2024-10-07 07:08
US CPI, PPI data due later this week Investor's interest in gold remains strong - analyst Traders see 95% chance of 25 bps rate cut in Nov Oct 7 (Reuters) - Gold prices edged up on Monday as an escalation in the Middle East conflict pushed investors to safe haven assets, while traders awaited inflation data this week for further clues on the Federal Reserve's rate cut path. Spot gold was up 0.2% at $2,658.07 per ounce by 1130 GMT. U.S. gold futures edged up about 0.4% at $2,677.90. "Gold prices are caught in a tug of war between a strengthening U.S. dollar and ongoing safe-haven demand, likely keeping them near current levels. Upcoming U.S. economic data may be the deciding factor in breaking this stalemate," said Ricardo Evangelista, senior analyst at ActivTrades. The market now awaits minutes of the Fed's last policy meeting and U.S. Consumer Price Index and Producer Price Index data this week. "This week's CPI data is crucial for anticipating what the Fed would do, but I'm not expecting a surprise because the market is already pricing an almost 100% chance that the Fed will look at a rate (cut) by only 25 basis points," said Kinesis Money market analyst Carlo Alberto De Casa. Traders now see a 95% probability that the Fed will cut rates by only a quarter of a percentage point next month, after a U.S. employment report on Friday pointed to a resilient economy that will probably prompt the central bank not to deliver large interest rate cuts for the rest of this year. "The dollar recovering and going up wouldn't be a good scenario for gold but despite that bullion has managed to remain steady, confirming a strong interest of investors for bullion. Apart from that, geopolitical tensions have also supported gold demand," said De Casa. Israel bombed targets in Lebanon and the Gaza Strip on Sunday ahead of the one-year anniversary of the Oct. 7 attacks that sparked the current conflict. Spot silver fell 0.6% to $31.98, platinum lost 0.4% at $986.15 and palladium rose 0.9% to $1,020.78. Sign up here. https://www.reuters.com/markets/commodities/gold-inches-lower-us-jobs-data-cements-bets-smaller-rate-cut-2024-10-07/
2024-10-07 06:40
Yoon and Marcos sign agreements on coastguard cooperation and nuclear energy South Korea to aid Philippines' military modernisation amid South China Sea tensions Countries to study feasibility of reviving Philippines' Bataan Nuclear Power Plant MANILA, Oct 7 (Reuters) - South Korean President Yoon Suk Yeol and Philippine President Ferdinand Marcos Jr agreed on Monday to boost defence cooperation as their countries elevated ties to a strategic partnership amid growing security challenges in the region. The two leaders discussed a range of issues including tensions in the South China Sea and on the Korean peninsula during talks at the Philippine presidential palace where they also signed agreements on coastguard cooperation and nuclear energy. "President Marcos and I opened a new chapter of our partnership by elevating our relationship to a strategic partnership," said Yoon, who is on a state visit to Manila, the first by a South Korean leader in more than a decade. In a joint press conference with Marcos, Yoon said his country would actively take part in the latest phase of the Philippines multi-billion-dollar effort to modernise its military security at a time of rising tensions with China in the South China Sea. South Korea has been trying to ramp up global defence exports, as Russia's invasion of Ukraine opened the door to sign large-scale contracts from Europe, the Middle East and Asia. The country, which has sold FA-50 fighter jets, corvettes, and frigates to the Philippines, aims to become the world's fourth-largest arms exporter by 2027. In the third phase of its modernisation plan, the Philippine military is looking to buy advanced assets such as fighter jets, submarines and missile systems, to beef up territorial defence and maritime security. The two leaders agreed to uphold an international rules-based order, including on safety of navigation in the South China Sea, Yoon said, adding they agreed the international community would never condone North Korea's nuclear programme or what he called "reckless provocations". Yoon, who was elected in 2022 on a pledge to boost South Korea's nuclear power industry by targeting the export of 10 more nuclear power plants by 2030, announced the signing of a memorandum of agreement (MOU) for a feasibility study on the long-dormant Philippine Bataan Nuclear Power Plant (BNPP). The BNPP, approved by the late strongman and namesake father of Marcos, has not produced any electricity since it was finished in 1984, despite its $2.3 billion price tag and its promise of energy security during the 1970s oil crisis. The Philippines wants to tap nuclear power as a viable alternative baseload power source as it seeks to retire coal plants to help meet climate goals and boost energy security. After Manila, Yoon will visit Singapore on Tuesday and Wednesday before heading to Laos the following day, where he will attend the regional summit of leaders of the Association of Southeast Asian Nations and several other Asian countries. Sign up here. https://www.reuters.com/world/asia-pacific/philippines-south-korea-upgrade-ties-strategic-partnership-2024-10-07/
2024-10-07 06:40
LONDON, Oct 7 (Reuters) - Shell's (SHEL.L) , opens new tab refining profit margins dropped sharply in the third quarter from the previous three months as global demand sagged, while oil product trading earnings also weakened, it said on Monday. In a trading update ahead of its quarterly results on Oct. 31, Shell said its indicative refining margins dropped by nearly 30% to $5.5 a barrel in the three months to the end of September from $7.7 a barrel in the previous period. Trading results for its chemicals and oil products division were expected to be lower than in the second quarter, Shell said. Global refining margins have come under pressure in recent months due to slowing economic activity, especially in China, and as new refineries came on line. Shell, the world's largest trader of liquefied natural gas, also lifted its LNG production guidance for the quarter to a range of 7.3 million to 7.7 million metric tons for the quarter from a previous forecast of 6.8 million to 7.4 million tons. LNG trading results were set to be in line with the previous quarter. The London-listed company also lifted its upstream oil and gas production outlook for the quarter to 1.74 million to 1.84 million barrels of oil equivalent per day from 1.58 million to 1.78 million boed. Last week, Exxon Mobil (XOM.N) , opens new tab warned that a slump in oil prices was set to hit its third-quarter results. Oil prices fell by 17% in the third quarter, the largest quarterly decline in a year, on worries about the global oil demand outlook. Brent futures settled at $71.77 a barrel on the last trading day of the quarter. Sign up here. https://www.reuters.com/business/energy/shell-says-refining-margins-dropped-sharply-third-quarter-2024-10-07/
2024-10-07 06:31
OSLO, Oct 7 (Reuters) - Norway's minority government said on Monday it plans to raise spending in 2025 from the country's $1.8 trillion sovereign wealth fund to pay for public expenses, with elections for parliament due in September of next year. The government of Labour and the Centre Party proposed withdrawing 460.1 billion Norwegian crowns ($43.1 billion) from the fund in 2025, up from a revised 416.5 billion in 2024, and must now negotiate with the Socialist Left to pass the budget. Gross domestic product for the non-oil economy is now expected to grow by 0.7% this year, down from 0.9% growth seen in May, rising to 2.3% expansion in 2025 and 2.1% in 2026, the finance ministry predicted. "The backdrop for the budget is an economy with prospects for stronger growth and continued low unemployment," the government said in a statement. Core inflation for 2025 was seen at 3.2%, declining to 2.7% in 2026. The structural non-oil deficit for 2025, a key measure of how much money the government will spend from the wealth fund, was set to 2.5% of the fund's expected value at the end of 2024, the finance ministry said. ($1 = 10.6719 Norwegian crowns) Sign up here. https://www.reuters.com/world/europe/norway-raise-wealth-fund-spending-43-bln-2025-2024-10-07/
2024-10-07 06:24
CHENNAI, Oct 7 (Reuters) - At least three people died of suspected heat stroke in India's southern city of Chennai on Sunday at an Indian Air Force show that was attended by about 1.5 million people, police officers said. The air show to celebrate the air force's 92nd anniversary was organised at the iconic Marina Beach - among the world's longest beaches - on a day where the maximum temperature touched 35 degrees Celsius (95 F), according to the weather department. "Two people died while attending the air show mainly due to dehydration. They fainted due to heat and then died," R. Alagu, a senior police officer in Chennai's Triplicane area, told Reuters by telephone. T. Vivekanandan, another police officer in the city's Mylapore area, said a third person had died "due to heat". Chandramohan, a software engineer who attended the event and uses only one name, said there was no water supply at the function despite the "hot and humid" weather and he saw people fainting due to lack of air circulation and dehydration. "Worst was the exit after the event. Roads were choked...Buses got stuck too," he said. Ma Subramanian, state minister for medical and family welfare, said in a post on X that the government had provided medical teams, security, temporary toilets, and drinking water supply for the event. Officials from the air force did not immediately respond to a request for comment. Sign up here. https://www.reuters.com/world/india/three-die-suspected-heat-stroke-air-force-event-indias-chennai-2024-10-07/
2024-10-07 06:10
LONDON, Oct 7 (Reuters) - Investors are retreating from bullish bets on Britain as hopes of its new Labour leadership reviving growth and investment are overshadowed by concern about the debt-laden economy and the government hiking taxes in this month's budget. After sizzling summer rallies, sterling has faltered and UK stocks, which bounced back sharply from depressed valuations this year, are turning lower. The sentiment shift comes after Prime Minister Keir Starmer and finance minister Rachel Reeves struggled to balance their ambitious growth messages with gloomy assessments of UK finances, and as economic trends have deteriorated. Premier Miton Global Investors chief investment officer (CIO) Neil Birrell said he had cut a hefty British stock allocation in his multi-asset funds from 45% of global equity holdings to 30% just days ago. POSITIVITY WANES "We have been positive on the UK for some time and had very significant exposure," Birrell said. "But this is risk management. I was worried about the level of UK exposure we had," he added, citing declining trends in UK business and consumer confidence and nerves about potential budget tax hikes weighing on growth. Investors pulled a net 666 million pounds ($874 million) out of UK stock funds in September, fund tracker Calastone said on Thursday, while adding money to all other geographically focused fund sectors, favouring U.S.-focused vehicles. Ahead of the Oct. 30 budget, UK business optimism has slumped to nine-month lows, having surged in the summer, and markets are bracing for higher capital-gains tax and bank levies. Britain's FTSE 100 share index is trading at a 46% valuation discount to Wall Street's S&P 500, almost the widest on record. The UK-focused FTSE 250 index (.FTMC) , opens new tab gained about 16% from mid January to late July in a strong catch-up trade but is on track for a 2.4% fall this week. BUDGET CAUTION Marlborough CIO Sheldon MacDonald said investors in the group's UK equity funds had started taking profits in the last two weeks, which he attributed to pre-budget caution. "People are watching and waiting to take the measure of Labour and see if they have a feasible and thought-through plan for the next few years," he said. But he also tipped lowly valued UK stocks and underperforming government bonds to recover if the Bank of England cuts interest rates faster than expected. Michael Crawford, CIO at Chawton Global Investors, said he was concerned Labour might scrap inheritance tax breaks that incentivise investment in stocks listed on Britain's junior AIM market. Finance minister Reeves has hinted she may redefine how Britain's public debt is measured or limited, in a move that could unsettle Britain's lenders in international bond markets. DEBT WOBBLES UK gilt yields, which move inversely to prices of the government debt and set state borrowing costs, have risen 25 basis points (bps) in two weeks as equivalent German yields fell . Adding to debt market pressure, traders expect UK interest rates will stand at about 3.5% in a year' time, compared with around 3% in the U.S. and 1.7% in the euro zone, even after dovish hints from BoE governor Andrew Bailey on Thursday. Sterling remains this year's top-performing major currency against the dollar but is on track for its worst weekly drop since April, which Deutsche Bank analysts said partly reflected traders rethinking long-held bullish positions . SUBMERGING MARKETS The recent allure of UK assets, which were long overlooked after 2016's Brexit vote, is fading just as emerging markets that benefit from Chinese stimulus grab investor attention. Royal London Asset Management multi-asset head Trevor Greetham said he had reduced UK equity holdings to switch money into emerging markets, where stocks are now racing ahead of their British equivalents. Janus Henderson equity portfolio manager James Henderson said investors may have turned too negative on Britain and planned to raise his UK exposure and cut in the U.S. "There's opportunities for things to turn out a little better than expected," he said. Sign up here. https://www.reuters.com/world/uk/bullish-bets-uk-assets-take-knock-budget-looms-2024-10-07/
