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Business

Sterling collapses as investors fly into dollars

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  • Sterling hits record low; risk of BOE response
  • Euro down 1%; Aussie, kiwi, yuan hit multi year lows
  • S&P 500 futures drop 0.6%

SYDNEY, Sept 26 (Reuters) – Sterling slumped to a record low on Monday, prompting speculation of an emergency response from the Bank of England, as confidence evaporated in Britain’s plan to borrow its way out of trouble, with spooked investors piling in to U.S. dollars.

Broadening worry that high interest rates will hurt growth hit Asia’s currencies and equities too, with exporters from Japanese carmakers to Australian miners hit hard.

The pound plunged nearly 5% at one point to $1.0327, breaking below 1985 lows. Moves were exacerbated by thinner liquidity in the Asia session, but even after stumbling back to $1.05 the currency is still down some 7% in just two sessions.

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“You’ve got to buy the dollar as a risk off-trade. There is nowhere else to go,” said Rabobank strategist Michael Every in Singapore.

“The BOE are going to have to step in today, surely, at which point everyone’s going to end up with massively higher mortgage rates to try and stabilise sterling.”

The collapse sent the dollar higher broadly and it hit multi-year peaks on the Aussie, kiwi and yuan and a new 20-year top of $0.9528 per euro .

In stocks, MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was down 1% to a two-year low. It is heading for a monthly loss of 11%, the largest since March 2020. Japan’s Nikkei (.N225) fell 2.2%.

S&P 500 futures fell 0.5%.

Last week, stocks and bonds crumbled after the United States and half a dozen other countries raised rates and projected pain ahead. Japan intervened in currency trade to support the yen. Investors lost confidence in Britain’s economic management.

The Nasdaq (.IXIC) lost more than 5% for the second week running. The S&P 500 (.SPX) fell 4.8%.

Gilts suffered their heaviest selling in three decades on Friday and on Monday the pound made a 37-year low at $1.0765 as investors reckon planned tax cuts will stretch government finances to the limit.

Sterling is down 11% this quarter.

Five-year gilt yields rose 94 basis points last week, by far the biggest weekly jump recorded in Refinitiv data stretching back to the mid 1980s. Treasuries tanked as well last week, with two-year yields up 35 bps to 4.2140% and benchmark 10-year yields up 25 bps to 3.6970%.

The euro wobbled to a two-decade low at $0.9660 as risks rise of war escalating in Ukraine, before steadying at $0.9686.

In Italy, a right-wing alliance led by Giorgia Meloni’s Brothers of Italy party was on course for a clear majority in the next parliament, as expected. Some took heart from a middling performance by eurosceptics The League.

“I expect relatively little impact considering that the League, the party with the least pro-European stance, seems to have come out weak,” said Giuseppe Sersale, fund manager and strategist at Anthilia in Milan.

Oil and gold steadied after drops against the rising dollar last week. Gold hit a more-than two-year low on Friday and bought $1,643 an ounce on Monday. Brent crude futures sat at $86.29.

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Additional reporting by Danilo Masoni in Milan; Editing by Sam Holmes

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Business

Stocks tense, dollar bullish for central bank binge

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Passersby wearing protective face masks walk past a stock quotation board in Tokyo, Japan February 24, 2022. REUTERS/Issei Kato

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  • S&P 500 futures slip, Nikkei futures down
  • Fed leads pack of central bank meetings
  • Market leaning toward 75 bp from Fed, PBOC eases
  • Dollar firm near multi-year highs

SYDNEY, Sept 19 (Reuters) – Shares slipped in Asia on Monday and the dollar firmed as investors braced for a packed week of central bank meetings that are certain to see borrowing costs rise across the globe, with some risk of a super-sized hike in the United States.

Markets are already fully priced for a rise in interest rates of 75 basis points from the Federal Reserve, with futures showing a 20% chance of a full percentage point.

They also show a real chance rates could hit 4.5% as the Fed is forced to tip the economy into recession to subdue inflation. read more

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“How high will the funds rate ultimately need to go?” said Jan Hatzius, chief economist Goldman Sachs.

“Our answer is high enough to generate a tightening in financial conditions that imposes a drag on activity sufficient to maintain a solidly below-potential growth trajectory.”

He expects the Fed to hike by 75 basis points on Wednesday, followed by two half-point moves in November and December.

Also important will be Fed members’ “dot plot” forecasts for rates, which are likely to be hawkish, putting the funds rate at 4%-4.25% by the end of this year, and even higher next year.

That risk saw two-year Treasury yields surge 30 basis points last week alone to reach the highest since 2007 at 3.92%, so making stocks look more expensive in comparison and dragging the S&P 500 down almost 5% for the week.

On Monday, holidays in Japan and the UK made for a slow start and S&P 500 futures dipped 0.2%, while Nasdaq futures fell 0.5%.

EUROSTOXX 50 futures added 0.2%, while FTSE futures were closed.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) eased 0.5%, after losing almost 3% last week.

Japan’s Nikkei (.N225) was shut, but futures implied an index of 27,360 compared to Friday’s close of 27,567.

China’s central bank went its own way and cut a repo rate by 10 basis points to support its ailing economy, leaving blue chips (.CSI300) up 0.1%.

A RUSH TO TIGHTEN

Bank of America’s latest fund manager survey suggests allocations to global stocks are at an all-time low.

“But with both U.S. yields and the unemployment rate headed to 4-5%, poor sentiment isn’t enough to keep the S&P from making new lows for the year,” warned BofA analysts in a note.

“Our suite of 38 proprietary growth indicators depict a grim outlook for global growth, yet we are staring at one of the most aggressive tightening episodes in history, with 85% of the global central banks in tightening mode.”

Most of the banks meeting this week – from Switzerland to South Africa – are expected to hike, with markets split on whether the Bank of England will go by 50 or 75 basis points. read more

“The latest retail sales data in the UK supports our view that the economy is already in recession,” said Jonathan Petersen, a senior market economist at Capital Economics.

“So, despite sterling hitting a fresh multi-decade low against the dollar this week, the relative strength of the U.S. economy suggests to us the pound will remain under pressure.”

Sterling was stuck at $1.1396 having hit a 37-year trough of $1.1351 last week,

One exception is the Bank of Japan, which has so far shown no sign of abandoning its uber-easy yield curve policy despite the drastic slide in the yen. read more

The dollar edged up to 143.25 yen on Monday , having backed away from the recent 24-year peak of 144.99 in the face of increasingly strident intervention warnings from Japanese policymakers.

The euro was holding at $0.9991 , having edged just a little away from its recent low of $0.9865 thanks to increasingly hawkish comments from the European Central Bank.

Against a basket of currencies, the dollar was up 0.3% at 109.88, not far from a two-decade high of 110.79 touched earlier this month.

The ascent of the dollar and yields has been a drag for gold, which was hovering at $1,668 an ounce after hitting lows not seen since April 2020 last week.

Oil prices were trying to bounce on Monday, having shed around 20% so far this quarter amid concerns about demand as global growth slows.

Brent firmed 50 cents to $91.85 a barrel, while U.S. crude rose 33 cents to $85.44 per barrel.

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Reporting by Wayne Cole; Editing by Sam Holmes and Christian Schmollinger

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Business

European stocks extend losses as slowdown warnings weigh

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LONDON, Sept 16 (Reuters) – European stocks dipped on Friday and Europe’s benchmark German 10-year bond yield hit its highest since mid-June as investors braced for a U.S. rate hike while warnings from the World Bank and the International Monetary Fund fanned fears of a slowdown.

The World Bank’s chief economist said on Thursday he was worried about a period of low growth and high inflation in the global economy. The International Monetary Fund said downside risks continue to dominate the global economic outlook but it is too early to say if there will be a widespread global recession. read more

Wall Street sold off on Thursday after U.S. economic data gave the Federal Reserve little reason to ease its aggressive rate-hike stance. read more

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The downbeat tone continued during Asian trading, with data showing that China’s property sector had contracted further last month. read more

As of 0815 GMT, the MSCI world equity index, which tracks shares in 47 countries, was down 0.5% on the day and set for its fourth consecutive day of losses. (.MIWD00000PUS)

Europe’s STOXX 600 was down 1.2% (.STOXX) and London’s FTSE 100 (.FTSE) edged 0.1% lower. Germany’s DAX was down 1.8% (.GDAXI). read more

Markets priced in a 75% chance of a 75-basis-point rate hike and a 25% chance of 100 bps when the Fed meets next Wednesday.

In the UK, retail sales fell more than expected, in another sign that the economy is sliding into recession as the cost-of-living crisis squeezes households’ disposable spending. read more

“We’re now seeing data confirm that the economy is indeed slowing down,” said Axel Rudolph, market analyst at IG Group.

“I expect stocks to head back down to below their March lows. If you are in an environment where you have central banks that aggressively raise rates, historically this has always led to bear markets.”

The pound weakened to a 37-year low against the U.S. dollar . read more

The U.S. dollar index was up 0.3% at 110.13 , still hovering near a 20-year high, and steady against the yen at 143.365 .

The yen could hurtle towards three-decade lows before the year-end, according to market analysts and fund managers. read more

The dollar’s strength pushed China’s offshore yuan past the 7-per-dollar level for the first time in nearly two years. read more

The euro was a touch lower at $0.9961 . Germany’s two-year bond yields hit a fresh 11-year high after the European Central Bank vice president said an economic slowdown in the euro zone would not be enough to control inflation and the bank will have to keep raising interest rates. read more

Germany’s benchmark 10-year bond was up 3 basis points on the day at 1.765% – having touched its highest since mid-June in early trading .

Oil prices edged higher, but were on track for a weekly drop amid fears of a reduction in demand. read more

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Reporting by Elizabeth Howcroft; Editing by Sherry Jacob-Phillips

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Elizabeth Howcroft

Thomson Reuters

Reports on the intersection of finance and technology, including cryptocurrencies, NFTs, virtual worlds and the money driving “Web3”.

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Business

U.S. stocks slip while yields rise, Fed in focus

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  • Fed looms over broader markets, dollar rises
  • Oil tumbles on demand concerns, U.S. rail strike averted
  • Treasury yields climb while oil gold tumbles

NEW YORK, Sept 15 (Reuters) – Wall Street indexes were firmly in the red after a choppy start to Thursday’s session while bond yields rose as investors digested economic data that provided the Federal Reserve little reason to ease its aggressive interest rate hiking cycle.

Oil futures tumbled more than 3% on demand concerns and after a tentative agreement that would avert a U.S. rail strike, as well as continued U.S. dollar strength with expectations for a large U.S. rate increase. read more

Economic data showed U.S. retail sales unexpectedly rebounded in August as Americans ramped up purchases of motor vehicles and dined out more while taking advantage of lower gasoline prices. But data for July was revised downward to show retail sales declining instead of flat as previously reported.

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Separately the Labor Department said initial claims for state unemployment benefits fell for the week ended Sept. 10 to the lowest level since the end of May. read more

Investors are widely expecting an aggressive rate hike after the Federal Open Market Committee (FOMC) meeting next week, but nervously awaiting hints from Fed Chair Jerome Powell about future policy moves, said Quincy Krosby, chief global strategist at LPL Financial.

“The market remains choppy knowing that there’s a Fed meeting next week. Even though participants agree that it’ll be a 75 basis points rate hike, it’s what the statement adds to previous commentary and what Chairman Powell says in his press conference” that have them worried, Krosby said.

The Dow Jones Industrial Average (.DJI) fell 173.07 points, or 0.56%, to 30,962.02; the S&P 500 (.SPX) lost 44.69 points, or 1.13%, to 3,901.32 and the Nasdaq Composite (.IXIC) dropped 167.32 points, or 1.43%, to 11,552.36.

MSCI’s gauge of stocks across the globe (.MIWD00000PUS) shed 0.96% while emerging market stocks (.MSCIEF) lost 0.57%.

Stocks, bonds and currencies on Thursday were showing a market “increasingly understanding the Fed is going to hike more aggressively next week,” said Scott Ladner, chief investment officer at Horizon Investments in Charlotte, North Carolina.

Referring particularly to the still strong labor market, Ladner said “economic numbers released today are tying a bow on the situation.”

Treasury yields rose with the two-year hitting fresh 15-year highs, after data on retail sales and jobless claims showed a resilient economy that gives the Fed ample room to aggressively hike interest rates.

Also already signaling a recession warning the inverted yield curve – the gap between 2-year and 10-year treasury yields – widened further to -41.4 basis points, compared with -13.0 bps a week ago.

Benchmark 10-year notes were up 4.5 basis points to 3.457%, from 3.412% late on Wednesday. The 30-year bond last fell 5/32 in price to yield 3.4779%, from 3.469%. The 2-year note last fell 5/32 in price to yield 3.8646%, from 3.782%.

“In this vicious cycle where the data continues to remain resilient, that would imply a Fed that would likely stay the course and continue to tighten policy,” said Subadra Rajappa, head of U.S. rates strategy at Societe Generale in New York.

Also clouding investors’ moods on Thursday was the World Bank’s assessment that the world may be edging toward a global recession as central banks across the world simultaneously hike interest rates to combat persistent inflation. read more

In currencies the dollar was slightly higher against the yen while the Swiss franc hit its strongest level against the euro since 2015. read more

The dollar index , which measures the greenback against a basket of major currencies, rose 0.091%, with the euro up 0.18% to $0.9995.

The Japanese yen weakened 0.19% versus the greenback at 143.44 per dollar, while Sterling was last trading at $1.1469, down 0.57% on the day.

Before the tentative labor agreement, fears of a U.S. railroad worker strike had supported oil prices due to supply concerns on Wednesday. In addition, the International Energy Agency (IEA) said this week that oil demand growth would grind to a halt in the fourth quarter.

U.S. crude settled down 3.82% at $85.10 per barrel while Brent finished at $90.84, down 3.46% on the day.

Gold dropped to its lowest level since April 2021, hurt by elevated U.S. Treasury yields and a firm dollar, as bets of another hefty Fed rate hike eroded bullion’s appeal.

Spot gold dropped 1.9% to $1,664.46 an ounce. U.S. gold futures fell 2.02% to $1,662.30 an ounce.

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Additional reporting by Herbert Lash in New York, Marc Jones in London, Stefano Rebaudo in Milan, Tom Westbrook in Singapore and Wayne Cole in Sydney; Editing by Kirsten Donovan and Jonathan Oatis

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Business

Asian shares extend global rout, yen perks up on intervention hints

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An electronic stock quotation board is displayed inside a conference hall in Tokyo, Japan November 1, 2021. REUTERS/Issei Kato

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  • Nikkei tumbles 2.3%, S&P 500 futures stabilise
  • Dollar falls 0.6% on yen on news of rate check from BoJ
  • 2-yr U.S. yields scale new 15-yr high of 3.8040%
  • U.S. yield curve remains deeply inverted

SYDNEY, Sept 14 (Reuters) – Asian stocks tumbled on Wednesday as U.S. data dashed hopes for an immediate peak in inflation, although the dollar paused its relentless run against the yen as Japan gave its strongest signal yet it was unhappy with the currency’s sharp declines.

Data on Tuesday showed the headline U.S. consumer price index gained 0.1% on a monthly basis versus expectations for a 0.1% decline. In particular, core inflation, stripping out volatile food and energy prices, doubled to 0.6%. read more

Wall Street saw its steepest fall in two years, the safe-haven dollar posted its biggest jump since early 2020, and two-year Treasury yields, which rise with traders’ expectations of higher Fed fund rates, jumped to the highest level in 15 years.

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The stock rout is set to hit European markets, with the pan-region Euro Stoxx 50 futures , German DAX futures and FTSE futures off more than 0.7%.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 2.2% on Wednesday, dragged lower by a 2.4% plunge in resources-heavy Australia (.AXJO), a 2.5% drop in Hong Kong’s Hang Seng index (.HSI) and a 1.5% fall in Chinese bluechips (.CSI300).

Japan’s Nikkei (.N225) tumbled 2.6%.

After a heavy equity selloff overnight, both the S&P 500 futures and Nasdaq futures rose 0.2%.

“Markets have reacted violently to what I would consider to be a modest miss in U.S. CPI,” said Scott Rundell, chief investment officer at Mutual Limited.

“Futures have stabilised, so we might see a dead-cat bounce tonight.”

Financial markets now have fully priced in an interest rate hike of at least 75 basis points at the conclusion of the Fed’s policy meeting next week, with a 38% probability of a super-sized, full-percentage-point increase to the Fed funds target rate, according to CME’s FedWatch tool.

A day earlier, the probability of a 100 bps hike was zero.

“USD rates are now pricing in a Fed funds rate of 4.25% by end-2022 (75bps, 75bps, 25bps for the remaining three meetings). Decent odds of a 4.5% peak early 2023 is also reflected,” said Eugene Leow, senior rates strategist at Deutsche Bank.

“While resilient growth and slowing inflation can make for a better risk taking environment, the U.S. economy now looks too hot still. With no clear signs of the labour market slowing and inflation still problematic, a downshift from the Fed looks set to be delayed again.”

The strength of the U.S. dollar had pressured the rate sensitive Japanese yen close to its 24-year low at 149.96 yen before giving up some of the gains on news that the Bank of Japan has conducted a rate check in apparent preparation for currency intervention. read more

Yen-buying intervention is rare. The last time Japan intervened to support its currency was in 1998, when the Asian financial crisis triggered a yen sell-off and rapid capital outflows.

Earlier in the day, Japanese Finance Minister Shunichi Suzuki said that currency intervention was among options the government would consider. read more

The dollar now hovered at 143.7 yen , down 0.6% for the day.

Many traders remained doubtful that intervention was imminent, but the jump in the yen pointed to rising nerves. The timing of the BOJ’s move also suggests that 145 per dollar will be an important level for markets and the authorities.

The two-year U.S. Treasury yield scaled a new 15-year high of 3.8040% on Friday before retreating to 3.7629%, and its curve gap with the benchmark 10-year yields widened to around 34 basis points, compared with just 16 basis points a week ago.

The yield curve inversion is usually treated as a warning of recession.

The 10-year Treasury note yield held steady at 3.4178%.

Oil prices edged lower on Friday. U.S. crude settled down 0.6% at $86.82 per barrel and Brent eased by a similar margin at $92.65.

Gold was slightly higher. Spot gold was traded at $1703.02 per ounce.

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Reporting by Stella Qiu; Editing by Stephen Coates, Ana Nicolaci da Costa and Sam Holmes

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Business

European shares, euro jump on Ukrainian advances in northeast

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LONDON, Sept 12 (Reuters) – European shares jumped on Monday after Ukrainian forces made a rapid advance in Kharkiv province in Russia’s worst setback since its Kyiv push was abandoned in March, while the euro extended on last week’s European Central Bank inspired gains.

On Saturday, Moscow abandoned its main bastion in northeastern Ukraine, in a sudden collapse of one of the war’s principal front lines after Ukrainian forces made a rapid advance. read more

The broad pan-European STOXX 600 (.STOXX) index was up 0.7% in early trade, hitting its highest since the end of August.

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Germany’s DAX (.GDAXI) rose 1.4%, France’s CAC 40 (.FCHI) and Britain’s FTSE 100 (.FTSE) both jumped 1%.

Asian shares also rallied in slow trading with China and South Korea out for a holiday.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 0.7%, having bounced modestly from a two-year low hit last week. Japan’s Nikkei (.N225) added another 1.2%, after rallying 2% last week.

“The Russia-Ukraine situation is creating some glimmers of hope for the market that there might be a resolution and provide some relief on the intensity of the energy shock,” said Hani Redha, a multi-asset portfolio manager at PineBridge Investments.

“For now, the balance of information we have is being interpreted as bullish by the market,” added Redha.

The news of Ukrainian advances also helped lift the euro, which extended last week’s post European Central Bank (ECB) gains to rise to its highest against the dollar in almost four weeks.

The single currency was also helped in part by a Reuters report that European Central Bank policymakers see a growing risk that they will have to raise their key interest rate to 2% or more to curb record-high inflation despite a likely recession. read more

The euro was last up 1.5% to $1.0194, touching its highest against a softening dollar since Aug. 17.

Meanwhile, peripheral euro zone government bonds underperformed their peers, hurt by reports that the ECB may next month kick off a debate about reducing the size of their balance sheet.

Italy’s 10-year government bond yield rose as much as 6.5 basis points to 4.098%, its highest since mid-June.

Germany’s 10-year yield was up 4 basis points, pushing the closely watched spread between Italian and German 10-year yields to as wide as 237 basis points. ,

“There is an urgency to front load rate hikes and take rates to neutral as soon as possible,” said Mohit Kumar, interest rate strategist at Jefferies, in a note.

“Once we reach levels close to neutral, we do expect the doves to take back control at the ECB and hence see the recent shift as a front loading exercise rather than a fundamental shift in ECB policy,” Kumar added.

The dollar index , which measures the greenback against a basket of six currencies, was down 0.7% to 107.98, its lowest since Aug. 26.

Still, the index is up over 12% this year, having gained over 10% against the euro, 13% against the pound and 24% against the Japanese yen.

U.S. inflation data released on Tuesday will be key for determining the direction of travel in the near term.

Falling petrol prices are seen pulling down the headline consumer price index by 0.1%, according to a Reuters poll.

The core is forecast to rise 0.3%, though some analysts see a chance of a softer report.

“Commodities, in general, have been coming off and that’s likely to be the main driver of softer numbers,” PineBridge’s Redha said.

A soft number might revive speculation the Federal Reserve will only hike by 50 basis points this month, though it would likely have to be very weak to have a real impact given how stridently hawkish policymakers have been recently. read more

Oil prices have been trending lower amid concerns about a global economic slowdown, though cuts to supply did prompt a 4% bounce on Friday.

On Monday, Brent was steady at $92.82 a barrel, while U.S. crude slipped 0.2% to $86.60.

The weaker dollar helped lift gold to $1,724 an ounce, away from last week’s low of $1,690.

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Reporting by Samuel Indyk in London, additional reporting by Wayne Cole in Sydney

Our Standards: The Thomson Reuters Trust Principles.

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World

Singapore will decriminalize sex between men, prime minister says

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  • Under existing law men face up to 2 years jail for gay sex
  • Law has not been actively enforced for decades
  • PM Lee says Singapore society is ready for this change
  • Reaffirms support for traditional definition of marriage

SINGAPORE, Aug 21 (Reuters) – Singapore will decriminalise sex between men but has no plans to change the legal definition of marriage as being between a man and a woman, Prime Minister Lee Hsien Loong said on Sunday.

LGBTQ groups welcomed Lee’s decision to repeal Section 377A of the penal code, a colonial-era law that criminalises sex between men, but also expressed concern that ruling out same-sex marriage would help to perpetuate discrimination.

In his annual national day rally speech, Lee said Singaporean society, especially young people in the city-state, were becoming more accepting of gay people.

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“I believe this is the right thing to do, and something that most Singaporeans will now accept,” he said.

It was unclear when exactly Section 377A would be repealed.

Singapore becomes the latest Asian country to move toward ending discrimination against members of the LGBTQ community.

In 2018, India’s highest court scrapped a colonial-era ban on gay sex, while Thailand has recently edged closer to legalising same-sex unions.

Under Singapore’s Section 377A, offenders can be jailed for up to two years under the law, but it is not currently actively enforced. There have been no known convictions for sex between consenting adult males for decades and the law does not include sex between women or other genders.

Lesbian, gay, bisexual, transgender, and queer (LGBTQ) groups have brought multiple legal challenges attempting to strike down the law, but none has succeeded.

On Sunday, several LGBTQ rights groups said in a joint statement they were “relieved” by Lee’s announcement.

A couple attends Pink Dot, an annual event organised in support of the LGBT community at the Speakers’ Corner in Hong Lim Park in Singapore, June 29, 2019. REUTERS/Feline Lim/File Photo

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“For everyone who has experienced the kinds of bullying, rejection and harassment enabled by this law, repeal finally enables us to begin the process of healing. For those that long for a more equal and inclusive Singapore, repeal signifies that change is indeed possible,” they said in the statement.

But the groups also urged the government not to heed calls from religious conservatives to enshrine the definition of marriage in the constitution, saying this would signal that LGBTQ+ citizens were not equal.

RESISTANCE

In February, Singapore’s highest court had ruled that since the law was not being enforced, it did not breach constitutional rights, as the plaintiffs had argued, and it reaffirmed that the law could not be used to prosecute men for having gay sex.

Some religious groups including Muslims, Catholics and some Protestants continued to resist any repeal of the law, Lee said.

An alliance of more than 80 churches expressed strong disappointment on Sunday over the government’s decision.

“The repeal is an extremely regrettable decision which will have a profound impact on the culture that our children and future generations of Singaporeans will live in,” it said.

Singapore is a multi-racial and multi-religious society of 5.5 million, of whom about 16% are Muslim, with bigger Buddhist and Christian communities. It has a predominantly ethnic Chinese population with sizeable Malay and Indian minorities, according to the 2020 census.

Stressing his government’s continued support for the traditional definition of marriage, Lee said: “We believe that marriage should be between a man and a woman, that children should be raised within such families, that the traditional family should form the basic building block of society.”

Singapore will “protect the definition of marriage from being challenged constitutionally in the courts”, he said. “This will help us repeal Section 377A in a controlled and carefully considered way.”

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Reporting by Chen Lin, editing by Kanupriya Kapoor and Gareth Jones

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Business

Workers at UK’s biggest container port Felixstowe due to begin 8-day strike

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A view shows stacked shipping containers at the port of Felixstowe, Britain, October 13, 2021. Picture taken with a drone. REUTERS/Hannah McKay

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LONDON, Aug 21 (Reuters) – More than 1,900 workers at Britain’s biggest container port are due on Sunday to start eight days of strike action which their union and shipping companies warn could seriously affect trade and supply chains.

The staff at Felixstowe, on the east coast of England, are taking industrial action in a dispute over pay, becoming the latest workers to strike in Britain as unions demand higher wages for members facing a cost-of-living crisis.

“Strike action will cause huge disruption and will generate massive shockwaves throughout the UK’s supply chain, but this dispute is entirely of the company’s own making,” said Bobby Morton, the Unite union’s national officer for docks.

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“It [the company] has had every opportunity make our members a fair offer but has chosen not to do so.”

On Friday, Felixstowe’s operator Hutchison Ports said it believed its offer of a 7% pay rise and a lump sum of 500 pounds ($604) was fair. It said the port’s workers union, which represents about 500 staff in supervisory, engineering and clerical roles, had accepted the deal.

Unite, which represents mainly dock workers, says the proposal is significantly below the current inflation rate, and followed a below inflation increase last year.

“The port regrets the impact this action will have on UK supply chains,” a Hutchison Ports spokesperson said.

The port said it would have a contingency plan in place, and was working to minimise disruption during the walkouts which will last until Aug. 29.

Shipping group Maersk (MAERSKb.CO), one of the world’s biggest container shippers, has warned the action would have a significant impact, causing operational delays and forcing it to make changes to its vessel line-up.

Figures released on Aug. 17 showed Britain’s consumer price inflation hit 10.1% in July, the highest since February 1982, and some economists forecast it will hit 15% in the first three months of next year amid surging energy and food costs. read more

The squeeze on household incomes has already led to strikes by the likes of rail and bus workers demanding higher pay rises.

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Reporting by Michael Holden

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Business

Stocks struggle as China rate cut sends oil tumbling

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FILE PHOTO – People pass by an electronic screen showing Japan’s Nikkei share price index inside a conference hall in Tokyo, Japan June 14, 2022. REUTERS/Issei Kato

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  • Nikkei edges up, S&P 500 futures dip
  • PBOC cuts key rates, China data badly miss forecasts
  • Eyes on Fed minutes, earnings

LONDON, Aug 15 (Reuters) – Global shares struggled to advance on Monday while investors digested news of an unexpected cut in Chinese interest rates as data pointed to faltering growth in the world’s second largest economy, sending oil prices nearly 2% lower.

Weaker U.S. stock index futures also weighed on sentiment, while a steadier dollar knocked gold.

The MSCI all country index (.MIWD00000PUS) was barely firmer, a month-long advance having whittled away the benchmark’s decline for the year to about 13%.

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China’s central bank cut key lending rates to revive demand as data showed the economy unexpectedly slowing in July, with factory and retail activity squeezed by Beijing’s zero-COVID policy and a property crisis. read more

Until now, investors have been grappling with how much further central banks in the United States and Europe would hike rates when they meet next month.

Hopes of smaller rate hikes on signs that U.S. inflation may be peaking helped Wall Street clock up its fourth straight week of gains by Friday.

The gains on Wall Street and steady growth figures for Japan helped the Nikkei (.N225) share average in Tokyo jump to its highest in more than seven months.

“China, I think, is a different situation than the rest of the world. They’ve got a self imposed recession that they’ve created from the zero COVID policy,” said Patrick Armstrong, chief investment officer at investment house Plurimi Group.

“I do think it’s going to be Fed driven if there is another leg down in markets. Quantitative tightening, I think, will begin in earnest in September and that’s going to withdraw liquidity from the market,” Armstrong said.

Markets are still implying around a 50% chance the Fed will hike by 75 basis points in September and that rates will rise to around 3.50-3.75% by the end of the year.

The Fed will publish minutes on Wednesday from its last rate-setting meeting, but investor hopes of them showing the central bank beginning to pivot on rate hikes could be dashed.

“I don’t think (Fed Chair) Powell is going to say that, I don’t think the minutes are going to indicate that,” Armstrong said.

In Europe, the STOXX share index of 600 leading companies was up 0.13% at 441.43 points, still down around 10% for the year.

Fed Rate Futures and Stocks

U.S. FUTURES EASE

S&P 500 futures and Nasdaq futures were both down around 0.5% after last week’s gains.

Earnings from major retailers, including Walmart (WMT.N) and Target (TGT.N), will be scrutinised for signs of flagging consumer demand.

The cut in Chinese interest rates failed to stop Chinese blue chips (.CSI300) easing 0.13%, while the yuan and bond yields also slipped. read more

Geopolitical risks remain high with a delegation of U.S. lawmakers in Taiwan for a two-day trip. read more

The bond market still seems to doubt the Fed can manufacture a soft landing, with the yield curve remaining deeply inverted. Two-year yields at 3.27% are well above those for 10-year notes which were trading at 2.86%.

Those yields have underpinned the U.S. dollar, though it did slip 0.8% against a basket of currencies last week as risk sentiment improved.

But on Monday the dollar regained some poise, with the euro down 0.2% against the greenback at $1.02345 after bouncing 0.8% last week. Against the yen, the dollar steadied at 133.51 after losing 1% last week.

“Our sense remains that the dollar rally will resume before too long,” argued Jonas Goltermann, a senior economist at Capital Economics.

Gold was down 0.8% at $1,786, losing nearly all of its 1% gains last week.

Oil prices eased as China’s disappointing data added to worries about global demand for fuel.

The head of the world’s top exporter, Saudi Aramco, said it was ready to ramp up output while production at several offshore U.S. Gulf of Mexico platforms is resuming after a brief outage last week.

Brent slipped 1.8% to $96.35, while U.S. crude fell 1.9% to $90.34 per barrel.

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Reporting by Wayne Cole; Editing by Sam Holmes, Raju Gopalakrishnan and Ed Osmond

Our Standards: The Thomson Reuters Trust Principles.

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Singapore-based crypto lender Hodlnaut suspends withdrawals

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Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies are seen on a PC motherboard in this illustration picture, February 14, 2018. REUTERS/Dado Ruvic/Illustration/File Photo

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HONG KONG, Aug 8 (Reuters) – Hodlnaut, a Singapore-based crypto currency lender and borrower, has suspended withdrawals, swaps and deposits, the company said on Monday, the latest sign of stress in the cryptocurrency industry.

The crypto lender also said it would withdraw its application for a licence from the Monetary Authority of Singapore (MAS) to provide digital token payment services, for which it received in principle approval in March.

An MAS spokesperson said it had rescinded the approval following the request.

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Hodlnaut said the move was “due to recent market conditions” and was “to focus on stabilising our liquidity and preserving assets”.

The company is the latest in a string of crypto players globally to run into difficulties following a sharp sell off in markets that started in May with the collapse of two paired tokens, Luna and TerraUSD. read more

Other high profile failures include U.S. crypto lender Celsius, and Singapore-based fund Three Arrows Capital, both of which filed for bankruptcy last month. read more

Hodlnaut was named as one of Celsius’ institutional clients, according to court filings.

Singapore, a major centre for crypto and blockchain in Asia, has seen several crypto companies run into difficulties in recent months. read more

Vauld, a Singapore-based crypto lending and trading platform, suspended withdrawals in early July, and later that month, Zipmex, a Southeast Asia-focused crypto exchange, suspended withdrawals, though has since resumed them for some products. read more

“Digital payment token service providers licensed by MAS under the (Payment Services) Act are regulated for money laundering and terrorism financing risks as well as technology risks. They are not subject to risk-based capital or liquidity requirements, nor are they required to safeguard customer monies or digital tokens from insolvency risk,” said an MAS spokesperson.

They said this was a reason why “MAS has been continually reminding the general public that dealing in cryptocurrency is highly hazardous,” and added spillover to Singapore’s domestic financial system from the recent turmoil in the cryptocurrency market has been “very limited”

Hodlnaut did not respond to a request for comment.

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Reporting by Alun John in Hong Kong, Chen Lin in Singapore and Elizabeth Howcroft in London; Editing by Toby Chopra and Louise Heavens

Our Standards: The Thomson Reuters Trust Principles.

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