2025-05-05 05:03
EU has goal to end Russian fossil fuel imports by 2027 Roadmap to phase out gas ties to be announced on Tuesday Analysts doubt that force majeure option would work BRUSSELS/LONDON, May 5 (Reuters) - The European Union will on Tuesday announce a roadmap to phase out the bloc's remaining gas ties with Moscow, but in the absence of sanctions it will be difficult for buyers to exit gas contracts using legal options such as force majeure. The roadmap comes as the U.S. is pushing Russia for a peace deal with Ukraine. If reached, the deal may reopen the door for Russian energy and ease sanctions. Sign up here. Around 19% of Europe's gas still comes from Russia, via the TurkStream pipeline and liquefied natural gas (LNG) shipments, and the European Union has a non-binding goal to end Russian fossil fuel imports by 2027. The Commission is exploring legal options to allow European companies to invoke force majeure and break their Russian gas contracts without facing penalties, as well as measures to forbid companies from entering into new contracts for Russian gas, a senior EU official said last month. Lawyers and analysts said it was doubtful that force majeure would work, given the years that have passed since the EU vowed to end Russian gas imports in 2022, after Russia's invasion of Ukraine. Agnieszka Ason, an independent energy lawyer specialising in LNG contracts, said that for force majeure to be declared, a supplier has to breach the contract, for example, through non-delivery. But remaining Russian supplies have been proved to be working well over three years of war. "Any deliberate action that the EU would undertake already weakens the force majeure case. It's the opposite of what force majeure as a concept is about," said Ason, who is also a senior research fellow at the Oxford Institute for Energy Studies. Legal experts said that sanctioning Russian gas imports is the most effective measure to phase out Russian gas. That would require unanimous approval from all 27 EU countries, but Slovakia and Hungary have sought to maintain close political and business ties with Russia, and the latter has vowed to block energy sanctions. Since the onset of the war in Ukraine, Gazprom and European companies have launched legal cases and counterclaims over breached gas contracts and missed payments. Based on court documents, Reuters calculations estimate these disputes to be worth around 18.5 billion euros ($21 billion). Contracts with Russian gas firm Gazprom include "take-or-pay" terms that require buyers that refuse gas deliveries to still pay for up to 95% of the contracted volumes. David Haverbeke, partner at law firm Fieldfisher, said the EU should focus on helping companies argue that a change in circumstances since 2022, such as the risks of purchasing Russian gas versus other supplies, should give them grounds to renegotiate, and potentially quit, their Russian contracts. "I would try to rely on EU regulation passed since 2023 and invoke hardship based on the changes in the regulatory framework," he said. Another option could be forcing companies to make future Russian LNG purchases via an EU joint buying scheme - and setting a maximum quota on the volumes that could be bought, Haverbeke added. https://www.reuters.com/world/europe/eu-seeks-cut-remaining-russian-gas-ties-legal-options-limited-2025-05-05/
2025-05-05 04:49
May 5 (Reuters) - Shares of Australia's Qantas Airways (QAN.AX) , opens new tab rose over 5% on Monday to a one-month high, tracking a drop in oil prices after OPEC+ signaled faster output hikes. Oil prices fell over $2 a barrel after OPEC+ agreed to boost output for a second straight month, despite sliding prices and weakening demand expectations. Sign up here. Jet fuel is a key cost for airlines, and falling prices raise hopes for improved profitability. Qantas spent A$5.32 billion ($3.44 billion) on fuel in fiscal 2024, up nearly 17% from the previous year. "Investors (are) anticipating that weaker energy prices will spell good news for the airline's profits," said Tim Waterer, chief market analyst at brokerage KCM Trade. The drop in fuel costs offers relief as Qantas faces intense competition from Virgin Australia (IPO-VIR.AX) , opens new tab, which is gearing up for an initial public offering later this year. Qantas and its budget arm Jetstar held about 65% of Australia's domestic market as at December-end, while Virgin had a 35% share, data from Australia's competition regulator showed , opens new tab. Qantas' stock had last risen to A$9.27, marking their biggest single-day gain since April 23. ($1 = 1.5470 Australian dollars) https://www.reuters.com/world/asia-pacific/qantas-soars-drop-oil-prices-signals-lower-jet-fuel-costs-2025-05-05/
2025-05-05 04:46
A look at the day ahead in European and global markets from Tom Westbrook The surging Taiwan dollar was the big mover in a holiday-thinned Asia session, kicking off a busy week of central bank decisions, key economic data and investors coming to grips with Warren Buffett's departure from the top of Berkshire Hathaway (BRKa.N) , opens new tab. Sign up here. U.S. President Donald Trump announced a 100% tariff on movies produced outside the U.S., ordered the reopening of the infamous Alcatraz prison in San Francisco Bay and reiterated his belief that China is open to cutting a trade deal. The Taiwan dollar leapt to an almost three-year high in its second consecutive session of outsized gains, fuelling speculation that some Asian countries were prepared to engineer foreign exchange revaluations to win U.S. trade concessions. The Taiwan dollar does not have an official peg but the central bank does intervene as and when needed to ensure the currency's "dynamic stability". Its two-day rise of more than 6% is the largest on record, according to LSEG data. Holidays in Britain, Hong Kong, China, Japan and South Korea otherwise put a damper on Monday trade, the barrage of Trump headlines notwithstanding. In a TV interview aired on Sunday, Trump said he would not attempt to remove Federal Reserve Chair Jerome Powell but repeated calls for lower interest rates and called the Chair a "stiff". The Fed meets on Wednesday and is widely expected to leave rates steady following a solid March payrolls report. The Bank of England meets on Thursday and is a heavy favourite to cut interest rates, while central banks in Norway and Sweden are expected to keep rates steady. At elections over the weekend, incumbents in Australia and Singapore were returned to power, echoing the result in Canada with ruling parties' fortunes bolstered by the global economic uncertainty that Trump has unleashed. At the same time, hard-right eurosceptic George Simion won the first round of Romania's presidential election re-run on Sunday, near-final results showed, riding a wave of Trump-style nationalism in the European Union. Key developments that could influence markets on Monday: Economics: U.S. Services ISM Earnings: Ford, Palantir Trying to keep up with the latest tariff news? Our new daily news digest offers a rundown of the top market-moving headlines impacting global trade. Sign up for Tariff Watch here. https://www.reuters.com/markets/europe/global-markets-view-europe-2025-05-05/
2025-05-05 04:24
May 5 (Reuters) - Saudi Arabia's non-oil private sector activity expansion slowed in April as growth in new orders decelerated sharply, even as hiring rates reached their joint-fastest pace in more than a decade, a survey showed on Monday. The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI) slid to 55.6 in April, the lowest reading since last August, from 58.1 in March, while remaining firmly in growth territory. Sign up here. The slowdown in new order growth reflected global economic uncertainties and competitive pressures, with the new order subindex slipping for the third consecutive month to 58.6 in April from 63.2 in March. "While output growth remains robust, it is somewhat tempered by global economic uncertainties and competitive pressures affecting client spending," Naif Al-Ghaith, Riyad Bank's chief economist said. "Nonetheless, employment figures continue to climb, indicating a sustained growth trend since last May." The increase in employment was driven by rising sales and business activity, with firms expanding staffing capacity to meet demand. But the degree of business optimism remained weaker than the long-run survey average, the survey showed. Saudi Arabia's economy grew 2.7% in the first quarter, supported by activity in the non-oil sector as the kingdom pushes ahead with diversifying away from hydrocarbons. The state's statistics authority has updated and expanded its data collection to increase the non-oil sector weighting to better align with international standards and data quality. https://www.reuters.com/world/middle-east/saudi-arabias-non-oil-business-sector-growth-eases-april-pmi-shows-2025-05-05/
2025-05-05 03:14
MUMBAI, May 5 (Reuters) - The Indian rupee is expected to resume its uptrend on Monday, supported by a rally in the Chinese yuan and other Asian currencies on optimism around U.S.-China trade talks. Market attention will remain on the Reserve Bank of India (RBI) after signs of intervention on Friday. Sign up here. The 1-month non-deliverable forward indicated that the rupee will open at 84.30-84.35 to the U.S. dollar compared to 84.58 in the previous session. The rupee had a volatile session on Friday, initially rallying past the 84 mark to touch 83.77, before retreating in the afternoon, likely due to RBI intervention. The central bank is believed to have bought dollars through state-run banks, triggering a reversal in the currency. Despite the late reversal on Friday, the rupee was still up 1.02% last week. The currency is likely to see two-way price action on Monday, a trader at a Mumbai-based bank said, adding that the RBI's intervention on Friday could slightly dampen appetite for short dollar positions. "A further push lower (on dollar/rupee pair) following the opening drop will require actual flows," the trader said. ASIA FX RALLIES On Monday, the offshore yuan (CNH) climbed past 7.20 level against the dollar, marking its highest level since November. The yuan had rallied by 1% last week. The Chinese Commerce Ministry said on Friday that Beijing is considering a U.S. offer to hold discussions on tariffs, suggesting a possible de-escalation in the trade dispute and boosting demand for the yuan. Riding on the yuan’s rally, other Asian currencies rose to kick off the week on a positive note. Meanwhile, data released on Friday showed that the U.S. jobs market remains resilient, with the economy adding 177,000 jobs in April, surpassing expectations. KEY INDICATORS: ** One-month non-deliverable rupee forward at 84.53; onshore one-month forward premium at 18.5 paise ** Dollar index down at 99.64 ** Brent crude futures down 3.5% at $59.2 per barrel ** Ten-year U.S. note yield at 4.31% ** As per NSDL data, foreign investors bought a net $20.4 million worth of Indian shares on April 30 ** NSDL data shows foreign investors sold a net $125.2 million worth of Indian bonds on April 30 https://www.reuters.com/world/india/trade-talk-hopes-stoke-yuan-rally-boost-rupee-rbi-actions-eyed-2025-05-05/
2025-05-05 02:03
Australia markets take ruling Labor Party election win in stride Labor's win boosts fiscal policy flexibility amid global trade tensions Aussie dollar hits five-month peak on broadly weaker USD Share market falls on Westpac earnings miss SYDNEY, May 5 (Reuters) - Australian financial markets on Monday largely welcomed a historic win by the centre-left Labor Party as it strengthens the government's hand in dealing with any serious threat to the economy from Donald Trump's global trade war. Prime Minister Anthony Albanese secured a resounding victory in the nation's general election on Saturday, riding a voter backlash against the policies of Trump that consigned the conservative Liberal-National coalition to a heavy defeat. Sign up here. The result expands the incumbent Labor Party's majority in the lower house and boosts its ranks in the senate, providing more leeway for the government to deal with what Treasurer Jim Chalmers described as a global economy "going crazy." Shane Oliver, chief economist at AMP, said Labor's victory was flagged by most recent opinion polls and wouldn't come as a big surprise for investors. "I think it's probably going to be more steady as she goes (on fiscal policy), rather than the aggressive change one way or the other," said Oliver. "Now of course if the economic outlook changes dramatically, then they may have to rethink." "The trade situation is still a threat, even though in the last few weeks that seems to have receded a little bit." Goldman Sachs left its forecasts for fiscal spending, GDP growth and RBA policy rates unchanged as the recent policy announcement from Labor is unlikely to have a material economic impact in the near-term. On Monday, the resources-heavy share market (.AXJO) , opens new tab slipped 0.4% but that was mostly due to an earnings miss from Westpac bank. It has largely been driven by the volatility in U.S. stocks over the last few months. The Australian dollar hit a new five-month peak of $0.6481 on the back of a soft dollar as Trump's chaotic trade policies dented investor confidence in U.S. assets. Ten-year government bond futures fell 5 ticks, although that mirrored a fall in Treasuries on Friday after solid U.S. jobs data added to market bets of more cautious policy easing from the Federal Reserve. For the Reserve Bank of Australia, swaps continue to fully price in another quarter-point rate cut to 3.85% this month, with a total of about four rate cuts expected by the year end. Analysts say the election win strengthens Albanese's hand with the United States in its trade negotiations and gives the government more scope to ramp up fiscal spending to counter the economic risks from a global tariff war. Australia's economy is expected to pick up this year on the back of a recovery in consumer spending, having expanded at a sub-par 1.3% last quarter. The worry for Canberra is that an escalation in tensions between the United States, Australia's main security ally, and China, its largest trading partner, risks seriously hurting the domestic economy. Fiscal spending has been a key driver of growth over recent years, without which the economy would have stagnated. TD Securities expects Australian yields to rise across the curve particularly at the long end, adding that Labor's resounding victory reinforces the view that larger fiscal deficits are here to stay. "Sure, budget deficits are not moving in the right direction, but the election outcome is not enough to threaten Australia's AAA credit rating," said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities. https://www.reuters.com/world/asia-pacific/australia-markets-welcome-political-stability-under-labor-trump-20-risks-mount-2025-05-05/
