectors that are up and some that are down, which was a feature of the pandemic," Croke said. That's even true within sectors, Croke added, pointing to recent manufacturing data, which remained depressed even as segments like motor vehicles reported gains. After spending whatever it took to keep store shelves stocked during the early days of the pandemic, supply chain executives now are wringing out costs to shelter profits from eroding demand, said Alan Amling, distinguished fellow at the University of Tennessee's Global Supply Chain Institute. "That's a really good thing for the supply chain."

☆ Stellantis warns UK risks exodus of EV production under post-Brexit rules
▼ + stars: | 2023-05-17 | by ( Jenni Reid | ) www.cnbc.com time to read: +2 min

Stellantis manufactures Vauxhall, Fiat, Opel and other vehicles across two plants in the U.K., employing more than 5,000 people. It plans to move both toward majority and then 100% EV production as it rolls out electrification across its brands. "If the cost of EV manufacturing in the U.K. becomes uncompetitive and unsustainable, operations will close," it said, citing previous decisions by BMW Group to relocate electric Mini production to China, and investments by Honda in EV production in the U.S. following the closure of its U.K. site. However, they will become progressively stricter in the coming years, rising to 45% and then 65% in terms of required domestic production. The company warned the U.K. does not have a sufficient supply of the materials needed to support vehicle battery production.

☆ Biden vetoes legislation to block solar panel tariffs waivers
▼ + stars: | 2023-05-16 | by ( ) www.reuters.com time to read: +2 min

May 16 (Reuters) - President Joe Biden said on Tuesday he has vetoed legislation passed by the U.S. Congress that would repeal exemptions on American tariffs on imported solar panels from four Southeast Asian nations. Biden said the waivers will create a "bridge" while U.S. manufacturing ramps up enough to supply the domestic projects needed to achieve goals in fighting climate change. Top clean energy trade groups, whose members rely on cheap imports to keep their costs low, support the exemption and praised Biden's veto. Domestic solar manufacturers have said the tariffs are needed now to compete with cheap panels made overseas. Solar Energy Industries Association (SEIA) said the legislation would have eliminated 30,000 jobs in the solar sector by stalling development.

Biden administration rules released on Friday that will determine which companies and manufacturers can benefit from new solar industry tax credits are being criticized by U.S.-based makers of solar products, who say the guidelines do not go far enough to try to lure manufacturing back from China. The Treasury Department, in guidance issued on Friday, said it would offer a 10 percent additional tax credit for facilities assembling solar panels in the United States, even if they import the silicon wafers used to make those panels from foreign countries. Under the Biden administration’s new climate legislation, solar and wind farms can apply for a 30 percent tax credit on the costs of their facilities. Senior administration officials told reporters on Thursday that they were trying to take a balanced approach, one that leaned toward forcing supply chains to return to the United States. But China’s dominance of the global solar industry has created a tricky calculus for the Biden administration, which wants to promote U.S. manufacturing of solar products but also ensure a plentiful supply of low-cost solar panels to reduce carbon emissions.

☆ US set to issue $362 mln loan for vehicle wiring production
▼ + stars: | 2023-05-12 | by ( David Shepardson | ) www.reuters.com time to read: +2 min

WASHINGTON, May 12 (Reuters) - The U.S. Energy Department on Friday said it intends to loan California startup CelLink $362 million to help finance construction of a U.S. manufacturing facility to improve key vehicle wiring components. The conditional commitment from the government's Advanced Technology Vehicles Manufacturing loan program is for the development of lighter, more efficient flexible circuit wiring harnesses for automotive and other industries. Once fully operational, the Georgetown, Texas facility is expected to produce flex harnesses to support some 2.7 million electric vehicles per year, the department said. CelLink, which already has products installed in more than a million vehicles on the road, currently operates a manufacturing facility in San Carlos. The new Texas facility will eventually hold up to 25 manufacturing lines that will be brought online in stages over the next several years depending on demand.

☆ Instant View: Solid April US jobs report undermines case for Fed cut soon
▼ + stars: | 2023-05-05 | by ( ) www.reuters.com time to read: +8 min

ANTHONY SAGLIMBENE, CHIEF MARKET STRATEGIST, AMERIPRISE FINANCIAL, TROY, MICHIGAN“It's definitely telling you that the job market is still hot. PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK“It was a hotter than expected report, it certainly didn’t show any cooling in the labor market. Hourly earnings were a little higher than I was looking for.”“Bottom line, this is a strong report and shows that the labor market is resilient. So I think the real focus is on the inflation numbers, and what's happening with wage growth. We are hopeful the continued strength of the jobs market and signs of slowing inflation will ease market volatility in the coming months.

LONDON, May 4 (Reuters) - U.S. manufacturing and freight activity has declined for six months running, which is being reflected in falling consumption of diesel and other distillate fuel oils as well as industrial electricity sales. The index has fallen to levels that have coincided with a significant mid-cycle downturn in industrial activity or a cycle-ending recession in the past. Chartbook: U.S. diesel and electricity useBecause manufacturing output is closely correlated with consumption of distillate fuel oils and industrial electricity use, the downturn is filtering through into significant reductions in energy consumption. Between November and January, industrial electricity sales were down by an average of 3% compared with a year earlier (12th percentile for all three-month periods since 1980). Related columns:- Hard-ish landing has already arrived for U.S. manufacturers (April 4, 2023)- U.S. diesel consumption falls as economy slows (March 1, 2023)John Kemp is a Reuters market analyst.

☆ US private payrolls increase solidly; wage growth cools
▼ + stars: | 2023-05-03 | by ( Lucia Mutikani | ) www.reuters.com time to read: +4 min

SummarySummary Companies Private payrolls increase by 296,000 in AprilPrior month's gain revised lower to 142,000WASHINGTON, May 3 (Reuters) - U.S. private employers boosted hiring in April amid strong demand for workers in the leisure and hospitality industry, but a slowdown in wage growth offered some good news for the Federal Reserve's fight against inflation. Private payrolls increased by 296,000 jobs last month, the ADP National Employment Report showed on Wednesday. Economists polled by Reuters had forecast private employment would increase 148,000. It has not been a reliable gauge in forecasting private payrolls in the BLS employment report. According to a Reuters survey of economists, private payrolls likely increased by 160,000 jobs last month.

☆ Private payrolls surged by 296,000 in April, much higher than expected, ADP says
▼ + stars: | 2023-05-03 | by ( Jeff Cox | ) www.cnbc.com time to read: +2 min

Hiring at private companies unexpectedly swelled in April, countering expectations for a cooling job market ahead, payroll processing firm ADP reported Wednesday. Private payrolls rose by 296,000 for the month, above the downwardly revised 142,000 the previous month and well ahead of the Dow Jones estimate for 133,000. An imbalance of demand over supply in the labor market has created strong wage gains that are reflected in persistent inflation pressures. "The slowdown in pay growth gives the clearest signal of what's going on in the labor market right now," Nela Richardson, ADP's chief economist, said. "Employers are hiring aggressively while holding pay gains in check as workers come off the sidelines."

☆ Instant View: Fed hikes another 25 basis points, hints it may be the last increase
▼ + stars: | 2023-05-03 | by ( ) www.reuters.com time to read: +7 min

TOM GARRETSON, STRATEGIST, RBC PORTFOLIO ADVISORY GROUP, MINNEAPOLIS, MINNESOTA"It was a pretty dovish rate hike today. The expectations were that it might be a bit more of a hawkish rate hike in terms of leaving the door open to further hikes if needed." "The updated language in the policy statement does suggest the bar is going to be quite high for further rate hikes. … The market is hoping or expecting the Fed to pause after this rate hike. From a consumer credit perspective, the impact of further rate hikes will likely continue to be felt by borrowers across a range of industries.

☆ Yen sinks to 15-year low vs euro, Aussie jumps as central banks diverge
▼ + stars: | 2023-05-02 | by ( Kevin Buckland | ) www.reuters.com time to read: +3 min

TOKYO (Reuters) - The yen continued its steep descent on Tuesday, reaching a 15-year low to the euro, as the implications of a steadfastly dovish Bank of Japan continued to reverberate days after the decision. FILE PHOTO: Japanese Yen and U.S. dollar banknotes are seen in this illustration taken March 10, 2023. REUTERS/Dado Ruvic/IllustrationMeanwhile, the Aussie dollar leapt to a one-week high after the Reserve Bank of Australia (RBA) surprised with a rate hike and signalled more tightening may come. The central bank lifted the cash rate to 3.85% and said “some further” tightening may be required to ensure that inflation returns to target in a reasonable timeframe. The European Central Bank (ECB), meanwhile, is widely expected to raise rates for a seventh straight meeting the following day, with a 50 basis-point increase on the table.

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