2025-06-03 07:09
EU carbon border tax to start from 2026 Impacts EU imports on steel, cement and other goods Penalties can be avoided with UK-EU carbon market linking LONDON/BRUSSELS, June 3 (Reuters) - Britain will struggle to link its carbon market to the EU's in just seven months, to avoid UK companies facing the bloc's carbon border tariff and annual bills around 800 million pounds ($1.08 billion) from next year, market experts have said. Billed as part of a "reset" in relations after Britain's 2016 exit from the European Union, the two sides announced last month they will link their carbon emissions trading systems. Sign up here. But neither side has set a timeframe or detailed the work that must be done to make this happen before January, when Europe's carbon border tax kicks in. "It's probably still likely to take many years before linkage takes effect. The earliest is 2028, but it's more likely to be 2029 or even 2030," said Ben Lee, senior emissions analyst at Energy Aspects. The UK government said a key upside of linking to the EU's carbon market, or emissions trading system (ETS), is to avoid businesses being hit by the EU's carbon border tariff - which, starting next year, will impose fees on the CO2 emissions associated with imports of steel, cement and other goods. The UK government said avoiding these costs would save 800 million pound a year. But EU officials say to get exempted from the carbon border levy, Britain would need to have linked its carbon market to the EU's. "Full linkage will take several years given the complexity of the process, purely from a technical perspective," ClearBlue carbon market analyst Yan Qin said, adding that an "optimistic" scenario could see the link forged in 2027. A spokesperson for the British government said it will seek to agree a carbon market link as soon as is feasible. "We will not provide a running commentary on the progress of negotiations," they said. A Commission spokesperson said the EU executive would "follow up swiftly" on the agreement, and propose a negotiating mandate to EU countries, to launch talks with Britain on the carbon market link. TECHNICAL HURDLES To make a link happen, the UK needs to adjust its national rules for issuing carbon trading permits, bring its emissions permit auctions in line with EU rules, and change its national cap on how much companies covered by the carbon market can emit. That's not all. The EU and UK schemes are also not yet aligned on how many free CO2 permits they give industries. And the EU carbon market has a special "reserve" which adds or removes permits from the market to help stabilise prices. Britain's scheme currently lacks a "reserve", though it has a cost containment mechanism that can act as a ceiling on prices, something the EU scheme does not have. "Resolving the question of a supply adjustment mechanism will likely be one of the technical calibrations that will need to be in place before the two systems can link," said Veyt senior analyst Ingvild Sorhus. Some businesses argue these issues are technically straightforward to resolve. "With the right political will, an ETS linking agreement between the EU and UK could be signed within 6 months, and operational by 2028," said Alistair McGirr, Head of Policy and Advocacy at British energy firm SSE. Industry group Energy UK said linkage negotiations could conclude within a year - but that Britain should seek an exemption from the EU carbon border levy until the link is sealed, in case talks drag into 2026. "It is a question not of major political roadblocks, but primarily of technical processes ... I'm not saying these are small problems, but they are simply not intractable problems," Energy UK Policy Director Adam Berman said, of the changes needed to allow the link. The UK plans to launch its own carbon border tariff a year later, in 2027. Brussels may be in less of a hurry. Britain's carbon market is less than a tenth of the size of the EU's, so a link would see British businesses gain access to a much more liquid market. The upside for the EU is less clear - although EU officials cite the bloc's aim to expand carbon pricing internationally, to ensure as many countries as possible put a price on greenhouse gas emissions. Companies also say the move would avoiding competitive distortions and reduce costs for both EU and UK consumers. Pascal Canfin, a French lawmaker in the European Parliament, said the upsides for Britain were more obvious than for the EU. "It's a political move," said Canfin, of the EU's motivation. "The UK was within [the EU] ETS before. I mean, it's not such a big deal to have it again." ($1 = 0.7387 pounds) https://www.reuters.com/sustainability/climate-energy/britain-facing-race-avoid-1-billion-eu-carbon-tax-costs-2025-06-02/
2025-06-03 06:50
Queues form at retailers for limited bags of cheap rice Private rice imports skyrocket despite tariffs Farm minister worried about surging rice imports Government may buy back previously released stockpiled rice TOKYO, June 3 (Reuters) - Japan's farm minister said on Tuesday the government stood ready to offer more stockpiled rice as consumers formed long queues to snatch up cheap, emergency-use grain made available through some retailers since the weekend. In an abrupt change of policy, the government last week began selling stockpiled rice directly to retailers, aiming to get a 5 kg bag to consumers for around 2,000 yen ($14) - less than half of average prices. Sign up here. Those products started hitting some store shelves at the weekend, when hundreds of people waited in line for hours at retailers such as Ito-Yokado and Aeon (8267.T) , opens new tab despite being allowed just one bag per household. The doubling in rice prices since last year, partly due to extreme heat impacting production, has become a major concern for voters and policymakers ahead of two key elections - for the Tokyo metropolitan assembly on June 22 and parliament's upper house in July. "I never thought the price of stockpiled rice would fall this low," said 75-year-old Kazumi Uchida as she waited in line at an Ito-Yokado store in Tokyo on a rainy Saturday. "I'm almost out of rice and was shifting to eat more bread and noodles." Average supermarket prices fell for the first time in three weeks in the seven days to May 25, but only by 25 yen to average 4,260 yen/5 kg, showing limited impact from the release of stockpiled rice under the previous auction system involving several layers of wholesalers. Farm Minister Shinjiro Koizumi, who scrapped that system upon taking his post on May 21, said the government could also consider buying back rice from wholesalers that had participated in those auctions since March, potentially bringing more of the staple grain to market at lower prices. He repeated that the government stood ready to release all of its stockpile if necessary. "If we let rice prices remain high, (store) shelves will be filled with imported rice," he said. It remains to be seen how the artificially cheap stockpiled rice would affect the price of single-origin "brand" rice and other products. Rice production is expected to rise for the 2025 harvest year. As homegrown rice prices soared, demand for cheaper, foreign-made rice has also surged, even after the hefty levy Japan imposes to protect producers of its staple rice, beyond the tariff-free "minimum access" quota. Private rice imports, while still tiny, quadrupled in the first 11 months of fiscal 2024 to just under 1,500 metric tons. Japan's fiscal year runs from April to March. Official data for the past few months is not yet available, but the Japan Agricultural News reported that private imports surged to more than 6,800 tons in April alone. ($1 = 143.2100 yen) https://www.reuters.com/markets/commodities/japanese-consumers-scramble-grab-cheap-rice-government-ready-release-more-2025-06-03/
2025-06-03 06:36
June 3 (Reuters) - Deutsche Bank has raised its year-end target for the S&P 500 (.SPX) , opens new tab to 6,550 from 6,150, citing lower tariff-related earnings drag and a resilient economy, in a move that comes amid a broader wave of target upgrades by major Wall Street brokerages. This follows similar moves by Goldman Sachs and UBS Global Wealth Management, which raised their forecasts in May, with RBC Capital Markets joining the trend on Monday. Sign up here. "We now see the tariff drag at only about one-third of what we previously penciled in," Deutsche Bank strategists led by Binky Chadha wrote in a note on Monday. The new target is 10.35% above the S&P 500 index's last close of 5,935.94. The S&P 500 posted its strongest monthly gain since November 2023 in May, boosted by U.S. President Donald Trump's softer stance on tariffs, strong corporate earnings, and tame inflation data that helped markets recover from April's decline. Still, the European brokerage warned that the rally could be volatile, with potential pullbacks driven by renewed trade tensions. "We expect the rally to be punctuated by sharp pullbacks on repeated cycles of escalation and de-escalation on trade policy", the brokerage said. Deutsche also increased the estimate for the index's earnings per share to $267 from $240. https://www.reuters.com/business/finance/deutsche-bank-lifts-sp-500-year-end-target-amid-wall-street-upgrade-wave-2025-06-03/
2025-06-03 06:36
HANOI, June 3 (Reuters) - Vietnamese firms will sign memorandums of understanding with U.S. partners to buy $2 billion worth of American farm produce, the agriculture ministry said on Tuesday, part of efforts to seal a new trade deal between the two countries. Vietnam has been slapped with 46% "reciprocal" tariffs by the Trump administration. Though they have been paused until July, if they come into effect they could seriously undermine a growth model that relies on exports to the United States, its top market. Sign up here. The new deals, signed during a visit to the United States by a delegation of 50 Vietnamese companies led by agriculture minister Do Duc Duy, include 5 MoUs to buy $800 million of products from Iowa over three years, the agriculture ministry said. The Iowa MoUs involve purchases of corn, wheat, dried distillers grains and soybean meal, it added. Vietnam and the Trump administration have been holding negotiations on a trade agreement, with Vietnam pledging to allow more U.S. imports to narrow the trade gap between the two countries. The United States registered a trade deficit of $123 billion with Vietnam last year. Vietnam last year bought $3.4 billion worth of U.S. farm produce, and exported $13.68 billion of its own agricultural products to the United States, Vietnam News Agency reported. Vietnam has also pledged to buy other American products, including Boeing planes and liquefied natural gas. It has also promised to crack down on counterfeits and digital piracy after the U.S. accused the country of being a major hub for these illegal activities. https://www.reuters.com/world/asia-pacific/vietnam-firms-sign-mous-buy-2-bln-us-farm-produce-2025-06-03/
2025-06-03 06:32
June 3 (Reuters) - Japanese equity funds logged their largest weekly outflows in nearly 18 years in the week to May 28, as investors either booked profits following a rally fueled by the then-easing U.S.-China trade tensions or turned cautious on earnings potential. According to LSEG Lipper data, Japanese equity funds recorded net outflows of $7.49 billion, marking the largest weekly withdrawal since July 4, 2007. Sign up here. Daisuke Motori, director of manager research at Morningstar Japan, said the outflows from Japanese equity funds in May reflected a familiar pattern, with investors buying during April's dip and selling into the May rebound. Some of the flows could also be due to rebalancing by Japan's massive life insurance and pension firms as they sell rising stocks and buy bonds to maintain asset ratios, analysts said. Another headwind has been the yen, which has appreciated 10% against the U.S. dollar so far this year, potentially eroding export profitability. LSEG data shows analysts have downgraded forward 12-month earnings estimates for Japanese firms by 1.8% over the past 30 days. "Corporate governance is improving, but we think this is unlikely to be a near-term catalyst," said Herald van der Linde, head of equity strategy at Asia Pacific. He noted that while reforms were underway, their impact on profits would take time - return on equity (ROE) in Japan still lagged other major markets. Domestic investors drove almost the entirety of outflows, Lipper data showed, with $7.55 billion pulled from local funds. In contrast, foreign funds recorded $59 million in net inflows. The Daiwa iFreeETF TOPIX (1305.T) , opens new tab, Nikko Listed Index Fund TOPIX (1308.T) , opens new tab, and Nomura NF TOPIX ETF (1306.T) , opens new tab recorded the largest outflows during the week, with redemptions of $2 billion, $1.92 billion, and $1.61 billion, respectively. https://www.reuters.com/business/japanese-equity-funds-log-sharpest-weekly-outflows-since-2007-2025-06-03/
2025-06-03 06:19
US pushes countries for best trade offers by Wednesday Trump and Xi will likely speak this week, White House says OECD trims global outlook as Trump trade war hits US growth June 3 (Reuters) - Gold pulled back on Tuesday after nearing a four-week high earlier in the session, as a rebound in the dollar and profit-taking added pressure, while investors remained cautious amid ever-changing U.S. trade policies. Spot gold fell 0.7% to $3,356.75 an ounce as of 1125 GMT, after hitting its highest since May 8 earlier in the session. U.S. gold futures eased 0.5% to $3,381.30. Sign up here. The dollar (.DXY) , opens new tab rose from an over-a-month low hit earlier in the session, making gold costlier for foreign buyers. "Today, the dollar trades a tad stronger ahead of key US economic data and these developments are the main reason why we are seeing some light profit following yesterday’s strong gain," said Ole Hansen, head of commodity strategy at Saxo Bank. Investors will be closely watching a likely call this week between U.S. President Donald Trump and Chinese leader Xi Jinping, just days after Trump accused China of breaching an agreement to reduce tariffs and trade restrictions. The European Commission said on Monday it would push the U.S. to reduce or eliminate tariffs, despite Trump's plan to double steel and aluminium duties to 50%. Meanwhile, the Trump administration is urging countries to submit their best trade offers by Wednesday, aiming to accelerate talks ahead of a five-week deadline, according to a draft letter seen by Reuters. The OECD said on Tuesday the global economy was on course to slow from 3.3% last year to 2.9% in 2025 and 2026, trimming March estimates for growth of 3.1% this year and 3.0% next year. Investors' focus this week will also be on U.S. non-farm payrolls due on Friday and speeches from a slew of Federal Reserve policymakers for clues on the interest rate trajectory. Zero-yielding bullion tends to do well in a low-interest rate environment. Spot silver fell 1.5% to $34.26 an ounce, platinum lost 0.6% to $1,056.70, while palladium was up 0.5% at $993.63. https://www.reuters.com/world/india/gold-retreats-near-four-week-peak-dollar-ticks-up-2025-06-03/
