2025-02-12 06:18

Consumer prices rise more than economists expected Fed seen cutting rates only one time this year US President Trump vows to impose tariffs NEW YORK, Feb 12 (Reuters) - The U.S. dollar jumped to a one-week high against the Japanese yen on Wednesday after data showed that consumer prices rose more than economists expected in January, raising the likelihood that the Federal Reserve will hold interest rates higher for longer as it battles to bring down price pressures. U.S. consumer prices increased by the most in nearly 1-1/2 years, with Americans facing higher costs for a range of goods and services. The headline consumer price index rose by 0.5% in January, while the core index rose by 0.4%. Both were expected to rise by 0.3%. That puts headline consumer price gains at 3.0% for the year, above expectations for a 2.9% increase, while core prices rose at an annual pace of 3.3%, above expectations for a 3.1% rise. "The takeaway is no matter what the reason was for the upside surprise, the Fed has been very clear that it won't cut rates until inflation is close to 2%," said Adam Button, chief currency analyst at ForexLive in Toronto. "Whether it's one-offs due to eggs or the fire in California, the prospect of hitting 2% inflation this year when we start the year with 0.5% is greatly diminished,” Button said. Interest rate futures traders are now pricing in 27 basis points of cuts by December, down from around 37 basis points before the data, implying a larger chance of only one 25-basis-point cut for the year. The dollar jumped 1.29% to 154.44 Japanese yen . The Japanese currency is highly sensitive to the interest rate gap between the United States and Japan. The dollar index was last up 0.02% on the day at 107.95, after earlier reaching a one-week high of 108.52. The greenback pared gains as traders took profits and evaluated whether January's inflation report was an anomaly and unlikely to signal a larger trend towards higher prices. "January is a tricky month because a lot of annual price increases are announced for all sorts of things, and sometimes they are chunky," Thomas Simons, chief U.S. economist at Jefferies, said in a note. "We are not inclined to expect a repeat next month." Fed Chair Jerome Powell on Wednesday repeated that the central bank is in no rush to cut interest rates during a second congressional hearing this week, but said that there has been "great progress" on inflation. The euro was also boosted after Bundesbank President Joachim Nagel said the European Central Bank should ease policy only gradually and not target a difficult-to-define "neutral" level for interest rates. The single currency was last was last up 0.27% at $1.0388. Meanwhile, traders are also focused on tariffs from the Donald Trump administration, which some analysts fear could add to price pressures if implemented. "Potential tariffs add upside risk to inflation in coming quarters," James Knightley, chief international economist at ING, said in a note on Wednesday. "But there are some encouraging signs that housing costs will slow meaningfully later in 2025 and keep the door open to the second half of the year cuts we are forecasting," he added. The Trump administration will announce reciprocal tariffs on every country that charges duties on U.S. imports by Thursday, the White House said. Trump is also planning to raise tariffs on steel and aluminum imports to 25% effective on March 4. In cryptocurrencies, bitcoin gained 0.80% to $97,162.44. Sign up here. https://www.reuters.com/markets/currencies/dollar-takes-breather-ahead-us-cpi-2025-02-12/

2025-02-12 06:06

India's natural gas demand forecast to reach 103 billion cubic meters per year by 2030 Domestic output will rise to 38 bcm/year by end of decade India's LNG import requirements expected to roughly double to 65 bcm/year IEA says India will need more LNG import capacity NEW DELHI, Feb 12 (Reuters) - India's natural gas consumption is set to jump 60% between 2023 and 2030, doubling the country's need for liquefied natural gas imports, as domestic output is expected to grow much more slowly than demand, the International Energy Agency said on Tuesday. Rapid urbanisation and industrialisation is set to transform the energy market in the world's fifth-largest economy and drive gas demand growth through the end of the decade and possibly beyond that, the IEA said in a report. After a decade of slow growth and periodic declines, India's natural gas demand rose more than 10% in the past two years, the Paris-based agency said. By 2030, India's gas demand will rise to 103 billion cubic meters (bcm) per year by 2030 in the IEA's most-likely scenario. If the government provides additional policy support for the sector, annual demand could reach 120 bcm by 2030, the IEA said. Over the same period from 2023 to 2030, India's domestic production is expected to grow by 8% to about 38 bcm per year, the IEA said. That means India, currently the world's fourth-largest buyer of LNG, will have to double annual imports to about 65 bcm by the end of the decade, the report said. That would equate to nearly 48 million metric tons a year of LNG, in line with India's current import terminal capacity. India, which is expected to be the biggest driver of global energy demand growth this year, will have to strategically plan its LNG procurement and expand import infrastructure to avoid exposure to spot-market volatility, the IEA said. "As legacy contracts expire, India faces a widening gap between contracted supply and projected demand after 2028, potentially increasing exposure to spot market volatility unless new long-term contracts are secured in the coming years," the agency said. India has seven LNG import terminals with capacity of around 47.7 million metric tons a year. A rapid rise in LNG requirements will necessitate additional import capacity in the second half of the decade, the IEA said. Major discoveries and new pipeline infrastructure have helped India increase the share of natural gas in its energy mix, Prime Minister Narendra Modi said in a virtual address to the India Energy Week conference in New Delhi on Monday. Modi has set a target to boost the share of gas to 15% of the country's energy mix by 2030, from the current 6.2%. Sign up here. https://www.reuters.com/business/energy/india-gas-demand-surge-by-2030-doubling-lng-imports-says-iea-2025-02-12/

2025-02-12 06:05

Trump advisers finalizing plans for new reciprocal tariffs Industries scramble to offset rising steel, aluminum costs Experts warn of challenges in implementing reciprocal tariffs Ahead of announcement, US CPI jumps by most in 16 months WASHINGTON, Feb 12 (Reuters) - U.S. President Donald Trump said he would impose reciprocal tariffs as soon as Wednesday evening on every country that charges duties on U.S. imports, in a move that ratchets up fears of a widening global trade war and threatens to accelerate U.S. inflation. "I may do it later on or I may do it tomorrow morning, but we'll be signing reciprocal tariffs," Trump told reporters at the White House. Trump's latest round of market-rattling tariffs comes as Indian Prime Minister Narendra Modi is due to visit the White House on Thursday. The Trump administration has complained that India has high tariffs that lock out U.S. imports. Republican U.S. House of Representatives Speaker Mike Johnson said that he believed Trump is considering exemptions that would include the automotive and pharmaceutical industries, among others, but said he was not certain. Economists broadly see tariffs as an inflation risk, and data released on Wednesday showed consumer prices increased in January by the most in nearly 1-1/2 years. The president has already stunned markets by announcing tariffs on all steel and aluminum imports beginning on March 12. That drew condemnation from Mexico, Canada and the European Union, while Japan and Australia said they were seeking exemptions from the duties. The news sent industries reliant on steel and aluminum imports scrambling to offset an expected jump in costs. The EU will prioritize negotiations over retaliatory countermeasures to avoid a damaging trade war, officials signaled earlier on Wednesday. An EU government official said ministers considered reinstating countermeasures imposed in 2018 on products like bourbon and Harley-Davidson (HOG.N) , opens new tab motorcycles in response to Trump's tariffs on steel and aluminum. EU trade chief Maros Sefcovic spoke on Wednesday with Hassett, Commerce Secretary-designate Howard Lutnick and U.S. trade representative nominee Jamieson Greer. HIGHER PRICES Last week, Trump imposed an additional 10% tariff on Chinese goods, effective February 4, with Chinese countermeasures taking effect this week. He delayed a 25% tariff on goods from Mexico and Canada until March 4 to allow negotiations over steps to secure U.S. borders and halt the flow of the drug fentanyl. Some U.S. workers have welcomed the metal tariffs, but manufacturing firms and other businesses have warned the hike would lead to higher prices. "You can't change your supply chain overnight, and with the number and pace of these changes, even if you tried to stay ahead of it, can you stay ahead of it?" said David Young, an executive with the Conference Board, a global business group. Europe's steelmakers are also worried that U.S. tariffs will lead to a flood of cheap steel into Europe. Canadian Prime Minister Justin Trudeau, speaking to reporters in Brussels, said some Americans would lose their jobs and U.S. growth would suffer from Trump's metals tariffs. TRICKY TO IMPLEMENT Trump trade adviser Peter Navarro downplayed the negative impact of the expected tariffs, telling CNBC that duties imposed during Trump's first term did not send inflation soaring and that export-dependent producer economies often lowered their prices to prevent losing market share. Trade experts say structuring the reciprocal tariffs that Trump wants would be difficult. U.S. officials could opt for a more easily implemented flat 10% or 20% tariff rate, or a messier approach that would require separate tariff schedules matching U.S. tariffs to other countries' rates, said William Reinsch, senior fellow at the Center for Strategic and International Studies. Damon Pike, a trade specialist at accounting firm BDO International, noted that each of the 186 members of the World Customs Organization had different duty rates. "It's almost an artificial intelligence project," he said. Sign up here. https://www.reuters.com/world/us/trump-administration-readies-reciprocal-us-tariffs-trade-war-fears-mount-2025-02-12/

2025-02-12 06:04

LITTLETON, Colorado, Feb 12 (Reuters) - Europe's top polluter from coal-fired power production has one of the world's largest nuclear power development pipelines that could help it boost power output and limit future emissions. Turkey has 4,800 megawatts (MW) of nuclear generation capacity in development, according to Global Energy Monitor (GEM), which is the third largest nuclear pipeline globally. The country currently has no operating nuclear power plants. The first unit of the new Akkuyu plant is due to start production this year, and once fully operational is expected to generate around 10% of Turkey's electricity. However, the Russia-built facility on the south coast, which commenced site construction in 2013, has been beset by numerous delays and cost overruns that raise questions about the likelihood of a timely start-up of its planned four stages. And given that Turkey is already one of the world's largest coal consumers, any delays in nuclear operations will trigger a potential acceleration in coal-fired power output in the country, which is undergoing a steep climb in power demand. NUCLEAR PHASES & SANCTIONS The first unit of the Akkuyu facility, built by Russia's State Atomic Energy Corporation Rosatom, is due online this year, with a nameplate capacity of around 1,200 MW. Equipment start-up and testing of the pressurized water reactor's pumping station and cooling systems began earlier this month, and the site passed an independent safety inspection in January, according to Akkuyu's website. The three remaining 1,200 MW units are due to be added one per year in 2026, 2027 and 2028, at a total estimated cost of around $20 billion. Given the advanced state of general construction at the site, the completion of the remaining reactors on the scheduled pace is feasible. However, due to the strict sanctions on several Russian entities following Russia's invasion of Ukraine in 2022, Rosatom has reported difficulties in acquiring certain parts from suppliers. Further delays and sourcing difficulties could emerge going forward following the imposition of new sanctions targeting Russia by the new administration of U.S. President Donald Trump. COAL CRUTCH While the finishing touches to Turkey's first nuclear plant are made, the country's power firms continue to crank output from the country's fleet of coal-fired plants, which supplied around 35% of Turkey's electricity last year. Its coal plants generated a record 121 terawatt hours (TWh) of electricity in 2024, according to energy think tank Ember, and discharged a record 114 million tons of carbon dioxide, which was the most in Europe from coal-fired generation. To feed the country's roughly 55 coal plants, around 26.5 million metric tons of thermal coal was imported by Turkey in 2024, according to ship-tracking firm Kpler, which was the eighth largest national import total globally. Hydropower plants generated the second largest amount of electricity in Turkey last year, around 75 TWh, while gas plants generated around 63 TWh. However, volatility in precipitation levels and gas prices has served to stifle the growth in hydro and gas-fired generation in recent years, and has forced Turkey's power firms to remain reliant on coal for the lion's share of power output. CAPACITY CLUSTER Judging by Turkey's power capacity pipeline, the country's firms have no 'Plan B' in place in case of major delays to the Akkuyu plant start-up. There is no additional coal-fired capacity currently under construction, and only 890 MW of new gas-fired capacity is in the works, according to energy data organisation GEM. In terms of non-nuclear clean capacity, some 250 MW of solar, 160 MW of hydro power and around 20 MW of geothermal capacity is also under construction. Upon completion, the new capacity additions will boost clean energy's share of Turkey's capacity mix to 49.5%, from 47% currently, and reduce the fossil fuel share to 50.5% from 53%. However, the sum total of all non-nuclear capacity currently being built in Turkey is less than 30% of the planned capacity growth in nuclear. That paucity of alternative capacity development speaks to the country's confidence in getting the nuclear plants up and running quite soon. But the limited scope for boosting power production without the new nuclear fleet also means that Turkey's power firms will remain beholden to the current swath of fossil fuel plants until the country finally does begin its nuclear age. The opinions expressed here are those of the author, a market analyst for Reuters Sign up here. https://www.reuters.com/business/energy/turkeys-clean-power-plans-hinge-dawn-its-nuclear-age-maguire-2025-02-12/

2025-02-12 06:00

McEwan is a former CEO of National Australia Bank, RBS Expected to be tasked with overseeing selection of next BHP CEO MacKenzie stepping down lowers chances of another bid for Anglo-investors MELBOURNE, Feb 12 (Reuters) - BHP (BHP.AX) , opens new tab, the world's biggest listed mining company, said on Wednesday that former National Australia Bank (NAB.AX) , opens new tab CEO Ross McEwan would be its new chairman, replacing Ken MacKenzie, who will step down on March 31. In his new role, McEwan is expected to be tasked with overseeing the selection of BHP's next CEO and will need to consider whether the company resurrects plans to buy rival Anglo American (AAL.L) , opens new tab after a $49 billion offer failed last year. McEwan has been a non-executive director at BHP since April 2024 after five years running NAB, Australia's second-largest bank, and its biggest business lender. He has also held the top job at Royal Bank of Scotland. The New Zealand-born banker was installed as CEO of NAB after a damaging royal commission inquiry into poor business practices in 2019, and was widely seen as reviving the bank’s standing with investors with a simplification programme. He is currently a director of defence technology company QinetiQ Group (QQ.L) , opens new tab and Australian plumbing and bathroom products supplier Reece (REH.AX) , opens new tab. McEwan is likely to oversee the process of finding a replacement for CEO Mike Henry who is entering his fifth year at the helm of BHP, where tenure in the top job averages about six years. MacKenzie was with BHP for nine years and has been chair for the last eight. He oversaw BHP's failed offer for Anglo, its recovery from the Samarco dam disaster in Brazil, the unification of its structure to a single Australian listing, the approval of major investments in Canadian potash and a workforce that is approaching gender equity. "I think he’s done a really good job over that time," said Andy Forster of Argo Investments in Sydney. “He brought in a lot of operational discipline, really focused on returns and capital allocation." MacKenzie's decision to step down probably lowered the chances of BHP making another tilt at Anglo, said two other investors who were not authorised to speak to media. MacKenzie told the company's annual general meeting on October 30 that BHP had "moved on" from pursuing Anglo, although the company subsequently backtracked in a filing to regulators. Sign up here. https://www.reuters.com/business/bhp-says-mcewan-replace-mackenzie-chair-2025-02-12/

2025-02-12 05:51

MUMBAI, Feb 12 (Reuters) - India's central bank hiked the quantum of funds that it intended to inject into the banking system through an overnight infusion on Wednesday, after aggressively intervening in the foreign exchange (FX) market in the last two sessions. The Reserve Bank of India (RBI) had offered to pour in 2.50 trillion rupees ($28.85 billion) through an overnight variable rate repo auction, the biggest infusion by the central bank in a single day in over a year. Banks subscribed to 1.94 trillion rupees. WHY ITS IMPORTANT The RBI's constant intervention in the foreign exchange market has squeezed rupee liquidity. This tightness in the banking system will make last week's rate cut ineffective as lenders will not be able to transfer the benefit of lower rates to customers. Most market participants have maintained that surplus liquidity conditions are a pre-requisite for the effective transmission of lower rates. CONTEXT India's banking system liquidity deficit quadrupled in less than a week to around 2 trillion rupees as on February 11, with traders citing tax outflows and aggressive dollar sales by the central bank among reasons for the jump. The RBI sold between $4 billion and $7 billion on Monday as it intervened in the FX market to support the rupee. It continued selling dollars on Tuesday to shore up the currency that has been struggling due to portfolio outflows and uncertainty around U.S. trade tariffs. The increase in the quantum of infusion comes a day after the central bank doubled the proportion of government securities that it aims to purchase to 400 billion rupees on Thursday. The RBI has infused over 1.5 trillion rupees into the system in the last one month. GRAPHIC KEY QUOTES "Since the RBI promised liquidity infusion, which will also support rate cut transmission, any aggressive FX sale will curtail that intention. I believe the RBI will want to sterilise any large FX interventions that drain out domestic liquidity sizeably, to keep the latter around neutral in line with the monetary policy stance," said Dhiraj Nim, an economist at ANZ Research. ($1 = 86.7625 Indian rupees) Sign up here. https://www.reuters.com/business/finance/indian-central-bank-infuse-record-overnight-funds-post-heavy-fx-intervention-2025-02-12/