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Business

Stocks step back, oil bounces as peace talks stall

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FILE PHOTO – Monitors displaying the stock index prices and Japanese yen exchange rate against the U.S. dollar are seen after the New Year ceremony marking the opening of trading in 2022 at the Tokyo Stock Exchange (TSE), amid the coronavirus disease (COVID-19) pandemic, in Tokyo, Japan January 4, 2022. REUTERS/Issei Kato

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  • Oil over $100 and extending gains
  • Rate cut hopes keep China shares bid
  • Biden-Xi phone call due at 1300 GMT

SINGAPORE, March 18 (Reuters) – Stockmarkets took a breather on Friday after several days of sizeable gains, as geo-political tensions arising from the Ukraine conflict kept investors on guard going into the weekend.

After a fourth straight day of talks between Russian and Ukrainian negotiators without tangible progress, earlier hopes for a peace deal have begun to wane and oil prices have begun climbing again. read more

Adding to the mix, U.S. President Joe Biden is expected to deliver a warning that Beijing will pay a price if it supports Russia’s war effort when he speaks to China’s President Xi Jinping in a call scheduled for 1300 GMT. read more

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MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was flat and Hong Kong’s Hang Seng steadied following a furious two-day surge. Japan’s Nikkei (.N225) rose 0.6%. S&P 500 futures eased 0.4% while Euro STOXX 50 futures and FTSE futures were flat.

Oil, which had crumbled some 30% from last week’s peak, has bounced hard as traders fret that hope for peace in Ukraine is misplaced. Brent crude futures were last up 2% and at $108.64, have added more than $10 a barrel in two sessions.

“It’s very difficult to get any confidence that you’re going to be able to reliably source commodities out of Russia or Ukraine,” said Tobin Gorey, a commodities strategist at Commonwealth Bank of Australia in Sydney. “You’re going to be looking elsewhere and that just tends to get priced up.”

Wheat and corn futures, which are sensitive to Black Sea supply disruptions, have bounced sharply.

Australia’s miner-heavy ASX 200 index (.AXJO) logged its best week since February last year and the commodities-sensitive Australian dollar hit a two-week high of $0.7398.

INVERSION

Problems faced by policymakers whose economies are suffering surging inflation and sagging growth were also underscored during a series of central bank meetings this week.

The U.S. Federal Reserve raised rates for the first time in more than three years on Wednesday, and surprised traders with a more hawkish than expected outlook. The Bank of England also hiked but surprised with a dovish outlook that drove a rally in gilts. read more

The Bank of Japan offered no surprises on Friday, leaving policy ultra easy, which has kept heavy pressure on the yen. read more

Japan’s currency hit a six-year low of 119.13 this week and last traded at 118.78 per dollar. “The next multi-session target may well be the 120.00 psychological level,” said Terence Wu, a strategist at OCBC Bank in Singapore.

The euro hovered at $1.1086.

Hong Kong’s Hang Seng (.HSI) followed its worst session in more than six years with its biggest two-day rally since 1998 this week and rate cut hopes kept it bid on Friday.

Treasuries steadied, but a flat yield curve that is flirting with inversion reflected worries about longer-term growth. The benchmark 10-year Treasury yield was last at 2.1780%.

Spot gold hovered at $1,932 and bitcoin was clinging on above $40,000.

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Reporting by Tom Westbrook
Editing by Shri Navaratnam & Simon Cameron-Moore

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Business

Oil surges 7% amid warnings of Russian supply shortages

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Industrial facilities of PCK Raffinerie oil refinery are pictured in Schwedt/Oder, Germany, March 7, 2022. The company receives crude oil from Russia via the ‘Friendship’ pipeline. REUTERS/Hannibal Hanschke

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LONDON, March 17 – Oil prices climbed over 7% on Thursday after the International Energy Agency (IEA) said three million barrels per day (bpd) of Russian oil and products could be shut in from next month and despite the U.S. Federal Reserve’s decision to raise interest rates.

The supply loss would be far greater than an expected drop in demand of one million bpd triggered by higher fuel prices, the IEA said in a report on Wednesday. read more

Benchmark Brent crude futures gained $7.47, or 7.6%, to $105.49 a barrel by 1427 GMT. U.S. West Texas Intermediate (WTI) crude was up $6.85, or 7.2%, to $101.89 a barrel.

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Morgan Stanley raised its Brent price forecast by $20 for the third quarter to $120 a barrel, predicting a fall in Russian production of about 1 million bpd from April.

The fall will more than offset a downward global demand revision of about 600,000 bpd, the bank said.

“Both supply and demand are hurting but supply is currently hurting more and a tight oil market for the coming two quarters is to be expected,” bank SEB said.

Prices had sagged in the previous session after government data showed U.S. crude inventories climbed 4.3 million barrels last week, versus analysts’ expectations of a fall of 1.4 million barrels. read more

The oil market largely shrugged off a decision by the U.S. Federal Reserve on Wednesday to raise interest rates by one-quarter of a percentage point, as anticipated.

Sentiment was somewhat boosted after China pledged policies to boost financial markets and economic growth while a decline in new COVID-19 cases in China spurred hopes lockdowns will be lifted to allow factories to resume production.

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Additional reporting by Muyu Xu in Beijing; editing by Jason Neely and Marguerita Choy

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Business

Stocks steady after Fed hike, BoE’s turn next

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A man wearing a protective mask, amid the coronavirus disease (COVID-19) outbreak, walks past an electronic board displaying various countries’ stock indexes including Russian Trading System (RTS) Index which is empty, outside a brokerage in Tokyo, Japan, March 10, 2022. REUTERS/Kim Kyung-Hoon

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LONDON/TOKYO, March 17 (Reuters) – Europe’s stock markets consolidated strong gains made in Asia on Thursday, after China signalled more support for its spluttering economy and the Federal Reserve had pressed ahead with the first U.S. interest rate rise in more than three years.

Traders remained gripped by the devastating war in Ukraine, but with hopes of possible a peace deal faint but alive they were also watching to see if the Bank of England raises UK interest rates again later too. read more

The EuroSTOXX 600 (.STOXX) was 0.1% lower after an initial rise. Earlier 3.5% leaps by both the Nikkei in Tokyo (.N225) and emerging market stocks (.MSCIEF) meant MSCI’s main world index (.MIWD00000PUS) was still up and more than 6% higher in the last three days, albeit after a torrid start to the year.

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Sanctions-ravaged Russia’s ongoing shelling of Ukraine meant commodity markets continued to gyrate wildly with oil prices back over the symbolic $100 level again. The Kremlin lashed out at U.S. President Joe Biden labelling Russian President Vladimir Putin a war criminal, but said it was putting “colossal energy” into peace talks. read more

Metals markets faced more drama after nickel trading had to be halted again on London Metal Exchange again on Wednesday.

“The reaction both this morning and overnight validates that the markets think the Fed is in line or ahead of the curve and doing the right thing,” by hiking interest rates, Chief Investment Officer of Close Brothers Asset Management, Robert Alster, said.

He added it would also be the “right thing” for the Bank of England to raise its rates later for a third meeting running, back to its pre-pandemic level of 0.75%.

The BoE last month predicted inflation will peak at around 7.25% in April – almost four times its 2% target – but that forecast has been overtaken by seismic shifts in European energy markets following Russia’s invasion of Ukraine.

“The crunch point is that we are all expecting inflation to start coming down after Easter,” Alster added. “But if that doesn’t happen then we all probably need to have a reset.”

The stock market gains had followed a 2.2% surge on Wall Street’s S&P 500 (.SPX) overnight.

Bond markets meanwhile were beginning to settle after Treasury yields had spiked to nearly three-year highs following the Fed’s signal that it also planned to hike rate at every meeting for the remainder of this year to aggressively curb inflation. read more

Ten-year Treasuries were last at 2.12% while Germany’s benchmark 10-year Bund yield slipped back 2 basis points to 0.382% having started the day edging higher, extending the previous session’s gains to hit 0.408%, its highest since November 2018 DE10YT=RR.

The more upbeat sentiment in recent days means there are “fewer excuses for central banks to delay policy tightening,” ING rates strategists said in a note to clients.

UK inflation surging

ASIA RISES

The dollar, though, remained on the back foot in the FX markets. The dollar index , which tracks it against six other major currencies, was slightly weaker at 98.476 after also dropping 0.5% on Wednesday.

Where the dollar showed some strength was against Japan’s currency, standing at 118.82 yen , not too far from the more than six year high of 119.13 reached overnight amid a widening monetary policy gap.

The Bank of Japan is widely seen keeping its vast stimulus programme in place on Friday as the economy there continues to sputter. read more

Meanwhile, concerns about a sharp slowdown in China, which is battling a spreading COVID-19 outbreak with ultra-restrictive measures, were assuaged after its Vice Premier Liu He on Wednesday has signalled more stimulus was on the way.

Hong Kong’s Hang Seng index had surged more than 5% overnight, adding to a 9% leap on Wednesday. Beaten down sectors including tech and real estate soared, with Country Garden Services Holdings (6098.HK) and Country Garden Holdings (2007.HK) climbing about 28% and 26%, respectively.

Online giant Alibaba (9988.HK) leapt 9%, China’s blue chips (.CSI300) gained 2.3%, extending the previous day’s 4.3% rebound while Japan also saw outsized gains, with the Nikkei (.N225) vaulting 3.5% and touching a two-week peak.

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Reporting by Marc Jones; Editing by Toby Chopra

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Business

Oil dips on Russia-Ukraine talks, U.S. inventory data

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Oil storage containers are seen, amid the coronavirus disease (COVID-19) pandemic, in Los Angeles, California, U.S., April 7, 2021. REUTERS/Lucy Nicholson/Files

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  • Russia says some deals with Ukraine close to being agreed
  • China’s new locally transmitted COVID-19 cases nearly halve
  • IEA lowers 2022 oil demand growth forecast
  • EIA figures show bigger-than-expected bump in inventories

March 16 (Reuters) – Oil fell on Wednesday in another volatile session as traders reacted to hoped-for progress in Russia-Ukraine peace talks and a surprising increase in U.S. inventories.

Around noon in New York, global benchmark Brent was slightly lower and U.S. crude was slightly higher.

The oil market has been on a roller-coaster for more than two weeks, trading in wide ranges of several dollars a day.

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On Wednesday, global benchmark Brent crude had swung between $97.55 and $103.70 and was down $1.41 to $98.50 a barrel as of 1:21 p.m. EST (1721 GMT). U.S. West Texas Intermediate (WTI) crude lost 54 cents to $95.87 a barrel.

Last week’s frenzied rally pushed Brent briefly past $139 a barrel on worries about extended disruption to Russian supply. Now, a cascade of selling has pushed prices much lower, but some analysts have warned that this reflects too much optimism that the war will end soon.

“We’re living headline to headline here,” said Robert Yawger, director of energy futures at Mizuho.

The United States and other nations have slapped heavy sanctions on Russia since it invaded Ukraine more than two weeks ago. This disrupted Russia’s oil trade of more than 4 to 5 million barrels of crude daily.

Brent staged a 28% rally in six days and then a 24% drop over the next six sessions counting Wednesday. A number of factors drove the turnaround, including modest hopes of a Russia-Ukraine peace agreement and faint signals of progress between the United States and Iran to resurrect a 2015 deal that would allow the Islamic Republic to export oil if it agrees to limit its nuclear ambitions.

In addition, Chinese demand is expected to slow due to a surge in coronavirus cases there, although figures showed fewer new cases and Chinese stimulus hopes boosted equities.

Three million barrels per day of Russian oil and products may not find their way to market beginning in April, the International Energy Agency (IEA) said, as sanctions bite and buyers hold off.

“These losses could deepen should bans or public censure accelerate,” the Paris-based IEA said in a report that also showed a cut in its oil demand forecast for 2022.

U.S. inventories rose by 4.3 million barrels, against expectations for a loss, while stocks at the Cushing, Oklahoma, hub rose as well, alleviating a bit of concern about the low level of inventories there.

Crude settled below $100 on Tuesday, the first time since late February. Prices hit a 14-year high on March 7.

Later on Wednesday, the Federal Reserve is expected to raise U.S. interest rates for the first time in three years and give guidance on future tightening. Investors expect the central bank to raise rates by at least 25 basis points.

Signs of progress in Russia-Ukraine peace talks added to the bearish tone. Ukraine’s president said the positions of Ukraine and Russia were sounding more realistic, but time was needed. read more Russia’s foreign minister said some deals with Ukraine were close to being agreed. read more

“Fears of a supply disruption have been tempered by tentative signs of progress in ceasefire talks between Russia and Ukraine,” said Stephen Brennock of oil broker PVM.

“That said, an end to hostilities still seems like a long way off.”

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Additional reporting by Emily Chow; Editing by Barbara Lewis, Louise Heavens, David Gregorio and Tim Ahmann

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Business

China share surge boosts Asian equity gauges ahead of Fed

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A broker reacts while trading at his computer terminal at a stock brokerage firm in Mumbai, India, February 26, 2016. REUTERS/Shailesh Andrade

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  • MSCI Asia ex-Japan up more than 3%, Nikkei +1.7%
  • China Vice Premier comments trigger jump in Chinese shares
  • U.S. Treasury yields down from June 2019 highs

SHANGHAI, March 16 (Reuters) – An afternoon surge in Chinese equities lifted a broad gauge of Asian shares on Wednesday on rising hopes Beijing will roll out more economic stimulus, while investors continued to watch Ukraine-Russia peace talks and the U.S. Federal Reserve.

The Fed is expected to raise rates for the first time in three years later on Wednesday (1800 GMT) and give guidance on future tightening. read more

European bourses were poised to open stronger. Pan-region Euro Stoxx 50 futures and German DAX futures were up about 0.9% in early deals, and FTSE futures were 0.6% higher.

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U.S. stock futures also pointed higher, with S&P 500 e-minis , up 0.2%.

The rise in Asian shares came a day after mainland China and Hong Kong equity indexes had tumbled in reaction to spiking coronavirus infections in China and fading expectations for a rate cut by the People’s Bank of China.

Chinese market volatility continued on Wednesday, with a strong early rebound in China’s CSI300 index (.CSI300) evaporating by late morning. But it charged higher after Vice Premier Liu He indicated China plans to take measures to boost the economy and would also announce policies favourable to capital markets.

The CSI300 was last up more than 3.5%. Hong Kong’s Hang Seng index (.HSI) also extended gains in the afternoon, surging more than 8% at one point, leading a more than 3% rise in MSCI’s broadest index of Asia-Pacific shares outside Japan. (.MIAPJ0000PUS)

Elsewhere, Australian shares (.AXJO) and Seoul’s Kospi (.KS11) were up about 1.1%, while Japan’s Nikkei stock index (.N225) rose 1.6%.

Liu’s comments helped to ease worries that encouraging economic data for January and February were leading to complacency among policymakers in Beijing. read more

“People are concerned that (Chinese) policymakers would believe that the economy is doing much better and growth is rebounding and there’s no need for further policy easing measures,” said Ting Lu, chief China economist at Nomura.

China has seen increasing positive changes in its economic performance backed up by surprisingly good economic data, but the impact of the latest COVID-19 resurgence need to be watched, a statistics bureau spokesman said on Tuesday. read more

On Wednesday, Chinese health authorities reported a slight drop in new cases compared to a day earlier, although major Chinese cities continue to grapple with controlling the spread of the virus. read more

The gains in Asia followed a relief rally overnight on Wall Street driven by hopes of a resolution in Ukraine. The S&P 500 (.SPX) gained 2.14%, the Nasdaq Composite (.IXIC) jumped 2.92% and the Dow Jones Industrial Average (.DJI) rose 1.82%.

Ukrainian President Volodymyr Zelenskiy said on Wednesday peace talks were sounding more realistic but more time was needed, as Russian air strikes killed five people in the capital Kyiv and the refugee tally from Moscow’s invasion reached 3 million.

EYES ON FED

Analysts at ING said in a note that market moves in Asia would be “cautious” ahead of the Fed meeting later in the global day.

Investors are expecting the U.S. central bank to raise interest rates by at least 25 basis points amid surging prices. Traders will also be closely watching the Fed for details on how it plans to end its bond-buying program.

U.S. bond yields fell in Asian trade, with the benchmark 10-year note yield at 2.1545%, after earlier rising to 2.169%, the highest since June 2019.

The two-year yield was last at 1.8433% from a close of 1.857%.

The U.S. dollar was down slightly against a basket of peers, trading at 98.861, and lower against the yen at 118.22 albeit still near a five-year high. The euro edged up 0.16% to $1.0969.

Oil prices, which had traded lower early in the session, turned higher, with Russia’s invasion of Ukraine continuing to stoke volatility.

Global benchmark Brent crude rose 0.93% to $100.84 per barrel, and U.S. crude added 0.44% to $96.86.

Highlighting the impact of global disruptions and soaring oil costs, Japan reported a wider-than-expected trade deficit in February as an energy-driven surge in import costs caused by massive supply constraints added to vulnerabilities for the world’s third-largest economy. read more

Spot gold was little changed at $1,916.61 per ounce.

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Reporting by Andrew Galbraith; Editing by Richard Pullin, Simon Cameron-Moore and Kim Coghill

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Business

Oil price benchmarks fall below $100, first time in weeks

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  • Brent, U.S. crude below $100 for the first time since late Feb
  • Outbreaks in China could slow demand
  • Iran nuclear deal hopes rise

NEW YORK, March 15 (Reuters) – Oil prices tumbled more than 6% on Tuesday to their lowest in almost three weeks, as Russia suggested it would allow a revival of the Iran nuclear deal to go forward and as traders worried growing pandemic lockdowns in China could dent demand.

Both Brent and U.S. crude futures benchmarks settled below $100 per barrel for the first time since late February. Since reaching 14-year highs on March 7, Brent has slid nearly $40 and WTI more than $30. Trading has been extremely volatile since Russia invaded Ukraine more than two weeks ago.

During the session, Brent futures plummeted $6.99, or 6.5%, to settle at $99.91 a barrel. U.S. West Texas Intermediate (WTI) crude fell $6.57, or 6.4%, to settle at $96.44 a barrel. Brent fell as low as $97.44 and WTI hit $93.53, their lowest since Feb. 25.

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On technical charts, both contracts moved the closest to oversold territory since December. They had been in overbought conditions during early March. Brent at one point topped $139 a barrel.

Russia is the world’s largest exporter of crude and fuels. Numerous buyers have shunned Russian barrels since the invasion, sparking fears of a disruption of millions barrels of daily crude supply. Those fears now look overdone.

On Tuesday a Ukrainian negotiator said talks with Russia over a ceasefire and withdrawal of Russian troops from Ukraine are ongoing. The ensuing sell-off drove prices lower but many expect volatility to continue.

“Whilst reports of promising talks are to be welcomed, it is hard to see how either side at this stage would be prepared to make concessions that would be acceptable to any party,” said a research note from Kpler. “In this current situation, it is hard to see how crude oil prices are not being under-priced.”

Also on Tuesday, Russia said it has written guarantees it can carry out its work as a party to the Iran nuclear deal, suggesting Moscow would allow a revival of the tattered 2015 pact to go ahead. read more

A model of 3D printed oil barrels is seen in front of displayed stock graph going down in this illustration taken, December 1, 2021. REUTERS/Dado Ruvic/Illustration

The talks to revive the nuclear accord could lead to the lifting of sanctions on Iran’s oil sector and allow Tehran to resume crude exports. They had stalled because of Russian demands. read more

In the fallout from Russia’s invasion, which it calls a “special operation,” Western sanctions have failed to deter China and India from buying Russian crude. read more

The Organization of the Petroleum Exporting Countries said oil demand in 2022 faced challenges from the invasion and rising inflation as crude prices soar, increasing the likelihood of reductions to its forecast for robust demand this year. read more

China saw a steep jump in daily COVID-19 infections, which could slow the current pace of consumption as that nation shifts to lockdowns. read more

“It is estimated that a severe lockdown in China could put 0.5 million bpd of oil consumption at risk, which would be further compounded by fuel shortages due to inflated energy prices,” said Louise Dickson, senior oil market analyst for Rystad Energy.

The U.S. Federal Reserve is widely expected to raise interest rates by 25 basis points on Wednesday for the first time in four years to fight soaring inflation. This could strengthen the U.S. dollar and dampen demand for oil and other commodities priced in greenbacks.

Preliminary data from the American Petroleum Institute showed U.S. crude inventories rose by 3.8 million barrels for the week ended March 11 while gasoline inventories fell by 3.8 million barrels and distillate stocks rose by 888,000 barrels, according to sources, who spoke on condition of anonymity.

Official U.S. government inventory data is due on Wednesday.

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Reporting by Stephanie Kelly in New York; Additional reporting by Rowena Edwards in London and Yuka Obayashi in Tokyo; Editing by Marguerita Choy, David Goodman, Mark Porter and David Gregorio

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Business

Asia stocks extend losses as Ukraine war, China’s COVID surge hit sentiment

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A man wearing a protective mask, amid the coronavirus disease (COVID-19) outbreak, walks past an electronic board displaying graphs (top) of Nikkei index outside a brokerage in Tokyo, Japan, March 10, 2022. REUTERS/Kim Kyung-Hoon

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SYDNEY, March 15 (Reuters) – Asian stocks were in the red on Tuesday as surging COVID-19 cases in China hit the confidence of investors who are already worried about the Ukraine war and the first U.S. interest rate rise in three years that could come this week.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 1.97%, led by pronounced weakness in Chinese stocks. The index is down 8.2% so far this month.

Global oil prices fell overnight as prospects of talks between Russia and Ukraine reaching some kind of resolution eased immediate concerns about energy supply disruption. read more

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Those losses extended into the Asian session, however, the investor focus had shifted to the demand side, with China’s new wave of COVID-19 infections casting a cloud over the outlook for the world’s second-largest economy.

More broadly, a lack of major progress seen in Ukraine-Russia talks on Monday added to the nervousness in equity markets while concerns are now growing about the potential for new tensions between China and United States.

Washington has warned Beijing against providing military or financial help to Moscow after its invasion of Ukraine, as sanctions on Russian political and business leaders mount. read more

“The question we are asking is whether the markets have reached peak bearishness,” said Jack Siu, Credit Suisse’s chief investment officer for Greater China.

“We know there has been a lot of bad news, there could be worse to come, stock prices have fallen substantially and there is no clarity on any resolutions from U.S. regulators towards Chinese listed stocks there.”

Hong Kong’s Hang Seng Index (.HSI) remained mired in negative territory Tuesday, dropping 4% following an almost 5% selloff a day earlier. Hong Kong’s main board is down 17% so far in March.

The city’s tech index (.HSTECH) has been hammered, falling nearly 30% this month as investors worry about the next regulatory crackdown from U.S. and Chinese authorities on the sector.

China’s CSI300 index (.CSI300) was down 1.78%, pushing its losses for the month out to 11.2%. Australian shares (.AXJO) closed down 0.73%.

Shrugging off the weakness in Asia, however, stock futures for the S&P 500 rose 0.21% while Tokyo’s Nikkei Index (.N225) reversed its losses and was marginally higher, up 0.22%.

Adding to the overall negative sentiment for markets are rising case numbers of COVID-19 in China, which investors fear will hurt the mainland’s economic growth in the first quarter. read more

China on Tuesday reported 3,602 new confirmed coronavirus cases compared with 1,437 on Monday. read more .

During the Asian session, U.S. crude slipped a further 5.2% to $97.66 a barrel. Brent crude was down 5.16% to $101.37 per barrel. read more

“Right now everyone is looking at the Chinese cases and realising that has to have an effect on production,” said Hong Hao, BOCOM International’s head of research.

“China’s growth in the first quarter could be closer to zero than 5.5%. There’s a ripple effect. There’s Ukraine, the risk of U.S. sanctions on China and rising Chinese domestic COVID cases – it does not look good.”

Investor focus is also on the U.S Federal Reserve, which meets on Wednesday and is expected to hike interest rates for the first time in three years to offset rising inflation.

Wall Street experienced a mixed session, with declining technology companies prompting most indexes to close lower Monday. read more

The yield on the benchmark 10-year Treasury notes rose to 2.1384%.

The two-year yield , which rises with traders’ expectations of higher Fed fund rates, touched 1.865%, up from 1.849%.

Gold was also weaker in Asia with the spot price at $1,932.1 per ounce.

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Reporting by Scott Murdoch in Sydney; Editing by Sam Holmes

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Health

Wisconsin flock of 2.75 mln chickens to be culled as bird flu spreads in U.S.

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CHICAGO, March 14 (Reuters) – A commercial flock of 2.75 million egg-laying chickens in Wisconsin will be culled to prevent the spread of a highly lethal form of avian flu after birds on the farm tested positive for the disease, state officials said on Monday.

The Wisconsin culls would bring to about 6.7 million the number of commercially raised chickens and turkeys killed nationwide due to bird flu since February. It is the biggest U.S. outbreak of the disease in poultry since 2015, when nearly 50 million birds died. read more

Outbreaks are limiting exports of American poultry products as importing countries like China and Mexico block shipments from states with infected flocks.

U.S. officials said bird flu is not an immediate public health concern and that birds from infected flocks will not enter the food system. No human cases have been detected in the United States.

The disease is already widespread in poultry in Europe and affecting Africa, Asia and Canada. read more

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Reporting by Tom Polansek, Editing by William Maclean

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Business

Shares gain as oil slips on hopes for Ukraine progress

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A man wearing a protective mask, amid the coronavirus disease (COVID-19) outbreak, walks past an electronic board displaying Shanghai Composite index, Nikkei index and Dow Jones Industrial Average outside a brokerage in Tokyo, Japan, March 7, 2022. REUTERS/Kim Kyung-Hoon

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  • >Asian stock markets :
  • S&P 500 futures firm 0.5%, China stocks slip
  • Yields rise ahead of expected rate hikes from Fed, BoE
  • Dollar climbs to 5-year peak on yen as BOJ lags
  • U.S. crude oil falls over $2 a barrel

SYDNEY, March 14 (Reuters) – Most share markets firmed and oil slid on Monday on hopes for progress in Russian-Ukraine peace talks even as fighting continued to rage, while bond markets braced for rate rises in the United States and UK this week.

While Russian missiles hit a large Ukrainian base near the border with Poland on Sunday, both sides gave their most upbeat assessment yet of prospects for talks. read more

Just the chance of peace saw S&P 500 stock futures add 0.5%, while Nasdaq futures rose 0.4%. EUROSTOXX 50 futures gained 0.5% and FTSE futures 0.2%.

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Tokyo’s Nikkei (.N225) rose 0.9%, but MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was dragged down 1.6% by losses in China.

Chinese blue chips (.CSI300) shed 1.7% after a jump in coronavirus cases saw the southern city of Shenzen locked down and stoked speculation about more policy easing. read more

Bonds elsewhere remained under pressure having taken a beating last week as surging commodity prices looked set to boost inflation further, with yields on 10-year Treasuries rising four basis points to 2.04% .

Notably, a key measure of U.S. inflation expectations climbed to 3% and near record highs .

That merely cemented expectations the Federal Reserve would lift rates by 25 basis points at its policy meeting this week and signal more to come through members’ “dot plot” forecasts.

“The dots will likely be mainly clustered around four or five hikes for 2022, up from three previously, given the stronger pace of inflation since the January FOMC meeting,” said Kevin Cummins, chief U.S. economist at NatWest Markets.

“We suspect we could also get an addendum on how the Fed plans to reduce the size of the balance sheet as early as this week.”

The Bank of England is expected to lift its rates to 0.75% on Thursday, the third rise in a row, and to signal more with the market pricing an aggressive 2% by year-end. read more

Fed fund futures imply no less than six or seven hikes this year to around 1.75%, keeping the U.S. dollar underpinned near the highest since May 2020.

The euro was stuck at $1.0905 , and not far from its recent 22-month trough of $1.0804, while the dollar hit a fresh five-year peak on the yen at 117.87 .

The Bank of Japan is seen lagging far behind other major central banks in tightening policy.

“The yen has been unable to display its typical safe-haven attributes, partly because of the big rise in U.S. yields and the BoJ yield curve control policy that prevents JGBs following the move up in core global yields,” said Rodrigo Catril, a senior FX strategist at NAB.

“Japan is also a big energy importer adding to concerns over a terms of trade shock from higher energy prices.”

Gold lost some of its safe-haven charm on Monday, easing 0.5% to $1,975 an ounce and away for last week’s peak at $2,069.

Likewise, the chance of progress on Ukraine saw oil prices surrender a little of their recent gains, even as talks with producer Iran seemed to be stalled. read more

Brent was last quoted $2.13 lower at $110.54, while U.S. crude fell $2.46 to $106.84.

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Reporting by Wayne Cole; Editing by Sam Holmes & Shri Navaratnam

Our Standards: The Thomson Reuters Trust Principles.

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World

Ukraine says Russia wants to drag Belarus into war, warns of invasion plan

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Russian President Vladimir Putin listens to Belarusian President Alexander Lukashenko during a meeting at the Kremlin in Moscow, Russia March 11, 2022. Sputnik/Mikhail Klimentyev/Kremlin via REUTERS

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LVIV, Ukraine, March 11 (Reuters) – Ukraine said Belarus could be planning to invade its territory on Friday and accused Russia of trying to drag its ally into the war by staging air attacks on Belarus from Ukrainian air space.

Belarus has served as a staging post for Russian troops, missiles and aircraft, both before and after Russia launched its invasion of Ukraine on Feb. 24, but it has not deployed its own forces in active battle.

Ukraine’s military accused Russian aircraft of firing at Belarusian border villages from Ukrainian air space on Friday to provide an excuse for an offensive.

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“This is a PROVOCATION! The goal is to involve the Armed Forces of the Republic of Belarus in the war with Ukraine!” Ukraine’s Air Force Command said in an online statement.

The Kremlin did not immediately respond to a request for comment on the Air Force Command’s statement.

The alleged attacks took place as Belarusian leader Alexander Lukashenko was meeting Russian President Vladimir Putin in Moscow, according to Ukraine’s State Centre for Strategic Communications.

The result of this meeting could be an attack by Belarus across Ukraine’s northern border, the centre said in statement.

“According to preliminary data, Belarusian troops may be drawn into an invasion on March 11 at 21:00 (1900 GMT),” it said.

Last week, Lukashenko, a close Kremlin ally, said Belarusian armed forces were not taking part and would not take part in what Russia calls its “special military operation” in Ukraine. read more

Ukrainian senior officials said Russia was doing everything possible to draw Belarus into the conflict, after failing in what Western countries say was an initial plan for a lightning assault on the capital. read more

“We also understand that the Belarusian government has been doing everything possible to avoid joining this war,” Ukrainian deputy interior minister Yevheniy Yenin said on national television on Friday.

There was no immediate comment on the allegations from Belarus.

Ukraine’s top security official Oleksiy Danilov said Ukraine had so far shown restraint towards Belarus, despite Russia using it as a launchpad for attacks on Ukraine. But he warned on Friday if “one fighter crosses our border, we will fight back.”

Meanwhile Ukrainian President Volodymyr Zelenskiy struck a more conciliatory note in a speech to the government of neighbouring Poland, which also shares a border with Belarus.

“I really want these words to be heard by our common neighbors – Belarusians. Peace between relatives, peace between neighbors, peace between brothers, we must achieve this with them too. And we definitely will,” Zelenskiy said.

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Reporting by Natalia Zinets, Pavel Polityuk and Max Hunder; Writing by Alessandra Prentice; Editing by Timothy Heritage and Daniel Wallis

Our Standards: The Thomson Reuters Trust Principles.

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