2024-12-04 22:34

PRAGUE/WARSAW, Dec 4 (Reuters) - Refiner Unipetrol reported delays in Russian oil deliveries to the Czech Republic via the Druzhba pipeline on Wednesday, while EU envoys failed to agree on whether to allow it to import products made from Russian crude from neighbouring Slovakia. Its operations were not affected, the unit of Polish refiner Orlen (PKN.WA) , opens new tab said, but added it had approached the government about an oil loan in light of "the dynamic situation in the regulatory environment". On Wednesday evening, diplomats in Brussels discussed the future of the EU exemption that allows the Czech Republic to import diesel and other products made from Russian oil. The exemption is part of a proposed 15th package of sanctions on Russia. Diplomats said talks would resume on Friday. In the meantime Czech Industry Minister Lukas Vlcek said the government had approved lending Unipetrol 330,000 metric tons of oil from state reserves. Czech pipeline operator Mero said it was investigating the oil pipeline delivery delays and that alternative supply routes were in use. "The Czech Republic's oil supply is not threatened in any way," it said in a statement, adding that supply via the western route through the TAL and IKL pipelines was running without any problems. The products imports exemption expires on Dec. 5 and deciding on its future requires unanimity. Two sources familiar with the discussions said that one option being considered is a six-month extension. If no consensus is reached the exemption will lapse. The Czech Republic last month said it was not looking to extend the exemption. Separately, oil supplies to Slovakia were uninterrupted, its oil pipeline operator said. The Czech Republic aims to end consumption of Russian oil in July next year after an upgrade to a transalpine pipeline allows it to ramp up shipments from the west, Mero said last month. Sign up here. https://www.reuters.com/business/energy/unipetrol-reports-delayed-russian-oil-flows-imports-ruling-looms-2024-12-04/

2024-12-04 22:01

Powell’s comments last on schedule before meeting Quarter-point cut still expected Jobs, inflation data still to come NEW YORK, Dec 4 (Reuters) - U.S. Federal Reserve Chair Jerome Powell on Wednesday said the economy is stronger now than the central bank had expected in September when it began reducing interest rates, and appeared to signal his support for a slower pace of interest-rate cuts ahead. “The U.S. economy is in very good shape and there’s no reason for that not to continue ...the downside risks appear to be less in the labor market, growth is definitely stronger than we thought, and inflation has come in a little higher," Powell said at a New York Times event. "So the good news is that we can afford to be a little more cautious as we try to find neutral.” His remarks during a wide-ranging half-hour interview that touched only lightly on monetary policy and the economy are likely his last before the Dec. 17-18 policy meeting, as the quiet period when Fed officials refrain from speaking about monetary policy ahead of a meeting starts on Saturday. In-depth comments by some of Powell's key colleagues this week have pointed in the direction of a third straight interest-rate cut, with Governor Christopher Waller saying on Monday he was "leaning toward" a reduction even as others decline to pre-commit to that outcome. Powell's own remarks on Wednesday appear to align him with that more cautious bloc of policymakers and largely echoed his last public appearance in mid-November, when he said the Fed could "carefully" deliberate over its rate cuts and need not be in a hurry. Inflation and jobs data since then, and Waller's comments in particular, substantially pushed up market expectations of another quarter-point cut in the benchmark rate to a range of 4.25% to 4.50%. As economists at BMO summed it up, "Powell said little to alter the market's view that the Fed will likely trim rates." The Fed chair has pressed on the need for the central bank to keep its options open at a time of increased uncertainty about the shape of broader economic policy in the coming year, some concern that its progress on inflation has stalled, and evidence that a feared drop-off in the job market has been avoided. Powell on Wednesday said the Fed's half-point interest-rate cut in September was meant to be "a strong signal that we were going to support the labor market if it continued to weaken." At the time the unemployment rate had ticked up and payroll growth had slowed, and at least one Fed official worried publicly that the Fed's next problem could be too-low inflation. "What happened instead was in the couple of months after that, we got some data revisions, which strongly suggests that the economy is even stronger than we thought," Powell said. Fed officials will get fresh data on the labor market on Friday, and on inflation next week, that will help shape not just the decision at their final policy-setting meeting of the year but also their policy outlook for next year. As Powell spoke the Fed published a survey showing businesses across the country are optimistic about rising demand in coming months, though at the same time worried about the potential inflationary implications of tariffs promised by President-elect Donald Trump. With exact policies yet unknown, though, decisions the Fed will make today "are not about that; they are about what's happening in the economy now," Powell said on Wednesday. Earlier on Wednesday, two other Fed officials - the heads of the regional banks in Richmond and St. Louis - held their cards close. "I'm keeping all my options open," St. Louis Fed President Alberto Musalem said at a Bloomberg monetary policy conference, adding he will look at incoming data before deciding whether rates need to come down again in two weeks. Richmond Fed President Thomas Barkin said at the CNBC CFO Council he believes both inflation and employment are heading in the right direction, but with more data to come before the meeting, he won't prejudge the outcome. A key measure of inflation, the personal consumption expenditures price index excluding food and energy costs, has run sideways in a range of from 2.6% to 2.8% since May, well above the central bank's 2% target. While Fed officials routinely say they feel price pressures are still set to ease, with housing costs in particular slowing in real time but not yet reflected in lagging government data, they also will want proof of that before cutting rates much further. Ahead of Powell's appearance, a key business survey showed some cooling in the vast U.S. services sector and businesses fretting about the likelihood of a new round of tariffs on imports from the incoming Trump administration early next year, which they worry could mean higher prices ahead. At the same time, auto sales in November were the highest in more than three years, showing consumption remains healthy. It's that ongoing mix of hot-and-cold data that is keeping Fed officials on guard and reluctant to offer much by way of concrete forward guidance, even as a few have noted that rates are still well above a level that would cease being a drag on the economy, and would still be even after another quarter-point reduction. Waller, for one, hedged his "leaning toward" a rate cut this month with a proviso that data ahead of the meeting could alter his posture. Sign up here. https://www.reuters.com/markets/us/powell-remarks-watched-sign-pushback-or-support-fed-rate-cut-2024-12-04/

2024-12-04 21:48

Dec 5 (Reuters) - A look at the day ahead in Asian markets. As a degree of calm descends on South Korean markets, for now at least, Asia is set for a positive open on Thursday as investors also draw encouragement from another record high on Wall Street and U.S. bond yields falling to the lowest in a month. Federal Reserve Chair Jerome Powell's upbeat remarks on Wednesday - that the U.S. economy in "remarkably" good shape and he feels "very good" about where U.S. monetary policy is - will also support investor sentiment and risk appetite. The S&P 500 rose for a fourth day on Wednesday for its 55th record high this year, and has now fallen only once in the last 12 trading sessions. The Nasdaq registered its second 1% gain this week. U.S. bond yields declined across the curve, most notably at the short end where the two-year yield fell to 4.12%. That's the lowest since the U.S. presidential election on Nov. 5, signaling that this particular leg of the so-called "Trump trade" has fizzled out. The fall in yields, partly fueled by surprisingly soft U.S. service sector data, was accompanied by a weaker dollar, offering a double dose of relief for Asian and emerging markets. Investors will also draw comfort from the apparent financial stability in South Korea, even though the political situation remains extremely tense and fluid. The won has recovered most of the losses that pushed it to a two-year low on Wednesday, and short-term implied won volatility has eased too. On the other hand, Kospi futures are still pointing to a fall of more than 1% for local stocks at Thursday's open. Meanwhile, market signals from China are also pointing to relative calm in FX but weakness in stocks. The yuan rebounded from a 13-month low to clock its biggest rise in a month on the onshore spot market, while weak service sector data and trade tensions with the US pushed stocks into the red again. The Australian dollar remains on the back foot after GDP data on Wednesday showed that Australia's economy expanded more slowly in the third quarter than was expected. That said, the central bank's first rate cut is still not fully priced in until April, according to the interest rate swaps market. The calendar in Asia on Thursday sees the release of revised South Korean GDP data, inflation numbers from Taiwan and the Philippines, retail sales from Singapore and Australian trade. As political uncertainty swirls in Seoul, it's worth noting that Asia's fourth largest economy only narrowly avoided what would have been a rare recession, according to initial estimates, contracting 0.2% in Q2 and rebounding 0.1% in Q3. Here are key developments that could provide more direction to markets on Thursday: - Reaction to political developments in South Korea - Fallout from collapse of France's government - Taiwan, Philippines inflation (November) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-2024-12-04/

2024-12-04 21:25

NEW YORK, Dec 4 (Reuters) - A single bank sold a large volume of U.S. oil futures contracts in early afternoon trading on Wednesday, a person with direct knowledge of the matter said, pushing prices down more than 1% within minutes and causing traders to scramble to decipher the reason. The sale, just hours ahead of an OPEC+ virtual meeting at which the group is expected to extend supply cuts through the end of the first quarter, left traders scrambling to make sense of the rationale for the transaction. The bank sold 4,000 lots of U.S. West Texas Intermediate crude oil futures in a single block at $69.21 a barrel around 1 p.m. EST (1800 GMT), the person said. The buyer then sold the contracts immediately afterwards, putting pressure on prices, they added. A spokesperson for CME Group (CME.O) , opens new tab, owner and operator of the New York Mercantile Exchange on which WTI futures are traded, confirmed that an outright block of that size traded. They declined to disclose the identity of the parties involved. WTI futures for January delivery fell from $69.42 a barrel at 12:59 p.m. to $68.76 a barrel by 1:00 p.m. WTI futures settled at $68.54 per barrel, down $1.40, or 2%. A lot of WTI futures equates to 1,000 barrels of oil, putting the value of the 4,000-lot trade north of $270 million. The average volume for the front-month WTI contract on the New York Mercantile Exchange since Sept. 4 has been around 200 lots per minute, according to data from financial firm LSEG. "Everyone's trying to figure this out," Mizuho analyst Robert Yawger said when asked about the sharp sell-off. "I have not seen any headlines that would explain it." Sign up here. https://www.reuters.com/markets/commodities/bank-sold-over-270-million-us-oil-futures-ahead-opec-meet-source-says-2024-12-04/

2024-12-04 21:23

Navarro did four months jail time for defying Jan 6 subpoena Trump says Navarro to communicate trade, manufacturing agendas Trump's trade team appears set, with Lighthizer assuming no role WASHINGTON, Dec 4 (Reuters) - U.S. President-elect Donald Trump said on Wednesday he had picked Peter Navarro, a fiercely loyal former aide who did jail time related to the Jan. 6, 2021, U.S. Capitol riot, to be senior counselor for trade and manufacturing, largely reprising a role he played during Trump's first administration. Navarro was sentenced in January to four months in prison after being found guilty of two misdemeanor counts of contempt of Congress for defying a subpoena from a committee probing the attack by Trump supporters. Trump said in a statement that Navarro's mission in the new role "will be to help successfully advance and communicate the Trump Manufacturing, Tariff and Trade Agendas." The role is similar to one Navarro played from 2017-2021 as director of the White House National Trade Council, where he fiercely defended Trump's tariffs on $370 billion worth of Chinese imports and national security tariffs on steel and aluminum. Navarro's appointment appears to round out Trump's new trade team. He has nominated Wall Street CEO Howard Lutnick as Commerce secretary with overall trade leadership, including "additional direct responsibility" for the U.S. Trade Representative's office. Last week, Trump named Jamieson Greer to lead the USTR trade agency, enlisting another veteran of his 2018-2020 U.S.-China trade war. Greer is a protege of Robert Lighthizer, the architect of Trump's first-term tariff and negotiating strategy. Lighthizer, who had been floated as a potential candidate to head the Treasury or Commerce departments in Trump's new administration, has not stepped forward for any other roles since those posts were filled. He could not immediately be reached for comment. Trump said that Navarro, who was often at Lighthizer's side during trade talks, helped renegotiate trade deals with Mexico, Canada and South Korea and "moved every one of my Tariff and Trade actions FAST." "During my First Term, few were more effective or tenacious than Peter in enforcing my two sacred rules, Buy American, Hire American," Trump said. SECURITY CLEARANCE Immediately after being released from a federal prison in July, Navarro spoke at the Republican National Convention in Milwaukee and told the crowd: "I went to prison so you won't have to." "The J6 committee demanded that I betray Donald John Trump to save my own skin. I refused," Navarro told the convention. Navarro's role at the White House would require a security clearance, and a criminal conviction can present vetting problems for federal employees. But Navarro's situation is likely different, as Trump could simply override any concerns raised in Navarro's application, said Brett O'Brien, an expert in security clearance law and owner of the National Security Law Firm LLC in Washington. "Ultimately the powers over security clearances rest with the president," O'Brien said in an interview, adding that Trump could also issue a presidential pardon for Navarro. Sign up here. https://www.reuters.com/world/us/trump-picks-navarro-be-senior-counselor-trade-manufacturing-2024-12-04/

2024-12-04 21:11

MEXICO CITY, Dec 4 (Reuters) - Shares in Mexican retailer Grupo Elektra (ELEKTRA.MX) , opens new tab deepened their losses on Wednesday, in a third day of volatile trades after the local stock exchange lifted a suspension implemented over a possible fraud by one of the company's creditors. Shares in the company - controlled by billionaire Ricardo Salinas - were down nearly 11% in afternoon trading, deepening the more than 70% nosedive recorded on Monday and erasing the 6.5% gains the share price clawed back on Tuesday. Elektra has blasted the stock regulator's lifting of the trading suspension, which began in July when Elektra said it was informed about a possible fraud scheme committed by one of its creditors, Astor Assets, which according to the group illegally disposed of over 7 million shares to sell them to the market. Elektra is set to propose taking the company private at a shareholder meeting scheduled for Dec. 27, after 95% of its shareholders expressed interest. Analysts at Moody's Ratings said the privatization plan poses "reputational risks" for the group's financial arm, Banco Azteca. "The bank maintains significant direct and indirect interlinkages with Grupo Salinas' economic conglomerate," it said, pointing to "substantial related-party exposure, revealing weaknesses on its governance framework from the group's closely held, family-based ownership structure." Sign up here. https://www.reuters.com/business/retail-consumer/shares-mexicos-elektra-slide-wiping-out-day-earlier-gains-2024-12-04/