2024-11-15 06:05

Dollar heads for strongest week since September Pound sags after data shows UK economy slowed Trump plans on taxes, tariffs hit trade partner currencies Bitcoin trades around $90,000 NEW YORK/LONDON, Nov 15 (Reuters) - The U.S. dollar was set for its biggest weekly gain in over a month on Friday, as markets reassessed expectations of future interest rate cuts and with the view that President-elect Donald Trump's policies could be inflationary. The dollar has benefited from market expectation that Trump administration policies, including tariffs and tax cuts, could stoke inflation, leaving the Federal Reserve less room to cut interest rates. Fed Chairman Jerome Powell said on Thursday the U.S. central bank did not need to rush to lower interest rates, prompting traders to axe their more aggressive bets on a rate cut next month and beyond. The greenback was set to notch a weekly gain against the Japanese yen after it traded above 156 yen this week for the first time since July. It was last down 1.4% to 154.145 per dollar. The euro was headed for the second straight week of losses after slumping to its lowest level since October 2023. It was last up at $1.054025. "Today is more about the Fed than anything else, and I'm a bit surprised that the euro is a little stronger in the face of what were perceived to be more hawkish comments from Powell," said Thierry Albert Wizman, global FX and rates strategist at Macquarie in New York. "People are maybe thinking that there's going to be a bit more chaos next year in view of some of the questionableness of these (U.S. cabinet) candidate appointments. So I can see why people are losing a little bit of faith in the Trump trade and the American exceptionalism story generally." Commerce Department data on Friday showed that U.S. retail sales increased slightly more than expected in October, but underlying momentum in consumer spending appeared to slow at the start of the fourth quarter. Boston Fed president Susan Collins in comments published Friday in the Wall Street Journal also said rate cuts could be paused as soon as the Dec. 17-18 meeting, depending on upcoming data on jobs and inflation. The probability of a December cut has dropped to around 61% from closer to 82% a day ago, according to CME's FedWatch tool. Sterling was on track for its steepest weekly fall since January 2023, at roughly 2.4%. It was last down 0.38% at $1.2620. The pound showed little reaction to data showing Britain's economy contracted unexpectedly in September and growth slowed to a crawl over the third quarter. The dollar index is trading around a one-year high against a basket of currencies at 107.07 , having risen nearly 1.65% this week, set for its best performance since September. It was last down 0.19% at 106.68. In cryptocurrencies, bitcoin traded around $90,000, as some investors took profits after a stellar run. Bitcoin gained 2.64% to $90,545.00. Ethereum declined 2.17% to $3,051.30. "Today is really just an ahead-of-weekend consolidation; we haven't taken out any key levels like 106 in the euro like 127 in sterling," said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. "The market overreacted to Powell yesterday, but U.S. interest rates are still firm. So whatever forces were unleashed by the U.S. election, they haven't been exhausted yet." Sign up here. https://www.reuters.com/markets/currencies/dollar-eyes-weekly-gain-slower-fed-easing-inflation-outlook-2024-11-15/

2024-11-15 06:04

MSCI index down for fourth-straight session Dollar slips but poised for weekly gain US retail sales slightly above expectations NEW YORK, Nov 15 (Reuters) - A gauge of global stocks was set for its biggest weekly drop in two months and the 10-year U.S. Treasury yield hit its highest level in 5-1/2 months on Friday as economic data and comments from Federal Reserve officials suggested a slower pace of interest-rate cuts ahead. Fed Chair Jerome Powell said on Thursday the central bank did not need to rush to lower interest rates due to ongoing economic growth, a solid job market and inflation that remains above its 2% target. The U.S. Commerce Department reported on Friday that retail sales rose 0.4% last month after an upwardly revised 0.8% advance in September. The growth topped the 0.3% rise expected by economists polled by Reuters, after a previously reported 0.4% gain in September. "In the last 48 hours we've had some pretty big changes, not just from the election but from economic data that was better than expected and Powell speaking about not having to be as aggressive on interest-rate cuts," said Adam Rich, deputy chief investment officer for Vaughan Nelson in Houston. "Market expectations for interest-rate cuts have come down materially and also the market is re-adjusting after a pretty bullish reaction to the U.S. election." In addition, the Labor Department said on Friday that import prices unexpectedly rose 0.3% last month after an unrevised 0.4% decline in September amid higher prices for fuels and other goods. Analysts had expected a decline of 0.1%. Equities had rallied after the U.S. presidential election, as investors gravitated toward assets expected to benefit from President-elect Donald Trump's policies in his second term after he pledged to impose higher tariffs on imports, reduce taxes and loosen government regulations. But the gains have fizzled in recent days as markets try to calibrate the Fed's rate-cut trajectory and any legislative policy changes. On Wall Street, the Dow Jones Industrial Average (.DJI) , opens new tab fell 305.87 points, or 0.70%, to 43,444.99, the S&P 500 (.SPX) , opens new tab fell 78.55 points, or 1.32%, to 5,870.62 and the Nasdaq Composite (.IXIC) , opens new tab fell 427.53 points, or 2.24%, to 18,680.12. Each of the three major indexes closed at record highs on Monday. For the week, the S&P 500 fell 2.08%, the Nasdaq declined 3.15%, and the Dow lost 1.24%. Other Fed officials made comments on Friday that also clouded the picture on the timing and magnitude of more rate cuts. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab slumped 8.53 points, or 1.00%, to 842.67. It was on track for its fourth-straight decline and biggest weekly percentage decline since early September, around 2.4%. In Europe, the STOXX 600 (.STOXX) , opens new tab index closed down 0.77% but eked out a small weekly gain, its first in four weeks. Bond yields and the dollar have surged not just on growth prospects but also on concerns that Trump's policies may rekindle inflation after a long battle against price pressures following the pandemic. In addition, tariffs could lead to increased government borrowing, further ballooning the fiscal deficit and potentially causing the Fed to alter its course of monetary-policy easing. The dollar index , which tracks the U.S. currency against peers including the euro and Japan's yen, was 0.12% lower on the day to 106.75 with the euro off 0.02% at $1.0528. The greenback had risen for five straight sessions and was poised for its biggest weekly percentage gain since early October. Against the Japanese yen , the dollar weakened 1.24% to 154.31. Sterling was down 0.45% to $1.2608. Expectations for a 25-basis-point cut at the Fed's December meeting stood at 58.4% on Friday, down from 72.2% in the prior session, and 85.5% a month ago, according to CME's FedWatch Tool , opens new tab. The yield on benchmark U.S. 10-year notes rose 1.9 basis points to 4.439% after earlier reaching 4.505%, its highest level since May 31. The yield is up about 13 bps this week and is set for its eighth weekly rise in the past nine. U.S. crude settled down 2.45% to $67.02 a barrel and Brent fell to settle at $71.04 per barrel, down 2.09% on the day, as investors digested a slower Fed rate-cut path and waning Chinese demand. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-11-15/

2024-11-15 05:32

A look at the day ahead in European and global markets from Stella Qiu Asian shares ended a brutal week on a steadier note helped by Chinese consumers pushing [USN:L1N3MM035 TEXT:“retail sales”] beyond forecasts after a blitz of policy support measures shored up... well, the stock market, mostly. Yes, property sales picked up a tad but they are still down a whopping 15.8% from a year ago. A decline in [USN:P8N3L60AM TEXT:“property investment”] deepened and [USN:AZN2MMZXT TEXT:“home prices”] fell the most in nine years - hardly the turnaround investors wanted to see. Chinese shares trimmed losses after the data blast though blue chips ended up 0.4% off the pace. Still, that’s up 30% from a September low thanks to Beijing’s stimulus. Globally, the bullish backdrop for share markets is waning a little as investors, who had revelled in the U.S. presidential election victory of Donald Trump, become increasingly concerned about the scope for U.S. policy easing in the new year - not unsurprisingly given the president-elect’s drastic trade and immigration policies. Federal Reserve Chair Jerome Powell’s comments about there being [USN:S0N3M60H1 TEXT:“no need to rush”] interest rate cuts sent short-term Treasury yields higher as the market scaled back wagers on a December cut to just 59% from 82% mid-week. Fed fund futures for next year slumped with December off 8 ticks and implying just 71 basis points of easing by the end of 2025, less than three standard-sized cuts. That is one reason Wall Street and European stock futures are in the red. Nasdaq futures were down 0.5%, EUROSTOXX 50 futures 0.4% and FTSE futures 0.2%. That Fed outlook shift has reinforced expectations the Bank of England will not be cutting rates anytime soon, with the next move not fully priced in until March due to Chancellor Rachel Reeves' big spending budget. The central bank will be watching third-quarter GDP figures closely with forecasts centring on a rise of 0.2% versus 0.5% in the prior quarter. Britain’s economy has performed better than many feared this year and any beat will take out some out of the bets for a total easing of 62 basis points by the end of next year. The U.S. will also have retail sales data later in the day. Again, with producer prices presenting an upside risk for the Fed’s preferred inflation gauge - the Personal Consumption Expenditures Price Index - markets might not see a beat in retail sales as a good thing. Key developments that could influence markets on Friday: Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-11-15/

2024-11-15 04:56

Brent, US crude futures fall on the week China's oil refiners in Oct run 4.6% less crude year-on-year Major forecasters indicate slowing global crude demand growth Strong US economic data leaves Dec Fed rate cut in the balance HOUSTON, Nov 15 (Reuters) - Oil prices settled down more than 2% on Friday as investors fretted about weaker Chinese demand and a potential slowing in the pace of U.S. Federal Reserve interest rate cuts. Brent crude futures settled down $1.52, or 2.09%, to $71.04 a barrel. U.S. West Texas Intermediate crude futures (WTI) settled down $1.68, or 2.45%, at $67.02. For the week, Brent fell around 4%, while WTI declined around 5%. China's oil refiners in October processed 4.6% less crude than a year earlier because of plant closures and reduced operating rates at smaller independent refiners, data from the National Bureau of Statistics showed on Friday. The country's factory output growth slowed last month and demand woes in its property sector showed few signs of abating, adding to investors' concerns over the economic health of the world's largest crude importer. "The headwinds out of China are persisting, and whatever stimulus they put forward could be damaged by a new round of tariffs by the Trump administration," said John Kilduff, partner at Again Capital in New York. U.S. President-elect Donald Trump has pledged to end China's most-favored-nation trading status and impose tariffs on Chinese imports in excess of 60% - much higher than those imposed during his first term. Goldman Sachs Research economists have modestly lowered their 2025 growth forecast for China, the bank said in a note, following on expectations of significant tariff increases under Trump. “However, we would likely make larger downgrades if the trade war were to escalate further,” Goldman Sachs Research chief economist, Jan Hatzius said in the note. Oil prices also fell this week as major forecasters indicated slowing global demand growth. "Global oil demand is getting weaker," said International Energy Agency (IEA) Executive Director Fatih Birol on Friday at the COP29 summit. "We have been seeing this for some time and this is mainly driven by the slowing Chinese economic growth and the increasing penetration of electric cars around the world." The IEA forecasts global oil supply to exceed demand by more than 1 million barrels per day in 2025 even if cuts remain in place from OPEC+. OPEC, meanwhile, cut its forecast for global oil demand growth for this year and 2025, highlighting weakness in China, India and other regions. FED RATE CUT IN THE BALANCE U.S. retail sales increased slightly more than expected in October, suggesting the economy kicked off the fourth quarter on a strong note. "The economic data this morning was strong and notable so that is keeping things somewhat stable with regard to what the U.S. demand picture should be," Again Capital's Kilduff said. The data added to the debate among Federal Reserve policymakers over the pace and extent of interest rate cuts as investors further downgraded their expectations for a rate reduction at the central bank's December meeting. Lower interest rates typically spur economic growth, aiding fuel demand. Federal Reserve Bank of Boston President Susan Collins, however, did not rule out a December rate cut when speaking on Bloomberg's television channel. "Looking at those numbers, there is nothing forcing the Fed to get real crazy about it, I think the odds for a 25 basis rate cut for December have dropped to between high 50s-60%," said chief economist at Matador Economics, Tim Snyder. "I wouldn't be surprised if we do not see anything in December, and have to wait and see how the year ends," Snyder added. Sign up here. https://www.reuters.com/business/energy/oil-dips-oversupply-concerns-heads-weekly-loss-2024-11-15/

2024-11-15 04:43

NEW DELHI, Nov 15 (Reuters) - A joint venture between India's NTPC Green Energy and ONGC Green Energy is the highest bidder for Ayana Renewable Power having bid about $650 million, two people involved in the deal told Reuters. The venture outbid JSW Energy (JSWE.NS) , opens new tab for the renewable energy firm backed by quasi-sovereign wealth fund National Investment and Infrastructure Fund, the people said. Ayana Renewable Power, owned by NIIF, British International Investment Fund and Green Growth Equity Fund, operates solar and wind plants that produce 1,600 megawatts in India and has another 2,500 megawatts in such projects under construction. "After due diligence, NTPC Green Energy and ONGC Green Energy have jointly decided to acquire 100% stake of Ayana Renewable Power through a joint venture company," one of the sources said. NTPC, ONGC, and Ayana Renewable Power did not immediately respond to queries sent by Reuters. A JSW Group spokesperson declined to comment. NTPC Green Energy and ONGC Green Energy signed an agreement in February this year to float an equal joint venture, the source said. Large power producers in India are betting big on renewables and making pledges to expand their green energy capacities. The Indian government has pledged to add 500 gigawatts of clean energy by 2030 to reduce carbon emissions. NTPC Green Energy, an arm of state-owned power company NTPC (NTPC.NS) , opens new tab, is targeting a valuation of as much as $10.8 billion in an initial offering next week, that is set to be India's third-largest IPO this year. It will sell all the shares in the IPO - which will be open for bids from Nov. 19-22 - and plans to use the proceeds to repay its unit NTPC Renewable Energy's debt. ONGC Green Energy, a unit of state-owned Oil and Natural Corp (ONGC), is expected to list in the current financial year. Sign up here. https://www.reuters.com/business/energy/jv-green-arms-indias-ntpc-ongc-is-highest-bidder-ayana-renewable-650-mln-sources-2024-11-15/

2024-11-15 04:29

Bauxite supply disruptions in Guinea, Brazil fuel alumina price New capacity in China, Indonesia, India set to ease tightness UBS, Antaike, forecast lower alumina price in 2025 BEIJING/LONDON, Nov 15 (Reuters) - New capacity for converting bauxite into alumina due online next year is set to ease tight supplies and potentially halt a record-breaking price rally of the material used to make aluminium. Higher alumina prices outside China have turned the top producer and consumer into a net exporter this year from a net importer and boosted prices of aluminium, which is used in the transportation, construction and packaging industries. Disruptions in supplies of bauxite from Guinea and Brazil and output suspensions in Australia contributed to a 70% surge in alumina prices this year to a record 5,645 yuan ($779.77) per metric ton on the Shanghai Futures Exchange. Aluminium prices are up around 7% this year. "There doesn't seem to be an end to this tightness of alumina, not immediately," said Eivind Kallevik, CEO at Norwegian aluminium producer Hydro. "New alumina refineries expected to start up in Indonesia and India will add more tons to the market." Global alumina supplies last year totalled 140 million metric tons, according to the U.S. Geological Survey, unchanged from the previous year. More supply is in the pipeline. In China, more than 13 million tons of new capacity is due to come online next year, according to information provider Shanghai Metals Market (SMM). In India, Vedanta (VDAN.NS) , opens new tab plans to invest in a plant with annual capacity for 6 million tons of alumina by 2026. In Guinea, an arm of Emirates Global Aluminium plans to build a 2 million tons-a-year alumina refinery, slated to open in September 2026. And in Indonesia, two state companies plan to double capacity at their refinery in West Kalimantan province to 2 million tons but have not specified a timeline. Meanwhile, elevated alumina prices and higher profit margins are expected to further incentivise use of China's capacity, adding to supply. China's alumina capacity of 102.7 million tons is being utilised at a rate of 83.6%, SMM said. "Alumina producers have shown strong willingness to maintain a high operating rate this year spurred by handsome profit margins," analysts at China's state-backed research house Antaike said. "But production might be affected if heavy pollution this winter lasts a long time, exacerbating tight supply." LOOMING SURPLUS China's January-September alumina exports rose 33% from the same period last year to 123.57 million tons, fetching an average price of $541 a ton, about 10% more than the price on the Shanghai exchange over the same period. Some analysts, seeing a looming oversupply, forecast lower alumina prices for 2025. UBS predicts an average price of 3,600 yuan a ton in 2025, while Antaike pegs it at 4,000 yuan a ton. "We expect China's alumina market to step into a supply glut from February and the price will slide as a result," said Sharon Ding, head of China basic materials at UBS. In China, SMM expects the market to swing to a surplus of 960,000 tons in 2025 from a deficit of 235,000 tons this year, while globally UBS expects a surplus of 890,000 tons in 2025 following a shortage of 920,000 tons in 2024. Surpluses in 2025 are likely to be higher if demand growth slows because of a government-mandated cap of 45.5 million tons of aluminium production. SPOOKED BY DISRUPTIONS This year's alumina deficits are due to multiple factors. U.S. aluminium producer Alcoa (AA.N) , opens new tab closed its Australian Kwinana refinery, with annual capacity of 2.19 million tons, in the second quarter. In May, Rio Tinto (RIO.AX) , opens new tab declared force majeure on alumina from its refineries in Queensland, Australia. Its Yarwun refinery can produce 3 million tons of alumina annually. It did not respond to a Reuters request for an update. "Some big sources of alumina have been lost this year including from Rio Tinto, which isn't expected to be back at normal production until sometime early next year," said Liberum analyst Tom Price. Last week, Alcoa halted bauxite shipments from Juruti Port in Brazil due to a stranded vessel, adding to nervousness in a market already spooked by export disruptions from Guinea. Flooding in Guinea earlier this year limited bauxite shipments, which again were disrupted by customs suspending exports by Guinea Alumina Corporation (GAC), a subsidiary of Emirates Global Aluminium (EGA). ($1 = 7.2393 Chinese yuan renminbi) Sign up here. https://www.reuters.com/markets/commodities/new-alumina-supplies-2025-poised-rupture-record-price-rally-2024-11-15/