2024-11-21 06:20
Nov 21 (Reuters) - Federal Reserve Bank of New York President John Williams sees inflation cooling and interest rates falling further, he told Barron's in an interview published on Thursday. Two percent is the inflation rate that can best balance the central bank's employment and price stability goals, Williams told Barron's. Sign up here. https://www.reuters.com/markets/rates-bonds/feds-williams-sees-inflation-cooling-interest-rates-falling-further-barrons-2024-11-21/
2024-11-21 06:14
Stocks sputter as Nvidia's growth slows, bitcoin hits new high Ukraine fired a series of cruise missiles into Russia Gold broke above the 50-day moving average LONDON, Nov 21 (Reuters) - Spot gold price rose for the fourth consecutive day on Thursday, with safe-haven demand for the precious metal supported by global stocks under pressure after AI bellwether Nvidia's revenue growth forecast failed to excite investors. Spot gold was up 0.7% at $2,669.30 per ounce by 1040 GMT. "This is a risk-off move. But the safe-haven pressure is coming more from falling stocks after Nvidia disappointed the Street than from Ukraine's fight against Russia," said Adrian Ash, head of research at online marketplace BullionVault. Signs of rising geopolitical risks, which usually support demand for gold, increased after Ukraine fired a series of British Storm Shadow cruise missiles into Russia on Wednesday, just a day after firing U.S. missiles. However, the strength of these risks is limited as Russia's invasion of Ukraine has been going on for more than 1,000 days, even though Russian President Vladimir Putin on Tuesday lowered the threshold for a nuclear strike in response to a broader range of conventional attacks. "If gold prices jumped every time Putin rattled his nuclear arsenal at the West, we would have crossed $10,000 (per ounce) long ago, never mind the $3,000 level now forecast for 2025 by some Wall Street pundits," Ash said. Spot gold prices hit a record high of $2,790.15 per troy ounce on Oct. 31 and then fell to a two-month low of $2,536.71 by mid-November, reacting to the Republicans' clean sweep in the U.S. Nov. 5 election. The gold's price recovery since then has been supported by the uncertainty of U.S. President-elect Donald Trump's cabinet and applying proposed policies while traders await more clarity on the country's interest rates outlook. On the technical front, the spot gold price broke above the 50-day moving average at $2,660.9 on Thursday and now faces resistance from the 21-day moving average at $2,679.8. Spot silver gained 0.6% to $31.05 per ounce, platinum fell 0.3% to $958.65 and palladium advanced 0.2% to $1,023.08. Sign up here. https://www.reuters.com/markets/commodities/gold-gains-fourth-straight-session-amid-geopolitical-woes-2024-11-21/
2024-11-21 06:10
Wall Street stocks finish higher Dollar hits 13-month high after labor-market data Russia-Ukraine concerns lift gold, oil Trump expected to be positive for cryptocurrencies NEW YORK, Nov 21 (Reuters) - An index of global stock markets edged higher in choppy trading on Thursday as investors digested lackluster revenue forecasts from artificial-intelligence chipmaker Nvidia and bitcoin approached the $100,000 milestone. Shares of Nvidia (NVDA.O) , opens new tab, the world's most valuable company and a major contributor to the gains this year in the benchmark S&P 500, hit a record high early in the session but retreated to end up 0.53%. The chipmaker forecast its slowest revenue growth in seven quarters. "(Nvidia's) results are still good but I think the disappointment came from maybe not quite as much of an upward guide on the Q4 number for the top line," said Garrett Melson, portfolio strategist at Natixis Investment Managers in Boston. On Wall Street, the three main indexes finished higher in a choppy session led by gains in utilities, financials, consumer staples and industrials. Communication services stocks were the biggest drag, driven by losses in Alphabet (GOOGL.O) , opens new tab, which ended down about 6%. U.S. prosecutors argued on Wednesday that Alphabet must divest its popular Chrome browser to end Google's search monopoly. The Dow Jones Industrial Average (.DJI) , opens new tab rose 1.06% to 43,870.35, the S&P 500 (.SPX) , opens new tab rose 0.53% to 5,948.71 and the Nasdaq Composite (.IXIC) , opens new tab rose 0.03% to 18,972.42. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab was up 0.38% to 851.05 after losing ground early in the session. European shares (.STOXX) , opens new tab were up 0.41%, buoyed by a rally in energy and technology stocks. "The market seems to be looking for a narrative right now and is in a little bit of a void for any news that can shape the direction of things," Melson added. Bitcoin soared and is closing in on the $100,000 milestone. The world's largest cryptocurrency has gained more than 40% since Donald Trump won the Nov. 5 election, driven by expectations that his administration will be crypto-friendly. It gained 3.75% to $98,005.00. Ethereum rose 8.77% to $3,350.80. Markets are also eyeing Trump's pick for Treasury secretary, who will play a key role in implementing his agenda of tariffs, tax cuts and deregulation. The dollar rose in choppy trading as investors assessed declining weekly jobless claims, suggesting labor-market strength, and comments from two Federal Reserve governors on the path of interest rates. Against the Japanese yen , the dollar weakened 0.62% to 154.45 but it strengthened 0.29% to 0.887 against the Swiss franc . The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.37% to 107, reaching a 13-month high. The euro down 0.41% at $1.0479. Oil prices settled up about 2% after Russia and Ukraine exchanged missiles, raising crude-supply concerns. Brent crude futures rose 1.95% to $74.23 per barrel, while U.S. West Texas Intermediate crude futures increased 2% to $70.10. Spot gold rose, on track for the fourth-consecutive session of gains after hitting a more than one-week high. Spot gold rose 0.8% to $2,671.28 an ounce. U.S. gold futures settled 0.9% higher at $2,674.90. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-11-21/
2024-11-21 06:03
LITTLETON, Colorado, Nov 21 (Reuters) - United States exports of LNG to Europe are set to jump in the coming weeks after the price spread between domestic natural gas and Europe's main gas pricing hub hit one-year highs. The price differential between U.S. Henry Hub natural gas futures - the U.S. gas price benchmark - and the TTF gas trading facility in The Netherlands has widened by over 30% from the current 2024 average for delivery during the coming winter. That's signalling bumper profit potential for U.S. exporters of liquefied natural gas (LNG), who are increasing the volumes of gas flows to export facilities. The increased LNG shipments to Europe will trigger a revenue rise for the largest U.S. LNG exporters, including Cheniere , TotalEnergies (TTEF.PA) , opens new tab and Freeport LNG. But higher demand for natural gas at LNG export terminals also raises the potential for a further climb in U.S. domestic gas prices, which are already at their highest since January. That means that while U.S. LNG exporters have a strong opportunity to boost revenues, they also face the risk of reviving inflation and triggering a backlash against the export of energy products needed for power generation at home. EUROPE BOUND U.S. natural gas prices are currently around 80% lower than TTF prices, giving LNG exporters the opportunity to profit from the wide price differential between the gas grades. So far in 2024, Henry Hub gas futures have averaged around $8 per million British thermal units (MMBtu) less than TTF gas futures, according to LSEG. That price differential in favour of U.S. suppliers has encouraged sustained U.S. LNG exports to Europe, which have totalled around 82 million cubic meters over the first 10 months of the year, according to Kpler. However, an even wider price spread is projected through the coming winter which looks set to spur even larger shipments. Forward markets from November through the end of March 2025 indicate that the Henry Hub-TTF price spread is roughly $11 per MMBtu. That's a $3 increase over the 2024 average so far, and a strong incentive for U.S. exporters to boost shipments further. Europe has bought over two-thirds of U.S. LNG shipments since 2022, when Russia's invasion of Ukraine triggered cuts to Russian gas pipeline flows to Europe and sparked a scramble by European gas buyers to plug supply gaps with LNG. And U.S. LNG exporters are keen to maintain market share in Europe as the cost of serving European buyers is far lower compared to customers in Asia, due to far longer journey times to buyers in Japan, China and South Korea. The roughly 12-day trip from Cove Point LNG terminal in Maryland to Wilhelmshaven in Germany - a major European LNG import hub - is a third of the time of the trip to Guangdong in China, the world's largest LNG buyer. That relatively quick turnaround time means U.S. exporters will prefer to prioritise Europe over other destinations over the coming months. However, Europe's relatively strong gas prices means the continent is also prized by other sellers. DIVERSIONS & CONGESTION? LSEG forward price data indicates that TTF prices are around $2 per MMBtu higher than LNG prices based off Brent-indexed LNG contracts, which utilize the price of Brent crude oil in formulating LNG prices. That price premium in Europe has already triggered traders to divert some cargoes from other markets, with the aim of capturing the higher prices available in Europe compared to other regions. Any sustained price strength in Europe relative to other markets will spur traders with unsold cargoes from Qatar and elsewhere to focus on finding buyers in Europe. That in turn will provide stiff competition for U.S. exporters, even if U.S. sail times to Europe are roughly a week shorter compared to shipments from Qatar. However, more competition for buyers in Europe will in time serve to depress European prices, which should then erode the economics of sending LNG to Europe from distant origins. That bodes well for U.S. exporters, as long as domestic gas prices remain vastly cheaper than gas supplies in other LNG export hubs. The main risk for U.S. LNG exporters is that domestic gas prices quickly push higher, which could be triggered by the enduring strong gas demand at LNG export terminals alongside a sharp increase in domestic gas use for heating. Such a scenario could spark backlash among U.S. power consumers, who are already reeling from high inflation and could push for measures that slow the flow of U.S. natural gas to overseas consumers. That means U.S. LNG sellers may be need to be content to exploit the current open sales window to Europe, and then dial back sales volumes if domestic prices gather more upside momentum. The opinions expressed here are those of the author, a market analyst for Reuters. Sign up here. https://www.reuters.com/business/energy/us-lng-exports-primed-jump-price-arb-europe-opens-wide-maguire-2024-11-21/
2024-11-21 05:55
TOKYO, Nov 21 (Reuters) - Tariff hikes under the new Trump administration do not shift the inflation outlook in Europe, ECB policymaker Francois Villeroy de Galhau said on Thursday, urging the European Central Bank to keep its options open. To rebuild the U.S. manufacturing base, President-elect Donald Trump has said he would put new tariffs of at least 60% on Chinese imports and 10%-20% on goods from elsewhere in moves that economists say could disrupt trade flows and raise costs. "The balance of risks on growth and inflation is ... shifting to the downside, and possible U.S. tariffs are not expected to alter significantly the inflation outlook in Europe," Villeroy said in a speech in Tokyo. Villeroy, who is also governor of the Bank of France, said the ECB should continue to reduce the degree of monetary tightness through interest rate cuts. The pace of future ECB rate cuts should be guided by "agile pragmatism", said Villeroy, adding that the central bank maintains "full optionality for our upcoming meetings". Sign up here. https://www.reuters.com/markets/europe/ecb-policymaker-says-trump-tariff-hikes-wont-shift-europes-inflation-outlook-2024-11-21/
2024-11-21 05:41
Farmers in top exporting countries hold wheat for better prices Global wheat prices near four-year low amid bumper harvests Asian millers covered for 2 months' supply, Gulf for 45 days Russian farmers sell to earn high interest, but supply limited SINGAPORE/CHICAGO, Nov 21 (Reuters) - Wheat growers in several exporting countries are reluctant to sell their crops with prices near four-year lows, traders, farmers and millers say, leaving flour makers with dwindling supplies and vulnerable to any potential upswing in prices. Typically grain processors buy wheat three to four months in advance. But millers in Asia, including Indonesia, the world's No. 2 wheat importer, are currently covered for about two months, and in the Middle East, most grain processors only have up to 45 days of supplies, two millers and a trader said. The limited supply held by flour makers reduces their buffer against any production shortfalls that would trigger a rally in world prices, with global reserves already projected to reach a nine-year low, and fuel food inflation. Farmers are hoarding their crop as global wheat prices have slumped to their lowest since 2020 on solid output in Australia and Argentina and on improved growing conditions in major exporting regions including the U.S. and Black Sea region. Wheat sales in Australia, the world's fourth-biggest wheat exporter, are running at half the pace of last year at 500,000 tons contracted for November shipment. At the same time, farmers in the U.S. and parts of the Black Sea region are storing grains gathered earlier this year in silos, hoping for higher prices, industry players said. "Farmers are not happy with the current price being offered to them," said a grains trader at an international trading firm in Singapore. "Farmer selling is very slow and it is not just Australia where the harvest is going on, it is the same situation in several exporting countries." FARMERS HOLD OUT In the physical market, Black Sea wheat with 12.5% protein is being offered at $265 a metric ton, including cost and freight (C&F) to Asia, down from $275 a couple of weeks ago. New-crop Australian Premium White wheat is quoted near $280 a ton, C&F, down from $290. "Prices have come off pretty dramatically. And personally, yeah, I am not selling any wheat at the current stage," said Cordell Kress, a farmer from Rockland in the northwestern U.S. state of Idaho. "If you are not needing money right away, it is kind of just, store it or hold on to it and hope for better prices or some other problem in Russia or Australia that will cause our prices to go up here domestically." Kress grows primarily soft white and hard red spring varieties of wheat. In Australia, farmers are selling other crops instead. "You have very strong sales of chickpeas for cash flow, and now we are getting strong sales of canola into the current prices," said Rod Baker at Australian Crop Forecasters in Perth. TIGHT SUPPLY AHEAD Along with lack of supply from farmers, high interest rates have deterred millers from stocking up on wheat, leaving them exposed if prices rise. "Lower supply cover does leave us vulnerable, but with high interest rates it doesn't make sense to hold large stocks," said one Dubai-based purchase manager at a flour mill in the Middle East. Even with robust southern hemisphere production, global wheat stockpiles are projected by the U.S. Department of Agriculture to shrink to a nine-year low by mid-next year. "Wheat crops in the northern hemisphere still have to go through crucial development stages, any issues with the weather until harvest in July can trigger a rally in prices, given how tight the inventories are," said Ole Houe, director of advisory services at IKON Commodities in Sydney. In a slight reprieve for millers, attractive interest rates have prompted Russian farmers, who had been withholding their crops, to change tack and sell crops so they can deposit money in banks. But top wheat exporter Russia might be running out of supplies. Moscow's grain export quota, to be in place from February to June, could be nearly three times smaller than the 29 million tons a year earlier. Sign up here. https://www.reuters.com/markets/commodities/flour-millers-face-supply-crunch-wheat-farmers-tighten-grip-stocks-2024-11-21/
