2024-10-10 05:27

NEW YORK, Oct 10 (Reuters) - The U.S. dollar slipped against the yen on Thursday as investors weighed data showing labor market weakness as well as a slight uptick in consumer prices, suggesting that the Federal Reserve will likely continue cutting interest rates. Labor Department data on Thursday showed that the consumer price index increased 0.2% in September. However, in the 12 months through September the CPI climbed 2.4%, which was the smallest year-on-year rise since February 2021. Economists polled by Reuters had forecast the CPI edging up 0.1% and rising 2.3% year-on-year. Other data from the Labor Department also showed that the number of Americans seeking unemployment benefits surged last week, driven partly by Hurricane Helene and furloughs at Boeing (BA.N) , opens new tab. "The market's been in a bit of a tug of war between caring more about inflation versus caring more about employment," said Brad Bechtel, global head of FX at Jefferies in New York. "Clearly, the Fed has shifted its view recently when it decided to focus more on the employment side of the equation, and then cut 50 basis points a few weeks ago and they also quickly turned around and said they may not cut 50 basis points again." The greenback was down 0.38% at 148.66 yen after rising to as high as 149.58 yen for the first time since Aug. 2 . Bank of Japan Deputy Governor Ryozo Himino's latest comments on Thursday supporting more rate hikes if the economy moves in line with bank projections, had helped to keep the dollar slightly weaker against the yen. The euro dropped to its lowest since Aug. 8 against the dollar and was down 0.14% on the day at $1.0925. Against the Swiss franc , the dollar weakened 0.45% to 0.856. The dollar index , which measures the currency against six key rivals including the yen, the pound sterling and euro, was up slightly by 0.07% to 102.96 in choppy trading after hitting its highest since August 15. In a Wall Street Journal interview on Thursday, Atlanta Federal Reserve Bank President Raphael Bostic said he would be "totally comfortable" skipping an interest-rate cut at an upcoming meeting of the U.S. central bank. He added that the "choppiness" in recent data on inflation and employment may warrant leaving rates on hold in November. Traders are betting a nearly 85% chance on the Fed cutting rates by 25 basis points at its next policy decision on Nov. 7, and a nearly 15% probability of no change, the CME Group's FedWatch Tool showed. The 2-year note yield, which typically moves in step with interest rate expectations, fell 2.8 basis points to 3.989%. "The claims number dominated the story and that's driven bond yields lower because it's reminded the market that the Fed actually has some concerns about the employment story," said John Velis, FX and macro strategist at BNY in Boston. "We had such a good September job print that this kind of swings back in the other direction and has taken out some of that restrictive Fed pricing, or let me say it's put in some more expectations of a rate cut for the November 7th meeting." The risk-sensitive Australian dollar was up 0.14% to $0.67280. It earlier rose more than 0.3% on the back of an equity rally in top trading partner China as the East Asian nation's central bank launched a swap programme aimed at supporting the stock market. China's finance ministry is due to hold a highly anticipated news conference on fiscal policy on Saturday. The dollar weakened 0.12% to 7.084 versus the offshore Chinese yuan. In cryptocurrencies, bitcoin fell 2.08% to $59,119.00. Ethereum declined 0.36% to $2,344.66. Sign up here. https://www.reuters.com/markets/currencies/dollar-hovers-near-two-month-peak-fed-easing-bets-ebb-before-inflation-data-2024-10-10/

2024-10-10 05:08

Rio's $6.7 bln Arcadium buyout brings access to lithium technology Direct lithium extraction could grow to $10 bln annual industry Rio CEO thinks DLE could supply much of world's lithium Analyst sees Rio paying premium for Arcadium's DLE expertise Oct 10 (Reuters) - Rio Tinto's (RIO.L) , opens new tab(RIO.AX) , opens new tab $6.7 billion buyout of Arcadium (ALTM.N) , opens new tab will give it a suite of lithium filtration technologies that are poised to revolutionize how the metal is produced for the electronics and electric vehicle industries. Arcadium's expertise in so-called direct lithium extraction (DLE) is the real prize for Rio, analysts said, and vaults it into contention with Eramet (ERMT.PA) , opens new tab, Sunresin (300487.SZ) , opens new tab, Exxon Mobil (XOM.N) , opens new tab and others aiming to make the technology commonplace in coming years. The DLE industry is expected to grow to more than $10 billion in annual revenue within the next decade by supplying lithium for EV batteries in hours or days, not months or longer as with existing large, water-intensive evaporation ponds and open pit mines. While DLE technologies vary, they are comparable to filtration used by common household water softeners and aim to extract about 90% or more of the lithium from brines, compared to about 50% using ponds. No one has launched a commercial DLE operation without ponds, although multiple companies are racing to be first. Arcadium, through a predecessor company, was the first to develop an early version of a DLE technology in the 1990s at an Argentina lithium brine site that is still operational today. While that site uses ponds in tandem with DLE, Arcadium's decades-long experience with the technology makes it a tantalizing prize for Rio as it aims to develop lithium deposits in Chile, where officials are phasing out ponds and requiring DLE, and elsewhere. "It (DLE) is actually the solution to provide the lithium that the world needs," Rio CEO Jakob Stausholm told investors on Wednesday after announcing the all-cash deal. It values Arcadium at a 90% premium to its share price before Reuters first reported the companies were in talks last Friday. Arcadium's Argentina DLE operations are located near a DLE project that Rio paid $825 million for in 2022, though that project has yet to produce lithium. Arcadium's engineers have already met with Rio's DLE team, Stausholm said. "There's a lot ahead of us and we haven't explored it fully, yet it's the right technology," he said. Though Rio has long been a leader in hard rock mining, it has far less expertise in the chemical processing at the core of lithium production. DLE, for example, is just one part of a complex process that can involve more than 20 steps, including pre-treatment of a lithium brine and crystallization. Each brine deposit can also have different chemical compositions - including various levels of calcium, magnesium and other metals - that must be carefully analyzed. All of those steps have been studied in depth for years by Arcadium. "The key to unlocking initial implementation of DLE tends to be that know-how plus infrastructure," Arcadium CEO Paul Graves told investors on Wednesday. "But once you have unlocked it, it's incredibly quickly replicable." Arcadium, through a predecessor company, also holds a stake in EnergySource Minerals, a DLE developer that licenses lithium technology to SLB (SLB.N) , opens new tab and others. When that investment was announced last December, executives said it could start commercial production by 2025. "Rio Tinto is paying a premium for Arcadium in part for its intellectual property around DLE technology," said Chris Berry, an independent lithium industry consultant. DLE RIVALS Rio's bid to make DLE mainstream will face intense competition, including from some of the very people who helped make Arcadium a DLE leader. Arcadium's Argentina DLE site, for example, was developed by a scientist who is now chairman of International Battery Metals , which has developed a modular DLE facility that Exxon, Chevron (CVX.N) , opens new tab and others have considered licensing. Albemarle, the world's largest lithium producer, is also testing DLE in Arkansas near its existing bromine operations and in Chile. SQM, which is headquartered in Santiago, agreed with Chile's government this year to a plan that will see its production increase in part due to DLE. "DLE is about being a chemical processing expert. Companies like Arcadium, Albemarle, SQM, they have a lot of expertise that they can put to work in that area," Eric Norris, head of Albemarle's energy storage business and a former executive at an Arcadium predecessor company, told Reuters earlier this year. Vulcan Energy (VUL.AX) , opens new tab, privately held EnergyX, Standard Lithium (SLI.V) , opens new tab and others are also advancing their own versions of DLE technologies. Sign up here. https://www.reuters.com/markets/deals/rio-tintos-real-prize-arcadiums-lithium-extraction-technology-2024-10-10/

2024-10-10 05:08

TOKYO, Oct 10 (Reuters) - Japan's weather bureau said on Thursday there were neither signs of El Nino nor La Nina phenomena at this moment, but it is approaching characteristics of La Nina. The bureau also said characteristics of La Nina will become clearer towards winter but won't last long, adding that the possibilities of La Nina forming and normal weather conditions continuing are split 50-50. El Nino is a warming of ocean surface temperatures in the eastern and central Pacific. La Nina is characterised by unusually cold ocean temperatures in the equatorial Pacific region and is linked to floods and drought. Sign up here. https://www.reuters.com/world/japan/japan-weather-bureau-says-no-signs-el-nino-la-nina-now-2024-10-10/

2024-10-10 05:00

MUMBAI, Oct 10 (Reuters) - The Indian rupee was flat on Thursday while dollar-rupee far forward premiums dipped to a one-month low hurt by the repricing of the Federal Reserve's rate cut path, with odds of the central bank skipping a rate cut in November nudging higher. The rupee was at 83.9550 as of 10:20 a.m. IST, nearly unchanged from its close at 83.9625 on Wednesday. While the rupee remains a whisker away from its record low of 83.9850 and is facing multiple headwinds including outflows from local equities and higher U.S. bond yields, the Reserve Bank of India's firm defence has kept declines at bay, traders said. The 10-year U.S. Treasury yield rose to an over two-month peak of 4.07% in Asia trading as investors priced in relatively shallow Fed rate cuts over the remainder of 2024. Odds of a 25-basis-point rate reduction in November have risen to about 85% from 65% a week earlier, while those of the Fed keeping rates unchanged have ticked up to 15%, according to CME's FedWatch tool. The repricing of Fed rate expectations has pegged back dollar-rupee far forward premiums, with the 1-year implied yield dropping 19 basis points over October so far to a one-month low of 2.20%. Asian currencies were mostly weaker by 0.1% to 0.3% on Thursday while the dollar index was at 102.8, hovering close to its highest level in nearly two months. "Markets will await the September US CPI (Consumer Price Index) data today, where a hotter than expected print could provide impetus for the US dollar to strengthen more," MUFG Bank said in a note. The inflation data is expected to show that core consumer prices rose 0.2% month-on-month in September, the same pace as the prior month, according to a Reuters poll of economists. Sign up here. https://www.reuters.com/markets/currencies/rupee-flat-forward-premiums-under-pressure-us-bond-yields-rise-2024-10-10/

2024-10-10 04:37

A look at the day ahead in European and global markets from Ankur Banerjee Chinese stocks were back at it and surging on Thursday, shaking off the previous day's slump, with the focus on a Saturday press briefing that investors hope will shed more light on fiscal stimulus measures aimed at reviving China's economy. European stocks might get a breather - especially China-related miners and luxury names that have taken a beating as scepticism around Chinese stimulus gains ground. Futures indicate European bourses are due for a slightly higher open. Over in the Far East, investor sentiment got a shot in the arm early on Thursday as the People's Bank of China kicked off a 500 billion yuan facility to spur capital markets which nevertheless were volatile and jittery. The blue-chip index (.CSI300) , opens new tab was last up 3.5% after sliding 7% on Wednesday, its biggest one-day drop since the pandemic as investors looked for details around the stimulus and awaited fiscal moves to spur growth. Hong Kong's Hang Seng (.HSI) , opens new tab was up 4% and in the space of two weeks has surged to be second best-performing major stock market in Asia this year with a gain of 25%, much of which has come since the stimulus was announced on Sept. 24. All eyes though will be on a finance ministry press conference on Saturday that could reveal plans on fiscal stimulus. In many ways, this is it, this is the moment markets and investors have been waiting for, especially after the central bank and other regulators in late September announced the most aggressive monetary stimulus measures since COVID-19 and steps to revive the debt-ridden property market. Those measures whetted investor appetite, stoking expectations for large-scale fiscal moves in the near term. Analysts though are wary that if these lofty expectations are not met, there may yet be a steep pull back in stocks. Beyond China, investor attention will be on U.S. inflation data due later in the day, with traders scaling back expectations of steep interest rate cuts from the Federal Reserve in the near term in the wake of blowout jobs data last week. A hot report could knock back more of those rate cut expectations, analysts said. U.S. dollar remained perched on a two-month high on the back of these shifting rate cut expectations. Key developments that could influence markets on Thursday: Economic events: Germany retail sales for July; U.S. inflation data for September Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-10-10/

2024-10-10 03:05

MUMBAI, Oct 10 (Reuters) - The Indian rupee will be pressured by the rise in U.S. Treasury yields and the dollar on Thursday amid mounting expectations that the Federal Reserve could deliver a smaller rate cut at its November meeting. The one-month non-deliverable forward indicated that the rupee will open barely changed from 83.9625 in the previous session. The rupee has been in a narrow six-paisa range this week and has largely avoided slipping past the 84 handle on back of the Reserve Bank of India's (RBI) help. "For whatever reason, the RBI is insistent that they do not want to see 84. Till the time they decide otherwise, you look for mini dips and rallies to trade on," a currency dealer at a bank said. The fact that the rupee is "holding on here is commendable, though it is not surprising", a treasury official at a bank said. The RBI has supported the currency in withstanding equity outflows, volatility in oil prices, and the resurgent dollar. The dollar index is near its highest level in nearly two months, boosted by bets that the Fed will at the most cut rates by 25 basis points at next month's meeting. Investors have now fully priced out a repeat of the 50 bps cut that the Fed delivered in September, largely due to a robust U.S. jobs report. The minutes of the Fed's September meeting encouraged bets of a smaller rate cut. They indicated that some policymakers reckoned a 25 bps cut would be more appropriate. U.S. yields rose on Wednesday, with the 10-year now at the highest since late July. The focus now shifts to U.S. consumer inflation data due later in the day. "A hot inflation print today, and the market will throw increased doubts that we see a cut play out at all in November," Chris Weston, head research at broker Pepperstone, said in a note. KEY INDICATORS: ** One-month non-deliverable rupee forward at 84.08; onshore one-month forward premium at 12 paise ** Dollar index at 102.84 ** Brent crude futures up 0.6% at $77.1 per barrel ** Ten-year U.S. note yield at 4.07% ** As per NSDL data, foreign investors sold a net $641mln worth of Indian shares on Oct. 8 ** NSDL data shows foreign investors bought a net $70.1mln worth of Indian bonds on Oct. 8 Sign up here. https://www.reuters.com/markets/currencies/higher-us-yields-squeeze-rupee-while-rbi-protects-84usd-2024-10-10/