2024-05-03 11:14
TORONTO, May 3 (Reuters) - The Canadian dollar is set to strengthen less than previously expected over the coming year as the Bank of Canada makes progress on taming inflation and will likely begin cutting interest rates ahead of the Federal Reserve, a Reuters poll found. According to the median forecast of nearly 40 foreign exchange analysts in the April 29-May 2 poll, the loonie will strengthen 0.7% to 1.36 per U.S. dollar, or 73.53 U.S. cents, in three months, compared to 1.34 in last month's poll. It was then predicted to advance to 1.32 in a year, versus 1.31 expected previously. "In the near term, I think there are going to be some headwinds," said Bipan Rai, global head of FX strategy at CIBC Capital Markets. "That's primarily a story about Canada potentially getting closer to rate cuts relative to the Federal Reserve." The BoC is getting closer to lowering its benchmark interest rate from 5%, its highest level in more than two decades, Governor Tiff Macklem said this week, adding "the data since January have increased our confidence inflation will continue to come down gradually even as economic activity strengthens." Inflation was 2.9% in March, higher than the central bank's 2% target. Money markets see a roughly 60% chance the BoC will lower its benchmark interest rate at the next policy meeting on June 5 and expect around 60 basis points (bps) of easing in total from the central bank by the end of 2024, compared to 38 bps from the Fed. "The Bank of Canada has made more progress on its inflation mandate than the Fed has at this point ... It's also clear (which central bank eases first) if you look at the relative performance of the economy," Rai said. The OECD projects Canada's economy will grow 1% this year, much less than the 2.6% growth rate it forecasts for the United States. Canada's economy is particularly sensitive to higher borrowing costs due to elevated household debt and a short mortgage cycle, analysts say. The typical loan term is five years or less in Canada, versus 30 in the United States. (For other stories from the May Reuters foreign exchange poll:) Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-forecasts-trimmed-by-analysts-boc-moves-closer-rate-cuts-2024-05-03/
2024-05-03 11:06
LONDON, May 3 (Reuters) - Britain's latest climate action plan is unlawful because ministers were not told of the risk that key policies could not be delivered, London's High Court ruled on Friday, in a further challenge for Britain as it navigates the move towards net zero. The court's judgment – that carbon budgets set by the government in 2023 to meet the UK's target of net zero emissions by 2050 were set without evidence they could be achieved – means Britain will have to submit a new plan for a second time. Friends of the Earth, ClientEarth and the Good Law Project took legal action over the targets last year, having successfully challenged the previous budgets set by the Conservative government in 2022. The High Court ruled then that Britain had breached legislation designed to help reach the 2015 Paris Agreement goal of keeping temperatures within 1.5 degrees Celsius of pre-industrial levels, requiring a new plan. The three environmental groups argued the new plan was also unlawful because it was agreed based on incorrect assumptions about its viability, citing the fact that the then-energy minister, Grant Shapps, was not told of the risk that policies to reduce emissions could not eventually be delivered. Judge Clive Sheldon upheld four out of five grounds of their legal challenge in a written ruling that Katie de Kauwe, a lawyer with Friends of the Earth, described as "another embarrassing defeat for the government and its reckless and inadequate climate plans". In response, a spokesperson for the Department for Energy Security and Net Zero said: "The UK can be hugely proud of its record on climate change." The spokesperson added: "The claims in this case were largely about process and the judgment contains no criticism of the detailed plans we have in place. "We do not believe a court case about process represents the best way of driving progress towards our shared goal of reaching net zero." MORE CHALLENGES Friday's ruling comes as climate campaigners have increasingly turned to the law to force governments to move more quickly on tackling emissions. Europe's top human rights court ruled New Tab, opens new tab in April that the Swiss government had violated the human rights of its citizens by failing to do enough to combat climate change, in a decision that could set a precedent for future climate lawsuits. The case in Britain was also heard amid concerns the country has lost its position as a global leader on climate action. Friends of the Earth lawyer David Wolfe said at February's hearing that Britain's Climate Change Committee warned there were credible policies in place for less than 20% of the reductions required to meet the carbon budget for 2033-2037. But, the group said, Shapps "proceeded on the assumption that the reductions in emissions of greenhouse gases from all of the proposals and policies ... would all be delivered in full". The High Court ruled that Shapps was wrongly told by officials that "each of the individual proposals and policies that form the package of measures would be delivered in full", rendering the carbon budget delivery plan unlawful. Shapps' decision was "based on reasoning which was simply not justified by the evidence", Sheldon said in his ruling. Sign up here. https://www.reuters.com/world/uk/uks-new-climate-action-plan-unlawful-londons-high-court-rules-2024-05-03/
2024-05-03 11:01
May 3 (Reuters) - Goldman Sachs (GS.N) New Tab, opens new tab said on Friday it had reached an in-principle settlement to resolve a 2014 class action lawsuit related to trading in platinum and palladium. The investment bank was among a number of defendants named in the lawsuit, which alleged they had violated antitrust laws by conspiring to manipulate a benchmark for physical platinum and palladium prices. The agreement is subject to final documentation and court approval, Goldman disclosed, adding that it had set aside reserves for its contribution to the settlement amount. Sign up here. https://www.reuters.com/legal/goldman-sachs-settles-2014-class-action-lawsuit-tied-metal-trades-2024-05-03/
2024-05-03 10:34
WASHINGTON, May 3 (Reuters) - The U.S. has been preparing since 2022 for the possibility that Russian President Vladimir Putin would stop selling it nuclear power fuel, and a pending ban on Russian imports will help boost domestic capacity to process uranium fuel, the outgoing top nuclear energy official told Reuters. The U.S. Senate passed legislation on Tuesday that bans the imports from Russia, the latest move by Washington to disrupt Putin's ability to pay for the full-scale invasion of Ukraine that began in 2022. The ban, which is expected to be signed by President Joe Biden, starts 90 days after enactment, although it allows the Department of Energy to issue waivers in case of supply concerns. The move has led to fears that Putin could retaliate by freezing exports to the U.S. boosting uranium prices. Russia supplied about 24% of the uranium used by reactors in the U.S. in 2022, and was its top foreign supplier. But Kathryn Huff, the DOE's assistant secretary for nuclear, who steps down on Friday, told Reuters the U.S. is prepared for any scenario. "The reality is this: over the last few years there has been a very real and present possibility that Russia could stop abruptly sending enriched uranium to the United States." Countries including Canada, France and Japan will help the U.S. deal with an "allied alternative" to Russian uranium, Huff said. And the imports ban would unlock $2.7 billion from previous legislation for building out the domestic uranium industry. "A paired structure in which we invest in new conversion and enrichment capacity and then protect those investments with some import restrictions is what's required," to cut dependence on Russia, said Huff, who will return to university teaching and nuclear research. Nuclear plants only refuel about every two years and contracts are worked out years in advance. Huff said the U.S. has "just about enough time" or about three or four years, to stand up new uranium conversion and enrichment capacity and replace Russian imports. In the U.S., the Vogtle nuclear plant in the state of Georgia, opened this week after years of delay. But no new construction is on the books, leading to concern the U.S. will not be able to meet Biden's 2050 goal of decarbonizing the economy. Huff expects the next plant to come on line will be Palisades, in Michigan. Holtec, the owner, is trying to reopen a nuclear plant for the first time in U.S. history. Palisades shut in 2022, 10 days early due to a problem with a control rod. Opponents of reopening Palisades, which opened in 1971, say the reactor vessel is vulnerable to cracking, a situation called embrittlement. Holtec, which got a $1.5 billion DOE loan in March, will have to refurbish the plant to get approval from U.S. regulators, Huff said. "I fully expect it will operate better than it was operating before once they complete those refurbishments." Holtec spokesperson Patrick O'Brien said Palisades, which still needs reauthorization, will undergo thorough inspections before any restart. Sign up here. https://www.reuters.com/business/energy/ban-russian-uranium-helps-us-build-nuclear-fuel-capacity-official-says-2024-05-03/
2024-05-03 10:23
India dealers charge premium of $1/oz vs $5 premium last week Strong gold demand expected for spring festival next week China premiums ease to $18-$20/oz this week Japanese traders note modest gold demand during Golden Week May 3 (Reuters) - Physical gold demand in India remained subdued this week despite a slight correction in prices as buyers awaited an even bigger drop, while Chinese premiums slipped for the second straight week due to sluggish holiday demand. In India, the world's second-largest gold consumer and a major importer, domestic prices fell to around 70,500 rupees per 10 grams this week, after hitting a record high of 73,958 rupees last month. "Though prices are coming down, demand is not improving. Buyers have taken a pause. They think prices could fall sharply, considering the big price rally of the last two months," said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji. Indian dealers charged a premium of up to $1 an ounce over official domestic prices - inclusive of 15% import and 3% sales levies, versus last week's premium of $5. Akshaya Tritiya, the second-biggest gold-buying festival after Dhanteras, will be celebrated next week in India. "If prices remain at this level or correct further, we could see good demand during the festival,” said a Mumbai-based bullion dealer with a private bank. In China, dealers charged premiums of $18-$20 per ounce over benchmark prices , down from the $20-$35 premiums seen last week. Chinese markets are closed for the Labour Day holiday from May 1-3, but there was no boost from pre-holiday spending and consumption volume declined due to a short trading week, said Bernard Sin, regional director, Greater China, at MKS PAMP. In Singapore, bullion was sold at anywhere between at par to $2 premiums , while dealers charged at par to $2.25 premiums in Hong Kong. In Japan, dealers sold gold at $0.5-$0.75 premiums, slightly lower than the last week's range. Despite a weaker yen and high gold prices, Japanese traders noted a reasonable number of customers buying gold during the April 29-May 5 Golden Week holiday season. ($1 = 83.4682 Indian rupees) Sign up here. https://www.reuters.com/markets/commodities/asia-gold-demand-subdued-top-consumers-india-china-despite-price-drop-2024-05-03/
2024-05-03 10:02
A look at the day ahead in U.S. and global markets from Mike Dolan The strength of the U.S. labor market will give Wall Street's interest rate relief a reality check on Friday, but Apple's (AAPL.O) New Tab, opens new tab monster share buyback has buoyed the market in advance. The world's second biggest company by market capitalisation wowed the gallery overnight with a whopping $110 billion stock buyback program - the biggest in the iPhone maker's history - and upped its dividend by 4% after a modest first quarter earnings beat. The news lifted Apple shares 6% in out-of-hours trading and helped S&P500 futures extend Thursday's near-1% index rally ahead of today's open. It's also strengthened the tailwind from this week's Federal Reserve meeting, which has calmed the Treasury market considerably by quashing creeping fears of another interest rate rise and surprising with a big taper of the Fed's balance sheet runoff. The upshot is that futures markets have bumped up full-year Fed easing expectations to 40 basis points on Friday - 10 bps more than was priced just before the Fed meeting. And two-year Treasury yields have fallen to three-week lows below 4.90%. The big test of that more relaxed view now comes from the April U.S. employment report later. Private sector payroll readings for last month and jobless claims updates this week show little give yet in a still-tight labor market - even though ebbing job openings data for March added a twist. U.S. non-farm payrolls are forecast to have risen 243,000 last month, only marginally cooler than the 303,000 added in March. The unemployment rate is expected to hold steady at 3.8%, while annual average earnings growth is seen cooling to 4.0%. Cooling inflation fears in the background have seen a recoil of U.S. crude oil prices this week, back below $80 per barrel for the first time in almost two months. And even though the United Nations' Food and Agriculture Organization said its food price index ticked up in April, it remains 7.4% below the level a year earlier after hitting a three-year low in February. Easier Treasury yields have taken the wind out of the dollar's (.DXY) New Tab, opens new tab sails, however, as the currency market's standoff with Japanese authorities over official yen support remains tense. After two bouts of Bank of Japan intervention this week to buoy the yen from a 34-year trough at 160 per dollar, the exchange rate fell back to three-week lows below 153 on Friday. The week's intervention forays, which estimates suggest may have totalled up to $60 billion in dollar sales, have tended to come in relatively thin and illiquid markets. With the world's biggest currency trading centre in London closed for a bank holiday on Monday, there's likely to be some trepidation among speculators who are heavily short yen going into the weekend. Elsewhere in Asia, Hong Kong stocks continued their remarkable recovery on signs the China's government is stepping up efforts to boost the economy. The Hang Seng Index (.HSI) New Tab, opens new tab climbed 1.5% for a ninth consecutive day of gains - its longest winning streak since January 2018. UBS says global hedge funds that use an equities long-short strategy are growing increasingly bullish on China, evidenced by the heavy pick-up in their purchases of Hong Kong-listed shares. In Europe, Norway's crown rose after its central bank kept its key policy interest rate on hold but said a tight monetary policy stance may be needed for somewhat longer than planned. In company news, Anglo American (AAL.L) New Tab, opens new tab jumped 3.2% after Reuters reported that Glencore (GLEN.L) New Tab, opens new tab was mulling an approach for the 107-year old miner, a move that could spark a bidding war. Glencore was down 1.8%. European banks were also buoyant. Societe Generale (SOGN.PA) New Tab, opens new tab jumped 5.5% following a lower-than-expected fall in first-quarter net income, while Credit Agricole (CAGR.PA) New Tab, opens new tab climbed 3.7% after a forecast-beating 55% jump in first-quarter net profit. Key diary items that may provide direction to U.S. markets later on Friday: * US April employment report, ISM and S&P Global's April U.S. service sector surveys * New York Federal Reserve President John Williams and Chicago Fed President Austan Goolsbee speak * Japan's finance minister Shunichi Suzuki holds press conference on sidelines of ADB meeting in Tbilisi. Brazil president Luiz Inácio Lula da Silva meets Japan's Prime Minister Fumio Kishida in Brasilia * US corporate earnings: Hershey, Monster Beverage, CBRE, Cboe Global Markets, Trimble Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-05-03/
