2024-11-19 06:05
2023/24 net loss at 1.5 bln eur EPCG can step back from steel deal if 50:50 JV fails Free cash flow before M&A positive at 110 mln eur ESSEN, Germany, Nov 19 (Reuters) - Thyssenkrupp (TKAG.DE) , opens new tab on Tuesday said it took a fresh 1 billion euro ($1.06 billion) impairment on its struggling steel division, citing the sector's deteriorating outlook as well as future investments needed to decarbonise production. The latest impairment on steel is the second in as many years and comes as talks with Czech billionaire Daniel Kretinsky, who already owns 20% in the division, continue over the question whether that stake could be raised to 50%. Like its German industrial peers, Thyssenkrupp has been struggling with a weakening global economy, rising competition from China and high costs, forcing it to seek new owners for its iconic steel business as well as its warship division. Steelmaking, one of the most energy-intensive industries, has battled high power costs and cheaper Asian rivals for years while facing billions of euros in investment to cut emissions and produce steel via renewable sources. "In respect of our main strategic issues, the current fiscal year will be a year of decisions – especially for Steel Europe and Marine Systems," CEO Miguel Lopez said. Kretinsky, via his energy holding EPCG, can step back from a deal with Thyssenkrupp if talks for a 50:50 stake fail, Thyssenkrupp said, adding discussions now depended on a new business plan for the unit which is currently being drawn up. While Thyssenkrupp's net loss came in at 1.5 billion euros in 2024, the group turned an unexpected positive free cash flow before mergers and acquisitions of 110 million euros thanks to prepayments by customers of its Marine Systems division. The group, which makes products as varied as submarines and car parts, had expected negative free cash flow before M&A - a gauge for investors of the conglomerate's operational health - of around 100 million euros. Thyssenkrupp's shares were indicated to open 1.5% higher. ($1 = 0.9438 euros) Sign up here. https://www.reuters.com/markets/commodities/thyssenkrupp-takes-fresh-1-bln-impairment-steel-division-2024-11-19/
2024-11-19 05:46
A look at the day ahead in European and global markets from Kevin Buckland Signs are positive for European stocks' open, with futures pointing up, and equity indices across most of Asia also in the green. Like Monday, there's little news to guide market direction, with a reversal of some of the big moves from last week when world stocks suffered their worst week since the start of September again being the main driver of moves. The U.S. dollar is trading on the back foot again today, extending its retreat from a one-year peak versus major peers from last week. Treasury yields sagged to new lows in Tokyo, pulling away from Friday's high above 4.5%, a level last seen 5-1/2-months ago. The outlook for Federal Reserve easing seems to have returned as the market's main preoccupation, in the absence of highly anticipated announcements of Donald Trump's picks for the Treasury and trade portfolios. A run of robust U.S. data combined with expectations of faster inflation under Trump's higher-tariff, tighter-immigration policies have seen bets for a December rate cut pared to around 58% on CME FedWatch, from greater than 65% odds a week ago. Despite the relative news vacuum, AI darling Nvidia's (NVDA.O) , opens new tab earnings on Wednesday loom large as the event likely to set the tone for equity markets at least for the final half of the week, and possibly into year-end. There's little on the data docket in Europe today, which is headlined by final consumer inflation readings for October for the euro zone as a whole. Similarly, the U.S. only has housing figures on tap. There are plenty of central bank speakers though, including Kansas City Fed President Jeffrey Schmid late in the day. Ahead of that, Bank of England Governor Andrew Bailey and his peers appear in parliament, where they are likely to be peppered with questions about the implications of the government's big-spending budget and Trump's potential trade policies. ECB policy maker Frank Elderson also gives remarks at a green finance forum in Frankfurt. And in Sweden, Riksbank's First Deputy Governor Anna Breman takes the podium. Key developments that could influence markets on Tuesday: -BoE officials speak in parliament -Euro zone final HICP (Oct) -ECB's Elderson speaks -Riksbank's Breman speaks -Kansas City Fed's Schmid speaks Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-11-19/
2024-11-19 05:31
Ukraine hits Russia with US missiles for first time Silver at 1-week peak, palladium at a near 2-week high Several Fed officials due to speak this week Market sees 63% chance of 25 bps US rate cut in December Nov 19 (Reuters) - Gold prices climbed for a second consecutive session on Tuesday, hitting a one-week high as mounting Russia-Ukraine tensions sparked a rush for safe-haven assets, while investors awaited key signals on the Federal Reserve's interest rate plans. Spot gold rose 0.6% to $2,628.76 per ounce by 01:42 p.m. ET (1842 GMT), hitting its highest level since Nov.11. U.S. gold futures settled 0.6% higher at $2,631 per ounce. On Monday, gold jumped 2%, marking its biggest one-day rise since mid-August and rebounding sharply from a two-month low hit last week. "We think that the overnight reports on Russia changing its nuclear doctrine following Ukraine's first long-range missile strike on Russian territory has led to some safe-haven flows in gold," said Daniel Ghali, commodity strategist at TD Securities. "Barring another consolidation in prices, speculative investors just don't have enough dry powder in their war chest for gold to resume its upward trajectory at this juncture." Gold's allure is bolstered by geopolitical tensions, economic risks and a low interest rate environment. Multiple Fed officials are scheduled to speak this week, which could offer further insights about the rate-cut path. Traders currently see a 63% chance of a 25-basis-point cut in December. "Since the arguments in favour of gold have not diminished, the lower price level is apparently leading to buying interest," Commerzbank analysts noted. Geopolitical uncertainty, central bank buying, and swelling deficits in the United States and other western nations are further supporting gold, the bank said. Also supporting bullion was the dollar's pullback that comes after a strong rally last week to a one-year high fuelled by the Trump trade euphoria. A weaker dollar makes gold more appealing to buyers in other currencies. Among other metals, spot silver added 0.1% to $31.17, hitting a one-week high earlier in the session. Platinum gained 0.5% to $971.66. Palladium rose 2.8% to $1,032.99, hitting a near two-week high after rising more than 5% on Monday. Sign up here. https://www.reuters.com/markets/commodities/gold-hits-one-week-high-softer-dollar-markets-await-fed-cues-2024-11-19/
2024-11-19 05:30
Foreigners pile in to bank shares, cyclical stocks Hedge funds dabble in bond shorts, dealers say Pricing for December rate hike jumps to 54% SINGAPORE, Nov 19 (Reuters) - Investors are betting a slide in the yen will force a hawkish shift at the Bank of Japan and are shorting bonds, buying bank shares and bracing for rates to rise as soon as next month. Markets are paying attention because Japan's last rate hike 3-1/2 months ago - against the tide of global cuts - was part of the trigger for a chaotic surge in the yen that whipped around the world as positions funded in yen were quickly unwound. With the yen at 154 to the dollar and near levels that drew intervention, followed by a rate hike, investors are taking fewer chances this time. They have accumulated positions, notably in bank stocks, which stand to benefit from higher rates. "There seems to be a lot more attention and sensitivity being paid around the BOJ," said Shinji Ogawa, co-head of Japan cash equities sales at J.P. Morgan in Tokyo. "That's being expressed through various asset classes, whether it be direct overnight index swaps...(or) financials, which is an area where there's obviously pretty aggressive share price movement." Dealers say some hedge funds have also taken out bets on bond yields rising. Since late October, pricing for a 25 basis point hike in Japan in December has gone from negligible to about a 54% probability. "Fast money is again focusing on short end of the curve," said Keita Matsumoto, head of financial institution sales and solutions at Citigroup Global Markets Japan, with hedge funds accumulating small short positions over recent weeks. In the two weeks since the U.S. election, Tokyo bank shares (.IBNKS.T) , opens new tab have surged about 13% against a mostly flat broader market (.N225) , opens new tab where exporters, especially in cyclical sectors like industrials (.INFRO.T) , opens new tab and machinery (.IMCHN.T) , opens new tab, have been the other outperformers. "Our focus has been on Japan mid-caps and Japan banks," said George Efstathopoulos, manager of a $102 million global multi-asset fund at Fidelity International, as they stand to benefit from wage inflation and higher interest rates respectively. "More recently, we are also turning more constructive on broader Japan large caps, as yen weakness should translate into a better earnings picture at a time when global growth is re-accelerating," he said. YEN STORY The price of the yen is a major factor in Japan's economy and equity market performance and can influence monetary policy through the cost of imports, which drive inflation. BOJ Governor Kazuo Ueda made only passing mention of the currency, which has lost more than 30% against the dollar since the start of 2021, in a closely watched policy speech on Monday. However, markets think the falling yen will pressure the central bank to move sooner rather than later, particularly as foreign exchange traders bet on a deeper slide. "In light of the recent performance of the Japanese yen, the BOJ might need to re-evaluate whether they need to be more hawkish in the coming meetings," said Nathan Swami, Asia-Pacific head of currency trading at Citi in Singapore. Speculators in foreign exchange have been adding to bets against the yen, according to CFTC data . To be sure, bets in the rates market are modest and a more than 375 basis point gap between two-year U.S. rates and two-year Japanese rates is a powerful fundamental driver of the yen's weakness that has many investors comfortable. "Given the yield differentials and the carry trade, many clients have been structurally eager to be long the dollar," said Shafali Sachdev, head of investment services in Asia at BNP Paribas Wealth Management in Singapore. Still, the scars of August, when the yen's lurch higher drove the Nikkei's largest one-day drop since 1987, has the currency strategy at the front of investors' minds. "I think Japan will be a yen story as much as a Japanese fundamentals story," said BNY strategist Geoff Yu. And, said Citi's Matsumoto, that may even be a boon for foreign investors in Japan if the currency stops eating in to dollar returns. "Because global investors have to worry about where this yen depreciation may stop," he said. "So they are looking for the bottom on JPY." Sign up here. https://www.reuters.com/markets/asia/investors-reload-rate-hike-bets-japan-2024-11-19/
2024-11-19 05:12
Singapore stocks hit highest level since Nov 2007 Ringgit rises 0.3%, Taiwan dollar gains 0.4% BSP on course for more rate cuts, says governor Nov 19 (Reuters) - Emerging Asian stock markets rallied on Tuesday, with Bangkok and Manila trading higher on expectations of rate cuts in the near future, while Singapore stocks hit a 17-year high. Thailand stocks (.SETI) , opens new tab gained as much as 1.3% to hit their highest since Nov. 8, after third-quarter economic growth data highlighted slowing private consumption, ramping up pressure on the central bank to lower interest rates. Analysts at TISCO Securities expect the Bank of Thailand to stay pat on rates in December. However, they see a high chance of a 25-basis-point rate cut in the first quarter of next year. Philippine stocks (.PSI) , opens new tab rose as much as 1.1% to hit their highest since Nov. 12, after the central bank governor said Bangko Sentral ng Pilipinas (BSP) was on course for more rate cuts. The peso was trading flat. BSP Governor Eli Remolona told reporters that a third rate cut was likely either at the central bank's December meeting or at its first meeting next year, and further reductions beyond that could be expected in 2025. Citi analysts expect a 25-bp easing in borrowing costs in December and a total of 75 bps of rate cuts over the course of next year. Losses in stocks (.MSCIEF) , opens new tab and currencies (.MIEM00000CUS) , opens new tab in developing nations around the world, and especially in emerging Asia, had widened since Donald Trump won the U.S. presidential election, as traders weighed his touted policies of tariffs and the dollar rallied on expectation of slow interest rate cuts. Singapore shares (.STI) , opens new tab hit their highest in 17 years, led by financials. Analysts expect Southeast Asia's top performing stock market in 2024 to continue its momentum next year as the central bank unveils stimulus measures to further boost the market. The city-state's Straits Times Index rose as much as 0.9%, while the Singapore dollar was trading unchanged. "New measures to strengthen Singapore's equities market will be announced in phases through 2025, likely delivering a much needed boost to trading liquidity and valuation multiples," Morgan Stanley analysts said in a note. Among other stock markets, Taipei (.TWII) , opens new tab recouped Monday's losses and was trading 1.3% higher, while Jakarta (.JKSE) , opens new tab and Mumbai (.NSEI) , opens new tab gained 1.1% and 1.3%, respectively. Currencies in developing nations were mostly upbeat, with the Malaysian ringgit , Indonesian rupiah and South Korean won gaining 0.3%, 0.2% and 0.2%, respectively. HIGHLIGHTS: ** Beijing, Shanghai announce tax breaks to boost ailing property markets ** Thai PM speaks to U.S. President-elect Trump, both parties pledge support to each others' administrations ** Indonesia considering another tax amnesty programme, lawmaker says Sign up here. https://www.reuters.com/markets/asia/singapore-shares-hit-17-year-high-market-revival-efforts-2024-11-19/
2024-11-19 04:47
Biden allows Ukraine to use U.S. weapons to strike into Russia China crude oil imports likely surged in Nov - analyst, shipping data Norway's Johan Sverdrup oilfield partially resumes output US crude stockpiles rose by 4.75 million bbl last week - market sources citing API NEW YORK, Nov 19 (Reuters) - Oil prices were broadly unchanged on Tuesday as signs of escalation of the Russia-Ukraine war kept investors cautious of supply disruptions, but the partial restart of production in Norway's Johan Sverdrup oilfield limited gains. Brent crude futures rose by a cent to settle at $73.31 per barrel. U.S. West Texas Intermediate crude futures rose 0.3%, or 23 cents, to close at $69.39 a barrel. For the first time, Ukraine used U.S. ATACMS missiles to strike Russian territory on Tuesday, Moscow said. Russian foreign minister Sergei Lavrov described the attack as a Western escalation. Russian President Vladimir Putin lowered the threshold for a possible nuclear strike. "This marks a renewed build up in tensions in the Russia-Ukraine war and brings back into focus the risk of supply disruptions in the oil market," ANZ Bank analyst Daniel Hynes said. Market watchers also pointed to signs of higher crude oil purchases by top importer China. China's crude imports are on track to end November at or close to all-time highs, StoneX energy analyst Alex Hodes said, referencing data from vessel tracker Kpler. Weak imports by China so far this year have weighed heavily on oil prices, pulling Brent futures down 20% from their April peak of over $92 a barrel. China's crude oil imports in October fell from a year earlier for the sixth straight month. China likely stepped up oil purchases this month as current prices offer relatively good value, Hodes said. Limiting oil's ascent, Equinor (EQNR.OL) , opens new tab resumed partial production from the Johan Sverdrup field in the North Sea, Western Europe's largest oilfield, the day after a power outage there contributed to a 3% surge in oil price benchmarks. The restart and a stronger U.S. dollar weighed on market sentiment on Tuesday, UBS analyst Giovanni Staunovo said. Oil prices also came under pressure after confidential reports by the U.N. nuclear watchdog, seen by Reuters, said Iran has offered to stop expanding its stock of uranium enriched to 60% purity, near the roughly 90% of weapons grade. U.S. crude oil stockpiles rose by 4.75 million barrels in the week ended Nov. 15, market sources said on Tuesday citing figures from the American Petroleum Institute. Analysts polled by Reuters on average expect to see a smaller build of around 100,000 barrels. The U.S. Energy Information Administration is scheduled to report official stockpiles data on Wednesday at 10:30 a.m. EST. Sign up here. https://www.reuters.com/business/energy/oil-prices-ease-caution-prevails-over-russia-ukraine-war-2024-11-19/
