2024-11-18 05:50

A look at the day ahead in European and global markets from Wayne Cole. It's been a relatively calm start to the week for markets with the early action in currencies, as the dollar nudged up on the yen after Bank of Japan Governor Kazuo Ueda again left investors guessing on the timing of rate hikes. While he left the door open for gradual tightening should the economy develop in line with the central bank's outlook, he made no mention of whether a hike would come in December. That disappointed many in the markets. When the Ueda event was announced on Friday, the markets had assumed it was arranged because he had something to say on policy, rather than just sticking to the old script. As a result, pricing for a December hike to 0.5% stayed at 54%, although that move is not fully priced until March. The dollar's gain was a modest 0.4%, to 154.78 yen, leaving it wedged between support at 153.86 and resistance around 156.76. The outlook for U.S. rates is only a little clearer, with futures implying a 62% chance the Federal Reserve will cut next month following Chair Jerome Powell's hawkish turn last week. At least seven Fed officials are due to speak this week and dealers assume they will sound cautious on speedy cuts. President-elect Donald Trump's choice for Treasury Secretary could have an influence should he get someone committed to sweeping tariffs and debt-funded tax cuts. The NY Times reported Trump had added former Fed Governor Kevin Warsh and billionaire Marc Rowan to the list of candidates, along with Scott Bessent and Howard Lutnick, the latter apparently Elon Musk's preferred pick. A host of ECB speakers are also on the docket this week, while inflation data in the UK and Canada should help to inform the outlook for rate cuts there. Early PMIs for November are due on Friday and could hint at how sentiment globally has fared following the Trump victory. For Wall Street, all eyes are on Nvidia results on Wednesday, where options imply the prospect of a near 9% move in its share price depending on the outcome. Analysts see Nvidia increasing third-quarter revenue by more than 80%, to $32.9 billion. Key developments that could influence markets on Monday: - Euro zone trade data for Sept - Appearances by ECB President Christine Lagarde, ECB chief economist Philip Lane, ECB board member Claudia M Buch, ECB vice president Luis de Guindos, - Fed Bank of Chicago President Austan Goolsbee speaks Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-11-18/

2024-11-18 05:24

BOJ governor flags gradual hikes but vague on timing Dollar holds near one-year high Eyes on Trump's Treasury pick NEW YORK, Nov 18 (Reuters) - The dollar rose against the yen on Monday to resume its recent ascent after Japan's top central bank official signaled further monetary policy tightening was on the horizon, but was vague on the timing of any such hike. Bank of Japan Governor Kazuo Ueda reiterated the economy was progressing toward sustained wages-driven inflation and warned against keeping borrowing costs too low, leaving open the chance of another interest rate increase as early as next month. These were his first comments on monetary policy since Donald Trump's victory in the U.S. presidential election two weeks ago. But Ueda offered no hints as to whether a hike would come in December, citing various "uncertainties" that needed to be examined. "The Bank of Japan governor didn't give any fresh signals," said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. "Because of the chaos caused in July, the market is anticipating that BoJ would better prepare the market for the next move and the Bank of Japan governor didn't do that today, and so I think the yen weakened." The BOJ had unexpectedly raised short-term interest rates at its July meeting. The dollar strengthened 0.17% to 154.6 yen . The greenback on Friday snapped a four-session rise against the Japanese currency after Finance Minister Katsunobu Kato on Friday warned authorities would take action to combat excessive exchange-rate moves. The market was pricing a roughly 54% chance of a quarter-point hike at its next policy meeting on Dec. 19, little changed from before Ueda's speech. The dollar index , which measures the greenback against a basket of currencies, fell 0.5% to 106.20, with the euro up 0.54% at $1.0598. The index hit a more than one-year high last week of 107.07 and has been rising on expectations a Trump victory could result in higher tariffs and potentially stoke inflation, which would slow the path of rate cuts from the Federal Reserve. Two top European Central Bank policymakers signaled on Monday they were more worried about the damage that expected new U.S. trade tariffs would do to economic growth in the euro zone than any impact on inflation. Recent comments from Fed officials, including Chair Jerome Powell, have pointed to the central bank being deliberate in its rate cut path. In a light week for U.S. economic data, the National Association of Home Builders/Wells Fargo Housing Market Index rose to 46 this month, the highest since April, from 43 in October on optimism the recent elections would lead to regulatory changes that could spur residential construction. Markets are waiting to hear who Trump will pick as Treasury secretary, with numerous media reports saying the list of potential candidates has expanded to include former Federal Reserve Governor Kevin Warsh and billionaire executive Marc Rowan. "My sense is looking at the appointments and even this discussion about the Treasury secretary, and wanting to be sure that the Treasury secretary endorses tariffs," said Chandler. Sterling strengthened 0.47% to $1.2674 after dropping 2.4% last week, its biggest weekly percentage drop since early February 2023. In cryptocurrencies, bitcoin fell 1.82% to $90,114.00. Sign up here. https://www.reuters.com/markets/currencies/dollar-firms-against-yen-boj-leaves-open-timing-hikes-2024-11-18/

2024-11-18 05:16

Nov 18 (Reuters) - Hong Kong-based WH Group (0288.HK) , opens new tab, the world's largest pork producer, is seeking shareholder approval for the proposed spin-off of its U.S. unit Smithfield Foods and plans to list the business in the U.S. WH Group said on Sunday the underlying pre-money valuation of the Smithfield Foods, the world's largest pork processor, for the offering will be no less than the net asset value of the unit, which is around $5.38 billion as of end September. The Hong Kong firm first submitted the application , opens new tab for the proposed spin-off application for Smithfield Foods in July, planning to list the unit either on the New York Stock Exchange or Nasdaq. WH Group seeks to receive shareholder approval for the propositions via an extraordinary general meeting to be held on Dec. 6. Both companies did not immediately respond to a Reuters request seeking details on the expected timeline and the offer price. Sign up here. https://www.reuters.com/markets/commodities/hong-kongs-wh-group-seeks-shareholder-approval-us-unit-spin-off-listing-2024-11-18/

2024-11-18 05:14

Johan Sverdrup output halted due to power outage, Equinor says Biden allows Ukraine to use US weapons to strike deep into Russia Oil prices fell more than 3% last week NEW YORK, Nov 18 (Reuters) - Oil prices climbed more than $2 a barrel on Monday after news that crude production at Norway's Johan Sverdrup oilfield had been halted, which added to earlier gains stemming from escalation of the Russia-Ukraine war. Brent crude futures settled at $73.30 a barrel, gaining $2.26, or 3.2%. U.S. West Texas Intermediate crude futures settled at $69.16 a barrel, rising $2.14, or 3.2%. Equinor (EQNR.OL) , opens new tab said it had halted output from its Johan Sverdrup oilfield, western Europe's largest, due to an onshore power outage. Work to restart production was under way, an Equinor spokesperson said, but it was not immediately clear when it would resume. Oil prices extended their gains on the outage news, which indicated a possible tightening of the North Sea crude market, UBS analyst Giovanni Staunovo told Reuters. Physical supply of crude oil from the North Sea underpins the Brent futures complex. Kazakhstan's biggest oil field Tengiz, operated by U.S. major Chevron (CVX.N) , opens new tab, has reduced oil output by 28%-30% due to ongoing repairs, helping to further tighten global supplies. Repairs were expected to be complete by Saturday, the country's energy ministry said. Prices also climbed as Russia's war in Ukraine escalated over the weekend. In a significant reversal of Washington's policy, President Joe Biden's administration allowed Ukraine to use U.S.-made weapons to strike deep into Russia, two U.S. officials and a source familiar with the decision said on Sunday. The Kremlin said on Monday that Russia would respond to what it called a reckless decision by Biden's administration, having previously warned that such a decision would raise the risk of a confrontation with the U.S.-led NATO alliance. "Biden allowing Ukraine to strike Russian forces around Kursk with long-range missiles might see a geopolitical bid come back into oil, as it is an escalation of tensions there in response to North Korean troops entering the fray," IG markets analyst Tony Sycamore said. There has been little impact on Russian oil exports so far, however oil prices could rise further if Ukraine targets more oil infrastructure, said Saul Kavonic, an energy analyst at MST Marquee. Russia unleashed its largest airstrike on Ukraine in almost three months on Sunday, causing severe damage to the country's power system. Brent and WTI fell more than 3% last week due to weak data on China's refinery run rates, and after the International Energy Agency forecast that global oil supply would exceed demand by more than 1 million barrels per day in 2025, even if output cuts remain in place from OPEC+. Traders began shifting WTI trades to the January contract ahead of the expiration of the December contract on Wednesday. The spread between the two contracts flipped for the first time since February into a contango structure, where the later contract traded higher than the front-month contract, meaning traders expected price to rise. "The expiration is going to a wild one," said Bob Yawger, director of energy futures at Mizuho. Sign up here. https://www.reuters.com/business/energy/oil-prices-edge-higher-after-russia-ukraine-tensions-escalate-2024-11-18/

2024-11-18 05:06

G20 leaders highlight suffering in Gaza and Ukraine Joint statement urges cooperation on climate, development Rio summit reflects geopolitical tensions as Trump returns China's Xi has key role, offers support to "Global South" RIO DE JANEIRO, Nov 18 (Reuters) - Leaders from the Group of 20 major economies on Monday issued a joint statement highlighting the suffering caused by conflicts in Gaza and Ukraine, while calling for cooperation on climate change, poverty reduction and tax policy. G20 leaders meeting at Rio de Janeiro's Modern Art Museum for a two-day summit tackled an agenda that reflected a shifting global order, trying to shore up multilateral consensus before U.S. President-elect Donald Trump returns to power in January. Their discussions of trade, climate change and international security will run up against the sharp U.S. policy changes that Trump vows upon taking office, from tariffs to the promise of a negotiated solution to the war in Ukraine. Still, leaders at the summit were able to reach a narrow consensus on the escalating Ukraine war, focused succinctly on "human suffering" and the economic fallout of the conflict. The leaders' statement also expressed "deep concern about the catastrophic humanitarian situation in the Gaza Strip," and called urgently for more aid and protection for civilians along with a comprehensive ceasefire in Gaza and Lebanon. After a massive Russian air strike in Ukraine on Sunday, European diplomats had pushed to revisit the previously agreed language on global conflicts, but they ultimately relented. Russian President Vladimir Putin did not attend the summit, and Moscow was represented by Foreign Minister Sergey Lavrov. It took marathon negotiations over the weekend for diplomats to finalize the joint statement, with debate over climate policy stretching into the dawn hours of Sunday, according to people involved in the talks. In their statement, leaders agreed the world needs to reach a deal by the end of the United Nations COP29 climate change summit in Azerbaijan on a new financial goal for how much money rich nations must provide to poorer developing nations. COP29 officials had called on the G20 leaders for a strong signal to help breach the impasse on climate finance. While the joint statement said nations need to resolve the issue, they did not indicate what should be the solution at the U.N. summit set to end on Friday. As host of this year's G20 meetings, Brazil expanded the group's focus on extreme poverty and hunger, while introducing debate on cooperation to fairly tax the world's wealthiest - topics also highlighted in the leaders' joint statement. LULA RAILS AGAINST HUNGER Brazilian President Luiz Inacio Lula da Silva opened the summit on Monday with the launch of a global alliance to combat poverty and hunger, with backing from more than 80 countries, along with multilateral banks and major philanthropies. "Hunger and poverty are not the result of scarcity or natural phenomena ... they are the product of political decisions," said Lula, who was born into poverty and entered politics organizing a metalworkers union. "In a world that produces almost six billion tons of food per year, this is unacceptable," he said. Brazilian officials recognized the rest of their agenda for the G20 - including sustainable development and taxing the super-rich - could lose steam when Trump starts dictating global priorities from the White House. Still, world leaders acknowledged that Brazil's agenda as chair, embraced by 2025 host South Africa, had pushed debate beyond the traditional comfort zone of Western powers. "We are experiencing a major, major change in global structures," German Chancellor Olaf Scholz said on the sidelines of the summit, noting the growing weight of major developing economies. "These are countries that want to have their say. And they will no longer accept that everything will continue to be the way it has been for decades." Chinese President Xi Jinping took the occasion to announce a raft of measures designed to support the developing economies of the "Global South," from scientific cooperation with Brazil and African nations to lowering trade barriers for least developed countries. While Xi played a central role at the summit, U.S. President Joe Biden arrived as a lame duck with just two months left in the White House as he juggles escalating conflicts in Ukraine and the Middle East. As the world awaits signals from Trump's incoming government, Xi has been touting China's economic ascendancy, including its vaunted Belt & Road initiative that inaugurated a massive deep-water port in Peru last week. Brazil has so far declined to join the global infrastructure initiative, but hopes are high for other industrial partnerships when Xi wraps up his stay in the country with a state visit in Brasilia on Wednesday. Sign up here. https://www.reuters.com/world/g20-summit-confronts-global-order-unsettled-by-trumps-return-2024-11-18/

2024-11-18 04:57

MUMBAI, Nov 18 (Reuters) - The Indian rupee was nearly unchanged on Monday as likely intervention by the Reserve Bank of India (RBI) helped offset pressure driven by weakness in local equities, which have borne the brunt of sustained foreign portfolio outflows this quarter. The rupee was at 84.3875 against the U.S. dollar as of 10:00 a.m. IST, barely changed from its close at 84.3950 on Thursday. Indian financial markets were shut on Friday for a local holiday. State-run banks were spotted offering dollars near 84.40 levels, most likely on behalf of the RBI, traders said. A surge in the dollar, elevated U.S. bond yields and sustained foreign portfolio outflows have put pressure on the rupee since October, but the currency has been supported by routine central bank interventions. Foreign investors have pulled out over $3 billion from local stocks and debt so far in November, adding to $11.4 billion in outflows last month, according to stock depository data. On the day, the benchmark BSE Sensex (.BSESN) , opens new tab and Nifty 50 (.NSEI) , opens new tab indexes were down 0.4% each. Asian currencies were mostly higher on Monday, with the Thai baht up 0.2% and leading gains, while the dollar index was at 106.7 after pulling back from a yearly peak of 107.07 hit last week. Expectations of slower U.S. interest rate cuts, signalled by the Federal Reserve Chair and other policymakers last week, have also supported the dollar and U.S. bond yields. Most analysts expect President-elect Trump's policies to be inflationary, limiting the scope for further rate cuts by the Fed. The dollar index could "correct lower if the Trump Trade loses momentum," analysts at DBS Bank said in a note. Sign up here. https://www.reuters.com/markets/currencies/rupee-nearly-flat-cenbank-intervention-supports-equities-stay-tepid-2024-11-18/