Business

By Julia Payne

LONDON (Reuters) -Oil prices fell on Friday on a weakening global demand outlook and the resumption of some Libyan crude oil output.

Brent crude futures fell $1.02 to $102.84 a barrel by 1023 GMT, while U.S. West Texas Intermediate (WTI) crude futures were down $1.08 cents to $95.27 a barrel.

The global economy looks increasingly likely to be heading into a serious slowdown, just as central banks aggressively reverse ultra-loose monetary policy adopted during the pandemic to support growth, data showed on Friday.

“Things are still negative on the economic front, but we are still in a structural shortfall for prompt oil and that means physical buyers will be there to support dips knowing the uncertainty of what lies ahead on the geopolitical front,” said Stephen Innes, managing partner at SPI Asset Management.

Innes said investors had next week’s U.S. Federal Reserve decision on interest rates firmly on their minds. Fed officials have indicated that the central bank would likely raise rates by 75 basis points at its July 26-27 meeting.

“While 75 is in the cards, guidance will be important and any softening in the rate hike outlook would be great for global growth,” Innes added.

While signs of softening U.S. demand weighed on oil prices and sent benchmark contracts sliding around 3% in the previous session, tight global supplies continued to keep the market buoyed.

Supply fears were easing slightly though after Libya resumed production at several oil fields earlier this week.

“Libyan production is recovering, but with clashes in the capital no one knows how long the production recovery will hold,” Giovanni Staunovo, analyst at UBS, said, referring to clashes between rival factions in Libya amid growing concern that a political standoff could prompt renewed conflict.

Staunovo also the market will look to preliminary OPEC production estimates for guidance next week.

WTI has been pummelled over the past two sessions after data showed that U.S. gasoline demand had dropped nearly 8% from a year earlier in the midst of the peak summer driving season, hit by record prices at the pump.

In contrast, signs of strong demand in Asia propped up the Brent benchmark, putting it on course for its first weekly gain in six weeks.

Demand in India for gasoline and distillate fuels rose to record highs in June, despite higher prices, with total refined product consumption running at 18% more than a year ago and Indian refineries operating near their busiest levels ever, RBC analysts said.

“This signals much more than a strong recovery from COVID-plagued years,” RBC analyst Michael Tran said in a note.

(Reporting by Julia Payne in London, Jeslyn Lerh in Singapore and Sonali Paul in Melbourne; Editing by Kenneth Maxwell and Susan Fenton)

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(Reuters) – Global equity funds recorded their biggest weekly outflow in five weeks in the week to July 20, on investor caution ahead of crucial central bank meetings in which rate hikes are expected to be announced.

According to Refinitiv Lipper, investors offloaded a net $13.79 billion worth of global equity funds, marking the biggest weekly outflow since June 15.

(GRAPHIC: Fund flows- Global equities bonds and money market – https://fingfx.thomsonreuters.com/gfx/mkt/zgvomxlryvd/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg)

The European Central Bank raised its benchmark deposit rate by 50 basis points, above its own guidance of a 25-basis-point hike, to rein in soaring inflation levels in the region.

The U.S. Federal Reserve is also expected to raise policy rates by another 75 basis points at its meeting next week as it seeks to balance the risks of a stubbornly high inflation and the likelihood of a recession.

U.S. and European equities funds booked withdrawals of $8.45 billion and $5.6 billion, respectively, although investors poured about $740 million in Asian equity funds.

Sectoral data showed financial, consumer discretionary and metals and mining funds witnessed outflows of $995 million, $445 million and $416 million, respectively, but healthcare gained $511 million in inflows.

(GRAPHIC: Fund flows: Global equity sectors – https://fingfx.thomsonreuters.com/gfx/mkt/mypmnlyaovr/Fund%20flows-%20Global%20equity%20sectors.jpg)

Selling continued for a second week in global bonds funds as investors unwind $6.9 billion worth of holdings.

Government funds saw outflows of $2.49 billion after 15 weeks of inflows, while net selling in short- and medium-term bond funds eased to a 15-week low of $1.88 billion.

(GRAPHIC: Global bond fund flows in the week ended July 20 – https://fingfx.thomsonreuters.com/gfx/mkt/gkplgyklxvb/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20July%2020.jpg)

Meanwhile, investors sold money market funds worth $1.34 billion after two weeks of purchases.

In the commodities space, net selling in gold and precious metal funds stood at $1.1 billion, a 63% bigger outflow than the previous week, while energy funds posted a fourth weekly outflow, valued at $180 million.

An analysis of 24,388 emerging market funds showed investors jettisoned equity fund worth 2.04 billion, the biggest outflow in 10 weeks, while bond funds suffered a sixth weekly outflow of $2.13 billion.

(GRAPHIC: Fund flows: EM equities and bonds – https://fingfx.thomsonreuters.com/gfx/mkt/mopanaoqlva/Fund%20flows-%20EM%20equities%20and%20bonds.jpg)

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Shounak Dasgupta)

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LAS VEGAS (AP) — Limiting the size of new swimming pools in and around Las Vegas might save a drop in the proverbial bucket amid historic drought and climate change in the West.

Officials are taking the plunge anyway, capping the size of new swimming pools at single-family residential homes to about the size of a three-car garage.

Citing worries about dwindling drinking water allocations from the drying-up Lake Mead reservoir on the depleted Colorado River, officials in Clark County voted this week to limit the size of new swimming pools to 600 square feet (56 square meters) of surface area.

“Having a pool in Las Vegas is like having a second car. It’s that common,” said Kevin Kraft, owner of a family custom pool design company that has been in business since 1942.

Clark County figures show there are about 200,000 residential swimming pools in the area of 2.4 million people. Another 1,300 are added annually.

“When you’re in the desert and it’s 100 degrees outside on a regular basis, it’s part of life to have a pool,” said Kraft, who derided the new regulations as more about “optics” than saving water.

But Clark County Commission Chairman Jim Gibson lamented before voting in favor of the cap Tuesday: “If the trends continue and the lake continues to decline, then this may be one of the least of the tough decisions that we’ll be making over the course of time.”

On Thursday, the Southern Nevada Water Authority voted unanimously to send the restriction to a vote by city councils in neighboring North Las Vegas and Henderson. Authority officials and an industry trade group, the Pool & Hot Tub Alliance, said they think the Las Vegas-area restriction is a first in the U.S.

The estimated 3,000 glimmering “commercial” pools familiar to the 40 million tourists who visit Las Vegas resort hotels, motels and water parks annually, or live in apartments, will not be affected by the limit.

Water use, abuse and scarcity have been hot topics during the scorching summer of 2022. Temperatures are projected to top 110 degrees Fahrenheit (43.3 Celsius) this week in Las Vegas, which averages a little more than 4 inches (10 centimeters) of rainfall per year.

Television ads urging water conservation are as common as theories about the history behind sunken boats and bodies that have surfaced in the mud as the crucial Lake Mead reservoir behind Hoover Dam recedes.

The lake providing about 90% of the Las Vegas water supply bears a telltale white mineral bathtub ring on steep lakeside cliffs showing the water line has dropped more than 170 feet (52 meters) since the reservoir was last full in 1983. It’s now below 30% capacity, raising the possibility it could fall so low that Hoover Dam could be unable to generate hydropower or release water downstream.

The Colorado River provides water for millions of acres of irrigation and more than 40 million people in tribes and cities in Arizona, Nevada, New Mexico, Colorado, California, Wyoming, Utah and Mexico.

In the face of that, the penalty for building a pool bigger than allowed after Sept. 1 will be severe: Denial of water service.

Builders of big swimming pools and spas for custom homes in far-flung neighborhoods complained the cap could cripple their companies, and that lap pools and diving boards may become a thing of the past.

“It’s easy to show pictures of lavish swimming pools and say, ‘That’s the problem why we have less water,’ ” Dustin Watters, whose family business, Watters Aquatech, started installing pools in 1985, told lawmakers Tuesday.

The water authority general manager, John Entsminger, said 23,000 gallons (87,000 liters) evaporate annually from the average 470 square foot (43.7 square meter) Southern Nevada home swimming pool. About 75% of recently constructed pools were already under the proposed size limit, he said.

The authority projects the pool size restriction will save 3.2 million gallons (12 million liters) of water the first year, increasing to 32 million gallons (121 million liters) by 2032, still just a fraction of the nearly 91 billion gallons (344 billion liters) the region draws from the lake per year.

Kraft and others in the pool industry told lawmakers the estimated savings under the pool size cap of one-tenth of a gallon (0.4 liter) per person per day was insignificant. The water authority could impose fees on owners of large pools, he suggested, and use the money to hire more water restriction enforcement agents.

The authority estimates that “enhanced watering compliance” could save 5.7 gallons (21.6 liters) per person per day. But water authority board member Cedric Creer, a Las Vegas City Council member, said “the philosophy that you can pay your way out of it is not a sound strategy.”

The vote to limit home pool sizes is the latest step by the authority to promote robust water reuse and conservation. It already encourages the removal of front lawns, and in recent months expanded patrols to identify and fine violators of landscape watering restrictions.

A new Nevada law that takes effect in 2027 bans “non-functional” or ornamental greenery at office parks, in street medians and entrances to housing developments. It excludes single-family homes, parks and golf courses.

Those measures put Southern Nevada years ahead of places like Los Angeles, where the regional water supplier declared a water emergency in April and imposed a one-day-per-week outdoor watering schedule for 6 million customers.

In Arizona, irrigation districts, water agencies, state entities and cities including Phoenix, Glendale, Scottsdale and Tempe have said they’ll find ways to use less water.

Kraft, the owner of the pool design company, said Las Vegas-area officials didn’t fully consider a study commissioned by the pool industry or other business recommendations. He predicted that multimillion-dollar home projects will be delayed or scrapped because of the new rule.

“The tone we got was that rich people shouldn’t be able to have big pools,” Kraft told The Associated Press. “All this work that people do on these big custom homes is usually around the pool. The pool is a big part of the design of the project.”

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SAVANNAH, Ga. (AP) — The owner of a large industrial site on the Georgia coast said Thursday that it has ended a longstanding agreement to sell the property to a county government whose officials worked for years on a plan to build a launch pad for commercial rockets there.

Opponents who fear the proposed Spaceport Camden would pose serious safety and environmental risks hailed the development as a potential deal breaker for the project, which Camden County officials have spent a decade and more than $10 million pursuing.

Union Carbide Corporation owns 4,000 acres (1,600 hectares) in the county where commissioners have pursued the spaceport for launching satellites into orbit. The county government in 2015 entered into an option agreement with the company to buy the land once the county obtained a spaceport operator license from the Federal Aviation Administration.

The FAA awarded the license in December. But before county commissioners could close on the land, opponents forced a referendum on the project by gathering more than 3,500 petition signatures. The project was put to a vote in March, and 72% cast ballots to block the deal.

In a statement Thursday, Union Carbide noted that Camden County voters had “repudiated” the land purchase.

“As a result, there is no longer an Option Agreement in existence between the County and UCC, and UCC does not intend to convey the property to the County pursuant to the prior Option Agreement,” said the statement, emailed to The Associated Press by Union Carbide spokesman Tomm Sprick.

Steve Howard, Camden County’s government administrator, did not immediately return a phone message seeking comment. Howard has led the spaceport project, saying it would bring economic growth not just from rocket launches, but also by attracting related industries and tourists to the community of 55,000 people on the Georgia-Florida line.

Opponents say building the spaceport on an industrial plot formerly used to manufacture pesticides and munitions would pose potential hazards that outweigh any economic benefits.

Critics, including the National Park Service, have said rockets exploding soon after launch could rain fiery debris onto Little Cumberland Island, which has about 40 private homes, and neighboring Cumberland Island, a federally protected wilderness visited by about 60,000 tourists each year.

Megan Desrosiers, president of the coastal Georgia conservation group One Hundred Miles, called the end of the land purchase agreement “a huge deal.”

“If Union Carbide doesn’t sell the property to Camden County, then there’s no site for a spaceport,” said Desrosiers, whose group helped organize the petition drive that forced the referendum.

The big loss at the polls in March didn’t stop county officials from pursuing the project. Commissioners in April voted unanimously to notify Union Carbide that they planned to move forward with the land purchase. The company said at the time it was evaluating the agreement.

Meanwhile, county officials are trying to have the referendum declared invalid by the Georgia Supreme Court. Their legal appeal argues that Georgia’s constitution doesn’t allow voters to veto government projects such as the spaceport. The court is scheduled to hear the case Aug. 23.

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By Lisa Baertlein and Tom Polansek

(Reuters) -Truckers protesting California’s new “gig worker” law blockaded the state’s third-busiest seaport for a second day on Thursday, stalling agricultural exports and threatening to worsen U.S. supply chain backups.

The operator of the largest marine terminal at the Port of Oakland closed it for business on Thursday, while the three other marine terminals on the property had some on-ship labor underway, port spokesman Robert Bernardo said.

Independent truck drivers have been picketing terminal gates and choking truck traffic on the port since Monday in protest of California’s new labor law formally known as AB5.

Backers say AB5 aims to clamp down on labor abuses and push companies to hire drivers as employees – which would enable them to join unions and collectively bargain with employers.

The law was a win for unions but is broadly opposed by big rig drivers who say it would make it more expensive for them to remain independent and push them to become company employees.

Protesters and the trucking industry want California Governor Gavin Newsom to delay enforcement of the law. Some organizers say the protesters – whose rally call is “The cargo won’t flow ’til AB5 goes” – won’t stop until they get a sit-down with Newsom.

In a rebuff on Thursday, the governor’s office said: “No one should be caught by surprise by the law’s requirements. The industry should focus on supporting this transition.”

The eighth-busiest U.S. container seaport – a key hub for agricultural trade – was already working to clear a pandemic-fueled cargo backup before the trucker protests began. The knock-on effects of the occasionally confrontational protests are already rippling beyond trucking.

“It’s not just this as a one-off,” Shawna Morris, senior vice president for U.S. Dairy Export Council and National Milk Producers Federation, said of the blockade.

ADDING TORNADO TO HURRICANE

Dairy farmers and other food producers have struggled to get products on the water because container shipping lines prioritized more lucrative, pandemic-fueled imports from Asia to the United States.

“We’ve added a tornado to the hurricane that the industry has been trying to endure for the last almost two years now,” Morris said.

It also complicates matters for the International Longshore and Warehouse Union (ILWU), which is in-high stakes U.S. West Coast port labor contract negotiations with terminal operators. The ILWU supports AB5 and said its dock worker members didn’t cross the blockade line for safety reasons.

“We’re not going to put our members in harm’s way to pass through the line of truckers,” said Farless Dailey, ILWU Local 10 president.

“We have dispatched 450 workers in the past three days who haven’t been able to get in to move cargo for the day, and they don’t get paid when they don’t get in,” Dailey said.

When trucks and dock workers don’t move cargo, the port clogs and ships don’t move – exacerbating backups and amplifying risks for shippers who rely on the port.

Oakland handles about $1.86 billion in exports per month at this time of year. Two thirds of the value of those are agricultural products, and perishables will take the biggest hit from the shutdown, said Jock O’Connell, international trade advisor at consultancy Beacon Economics.

That puts at risk California’s $20 billion-plus agriculture export industry and shipments of everything from almonds and rice to milk powder and wine.

The clock is also ticking for the $18 billion U.S. pork and beef export market, said Joe Schuele, spokesman for the U.S. Meat Export Federation.

Fresh U.S. beef and pork producers transport products hundreds of miles to the Oakland port because it is the preferred launch point for cargo ships bound for Asian countries like Japan and South Korea, Schuele said.

If port delays drag on more than a few days, the refrigerated meat may need to be frozen to prevent it from spoiling, which lowers its value while adding frozen storage costs, he said.

“You don’t have a lot of time to spare,” Schuele said.

(Reporting by Lisa Baertlein in Los Angeles, additional reporting by Tom Polansek in Chicago; Editing by Mark Porter and Diane Craft)

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(Corrects comparison with forecast in paragraph 4.)

By Daniel Leussink

TOKYO (Reuters) – Japan ran a trade deficit for the 11th straight month in June as high energy and other commodity costs pushed up imports, highlighting growing economic pressures from a sharply declining yen and global inflation.

Imports surged 46.1% in the year to June, Ministry of Finance data showed on Thursday, slightly above a median market forecast for a 45.7% gain in a Reuters poll.

That outpaced a 19.4% year-on-year rise in exports in the same month, resulting in a 1.3838 trillion yen ($9.99 billion) trade deficit, the 11th straight month of shortfalls.

June’s deficit was smaller than the 1.510 trillion yen gap expected in a Reuters poll.

Imports swelled due to a surge in shipments of oil from Saudi Arabia and coal and liquefied natural gas (LNG) from Australia. Imports of LNG from Malaysia and coal from Indonesia posted triple-digit surges, the data showed.

“Import volumes outpaced export volumes across Q2 so net trade should have been a small drag on Q2 GDP (gross domestic product) growth,” said Marcel Thieliant, senior Japan economist at Capital Economics.

“Car exports remain the Achilles heel of Japan’s manufacturing sector as they were only up 0.4% year-on-year, but that marked at least a pick-up from the 7.9% year-on-year fall in May,” he added.

By region, exports to China, Japan’s largest trading partner, rose 8.3% in the 12 months to June, recovering from two months of declines on stronger shipments of chip parts. China-bound exports of cars posted a sharp 23.2% year-on-year decline, the data showed.

Shipments bound for the United States, the world’s largest economy, gained 15.7% in June, thanks to stronger exports of medical products.

The Bank of Japan is expected to maintain its ultra-loose monetary policy later on Thursday, a commitment that could lead to further falls in the yen.

While the yen’s slide against the U.S. dollar and other currencies this year has pushed up import costs, Japan’s economy is still projected to have returned to growth in the second quarter following a decline in January-March.

However, the recovery from the COVID-19 pandemic faces headwinds from slowing global growth, lower exports and persistent supply chain snags.

That has forced policymakers to maintain sufficient stimulus in the economy, going against a global tide of rate increases to rein in rampant inflation.

($1 = 138.4600 yen)

(The story corrects comparison with forecast in paragraph 4.)

(Reporting by Daniel Leussink; Editing by Sam Holmes)

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By Tom Westbrook

SINGAPORE (Reuters) – Asian stocks inched lower and the dollar was firm on Thursday as looming central bank meetings in Europe and Japan and uncertainty over the supply of Russian gas kept traders on edge.

Wall Street indexes rallied overnight but even better-than-expected results from Tesla after hours couldn’t carry the positive mood into the Asia session.[.N]

Nasdaq 100 futures fell 0.3% and S&P 500 futures fell 0.2%. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.2% and Japan’s Nikkei fell 0.1%.

Market focus is on the resumption of gas flow along the biggest pipeline from Russia to Germany. A planned 10-day outage is set to end at 0400 GMT. If flow isn’t resumed, or is lacklustre, it will stoke worries about winter supplies.

Two sources familiar with the plans of Russia’s monopoly gas exporter, Gazprom, told Reuters on Tuesday that flows were likely to restart at pre-maintenance levels of 40% of capacity, which would probably be enough to calm markets for now.

The European Central Bank also meets on Thursday to begin Europe’s rate-hike cycle. Markets are hedging bets on a hike of either 25 basis points or 50 bps, with the latter perhaps able to support a euro that has slipped below $1 this month.

“They need to be raising rates to deal with the way inflation is embedded,” said George Boubouras, head of research at K2 Asset Management in Melbourne.

“But the dilemma they’ve got is that the lack of energy security planning has regions of the European Union in a very difficult position…one can only assume that you’ve got minimal upside and large downside risks to the European economy.”

The euro wavered overnight and bought $1.0191 early in the Asia session. Traders also await details of an ECB plan to steady bond spreads in Europe by buying extra debt from periphery countries to keep a lid on yields. [FRX/]

The Bank of Japan ends a two-day meeting later on Thursday and although no policy change is expected, the outlook will be closely watched as will the reaction in currency and bond markets where some funds have bet on a shift.

CHINA CLOUDS

A cloud over Chinese growth due to its strict COVID-19 controls and fresh concern over stability in the property market is also casting gloom over the prospects for global demand.

U.S. President Joe Biden expects to speak to his Chinese counterpart by the end of the month, but markets are sanguine as to whether much of a thaw in Sino-U.S. ties is possible or whether it can arrest economic problems.

Growth-sensitive commodities such as copper and iron ore have been sliding and this week Chinese banks and property stocks have been hurt by borrowers boycotting repayments on unfinished real estate.

“Past due mortgages doubled over the week, and … potential home buyers are waiting for a general drop in home prices for the housing market, including completed projects,” ING analysts said in a note to clients on Thursday.

“This is negative even for cash-rich developers.”

China’s yuan was under pressure in morning trade at 6.7700 to the dollar. Against other currencies the greenback steadied after dipping earlier in the week. The Australian dollar bought $0.6890.

Sterling, at $1.1983, didn’t get much of a bounce from British inflation zooming to a 40-year high, even though it stoked bets on rate rises. Traders have a wary eye on the race to replace Boris Johnson as Prime Minister.

Beyond the ECB, investors have scaled back bets on a 100 bp rate hike from the Federal Reserve next week, with a 75 bp hike seen most likely. But the retreat has come in concert with a deepening of economic growth worries.

The benchmark 10-year Treasury yield held at 3.0172% in Asia, below the 2-year yield of 3.2293%, a market signal that often presages a recession. [US/]

(This story refiles to remove extraneous words; adds subheading)

(Editing by Sam Holmes)

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(Reuters) -Microsoft Corp said on Wednesday it was investigating an outage where users were unable to access Microsoft Teams or leverage any features on the app, but did not disclose details on how many users were affected.

However, there were more than 4,800 incidents of people reporting issues with Microsoft Teams at about 10 p.m. ET, according to Downdetector.com, which tracks outages by collating status reports from sources including user-submitted errors on its platform.

The web monitoring firm also showed there were more than 150 incidents of people reporting issues with Microsoft Office 365.

Other big technology companies have also been hit by outages in the past year, with a near six-hour disruption at Meta Platforms keeping WhatsApp, Instagram and Messenger out of reach for billions of users last October.

(Reporting by Akriti Sharma in Bengaluru; Editing by Sherry Jacob-Phillips)

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NEW YORK (Reuters) – U.S. existing home sales fell for a fifth straight month in June to the lowest level in two years, as fast-rising interest rates and record-high selling prices make buying a home too expensive for a growing share of American households.

Mortgage interest rates have soared as a result of the Federal Reserve’s stiff rate hikes to try to tame high inflation. That has driven a new buyer’s monthly payment up by more than 50% in the first six months of 2022 by some estimates and has had a clear effect on home sales that had surged during the COVID-19 pandemic to the highest levels since the mid-2000s.

In June, sales of previously owned homes fell 5.4% to a seasonally adjusted annual rate of 5.12 million units, the lowest level since June 2020 when sales were rebounding from the COVID-19 lockdown slump, the National Association of Realtors said on Wednesday. Sales have now fallen each month since January.

Economists polled by Reuters had forecast sales would decrease to a rate of 5.38 million units. Sales were unchanged in the Northeast and fell in the Midwest, the West and South.

GRAPHIC: Existing home sales https://graphics.reuters.com/USA-STOCKS/klvykybqbvg/ehs.png

Home resales, which account for nearly 90% of the residential real estate market, dropped 14.2% on a year-on-year basis. The decline brought June’s sales rate to below the pace that prevailed in 2019 before the pandemic.

That was not enough to stall the relentless increase in selling prices, however. The median existing house price climbed 13.4% from a year earlier to an all-time high of $416,000 in June. It was the 23rd straight month of double-digit annual price gains, the longest such run since the late 1970s.

Sales gains remained concentrated in the upper-price end of the market amid a paucity of entry-level houses. Sales of homes priced below $500,000 were down by double-digit margins, led by a 31% year-over-year drop in the $100,000 to $250,000 range, while sales of houses selling for $500,000 and up eked out modest gains.

“Falling housing affordability continues to take a toll on potential home buyers,” NAR Chief Economist Lawrence Yun said in a statement. “Both mortgage rates and home prices have risen too sharply in a short span of time.”

GRAPHIC: U.S. existing home prices hit a record … again https://graphics.reuters.com/USA-ECONOMY/HOUSING/zgvomxzabvd/chart.png

There were 1.26 million previously-owned homes on the market, up 9.6% from May and 2.4% from a year earlier, the first yearly increase since 2019.

With demand cooling, monthly supply is likely to continue to steadily improve. The government reported on Tuesday that housing completions in June decreased 4.6%, but the backlog of homes yet to be built hovered near record highs.

At June’s sales pace, it would take 3.0 months to exhaust the current inventory of existing homes, up from 2.6 months in May. A six-to-seven-month supply is viewed as a healthy balance between supply and demand.

Properties typically remained on the market for 14 days in June, the shortest period ever. First-time buyers accounted for 30% of sales, up from 27% in May. All-cash sales made up 25% of transactions.

HIGHER MORTGAGE RATES

The interest rate-sensitive housing market has softened notably this year as the Fed lifts rates aggressively to blunt inflation that is running at its highest pace in four decades.

The average contract rate on a 30-year fixed-rate mortgage climbed to nearly 6% in June, according to the Mortgage Bankers Association, up from about 3.3% at the start of the year, which has put home purchases out of reach for a growing number of prospective buyers. The rate in the latest week was 5.82%, MBA said earlier on Wednesday.

While it is unclear how much higher mortgage rates will climb, it’s almost certain they will remain high for some time with the Fed set to raise interest rates again at its policy meeting next week and more hikes to come through the end of the year.

An Oxford Economics index out last week showed homes were the least affordable in the first quarter of 2022 at any time since the 2007-2009 financial crisis, and it forecast that picture would worsen through the rest of this year.

“The increase in both home prices and mortgage rates since the end of 2021 has pushed the monthly mortgage payment on a median priced home up by nearly $700, or 56%, pricing millions of buyers out of the market,” Nancy Vanden Houten, lead U.S. economist at Oxford Economics, wrote in a note following Wednesday’s sales data. “We think underlying demand from younger households and investors may keep a floor under home sales, but not if home price growth does not begin to moderate.”

(Reporting by Dan Burns; Editing by Nick Zieminski and Paul Simao)

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By Saqib Iqbal Ahmed

NEW YORK (Reuters) -The U.S. dollar rose against the euro on Wednesday in a choppy session, but its gains were capped as traders were hesitant to drive big moves ahead of a crucial European Central Bank policy decision on Thursday.

The single currency has rallied about 2% in the last three trading sessions on expectations the ECB might deliver a big 50-bps rate hike and a Reuters report that a key Russian gas pipeline would reopen on time after maintenance.

“The euro popped yesterday on the slight possibility that the ECB would consider a 50 basis point hike,” said John Doyle, vice president of dealing and trading at Monex USA.

“I think expectations of that have waned a bit this morning especially with the energy crisis back in the headlines.”

The European Union told member states on Wednesday to cut gas usage by 15% until March as an emergency step after President Vladimir Putin warned that Russian supplies sent via the biggest pipeline to Europe could be reduced further and might even stop.

Both events – the ECB meeting and the reopening of the Nord Stream 1 conduit after a 10-day shutdown – are due on Thursday, leaving markets on tenterhooks.

“Our expectation is the ECB will only hike 25 bps this month. But the chance of a upside surprise will keep EUR/USD choppy until the decision is released,” Doyle said.

The dollar was about 0.52% lower against the euro at $1.01675.

The common currency found little relief from selling pressure after Italian Prime Minister Mario Draghi won a confidence motion in the upper house Senate on Wednesday, but three main coalition parties refused to take part in the vote, effectively torpedoing his administration.

Against a basket of currencies, the dollar was 0.5% higher at 107.15, not far from the two-decade high of 109.29 touched last week.

The dollar was about 0.1% lower against the yen at 138.29 yen. The Bank of Japan is expected to stick to its dovish stance at its Thursday meeting..

Sterling weakened against the dollar, as data showed British inflation climbed to its highest rate in 40 years, but only slightly above forecast. Against the dollar, the pound was 0.3% lower at $1.1961.

The Canadian dollar slipped about 0.2% against the U.S. dollar after data showed inflation in Canada picked up speed again in June, though the gain missed forecasts.

In cryptocurrencies, bitcoin was about 1.67% higher at $23,795.2, on pace for its third straight day of gains, as traders bet the recent bout of weakness that had engulfed the market was over.

(Reporting by Saqib Iqbal Ahmed;Editing by Alison Williams and Richard Chang)

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