2025-02-19 11:18
FRANKFURT, Feb 19 (Reuters) - Germany's Trading Hub Europe will be charged with enacting in its home market any changes to gas storage filling rules that national and European policymakers decide in response to claims rigid targets are inflating prices. According to a draft EU document due to be published next week, the European Commission plans to work on more flexible targets for EU countries to refill their gas storage ahead of winter. The state-mandated gas market manager - whose unwieldy acronym spells THE in English - has said there is no set decision yet on the timing or shape of changes to the system at home, although the leaked EU documents showed some bloc-wide action is afoot. THE had already started discussions on new filling procedures in January at a national level. Following are explanations of what THE is and does. CONTEXT European Union gas stocks are less than half full as a cold winter has resulted in a quick drawdown and Russian supplies have stopped, raising concern over security of supply. Germany's inventories are 41% full, down from 71% a year ago. TARGETS THE in Germany, as the biggest storage provider, should under current obligations refill caverns by 90% by November 1. Some EU members including Germany are uneasy as the targets have driven up prices by promising traders easy profits should accompanying subsidies flow. WHO IS THE GAS MARKET MANAGER TALKING TO, AND ABOUT WHAT? THE, as auctioneer and administrator of a quarter of German storage space, must cooperate with regulator the Bundesnetzagentur, which wants consumer prices reined in, and with the Berlin Economy Ministry, about product designs. In THE's technical jargon, it will devise new products for auction called SBI, or strategic filling instruments, to replace SSBOs - Strategic Storage-Based Options - which according to traders would reduce commercial risks for suppliers. The regulator has confirmed it is "evaluating options and necessities" around SBIs with THE and the ministry, but said the outcome is open. GERMAN INDUSTRY CONCERNS The country faces a legal limbo as new elections on February 23 are not likely to quickly produce a functioning government or give an effective steer to central ministries overseeing THE. A German gas tariff to offset THE's costs was removed after neighbours protested. This has increased internal ex-storage gas prices. Sign up here. https://www.reuters.com/business/energy/german-gas-hubs-role-implementing-european-storage-policy-2025-02-19/
2025-02-19 11:09
A look at the day ahead in U.S. and global markets from Mike Dolan Even though Wall Street stocks lag world markets this year, the S&P500 (.SPX) , opens new tab still managed to wring out another record high on Tuesday - with a mix of new tariff threats, housing updates and Federal Reserve minutes to digest later today. A confusing and turbulent start to the year has seen global investors' attention switch away from pricey U.S. equity to cheaper European stocks and Chinese tech - with this week's talks on ending the Ukraine war and Germany's weekend election catalyzing interest in the former. The rapid turnaround in portfolio investment allocations and mutual fund flows this year is eye catching, but so too is the shift in economic news relative to some extreme expectations. Economic surprise indexes compiled by Citi show the euro zone gauge at its most positive in eight months while the U.S. equivalent has slipped back into negative territory - with the gap between the two at its most favorable to Europe since July. Still, these are all relative measures and - for now at least - the still upbeat global activity picture is lifting all boats. And that's allowed U.S. indexes to keep nudging higher even as global investment portfolios rebalance. U.S. futures held the latest marginal stock into Wednesday As to the hot button geopolitical issues of the moment, they continue to rankle overnight - as US President Donald Trump re-iterated threats to impose 25% tariffs on autos, drugs and chips while tensions built around the controversial Ukraine talks. Washington's decision to bypass Ukraine and talk directly to Russia about ending the war has raised major concerns about attempts to unseat Kyiv's government as part of the deal. With barely concealed anger in Europe at the absence of Ukraine President Volodymyr Zelenskiy from the talks in Saudi Arabia, European Union leaders are now bracing for a ratcheting up of future security risks, pushing to up defense spending and ways to fund it. Markets are scrambling to price the shift, with European defense stocks surging this week while talk of higher public spending in Germany after the weekend election has encouraged bets on a wider reboot of the euro bloc. Talk of a rapid defense push has also spurred talk of another round of joint European borrowing, akin to that seen during the post-pandemic rebuild. That's both seen benchmark German bund yields rise further as well as squeezing the risk spread between Germany and other euro sovereigns. Italy's 10-year spread has hit its narrowest in 3-1/2 years while the recently elevated French spread is back at its lowest since July. The euro itself slipped back on Wednesday - in part as the renewed Trump tariff threats nudged the dollar and U.S. Treasury yields back higher. Gold prices jumped to another all-time high on both trade and military tensions as well as incoming inflation news. Spot gold hit an all-time-high of $2,946.75/oz - the ninth record notched so far this year. Benchmark bond yields around the world were also aggravated by the sweep of disappointing inflation reports. Mirroring January's 'hot' U.S. consumer price inflation report last week, both Canada and Britain saw above forecast annual CPI gains last month too - with the latter's inflation rate popping back as high as 3%. Sterling firmed to its best levels since January 2 against the euro and UK gilt yields increased on Wednesday as hopes for a more rapid Bank of England easing trajectory were set back. Regardless, the Reserve Bank of New Zealand felt no such constraint overnight and cut its benchmark rate by 50 basis points to 3.75% - flagging further reductions in borrowing costs amid moderating inflation there. The kiwi dollar held steady after the expected move. Back on Wall Street, housing starts and the Federal Reserve's latest meeting minutes top the diary - with the tail end of the earnings season also still streaming in. Key developments that should provide more direction to U.S. markets later on Wednesday: * US January housing starts/permits, New York Fed's February service sector survey * Federal Open Market Committee publishes minutes from Jan 28/29 meeting; Fed Vice Chair Philip Jefferson speaks * US corporate earnings: Analog Devices, ANSYS, American Water Works, Garmin, Progressive, Cadence Design Systems, Texas Pacific, CF Industries, Nordson, Charles River, Host Hotels & Resorts, Trimble etc * U.S. Treasury sells $16 billion of 20-year bonds Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2025-02-19/
2025-02-19 11:06
GDANSK, Feb 19 (Reuters) - Polish utility Energa (ENGP.WA) , opens new tab said on Wednesday it has signed a loan deal for up to 7.66 billion zlotys ($1.92 billion) with Poland's development bank BGK to invest in the company's power distribution network. Polish oil refiner Orlen (PKN.WA) , opens new tab, which owns Energa, plans to add 4.3 gigawatts (GW) of gas-fired power generation capacity and develop four offshore wind farms under its strategy to invest up to 380 billion zlotys by 2035. The 25-year loan has a fixed interest rate of 0.5% per year as funds are disbursed under the European Union's recovery facility, which provides Poland with nearly 60 billion euros in grants and cheap loans. By 2035, Orlen plans to invest 40 billion zlotys in its power distribution network. The investment plans assume building 11,000 kilometres of new transmission lines and upgrades of 10,000 kilometres of existing ones, Energa said in a statement. Major grid upgrades are necessary as new power sources, including doubling of the utility's renewable capacity to nearly 19 gigawatts, will be located in northern Poland, where Energa operates. ($1 = 3.9924 zlotys) Sign up here. https://www.reuters.com/business/energy/energa-gets-up-192-bln-loan-power-grid-investments-2025-02-19/
2025-02-19 11:03
FTSE 100 down 0.3%, FTSE 250 down 0.4% Glencore drops on lower 2024 earnings Trainline slides after JP Morgan downgrades Feb 19 (Reuters) - Britain's benchmark index fell on Wednesday after inflation rose more than expected in the country, while Glencore's (GLEN.L) , opens new tab shares slid after the company posted lower 2024 earnings. The blue-chip FTSE 100 (.FTSE) , opens new tab was down 0.3% at 1034 GMT, while the midcap FTSE 250 (.FTMC) , opens new tab fell 0.4% to a nearly two-week low. Britain's inflation accelerated to a 10-month high of 3.0% in January, surpassing expectations and testing the Bank of England's confidence that price pressures will ease over the longer term. The BoE earlier this month cut its benchmark interest rate to 4.5% from 4.75% and said inflation was likely to hit 3.7% later this year, almost double its 2% target. The UK house builders' index (.FTNMX402020) , opens new tab dropped 1.6%, with homebuilders such as Persimmon (PSN.L) , opens new tab, Taylor Wimpey (TW.L) , opens new tab and Barratt Redrow (BTRW.L) , opens new tab falling between 1.6% and 2.4%. Elevated interest rates lead to higher mortgage payments, resulting in lower demand for new homes. "It feels like we're balancing on an knife edge and it's just going to take a few poor sets of data to turn any optimism into pessimism for the markets," said Nick Saunders, chief executive officer at Webull UK. Glencore's shares declined 6.9% after the miner and commodity trader reported that lower commodity prices impacted its earnings last year, despite returning $2.2 billion to shareholders through a share buyback. This dragged the industrial metal mining index (.FTNMX551020) , opens new tab down 2.6%, making it the day's biggest sectoral loser. Trainline (TRNT.L) , opens new tab slid 9% to a near five-month low after J.P. Morgan downgraded the stock to "neutral" from "overweight". Jet2 (JET2.L) , opens new tab tumbled 10.6% after the travel company warned of profit margin pressure due to high inflation increasing costs and reducing consumer holiday spending. Peers Easyjet and Wizz Air (WIZZ.L) , opens new tab were down over 4% each. The UK's travel-linked index (.FTNMX405010) , opens new tab fell 1.9%. Britain's 10-year bond yield rose to a three-week high at 4.6%, adding pressures on equities. Utilities (.FTUB6510) , opens new tab, often traded as bond proxy, added 0.8%. Meanwhile, the energy index (.FTNMX601010) , opens new tab advanced 0.7% as it tracked gains in crude prices. Sign up here. https://www.reuters.com/world/uk/british-stocks-fall-inflation-rises-glencores-earnings-hit-2025-02-19/
2025-02-19 10:59
LONDON, Feb 19 (Reuters) - London-listed global commodity trader and miner Glencore (GLEN.L) , opens new tab traded more oil in 2024 than in the previous year, preliminary results showed on Wednesday, but its earnings from trading energy products fell. Glencore traded 3.7 million barrels per day (bpd) of crude oil, oil products and gas products last year, compared with 3.3 million bpd in 2023. Despite an increase for two consecutive years, Glencore's traded volumes are below the 4.8 million bpd it marketed in 2019, and fell every year between 2020-2022, reaching a low of 3 million bpd. The drop coincided with the COVID-19 pandemic, the disruption caused by Russia's invasion of Ukraine, and increased scrutiny into Glencore's oil trading activities from authorities. Current head of oil Alex Sanna took over in mid-2019, after the retirement of Alex Beard, who stands trial on bribery charges in London in 2027. As Glencore's overall earnings fell, its adjusted earnings before interest and taxes (EBIT) for energy products and steelmaking coal were $908 million in 2024, a 47% decrease on the year. Glencore said the lower earnings were a return to more normal levels after extreme prices and volatility. The 2023 EBIT for energy trade of $1.7 billion “was at some sort of unsustainable level, frankly, where normal cruising speed is," CFO Steve Kalmin said on an investor call. Glencore expanded its oil portfolio in the last year with a joint takeover of Shell's 237,000 bpd capacity Singapore oil refinery with Chandra Asri, a crude supply agreement for the UK's 113,000 bpd Lindsey refinery, owned by Prax, and a $400 million debt deal with Tullow Oil signed in November 2023 to market Ghanaian and Gabonese crudes. Rival trading house Trafigura's traded oil and fuel volumes hit 6.8 million bpd for its 2024 financial year, which runs from October to September, up from 6.3 million bpd in 2023. Vitol has yet to publish its results. Sign up here. https://www.reuters.com/markets/commodities/glencore-oil-trading-volumes-rose-2024-results-show-2025-02-19/
2025-02-19 10:10
Trump's tariff plans, geopolitical worries sap sentiment Chinese tech stocks drop after a blistering rally Safe-haven yen hits over two-month high Gold hits all-time high SINGAPORE, Feb 20 (Reuters) - Global stocks treaded with caution on Thursday, with Asian shares feeling the heat as U.S. President Donald Trump's tariff plans, geopolitical worries and a cautious stance from Federal Reserve policymakers hurt risk sentiment. The risk-off mood lifted gold prices to a record high, while the safe-haven Japanese yen firmed to its highest level since early December against the dollar. European futures pointed to a muted open on Thursday, a day after the pan-European STOXX 600 index (.STOXX) , opens new tab dropped nearly 1%, its biggest daily drop in two months. Futures for S&P 500 and Nasdaq eased 0.3%. Trump through the week has vowed tariffs on wide-ranging imports including pharmaceuticals products, semiconductor chips and lumber. He intends to impose tariffs on autos as soon as April 2. That along with other threats has exacerbated fears of a broad trade war, leaving investors nervous, although some analysts see the moves by Trump as negotiating tactics. Market jitters escalated on geopolitical worries after Trump alarmed European officials by denouncing Ukrainian President Volodymyr Zelenskiy as a "dictator", amid U.S. talks with Russia to end the Ukraine war. The yen hit an over two-month high against the dollar and was last up 0.9% at 150.065 per dollar. The yen has risen more than 4% against the dollar this year boosted by rising odds of the Bank of Japan hiking rates again in 2025. "Uncertainty about the Fed's policy and Trump’s tariffs will continue to rattle markets and keep investors on edge, with no end in sight in the short term," said Vasu Menon, managing director of investment strategy at OCBC Bank in Singapore. "Investors must come to terms with the fact that volatility will be more elevated this year ... There are valid reasons to remain sanguine about the investment outlook especially for those with the risk appetite and patience." In Asia, Japan's Nikkei (.N225) , opens new tab slid 1.5% on the strong yen, while a blistering rally in Chinese technology shares (.HSTECH) , opens new tab took a breather. Hong Kong's Hang Seng Index (.HSI) , opens new tab slipped 1.3%, having touched a four-month high earlier this week boosted by tech stocks in the wake of Chinese startup DeepSeek's breakthrough. Trump's initial policy proposals raised concern at the Fed about higher inflation, with firms telling the U.S. central bank they generally expected to raise prices to pass along the cost of import tariffs, according to the Fed's January meeting minutes released on Wednesday. "Trump's policies ... no doubt added complexity to the Fed's balancing act between inflation and employment, forcing policymakers to lean into a wait-and-see approach," said Yeap Jun Rong, market strategist at IG. "That said, with market expectations already well aligned for a rate hold over the next two FOMC meetings, the minutes served more as confirmation of existing sentiment." Traders are pricing in 39 basis points of cuts this year from the Fed with the next move fully priced in for September, LSEG data showed. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, eased 0.16% to 107.06. The euro was steady at $1.0428. Gold prices rose to a fresh record high of $2,947.11 an ounce, reaching a new peak for the tenth time this year. The yellow metal is up 12% so far in 2025 after rising 27% last year, its strongest annual performance in over a decade. Oil prices eased away from a one-week high while wheat extended gains to a fifth session to trade near its highest close since October, underpinned by worries that cold weather in Russia and the U.S. could damage the crop. Sign up here. https://www.reuters.com/markets/asia/global-markets-wrapup-1-2025-02-19/
