2024-11-20 05:45

US crude, gasoline stocks rose, distillates fell, EIA data shows Key North Sea oilfield restores full output capacity Escalation in Ukraine war buoys risk premium US vetoes UN Security Council resolution for Gaza ceasefire OPEC+ could delay output increases on weak global demand outlook HOUSTON, Nov 20 (Reuters) - Oil prices settled lower on Wednesday after U.S. crude and gasoline stocks rose by more than expected last week, but losses were capped by worries about the intensifying war between major oil producer Russia and Ukraine. Brent crude futures for January settled down 50 cents, or 0.68%, at $72.81. U.S. West Texas Intermediate crude futures for December expired on Wednesday, and settled down 52 cents, or 0.75%, at $68.87, while the more active WTI contract for January settled down 49 cents, or 0.71% at $68.75. U.S. crude and gasoline stocks rose by more than expected last week, according to data from the Energy Information Administration, which weighed on prices. Further boosting supply, Norway's Equinor (EQNR.OL) , opens new tab said it had restored full output capacity at the Johan Sverdrup oilfield in the North Sea following a power outage. Weak demand in the world's largest crude importer continued, with Chinese stimulus announcements failing to boost oil demand growth in the near-term, Macquarie energy strategists said in a note. The conflict between Russia and Ukraine and concern around future oil supply disruptions helped keep a floor under prices. "These risks to supply are definitely keeping the support here and offsetting to a degree concerns around the global demand outlook," said John Kilduff, partner at Again Capital in New York. Ukraine fired a volley of British Storm Shadow cruise missiles into Russia on Wednesday, the latest Western weapon it has been permitted to use on Russian targets a day after it fired U.S. ATACMS missiles. This has put geopolitical risk back in the market, StoneX energy analyst Alex Hodes said in a note on Wednesday. But long positions in WTI have declined significantly despite the added geopolitical risk, according to Aegis Hedging associate Christian Drolshagen, with hedge funds holding only 50% of summer levels, per CFTC data. Elsewhere, the U.S. on Wednesday vetoed a U.N. Security Council resolution for a ceasefire in Gaza, buoying oil prices' war risk premium on concerns around potential supply disruptions as war in the Middle East continues. "The market is very nervous something could happen with another escalation between the Israelis and Iranians," said Again Capital's Kilduff. "Everyone is focused on (U.S. President-elect Donald) Trump and U.S. producers being let loose, but the flip side of that is that sanctions are definitely back in the market as far as what happens next with Iranian supplies and its ability to export," he added. Global supply could be further squeezed, with OPEC+ potentially set to push back output increases again when it meets on Dec. 1 due to weak global oil demand, according to three OPEC+ sources familiar with the discussions. Sign up here. https://www.reuters.com/business/energy/oil-nudges-up-escalating-ukraine-war-signs-improving-china-demand-2024-11-20/

2024-11-20 05:38

A look at the day ahead in European and global markets from Stella Qiu Trading was subdued in Asia with everyone waiting for the earnings results of AI darling Nvidia (NVDA.O) , opens new tab, the world's most valuable company with a market cap of $3.6 trillion. Expectations are running high given that its shares already rallied 5% overnight. Trade in options points to a nearly $300-billion swing in market value, which will make for a potentially messy trading session ahead. In Asia, shares were mixed, with Japan trailing behind with a drop of 0.4%. Wall Street futures were mostly steady and European stock futures also pointed to a subdued start for markets there. Investors were rattled by Ukraine's use of U.S. missiles to strike Russia, with Russia lowering the threshold for a possible nuclear strike, although those fears seem to have abated a little. Bitcoin broke above $94,000 for the first time on expectations that U.S. President-elect Donald Trump's administration will be crypto-friendly. Trump has yet to announce his pick for Treasury secretary yet but it could come as soon as Wednesday. Before all the Nvidia action, British inflation data for October is due and any upside surprises there would perhaps add to recent signs that the global disinflationary pulse may have stalled. Canada's inflation accelerated back above 2% as investors scaled back the chance of another outsized half-point rate cut from the Bank of Canada in December. Traders are not even sure if the Federal Reserve will cut rates by 25 basis points next month. Economists expect core CPI in Britain to rise 0.3% on a monthly basis, which would push up the annual rate to 3.1% from 2.9% in the prior month. Headline inflation is likely to have rebounded to 2.2% from 1.9% before. For the Bank of England, markets are already pricing in a gradual approach to future easing - about one cut per quarter - after chancellor Rachel Reeves' big spending budget. There are also a few Fed officials due to speak tonight, as well as European Central Bank President Christine Lagarde, all worth watching to see how far the interest rates in Europe and the U.S. could go the opposite way. Key developments that could influence markets on Wednesday: -- UK CPI for October -- Nvidia Q3 earnings -- Fed Board Governor Lisa Cook, Fed Board Governor Michelle Bowman, Fed Boston President Susan Collins and ECB President Christine Lagarde due to speak at events Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-11-20/

2024-11-20 03:24

TOKYO, Nov 20 (Reuters) - The Bank of Japan is laying the groundwork to raise interest rates again, but has left markets guessing how soon and at what pace it could push up still-low borrowing costs. Here is a guide to the BOJ's recent communications on when and how far it could eventually raise interest rates: WHAT HAS THE BOJ SAID AND DONE SO FAR? The BOJ ended negative interest rates in March and raised its short-term policy target to 0.25% in July. In the latest sign another hike was nearing, BOJ Governor Kazuo Ueda said on Nov. 18 the economy was progressing towards sustained wages-driven inflation. Ueda has also talked up the benefits of timely rate hikes, saying that pushing up borrowing costs from ultra-low levels would help achieve long-term economic growth. The rhetoric is similar to that used during the BOJ's previous rate-hike cycle in 2007. Then governor Toshihiko Fukui had said phasing out stimulus early would help achieve stable, long-lasting economic growth by forestalling a bubble. Under Fukui, the BOJ hiked rates twice from zero to bring them up to 0.5% in February 2007. But it was forced back into a rate-cut cycle the following year to combat the global financial crisis. Rates would remain around zero for another 16 years. WHEN COULD THE BOJ NEXT RAISE INTEREST RATES? Ueda is confident wages will keep rising and boost consumption, allowing companies to continue pushing up prices, meeting the prerequisite for more rate hikes. While warning of U.S. economic uncertainty and market volatility, Ueda said the BOJ wouldn't necessarily wait until all such risks disappeared, which suggests he is open to hiking again at the next meeting on Dec. 18-19. BOJ policymakers won't commit to a preset timing for the next rate hike. But they see no problem with markets pricing in a rate hike to 0.5% some time by end-March. WHERE DOES THE BOJ SEE JAPAN'S NEUTRAL RATE? If the economy continues to recover, the BOJ will keep raising its short-term policy rate towards Japan's neutral interest rate - or the level at which monetary policy is neither contractionary nor expansionary. The BOJ keeps short-term rates at 0.25% even though inflation had hovered around 2% for well over two years, meaning inflation-adjusted, real borrowing costs remain very low. By pushing up borrowing costs to levels deemed neutral to the economy, the BOJ can remove what it sees as excessive monetary stimulus. But estimating the neutral rate, which cannot be observed, isn't easy with different models yielding varying results. Major central banks use neutral rates as a benchmark, but warn against overly relying on it in conducting monetary policy. The BOJ has produced staff estimates using different models that show Japan's inflation-adjusted real neutral rate to be in a range of around -1% to +0.5%. That means if inflation were to hit the BOJ's 2% target, the BOJ can hike its short-term rate at least to around 1% without cooling growth. Based on current forecasts made in October, the BOJ expects short-term rates to approach what it considers neutral "in the latter half of the three-year projection period" through March 2027, which suggests some time after October 2025. While board member Naoki Tamura said in September the BOJ must raise rates to at least 1% as soon as late next year, his colleagues remain mum on the neutral rate level. Ueda has said it was too hard to come up with credible estimates due to a lack of data, as Japan had seen rates stuck at zero for so long. WHAT ARE KEY TRIGGERS TO WATCH? Neutral rates aside, yen moves will have a big effect on the BOJ's rate hike timing. A weak yen was one factor that prodded the BOJ to hike rates in July, as it pushes up the cost of imports and broader inflation. Uncertainty over U.S. president-elect Donald Trump's economic policy also complicates the BOJ's decision. Many of his policies are seen as inflationary and may prevent the Federal Reserve from cutting interest rates too much, thereby keeping the yen weak against the dollar. WHEN MIGHT THE BOJ OFFER MORE HINTS? Consumer inflation data for October, due on Nov. 22, will be closely watched for clues on whether companies are passing on rising labour costs through hikes in services prices. Toyoaki Nakamura, a dovish BOJ board member who is cautious about hiking rates too quickly, delivers a speech and news conference on Dec. 5. The BOJ will release its "tankan" quarterly business survey on Dec. 13. If the data shows strength in business mood, capital expenditure plans and corporate inflation expectations, that could heighten the chance of a December rate hike. Sign up here. https://www.reuters.com/markets/rates-bonds/how-far-could-bank-japan-raise-interest-rates-2024-11-20/

2024-11-20 02:05

Trump's social media firm in talks to buy Bakkt Options trading debut on Blackrock's bitcoin ETF lifts sector Big inflows for bitcoon ETFs also a big positive LONDON/SINGAPORE/NEW YORK, Nov 20 (Reuters) - Bitcoin rose to a fresh record high just shy of $95,000 after a report that Donald Trump's social media company was in talks to buy crypto trading firm Bakkt (BKKT.N) , opens new tab boosted expectations of a crypto-friendly regime under his incoming administration. Bitcoin , the world's biggest and best-known cryptocurrency, has more than doubled this year. It was last at $93,709, up 1.6%, after hitting an all-time peak of $94,982.37. The Financial Times said Trump Media and Technology Group (DJT.O) , opens new tab, which operates Truth Social, is close to an all-stock acquisition of Bakkt, which is backed by NYSE-owner Intercontinental Exchange (ICE.N) , opens new tab. Bitcoin has soared more than 40% since the Nov. 5 U.S. presidential election, as traders bet that Trump's stated commitment to support cryptocurrencies would lead to a less restrictive regulatory environment, lifting the sector overall. "The rise of bitcoin over the past 15 years is due to an innovation that cannot be recreated: decentralized electronic cash," wrote Nikhil Bhatia, founder of The Bitcoin layer, a research provider analyzing bitcoin through a global macroeconomic lens, in emailed comments. "The term 'digital gold' best describes this digital asset that has an algorithmically limited supply function. If bitcoin were to reach the market size of gold ($17 trillion), it would imply a price of around $800,000 for 1 BTC," said Bhatia, who is also an adjunct professor of finance at USC Marshall School of Business. Earlier this week, the Wall Street Journal reported Trump was meeting privately with the crypto exchange Coinbase chief executive officer Brian Armstrong, further aiding sentiment. OPTIONS TRADING Also lifting the outlook for the crypto sector was the strong debut , opens new tab on Tuesday of options trading for BlackRock's spot bitcoin ETF (IBIT.O) , opens new tab on the Nasdaq, with a bullish call-to-put ratio of 4.4:1, according to QCP Capital. It tallied nearly $1.9 billion in notional exposure with 354,000 contracts traded, according to James Seyffart, Bloomberg's ETF research analyst. "We expect these options to be popular and, in turn, may positively influence trading volumes of these ETPs (exchange traded products) as the underlying," said Kenneth Worthington, analyst at J.P. Morgan. The growing excitement has taken the global cryptocurrency market's value above $3 trillion to a record high, based on analytics and data aggregator CoinGecko. U.S. spot bitcoin exchange-traded products have attracted about $4.2 billion in inflows since Trump's election victory, about 15% of the total inflows since the products were launched on U.S. stock exchanges in January. Chris Weston, head of research at Australian online broker Pepperstone, said there is real underlying buying pressure for bitcoin, and "another kick higher should bring in a fresh chase from those who like to buy what's strong". Sign up here. https://www.reuters.com/technology/bitcoin-breaches-94000-first-time-2024-11-20/

2024-11-20 00:21

SAO PAULO/BRASILIA, Nov 19 (Reuters) - Brazil's lower house of Congress approved a bill on Tuesday that sets rules for a carbon market in the country, with the text now pending only approval from President Luiz Inacio Lula da Silva to become a law. The bill, which had already received the green light from the Senate, proposes two types of carbon credits markets: a regulated one, with a cap of emissions for specific sectors of the economy, and a so-called volunteer market. WHY IT'S IMPORTANT Companies typically buy such credits to offset a portion of their greenhouse gas emissions, essentially paying for projects that cut climate pollution. Brazil hosts part of the Amazon rainforest, whose protection scientists say is vital to curbing climate change because of the vast quantity of carbon dioxide its trees absorb. ADDITIONAL CONTEXT Brazil's approval comes a week after countries at the United Nations COP29 climate talks in Azerbaijan agreed to rules that could allow for a U.N.-backed global carbon market to be launched as soon as next year. Sign up here. https://www.reuters.com/world/americas/brazils-congress-approves-rules-local-carbon-credits-market-2024-11-20/

2024-11-20 00:18

MELBOURNE, Nov 20 (Reuters) - Mining major Rio Tinto (RIO.AX) , opens new tab said cases of rape and sexual assault at the company persist, a report into the company's culture showed on Wednesday, two years after the industry faced an Australian state inquiry for its poor treatment of women. A Western Australian state government report in 2022 recommended sweeping changes after finding sexual harassment and assault were rife in the sector, detailing what it said was horrifying behaviour against women in the mining industry. Australian miners including iron ore giants BHP (BHP.AX) , opens new tab and Fortescue (FMG.AX) , opens new tab have since taken steps to address sexual harassment, which has been prevalent at remote fly-in fly-out (FIFO) mining operations like Pilbara iron ore. As part of those measures, Rio Tinto undertook a cultural assessment in early 2022 that outlined a culture of bullying, harassment and racism at the global mining giant, and recommended 26 steps the company should take to improve. Two years on, an external progress report found Rio had implemented the majority of those changes although there was more work to do at the global miner, which employs some 57,000 people across 35 countries. The report found eight people reported experiencing actual or attempted sexual assault or rape, compared to five people in 2021. Thirty-two people reported experiencing pressure or requests for sex or sexual acts, compared to 37 people in 2021. The majority of people in both cases were women, the report found. "I read the report with mixed emotions for the continued hurt that people feel and the unsafe behaviours that people are experiencing," Rio's Australia chief, Kellie Parker, told Reuters. "But I'm also encouraged by how much more people are empowered to speak up." The miner has fired a "significant" number of people for those behaviours, Parker said, declining to elaborate. "It's a multi-year journey ... We are staying the course." The report found half or nearly half of respondents perceived improvements in relation to bullying, sexual harassment and racism. However the percentage of people experiencing bullying rose to 39% from 31%, and 7% of survey respondents experienced sexual harassment in the past year, steady from 2021. That was partly due to increasing retaliation in the form of gendered bullying as a response to Rio Tinto's efforts to promote gender diversity and inclusion, it said. Sign up here. https://www.reuters.com/markets/commodities/rio-tinto-probe-finds-rape-pressure-sex-persists-miner-2024-11-20/