2025-01-14 23:09

Jan 15 (Reuters) - A look at the day ahead in Asian markets. A pause in the global bond selloff took some wind out of the dollar's sails and allowed equities to regain their footing early on Tuesday but Wall Street's wobble ahead of U.S. inflation data could put Asian markets back on the defensive on Wednesday. The dollar and Treasury yields losing steam should offer emerging and Asian markets some welcome respite. But the reversal in U.S. stocks could ensure it is short-lived, especially with U.S. CPI inflation numbers landing after Asia has closed. Asian markets were buoyant on Tuesday. The MSCI Asia ex-Japan index rebounded from a five-month low and blue chip Chinese stocks leaped more than 2.5%, as regulators pledged more support for markets and local chip firms rallied after the U.S. stepped up its tech curbs. Japanese stocks went the other way, however, after Bank of Japan Deputy Governor Ryozo Himino flagged the chance of a rate hike next week. The Nikkei 225 index chalked up its biggest fall in two and a half months, slumping 1.8% , opens new tab. That's the regional local backdrop to the open on Wednesday, where the main local event will be Bank Indonesia's policy decision. Spooked by recent currency volatility, BI is widely expected to keep its main interest rate on hold at 6.00%. With inflation at the lower end of the central bank's target range of 1.5%-3.5%, monetary policy is being directed towards stabilizing the rupiah, which is down around 7% against the dollar from its September peak. Like most emerging countries, Indonesia has been hit hard by spiking U.S. bond yields and the dollar "wrecking ball", a tightening of financial conditions that is restricting BI's ability to ease policy. According to Goldman Sachs, Indonesia's financial conditions have deteriorated sharply since late September, mainly due to the rise in long rates and decline in equities. They are now the tightest since October 2023, and close to the tightest since October 2022. The threat of a global trade war and punitive U.S. tariffs on many countries - especially China - continues to weigh on market sentiment as U.S. president-elect Donald Trump's Jan. 20 inauguration draws closer. Meeting with European Council President Antonio Costa on Tuesday, Chinese President Xi Jinping said China and the European Union have a robust "symbiotic" economic relationship and Beijing hopes the bloc can become "a trustworthy partner for cooperation". Meanwhile, Trump said on Tuesday he will create a new department called the External Revenue Service "to collect tariffs, duties, and all revenue" from foreign sources. South Korea's won is one of the best-performing Asian currencies this year, but could fall on Wednesday after Yonhap reported that authorities investigating impeached President Yoon Suk Yeol were at his official residence to execute an arrest warrant. Here are key developments that could provide more direction to markets on Wednesday: - Indonesia interest rate decision - South Korea unemployment (December) - Japan services tankan survey (January) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-2025-01-14/

2025-01-14 22:00

Head of separatist region in Moscow, Russian officials make no comment Moldovan president says Moscow decides for rebel region Gas giant Gazprom says Moldova must pay arrears CHISINAU, Jan 14 (Reuters) - The leader of Moldova's breakaway region of Transdniestria has travelled to Moscow for talks to resolve an energy crisis following the suspension of Russian gas deliveries, Transdniestria's news agency reported on Tuesday. Transdniestria has suffered widespread power cuts since Jan. 1 when Russia's Gazprom (GAZP.MM) , opens new tab suspended gas exports to the region, citing an unpaid Moldovan debt of $709 million that Chisinau does not recognise as valid. Moscow blames the suspension of gas supplies on Moldova and Ukraine, which refused to extend a five-year gas transit deal that expired on Dec. 31 on the grounds that the proceeds help fund Russia's invasion. Moldova says Moscow could use an alternative route to continue supplying Transdniestria, which was receiving gas via Ukraine. Transdniestria's separatist leader Vadim Krasnoselsky held talks to overcome the energy crisis, his press secretary Denis Podgorny was quoted as saying by Novosti Pridnestrovya agency. He gave no details, and Russian authorities made no comment. SANDU SAYS MOSCOW DECIDES FOR SEPARATISTS Moldova's pro-Western President Maia Sandu said she was aware of the visit, adding: "We want the people in the Transdniestrian region... to have electricity, heat, and water as soon as possible." "Tiraspol's refusal to accept help from Moldova is not its (refusal) but the Kremlin's," Sandu said, reiterating Chisinau's view that Transdniestria acts only on Moscow's orders. Tiraspol is the separatist region's capital. Moldovan political analyst Vitalie Andrievschi told Reuters that Krasnoselsky's talks in Moscow could simply produce the same position that a resumption of Russian gas supplies depended on Moldova paying arrears. "Or Russia could consider Transdniestria's position and say it will start shipments at this or that date through the Balkan corridor (Turkey, Bulgaria, Romania), without Moldova paying off the arrears," he said. Moldovan officials say they have offered Transdniestria help with buying gas on external markets and securing coal supplies from Ukraine. The separatist authorities say Chisinau has made no real proposals. Sandu said she believed the energy crisis had been artificially stoked, arguing that Russia had alternative routes to continue supplying contracted natural gas. Russia's only goal is to destabilise the situation in Moldova, she added. Sandu, who won a second presidential term in a closely fought election late last year, aims to take Moldova into the European Union. Moldova's foreign ministry, meanwhile, denounced as "unacceptable interference" comments by a senior Kremlin aide, Nikolai Patrushev, who blamed Chisinau authorities for the energy crisis and said they should "acknowledge their mistakes". "I cannot rule out that Chisinau's aggressive anti-Russian policy will lead to Moldova either being made part of another country or ceasing to exist," Patrushev told the daily Kosomolskaya Pravda. He said the same fate could also befall Ukraine, citing the long-held Russian position that Kyiv's policies were guided by what Moscow calls "neo-Nazi" principles. Sign up here. https://www.reuters.com/world/europe/leader-moldovas-separatist-region-has-travelled-moscow-during-gas-crisis-sandu-2025-01-14/

2025-01-14 20:59

Jan 14 (Reuters) - The use of treated sewage sludge as fertilizer on farms can pose a health risk to residents and consumers because of the presence of "forever chemicals" that break down slowly, the U.S. Environmental Protection Agency said on Tuesday. The sludge, known as biosolids, is applied to less than 1% of U.S. fertilized farm acres, according to the agency. But research has found that biosolids can contain per- and polyfluoroalkyl substances (PFAS), known as forever chemicals, which have been tied to cancers, liver damage, and other illnesses. The agency modeled hypothetical health risks to people living on or near sites that had been treated with biosolids and to people consuming their products, such as eggs, beef and drinking water. The draft assessment, which is open to public comment for 60 days, found there can be a risk exceeding the EPA's thresholds, "sometimes by several orders of magnitude," for those people. The assessment does not suggest a risk to the broader food supply, the agency said. The assessment will guide actions by federal and state agencies, as well as by wastewater system operators and farmers, to prevent exposure to the chemicals, said Jane Nishida, the agency's acting administrator. In April, the EPA announced a first-ever drinking water standard for PFAS and said the standard would avoid tens of thousands of deaths linked to the chemicals. Sign up here. https://www.reuters.com/business/healthcare-pharmaceuticals/us-warns-health-risks-sewage-use-fertilizer-2025-01-14/

2025-01-14 20:59

At least 25 people dead, over 12,000 structures damaged or destroyed More than 88,000 people under evacuation order High winds and low humidity pose extreme danger for at least another day Despite wind, size of fires has not increased in two days LOS ANGELES, Jan 14 (Reuters) - Firefighters on Tuesday held the line against two massive wildfires that have ravaged parts of Los Angeles for the past week, even as desert winds and a parched landscape presented extremely hazardous conditions. Some 8,500 firefighters from at least seven states and two foreign countries prevented the blazes from growing for the second day running. Still, the fires have consumed an area the size of Washington, D.C. A fleet of aircraft dropped water and retardant into the rugged hills while ground crews with hand tools and hoses have worked around the clock since the fires broke out on Jan. 7, with the aircraft occasionally grounded by high winds. The Palisades Fire on the west edge of town held steady at 23,713 acres (96 square km) burned, and containment nudged up to 18% - a measurement of how much of the perimeter was under control. The Eaton Fire in the foothills east of the city stood at 14,117 acres (57 sq km) with containment at 35%. Southern California has lacked any appreciable rain since April, turning brush into tinder as Santa Ana winds originating from the deserts whipped over hilltops and rushed through canyons, sending embers flying up to 2 miles (3 km) ahead of the fires. Winds were weaker than expected during the day on Tuesday but forecast to peak around 3 a.m. (1100 GMT) on Wednesday, with gusts in the mountains possibly reaching 70 mph (112 kph), the the National Weather Service said, as it kept a red flag warning in place. The death toll from the fires rose by one on Tuesday to 25, according to the Las Angeles medical examiner's office. The estimate of structures damaged or destroyed held steady at over 12,000, still portending a Herculean rebuilding effort ahead. Entire neighborhoods have been leveled, leaving smoldering ash and rubble. In many homes, only a chimney is left standing. In hard-hit Pacific Palisades, Karina Maher and her husband Michael Kovac experienced some "survivor guilt" that their home made it through the fire while many of their neighbors' properties were lost. “Designing the house so close to nature and knowing the history of Southern California, we were acutely aware that, at some point in the house's life, there would be a serious fire," said Kovac, an architect who designed the building. "So we designed the house to be both fire resilient and sustainable. And happily, those two systems are often one in the same." A few thousand more people were allowed back home but 88,000 remained under evacuation orders with another 84,000 under evacuation warning - large-scale displacements unprecedented in the metropolitan area's history. "It's one thing to see it on television. It's another thing to see it from the air. The massive, massive destruction is unimaginable until you actually see it," Los Angeles Mayor Karen Bass told a press conference after taking an aerial tour. John Adolph, 48, who lost his home in Altadena to the Eaton Fire, was grateful to be safe but uncertain of what lies ahead. Adolph said he went back to see what he could salvage as the fire raged. "There were burning grocery stores, gas stations, exploding cars that went pop with glass flying ... Walls of flames two stories tall, tornadoes of flame. I was stupid with a side of crazy to try," Adolph said. Urban search and rescue teams worked from an Altadena grocery store parking lot, tracking progress on whiteboards and handing out assignments from inside a trailer. A team of 50 firefighters and sheriff's deputies conducted house-by-house searches, looking for any lingering fires and hazards such as lithium-ion batteries connected to solar panels. PRICELESS ART DEEMED SAFE The Palisades Fire also approached the priceless art collection at the J. Paul Getty Museum, which houses paintings by Van Gogh, Rembrandt, Monet and Degas. But the collection remained safely inside the Getty Center's fortress of travertine stone, fire-protected steel and reinforced concrete. "It would be extremely foolish to try and remove artwork" from its safe harbor, Getty Trust President Katherine E. Fleming said. In Washington, a battle over emergency aid broke out between Republicans and Democrats over what is already the costliest wildfire in terms of insured losses. Private forecaster AccuWeather estimates total damage and economic loss between $250 billion and $275 billion, which would make it the costliest natural disaster in U.S. history, surpassing Hurricane Katrina in 2005. Democrats in Congress opposed the suggestion by House Speaker Mike Johnson, a Republican, that conditions be placed on aid. Johnson also said any wildfire disaster assistance funding should be "paid for," meaning the cost should be covered to prevent adding to the budget deficit, possibly by cutting other programs. That is a departure from many previous natural disasters, and Democratic Representative Ted Lieu of California called Johnson's position "outrageous." "We should not be leveraging the pain and suffering of our fellow Americans to try to force new policy changes," Lieu said. Sign up here. https://www.reuters.com/world/us/los-angeles-firefighters-alert-return-extreme-winds-2025-01-14/

2025-01-14 20:48

S&P 500 futures rise; BlackRock, BNY report earnings Bond yields tick lower ahead of CPI; oil steady Pound holds, gilts soothed by UK inflation Sterling, gilts in focus ahead of UK CPI data LONDON, Jan 15 (Reuters) - Global stocks edged up on Wednesday in cautious trading ahead of U.S. consumer price data that could shift the country's monetary policy outlook, while investors waited to see if the earnings of big U.S. banks would match sky-high expectations. The bond market got some respite from the recent heavy selling, as yields on Treasuries ticked lower and those on German 10-year Bunds broke their second-longest stretch of price losses in over 40 years. Wall Street futures , rose 0.2-0.3% by midday in Europe, where the regional STOXX 600 index (.STOXX) , opens new tab rallied 0.7% on the day, led mostly by gains in rate-sensitive UK homebuilders, after data showed an unexpected cooling in British inflation. BlackRock (BLK.N) , opens new tab, the world's largest money manager, was one of the first major financial companies to report earnings on Wednesday. The company said assets under management hit a record $11.6 trillion in the fourth quarter. U.S. bank BNY (BK.N) , opens new tab reported a rise in fourth-quarter profit ahead of bigger rivals JPMorgan (JPM.N) , opens new tab and Citigroup (C.N) , opens new tab before the opening bell and ahead of consumer inflation numbers that could inform expectations of what the Federal Reserve might do to interest rates this year. ADM Investor Services Chief Global Economist Marc Ostwald said the central bank's "Beige Book" for December, which captures anecdotal evidence of conditions across the 12 Federal Reserve districts, reported an uptick in economic activity, but an expectation for price pressures to persist. "Given the strength of the latest labour data, and expected strength in this week's activity data, the data will likely strengthen the Fed's resolve to pause its rate cutting cycle," he said. Right now, the swaps market shows traders believe there is only likely to be one rate cut this year, with a second quarter-point reduction being a more distant possibility, as just 31.4 basis points of easing are priced in. This was closer to 45 bps about a week ago, before the December employment report on Friday showed robust jobs growth. PIVOT POINT For the CPI report, forecasts are centred on a small 0.2% rise in the core measure, with risks skewed to the upside. A strong reading of 0.3% or more could see the selloff in global stocks and bonds resume. "This CPI print is a pivot data point. A dovish print likely reignites the rally which is likely to get a boost from a strong earnings period," said analysts at JPMorgan in a note to clients. "A hawkish print could see the 10Y yield make a run at 5%, increasing volatility across all asset classes, and continuing to pressure equities." Overnight, U.S. producer price data for December was surprisingly tame, with the core measure flat in the month. That restrained the U.S. dollar and pulled short-term Treasury yields off their highs. The benchmark 10-year U.S. yield was down 2 bps at 4.768%, having hit a 14-month high near 4.8% earlier this week. Benchmark yields in Europe also ticked lower. German 10-year yields were down 2 bps at 2.6%, having risen for 10 straight days at Tuesday's close - the longest stretch of increases since February 22, which at 11 days was the longest since a 13-day stretch of rises in May 1981, according to LSEG data. Yields on UK government bonds , or gilts, fell more sharply with the 10-year down 8.1 bps at 4.808%, after data showed British inflation rose less than expected in December. Gilts have been at the centre of this month's bonds selloff, pushing long-dated yields to their highest since the late 1990s over concerns about UK government finances. On the currency markets, the pound was mostly unchanged on the day at $1.223, while the Japanese yen was one of the strongest performers. The dollar fell 0.66% to 156.93 yen as markets now see a 70% chance the Bank of Japan will raise interest rates in January after Governor Kazuo Ueda said policy-makers would discuss such an option next week. In commodities, oil prices stabilised around $80 a barrel after a 1% drop on Tuesday. Sign up here. https://www.reuters.com/markets/global-markets-corrected-wrapup-1-2025-01-14/

2025-01-14 20:45

HOUSTON, Jan 14 (Reuters) - Energy producers have rushed to lock in oil prices since the United States announced its harshest sanctions yet on Russian energy trade on Friday, which sent oil prices surging to multi-month highs, market participants said. Hedging activity hit a record high on the AEGIS Markets platform on Jan. 10, said Jay Stevens, director of market analytics at AEGIS. AEGIS says its clients represent about 25-30% of total U.S. oil production. Hedging can help producers reduce risk and protect their production from sharp moves in the market by locking in a price. It can also give traders opportunities to profit from volatility. Global and U.S. oil benchmarks rallied sharply on Friday and Monday, touching multi-month highs, after the United States announced new sanctions targeting Russian oil producers, tankers, intermediaries, traders and ports, aiming to hit every stage of Moscow's oil production and distribution chains. "When we see moves like we have seen in the past few days, if a producer wasn't already very well hedged going into it, most will clearly want to take advantage of the higher prices," said Mike Corley, founder of advisory firm Mercatus Energy. Corley noted that Mercatus clients have also taken advantage of higher prices over the past few days to hedge. More than 2 million WTI light sweet crude oil futures traded on both Friday and Monday, the first time volumes exceeded 2 million since February and March 2022, the CME group said. U.S. West Texas Intermediate futures eased $1.26, or 1.6%, to settle at $77.50 a barrel on Tuesday, after touching their highest level since August on Monday. Sign up here. https://www.reuters.com/business/energy/oil-hedging-hit-record-high-last-week-after-new-us-sanctions-russia-2025-01-14/