2024-10-16 10:07
A look at the day ahead in U.S. and global markets from Mike Dolan World markets struggled to find a footing on Wednesday after Europe's ASML (ASML.AS) , opens new tab sideswiped the global chip sector late yesterday with a surprisingly weak orders outlook and investors prayed the flub was a one-off as third-quarter earnings updates stream in. There was better news for bond markets - with yields declining on a mix of falling oil prices and significant European disinflation that underscores expectations of another European Central Bank interest rate cut on Thursday. And that picture was replicated in Britain on Wednesday, with headline inflation dropping much further below the Bank of England's 2% target than markets had bet on - upping bets on a BOE rate cut next month and knocking the pound back to its lowest in almost two months. With European fixed income markets rallying again, U.S. Treasury yields also fell back close to 4% and Federal Reserve futures are back fully pricing a quarter point U.S. rate cut on Nov. 7. But much of the heat and price action was in stocks. While banks and pharma firms dominate Wednesday's diary, reverberations from ASML's big miss knocked Wall Street (.SPX) , opens new tab back from record highs on Tuesday, adding to a swoon in energy stocks from falling oil prices and throwing a spotlight on Thursday's update from Taiwan's chip behemoth TSMC. The read across to AI-darling Nvidia (NVDA.O) , opens new tab saw its shares recoil almost 5% from Monday's new record, with a small recovery pencilled in ahead of today's bell. However ASML itself, the world's biggest chipmaking equipment manufacturer, shed another 4% in Europe on Wednesday, adding to the 16% loss on Tuesday - its steepest one-day decline in four years. And in a bad week for European stocks more generally, the luxury sector remained under the cosh as France's LVMH (LVMH.PA) , opens new tab dropped 7% due a fall in third-quarter sales hit by waning customer confidence in China. China's struggling economy, U.S. investment curbs on its technology sector and a brewing tariff trade war between Beijing and Brussels tie all these stories together. And despite slightly frantic Chinese stimulus measures in recent weeks to lift the flagging economy, the initial stocks boost from that is fading fast. China's mainland index (.CSI300) , opens new tab and Hong Kong's Hang Seng (.HSI) , opens new tab ended in the red again on Wednesday - both more than 10% off post-stimulus highs. Beijing will hold a press conference on Thursday to discuss promoting the "steady and healthy" development of the property sector, the State Council Information Office said, although that's failed to reignite much market excitement. And indeed China's troubles, along with scaled back global oil demand forecasts for 2025, are one of the reasons crude prices are sliding yet. Crude tumbled more than 4% to a near two-week low on Tuesday due to that weaker outlook and after a media report said Israel would not strike Iranian nuclear and oil sites, easing fears of supply disruptions. While U.S. oil prices tried to retain a toehold on $70 per barrel on Wednesday, they continue to track year-on-year losses of close to 20% and remain a powerful force depressing headline annual inflation rates. Back on Wall St, the chip sector wobble cut across better news from the banks. Bank of America (BAC.N) , opens new tab shares rose 0.5% following a third-quarter profit beat, while Charles Schwab (SCHW.N) , opens new tab shares climbed 6% after exceeding estimates. Citigroup (C.N) , opens new tab, however, fell 5% after it reported mixed results with net income declining and net interest income weaker than expected while debt underwriting propped up its investment banking results. Morgan Stanley and some of the small regional banks are up next on Wednesday. Wall St futures more broadly are slightly higher before the open. Aided in part by sterling's slide, the dollar index (.DXY) , opens new tab nudged to its best levels since early August. As the U.S. election campaign enters its final phase, betting markets put Republican Donald Trump as the slight favorite to return to the White House despite opinion polls showed a tight race between him and Democrat rival Kamala Harris. Trump on Tuesday defended his protectionist trade policies and other fiscal proposals in an interview with Bloomberg, dismissing suggestions that they could drive up the federal debt. And he appeared to back away from previous comments that as president, he should be able to exert control over the Fed interest rate decisions. "I think I have the right to say I think you should go up or down a little bit," Trump said, referring to setting interest rates. "I don't think I should be allowed to order it, but I think I have the right to put in comments as to whether or not the interest rates should go up or down." How Trump plans to weaken the dollar, however, remains a bit of mystery beyond his well-flagged tariff plans. Key developments that should provide more direction to U.S. markets later on Wednesday: * US corporate earnings: Morgan Stanley, US Bancorp, Citizens Financial, Discover Financial, Equifax, Synchrony, Prologis, Abbott Laboratories, CSX, PPG, Kinder Morgan, Steel Dynamics, Crown Castle * US September import/export prices * European Central Bank President Christine Lagarde speaks Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-pix-2024-10-16/
2024-10-16 08:01
Key rate cut by 25 bps to 2.25%, first cut in over 4 years C.bank says rate cut consistent with economy, no govt pressure C.bank raises 2024 growth outlook, cuts 2025 forecast Economists expect more policy easing this year BOT's rate cut follows months of government pressure BANGKOK, Oct 16 (Reuters) - Thailand's central bank unexpectedly cut its key interest rate on Wednesday, saying the move brought rates a "neutral" level consistent with the economy's growth potential and downplaying the impact of government calls for policy easing on its decision. The 25-basis-point reduction was the first rate cut since May 2020, following five consecutive meetings where it held rates steady and months of pressure from the government, looking to the central bank for help with reviving sluggish growth. The benchmark stock index (.SETI) , opens new tab rose 1.6% with the baht dropping 0.36% after the decision that only four of 28 economists polled by Reuters had anticipated. "The lower policy rate would not impede debt deleveraging given the expected slowdown in loan growth and would remain neutral and consistent with economic potential," the Bank of Thailand (BOT) said in a statement , opens new tab. The BOT's monetary policy committee voted , opens new tab 5 to 2 to bring the one-day repurchase rate (THCBIR=ECI) , opens new tab to 2.25% from a decade-high of 2.50%, where it has been since September 2023, when the bank hiked its benchmark by 25 basis points. "It's not an easing cycle... just recalibrating the policy interest rate," assistant governor Sakkapop Panyanukul told reporters. "It was not from political pressure," he said. Deputy Finance Minister Paopoom Rojanasakul told reporters on Wednesday the rate cut would help boost growth and showed that fiscal and monetary policies were being coordinated. At their previous meeting in August only one policymaker backed a rate cut while the rest voted to keep the rates steady. "The mounting headwinds swayed the other four members," said Kobsidthi Silpachai, head of capital markets research of Kasikornbank. Floods in parts of the country, competition with cheap Chinese imports and factory closures were all weighing on the economy, he said. "The case for cuts arguably only grew even more over the past few months, in view of the rapid appreciation of the baht," said Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomic, who predicts another cut at the next rate meeting on Dec. 18. Capital Economics also expects a rate cut in December and sees the policy rate at 1.5% at the end of next year. On Wednesday, the Philippines also cut rates, while Indonesia kept rates unchanged. The central bank on Wednesday raised its 2024 economic growth forecast to 2.7% from 2.6% earlier, and predicted 2.9% growth in 2025, down from the 3% previously projected. Southeast Asia's second-largest economy has lagged its regional peers, saddled by high household debt and borrowing costs, and weak exports. The BOT also cut its forecast for 2024 headline inflation to 0.5% from 0.6%, which is below the target range of 1% to 3%. The central bank and Finance Ministry will meet again at the end of October to discuss the inflation target. ($1 = 33.34 baht) Sign up here. https://www.reuters.com/markets/asia/thai-central-bank-unexpectedly-cuts-key-rate-by-25-bps-2024-10-16/
2024-10-16 07:46
LONDON, Oct 16 (Reuters) - CorPower Ocean has secured 32 million euros ($35 million) of funding to support the commercialisation of wave energy technology, the firm said on Wednesday. Some countries are developing wind and tidal energy projects to help reduce emissions and meet climate goals. Wave power is more predictable than wind power and it increases during the winter, when electricity demand is high, but costs are still high and the industry is not yet at large-scale commercialisation. The investment in CorPower comes after its wave technology demonstration project in Portugal showed its ability to operate in Atlantic storms combined with a large power generation capacity, the firm said. The consortium of investors to commit funds was led by Japanese-backed venture capital firm NordicNinja VC, SEB's (SEBa.ST) , opens new tab clean technology investment arm SEB Greentech and InnoEnergy. The consortium also includes Santander Asset Management, Iberis Capital, Cisco Investments and existing shareholders. Headquartered in Sweden, CorPower Ocean said it has so far secured 95 million euros in funding from private and public investors and has demonstrated four generations of its technology. Project developers are using CorPower Ocean's technology at sites in Scotland, Ireland, Portugal and Norway, it said. ($1 = 0.9191 euros) Sign up here. https://www.reuters.com/business/energy/wave-energy-technology-firm-corpower-ocean-secures-32-million-euros-2024-10-16/
2024-10-16 07:41
JAKARTA, Oct 16 (Reuters) - Indonesia's central bank on Wednesday kept interest rates unchanged, as expected, saying the decision was consistent with its objective to keep inflation within its target range through to 2025. Bank Indonesia (BI) left the benchmark 7-day reverse repo rate at 6.00%, as expected by the majority of economists polled by Reuters, following its surprise decision to cut rates last month. The central bank also kept the overnight deposit facility rate (IDCBID=ECI) , opens new tab and lending facility rate (IDCBIL=ECI) , opens new tab at 5.25% and 6.75%, respectively. Governor Perry Warjiyo said the decision was influenced by rising global market uncertainties. He said BI will continue to assess if there is room for further rate cuts, taking into account the country's inflation, rupiah stability and growth outlook. BI's cut last month came just ahead of a rate cut by the U.S. Federal Reserve. Since then, the rupiah has become more volatile against the U.S. dollar on a shifting outlook for further U.S. rate cuts. Annual inflation in Southeast Asia's largest economy cooled to 1.84% last month, the lowest since 2021 and moving closer to the lower end of BI's target range of 1.5% to 3.5% target range. Indonesia's economic growth has remained steady at a solid pace of 5% post-pandemic, but that is far below the 8% target of Prabowo Subianto, who will be inaugurated as president on Sunday. BI kept its outlook for economic growth at a range of 4.7% to 5.5% this year, and said it expected growth to accelerate next year. Sign up here. https://www.reuters.com/markets/asia/indonesia-central-bank-holds-rates-global-uncertainties-re-emerge-2024-10-16/
2024-10-16 07:39
KAMPALA, Oct 16 (Reuters) - The Ugandan shilling was broadly stable on Wednesday due to muted demand for dollars from commercial banks and importers, traders said. At 0722 GMT, commercial banks quoted the shilling at 3,665/3,675, compared with Tuesday's closing rate of 3,667/3,677. Sign up here. https://www.reuters.com/markets/currencies/ugandan-shilling-stable-due-muted-dollar-demand-2024-10-16/
2024-10-16 07:35
NEW DELHI, Oct 16 (Reuters) - India's crude oil imports from Russia rose by 11.7% to about 1.9 million barrels per day (bpd) in September, accounting for about two-fifths of the South Asian nation's overall crude imports in the month, tanker data obtained from industry sources showed. Overall, refiners in India imported a total of 4.7 million bpd of crude oil in September, marginally higher than in August and about 8.5% more than the same month a year ago, the data showed. The refiners have invested billions of dollars in plant upgrades, allowing them to process more crude grades, in an effort to reduce costs. India, the world's third largest oil importer and consumer, has emerged as the top buyer of discounted Russian seaborne oil after Western nations stopped buying from Moscow following its invasion of Ukraine. Crude from the Commonwealth of Independent States, comprising Russia, Kazakhstan and Azerbaijan, accounted for about 43% of India's overall imports, up from 38.5% in August, the data showed. During April-September, the first six months of the fiscal year to March 2025, India's imports of Russian oil rose 9.1% to 1.91 million bpd, the data showed. Russia remained India's top oil supplier in September, followed by Iraq and Saudi Arabia. Russian oil imports were more than double Iraq's 867,600 bpd, the data showed. India also resumed its imports of Venezuelan oil in September after a gap of two months, with private refiner Reliance Industries Ltd (RELI.NS) , opens new tab receiving a cargo, the data showed. The market share accounted for by producers from the Organization of the Petroleum Exporting Countries (OPEC), mainly from the Middle East and Africa, declined marginally between April and September from the same period a year ago, a Reuters analysis of the data showed. Imports from the Middle East fell to about a 41.6% share in April-September from 43.8% a year earlier, the data showed. Indian refiners mostly buy Middle Eastern oil under annual contracts with producers in the region. Sign up here. https://www.reuters.com/business/energy/indias-russian-oil-imports-rise-117-sept-aug-data-shows-2024-10-16/
