2024-10-31 16:05

Oct 31 (Reuters) - The pound fell on Thursday, set for its worst two-day loss against the euro in two years, a day after new British finance minister Rachel Reeves announced a tax-and-spend budget that investors worried would reignite inflation and weigh on growth. Sterling was heading for a two-day loss of 0.7% against the euro , the largest since September 2022, when then-Prime Minister Liz Truss unleashed turmoil on UK financial markets with budget plans for billions of pounds in unfunded tax cuts. Reeves' budget on Wednesday contained the biggest tax increases since 1993 as she sought to repair Britain's public services, and she also changed the government's fiscal rules to increase borrowing for long-term investment to boost the economy. Giving the euro an extra boost against the pound was data on Wednesday that showed a surprise pick-up in the German economy, which has flatlined for months, while the dollar got a lift from yet more evidence on Thursday of the strength of the U.S. economy. “A lot of news over the last day or two from Europe and the U.S. and so it’s perhaps more difficult to remove just the UK effect from that, so it makes the movements a little more opaque," Rabobank currency strategist Jane Foley said. "But we can certainly see that this budget has had a large effect," she said. The Office for Budget Responsibility (OBR), whose forecasts underpin British government budgets, now expects inflation will average 2.6% next year, compared with a previous 1.5% forecast. A sell-off in UK government bonds accelerated on Thursday, sending two-year gilt yields up by over 20 basis points to their highest since May. Money markets see an 80% chance that the BoE will cut interest rates by 25 basis points at its Nov. 7 meeting, but traders are now betting on fewer than four rate cuts over the next year from nearly five quarter-point reductions before the budget. Against the dollar, sterling fell 0.7% on the day to $1.28715 . The euro was up 0.75% against the pound at 84.39 pence. Reeves said her Labour government had more plans to boost the economy and she hoped to not have to hike taxes again. "This was a big fiscal event – and the headroom for more is narrow," Bruna Skarica, chief UK economist at Morgan Stanley said. "In net terms, the event was a bit more BoE-hawkish than we expected, but the scale of the market reaction post the release of the OBR's EFO seems a bit excessive to us." Sign up here. https://www.reuters.com/markets/currencies/sterling-ticks-higher-investors-expect-fewer-boe-rate-cuts-2024-10-31/

2024-10-31 15:49

NEW YORK, Oct 31 (Reuters) - Abu Dhabi firms Realize and Neovision Wealth Management have launched an investment vehicle that will buy units of exchange traded funds (ETFs) focused on U.S. Treasury bills and convert these assets into digital tokens that can be held, traded and transferred on a blockchain. The fund is called Realize T-BILLS Fund and it will buy BlackRock's iShares and State Street's SPDR, tokenize units from these ETFs, and incorporate them within the fund, Dominik Schiener, co-founder of technology company Realize, told Reuters in an interview. It hopes to grow to a $200-million fund. Realize will tokenize the units of the T-BILLS Fund, while Neovision will manage it. WHY IT'S IMPORTANT Tokenized Treasuries are a growing segment of the crypto market, with a market capitalization of $2.4 billion on public blockchains, primarily Ethereum, according to data platform rwa.xyz , opens new tab. They are effectively digital tokens created on a blockchain and backed by U.S. government debt, and issued both by blockchain-native firms and traditional institutions, notably BlackRock and Franklin Templeton. In March, BlackRock launched its first tokenized fund called BUIDL on the Ethereum blockchain, investing 100% of its assets in cash, U.S. Treasury bills and repurchase agreements or repos. The BlackRock fund has a current market cap of $530 million. FUND DETAILS The Realize fund, the first tokenized fund to be domiciled out of the Abu Dhabi Global Market, will issue the $RBILL token and will serve as the digital representation of the units of the fund. They will initially launch on both the IOTA and Ethereum blockchain networks. KEY QUOTES "The goal is to bring fungible assets onchain. T-Bills are the most liquid asset today in the real world," said Schiener. "They're also the best form of collateral, paying around 5%." Dr. Ryan Lemand, co-founder and chief executive officer of Neovision, said it makes sense to buy T-Bill ETFs and tokenize them, instead of outright purchasing Treasury bills in the market. He noted buying cash Treasuries in the market would involve continuous transaction costs because they will have to be bought again and again. Sign up here. https://www.reuters.com/technology/abu-dhabi-firm-launch-tokenized-us-treasuries-fund-2024-10-31/

2024-10-31 14:26

August GDP dented by weakness in goods-producing sector July growth downwardly revised to 0.1% from 0.2% Growth likely to hit 0.3% in September, Q3 seen up 1% OTTAWA, Oct 31 (Reuters) - Canada's economy is likely to miss the Bank of Canada's revised third-quarter forecast after a slew of temporary factors stalled gross domestic product growth in August, data showed on Thursday, at a time when business output was already anemic. Economic growth for July also was revised downwards to 0.1% from 0.2%, Statistics Canada said, and added that preliminary data showed growth is likely to have rebounded to 0.3% in September. All this together translates to a 1.0% annualized growth in the third quarter, lower than the Canadian central bank's estimate of 1.5%, a forecast that had already been revised down earlier this month. Statscan's quarterly GDP figures are based on Canada's industrial output, while the third-quarter figure, which is due to be released next month, will be based on a calculation of income and expenditure. The flat GDP reading for August matched the median forecast of analysts polled by Reuters. Canada's economic growth has slowed under the weight of high borrowing costs, which have throttled business investments and output and consumer demand. Goods-producing industries contracted by 0.4% in August, reaching their lowest level since December 2021, Statscan said, with the manufacturing sector declining by 1.2% and contributing the most to GDP for that month. "Durable goods manufacturing continued the downward trend that began in the summer of 2023 and decreased 1.0% in August 2024," the agency said, adding that activity was at its lowest level since September 2021. Temporary factors such as work stoppages at Canada's two biggest rail companies and maintenance at car manufacturing factories added to the lackluster figure. "These data support our call for another 50-bp (basis point) cut at the (Bank of Canada's) next meeting in an effort to try and accelerate growth and reduce slack in the economy," Andrew Grantham, senior economist at CIBC, wrote in a note. Canada's central bank has said it wants the economy to strengthen and has cut its key interest rate four times in a row to 3.75% to spur growth after inflation returned to its 1%-3% control range. Money markets increased bets for another 50-basis-point rate cut in December to more than a 25% probability from roughly 18% before the release of the GDP data. <0#BOCWATCH> The Canadian dollar edged up, with the loonie trading 0.06% higher at 1.3893 to the U.S. dollar, or 71.98 U.S cents. Bond yields for two-year Canadian government bonds fell 0.9 basis points to 3.169%. The Bank of Canada will have the chance to pore over another GDP report, inflation data for October and two job reports before its next monetary policy decision announcement on Dec. 11. Sign up here. https://www.reuters.com/markets/canadas-economy-likely-missed-central-banks-third-quarter-growth-forecast-2024-10-31/

2024-10-31 12:55

Floods kill at least 158, undeclared number still missing More weather alerts issued as storm moves north Residents in worst-hit areas clean up, count losses Warming seas seen driving the extreme weather VALENCIA/GODELLETA, Spain, Oct 31 (Reuters) - The death toll from devastating flash floods in eastern Spain climbed to 158 on Thursday, with rescue teams still searching for those missing in what could become Europe's worst storm-related disaster in over five decades. "There's a total of 158 people to which must be added dozens and dozens of missing," Angel Victor Torres, minister in charge of cooperation with Spain's regions, told a press conference. A year's worth of rain fell in eight hours in parts of the Valencia region on Tuesday. The tragedy is already Spain's worst flood-related disaster in modern history, and meteorologists say human-driven climate change is making such extreme weather events more frequent and destructive. In 2021, at least 185 people died in heavy flooding in Germany. Prior to that, 209 people died in Romania in 1970 and floods in Portugal in 1967 killed nearly 500 people. Rescue teams on Thursday discovered the bodies of eight people, including a local policeman, who had been trapped in a garage on the outskirts of the city of Valencia, Mayor Maria Jose Catala told reporters. In the same neighbourhood of La Torre, she said, a 45-year-old woman was also found dead in her home. Thousands of people carrying bags or pushing shopping trolleys could be seen on Thursday crossing a pedestrian bridge over the Turia River from La Torre into Valencia city centre to stock up on essential supplies such as toilet paper and water. Opposition politicians accused the central government in Madrid of acting too slowly to warn residents and send in rescue teams, prompting the Interior Ministry to say regional authorities were responsible for civil protection measures. "Those people wouldn't have died if they had been warned in time," Laura Villaescusa, a neighbour and manager of a local supermarket, told Reuters. Maribel Albalat, mayor of the nearby town of Paiporta, said residents were not warned of the imminent danger of flooding. She said 62 people had died in her town. "We found a lot of elderly people inside their homes and people who went to get their cars. It was a trap," she told TVE. CLINGING TO PILLAR In Godelleta, a town 37 km (23 miles) west of Valencia city, Antonio Molina, 52, described how he survived by clinging to a pillar on a neighbour's porch on Tuesday as water reached his neck. Molina's home suffered two major floods in 2018 and 2020 and he blamed authorities for allowing construction of residential buildings in depressions where water accumulates. "We don't want to live here anymore," he said, tearfully. "As soon as we get a couple of raindrops, we're already checking our phones." The floods have battered Valencia's infrastructure, sweeping away bridges, roads and rail tracks, and submerged farmland in a region that produces about two-thirds of Spain's citrus crops like oranges, which the country exports globally. About 80 km (50 miles) of roads in the eastern region were seriously damaged or impassable, said Transport Minister Oscar Puente. Many were blocked by abandoned cars. "Unfortunately there are dead bodies in some vehicles," Puente told reporters, adding that it would take two to three weeks to re-establish the high-speed train connection between Valencia and Madrid. Visiting a rescue coordination centre near Valencia city, Spanish Prime Minister Pedro Sanchez urged people to stay at home due to the threat of more stormy weather. "Right now the most important thing is to safeguard as many lives as possible," he told reporters. In the hard-hit rural town of Utiel, some 85 km (53 miles) inland, the Magro River burst its banks, sending up to three metres (9.8 feet) of water into the mostly single-storey homes. Utiel's mayor, Ricardo Gabaldon, said at least six people died in the town of about 12,000, most of them elderly or disabled people who were unable to clamber to safety. Residents used water pumps carried on tractors as they started to clean up on Thursday, with children helping to sweep the sidewalks. Ruined household appliances and furniture were piled up in the middle of roads and elderly people struggled to walk in the slippery, mud-coated streets. Pope Francis said he was praying for the people of the region. "I'm close to them in this moment of catastrophe," he said in a video posted on X. Research group Climate Central said in a report on Thursday that a low-pressure system behind Spain's floods had tapped into an "atmospheric river" carrying excess moisture from the unusually warm Tropical Atlantic. According to its Climate Shift Index: Ocean , opens new tab, human-caused climate change has made these elevated sea surface temperatures at least 50 to 300 times more likely. Sign up here. https://www.reuters.com/world/europe/spanish-rescue-teams-hunt-missing-after-deadly-floods-2024-10-31/

2024-10-31 12:33

PARIS, Oct 31 (Reuters) - TotalEnergies (TTEF.PA) , opens new tab recently divested from its South African offshore blocks due to the difficulty in generating a return on gas at the sites, CEO Patrick Pouyanne told analysts on Thursday after the French company reported its third quarter results. He said there was no gas market to be able to monetise any gas found. Sign up here. https://www.reuters.com/business/energy/totalenergies-exited-south-africa-offshore-due-lack-gas-market-says-ceo-2024-10-31/

2024-10-31 12:30

Oct 31 (Reuters) - Cheniere Energy (LNG.N) , opens new tab raised its annual core profit forecast after higher demand for liquefied natural gas helped the company beat third-quarter estimates on Thursday. Asian spot LNG prices rose to their highest in more than eight months in August, with warmer temperatures across the region boosting power demand for cooling purposes. The company said earlier this year it had a more constructive outlook for the remainder of the year, betting on higher demand from Asia. Houston, Texas-based Cheniere exported 158 LNG cargoes in the quarter, up about 4% over the year earlier. The LNG producer also raised its 2024 adjusted core profit forecast to between $6 billion and $6.3 billion, from its previous range of $5.7 billion to $6.1 billion. Cheniere's Corpus Christi Stage 3 project, an export facility in South Texas, was 67.8% complete, as of Sept. 30, it said. CEO Jack Fusco said the progress achieved on Stage 3 provides increased visibility into the company's production forecast for 2025. The Stage 3 project is expected to add 10 million metric tons per annum (mtpa) of LNG to Cheniere's current production capacity of 15 mtpa at the Corpus Christi export facility. The company posted an adjusted core profit of $1.5 billion for the quarter ended Sept. 30, beating analysts' average estimate of $1.39 billion, according to data compiled by LSEG. Its quarterly revenue of $3.76 billion also edged past estimates of $3.73 billion. Sign up here. https://www.reuters.com/business/energy/cheniere-energys-third-quarter-profit-falls-lower-lng-margins-2024-10-31/