2024-10-17 05:06

FRANKFURT, Oct 17 (Reuters) - European power purchase agreements (PPA) for green electricity decreased in price by 12.4% in the third quarter compared with the same time in 2023, price tracking platform LevelTen said on Thursday. It cited factors including a decline in inflation and in market volatility following the COVID-19 pandemic and 2022 energy crisis. "With current market conditions relatively stable, buyers may be wise to enter the market soon to secure the deals they need," it said in its quarterly report. "The variety of offtake (buying) opportunities available to potential PPA buyers has perhaps never been greater," it said further. PPAs are long-term agreements between corporate power users and solar and wind project developers. They are guarantees of supply for providers faced with meeting a European Union (EU) regulatory requirement for at least 42.5% of electricity to come from renewable sources by 2030. For the developers, PPAs guarantee an income stream, making it easier to arrange financing. The impact of the cheaper deals for ordinary household consumers is unclear, although policymakers say increased green power will ultimately cut costs. LevelTen said the period had been marked by a big gap between regions, with an expansion of projects in central and eastern Europe, as well as an upsurge in solar projects in Ireland. Supply chain issues , opens new tab and inflation have hampered the wind sector, and Belgium, France, Greece, Ireland, Italy and Portugal did not contribute prices in Q3 for the LevelTen index. The 25% most competitive PPA prices for new-built capacity in July through September across 22 European countries in a market-averaged index dropped to 76.17 euros ($82.97) a megawatt hour (MWh) from 86.94 euros a year earlier. They were down 1.3% from 77.21 euros in second quarter 2024. In the blended index for wind and solar, solar showed a 1.3% quarter-on-quarter rise, which LevelTen attributed to higher Hungarian and Italian and newly added Irish prices. It said lower interest rates should make financing easier for renewable projects, and that development appetite had also been enhanced by signs of positive political will in Britain, and German government wind capacity auctions. Its quoted PPA term lengths are typically for 11 years. Prices are settled against hourly day-ahead wholesale market prices. ($1 = 0.9180 euros) Sign up here. https://www.reuters.com/business/energy/european-renewable-power-prices-fell-q3-ppa-platform-says-2024-10-17/

2024-10-17 04:33

A look at the day ahead in European and global markets from Tom Westbrook The European Central Bank is expected to make its first back-to-back rate cut in 13 years on Thursday. With that in the price, the policy outlook will be traders' focus and it will need to sound pretty dovish to drive the euro lower still. The common currency is already down 2.4% for October and rates markets are pricing more cuts in Europe next year than in the U.S. - even though U.S. rates sit above 4.75% and European rates are at 3.5%. Results at chipmaking giant TSMC could also move markets, especially after a disappointing outlook from chip equipment supplier ASML set off a sharp fall in semiconductor shares earlier in the week. TSMC profit is expected to have leapt 42% in the third quarter to just over T$300 billion ($9.3 billion), on soaring demand for artificial intelligence applications. It will give fourth-quarter revenue guidance in U.S. dollars. Earnings at pest control company Rentokil (RTO.L) , opens new tab are due in London and could be an indicator of global economic conditions. The company's UK shares have slid precipitously to more than four-year lows. U.S. retail sales data and earnings at Netflix (NFLX.O) , opens new tab will also be parsed for insights on consumers' mood. Asia trade on Thursday was reasonably steady but marred, yet again, by disappointment with Chinese authorities who announced policy measures far short of what markets have been hoping for. Beijing promised easier access to credit for builders to complete unfinished housing projects. Iron ore prices and real estate shares slid in China, while the Australian dollar - which had caught a boost from stronger-than-expected jobs numbers - pared early gains. Key developments that could influence markets on Thursday: - ECB policy decision and news conference - U.S. retail sales Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-10-17/

2024-10-17 03:06

MUMBAI, Oct 17 (Reuters) - The Indian rupee is likely to decline on Thursday, weighed down by the U.S. dollar's rally to a two-and-a-half-month high on mounting expectations that the Federal Reserve will opt for a smaller interest rate cut at its next monetary policy meeting. The 1-month non-deliverable forward indicated that the rupee will open at 84.01-84.03 to the dollar, compared with 83.9950 in the previous session. The rupee, slightly surprisingly, managed a mini rally late on Wednesday, to past the 84 handle. In the context of how low the volatility on the rupee is, "I would says yesterday's move was quite decent", a currency trader at a bank said. "At least decent enough, to nullify the immediate bias on the upside (for dollar/rupee) pair." The dollar/rupee pair not able to make much headway, following the move past 84 and possible inflows were reasons cited for the last hour dip. The rupee now will have to contend with a dollar that in the New York session on Wednesday climbed to 103.60, its highest level since the first week of August. The dollar is on a four-day winning streak, boosted by the increasing probability of U.S. election victory for former President Donald Trump and near surety that the Fed will not deliver a large rate cut next month. Markets are now nearly certain that the Fed will cut rates by 25 basis points, which is supporting the dollar and add to that a Trump win is considered a positive for the dollar, Srinivas Puni, managing director at QuantArt Market Solutions, said. The slump in the pound on Wednesday on weaker-than-expected UK inflation data further helped the dollar. Focus now turns to the U.S. retail sales and jobless claims data due later in the day. The jobless claims data is especially important in wake of the Fed's intention to not wanting a further cooling in the labour market. KEY INDICATORS: ** One-month non-deliverable rupee forward at 84.1250; onshore one-month forward premium at 10.5 paisa ** Dollar index at 103.5 ** Brent crude futures up 0.2% at $74.4 per barrel ** Ten-year U.S. note yield at 4.03% ** As per NSDL data, foreign investors sold a net $182.4mln worth of Indian shares on Oct. 15 ** NSDL data shows foreign investors sold a net $10.3mln worth of Indian bonds on Oct. 15 Sign up here. https://www.reuters.com/markets/currencies/rupee-mini-rally-will-have-contend-with-runaway-dollar-2024-10-17/

2024-10-17 02:40

SYDNEY, Oct 17 (Reuters) - Australian employment beat forecasts for a sixth straight month in September, while the jobless rate held steady, reinforcing the view that the labour market remains tight as market bets for a rate cut by year end diminish. The Australian dollar rose 0.5% to $0.6698, rebounding from a one-month low, while the three-year government bond yield jumped 7 basis points to 3.829%. Markets pared the chance for a first interest rate cut from the Reserve Bank of Australia in December to 30% from 46% before the data. They're now even not sure if a cut can come in February next year, with just 75% priced in. "We see no incentive to shift from our call that the RBA won't even start cutting rates until 1Q2025, and there is a chance that even this is too aggressive," said Robert Carnell, regional head of research, Asia Pacific, ING. Data from the Australian Bureau of Statistics on Thursday showed net employment surged 64,100 in September from August, when they rose a downwardly revised 42,600. That was well above market forecasts for a 25,000 rise, and most of the gains were in full-time employment. The jobless rate held relatively steady at a downwardly adjusted 4.1% where it has generally been over the past six months, noted the ABS. The participation rate edged up to another all-time high of 67.2% as the workforce expanded rapidly. Bjorn Jarvis, ABS head of labour statistics, noted that there are still large numbers of people entering the labour force and finding work in a range of industries, given the still elevated job ads. The RBA has held its policy steady since November, judging the current cash rate of 4.35% - up from 0.1% during the pandemic - is restrictive enough to bring inflation to its target band of 2-3% while preserving employmentgains. However, underlying inflation has remained sticky and the labour market is only slowing gradually, a reason that the RBA has all but ruled out a rate cut this year, lagging other major central banks in kick starting an easing cycle. Headline inflation did slow to 2.7% in August, due to government electricity rebates, but the RBA has warned the monthly measure is volatile and it would look through the temporary impact. The job report showed hours worked rose 0.3% in September, after an increase of 0.4%, while the underemployment rate fell 0.1 percentage point to 6.3%, all pointing to a strong labour market. "Ultimately, this means less pressure on the RBA to bring forward its rate cut timeline," said Russel Chesler, VanEck head of investments & capital markets. "The hot jobs market is preventing inflation from falling much further, as it is keeping services inflation persistently high ... The market is pricing in cuts to start by February 2025, but we believe rate cuts will start much later in 2025." Sign up here. https://www.reuters.com/markets/australias-job-gains-extend-strong-run-sept-dashing-rate-cut-hopes-2024-10-17/

2024-10-17 00:41

US dollar index hits fresh 11-week high US retail sales rise in September ECB cuts rates for 3rd time this year US rate future price in 44 bps of cuts this year NEW YORK, Oct 17 (Reuters) - The U.S. dollar surged to a fresh 11-week high on Thursday after data showed U.S. retail sales rose in September, reinforcing expectations that the Federal Reserve will pursue modest interest rate cuts over the next year and a half as the world's largest economy remained resilient. Against the Japanese currency, the dollar touched 150 yen, for the first time since Aug. 1. It was last up 0.4% at 150.24 yen . The dollar index , a measure of the greenback's value against six major currencies, was last up 0.3% at 103.81, having risen as high as 103.87, its highest since Aug. 2. "What's going on today is a continuation of what has been going on essentially for the whole month of October," said Eugene Epstein, head of structured products, North America at Moneycorp in New York. "Everybody is seeing the data coming in stronger than expected, so the dollar ... is going higher. The dollar was actually weak going into the 50 basis-point cut by the Fed in September. Now that has been unwinding." Thursday's data showed U.S. retail sales rose 0.4% last month after an unrevised 0.1% gain in August. Economists polled by Reuters had forecast retail sales would rise 0.3%. A separate report from the Labor Department showed initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 241,000 last week, though hurricanes and a month-long strike at Boeing (BA.N) , opens new tab are making it harder to get a clear read of the labor market. At the same time, the euro fell after the European Central Bank cut interest rates on Thursday for the third time this year. It said inflation in the euro zone was increasingly under control while the outlook for the region's economy has been worsening. MORE ECB CUTS? ECB President Christine Lagarde, in her press briefing, did not provide clues as to the bank's future moves, but four sources close to the matter told Reuters a fourth cut in December is likely unless economic or inflation data turns around in the coming weeks. The euro dropped to an 11-week trough against the dollar of $1.0811, and last changed hands at $1.0826, down 0.3%. Europe's single currency has declined for four straight sessions and has fallen 2.8% against the dollar for the month of October, on track for its largest monthly drop since May 2023. In the United States, U.S. rate futures have priced in 92% chance that the Fed will cut rates by 25 bps, and an 8% probability that it will pause, meaning it will keep the fed funds rate at the 4.75%-5% target range, according to LSEG estimates. They had previously seen a further 50 basis point cut as likely at one of these meetings. The futures market also expect about 44 bps cut for 2024, and an additional 102 bps reductions next year. Fed officials including Fed Chair Jerome Powell have pushed back against the prospect of additional 50 basis point rate cuts since the U.S. central bank in September surprised some market participants with the larger than usual rate reduction. Currency investors are also focused on the upcoming U.S. presidential election. Betting site Polymarket , opens new tab, meanwhile, shows improving odds of a victory by Donald Trump at November's U.S. presidential election. "Trump's odds of winning has increased and therefore the so-called 'Trump trade', which means buying the dollar, is back," said Moneycorp's Epstein. A Trump administration is expected to introduce new tax cuts, loosen business regulations and enact new tariffs, which analysts say could increase growth and inflation, a dollar-positive scenario. Brad Bechtel, global head of FX at Jefferies in New York said election-related hedging has helped recent dollar strength, with much of the activity being made against the Mexican peso and Chinese yuan "which are going to be the two main targets for any sort of tariff-related friction or trade-related friction." In other currencies, the Australian dollar rose after Australian employment data beat forecasts for a sixth straight month in September. The Aussie was last up 0.4% versus the greenback at US$0.6695. In cryptocurrencies, bitcoin fell 1.1% to $66,849. (This story has been refiled to remove the extraneous euro rate in paragraph 10) Sign up here. https://www.reuters.com/markets/currencies/dollar-hovers-near-11-week-high-eyes-china-property-briefing-2024-10-17/

2024-10-16 23:35

Dow posts third record closing high in four sessions Russell 2000, S&P Small Cap 600 at highest levels since Nov 2021 Morgan Stanley record high as Q3 profit jumps; banks buoyant Utilities climb; Amazon nuke accord benefits Dominion Indexes up: Dow 0.79%, S&P 500 0.47%, Nasdaq 0.28% Oct 16 (Reuters) - The Dow Jones Industrial Average rose on Wednesday and closed at a record high, and Wall Street's two other benchmark indexes also ended higher, weathering declines in megacap tech shares thanks to small-caps gains and financial shares buoyed by strong earnings. It was the third time in four sessions the Dow (.DJI) , opens new tab has recorded a best ever finish, ending above 43,000 points again and recouping losses from the previous session. Also a whisker away from setting another closing milestone was the S&P 500 (.SPX) , opens new tab, but ultimately it finished just short, up 27.21 points, or 0.47%, to 5,842.47 points. The Nasdaq Composite (.IXIC) , opens new tab rose 51.49 points, or 0.28%, to 18,367.08. The Dow Jones Industrial Average (.DJI) , opens new tab advanced 337.28 points, or 0.79%, to 43,077.70. On a broadly positive day for Wall Street, it was financial stocks which led the way. "I think investors have rotated a little bit out of some of the big tech companies and into the big financial companies," said Michael Kantrowitz, chief investment strategist at Piper Sandler. He said some movement from investors made sense as the rate environment has become more conducive for bank earnings, while a lot of optimism around artificial intelligence (AI) is priced into tech companies. Morgan Stanley (MS.N) , opens new tab posted a record close, jumping 6.5%, after it joined peers such as JPMorgan Chase (JPM.N) , opens new tab in reporting strong profits following a sharp increase in investment banking revenue. Larger regional banks, traditionally less reliant on investment banking activities, were also higher. First Horizon (FHN.N) , opens new tab rose 4.1% and U.S. Bancorp (USB.N) , opens new tab advanced 4.7% after reporting third-quarter results. The broader Banks (.SPXBK) , opens new tab index was up 1.2%, and an index tracking regional banks (.KRX) , opens new tab gained 1.5%. Investors also focused on small-cap stocks, with some rotation from expensive tech megacaps to less expensive sectors. The Russell 2000 index (.RUT) , opens new tab rose 1.6%, and the S&P Small Cap 600 (.SPCY) , opens new tab gained 1.4%. Both had their highest finishes since November 2021. While acknowledging some buying in recent days, Piper Sandler's Kantrowitz said he was yet to be convinced of a wider rotation into small caps. "I think people are broadening out their portfolio exposure, but still sticking with the same flavor of fundamentals," adding people were buying high-quality small-caps but not digging into the kinds of deep-value names you would expect to attract attention if the full rotation was underway. Among the big-tech names which dragged, Apple (AAPL.O) , opens new tab dipped 0.9% after hitting a record high in the previous session. Alphabet (GOOGL.O) , opens new tab, Meta Platforms (META.O) , opens new tab, and Microsoft (MSFT.O) , opens new tab all declined between 0.2% and 1.6%. Chip heavyweight Nvidia (NVDA.O) , opens new tab, however, bucked the megacap slide, rising 3.1% after slumping nearly 5% in the previous session. Gains in the so-called Magnificent Seven group of tech stocks have driven most of Wall Street's record-breaking run this year. However, with valuations increasingly stretched and a brighter economic outlook, investors have been seeking opportunities elsewhere. Four of the 11 S&P sectors registered record closing highs: financials (.SPSY) , opens new tab, utilities (.SPLRCU) , opens new tab, materials (.SPLRCM) , opens new tab and industrials (.SPLRCI) , opens new tab. Utilities led sectoral gains, leaping 2%, with Dominion Energy's (D.N) , opens new tab 5.1% increase among the catalysts after it was one of the power companies with which Amazon.com (AMZN.O) , opens new tab announced agreements for developing nuclear technology to power data centers. The second best-performing S&P sectors year to date, Piper Sandler's Kantrowitz said he remains bullish on utilities as they benefit from both the higher power demand coming from AI, but also the lower interest rate environment. The economically sensitive Transport index (.DJT) , opens new tab jumped 1.9%, lifted by United Airlines' (UAL.O) , opens new tab best one-day performance in six months. It gained 12.4% after it forecast better-than-expected fourth-quarter profit and announced a $1.5-billion share buyback program on Tuesday. Delta Air Lines (DAL.N) , opens new tab and American Airlines (AAL.O) , opens new tab also benefited, advancing 6.8% and 7.1%, respectively. Attention now turns to more corporate earnings are due through the week, along with key economic data including the retail sales and industrial production figures for September on Thursday. Volume on U.S. exchanges was 10.63 billion shares, compared with the 12.13 billion average for the full session over the last 20 trading days. Sign up here. https://www.reuters.com/markets/us/futures-steady-nasdaq-higher-markets-await-bank-earnings-2024-10-16/