2024-11-27 11:54

US gasoline stocks rose by 3.3 million barrels, EIA says US crude stocks fell by 1.8 million barrels Inflation appears stuck above Federal Reserve's target Israel-Hezbollah ceasefire started on Wednesday OPEC+ considers delaying oil output increase, sources say Nov 27 (Reuters) - Oil prices were little changed on Wednesday, pressured by a large surprise build in U.S. gasoline stocks and worries about U.S. interest rate cuts next year, but prices drew support from concerns about supply eased after a ceasefire deal between Israel and Hezbollah. Brent crude futures settled 2 cents higher at $72.83 a barrel. U.S. West Texas Intermediate crude slipped 5 cents to $68.72. U.S. gasoline stocks rose by 3.3 million barrels in the week to 212.2 million barrels, the Energy Information Administration said, counter to analysts' expectations in a Reuters poll for a draw of 46,000 barrels. Crude stocks fell by 1.8 million barrels in the week ended Nov. 22, the EIA added, far exceeding analysts' expectations in a Reuters poll for a draw of 605,000 barrels. Market sources, citing the American Petroleum Institute, had said on Tuesday that oil inventories fell by 5.94 million barrels and fuel inventories rose last week. "It is surprising to see gasoline inventories building so much and implied demand not really budging week-on-week, given expected record travel this Thanksgiving," said Matt Smith, an analyst at Kpler. Oil prices also were dented by U.S. data showing progress on lowering inflation appears to have stalled in recent months, which could narrow the scope for the Federal Reserve to cut interest rates in 2025. Traders added to bets the U.S. central bank will lower borrowing costs by 25 basis points at its Dec. 17-18 meeting, according to CME Group's FedWatch tool. However, they anticipate the Fed will leave rates unchanged at its meetings in January and March. Slower-than-expected rate cuts would keep the cost of borrowing elevated, which could slow economic activity and dampen demand for oil. Both oil benchmarks settled lower on Tuesday after Israel agreed to a ceasefire deal with Lebanon's Hezbollah group, effective Wednesday after both sides accepted the agreement brokered by the U.S. and France. The ceasefire started on Wednesday. "The real question will be for how long it (the ceasefire) will truly be honoured," said Dennis Kissler, senior vice president of trading at BOK Financial. Oil gained support after sources from the OPEC+ group, which includes the Organization of the Petroleum Exporting Countries and allies led by Russia, said it is discussing a further delay to the oil output increase set for January. The group, which produces about half of the world's oil, had aimed to gradually ease production cuts through 2024 and 2025, but weaker global demand and rising output outside OPEC+ have cast doubt on that plan. The decision will be made at a Dec. 1 meeting. The heads of commodities research at Goldman Sachs (GS.N) , opens new tab and Morgan Stanley (MS.N) , opens new tab said oil prices are undervalued, citing a market deficit and risk to Iranian supply from possible sanctions when U.S. President-elect Donald Trump takes office. Sources also told Reuters on Tuesday that crude oil would not be exempt from the 25% tariffs that Trump has threatened to impose on all products coming into the U.S. from Mexico and Canada. Oil industry analysts and traders warned the move would likely raise oil prices for U.S. refiners, squeezing margins and driving up the cost of fuel. Sign up here. https://www.reuters.com/business/energy/oil-prices-steady-amid-focus-israel-hezbollah-ceasefire-opec-policy-2024-11-27/

2024-11-27 11:54

TSX ends up 0.3% at 25,488.30 Eclipses Friday's record closing high Consumer staples sector climbs 1.9% Utilities add 0.9% Nov 27 (Reuters) - Canada's stock market rose to a record high on Wednesday, led by gains for the utilities and consumer-related sectors, as long-term borrowing costs fell and investors grew less anxious about the prospect of sweeping U.S. tariffs on imports from Canada. The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) , opens new tab ended up 83.16 points, or 0.3%, at 25,488.30, eclipsing the record closing high it posted on Friday. Investors have "had a day to think about the tariff situation and maybe it's not as bad as they originally thought," said Michael Sprung, president of Sprung Investment Management. After Monday's market close, U.S. President-elect Donald Trump said he would impose a 25% tariff on imports from Canada and Mexico in a move that weighed on energy, railroad, aerospace and auto-parts manufacturing shares. "There's a lot of details to be worked out with these tariffs and I'm pretty sure President Trump does not want to be in a position to cause massive inflation in the U.S.," Sprung said. "And the U.S. depends on Canada for a lot of energy products, whether it's oil, gas or electricity." Oil producers in Canada and Mexico will likely be forced to reduce prices and divert supply to Asia if Trump imposes tariffs on crude imports from the two countries, analysts said. The consumer staples sector rose 1.9%, consumer discretionary was up 0.8% and utilities ended 0.9% higher. The Canadian 10-year yield eased 5 basis points to 3.236%, its fourth-straight day of declines. Shares of fuel distributor Parkland Corp (PKI.TO) , opens new tab rose 5.1% as the company said it would enter into a stock buyback program. Alimentation Couche-Tard (ATD.TO) , opens new tab was another standout, rising 4.3%, as a number of analysts raised their target price on the convenience store operator's stock. Sign up here. https://www.reuters.com/markets/tsx-futures-edge-up-investors-await-key-us-data-2024-11-27/

2024-11-27 11:51

STRASBOURG, Nov 27 (Reuters) - Ursula von der Leyen on Wednesday secured European Parliament backing for her new team at the European Commission, paving the way for her to take office at the start of next month amid mounting challenges in Europe and across the Atlantic. A majority of lawmakers at the European Parliament on Wednesday endorsed the new Commission, headed by Ursula von der Leyen for a second term. Three hundred and seventy lawmakers voted for the new European Union executive team, while 282 voted against. The new Commission is expected to take up its duties on Dec. 1 after its formal appointment by the European Council via a qualified majority. The issues Von der Leyen will have to deal with next year include Donald Trump's return to the White House as U.S. president, along with mounting tensions with China, the war in Ukraine and climate change. She has pledged to announce proposals in her first 100 days to help companies reach the EU's 2050 carbon neutrality goal, to boost European defence, set out a vision for EU agriculture and present reports on planned EU enlargement. Sign up here. https://www.reuters.com/world/europe/eu-lawmakers-endorse-von-der-leyens-new-european-commission-2024-11-27/

2024-11-27 11:25

Nov 27 (Reuters) - Sterling rose against the dollar and was little changed versus the euro on Wednesday, with investors focused on the market reaction to U.S. President-elect Donald Trump's tariff promises. Markets will closely watch the U.S. economic data later in the day, which could affect the Federal Reserve's easing path. The greenback fell to a one-week low as investors grew cautious about Trump's tariff pledges while rebalancing their portfolios before the end of the month. The pound rose 0.3% to $1.2612 . It hit $1.2484 last week, its lowest level since May 9. Analysts flagged that expectations for a hawkish stance by the Bank of England and possible U.S. tariffs against the euro area will be supporting the pound versus the single currency. However, if the trade conflict escalates, there are risks for the British currency as the global economy will slow down. The BoE's Clare Lombardelli said on Wednesday that Trump's proposed tariffs would also pose a risk to growth in the UK. Sterling was flat versus the single currency at 83.41 pence per euro . "With one-week deposit rates at 4.75%, the highest in the G10 space, sterling may be deriving inflows as the market makes up its mind about the speed and magnitude of Trump's policy agenda," said Chris Turner, head of forex strategy at ING. The BoE's Lombardelli made the case for only gradual reductions in interest rates on Monday. "On the UK, we fundamentally remain convinced that the UK economy would have difficulty supporting the terminal rates as currently priced by the market, like the euro zone, as both are faced with similar structural weakness and low growth," U.S. asset manager Candriam said in a note. Money markets priced in a BoE rate at around 4% by end 2025, while discounting an ECB deposit facility rate below 1.8% from the current 3.25%. Sign up here. https://www.reuters.com/markets/currencies/sterling-drops-versus-dollar-flat-against-euro-awaits-data-2024-11-27/

2024-11-27 11:18

A look at the day ahead in U.S. and global markets from Mike Dolan With Wall Street about to log off for what's effectively a four-day Thanksgiving holiday, trade tariff jitters are replaced by inflation angst as the Federal Reserve gets another price check. Although big automakers (GM.N) , opens new tab, (F.N) , opens new tab took a hit, broad U.S. stock indexes (.SPX) , opens new tab, (.IXIC) , opens new tab seemed unperturbed on Tuesday by President-elect Donald Trump's threat of 25% tariffs on imports from Canada, Mexico and China. The main heat was in the Mexican peso, Canadian dollar and their related bourses - while stocks in Europe, Japan and South Korea wobbled again. But the S&P500 gained more than half a percentage point through the session, closing back above 6,000 at another record high. Futures were back off marginally ahead of today's bell. With trading thinning this week, stocks are still feeding off assumptions about the extent of Trump's agenda of tax cuts, tariff rises and immigration crackdowns. Surveys showing a jump in consumer confidence this month helped. There's also been some relief this week from a calming of the Treasury market, with yields retreating in a week of big debt sales - due to mix of optimism about money manager Scott Bessent's nomination as Treasury Secretary and an ebbing crude oil price following the Israel-Hezbollah ceasefire. Minutes from the Fed's post-election meeting this month showed policymakers divided over how much further they may need to cut interest rates from here, avoiding much guidance on the forward trajectory. Part of the Fed's problem is visibility over the impact of Trump's economic plans. Goldman Sachs' 'ready reckoner', for example, shows a 25% tariff on U.S. imports from Canada, Mexico and China - more than 43% of all U.S. imports - would generate government revenue of about 1% of GDP. But, by lifting the effective U.S. tariff rate by 8.6%, it would boost the core PCE price index by 0.9%. Wednesday gets two cuts of that personal consumption expenditures inflation gauge - along with third quarter GDP revisions and the monthly update from October. The latter is expected to show annual headline and core PCE inflation gauges - the Fed's favored measures - ticking back up to 2.3% and 2.8% respectively. And yet Treasury yields , continued to retreat ahead of those releases, falling back to levels seen just after the November election. Even market inflation expectations, captured by 10-year inflation swaps or 'breakeven' rates in inflation-protected Treasuries , are ebbing too. Some of the optimism in Treasuries may have come from indications in the Fed minutes that some policymakers believe it may soon be time to lower the interest rate on funds that banks and money market funds park at the Fed - so that it once again matches the bottom of the Fed's policy rate range. The so-called overnight reverse repurchase agreement rate, one of two technical lending rates the Fed uses to ensure the federal funds rate stays within its monetary policy target range, is currently set at 4.55%, while the policy rate range is 4.5% to 4.75%. The fallback in U.S. yields also took the steam out of the dollar (.DXY) , opens new tab, whose main index slipped back further from Friday's two-year highs and skidded sharply against Japan's yen , which was last up 1.2%. Some of the moves were exaggerated by the holidays stateside and end-of-month positioning. There was a mixed picture in overseas markets. Europe's stocks continue to fall on everything from the trade war worries to France's political impasse over its budget. European auto stocks (.SXAP) , opens new tab slid for a second day on world trade jitters. French stocks and bonds were hit hard, driving the premium the government pays for long-term borrowing to its highest since the euro zone debt crisis of 2012, as investors grow uneasy over the fate of the new government and its budget. Prime Minister Michel Barnier told French broadcaster TF1 on Tuesday that France could face fiscal turmoil if his government falls. Far-right leader Marine Le Pen has been threatening to topple France's coalition government in a no-confidence vote, over a disagreement with Barnier over the proposed budget, which contains measures to cut spending and raise taxes. Among French lenders, Societe Generale (SOGN.PA) , opens new tab and BNP Paribas (BNPP.PA) , opens new tab fell around 2% each. Elsewhere, China and Hong Kong stocks outperformed as data showed a less sharp decline in industrial profits, while traders placed bets Beijing will roll out more supportive policies to counter the risks of U.S. tariffs. Key developments that should provide more direction to U.S. markets later on Wednesday: * US October personal income and expenditure and PCE inflation gauge, Oct durable goods orders, Oct trade balance, Oct pending home sales, weekly jobless claims, Q3 GDP revision and corporate profits and PCE price deflator, Oct retail/wholesale inventories * European Central Bank chief economist Philip Lane speaks * US corporate earnings: Autodesk * US Treasury sells $44 billion of 7-year notes Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-11-27/

2024-11-27 10:52

WARSAW, Nov 27 (Reuters) - Polish refiner Orlen is estimated to have lost 5 billion zlotys ($1.22 billion) on the Olefins petrochemicals project, State Assets Minister Jakub Jaworowski said on Wednesday as he presented the results of an audit of state companies. "The losses in the Olefin project are estimated at 5 billion zlotys," Jaworowski said. Orlen has said it will not continue with the project in its current form and will decide by December between "optimising", suspending or terminating the investment. The Ministry of State Assets' audit of state treasury companies was launched after the new coalition government of Donald Tusk took power. The audit revealed losses from unsuccessful investments and unjustified expenses at the companies of at least "several billion zlotys", Jaworowski said in a press release. The largest were those incurred by Orlen, he said. He said about 50 notifications have been submitted to the prosecutor's office and there may be more. Executives who served at state companies under the previous Law and Justice (PiS) government have previously rejected accusations of wrongdoing. ($1 = 4.0969 zlotys) Sign up here. https://www.reuters.com/markets/commodities/orlen-has-lost-12-bln-petrochem-project-state-audit-finds-2024-11-27/