2024-12-05 12:09

TORONTO, Dec 5 (Reuters) - The Canadian dollar is expected to recoup only a small fraction of its recent losses over the coming year as the threat of U.S. trade tariffs hampers the outlook for Canada's export-dependent economy, a Reuters poll found. The median forecast of 36 foreign exchange analysts in the Dec. 2-4 poll predicted the loonie would edge 0.3% higher to 1.4034 per U.S. dollar, or 71.26 U.S. cents, in three months, compared to the 1.36 level expected in a poll last month. In a year, the currency was forecast to be up 0.4% at 1.4020, versus 1.32 seen previously. The currency has tumbled nearly 5% since late-September. "If the U.S. puts tariffs of upwards of 25% on Canada, the main adjustment that would take place would likely be through the currency," said Benjamin Reitzes, Canadian rates & macro strategist at BMO Capital Markets. "That would help offset some of the tariffs but not all of them." U.S. President-elect Donald Trump has pledged to impose a 25% tariff on imports from Canada and Mexico until they clamp down on drugs and migrants crossing the border. Canada sends about 75% of its exports to the United States, including oil and cars. The Bank of Canada has said if Trump follows through on his threat it would have an impact on both economies and the central bank would incorporate those into its economic forecasts. Investors expect the central bank to continue its easing campaign at a policy decision on Wednesday. The BoC has cut its benchmark rate by 1.25 percentage points since June to support the Canadian economy, lowering borrowing costs to 3.75%. Canadian Prime Minister Justin Trudeau has promised Trump that Canada will toughen controls over the long undefended joint border. Still, the mere threat of tariffs could forestall business investment. "Until there's clarity on the free trade front, and specifically free trade with the U.S., it will be difficult for some businesses to be putting new money to work in Canada," Reitzes said. (Other stories from the December Reuters foreign exchange poll) Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-forecasts-slashed-us-tariff-threat-2024-12-05/

2024-12-05 12:07

Dec 5 (Reuters) - Meta Platforms Inc (META.O) , opens new tab announced a deal on Thursday to buy the green credits from four large U.S. solar energy projects that will help the Facebook owner meet its clean electricity goals as its power needs surge. The agreement is the latest in a string of announcements Meta has made this year aimed at meeting the energy needs of its power-hungry data centers without harming the climate. The company has previously announced deals with several large solar projects, a geothermal startup, and is seeking proposals from nuclear power developers. In its latest move, Meta signed four contracts with Chicago-based energy project developer Invenergy for 760 megawatts of solar electricity. That is about enough energy to power 130,000 homes. The projects will connect to the power grid between 2024 and 2027 and will be located in Ohio, Texas, New Mexico and Arkansas, Meta and Invenergy said in a joint statement. Meta will receive clean energy credits from the projects rather than using the power directly for its own operations. "These projects will help us continue our commitment to support all of our operations with 100% clean energy," Urvi Parekh, Meta's head of global energy, said in a statement. Sign up here. https://www.reuters.com/sustainability/climate-energy/meta-buys-credits-four-big-us-solar-projects-2024-12-05/

2024-12-05 12:02

PM offers to impose state of emergency in energy Moldova's breakaway region heavily dependent on Russian gas Transit agreement delivering gas via Ukraine expires on Dec. 31 CHISINAU, Dec 5 (Reuters) - Moldova's president on Thursday sacked Energy Minister Victor Parlicov and the prime minister called for two other senior energy officials to resign for failing to tackle an energy crisis in the small former Soviet republic. Prime Minister Dorin Recean also said he would ask parliament to impose a state of emergency in the energy sector. Ukraine has repeatedly said it would not extend its gas transit agreement with Russia after it expires on Dec. 31, raising the risk of a cut-off of Russian gas to several eastern European countries, including Moldova. Moldova's Moscow-backed breakaway Transdniestria region is particularly dependent on Russian gas. "The resignations are the first stage of correcting the crisis situation. I had full confidence in Minister Parlicov. But he did not ensure the purchase of gas," Recean said at a press conference. The presidential decree sacking Parlicov followed. Parlicov, who had held talks on gas supplies last week in Russia with the head of gas giant Gazprom (GAZP.MM) , opens new tab, said he knew his position was temporary and he was leading the ministry "as long as I was trusted." He told a press conference that the importance of gas was overstated in Moldova compared to electricity, but said he did "not want to make a scandal" out of his dismissal. He had been told of his dismissal minutes before the prime minister spoke, though he had anticipated his departure. "I am no victim. I will now have plenty of free time while others will be subject to stress," he said. Recean also called for the resignation of state energy company Energocom head Victor Binzari and Moldovagaz supervisory board member Sergiu Tofilat for failing to buy and store enough volumes of gas at favourable prices. STATE OF EMERGENCY The government plans to ask parliament to impose a preventative state of emergency starting Dec. 16, he added. "A state of energy emergency is necessary to manage the risks of energy supply disruptions, at least partially, and to allow the government to impose certain actions, including restricting energy exports," Recean added, citing uncertainty over gas supplies. Moldova has received about 2 billion cubic metres of gas per year from Russia through Ukraine and since 2022, Transdniestria and Chisinau have agreed that all Russian gas received by Moldova will go to the breakaway region. Transdniestria also has a large power plant fueled by Russian gas and Chisinau, in turn, buys electricity from the region at a relatively low fixed price. Recean urged state bodies responsible for energy to prepare for various scenarios, including cuts of power supply from the power plant in Transdniestria. Moldova has previously said that cutting off supplies through Ukraine is a "very realistic" scenario, and that if Kyiv stops such transit, gas could be delivered via the TurkStream pipeline to Turkey and then via Bulgaria and Romania to Moldova. Sign up here. https://www.reuters.com/world/europe/moldova-pm-urges-resignation-energy-minister-two-senior-energy-officials-2024-12-05/

2024-12-05 11:33

LONDON/MOSCOW/DUBAI, Dec 5 (Reuters) - OPEC+ will delay its plan to raise oil output, currently set to start in January, during its online meeting on Thursday, an OPEC+ source told Reuters, to provide additional support for the oil market in 2025. OPEC+, which pumps about half the world's oil, was planning to begin unwinding output cuts through 2025. However, a slowdown in global demand and rising output outside the group pose hurdles to that plan and have weighed on prices. Several OPEC+ sources have told Reuters an extension of the output cuts for three months is the most likely outcome, while others have said a longer period is possible. All of the sources declined to be identified by name. "There will be no surprise decisions," one of the sources said when asked what the meeting will decide. OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies such as Russia, started its online talks, another source said. A monitoring group of top ministers was scheduled to gather ahead of the full OPEC+. Despite the group's supply cuts, global oil benchmark Brent crude has mostly stayed in a $70 to $80 per barrel range this year and on Thursday was near $73 a barrel, having hit a 2024 low below $69 in September. OPEC+ members are holding back 5.86 million barrels per day of output, or about 5.7% of global demand, in a series of steps agreed since 2022 to support the market. An output hike of 180,000 bpd - a fraction of the total - was planned for January from the eight members involved in OPEC+'s most recent cuts of 2.2 million bpd. The hike has been delayed from October due to falling prices. The group also needs to address a 300,000 bpd output hike for the United Arab Emirates agreed in June that is scheduled to start in January 2025 and be phased in gradually. The UAE is keen for it to go ahead, sources said. Sign up here. https://www.reuters.com/business/energy/opec-will-delay-oil-output-hike-meeting-source-says-2024-12-05/

2024-12-05 11:28

LONDON, Dec 5 (Reuters) - The risk premium on French bonds dropped and bank stocks rallied on Thursday after a widely expected no-confidence vote toppled Prime Minister Michel Barnier's government, with focus turning to what a new government might look like. Barnier resigned and President Emmanuel Macron is hunting for a new prime minister, a day after opposition to Barnier's 60-billion euro ($63 billion) belt-tightening effort led far-right and leftist lawmakers to vote his government out. That makes any meaningful progress towards closing France's budget deficit, which is set to top 6% of GDP this year, even harder. The closely watched risk premium - the spread France pays for 10-year government debt over Germany - dropped to the lowest in nearly two weeks at 77 bps. The spread had touched 90 bps last week, the highest since 2012's euro zone debt crisis. French stocks (.FCHI) , opens new tab earlier rose as much as 0.65% to their highest in over three weeks, but retreated to trade up 0.2% by 1515 GMT. Shares in French lenders extended the day's rally. BNP Paribas (BNPP.PA) , opens new tab, Credit Agricole (CAGR.PA) , opens new tab and Societe Generale (SOGN.PA) , opens new tab were up between 2-4%. The euro was around 0.5% higher. A number of these moves accelerated in late trading on Thursday. Analysts cited as a catalyst a Bloomberg report that quoted far-right leader Marine Le Pen, the driving force behind government collapse, as saying a budget could be delivered in weeks if the next prime minister is prepared to narrow the deficit more slowly. "The interpretation could be that she wants to cooperate with a new government and with Macron's party and that's what is calming markets in France, namely that she doesn't want Macron to resign immediately," said Rune Thyge Johansen, analyst at Danske Bank. Separately, a Financial Times report that European Union countries are discussing setting up a fund to tap bond markets for defence spending also pushed German bond yields higher, analysts said, narrowing the gap with France. Earlier, in another sign of stability, France raised 4.6 billion euros ($4.84 billion) from a longer-dated bond sale on Thursday, with demand in line with recent auctions. UNCERTAINTY AHEAD Thursday's relief rally doesn't reduce the uncertainty ahead for French markets. Macron is aiming to install a new prime minister swiftly, sources told Reuters, with one saying he wanted to name one as soon as Saturday. He will address the nation at 1900 GMT. "The market is reacting quite well to that," said Francois Savary, chief investment officer at Genvil Wealth Management. French media reported that Francois Bayrou, a centrist Macron ally often cited as a possible successor to Barnier, had lunch with Macron. Le Pen said on Wednesday her camp would support an emergency law that rolls over the 2024 budget's tax-and-spend provisions into next year to ensure stopgap financing. But any new prime minister will face the same challenges as Barnier in getting a 2025 budget adopted. There can be no new parliamentary election before July. "The market is asking whether the new prime minister is going to be perceived as market friendly or not, and is capable of passing a budget in a fragmented parliament," said Amedeo Scippacercola, head of European government bond trading at Mizuho. Ratings agency S&P, which left its French rating unchanged on Friday, said a rollover of this year's budget was now the most likely outcome, adding that the country is left without a clear path towards reducing its deficit. The political backdrop in France has been fraught since Macron called the snap elections on June 9 that brought Barnier's minority government to power. France's bond spread remains around 30 bps higher since then, and French bank shares have racked up double-digit losses in that time. "Depending on who will be heading this future government, markets may not see this eventually as a good thing,” said Kevin Thozet, investment committee member at French asset manager Carmignac, adding that he was staying away from French bonds and bank shares. ($1 = 0.9493 euros) Sign up here. https://www.reuters.com/markets/europe/french-stock-futures-fall-after-government-collapses-2024-12-05/

2024-12-05 11:26

LONDON, Dec 5 (Reuters) - The British pound rose for a third consecutive session on Thursday as it continued to recover from a six-month trough hit in late November. Sterling climbed 0.15% on Thursday to $1.2721 , up from a recent low of $1.2475 on Nov. 22. The euro was flat versus sterling at 82.78 pence , around its lowest in more than two years as political stress in France and a weak euro zone economy take their toll. Sterling has been at the mercy of the dollar in recent months, dropping from a 1-1/2-year high in October as the U.S. jobs market roared ahead and falling further in November as the re-election of Donald Trump boosted the American currency. Yet it has found a footing over the last week as the dollar has lost steam. Bank of England data on Thursday showed British employers' expectations for wage growth have cooled a bit further. Separate figures showed activity in Britain's construction industry picked up in November, though neither release impacted sterling. The pound has largely remained out of the limelight as the re-election of Trump as has led to swings in currencies whose economies might face tariffs, such as the euro, Chinese yuan, Mexican peso and Canadian dollar. On Thursday, investor attention was also on bitcoin , which rose past $100,000 for the first time on record. Britain's economy has largely escaped Trump's ire, sparing the pound some volatility. Its economy is dominated by services, which do not face tariffs, and recorded a small trade in goods surplus with the United States in the middle of this year. "The UK's trade mix is much more directed toward the service sector than the manufacturing sector, and the tariffs go on goods rather than services," said Chris Turner, global head of markets at ING. "I think sterling's been a bit spared from Trump tariff threat." Sign up here. https://www.reuters.com/markets/currencies/sterling-ticks-higher-third-day-gains-2024-12-05/