2025-02-06 10:45

European stocks head for 7th weekly gain Yen at two-month high on rate hike bets Gold steady near record peak LONDON, Feb 7 (Reuters) - U.S. stock futures steadied on Friday ahead of U.S. payrolls data, with investors cautiously optimistic that the world might avoid a full-on trade war, while the prospect of more rate hikes in Japan this year briefly sent the yen towards two-month highs. In a week that started with U.S. President Donald Trump kicking off a trade war and whipping up market volatility, investors have been wary of making any major moves, given that he followed through on his threat to impose duties on China while granting Mexico and Canada a one-month reprieve. The all-important U.S. jobs report for January is due ahead of the Wall Street open. Economists expect to see 170,000 workers added to nonfarm payrolls last month, but given the potential distortions from spells of cold weather and the California wildfires, the range of forecasts is wide. "The focus for the financial markets in recent weeks has been very much on Trump and his economic policies, in particular on trade, but today there is the potential for the jobs data to influence Fed rate expectations," Derek Halpenny, a currency strategist at MUFG, said. "A pretty large divergence from the consensus is still likely required to shift expectations notably but extreme weather at this time of the year has in the past resulted in sharply weaker NFP readings and weather could impact today’s report," he said. Futures on the Nasdaq and S&P 500 were trading mostly steady on the day, while shares of Amazon(AMZN.O) , opens new tab slipped in premarket trading on the back of weakness in the retailer's cloud unit. In Europe, the STOXX 600 (.STOXX) , opens new tab headed for a seventh straight week of gains, trading flat on the day after having hit record highs earlier this week, following a spate of strong earnings from the likes of Danish weight-loss drugmaker Novo Nordisk (NOVOb.CO) , opens new tab, German software company SAP (SAPG.DE) , opens new tab and French lender BNP Paribas (BNPP.PA) , opens new tab. European stocks have staged their best performance in a decade against Wall Street in the first six weeks of 2025, but the focus is now on whether those gains can be sustained. On the Asian market, tech stocks staged a rally, powered by Chinese retail investors, who have pounced on the AI theme in the wake of home-grown start-up DeepSeek's breakthrough. DELICATE CHINA Beijing's seemingly measured response to Trump's tariffs has left room for negotiations, analysts say, which has helped repair investor sentiment. China's blue-chip stock index (.CSI300) , opens new tab closed up 1.3% after touching a one-month high. "Whilst there is considerable noise and uncertainty, we don't see escalating trade tensions as a game changer in the prospects for the Chinese market," said James Cook, investment director for emerging markets at Federated Hermes. "China's bigger problem is not Trump but the domestic economy." While political uncertainties kept investors wary, fears have eased that Trump's approach to tariffs could escalate into a global trade war. Markets are pricing in 43 basis points of easing this year from the Fed, with a rate cut in July fully priced in, as policymakers are in no hurry to start the rate-cutting cycle again. The dollar edged up 0.1% against a basket of currencies, having rallied 7% last year, as investors priced in a far more aggressive policy stance from the Fed this year, where rate cuts may be few and far between. Other central banks are cutting interest rates, while the Bank of Japan is gearing up for at least another rate hike this year. Strong wage growth data has beefed up the chances of tighter monetary policy, which has pushed the yen to two-month highs against the dollar . The yen touched 150.96 per dollar overnight, its strongest level since December 10, before easing to leave the dollar up 0.4% on the day at 152.155. Sterling reversed earlier losses to rise 0.1% to $1.2449, having dropped 0.5% on Thursday as the BoE cut interest rates and slashed its 2025 UK growth forecast. In commodities, oil edged up, while gold steadied above $2,800 an ounce, close to record highs. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-3-pix-2025-02-06/

2025-02-06 10:14

MUMBAI, Feb 6 (Reuters) - The Indian rupee declined to its lifetime low on Thursday as a dip in Asian peers added to the prevailing bearish outlook on the currency a day before a crucial monetary policy decision. Uncertainty about U.S. trade tariffs and persistent portfolio outflows have hurt the rupee over the last two months and made it the worst performing Asian currency in 2025. The rupee declined to a record low of 87.5825 during the session before closing at 87.5775, down 0.1% on the day and more than 2% so far this year. Short bets on the rupee have risen to their highest since mid-July 2022 even as the bearish outlook on other regional currencies has eased, according to a Reuters poll. The 1-month 25 delta dollar-rupee risk reversal, a volatility gauge, has also ticked up, which signals that the cost of betting against the rupee via options has risen relative to the cost of wagering on its rally. Heightened dollar bids spurred by frequent maturities of positions in the non-deliverable forwards market have also hurt the rupee while interventions by the central bank, like on Thursday, have helped limit the losses. India's central bank also likely conducted dollar-rupee buy/sell swaps on Thursday, a measure it has deployed over recent trading sessions to mitigate the liquidity impact of its spot dollar sales. The dollar index was up 0.3% at 108 after hitting a one-week low on Wednesday as investors digested the prospect of a global trade war being averted. MUFG Bank said that U.S. President Donald Trump's decision to delay tariffs on Canada and Mexico has "made us cautiously more optimistic that a wider global tariff war can be avoided", which dampens the risk of his policies being inflationary for the U.S. economy. Sign up here. https://www.reuters.com/markets/currencies/rupee-hits-record-low-ahead-central-bank-policy-decision-2025-02-06/

2025-02-06 10:06

NAIROBI, Feb 6 (Reuters) - Kenya's central bank governor said on Thursday that bank officials did not see much effect on the exchange rate from U.S. President Donald Trump's foreign aid freeze. In late January, Trump placed a pause on most foreign development assistance pending assessments of efficiencies and consistency with his foreign policy. Central Bank Governor Kamau Thugge cited strong remittance inflows among reasons why Kenya's foreign exchange reserves were healthy at roughly $9 billion, or more than four months of import cover. "We don't see much impact on the exchange rate from the freeze on aid. We see our foreign exchange reserves remaining fairly strong, exchange rate stable," he told a news conference. On Wednesday, Finance Minister John Mbadi said Trump's move to freeze aid could hit Kenya hard, as it lacks the fiscal space to replace the funding, adding that he hoped the United States would reconsider its decision. Kenya's shilling currency is broadly unchanged year-to-date against the dollar. It closed 2024 up about 21% after a bond buyback eased concerns that the government could default. On Wednesday, the central bank cut its main interest rate for the fourth meeting in a row, saying it wanted to do more to support lending and boost economic growth. The Central Bank Rate (KECBIR=ECI) , opens new tab was lowered by 50 basis points to 10.75%, in line with the forecast of a Reuters poll of four economists. Sign up here. https://www.reuters.com/world/africa/kenya-central-bank-sees-minimal-effect-shilling-trump-aid-freeze-2025-02-06/

2025-02-06 07:57

China's imports of US ethane could grow over 20% this year, analysts forecast Wanted: more US export capacity, ethane tankers Ethane in demand due to much higher margins than other feedstock China buys nearly half of US exports, tariff hikes seen unlikely Demand growth and constrained export capacity to support market SINGAPORE, Feb 6 (Reuters) - Despite a growing trade war between Washington and Beijing, China's ethane imports from the U.S. are set to surge this year as big petrochemical producers battling shrinking profits switch to the cheaper feedstock flowing from the U.S. shale gas boom. Companies including Satellite Chemical (002648.SZ) , opens new tab, China Sanjiang Fine Chemical (2198.HK) , opens new tab, and Wanhua Chemical Group (600309.SS) , opens new tab are investing more than $16 billion to build crackers, upgrade plants, expand storage, and construct Very Large Ethane Carriers to ship the liquefied gas. U.S. export capacity and a lack of tankers are the two factors holding back growth in the ethane trade between the world's two biggest economies. Nearly all of China's ethane imports come from the U.S. Forecasts from three analysts for China's ethane imports in 2025 range between 6.3 million and 8.2 million metric tons, which they estimate would amount to an increase of between 9% and 34%. There is no official data publicly available on ethane imports. To meet the rising export demand, U.S. pipeline network operators Energy Transfer (ET.N) , opens new tab and Enterprise Products Partners (EPD.N) , opens new tab are expanding capacity at their terminals. "The bottleneck is U.S. exports right now," said Armaan Ashraf, head of natural gas liquids at consultancy FGE. China buys nearly half of U.S. ethane exports, according to the U.S. Energy Information Administration, which sees U.S. net ethane exports rising 6% to 520,000 barrels per day (11.2 million tons) in 2025, it said in an October report. China is expected to take most of that increase, an EIA analyst said. In competition with China, Thailand plans to buy more U.S. ethane to reduce its trade deficit with the United States, while Siam Cement Group (SCC.BK) , opens new tab is re-configuring its new Long Son cracker in Vietnam to use the cheaper feedstock. Taiwan's Formosa Petrochemical (6505.TW) , opens new tab, the region's largest naphtha importer, is also studying importing U.S. ethane for its crackers, its spokesperson KY Lin told Reuters. The growing demand and constrained export capacity will result in a tight ethane market from 2026, said Wang Yan, an analyst at commodities intelligence firm ICIS. NEW CRACKERS AND SHIPS Between 2024 and 2026, Chinese companies plan to add at least 7.7 million tons per year (tpy) of capacity to process ethane and other gas liquids, company filings show, as they look to take advantage of the cheaper feedstock. They need to make the switch to improve their returns. Crackers in China processing ethane can reap $300-$500 per ton of ethylene produced, beating the profit margins at plants processing naphtha, said Cheryl Liu, an analyst at consultancy Energy Aspects. Sanjiang Chemical said in its first-half 2024 financial report that the start-up of its mixed-feed cracker cut its costs by a fifth and flipped its loss-making ethylene oxide/ethylene glycol production to profit. Along with plant upgrades, new shipping capacity is required. For every one-million tons per year in cracking capacity, at least six dedicated VLECs are needed to ship the feedstock, Ashraf said. A VLEC costs $160 million-$170 million and takes three years to build, said executives at Japan's IINO Lines. The operator has leased its first two VLECs to be completed this year to privately-owned UK group Ineos to send U.S. ethane to China. Wanhua Chemical, which has three VLECs, will add another two to three tankers by the end of the year, said a source familiar with the matter who declined to be named as he is not authorised to speak to media. "The main constraint is shipping," he said, as Chinese shipyards are fully booked over the next few years. He estimated there are 29 VLECs in service and expects China's demand growth to track new ships coming on. "There is lots of demand, but lots of vessels also coming. And since the main importers will be China and exporter (is) U.S., there is the political issue between the U.S. and China. So we have to be careful of that," the LNG team of IINO Kaiun Kaisha (9119.T) , opens new tab said in an email response to Reuters. However, some analysts and Enterprise CEO Jim Teague played down the likelihood of ethane being affected by the tit-for-tat tariffs between Beijing and Washington, as China would prefer to keep feedstock cheap to support industry. "The whole segment is not doing very well. There are always other sectors that they can tap down on when it comes to trade war," said FGE's Ashraf. China lowered its import tariff for ethane in 2025 to 1% from the 2% in 2024. Teague said Chinese propane and ethane users are dependent on imports. "So from an NGL perspective, I'm not worried," he told analysts on Feb. 4, referring to natural gas liquids. Gearing up for the surge, Enterprise plans to open a terminal in Orange County, Texas, in the second half of this year to export 120,000 bpd of ethane and aims to expand that in 2026. Energy Transfer said it would add 250,000 bpd of natural gas liquids export capacity at Nederland, Texas, from the third quarter of 2025. Its co-chief executive officer, Marshall McCrea, told an earnings call in November: "The international demand for ethane and LPG continues to grow through the roof ... especially in China." ($1 = 7.2751 Chinese yuan renminbi) Sign up here. https://www.reuters.com/business/energy/chinas-us-ethane-imports-surge-2025-drive-cut-costs-2025-02-06/

2025-02-06 07:53

FRANKFURT, Feb 6 (Reuters) - Germany elects a new parliament on February 23, with potential ramifications for the financial industry of Europe's largest economy. Below is an outline of how those parties faring best in the polls are planning to shape finance, based on hundreds of pages of platform documents. Spoiler alert: The far-right Alternative for Germany wants to exit the euro and deregulate Bitcoin, while Chancellor Olaf Scholz's Social Democrats want to tax the super rich. CDU/CSU Chancellor candidate: Friedrich Merz The conservative alliance of Merz's Christian Democrats (CDU) and the Bavarian Christian Social Union (CSU) are leading in the polls and, where finance is concerned, lay out only broad-brush ideas with few specifics. AfD Chancellor candidate: Alice Weidel The far-right Alternative for Germany party is running second in the polls, but the nation's mainstream parties refuse to work with them in any government, meaning the proposals may never see daylight. Their plans for finance are nevertheless the most concrete, and radical. SPD Chancellor candidate: Olaf Scholz The centre-left Social Democrats under Chancellor Scholz is trailing third in the polls but has for decades participated in coalition governments. GREENS Chancellor candidate: Robert Habeck The business-friendly Free Democrats (FDP) under party leader Christian Lindner, are trailing so far behind that they may not be represented in the next parliament. They stand for lower taxes and less red tape. Sign up here. https://www.reuters.com/world/europe/what-germanys-election-means-bitcoin-super-rich-2025-02-06/

2025-02-06 07:49

Feb 6 (Reuters) - ArcelorMittal (MT.LU) , opens new tab said on Thursday that it would build an advanced steel manufacturing facility in Calvert, Alabama, as it seeks to increase its production capacity to meet demand from the U.S. automotive sector. The world's second largest steelmaker said the plant would be able to deliver up to 150 kilotons of premium non-grain-oriented electrical steel (NOES) annually, used primarily in the manufacturing of larger vehicles, full-size pickups and SUVs. The company said demand for sophisticated NOES in the U.S. was growing while domestic supplies were limited, which should support a premium pricing outlook for NOES produced at the new plant. The cost of building the plant is estimated at $0.9 billion, with an expected production start in the latter half of 2027, ArcelorMittal said. New car sales in the U.S. rose to a five-year high in 2024, helped by hybrid models, according to Wards Intelligence. Automakers are expecting the strong sales to continue into 2025, although President Donald Trump's proposed automotive policies, such as removing tax credits for electric vehicles, could present a wild card to the sector. Sign up here. https://www.reuters.com/markets/commodities/arcelormittal-build-new-steel-plant-us-meet-auto-sector-demand-2025-02-06/