2024-10-07 10:51
NEW DELHI, Oct 7 (Reuters) - India's Trade Minister Piyush Goyal said on Monday it is time for the Indian rupee to appreciate on the back of inflows in debt and equity markets. "I believe India's currency should appreciate now. What else will we do with $700 billion (forex reserves)," Goyal said at an event in Mumbai. Sign up here. https://www.reuters.com/markets/currencies/indias-trade-minister-says-time-indian-rupee-appreciate-2024-10-07/
2024-10-07 10:49
OSLO, Oct 7 (Reuters) - Energy firms Equinor (EQNR.OL) , opens new tab, Aker BP (AKRBP.OL) , opens new tab and Vaar Energi (VAR.OL) , opens new tab have raised their crown-denominate cost estimates for major oil and gas development projects offshore Norway, the country's government said on Monday. Equinor's Johan Castberg project is now expected to cost 86 billion crowns ($8.08 billion), up from a nominal estimate of 80.3 billion seen one year ago, the government's fiscal budget documents showed. The oilfield the Arctic Barents Sea is expected to start production by the end of this year, the company has said, two years behind its original schedule. The field was initially estimated , opens new tab to cost 49 billion crowns to develop, when it was approved in 2018. Since then, costs have increased by 25.7 billion crowns and by 2.2 billion crowns from a year ago, measured in 2024 crowns, Equinor said in a statement. The increase from a year ago was due to Castberg's production vessel having to spend more time at a shipyard in Norway, currency effects and a general cost increase, the company said. Meanwhile, Aker BP's Yggdrasil is expected to cost 134.4 billion crowns, up from nominal 120.2 billion seen a year go, while Vaar's Balder Future will cost 52.2 billion crowns, up from 44.5 billion crowns. Cost increase measured in 2024 crowns were due to a weaker exchange rate, which contributed to imported inflation, said an Aker BP spokesman, adding that costs measured in U.S. dollars were within previous guidance. Vaar Energi was not immediately available for comment. The independent subsidiary of Italy's Eni (ENI.MI) , opens new tab warned in August that Balder's project costs would increase by pre-tax 4.3 billion crowns due to its startup being delayed until the second quarter of 2025 from end of this year. Balder's costs have more than doubled from an initial estimate , opens new tab of 19.6 billion crowns in 2019. Aker BP's Yggdrasil, Norway's largest oil and gas development since the startup of Equinor's Johan Sverdrup oilfield in 2019, is facing legal challenges, with environmental organisations disputing its approval by the energy ministry. The company, however, has said the project, approved at the end of 2022, is on track to start production in 2027. ($1 = 10.6472 Norwegian crowns) Sign up here. https://www.reuters.com/business/energy/equinor-aker-bp-vaar-energi-face-rising-project-costs-norway-budget-shows-2024-10-07/
2024-10-07 10:48
MUMBAI, Oct 7 (Reuters) - India's central bank is likely to be less hawkish than its previous monetary policy following softer domestic data, although a change in stance or rates is unlikely at its policy meeting this week, an economist with DBS Bank said on Monday. "I do not think they will change their stance as yet," as a change in monetary policy stance does not need to precede a rate cut, said Radhika Rao, senior economist and executive director at DBS Bank in Singapore. "Both could happen concurrently when they finally bite the bullet," she told the Reuters Trading India forum. The Reserve Bank of India is likely to keep rates steady on Wednesday, with some investors betting on a change in stance to "neutral" from "withdrawal of accommodation" as economic growth slows. India's economic growth slowed to 6.7% in the April-June quarter from a year earlier as a decline in government spending during national elections weighed, but it remained the world's fastest-growing major economy. Several economists expect at least one dissenter, among India's newly-appointed monetary policy committee members, to call for a rate cut. "Official leaning of the new members is likely to be gleaned from the commentary during the rate decision as well as subsequent minutes of the policy meeting," Rao said. Last week, India's government appointed Ram Singh, Saugata Bhattacharya and Nagesh Kumar as new external members of the RBI's rate-setting panel. Meanwhile, the recent escalation in tensions in the Middle East is being watched, Rao said, but they are unlikely to impact foreign investments into Indian government bonds. "I would still expect country-specific drivers to continue triggering portfolio adjustments." She also expects the RBI to revise down its growth forecast by 20 basis points to 7% at either the October or December policy meeting, to account for a slowdown in the Indian government's capital expenditure. (Join Trading India on LSEG Messenger for live updates and interviews: https://bit.ly/3TNDwkC , opens new tab | Reuters Global Markets Forum , opens new tab) Sign up here. https://www.reuters.com/world/india/india-cenbank-be-less-hawkish-october-policy-dbs-bank-economist-says-2024-10-07/
2024-10-07 10:47
London, Oct 7 (Reuters) - The uptrend in demand for metals such as copper used in electric vehicles is intact despite doubts raised by the slowdown in EV sales, but estimating numbers is difficult as the market is evolving, commodity trader IXM's head of refined metal said. Sales of electric vehicles have slowed for reasons including a lack of charging infrastructure and concerns about resale values. "The electric vehicle industry is new. There are a lot of variables including penetration rates and battery chemistries which makes forecasting demand a guessing game," Tom Mackay said. "Growth in electric vehicle sales is slowing, but sales are still increasing. It varies from region to region, but overall growth is strong and the demand story for metals is healthy." According to consultancy Rho Motion, sales of battery EVs and plug-in hybrid EVs rose 32% last year to 13.63 million units, while in the first and second quarters of this year sales were down 25% and up 22% respectively from the previous quarters. Copper is used in electric vehicle wiring. It is also used in the batteries, which typically contain lithium and depending on the chemistry nickel and cobalt. "There have been some impressive technological advances in LFP (lithium ion phosphate) chemistry. Some LFP batteries can go for 1,000 kilometres and some can charge up to 80% in 10 minutes," said Mackay, who manages the copper cathode, zinc, lead nickel, cobalt and lithium books at the Swiss-based trader. LFP batteries were developed for the Chinese market to provide a cheaper alternative to nickel cobalt manganese (NCM). But earlier LFP batteries could not be used for long distances. "People still believe Western world battery demand will still be predominantly NCM, if only because of the higher value of recycling NCM batteries," Mackay said. "Recyclability is a very important factor for automakers when deciding what chemistries to use." Mackay added that the number of people working at IXM globally is lower than before, around 440. "Focus has been on the quality of people. We exited the aluminium business because it wasn't providing the return we require from the resources." Sign up here. https://www.reuters.com/business/autos-transportation/copper-demand-electric-vehicles-is-intact-trader-ixm-says-2024-10-07/
2024-10-07 10:20
A look at the day ahead in U.S. and global markets from Mike Dolan With any thought of U.S. recession off the agenda after a monster September jobs report, doubts about the extent of further Federal Reserve easing have inevitably re-emerged - and now need a cool inflation report this week to keep in check. Any which way you cut it, last month's employment report was a robust reading of a labor market in rude health. With payroll gains of 254,000 - more than 100,000 above forecast - a decline in the jobless rate to 4.1% and a pickup in annual wage growth to 4%. Indeed, 4% seems to be the magic number as the week unfolds. The strength of the report whacked Treasuries by taking a quarter point out of Fed rate cut expectations through the end of next year and ensured the dollar (.DXY) , opens new tab recorded its best week in two years. Ten-year yields , which leapt more than 20 basis points over last week, topped 4% on Monday for the first time in two months and 2-year yields were stalking 4% too - flattening the 2-10-year yield curve to near zero in the process. Fed futures pricing has now not only removed all chance of another half point cut next month, but is even starting to see doubts creep in about any cut at all in November - with only 23 bps in the price and no more than 50bp for rest of this year. And the "terminal rate" in this Fed cycle has now jumped to as high as 3.25% - above the 3% landing zone broadly assumed after the central bank's first outsize cut last month and above the 2.9% level Fed policymakers had indicated as long-term "neutral". The dollar index (.DXY) , opens new tab held last week's 2.1% surge first thing on Monday, not least with euro hit with another set of dire German industrial orders that stoked speculation of a third European Central Bank cut of the year in 10 days' time. French Central Bank Chief Francois Villeroy de Galhau said there would "quite probably" be another rate cut this month. "Now we must also pay attention to the opposite risk, of undershooting our (inflation) objective due to a weak growth and a restrictive monetary policy for too long." And yet, far from running scared from the borrowing rate rethink, Wall Street stocks (.SPX) , opens new tab lapped up the seeming removal of recession risk on Friday and set a record high close at 5,765 points. CRUDE OIL PRICES The payrolls report saw Goldman Sachs lower the odds on recession over the next 12 months by 5 percentage points to 15% - less than where it would be on any 12 month view historically - and lift its 12-month S&P500 target by 300 points to 6,300. That's some 10% higher than Friday's close. The third-quarter corporate earnings season kicks off later this week and aggregate annual profit growth is set to have expanded 5%-10% during the three months. But the rates picture will now likely be in thrall to the September consumer price report on Thursday, which is expected to see headline inflation inch down further to a three-year low of 2.3% - and within a whisker of the Fed's target. While "core" inflation likely remained above 3%, the constellation of robust jobs growth and ebbing, near-target inflation is as good as the central bank could wish for at this point of the cycle. One possible fly in the ointment is latest rebound in crude oil prices - which were clocking annual losses of more than 20% all through September but have reared up over the past week amid heightened Middle East tensions and a standoff between Israel and Iran. On the first anniversary of the Hamas attacks on Israel that have spurred 12 months of intense conflict, crude oil edged up further to $76 per barrel - although they remain about 8% lower than they were a year ago. The U.S. election is also less than a month away, with non-partisan analysis showing Republican Donald Trump's economic plans would raise the Federal debt by roughly double the increase under Democrat Kamala Harris' plans. Trump said on Sunday he would slap tariffs as high as 200% on vehicles imported from Mexico as he ratchets up a protectionist trade stance. Elsewhere, Tokyo and Hong Kong shares were up more than 1% - largely a catchup on Friday's payrolls surprise. European stocks and U.S. futures fell back. Key developments that should provide more direction to U.S. markets later on Monday: * U.S. August consumer credit; Mexico August jobless rate * St. Louis Federal Reserve President Alberto Musalem, Minneapolis Fed President Neel Kashkari and Atlanta Fed chief Raphael Bostic all speak * Euro zone finance ministers meeting in Luxembourg to discuss European productivity and progress towards capital markets union * US Treasury auctions 3-, 6-month bills Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-pix-2024-10-07/
2024-10-07 10:12
MUMBAI, Oct 7 (Reuters) - The Indian rupee ended nearly unchanged on Monday, sidestepping a decline in its regional peers and pressure from equity-related outflows, as the Reserve Bank of India's firm grip on the currency limited losses, traders said. The rupee closed at 83.9775 against the U.S. dollar, little changed from its previous close of 83.9725. The RBI on Monday asked state-run and private banks to refrain from betting heavily against the rupee, which has been pinned close to its record low of 83.9850 in recent trading sessions, four sources said. The rupee has held above the 84 handle largely on account of the central bank's routine interventions, traders said. Outflows from equities, elevated oil prices and a stronger dollar all weighed have all weighed on the rupee in recent sessions. The currency posted its worst week since late-May last week, falling 0.3%. India's benchmark equity indices Sensex (.BSESN) , opens new tab and Nifty 50 (.NSEI) , opens new tab, logged their sixth straight day of losses on Monday, and ended the session lower by about 0.8% each. Overseas investors have pulled out nearly $5 billion from Indian stocks over the last five sessions, according to provisional exchange data, while oil prices have climbed to their highest level since August. Other Asian currencies were mostly weaker by 0.1% to 1.5%, as the dollar hovered close to a seven-week high boosted by fading hopes of aggressive rate cuts by the Federal Reserve after a stronger-than-expected employment report. "The dollar seems more likely to consolidate recent gains than trend back to mid-September levels," ING Bank said in a note. While markets were debating whether the Fed would cut rates by 25 or 50 basis points in November, odds of the latter have been nearly priced out after the jobs data, according to the CME FedWatch Tool , opens new tab. The repricing also weighed on dollar-rupee forward premiums, with the 1-year implied dropping 11 basis points to 2.27%, its steepest single day fall since May 2023. Sign up here. https://www.reuters.com/markets/currencies/rupee-ends-flat-ducking-pressure-regional-fx-rbi-maintains-grip-2024-10-07/
