2024-10-02 12:43

BENGALURU, Oct 2 (Reuters) - The U.S. dollar will hold steady in coming months despite an expected series of Federal Reserve interest rate cuts, according to median forecasts from FX strategists polled by Reuters who were, however, largely split on the currency's broad direction. Since July the greenback (.DXY) , opens new tab has lost almost all the near-5% gains against a basket of major currencies accumulated through mid-year on expectations the Fed would reduce its funds rate (USFOMC=ECI) , opens new tab from what many considered an overly-restrictive level. However, the currency has been mostly stable in recent weeks. With price pressures now broadly thought to have been tamed, the central bank started easing last month with an oversized half-percentage-point cut to forestall any further weakening in the job market in the world's largest economy. The Fed was expected to cut its key policy rate by 25 bps in both November and December, according to a majority of over 100 economists in a separate snap Reuters survey taken after the September meeting. While in line with the Fed's own projections and chair Jerome Powell saying policymakers were not "in a hurry" to cut rates, that expectation was shallower than the near-72 bps of easing interest rate futures are currently pricing. Despite this, the dollar would remain resolute in coming months with the euro , currently around $1.11, seen holding that level by year-end and through end-March, according to median forecasts of nearly 80 strategists in a Sept. 30-Oct. 2 Reuters poll. The common currency was then expected to strengthen about 2% to $1.13 in a year, the survey showed, consistent with calls for dollar weakness analysts have held for the majority of this year. "While it has been our view a global soft landing combined with Fed easing should, if realized, eventually result in broad dollar weakness, the path to get to that destination at least in the near-term could be treacherous," noted Meera Chandan, FX strategist at JP Morgan. Analysts who answered a separate question were split on the dollar's broad direction over the remainder of the year with slightly over half, 35 of 62, saying it was more likely to trade weaker than they predict. The rest said stronger. "The Fed seems to be very much in risk-management mode and wanting to achieve a soft landing and though employment data is slowing it's not falling off a cliff either," said Alex Cohen, FX strategist at Bank of America. "What markets have generally been pricing - a 50 bps cut in November followed by 25 bps in December - we are forecasting that as well. Barring any major upside surprise in labor market data, that's the path they'll be on - and that coincides with a softer dollar." Respondents on the other end of the spectrum highlighted safe-haven demand from increasing risks of widening conflict in the Middle East as being one of a few possible tailwinds for the dollar in coming weeks. The outcome of the November U.S. presidential election and financial markets now fully pricing an October European Central Bank rate cut were also mostly viewed as potential dollar-positive events, the poll found. "The dollar can probably strengthen further, more so into the U.S. election as we don't think the market is fully pricing any premium for potential Trump tariffs," said Dan Tobon, head of G10 FX strategy at Citi. "We also think there's more room for markets to price in a more dovish ECB, though that's more of a bearish euro view than a view of broad dollar strength." The Japanese yen , up over 11% since July, was projected to be the top-performer among major currencies, rising over 6% to about 136/$ in a year. (Other stories from the October Reuters foreign exchange poll) Sign up here. https://www.reuters.com/markets/currencies/dollar-stay-unfazed-despite-growing-uncertainties-2024-10-02/

2024-10-02 12:17

BERLIN, Oct 2 (Reuters) - Germany rejected a proposal by Italy to bring forward a planned European Union review of the bloc's ban on the sale of new internal combustion engine cars from 2035, saying it would lower standards and cause uncertainty for industry. "Germany will not entertain discussion on potentially watering down the European CO2 emission performance standards ... the German government does not support the Italian government's proposal," German Environment Minister Steffi Lemke said in comments to Reuters on Wednesday. In March 2023, EU countries approved a landmark law that will require all new cars to have zero CO2 emissions from 2035, effectively banning diesel and petrol engines and allowing electric vehicles (EVs) to dominate. Ahead of that deadline, automakers face tougher CO2 targets in 2025 as the cap on average emissions from new vehicles sales falls to 94 grams/km from 116g/km in 2024. Exceeding CO2 limits can lead to fines of 95 euros per excess CO2 g/km multiplied by the number of vehicles sold. That could lead to penalties of hundreds of millions of euros for large carmakers, particularly as sales of battery-electric cars have slowed across the region. The EU Commission scheduled a review of the legislation for 2026 to assess the technological advances of hybrid cars and whether they can comply with the 2035 goal. Europe's auto association ACEA urged the Commission in mid-September to bring forward the review targets to give carmakers some relief from the measures, saying the necessary conditions to boost their electric sales - including charging infrastructure, cheaper energy, tax incentives, and raw material supply - were not in place. Sign up here. https://www.reuters.com/business/autos-transportation/germany-rejects-italys-proposal-early-review-eu-combustion-engine-ban-2024-10-02/

2024-10-02 11:42

Oct 2 (Reuters) - Conagra Brands' (CAG.N) , opens new tab first-quarter results missed Wall Street estimates on Wednesday as budget-conscious consumers prioritized spending on lower-priced alternatives over the company's higher-priced pantry staples. Shares of the company, which maintained its annual forecasts, were down about 3% in premarket trading. Conagra, like other U.S. packaged food companies, has seen demand take a hit from prior price hikes on its frozen meals and Slim Jim beef jerky, with shoppers opting for cheaper private label brands. The company's total organic sales volumes fell 1.6% in the first quarter after decreasing 1.8% in the fourth quarter. Volumes at Conagra's grocery and snacks unit, which accounts for most of the company's revenue, fell 1.8%, while its foodservice segment volumes dropped 11.1%. "Drastic changes in consumer shopping habits seen in the past few years are likely to be more permanent than previously thought," eMarketer analyst Blake Droesch said. "Companies such as Conagra will need to innovate to meet the demands of the modern consumer." Temporary manufacturing disruptions during the quarter in the company's Hebrew National hot dog business resulted in a $27 million hit to its first-quarter results, Conagra said. The company's first-quarter net sales fell 3.8% to $2.79 billion. The average analyst expectation was $2.84 billion, according to data compiled by LSEG. On an adjusted basis, Conagra earned 53 cents per share, missing estimates of 60 cents. The Duke's mayonnaise maker's quarterly gross margin fell 189 basis points to 26.5%. Last month, peer General Mills (GIS.N) , opens new tab reported a smaller-than-expected drop in quarterly sales, benefiting from improved demand as the Cheerios maker cut prices for some of its products. Sign up here. https://www.reuters.com/business/retail-consumer/conagra-brands-posts-bigger-than-expected-drop-quarterly-sales-weak-demand-2024-10-02/

2024-10-02 11:13

PARIS, Oct 2 (Reuters) - France is aiming for a target growth rate of 1.5 gigawatts (GW) per year in onshore wind power, Energy minister Olga Givernet said on Wednesday, which would be in line with the previous government's renewable energy policy goals. In the run up to parliamentary elections in the summer, the far-right National Rally (RN) made stopping wind power a feature of their election campaign, and also promised to "gradually dismantle" existing wind parks. The RN suffered a setback in the vote, with a leftist alliance taking the top spot, but no group getting a majority. New Prime Minister Michel Barnier said on Wednesday that the government intended to pursue nuclear power and renewable energy development, while better measuring all their impacts - particularly in wind power - saying that planning work would resume immediately. Givernet said the government would target having 45 GW of offshore wind power in service by 2050, and said a map of priority areas for its development would be announced soon, with a call for tenders by early 2025. France produces nearly 70% of its electricity supply from nuclear reactors, and lags other European countries in renewable supply development due to difficult permit processes. The wind power development plan sticks to the goals announced by the previous government, whose multi-year energy plan was hampered by a lack of an absolute majority in France's National Assembly. It was previously planned for 2023. The previous iteration of the plan aimed for an onshore wind supply development rate of 1.5 GW per year, with a "more balanced distribution" and an installed capacity of 33 to 35 GW by 2030, up from 22 GW at the end of 2023. Sign up here. https://www.reuters.com/business/energy/france-stick-with-wind-power-development-targets-2024-10-02/

2024-10-02 10:58

TSX ends down 0.1% at 24,001.55 Posts record intraday high at 24,113.27 Financials fall 0.3%; industrials lose 0.4% Energy adds 0.2%; oil settles 0.4% higher Oct 2 (Reuters) - Canada's main stock index ended lower on Wednesday, weighed by declines for industrials and heavily weighted financial shares, as investors took stock of recent gains for the market that lifted it to a record intraday high. The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) , opens new tab ended down 32.44 points, or 0.1%, at 24,001.55, after touching a record high of 24,113.27 earlier in the day. On Tuesday, the TSX notched a record closing high as escalating tensions in the Middle East led to a jump in oil prices, boosting energy shares. The index climbed 9.7% in the third quarter, its largest quarterly gain in nearly four years. "It looks like it's taking a bit of a breather after the tremendous run we had in Q3," said Elvis Picardo, a portfolio manager at Luft Financial, iA Private Wealth. "It's been a pretty good run for the indices so far but you have not just geopolitical risk but Q3 earnings ... That might be a key catalyst for which way the markets go from here." Financials, which account for 31% of the TSX's weighting, fell 0.3%, while industrials ended 0.4% lower as railroad shares lost ground. Consumer staples was down 1.4% and real estate, which tends to be particularly sensitive to the interest rate outlook, declined 0.8%. The Canadian 10-year yield climbed 8.1 basis points to 3.027% as recent upbeat U.S. data tempered expectations for another supersized interest rate cut by the Federal Reserve next month. Information technology helped limit the Toronto market's decline, rising 0.6%, and energy added 0.2% as the price of oil settled 0.4% higher at $70.10 a barrel. Sign up here. https://www.reuters.com/markets/tsx-futures-dip-rising-middle-east-conflict-2024-10-02/

2024-10-02 10:37

KYIV, Oct 2 (Reuters) - Russian drones overnight attacked port infrastructure in Ukraine's southern Odesa region, damaging a grain facility and buildings at a border crossing to Romania, as well as cutting power to thousands in the northern Sumy region, officials said. The attack hit Ukraine's Izmail district near the Danube river, the regional governor Oleh Kiper said on Telegram messenger. "Russia continues to wage war against grain and global food security," Oleksiy Kuleba, deputy prime minister for restoration, said on Telegram, reporting damage to the grain facility and administrative buildings at the Orlivka crossing. The crossing temporarily suspended operations due to the attack, Kiper added. Two lorry drivers, including a Turkish citizen, were injured, according to officials. Separately, the attack hit an electrical substation in the northern Sumy region, damaging equipment, Ukraine's energy ministry said on Telegram. Sumy region grid operator said the attack led to power cuts for over 80,000 consumers. Substations in the central Cherkasy region also lost power due to falling drone debris, the ministry said. Ukraine's air force said it had destroyed 11 out of 32 Russian attack drones launched overnight. Another four drones left Ukrainian airspace in the direction of Russia and 10 drones were lost in northern and central Ukrainian regions as a result of electronic warfare countermeasures, it said. Sign up here. https://www.reuters.com/world/india/ukraine-says-it-downed-11-drones-during-russias-overnight-attack-2024-10-02/