2026-02-06 11:01

LONDON, Feb 6 (Reuters) - The pound rose on Friday, recovering some of the previous day's steep slide that followed a surprisingly tight vote from the Bank of England to leave rates unchanged and its signal that it could cut if inflation continues to cool. Sterling rose 0.4% to $1.3581 by mid-morning in London, partially recovering from Thursday's near-1% drop to 10-day lows. Sign up here. The pound strengthened against the euro , which dropped 0.2% to 86.88 pence, after having staged its biggest one-day rally against sterling since last August the previous day. The European Central Bank also met to set interest rates on Thursday, leaving them unchanged. But policymakers indicated they were in no hurry to lower borrowing costs, even as inflation runs below their 2% target. On top of the shifting outlook for interest rates, sterling traders, who are sticking with their view that the BoE will likely cut rates twice this year, are having to contend with a tricky political backdrop this week. Prime Minister Keir Starmer is under huge pressure, including from lawmakers in his own Labour Party, over the decision to make Peter Mandelson Britain's ambassador to Washington in December 2024, when his ties to the late U.S. sex offender Jeffrey Epstein were already known. Concern about the vulnerability of his position drove a rise in gilt yields earlier this week that reversed after the BoE decision. "The market struggles to fully price two 25-basis point cuts this year – probably because of politics. Any leadership challenge to PM Keir Starmer and the presumed leftward shift in policy setting would leave the gilt market vulnerable and could delay a BoE easing cycle. Notably, 30-year UK gilt yields ended the day higher yesterday, despite the dovish BoE communication," ING strategist Chris Turner said. "We see plenty of room for sterling to take the strain here and would look for EUR/GBP to now find support at 0.8670/80. Our bias over the next month is towards 0.88 as political pressure remains on Starmer and data slowly adds to the case for a March BoE rate cut," he said. https://www.reuters.com/world/uk/sterling-recovers-some-boe-led-losses-politics-loom-large-2026-02-06/

2026-02-06 10:48

LONDON, Feb 6 (Reuters) - Shell (SHEL.L) , opens new tab has chosen PricewaterhouseCoopers (PwC) as its next auditor after a tender process, with PwC set to replace EY from 2027, the oil major said on Friday. Britain's Financial Reporting Council said in December it had opened an investigation into EY's audit of Shell's 2024 financial statements over potential breaches of audit partner rotation rules. Sign up here. Shell said in a July regulatory filing that there had been a breach of rules that require listed companies to change the lead audit partner every five to seven years and impose cooling-off periods before they can return. At the time, the company also said it would amend its 2023 and 2024 annual reports after EY failed to comply with U.S. Securities and Exchange Commission rules on partner rotation, though its financial statements would remain unchanged. Shell and EY did not immediately respond to a request for further comment. https://www.reuters.com/sustainability/boards-policy-regulation/shell-picks-pwc-auditor-replace-ey-2026-02-06/

2026-02-06 10:23

JAKARTA, Feb 6 (Reuters) - Indonesia's sovereign wealth fund Danantara Indonesia on Friday launched six projects in the natural resources processing sector valued at $7 billion, including a green refinery project by state-run Pertamina, the fund's chief said. The other projects included construction of alumina and aluminum smelters, an ethanol plant, a palm-oil blended aviation fuel plant, and integrated poultry facilities, said CEO Rosan Roeslani. Sign up here. The projects are among the government's 18 priority projects in the natural resources processing sector set to be launched this year with total investment of 618 trillion rupiah ($36.65 billion). "The president emphasised the acceleration of downstream projects that have direct impact to the people," Roeslani said during the launch. Pertamina's refinery plant, located in Cilacap, Central Java province, converts used cooking oil to aviation fuel and has produced 3,000 barrels per day, said Emma Sri Martini, the company director. It is expected to boost its production capacity to 6,000 barrels per day, Martini added. The alumina and aluminum smelters are located in West Kalimantan province. ($1 = 16,860.0000 rupiah) https://www.reuters.com/business/energy/danantara-indonesia-launches-natural-resources-processing-projects-worth-7-2026-02-06/

2026-02-06 09:11

BERLIN, Feb 6 (Reuters) - A significant appreciation of the euro could trigger a monetary policy response from the European Central Bank, wrote ECB policymaker Martins Kazaks in a blog post on Friday. While the ECB Governing Council does not pursue a specific exchange rate target, "a sizeable and pacey euro strengthening would lower inflation outlook via weakening competitiveness and economic activity, thereby potentially triggering a policy response," he wrote , opens new tab. Sign up here. Kazaks noted that the euro-dollar exchange rate has fluctuated within a relatively narrow range in recent months, with the last significant appreciation occurring in the second quarter of 2025, which currently appears to be permanent. Due to time lags, the peak effect of this appreciation on inflation will only become visible in spring, he said. However, this has already been taken into account in the ECB's baseline forecast, added the Latvian governor. The European Central Bank left interest rates on hold as expected on Thursday. ECB President Christine Lagarde said at a press conference after the rate announcement that the Governing Council did spend time discussing exchange rate moves after the dollar tumbled last week. Asked about the currency, Lagarde said the ECB was keeping a close eye on markets but ultimately concluded that no big change has taken place in recent months. https://www.reuters.com/world/europe/ecbs-kazaks-says-significant-euro-appreciation-could-trigger-response-2026-02-06/

2026-02-06 08:59

Japan holds February 8 snap election AI splinters into winners and losers US CPI, non-farm payrolls released LONDON, Feb 6 (Reuters) - Japan's snap election, a heavy dose of key U.S. data, earnings season, plus a slide in (some) tech shares suggest there won't be much down time for traders in the coming week. Here's all you need to know about what's coming up in financial markets by Rae Wee in Singapore, Lewis Krauskopf in New York and Karin Strohecker, Tommy Wilkes and Lucy Raitano in London. Sign up here. 1/ A FREE HAND? Japan heads to the polls on Sunday and Prime Minister Sanae Takaichi wants the nation of over 120 million people to hand her a stronger mandate to deliver on her promises of more spending. The closely-watched lower house election is shaping up to be one of the most unpredictable in years, though polls point to Takaichi's Liberal Democratic Party gaining a majority. A strong showing by the LDP would allow Takaichi to expand stimulus, which could heighten concerns about Japan's finances and push up government bond yields further in a selloff that could ripple out overseas. Investors have also sold the yen. Its recent slide prompted suspected rate checks from Japan and the U.S. to stem its decline - which, if confirmed, would mark a rare, coordinated move. 2/ AI SPLITS INTO WINNERS AND LOSERS Cisco Systems (CSCO.O) , opens new tab and Germany's Siemens Energy report earnings on Wednesday. They've benefited from the AI boom in different ways, but now Barclays says that trade is "seeing extreme dispersion". In other words, the market is sifting between the winners and losers with more conviction. The sensitivity to which companies are benefiting or suffering from AI disruption is evident in sliding software and data analytics stocks. They have plunged as traders honed in on the existential threat posed by increasingly powerful AI models. AI enablers, companies contributing to the global AI data centre build-out, meanwhile, have fared better. But with the spectre of a bubble popping and markets near record highs, it would be wise to hold onto your hats. 3/ DELAYED DATA DUMP A double dose of major U.S. economic reports should give investors a critical view of the economy, after the releases were delayed a little by the recently ended three-day government shutdown. The January non-farm payrolls report, now due on Wednesday, is expected to show an increase of 70,000 jobs, according to a Reuters poll. The Federal Reserve pointed to signs of stabilisation in the labour market as it held rates steady last month, pausing its easing cycle. Two days later, the January consumer price index, one of the most closely watched measures for assessing inflation trends, is set to be published. The data comes as investors gauge the impact of newly nominated Fed chair Kevin Warsh, who could take charge in time for the Fed's June meeting. Markets currently price that meeting as the likely next time for a rate cut. 4/FROM MUNICH, WITH LOVE The Munich Security Conference gets underway on Thursday. Now in its seventh decade, the annual gathering saw possibly its most consequential - and contentious — meeting in 2025 when a series of U.S. statements set the stage for a tectonic shift in the international order still underway today. There is no shortage of hot geopolitical issues - from Iran to Ukraine and Greenland - while questions over the future role of NATO are looming large. But the meeting looks to stretch beyond its usual scope: The European Central Bank is working on opening up access to euro liquidity to more countries - part of efforts to bolster the single currency's international role, sources told Reuters. The announcement will likely come from ECB chief Christine Lagarde, who will open a roundtable on trade dependencies at the conference. 5/ EUROPEAN BANKS' TIME IN THE SUN OVER? European banks have been among the best performing stocks in the past 12 months (.SX7P) , opens new tab with a more than 60% gain, aided by rising profitability, low loan defaults and a showering of shareholders with cash. Britain's Barclays (BARC.L) , opens new tab and NatWest (NWG.L) , opens new tab and Italy's UniCredit (CRDI.MI) , opens new tab report 2025 earnings in coming days, following generally strong numbers already from Deutsche Bank (DBKGn.DE) , opens new tab and BNP Paribas (BNPP.PA) , opens new tab. The French lender and Lloyds (LLOY.L) , opens new tab also lifted their key profitability targets. But analysts warn the good times cannot last, especially if European economies slow. Spain's BBVA (BBVA.MC) , opens new tab saw a 7% drop in its shares on Thursday after it set aside 19% more in cash for loan losses in the fourth quarter than a year earlier. As well as financial prospects, investors are looking for signs that bosses have an appetite to spend more of their excess capital on deals - such as Santander's recently announced $12.2 billion acquisition of U.S. lender Webster Financial WBS.N. https://www.reuters.com/business/take-five/global-markets-themes-graphic-2026-02-06/

2026-02-06 07:48

Qatar Energy in talks with Mitsui for North Field South stake, sources say Japan seeks to diversify energy sources amid rising power demand Mitsui, Tohoku, Kyushu interested in Qatar LNG supply via JERA, sources say TOKYO/LONDON/DOHA, Feb 6 (Reuters) - Japan's Mitsui & Co (8031.T) , opens new tab is close to buying a stake in the second phase of QatarEnergy's massive North Field project as it seeks to secure stable liquefied natural gas (LNG) supply, five sources close to the matter told Reuters. If reached, the deal would bolster Japan's energy security as it looks to meet an increase in electricity demand from the artificial intelligence boom with conventional fuels, since adoption of renewable power is slowed by delays at wind power projects. Sign up here. It would also give Qatar, the world's second-largest LNG producer after the United States, a greater weighting in Tokyo's energy portfolio after the Middle Eastern country struck a vast 27-year supply deal earlier this week with JERA, Japan's top power generator. QatarEnergy did not respond to a request for comment and Mitsui declined to comment. The sources spoke on condition of anonymity as the matter is not yet public. The size of the stake and its value were not immediately available. "Talks are at an advanced stage," said one of the sources. Another industry source said Mitsui and QatarEnergy are finalising terms. The North Field LNG project, which will be the world's largest, is expected to boost QatarEnergy's output of the super-chilled fuel by about 64% to 126 million metric tons per annum by 2027, from 77 mtpa now. Of that, the second phase, called North Field South, will add 16 mtpa at a cost of about $17.5 billion, according to a 2024 research report by the Japan Organization for Metals and Energy Security. TALKS AT 'ADVANCED STAGE' QatarEnergy holds a 75% stake in North Field South while majors TotalEnergies (TTEF.PA) , opens new tab and Shell (SHEL.L) , opens new tab hold 9.375% each and ConocoPhillips (COP.N) , opens new tab has a 6.25% stake. Mitsui, a trading house, said in 2023 that it was considering buying a stake in the project to secure stable LNG supply. A deal would extend cooperation between the companies after Mitsui signed a 10-year deal with QatarEnergy in 2024 for supply of condensate, a byproduct of the natural gas production process. One of the sources said Malaysia's Petronas has also expressed interest in an equity stake in the project, without giving further details. Petronas did not respond to a request for comment. In addition to the equity stake, Mitsui will receive some Qatari supply through JERA's recent deal, while Japanese regional utilities Tohoku Electric Power (9506.T) , opens new tab and Kyushu Electric Power (9508.T) , opens new tab are also keen on buying Qatar LNG via JERA, two of the sources said. Tohoku declined to comment. Kyushu did not have immediate comment and JERA did not respond to requests for comment. https://www.reuters.com/sustainability/boards-policy-regulation/japans-mitsui-close-stake-qatar-lng-project-sources-say-2026-02-06/