2024-10-11 06:06

LONDON, Oct 11 (Reuters) - The Federal Reserve's road ahead appeared crystal clear in September, but the picture is far foggier than many thought and the past and future impact of immigration on the labour market is hardest to see through. Less than a month ago, the Fed launched its easing campaign with a jumbo half-point interest rate cut, sounding confident inflation had largely been licked and the red-hot jobs market was cooling. But a combination of forecast-busting payrolls gains last month, an unexpected drop in the unemployment rate and stickier consumer prices has seemingly shifted Fed rhetoric back into more wait-and-see territory. The release on Wednesday of minutes from last month's Fed meeting revealed far less certainty about prevailing economic conditions and the official data reflecting them than the statement issued on the day of the decision. "Many participants", the minutes recorded , opens new tab, "observed that the evaluation of labor market developments had been challenging, with increased immigration, revisions to reported payroll data, and possible changes in the underlying growth rate of productivity cited as complicating factors". And the formal readout added that "several participants" emphasised the importance of continuing to use "disaggregated data or information provided by business contacts as a check on readings on labor market conditions". The Fed may not be flying blind, but it's still desperately trying to filter many of the critical signals on its dashboard. Reflecting some of those multiple data twists, Atlanta Fed President Raphael Bostic told the Wall Street Journal on Thursday: "This choppiness to me is along the lines of maybe we should take a pause in November. I'm definitely open to that." JUNE SWITCH A large part of the confusion on U.S. economic and employment resilience surrounds on huge revisions to post-pandemic immigration numbers that lifted workforce projections, eased labour shortages and arguably cooled wage and price growth. But that picture is morphing yet again with mid-year changes to migration policies and a post-election stance that's up in the air. Most economists' thinking on immigration was jarred in February when revisions by the U.S. Congressional Budget Office (CBO) showed there were 3.3 million net immigrants last year compared to the 1 million projected pre-pandemic. For many economists, that went some way to explaining the surprising strength of the U.S. labour market, consumer spending and overall growth since 2022, even as the Fed was tightening credit conditions. After reconfiguring its forecasts, the CBO said this surge in net immigration could increase the U.S. workforce by 5.2 million over the next 10 years. The organisation projects this could add some $7 trillion to economic output and $1 trillion to tax revenue. These revised forecasts, in turn, prompted some private sector economists to begin arguing that the labour market could run hotter than previously expected without generating fresh inflation. That led many to estimate that sustainable monthly payroll growth could be as high as 200,000 through year-end. But the picture was complicated again in June when the U.S. immigration stance shifted. President Joe Biden announced two major policy moves: an asylum ban to cut illegal crossings at the U.S.-Mexico border and sweeping measures to legalise many long-term residents married to U.S. citizens. Economists at Barclays estimate the combination of Biden's move, reduced numbers of would-be immigrants at the southwest border, and a suspension of an advance parole programme for Cuba, Venezuela, Haiti and Nicaragua has reduced flows of entrants sharply. They now estimate that so-called "humanitarian" net immigration, which accounts for people who need protection but are not refugees, is stabilising at only around 100,000 per month compared to as many as 300,000 late last year. That would add an estimated 63,000 to the labour force each month going forward. That's much lower than the level over the past 18 months. To make things even more complex, delays in work registrations mean those who arrived before June's policy move may buoy payrolls to the end of 2024 and will possibly be reflected in September's jobs report. DISTORTIONS AND DEPORTATIONS So far, so uncertain - and that's even before attempting to dissect the statistical contortions involved in assumptions about overall population size, the share of U.S.-born citizens expected to join the labor force, and related effects on the household survey used to compile the unemployment rate at large. What's more, payrolls data is likely to be distorted over the next month due to recent strikes and devastating hurricanes. And then there's what could be the biggest game-changer of all: the U.S. presidential election next month. Former President Donald Trump's draconian proposals on migration are obviously a clear break with existing policies and those put forward by Democrat candidate Kamala Harris. Not only has Trump detailed numerous plans to limit immigration, he has pledged to launch the largest deportation effort in U.S. history. Considering all of this and the significant impact immigration can have on so many aspects of the economy, it's little surprise the Fed is having some trouble seeing the path ahead. The opinions expressed here are those of the author, a columnist for Reuters Sign up here. https://www.reuters.com/markets/us/fed-dashboard-fogged-by-immigration-uncertainty-mike-dolan-2024-10-11/

2024-10-11 05:51

ANKARA, Oct 11 (Reuters) - Turkey has imposed anti-dumping duties on some steel imports from China, Russia, India and Japan, according to a decision published in the Official Gazette on Friday, with the highest tariffs on Chinese imports. The duties imposed will range between 6.10% to 43.31% of cost, insurance and freight (CIF) prices, the decision said, in a move aimed at preventing "unjust competition" after appeals from domestic producers last year. An investigation into hot rolled steel imports following the local producers' appeal showed that the alleged dumping of steel from China, Russia, India and Japan threatened to damage domestic production, the decision published in the Official Gazette said. Turkey's Official Gazette is a national journal that publishes new legislation and other announcements every day. Duties imposed on imports from China range from around 15% to 43%, and tariffs imposed on imports from Russia, India and Japan go from 6% to 9%, according to the decision. Ankara's decision comes amid rising trade tensions between China and the European Union over tariffs on electric vehicles, brandy and other goods, and follows China's complaint to the World Trade Organisation on import duties imposed on Chinese EVs entering Turkey. Sign up here. https://www.reuters.com/markets/commodities/turkey-imposes-anti-dumping-duties-steel-imports-china-russia-india-japan-2024-10-11/

2024-10-11 05:48

U.S. stocks gain as banks lead after earnings Bets for quarter point Fed rate cut intact after PPI data Oil slips but set for weekly gain NEW YORK, Oct 11 (Reuters) - Global stocks rose on Friday, lifted by U.S. bank earnings, and on track for a weekly gain while U.S. Treasury yields were mostly lower after inflation and consumer confidence reports solidified expectations for the path of Federal Reserve rate cuts. The U.S. producer price index for final demand was unchanged in September, slightly below the forecast of economists polled by Reuters for a gain of 0.1%. It followed an unrevised 0.2% increase in August, indicating inflation continues to cool and giving the Fed leeway to continue cutting interest rates. In the 12 months through September, the PPI increased 1.8% versus the 1.6% estimate. On Thursday, the consumer price index turned out to be slightly higher than expected as goods costs increased. The University of Michigan's preliminary reading on the overall index of consumer sentiment came in at 68.9 this month, compared with a final reading of 70.1 in September and below the 70.8 estimate as high prices discouraged shopping. On Wall Street, U.S. stocks advanced, with the Dow and S&P 500 closing at record highs, as bank shares (.SPXBK) , opens new tab jumped 4.21%, its biggest daily percentage gain since May 2023, at the start of the quarterly earnings season. JP Morgan (JPM.N) , opens new tab rose 4.44% and Wells Fargo (WFC.N) , opens new tab shot up 5.61%. "As we get to the latter part of this year and into next year, you're going to see earnings growth in the broader market and not just a small group of stocks and what the banks are telling us today is that's happening," said Craig Sterling, head of U.S. equity research at Amundi U.S. in Boston. "Banks have been as big a question mark as anybody - the level of rates, the yield curve, capital markets activity, et cetera - and two of our biggest banks today are saying well everything's going to be pretty good." S&P 500 earnings growth is expected to be 4.9%, LSEG data showed, down slightly from 5.2% at the start of October. The Dow Jones Industrial Average (.DJI) , opens new tab rose 409.74 points, or 0.97%, to 42,863.86, the S&P 500 (.SPX) , opens new tab rose 34.98 points, or 0.61%, to 5,815.03 and the Nasdaq Composite (.IXIC) , opens new tab rose 60.89 points, or 0.33%, to 18,342.94. Gains were capped, however, by an 8.78% tumble in Tesla (TSLA.O) , opens new tab shares as the electric vehicle maker promised much at its robotaxi event with few practical details. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab rose 4.56 points, or 0.54%, to 852.75 and was on track for its fourth weekly gain in five weeks. In Europe, the STOXX 600 (.STOXX) , opens new tab index closed up 0.55% as investors shifted their focus to China's fiscal stimulus, corporate earnings seasons and the European Central Bank's (ECB) expected rate cut next week. Bets that the Fed will cut rates by 25 basis points at its November meeting have been choppy in recent sessions, and stand at 88.4%, with markets pricing in a 11.6% chance of no change in rates, CME's FedWatch Tool , opens new tabshowed. Markets had been fully pricing in a cut of at least 25 basis points, with a chance for another outsized 50 bps cut last week, until a strong U.S. payrolls report prompted investors to dial back expectations. Comments from Fed Chair Jerome Powell and other central bank officials have signaled a shift in focus from combating high inflation to labor market stability. On Thursday, several policymakers said the data gives the Fed room to continue cutting rates, but Atlanta Federal Reserve Bank President Raphael Bostic told the Wall Street Journal he was open to skipping a rate cut. U.S. yields were choppy around the data as investors gauged the Fed's rate path before heading lower. The benchmark U.S. 10-year note yield 0.5 basis point to 4.089% while the 2-year note yield, which typically moves in step with interest rate expectations, declined 5 basis points to 3.949%. The 10-year yield is up about 11 bps for the week, poised for its fourth straight weekly advance. The 2-year yield is nearly 7 bps on the week, on track for a second straight weekly climb. In currency markets, the dollar index , which measures the greenback against a basket of currencies, edged up 0.05% to 102.94, with the euro down 0.03% at $1.0932. The greenback is up 0.44% on the week, on track for a second straight weekly gain after four straight weeks of declines. Against the Japanese yen , the dollar strengthened 0.4% to 149.15. Sterling strengthened 0.05% to $1.3065 but remained near a one-month low after data showed Britain's economy grew in August after two consecutive months of stagnation. Crude prices slipped, but secured a second straight weekly climb, as investors weighed the impact of hurricane damage on U.S. demand against any broad supply disruption if Israel attacks Iranian oil sites. U.S. crude settled down 0.38% to $75.56 a barrel and Brent fell to settle at $79.04 per barrel, down 0.45% on the day. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-10-11/

2024-10-11 05:45

US PPI data due at 1230 GMT Silver, platinum head for weekly falls Palladium up nearly 7% so far in the week Oct 11 (Reuters) - Gold prices climbed on Friday after recent data firmed bets for a Federal Reserve rate cut next month, while market participants awaited the U.S. Producer Price Index (PPI) report for further direction. Spot gold rose 0.6% to $2,644.16 per ounce by 0514 GMT but was down about 0.3% for the week. Prices hit a record high of $2,685.42 last month. U.S. gold futures gained 0.8% to $2,661.40. The dollar index fell from a two-month high, making bullion more attractive for other currency holders. Data on Thursday showed that U.S. consumer prices rose slightly more than expected in September, while jobless claims increased to 258,000 in the week ended Oct. 5, versus estimates of 230,000. All eyes are now on the PPI data due at 1230 GMT. "Gold is seeing short-term gains as recent data has been positive. If the PPI data comes in softer, gold's momentum could continue upward," said Kelvin Wong, OANDA's senior market analyst for Asia Pacific. "From a technical view point, in the near-term, gold could retest $2,657 and if it breaks above that, then test levels near its all-time high." Markets currently see an 84.4% chance of a 25-basis-point rate reduction in November, compared with 76% before the data, and a 15.6% probability of the Fed keeping rates on hold, according to CME's FedWatch. Lower interest rates reduce the opportunity cost of holding bullion. Elsewhere, Israeli strikes on central Beirut on Thursday night killed 22 people, Lebanon's health ministry said. Analysts have noted that an escalation in the Middle East situation could further support gold, which is considered a safe asset during times of turmoil. Among other metals, spot silver rose 0.3% to $31.28 per ounce and platinum climbed 1% to $976.55. Both metals were headed for weekly declines. Palladium firmed 1% to $1,080.27 and was up nearly 7% for the week. Sign up here. https://www.reuters.com/markets/commodities/gold-drifts-higher-after-data-supports-us-rate-cut-bets-2024-10-11/

2024-10-11 05:18

New govt reviewing contracts signed by predecessor Deal with India’s Adani for 1,600 MW power under scrutiny Dhaka likely to keep deal despite pricing concerns -sources Adani has no indication of review, waits for dues to be paid DHAKA/NEW DELHI, Oct 11 (Reuters) - Bangladesh is likely to set aside pricing concerns and retain a power purchase pact with India’s Adani Power (ADAN.NS) , opens new tab, in the face of supply worries and gloomy prospects for a legal challenge, two sources with direct knowledge of the matter said. The new government has set up a panel to gauge whether its predecessor's contracts adequately protected the nation's interests, particularly projects faulted for lack of transparency that were initiated under a special expediting law. One contract being scrutinised over price concerns is a 2017 deal to buy electricity for 25 years from Adani's $2-billion, 1,600-MW power plant in India's eastern state of Jharkhand that exclusively supplies Bangladesh. The project meets nearly a tenth of Bangladesh's demand for power, so cancelling the Adani deal outright would be difficult, however, said one of the sources. Both spoke on condition of anonymity as the matter is a sensitive one. Also, a legal challenge in an international court was likely to fail without strong evidence of wrongdoing, the source added. While an exit may not be possible, the only feasible option could be a mutual agreement to reduce the tariff, the second source said. Asked for comment on the remarks, Muhammad Fouzul Kabir Khan, the power and energy adviser, or de facto minister in the interim government, said, "The committee is currently reviewing the matter, and it would be premature to comment." The Adani power costs Bangladesh about 12 taka ($0.1008) a unit, an official of the Bangladesh Power Development Board said, citing the latest audit report for financial year 2023/24. That is 27% higher than the rate of India's other private producers and as much as 63% more than Indian state-owned plants, he added. Under the deal, Bangladesh has been sourcing electricity since April 2023 from Adani, along with about 1,160 MW from other Indian plants. Adani has had "no indication" that Bangladesh is reviewing the agreement, a spokesperson in India said. "We continue to supply power to Bangladesh despite mounting dues, which are of significant concern and are rendering plant operations unsustainable," the spokesperson said. Dhaka is struggling to clear dues of $800 million to Adani Power, among more than $1 billion owed to Indian power companies, because of difficulty in accessing dollars to make payment. "We are in constant dialogue with senior officials of the Bangladesh Power Development Board and the government, who have assured us our dues will be cleared soon," the Adani spokesperson added. Adani Power was confident Dhaka would fulfil its commitments, just as the company had met its contract terms, the spokesperson added, but did not respond to a query on why its rates exceeded those of other suppliers. Nevertheless, domestic critics, such as the Bangladesh Nationalist Party (BNP) of former premier Khaleda Zia, say pricing concerns make a review of the deal necessary. "The deal with Adani has raised serious concerns about overpricing from the start, and it’s a positive step that the government is now reviewing it," said senior party leader Zainul Abdin Farroque. "I hope they make the right decision." The interim government led by Nobel laureate Muhammad Yunus took power in Bangladesh in August after deadly protests prompted then Prime Minister Sheikh Hasina to resign and flee to neighbouring India. It has since scrapped projects such as a floating LNG terminal planned by domestic conglomerate Summit Group, with officials saying more cancellations are possible. ($1=119.0000 taka) Sign up here. https://www.reuters.com/business/energy/bangladesh-likely-keep-power-deal-with-indias-adani-sources-say-2024-10-11/

2024-10-11 04:43

SINGAPORE, Oct 11 (Reuters) - Marine fuel trading house KPI OceanConnect is looking to offer biofuel for bunkering at more ports, in view of higher demand as FuelEU regulations kick in next year, a senior executive said on the sidelines of SIBCON 2024 this week. The company is expanding its marine biofuel trade to 120 ports, up from about 70 ports previously, said Jesper Sorensen, global head of alternative fuels and carbon markets. The company has delivered more than 300 biofuel stems to over 80 clients to date, according to Sorensen. "The most developed region is Europe where biofuels are available. In many locations, Asia is catching up," he said, adding that the FuelEU regulation is a game-changer for demand. FuelEU standards , opens new tab start from Jan. 1, 2025, requiring the greenhouse gas intensity in shipping fuels to be cut by 2% next year and an 80% reduction by 2050. "While there are many ways of complying with FuelEU maritime, it is the first regulation in place that puts a demand on what is burned," Sorensen said. Biofuels of B24 blend with International Sustainability & Carbon Certification (ISCC , opens new tab) can provide greenhouse gas emission reductions of up to 20% compared to conventional fuel oil, while a pure biofuel can potentially reduce emissions up to 85%-95%. Despite the potential for reducing emissions, growth of demand is gradual because of the price premium commanded by marine biofuels. It is also cheaper to buy emissions allowances over the European emission trading system (ETS) that started up this year than it is to buy biofuels, Sorensen said. "The EU ETS does not encourage the uptake of alternative fuels," he said. "If you look at the price gap between taking a biofuel, say a full biofuel (B100) for instance, which will exempt you from the ETS ... that is so much more expensive than buying the equivalent EUAs," he said. EU Allowances, or EUAs, allow companies operating in the ETS zone a certain amount of carbon dioxide emissions. Sign up here. https://www.reuters.com/markets/commodities/kpi-oceanconnect-targets-more-ports-marine-biofuel-sales-2024-10-11/