2024-10-29 18:20

Pemex's net loss widens despite continuing government support Says has received 145 billion pesos from state coffers in Q3 Revenue down nearly 8% year-on-year New President Sheinbaum pledged continued support MEXICO CITY, Oct 29 (Reuters) - Mexican state-owned oil company Pemex reported a deeper $8.2 billion third-quarter net loss on Tuesday, hurt mostly by a weaker exchange rate even as it benefited from support from the country's new government. The company, in a filing with the Mexican stock exchange, posted a loss of around $4.5 billion in the third quarter of 2023, but Mexico's peso currency weakened more than 13% in the year since, according to LSEG data. While Pemex mostly operates in U.S. dollars, like nearly all oil companies, it uses pesos for most of its local costs. Revenue for the country's biggest company during the July-to-September period totaled 426 billion pesos, down by nearly 8% year-over-year due in large part to lower crude oil export sales. In recent years, Pemex has sought to reduce its crude oil exports while prioritizing refining. But it has mostly failed to reduce foreign motor fuel purchases in line with government targets, with gasoline and diesel import volumes consistently higher than Pemex's own output. During the third quarter, it processed 962,000 barrels per day of crude, up by nearly a quarter compared to the year-ago period. The quarterly performance of its refining unit yielded 278,000 bpd of gasoline and 186,000 bpd of diesel, the filing showed. Pemex noted that its financial debt for the three-month period totaled $97.3 billion, down by almost $9 billion compared with the end of 2023, according to the filing. CRUDE AND CONDENSATE OUTPUT DOWN President Claudia Sheinbaum took office at the start of this month, mostly pledging to continue generous government support for the heavily-indebted Pemex, much like her predecessor. In its filing, Pemex said it had received 145 billion pesos in assistance from state coffers during the third quarter. Some close to Sheinbaum have suggested she might be more open to some form of Pemex partnerships with private oil companies in a push to boost production despite the company's massive debt load. The new president has said she would target what she has described as sustainable oil output of 1.8 million bpd. In its report, Pemex reported combined crude and condensate production during the quarter of 1.76 million bpd, down about 6% compared with the year-ago period. Over the years, the company has seen its crude output fall steadily from a peak of 3.4 million bpd two decades ago, sliding in recent months to fresh record lows under 1.5 million bpd. Earlier this month, Pemex faced lawsuits stemming from a toxic hydrogen sulfide release at its Deer Park, Texas, refinery in which two contractors were killed and nearly three dozen others injured. The deadly incident could lead to significant payouts. On a call with analysts following the quarterly report, executives said investigations into the cause of the accident were ongoing while also minimizing its impact on the facility's operations. According to its previous quarterly filing, Pemex also upwardly revised its second-quarter loss by about 7%, from a 255.9 billion peso loss to 273.3 billion peso loss during the April to June period. That added more than $950 million to losses, according to calculations based on that quarter's exchange rate. ($1 = 19.6921 Mexican pesos at end-September) Sign up here. https://www.reuters.com/business/energy/mexicos-pemex-reports-third-quarter-loss-1613-bln-pesos-2024-10-29/

2024-10-29 15:57

BENGALURU, Oct 29 (Reuters) - The U.S. Federal Reserve will cut its key interest rate by 25 basis points on Nov. 7, according to all 111 economists in a Reuters poll, with more than a 90% majority predicting another quarter-percentage-point move in December. Since the U.S. central bank kicked off its long-awaited easing cycle last month with a half-percentage-point reduction in the federal funds rate to a 4.75-5.00% range, news on the economy has been strong, including consumer spending and jobs data. The Fed's next policy meeting is scheduled to start just after the Nov. 5 U.S. presidential election, with opinion polls showing a neck-and-neck race but recent momentum behind Republican candidate Donald Trump. All 111 economists in the Oct. 23-29 Reuters poll predicted the Fed will switch back to a quarter-percentage-point reduction next week. More than 90% of them, a total of 103, expected the same-sized move in December, taking the fed funds rate to a 4.25%-4.50% range. "I expect we will get a 25-basis-point cut at each of the next two meetings," said Thomas Simons, senior economist at Jefferies. But Simons said "the information we gather suggests the economy overall is not in desperate need of easing." The Fed will deliver a total of 50 basis points of cuts each in the first two quarters of 2025 and another 25-basis-point cut in the final quarter of the year, poll medians showed, taking the fed funds rate to 3.00%-3.25% by end-2025, slightly lower than the Fed's median "dot-plot" projection. Nearly 80% of economists, 74 of 96, predicted the fed funds rate to be in a 3.00%-3.25% range or higher by the end of next year, still technically in restrictive territory. The Fed's current estimate of the neutral rate, the level of interest which neither stimulates nor restrains the economy, is 2.9%. "Since the start of this year, the median view of Fed officials on the neutral rate has risen from 2.5% to 2.9%, and it is likely that this view can edge up slightly more," noted Stephen Gallagher, chief U.S. economist at Societe Generale. "The more cautious approach, as advocated by most Fed officials, is the appropriate course, particularly as economic evidence shows more strength and perhaps greater challenges in achieving the 2% inflation objective." Asked about the greater risk to their end-2025 forecast, more than 80% of the economists, 33 of 40, said it was more likely to be higher than they currently expect. The rest said lower. For now, inflation appears under control, but economic growth is set to stay strong and at some point could usher in a revival. The latest report of inflation as measured by the personal consumption expenditures price index, the Fed's preferred gauge, is due to be released on Thursday and is expected to edge down to 2.1% in September from 2.2%. PCE inflation was expected to hit the 2% target next quarter, according to the poll, averaging 2.1% and 2.0% in 2025 and 2026, respectively. The U.S. economy will expand faster than what Fed officials currently see as the non-inflationary growth rate of 1.8% in the coming years, according to median forecasts in the poll. An advance estimate of gross domestic product due to be released on Wednesday is expected to show the economy grew at a 3% annualized rate last quarter. TRUMP ECONOMIC POLICIES In the race for the White House both Trump and Democratic Vice President Kamala Harris have proposed policies which could reignite price pressures, according to many economists. Asked whose policies would be more inflationary, an overwhelming majority, 39 of 42, said Trump's would. He plans higher import tariffs as well as additional tax cuts which will require a sharp increase in borrowing. "Relative to our baseline, Trump's proposals, including more tax cuts ... could add to growth and upside inflation risks. And if the fiscal loosening is coupled with tariffs, the risks to higher inflation are significantly higher," said Brett Ryan, senior U.S. economist at Deutsche Bank. (Other stories from the Reuters global economic poll) Sign up here. https://www.reuters.com/markets/rates-bonds/federal-reserve-cut-rates-by-25-basis-points-next-two-meetings-2024-10-29/

2024-10-29 15:40

BRASILIA, Oct 29 (Reuters) - Brazil's net imports of crypto assets in the nine months through September 2024 increased by 60.7% over the same period last year, already exceeding the full-year total for 2023, central bank data showed on Tuesday. The surge in Brazil's crypto market, the world's tenth-largest according to blockchain analytics firm Chainalysis, was fueled by a significant increase in so-called stablecoins - which are pegged to real-world assets like the U.S. dollar. These stablecoins accounted for nearly 70% of all crypto transactions in the country this year, according to tax revenue service data. Central bank chief Roberto Campos Neto recently said Brazil would regulate stablecoins in 2025. He previously noted that growing demand for stablecoins in Brazil was largely linked to tax evasion and illicit activities. Central bank data, which does not differentiate between asset classes, showed that year-to-date net imports of crypto assets reached $12.9 billion in September, surpassing the $11.7 billion recorded for all of last year. The head of the bank's statistics department, Fernando Rocha, highlighted that net imports continue to accelerate significantly year-over-year, though he noted a month-to-month decline. In September, net imports of crypto assets totaled $1.4 billion, down from $1.5 billion in August. "This doesn't necessarily mean they've peaked," he said. Unlike Bitcoin and other crypto assets without a corresponding liability, and whose value fluctuates widely, stablecoins such as Tether (USDT) and Circle's USDC provide more stability, while also enabling rapid transfer anywhere in the world. Sign up here. https://www.reuters.com/business/finance/brazil-crypto-imports-surge-607-through-september-exceeding-2023-total-2024-10-29/

2024-10-29 15:39

Oct 29 (Reuters) - Federal Reserve policymakers are nearly certain to deliver a quarter-point reduction in short-term borrowing costs next week, traders bet on Tuesday, as a U.S. Labor Department report showed job openings dropped last month to their lowest since January 2021. Analysts also took the report as confirmation that the U.S. central bank is on track for rate cuts at each of the Fed's last two meetings this year, despite much stronger-than-expected job growth in September reported earlier this month. "Overall, the report will caution the Fed against overreacting to recent rosy jobs data by prematurely moving away from its rate-cutting path when it meets next week," wrote ZipRecruiter Chief Economist Julie Pollak. Fed policymakers have said they do not believe the labor market need slow further to continue to make progress on bringing down inflation. Still, neither the Labor Department report nor other data out on Tuesday suggested a sharp or imminent collapse in the labor market. With just over one job opening for every job seeker, the labor market has cooled sharply from earlier this year, but the ratio remains little changed from August's reading, Tuesday's report showed. Consumer confidence jumped in October, a separate report from the Conference Board reported, and the proportion of consumers who said jobs are plentiful rose. Fed policymakers gather for their next two-day meeting a week from Wednesday, one day after U.S. voters cast their ballots in a closely contested election for control of the White House and Congress. Last month the Fed cut the policy rate by a half percentage point, to a range of 4.75%-5.00%. Sign up here. https://www.reuters.com/markets/rates-bonds/fed-seen-track-quarter-point-rate-cuts-nov-dec-2024-10-29/

2024-10-29 15:39

NEW YORK, Oct 28 (Reuters) - JPMorgan Chase (JPM.N) , opens new tab CEO Jamie Dimon blasted several major U.S. financial regulatory initiatives on Monday and vowed to oppose those he said would not make banks safer. The outspoken executive, 68, who runs the largest U.S. lender, criticized what he called overlapping or ill-conceived rules on capital requirements, card payments and open banking. "It's time to fight back," Dimon said at a conference. Many banks are afraid to "fight with their regulators, because they would just come and punish you more," he added. "I have been told by people at the Fed, know that because of what you have said and what you wrote about, you know they are coming after you." The Federal Reserve declined to comment. "We are suing our regulators over and over and over because things are becoming unfair and unjust, and they are hurting companies, a lot of these rules are hurting lower-paid individuals," he said. As banks await new proposals under what is known as the Basel III endgame, "the devil is in the details," Dimon said. He was referring to a proposal by U.S. regulators in July 2023 to align their standards with those of the Basel Committee on Banking Supervision to help the industry better absorb economic shocks. The Fed's regulatory chief Michael Barr last month outlined a plan to raise big bank capital by 9%, easing the previous proposal to hike capital 19%. It was a major concession to Wall Street banks that had lobbied to water down the draft. Despite the apparent industry victory, the plan was still mired in uncertainty, with key details unclear and the Nov. 5 U.S. presidential election casting doubt over whether it would survive a new administration. It will be difficult to get anything done if the proposals do not emerge before the election, Dimon said. The capital surcharge for global systemically important banks was among the "stupidest" elements of the Basel framework, its operational risk calculations were "ridiculous," and there were "inconsistencies" in the liquidity coverage ratio, he said. "The biggest problem I have with all these overlapping rules is that we are not stepping back and saying, what could we do better to make the system work better," he added. Dimon has been floated for senior positions on U.S. economic policy, such as Treasury secretary. Despite opining on what qualities the next president should possess, he has not publicly endorsed either candidate. The bank chief has been among the most strident critics of regulations and has warned the bank is willing to challenge some rules in court when it sees no other choice. "It is time to fight back," Dimon told the American Bankers Association, drawing applause and laughter. "We don't want to get involved in litigation just to make a point, but if you're in a knife fight, you better bring a knife and that's where we are." The CEO also said regulators should not allow card-issuing financial services firms such as American Express (AXP.N) , opens new tab, Capital One (COF.N) , opens new tab and Discover Financial Services (DFS.N) , opens new tab to charge more for debit card transactions. This is because banks are limited in how much they can charge for debit cards while card issuers have no such limits. "It's grossly unfair to allow them to do more," he said. Dimon, the longest running bank chief at a major Wall Street bank, also criticized the top U.S. consumer finance watchdog's rules unveiled last week which would make it easier for consumers to switch between financial services providers. The Consumer Financial Protection Bureau's "open banking" rule governs data sharing between fintech firms and traditional banks, allowing consumers to easily transfer their personal data between providers free of charge. Dimon said he was not against open banking but noted that it could compromise consumer data and lead to fraudulent money transfers and he was set to fight it. Sign up here. https://www.reuters.com/business/finance/jpmorgan-ceo-says-its-time-fight-back-regulation-2024-10-28/

2024-10-29 15:26

CAIRO, Oct 29 (Reuters) - By 2040, there will be at least 10 billion humanoid robots priced between $20,000 and $25,000, Elon Musk said at the 8th Future Investment Initiative conference, which began on Tuesday in Saudi Arabia's capital, Riyadh. Sign up here. https://www.reuters.com/technology/elon-musk-10-billion-humanoid-robots-by-2040-20k-25k-each-2024-10-29/