2024-12-04 06:12

Dec 4 (Reuters) - Shares of Australia's Lynas Rare Earths (LYC.AX) , opens new tab climbed to a near three-week high on Wednesday, a day after China banned exports of some critical mineral to the United States. China on Tuesday banned exports of gallium, germanium and antimony that have widespread military applications to the United States, escalating trade tensions after Washington's latest crackdown on China's chip sector. China's decision has raised concerns that it could target other critical minerals, including those with even broader usage such as nickel or cobalt, and rare-earths. Shares of Lynas, the world's biggest producer of rare earth minerals outside China, ended the session up by 5% at A$7.32, and was among the top gainers on the benchmark ASX 200 (.AXJO) , opens new tab, which slipped 0.4%. The ban signals the near-inevitability of a heightened U.S.-China trade war 2.0, as Beijing continues its tit-for-tat response to Washington's chip restrictions, said Hebe Chen, a market analyst at IG. "This rising tension could potentially position Australia, a key player in the global critical minerals market, to capitalize on increased demand and diversify its export partnerships," Chen said. The order also requires stricter review of end-usage of graphite items exported to the U.S. Shares of graphite companies in Australia such as Syrah Resources (SYR.AX) , opens new tab and Renascor Resources (RNU.AX) , opens new tab closed 13.6% and 3.3%, respectively. Sign up here. https://www.reuters.com/markets/commodities/australias-lynas-near-3-week-high-after-china-bans-export-critical-minerals-us-2024-12-04/

2024-12-04 06:02

LITTLETON, Colorado, Dec 4 (Reuters) - Gas-fired electricity production in Germany jumped by a record 79% in November from the month before as utilities scrambled to offset a second straight month of sharply below-normal output from wind farms. Wind power output has been 25% below year-prior levels in October and November due to slow wind speeds, depriving power firms of a key electricity source just as winter set in. Wind farms supplied 27% of German utility electricity in 2023. To plug the resulting generation gap, utilities lifted gas-fired electricity production from 5.34 terawatt hours (TWh) in October to 9.55 TWh in November, data from energy think tank Ember shows. That was the largest ever monthly rise in German gas-fired generation, and was accompanied by a jump in coal-fired production to 20-month highs as utilities also had to offset a drop in solar generation to the lowest level this year. Wind output is forecast to return to around 6% above normal levels in December, according to LSEG, which should help ease the strain on Germany's power systems before year-end. But with solar generation set to fall further during the dead of winter, power firms may not be able to cut back on fossil-fuel output until well into 2025. That means Germany's power emissions, which are already at their highest since early 2023, may climb further in the months ahead before dropping again next spring. DEALING WITH A DRAWN OUT 'DUNKELFLAUTE' A 'Dunkelflaute' or 'dark wind lull' is a period of low wind speeds that greatly curtail wind farm generation. And Germany's main wind farm areas have suffered from an extended lull since October, which is when wind generation largely held flat at around 10 TWh instead of climbing steadily on the usually brisk autumn winds. The October wind generation total was the lowest for that month since 2016, and was a full 26% below the generation total during the same month in 2023. Germany's power producers have experienced wind lulls before, and can usually accommodate them for a few weeks by tweaking output from other sources. But this year's Dunkelflaute stretched into November as well, and kept wind generation to less than 12 TWh compared to nearly 16 TWh in November 2023. That back-to-back wind shortfall meant that power firms had to rely on fossil fuels to not only make up for less-than-expected wind output, but to also raise total generation to meet higher system demand during winter. NO REPRIEVE? Wind forecasting models call for German wind generation to be around 6% above the long-term average in December, according to LSEG. If that recovery materialises, German utilities will be able to deploy that extra power to balance system needs, and could potentially dial back generation from fossil fuel plants. However, weather forecasts call for temperatures in Germany to average well below normal for the next two weeks, according to LSEG. That means power firms may be forced to lift generation from all sources in order to meet higher heating demand. That in turn will likely trigger a further climb in German power sector emissions, which hit nearly 19 million metric tons of carbon dioxide (CO2) and a 21-month high in November, according to Ember. The opinions expressed here are those of the author, a market analyst for Reuters. Sign up here. https://www.reuters.com/business/energy/germanys-weak-winds-trigger-record-surge-gas-fired-power-maguire-2024-12-04/

2024-12-04 05:49

A look at the day ahead in European and global markets from Ankur Banerjee Political turmoil moves to Europe as French lawmakers gear up to vote on no-confidence motions on Wednesday that could topple the fragile coalition government. Earlier in the day in Asia South Korean politicians called for the impeachment of President Yoon Suk Yeol after a failed martial law bid jolted markets. French bond futures are weak as are European futures , while the euro remains not far off a two-year low it touched in November, ahead of the crucial vote for the eurozone's second-biggest economy. PMI data from the region will also provide more clarity on how the economies are faring. Investors have punished French assets during the political crisis, with the spread between French bonds and the German benchmark widening further and a sell-off in the euro gathering pace. Since President Emmanuel Macron called snap elections in early June, France's CAC 40 (.FCHI) , opens new tab has dropped nearly 10% and is the heaviest loser among top EU economies. The single currency is down nearly 4% in the same period. Over in Asia, the spotlight was firmly on South Korea after president Yoon declared martial law only to reverse the move hours later, triggering the biggest political crisis in decades in Asia's fourth-largest economy. A coalition of lawmakers from opposition parties said they planned to propose a bill to impeach Yoon on Wednesday which should be voted within 72 hours. The political brouhaha has come at the absolutely wrong time for Korean assets which are already the laggards in the region. The benchmark Kospi Index (.KS11) , opens new tab is down nearly 2% on the day, taking its 2024 losses to 7.5%, easily the worst performing major Asian stock market. The South Korean won was stable in Asian hours after dropping steeply overnight when the martial law was first announced, but the stability was suspected to be engineered by authorities. It has dropped 9% versus the dollar this year, the region's worst performer. The finance ministry said on Wednesday it was ready to deploy "unlimited" liquidity into financial markets. Elsewhere, The Australian dollar dropped more than 1% to a four-month low after weaker-than-expected economic growth boosted the case for earlier rate cuts by the central bank there. Key developments that could influence markets on Wednesday: - November PMI data for France, Germany, UK and euro zone Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-12-04/

2024-12-04 05:34

French lawmakers back no-confidence motion US data mixed: private payrolls rise, services activity eases Powell says Fed can afford to be cautious Korean won rallies vs dollar amid political turmoil BOJ pricing shift weakens yen NEW YORK, Dec 4 (Reuters) - The euro rose marginally against the U.S. dollar on Wednesday, but came off session highs, after a widely expected collapse of the French government following a no-confidence vote by opposition lawmakers. The greenback, on the other hand, was little changed overall, as the December interest rate cut chances remained on track amid signs that the American economy was slowing. The South Korean won , one of the biggest movers on Tuesday, rose against the dollar, bolstered by suspected central bank intervention and the finance ministry's pledge of "unlimited" liquidity support to markets. That came a day after South Korean President Yoon Suk Yeol declared martial law in a late-night television address, only to lift it hours later. The euro was slightly up against the dollar at $1.0512 after far-right and left-wing lawmakers joined forces to back a no-confidence motion against Prime Minister Michel Barnier and his government, with a majority 331 votes. Barnier is expected to tender his resignation and that of his government to President Emmanuel Macron shortly. "At this point, it really becomes a question of how much worse the situation gets from here," said Eugene Epstein, head of trading and structured products, North America, at Moneycorp in New Jersey. "We don't have any kind of clarity on what the outcome of the votes is going to be and how long essentially the budget is used as leverage to get all the parties' political interest sorted." Three sources told Reuters that French President Emmanuel Macron aims to install a new prime minister quickly if his government falls on Wednesday. Barnier's removal would deepen the political crisis in the euro zone's second-largest economy, and could further weigh on the euro. Investors also digested comments from European Central Bank President Christine Lagarde in a parliamentary hearing on Wednesday. She said the ECB will continue to lower rates, but did not commit to any pace of easing. The ECB will next meet on Dec. 12, and economists overwhelmingly expect another 25 basis-point (bp) rate cut, the fourth such move this year. FED SEEN STILL CUTTING RATES IN DECEMBER In the United States, the dollar index was flat at 106.33. Wednesday's data did not shake expectations of an interest rate cut later this month. U.S. private payrolls increased at a moderate pace in November, but it came below expectations, while annual wages for workers staying in their jobs edged up for the first time in 25 months. Private payrolls rose by 146,000 jobs last month after advancing by a downwardly revised 184,000 in October, the ADP report showed. Economists polled by Reuters had forecast private employment increasing by 150,000 after a previously reported 233,000 jump in October. At the same time, the U.S. services sector activity slowed in November after posting big gains in recent months. The Institute for Supply Management's non-manufacturing purchasing managers index slipped to 52.1 last month after surging to 56.0 in October, the highest since August 2022. Economists polled by Reuters had forecast the services PMI easing to 55.5. U.S. fed funds futures raised the chances of a 25-bp cut this month to 78%, from 73% late Tuesday, while reducing the odds of a pause in easing to 22% from 27% the day before, according to the CME's FedWatch. "It's possible the Fed cuts again in December, which can put tactical pressure on the dollar because the market is long dollars already," said Vassili Serebriakov, FX strategist at UBS in New York. "But unless U.S. data really deteriorates, which we don't see at the moment, any weakness in the dollar is going to be short-lived." The dollar edged higher after St. Louis Federal Reserve President Alberto Musalem said on Wednesday he expects the Fed to continue cutting rates, but said it is keeping options open on the Dec. 17-18 meeting. Musalem will be a voter on the Federal Open Market Committee next year. Fed Chair Jerome Powell later on Wednesday seemed to signal his support for a slower pace of interest-rate cuts ahead, noting the economy is stronger now than the central bank had expected in September when it began easing. In South Korea, the won rallied on Wednesday after plunging overnight in the wake of President's declaration of martial law, which was reversed hours later. The dollar was last down 0.8% at 1,413.6 won, after jumping overnight. But politics remained in focus and South Korean lawmakers on Wednesday submitted a bill to impeach President Yoon. Dealers said the Bank of Korea may have supported the won at Wednesday's open by selling dollars. The dollar also climbed against the yen , rising 0.6% to 150.52, after media reports raised doubts about market expectations the Bank of Japan would hike interest rates this month sent government bond yields lower . Sign up here. https://www.reuters.com/markets/currencies/dollar-holds-ground-fed-path-pondered-won-stable-after-martial-law-lifted-2024-12-04/

2024-12-04 05:28

MUMBAI, Dec 4 (Reuters) - The Indian rupee was a tad stronger on Wednesday, supported by gains in the Chinese yuan and on dwindling pressure from foreign portfolio outflows, which have been a persistent pain point for the domestic currency over the last two months. The rupee was at 84.6475 as of 10:45 a.m. IST, compared with its close at 84.6850 in the previous session. The currency declined to its all-time low of 84.7575 on Tuesday, pressured by strong bids for the U.S. dollar in the non-deliverable forwards (NDF) market and weakness in the Chinese currency, prompting the Reserve Bank of India (RBI) to intervene. On Wednesday, dollar bids in the NDF market were lighter and foreign banks were spotted offering dollars, which gave the rupee some breathing room, a trader at a state-run banks said. Foreign institutional investors turned net buyers of Indian equities on Tuesday, pouring in about $430 million after three sessions of selling. The offshore Chinese yuan rose about 0.1% to 7.29 on Wednesday, after hitting a one-year low in the previous session, while other Asian currencies were mixed. The dollar index rose 0.1% to 106.4. "With the Federal Reserve leaning towards a December rate cut ... alongside slowing FII (foreign institutional investor) outflows and the RBI’s vigilance, the rupee is unlikely to breach the 85 level," Amit Pabari, managing director at FX advisory firm CR Forex, said. Investors are currently pricing in a near 73% chance of a U.S. rate reduction this month, up from 61% a day earlier, according to the CME's FedWatch tool. U.S. labour market data later in the day, alongside remarks from Fed Chair Jerome Powell will be parsed for cues on the future path of policy rates. Meanwhile, the RBI will kick off its December monetary policy meeting on Wednesday, with a decision expected on Friday amid some anticipation of policy easing following weak September-quarter economic data. Sign up here. https://www.reuters.com/markets/currencies/rupee-finds-mild-relief-yuan-nudges-higher-portfolio-outflows-ease-2024-12-04/

2024-12-04 05:19

Dec 4 (Reuters) - Activist investor Palliser Capital has intensified its bid to push Rio Tinto (RIO.L) , opens new tab to abandon its London listing, demanding an independent review of the miner's corporate structure in Australia, the Financial Times reported on Wednesday. Palliser had first called for Rio to abandon its London listing and unify its corporate structure in Australia in May. Sign up here. https://www.reuters.com/markets/commodities/palliser-intensifies-campaign-push-rio-give-up-london-listing-ft-reports-2024-12-04/