Latest news with #Kashkari
Globe and Mail
3 days ago
- Business
- Globe and Mail
Dollar Climbs and Gold Retreats on Trade Optimism
The dollar index (DXY00) Tuesday rose by +0.59%. The dollar moved higher Tuesday after President Trump over the weekend extended the deadline for a 50% tariff on US importers of EU goods by about 5 weeks to July 9 from June 1. The dollar also garnered support from hawkish comments Tuesday by Minneapolis Fed President Kashkari, who said he favors 'maintaining the fed funds rate at current levels.' The dollar extended its gains after the Conference Board's US May consumer confidence index rose more than expected to a 3-month high. Gains in the dollar were limited Tuesday after the US Apr capital goods new orders nondefense ex-aircraft and parts fell more than expected. Also, Tuesday's stock rally curbed liquidity demand for the dollar. The dollar still has some negative carryover from last Thursday when the House passed President Trump's tax and spending plan, which would add to the burgeoning US budget deficit. US Apr capital goods new orders nondefense ex-aircraft and parts fell -1.3% m/m, weaker than expectations of -0.2% m/m and the biggest decline in 6 months. The US Mar S&P CoreLogic composite-20 home price index rose +4.07% y/y, weaker than expectations of 4.50% y/y and the smallest increase in 1-2/ years. The Conference Board's US May consumer confidence index rose +12.3 to a 3-month high of 98.0, stronger than expectations of 87.1. The US May Dallas Fed manufacturing survey general business activity index rose +20.5 to -15.3, stronger than expectations of -23.1. Minneapolis Fed President Kashkari said he favors maintaining the fed funds rate at current levels until there is more clarity on the path of tariffs and their impact on prices. The markets are discounting the chances at 6% for a -25 bp rate cut after the June 17-18 FOMC meeting. EUR/USD (^EURUSD) Tuesday fell by -0.46%. Tuesday's rally in the dollar undercut the euro. Losses in the euro were contained following Tuesday's better-than-expected Eurozone economic news, which showed strength in the economy. Additionally, hawkish comments from ECB Governing Council member Holzmann on Tuesday supported the euro since he stated that he doesn't support additional ECB interest rate cuts. The Eurozone May economic confidence indicator rose +1.0 to 94.8, stronger than expectations of 94.1. Eurozone Apr new car registrations rose +1.3% y/y to 925,000 units, the first increase in four months. ECB Governing Council member Holzmann said the ECB moving interest rates 'further south would be more risky than staying where we are and waiting until September.' Swaps are discounting the chances at 98% for a -25 bp rate cut by the ECB at the June 5 policy meeting. USD/JPY (^USDJPY) Tuesday rose by +0.99%. The yen on Tuesday retreated from a 4-week high against the dollar and fell sharply after Japanese government bond yields plunged when Bloomberg News reported that Japan's finance ministry sent a questionnaire to market participants regarding appropriate issuance amounts for government bonds, a sign the finance ministry may seek to reduce debt issuance. The yen on Tuesday initially rallied to a 4-week high against the dollar after economic news showed Japan Apr PPI services prices rose more than expected, a hawkish factor for BOJ policy. Also, Tuesday's comments from BOJ Governor Ueda supported the yen when he said the BOJ will continue to tighten monetary policy as long as its objectives are met. In addition, lower T-note yields on Tuesday were bullish for the yen. Japan Apr PPI services prices rose +3.1% y/y, stronger than expectations of +3.0% y/y. BOJ Governor Ueda said, 'We will adjust the degree of monetary easing as needed' to ensure that the BOJ achieves its sustainable price goal if incoming news gives authorities greater confidence that their economic expectations will be met. June gold (GCM2 5) Tuesday closed down -65.40 (-1.94%), and July silver (SIN2 5) closed down -0.298 (-0.89%). Precious metals retreated on Tuesday due to an easing of trade tensions after President Trump extended the deadline on 50% tariffs on EU goods to July 9 from June 1. Also, dollar strength and Tuesday's sharp rally in stocks have curbed safe-haven demand for precious metals. In addition, hawkish central bank comments on Tuesday weighed on precious metals after Minneapolis Fed President Kashkari and ECB Governing Council member Holzmann said they favor keeping interest rates steady, and BOJ Governor Ueda said the BOJ will keep raising interest rates as long as its objectives are met. Weakness in Tuesday's US economic news was a bearish factor for industrial metals demand and silver prices. Apr capital goods new orders nondefense ex-aircraft and parts posted its biggest decline in 6 months, and the Mar S&P CoreLogic composite-20 home price index posted its smallest increase in 1-1/2 years. Lower global bond yields on Tuesday were supportive of precious metals. Also, geopolitical risks in the Middle East continue to support safe-haven demand for precious metals. Silver is also pressured by concern that an escalation of the global trade war would dampen economic activity and demand for industrial metals.
Globe and Mail
3 days ago
- Business
- Globe and Mail
Dollar Gains and Gold Plunges as Trade Tensions Ease
The dollar index (DXY00) today is up by +0.45%. The dollar is climbing today after President Trump over the weekend extended the deadline for a 50% tariff on European Union goods by about 5 weeks to July 9 from June 1. The dollar also garnered support from hawkish comments today by Minneapolis Fed President Kashkari, who said he favors 'maintaining the fed funds rate at current levels.' The dollar extended its gains after the Conference Board's US May consumer confidence index rose more than expected to a 3-month high. Gains in the dollar are limited after the US Apr capital goods new orders nondefense ex-aircraft and parts fell more than expected. Also, today's stock rally has curbed liquidity demand for the dollar. The dollar still has some negative carryover from last Thursday when the House passed President Trump's tax and spending plan, which would add to the burgeoning US budget deficit. US Apr capital goods new orders nondefense ex-aircraft and parts fell -1.3% m/m, weaker than expectations of -0.2% m/m and the biggest decline in 6 months. The US Mar S&P CoreLogic composite-20 home price index rose +4.07% y/y, weaker than expectations of 4.50% y/y and the smallest increase in 1-2/ years. The Conference Board's US May consumer confidence index rose +12.3 to a 3-month high of 98.0, stronger than expectations of 87.1. Minneapolis Fed President Kashkari said he favors maintaining the fed funds rate at current levels until there is more clarity on the path of tariffs and their impact on prices. The markets are discounting the chances at 2% for a -25 bp rate cut after the June 17-18 FOMC meeting. EUR/USD (^EURUSD) today is down by -0.27%. Today's rally in the dollar is undercutting the euro. Losses in the euro are contained following today's better-than-expected Eurozone economic news, which showed strength in the economy. Additionally, hawkish comments from ECB Governing Council member Holzmann today supported the euro since he stated that he doesn't support additional ECB interest rate cuts. The Eurozone May economic confidence indicator rose +1.0 to 94.8, stronger than expectations of 94.1. Eurozone Apr new car registrations rose +1.3% y/y to 925,000 units, the first increase in four months. ECB Governing Council member Holzmann said the ECB moving interest rates 'further south would be more risky than staying where we are and waiting until September.' Swaps are discounting the chances at 97% for a -25 bp rate cut by the ECB at the June 5 policy meeting. USD/JPY (^USDJPY) today is up by +1.06%. The yen today retreated from a 4-week high against the dollar after Japanese government bond yields plunged when Bloomberg News reported that Japan's finance ministry sent a questionnaire to market participants regarding appropriate issuance amounts for government bonds, a sign the finance ministry may seek to reduce debt issuance. The yen today initially rallied to a 4-week high against the dollar after economic news showed Japan Apr PPI services prices rose more than expected, a hawkish factor for BOJ policy. Also, today's comments from BOJ Governor Ueda supported the yen when he said the BOJ will continue to tighten monetary policy as long as its objectives are met. In addition, lower T-note yields today are supportive of the yen. Japan Apr PPI services prices rose +3.1% y/y, stronger than expectations of +3.0% y/y. BOJ Governor Ueda said, 'We will adjust the degree of monetary easing as needed' to ensure that the BOJ achieves its sustainable price goal if incoming news gives authorities greater confidence that their economic expectations will be met. June gold (GCM2 5) today is down -69.60 (-2.07%), and July silver (SIN2 5) is down -0.389 (-1.16%). Precious metals today are sharply lower on an easing of trade tensions after President Trump extended the deadline on 50% tariffs on EU goods to July 9 from June 1. Also, dollar strength and today's sharp rally in stocks have curbed safe-haven demand for precious metals. In addition, hawkish central bank comments today are weighing on precious metals after Minneapolis Fed President Kashkari and ECB Governing Council member Holzmann said they favor keeping interest rates steady, and BOJ Governor Ueda said the BOJ will keep raising interest rates as long as its objectives are met. Weakness in today's US economic news is a bearish factor for industrial metals demand and silver prices. Apr capital goods new orders nondefense ex-aircraft and parts posted its biggest decline in 6 months, and the Mar S&P CoreLogic composite-20 home price index posted its smallest increase in 1-1/2 years. Lower global bond yields today are supportive of precious metals. Also, geopolitical risks in the Middle East continue to support safe-haven demand for precious metals. Gains in silver were limited by concern that an escalation of the global trade war would dampen economic activity and demand for industrial metals.
Yahoo
5 days ago
- Business
- Yahoo
Gold prices pull back as Trump postpones EU tariffs
Gold prices fell slightly in Asian trade on Monday, giving back some of last week's gains after U.S. President Donald Trump over the weekend reneged on his threat to immediately impose 50% tariffs on the European Union. But losses in gold were limited by persistent weakness in the dollar and a steady sell-down in Treasuries, as markets remained on edge over the U.S.' deteriorating fiscal health and rising debt levels. Risk sentiment was also rattled by Minneapolis Federal Reserve President Neel Kashkari warning that the tariff shock was likely to be stagflationary, keeping safe haven demand in play. Spot gold fell 0.2% to $3,349.45 an ounce, while gold futures for June fell 0.5% to $3,376.91/oz by 00:54 ET (04:54 GMT). Trump said on Sunday evening that he had agreed to postpone his recently proposed 50% tariffs on the European Union to early-July, citing positive dialogue with EU head Ursula Von Der Leyen. The move comes after Trump on Friday threatened to impose 50% tariffs on the EU from early-June, citing a lack of progress in trade negotiations. While Trump's Sunday announcement did offer some relief to risk-driven markets, hurting safe haven demand for gold, traders were seen remaining uncertain over the U.S. President's policies. Sunday's announcement also represented another instance of Trump flip-flopping on his tariff threats, a trend that has sparked wild swings in markets this year. Trump's July 9 deadline also applies to plans for sweeping tariffs against major U.S. trading partners, who are now racing to reach trade deals with Washington. Trump on Friday also threatened to tariff smartphone imports to the U.S., keeping investors cautious. Uncertainty over Trump's trade policy drove strong gains in gold this year, with the yellow metal hitting a record high of $3,500/oz earlier this month. Broader metal prices advanced against a softer dollar, especially as the Fed's Kashkari warned of stagflationary risks from Trump's tariffs. Kashkari also said the Fed was unlikely to alter rates by September, amid heightened economic uncertainty. The dollar fell 0.3% in Asian trade, although greenback volumes are expected to be limited by a U.S. and UK holiday on Monday. The dollar was also nursing steep losses in recent weeks, which stemmed from heightened concerns over U.S. fiscal health. Kashkari's warning added to this uncertainty. Platinum futures rose 0.7% to $1,095.90/oz, while silver futures rose 0.3% to $33.690/oz. Related articles Gold prices pull back as Trump postpones EU tariffs Bernstein says U.S. gas supercycle is coming Crude oil futures drop on potential OPEC+ output hike Sign in to access your portfolio
Yahoo
6 days ago
- Business
- Yahoo
Tariff shock to be ‘stagflationary', no rate moves before Sept- Fed's Kashkari
Minneapolis Federal Reserve President Neel Kashkari warned on Monday that supply shocks stemming from President Donald Trump's trade tariffs stood to underpin inflation and dampen growth– presenting a stagflationary scenario. Speaking during an interview with Bloomberg TV, Kashkari warned that the Fed was unlikely to have enough clarity to alter interest rates by September, and that the central bank needed to see more trade deals and dee 'Uncertainty is something that we are dealing with at the Fed, as we're trying to navigate where inflation is going, where the labor market is going,' Kashkari told Bloomberg. He warned that the impact of the tariffs was still yet to be felt by American consumers, and that the impact of Trump's trade duties was likely to be stagflationary. 'There's no question that the shock of tariffs are stagflationary, the question is going to be ultimately how high (the tariffs) settle at, and how long a period is this uncertain environment and the tariffs are going to last,' Kashkari said. He said that the stagflationary impact of tariffs would be subdued if the tariffs did not remain in place for longer. Speaking on the recent increase in Treasury yields, Kashkari noted that investors were beginning to reassess investing in the United States, and that shifting yields could represent a new global paradigm. Uncertainty over Trump's trade policy ramped up after his inauguration, especially as the President flip-flopped on several major tariff decisions. His steep trade tariffs on China also sparked a bitter trade war with the country, although Washington and Beijing did agree to a deescalation earlier in May. On the fiscal front, Treasury yields have also risen sharply in recent weeks on concerns over high U.S. debt levels and fiscal health, especially after Moody's recently cut the U.S. sovereign rating. Related articles Tariff shock to be 'stagflationary', no rate moves before Sept- Fed's Kashkari Musk says he's back to 24/7 work mode after major X outage Canada's March retail sales beat expectations on auto sector
Yahoo
13-04-2025
- Business
- Yahoo
Neel Kashkari: Fast resolution with countries over tariffs will ease recession fear
Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said a fast resolution between the Trump administration and countries with tariffs will help ease the fear of a recession. Kashkari joined CBS News's 'Face the Nation' on Sunday, where he was asked about the increasing odds of a recession after the administration slapped 'reciprocal' tariffs on allies and adversaries alike. 'JPMorgan CEO Jamie Dimon said the odds of a recession are to 50-50, Goldman Sachs says 45 percent chance of recession, is the risk that high in your estimate?' host Margaret Brennan asked. 'It's really going to be determined by, are there quick resolutions?' Kashkari replied. 'Are there quick resolutions to these trade uncertainties with our major trading partners?' 'The faster those resolutions come, I think more … confidence can be restored and hopefully those odds can be brought down,' he continued. Still, Kashkari warned it's a 'serious situation' that he said was volatile. The uncertainty comes just days after Trump walked back most tariffs on various countries, leveling it out at 10 percent per country. China, however, was increased to a 125 percent tariff on its goods, and it retaliated with its own increase on U.S. goods. The situation has plunged the U.S. into a trade war as countries look to strike a deal with the Trump administration over exemptions to tariffs. Kashkari warned that if businesses and consumers get nervous and pull back, it could lead to economic downturn, regardless of the tariffs. 'There's a lot to try to unwrap right now, and we're doing our best to try to keep our arms around it,' he said. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
