2025-01-09 10:54
LONDON, Jan 9 (Reuters) - British financial markets remain orderly and there is no need for authorities to intervene, deputy finance minister Darren Jones said on Thursday after sterling fell to a 14-month low and 30-year borrowing costs hit their highest since 1998. "UK gilt markets continue to function in an orderly way. Underlying demand for the UK's debt remains strong," Jones told parliament on Thursday. "There is no need for any emergency intervention," Jones added in response to a follow-up question from the Conservative opposition about why finance minister Rachel Reeves - who is due to travel to China - was not in parliament. British government bonds have fallen sharply for three days in a row, underperforming U.S. and German debt, although the higher yields attracted solid investor demand at regular bond auctions on Tuesday and Wednesday. Ten-year gilt yields have risen by 0.22 percentage points this week - representing the biggest jump in a year though much less than the 0.69 percentage point surge that followed the mini-budget of former prime minister Liz Truss in September 2022. Jones stressed the Labour government's commitment to new fiscal rules that target a balanced day-to-day budget and falling public sector net financial liabilities by 2029-30. "These fiscal rules are non negotiable. That is why public spending will be within the numbers set out at the budget." Jones did not directly respond to questions about whether the government would rule out raising taxes given higher borrowing costs. Britain's Office for Budget Responsibility estimated that Reeves had just under 10 billion pounds ($12 billion) of headroom to meet the fiscal rules after her Oct. 30 budget. But the rise in gilt yields and government debt interest payments mean many economists think Reeves is now on course to break the rules - a view a finance ministry spokesperson described as "pure speculation" on Wednesday. The OBR will produce fresh budget forecasts on March 26 and the government will conclude a spending review in June. Sterling and gilt yields were little changed as Jones spoke. Ten-year gilt yields were up 0.02 percentage points on the day at 4.82%, but below a peak of 4.925% hit early in the day. Matthew Amis, investment director at asset manager abrdn, said Jones' remarks had not eased market concerns. "We have the OBR in March, and it's the first week in January, so what happens to the gilt market in between now and March?", he said. "It would have been better if we had more information there, just to calm markets down." ($1 = 0.8139 pounds) Sign up here. https://www.reuters.com/world/uk/uk-minister-financial-markets-functioning-an-orderly-way-2025-01-09/
2025-01-09 10:48
Wildfires are worst in Los Angeles history Two largest blazes consume 34,000 acres (13,750 hectares) Death toll rises to 10, 180,000 evacuated, 200,000 under warnings Firefighting efforts aided by diminished winds, aerial support LOS ANGELES, Jan 9 (Reuters) - Wildfires menacing Los Angeles have killed at least 10 people and devoured nearly 10,000 structures, with five fires burning into a third night on Thursday as dry desert winds fanning the flames again gathered strength. The Palisades Fire between Santa Monica and Malibu on the city's western flank and the Eaton Fire in the east near Pasadena already rank as the most destructive in Los Angeles history, consuming more than 34,000 acres (13,750 hectares) - or some 53 square miles - turning entire neighborhoods to ash. The death toll from the blazes rose to 10, Los Angeles County's Medical Examiner said in an update late on Thursday, without providing identities or other details. Los Angeles County Sheriff Robert Luna told an earlier press conference he expected the number to grow. "It looks like an atomic bomb dropped in these areas. I don't expect good news, and we're not looking forward to those numbers," Luna said. Private forecaster AccuWeather estimated the damage and economic loss at $135 billion to $150 billion, portending an arduous recovery and soaring homeowners' insurance costs. "We're already looking ahead to aggressively rebuild the city of Los Angeles," said Mayor Karen Bass, a Democrat, who faced criticism from President-elect Donald Trump and other Republicans over her handling of the disaster. President Joe Biden, who declared a major disaster on Tuesday, promised on Thursday that the federal government would reimburse 100% of the recovery for the next 180 days to pay for debris and hazard material removal, temporary shelters and first responder salaries. "I told the governor, local officials, spare no expense to do what they need to do and contain these fires," Biden said after meeting with senior advisers at the White House. In all, five wildfires burned in Los Angeles County, with the largest Palisades fire just 6% contained and the Eaton fire 0% contained. Skies buzzed with aircraft dropping retardant and water on the flaming hills. A large Super Scooper aircraft on loan from Canada was damaged and grounded after hitting an unauthorized civilian drone near the Palisades fire, the L.A. County Fire Department said. There were no injuries. One rapidly growing blaze broke out on Thursday near Calabasas, one of the wealthiest cities in the U.S. and home to numerous celebrities and gated communities. The so-called Kenneth Fire expanded to 960 acres (388 hectares) in a matter of hours. With nerves on edge, Los Angeles County mistakenly sent an evacuation notice countywide to a population of 9.6 million, even though it had been meant only for the area of the Kenneth Fire, officials said. A correction was quickly sent. 'WE ARE ALIVE' Officials said the Eaton Fire had damaged or destroyed 4,000 to 5,000 structures while the Palisades Fire destroyed or damaged another 5,300 structures. Some Pacific Palisades residents ventured back to areas the fire had already swept through, where brick chimneys were left looming over charred waste and burnt-out vehicles. "We are alive. That's all that matters," private security guard Bilal Tukhi said while standing watch outside his employer's damaged home, saying the scene reminded him of his native, war-torn Afghanistan. School was canceled for a second day on Friday due to the contaminated air, Superintendent Alberto Carvalho said. Winds dropped on Thursday from the 100-mile-per-hour (160-kph) gusts seen earlier in the week, permitting crucial aerial support for crews on the ground. But officials said winds intensified again overnight, and red flag conditions were expected until Friday afternoon. The Eaton Fire reached the grounds of the Mount Wilson Observatory, the place where a century ago Edwin Hubble discovered the existence of galaxies beyond the Milky Way and that the universe is expanding. The Observatory later said the flare-up appeared under control. In Altadena, a racially and economically diverse community nearby, many residents told Reuters they were concerned government resources would be channeled towards high-profile areas popular with A-Listers, while insurance companies might shortchange less affluent households that don't have the financial means to contest fire claims. "They're not going to give you the value of your house ... if they do you really have to fight for it," said Kay Young, 63, her eyes welling up with tears as she stared at a sprawl of smoking rubble, the remnants of a home that had been in her family for generations. HOLLYWOOD FIRE CONTAINED Firefighting crews managed to fully control the Sunset Fire in the Hollywood Hills, after flames had raged atop the ridge overlooking Hollywood Boulevard's Walk of Fame on Wednesday night. In Pacific Palisades, once-palatial homes stood in ruins, while downed power lines and abandoned cars littered the roadways. One resident, John Carr, 65, said he defied evacuation orders and stayed to successfully protect his home. "The house was built by my mother and father in 1960 and I lived here my whole life so there's a lot of memories here. And I think I owed it to them as well to try my best to save it." Carr said there were no fire crews to help him try to save his neighbors' homes. "If they had had some fire trucks and just put a squirt here, a squirt there and kept an eye on things, all these houses would be here now." Officials said they were working to establish curfews for areas affected by mandatory evacuation orders. Aerial video showed block after block of leveled homes, while satellite images showed the two largest fires forming a pincer around the city and thick plumes of smoke from the fires being blown out over the Pacific Ocean. The homes of movie stars and celebrities were among those consumed by flames. Chef Jose Andres, the Spaniard known for providing free food to disaster victims around the world, set up a food truck near the Palisades Fire on Pacific Coast Highway. "Everybody needs support and love in these moments, wealthy or not, poor or not," he said. Actor Jamie Lee Curtis said on Thursday her family would donate $1 million to relief efforts. Firefighters from half a dozen other U.S. states and Canada were being rushed to California, in addition to U.S. federal personnel and materiel. "To our American neighbors: Canada's here to help," said Canadian Prime Minister Justin Trudeau, whose country has experienced its own severe wildfires. Sign up here. https://www.reuters.com/business/environment/hollywood-hills-burn-la-engulfed-by-the-big-one-2025-01-09/
2025-01-09 10:39
DUESSELDORF, Jan 9 (Reuters) - Several companies have expressed an interest in a possible partnership with Thyssenkrupp's TKMS marine division, a company spokesperson said on Thursday after a newspaper reported German engine maker Deutz wanted to take it over. Handelsblatt business daily cited industry sources as saying Deutz was among the companies that had submitted a non-binding offer for TKMS at the end of last year, adding the move would help Deutz to set up a new business area. "We can confirm that several companies have expressed interest in a possible partnership with Thyssenkrupp Marine Systems (TKMS)," a Thyssenkrupp spokesperson said, adding they were subject to confidentiality. "Irrespective of this, we are, as we have stressed, vigorously pursuing a spin-off of TKMS," added the spokesperson. Deutz declined to comment. Carlyle (CG.O) , opens new tab and German state-lender KfW had been poised to take a majority stake in TKMS, which makes submarines and frigates, but the U.S. investor dropped out in October, leaving Thyssenkrupp to pursue alternatives. Handelsblatt had in December reported that Thyssenkrupp had received several bids from Rheinmetall (RHMG.DE) , opens new tab, Luerssen and the German government. Sign up here. https://www.reuters.com/markets/commodities/thyssenkrupp-says-several-firms-interested-marine-division-2025-01-09/
2025-01-09 10:32
Jan 9 (Reuters) - Standard Chartered (2888.HK) , opens new tab has formed a new entity in Luxembourg to offer crypto and digital asset custody services in the European Union, as the global lender looks to cash in on the growing demand for digital security. StanChart is among several major financial institutions that have been entering the crypto sector as more institutional investors adopt the growing asset class. The lender recently launched digital asset custody services in the United Arab Emirates. Standard Chartered has appointed Laurent Marochini, a former innovation head at Societe Generale (SOGN.PA) , opens new tab, as the chief of the Luxembourg entity. Zodia Custody, a crypto custodian owned by Standard Chartered, in March 2023 said it had registered its Irish unit with Luxembourg's financial regulator. Sign up here. https://www.reuters.com/business/finance/stanchart-forms-new-entity-digital-assets-custody-services-eu-2025-01-09/
2025-01-09 10:26
JAKARTA, Jan 9 (Reuters) - Kilang Pertamina Internasional, refinery unit of Indonesia's state owned energy firm Pertamina, aims to produce its first certified sustainable aviation fuel (SAF) in the first quarter of this year, the company said on Thursday. The firm received certification for SAF in December including the International Sustainability Carbon Certification(ISCC) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and ISCC Europe Union (EU) certification. It will produce SAF using the treated distillate hydro treating unit at its Cilacap refinery. "KPI is ready to move forward by producing the first ISCC-certified Pertamina SAF in Indonesia and in the region with used cooking oil as the raw material which is scheduled in the first quarter of 2025," KPI spokesperson Hermansyah Y. Nasroen said in a statement. KPI had said its Green Refinery Cilacap has capacity to process 6,000 barrels of used cooking oil per day to produce hydrotreated vegetable oil and SAF with total output estimated about 300,000 kilolitres per year. Sign up here. https://www.reuters.com/business/energy/pertamina-unit-produce-iscc-certified-saf-q1-2025-01-09/
2025-01-09 10:20
UK government bond yields highest in 16 years Higher yields add to worries over UK government finances Finance ministry says it has 'iron grip' on public purse LONDON, Jan 9 (Reuters) - The pound fell to its lowest since late 2023 on Thursday, under pressure from a selloff in global bonds that has driven the UK government's borrowing costs to their highest in over 16 years, which has reignited concern about Britain's finances. Sterling was last down 0.6% at $1.2295, having touched its lowest since November 2023 earlier in the day, while the cost of hedging against bigger price swings over the coming month jumped to its highest since the March 2023 banking crisis . Global bond yields have soared this week on the back of concern about rising inflation, reduced chances of a drop in interest rates, uncertainty over how U.S. President-elect Donald Trump will conduct foreign or economic policy and the prospect of trillions of dollars in extra debt. The UK market has been hit particularly hard. Benchmark 10-year gilt yields have spiked by a quarter point this week alone to their highest since 2008, as confidence in Britain's fiscal outlook deteriorates. Finance minister Rachel Reeves is facing her first major test, as turmoil in the bond market could force her to cut future spending. Ordinarily, higher gilt yields would support the pound, but right now, that relationship has broken down, reflecting investors' worry about the country's finances. "This is the bond market starting to discipline the UK government. And at the moment they want to fight the market, and that never ends well," Lloyd Harris, head of fixed income at Premier Miton Investors, said. In a statement late on Wednesday, the UK finance ministry said it would maintain "an iron grip" on the public finances. Sterling has been one of the best-performing currencies against the dollar in the last couple of years, largely because of the Bank of England's policy of keeping UK interest rates higher for longer than other major central banks, which creates an incentive for foreign investors to earn interest from UK assets. Trump's proposed policies on trade tariffs and immigration carry the risk of fuelling U.S. price pressures, thereby limiting the Federal Reserve's ability to cut rates, which has sent the dollar soaring against virtually every other currency. The derivatives market shows traders believe the Fed will deliver one rate cut this year, but are not fully pricing in the chance of a second. The UK market, meanwhile, shows almost identical expectations for the BoE. Britain is struggling with slower growth, persistent inflation and a deteriorating labour market, lagging behind the United States, which shows resilience in virtually every area. "We had this story of the UK being better than Europe, the currency is doing better, interest rates are higher, everything’s fine (for sterling)," Societe Generale chief FX strategist Kit Juckes said. “The danger now is people start to get a general sense of why not use sterling for the short side of our long dollar trade," he said. Britain's economy is flat-lining, while the labour market is deteriorating rapidly, as employers grapple with tax rises in the Reeves' October budget, which contained the biggest overall tax increases since 1993. The yield on 30-year gilts has hit its highest since 1998, echoing the rise in global long-dated yields. The last time UK debt was in the eye of the storm was September 2022, when then-Prime Minister Liz Truss unveiled budget plans that contained billions in unfunded tax cuts that sent gilts into freefall, battered the pound and forced the BoE to step in to stabilise the market. This week's move is nowhere near that of late 2022, when 10-year gilts rose a full percentage point in a week and the pound hit record lows against the dollar. Indeed, PIMCO, one of the world's largest bond investors, told Reuters late on Wednesday it was still positive about UK debt and said much of the rise in gilt yields was a function of the increase in U.S. Treasury yields, rather than a reflection of deeper problems at home. Sign up here. https://www.reuters.com/markets/currencies/pound-biggest-three-day-slide-two-years-gilt-pain-intensifies-2025-01-09/
