2024-04-25 10:21

April 25 (Reuters) - U.S. issuers and other firms expect the Securities and Exchange Commission to deny their applications to launch exchange-traded funds (ETFs) tied to the price of ether after discouraging meetings with the agency in recent weeks, four people said. VanEck, ARK Investment Management and seven other issuers have filed with the SEC to list ETFs that would track the spot price of the world's second-largest cryptocurrency after bitcoin. The SEC must decide on VanEck's and ARK's filings, which are first in line, by May 23 and May 24 respectively. Recent meetings between issuers and the SEC have been one-sided and agency staff have not discussed substantive details about the proposed products, said four people who participated. That is in contrast to the intensive and detailed discussions between issuers and the agency in the weeks before its landmark approval of spot bitcoin ETFs in January, said the people who declined to be identified because the talks are private. The agency, which is led by crypto skeptic Gary Gensler, rejected spot bitcoin ETFs for more than a decade over market manipulation worries but was forced to approve them after Grayscale Investments won a court challenge. Issuers argued in the meetings that those ETFs and ether futures-based ETFs the SEC approved in October set a precedent for the spot ether products, and have tried to address potential regulatory concerns, the people said. SEC staff listened but did not spell out specific concerns or generally ask questions, suggesting the agency will deny the filings, they added. That would be a setback for the crypto industry which had hoped spot bitcoin ETFs would pave the way for other similar products and push cryptocurrencies into the mainstream. "It seems more likely that approval will be delayed until later in 2024, or longer," said Todd Rosenbluth, head of ETF analysis at data firm VettaFi, who is tracking the issue closely. "The regulatory picture still seems cloudy." Some issuers said they still plan to file additional disclosure paperwork with the SEC to keep the conversation going. A SEC spokesperson said it does not comment on individual filings. VanEck CEO Jan van Eck told CNBC this month the firm's application would "probably be rejected." ARK did not return requests for comment. When asked by Reuters at an event this week about its ether application, ARK CEO Cathie Wood said only that ether could become a major asset class. An expected thumbs-down is reflected in ether's price, said Hong Fang, president of crypto exchange OKX. While the cryptocurrency is up 39% this year, it has struggled to keep pace with bitcoin, which is up more than 51% and scaled new peaks last month. "There's more downward pressure on prices as people build that expectation in," said Fang. 'MORE DATA' The SEC has held just a handful of meetings on the ether products so far, according to the sources and SEC records. The only meeting disclosed by the regulator was last month with crypto exchange Coinbase . It related to Grayscale's application to convert its Ethereum Trust (ETHE.PK) New Tab, opens new tab into an ETF, for which Coinbase is the custodian. The SEC approved spot bitcoin ETFs on the basis that existing market surveillance mechanisms for bitcoin futures ETFs, which it approved in 2021, were good enough for spot ETFs too. Coinbase argued that the same rationale applies to the spot ether products, since ether futures and the spot market are highly correlated, according to the SEC disclosure. If the SEC does reject ether ETFs, several applicants expect it to do so due to broad issues, such as the nature and depth of statistical data on the underlying ether market. The agency may argue it has had limited time to observe ether futures, said Matt Hougan, chief investment officer at Bitwise Asset Management, which has filed for a spot ether ETF. "I think that would be the mechanical reason why it would get pushed out is they just want to see more data." Some say rejection could invite another lawsuit. "It's entirely possible we'll eventually see ether ETFs," said one of the sources. "But not until somebody is denied and goes to the courts." Sign up here. https://www.reuters.com/markets/us/us-sec-expected-deny-spot-ether-etfs-next-month-industry-sources-say-2024-04-25/

2024-04-25 09:33

April 25 (Reuters) - Sterling rose versus the dollar and the euro as investors assessed the Bank of England's monetary policy path after recent mixed signals from policymakers. The pound dropped late last week and on Monday versus the greenback as Governor Andrew Bailey said that inflation was broadly declining in line with BoE forecasts, which would indicate that interest rates might fall more quickly than the market currently expects. On Tuesday, it jumped against the dollar after a softer reading of monthly U.S. business activity battered the dollar. "With sterling undershooting the move in UK rates and more balanced commentary this week, our bias would be to fade the recent dovishness and for the pound to retrace some of its losses," said Kamal Sharma, forex strategist at BofA. BoE Chief Economist Huw Pill said on Tuesday that rate cuts remained some way off, even if the passage of time and an absence of bad news on inflation had brought them closer. Some analysts argued that recent British economic data would suggest a later rather than earlier start of the BoE monetary easing cycle. "However, with June now pricing in a greater chance for cuts, we doubt that the pound will immediately recapture its recent highs ahead of the May BoE rate meeting," BofA's Sharma added, flagging the May 9th quarterly inflation report as the most important event for the British currency. Sterling was up 0.4% at $1.2519, having risen 0.8% on Tuesday, the most in one day since mid-December. It dropped around 1.5% from Thursday to Monday. The pound's decline against the euro resulted from the dovish comments from BoE officials, which were further compounded by solid economic data in the euro area. This included euro zone business activity expanding at its fastest pace in April of nearly a year, and Germany's private sector unexpectedly returned to growth. Sterling recouped some losses in the last two sessions, with the euro at 85.64 pence per pound after hitting on Monday 86.44, its highest level since early January. UBS maintained its 85-87 range view for the euro against the pound, with a target at 85 for the end of the second quarter. Sign up here. https://www.reuters.com/markets/currencies/sterling-rises-versus-euro-dollar-eyes-boe-policy-path-2024-04-25/

2024-04-25 09:30

Yen at weakest level vs dollar since 1990 Weakness to persist while rates gap is wide - traders BOJ expected to leave rates on hold TOKYO, April 25 (Reuters) - As the yen plumbs three-decade lows and pressure grows on Japan to intervene or make monetary policy changes, traders figure there is not much Tokyo can do to reverse the currency's slide while interest rates and momentum are heavily skewed against it. The Bank of Japan (BOJ) sets policy on Friday with almost no expectation of a rate rise. It has no currency mandate but a weakened yen, which is at a 34-year trough on the dollar and record low levels in real terms, affects inflation because it raises import prices. Politicians have been describing its slide as excessive and BOJ Governor Kazuo Ueda has hinted at future rate hikes. Yet traders in foreign exchange markets, in thrall to a rising dollar, have barely stopped selling the yen through some 16 months of important and theoretically yen-positive shifts culminating in the BOJ’s first rate hike in 17 years in March. Japan has sloughed off yield caps and negative interest rates. The central bank has flagged a retreat from the bond market. And still the yen has remained the cheapest major currency to borrow and short-sell - all but sealing its fate. "In the short-term, BOJ hiking policy rates might not make material difference to the yen. The yen is currently driven more by U.S rates and the yield differential which is significant," said Nathan Swami, Asia-Pacific head of foreign exchange trading at Citi in Singapore. "It might take a while for the BOJ to normalise policy fully and that should start to help strengthen the yen but the key question is what the Fed does in the meantime." Increasingly, and to the delight of yen bears, markets expect the Fed will not do much. Pricing for as many as six Federal Reserve interest rate cuts this year has unwound on signs of sticky U.S. inflation and economic strength. Barely two are now anticipated. That leaves short-term U.S. rates above 5.25% for longer, while short-term Japanese rates sit at 0.1%, meaning the 22 bp increase priced in for Japan this year hardly moves the dial. At the ten-year tenor, U.S. yields are 375 basis points higher than Japanese yields , with the gap not far from over 400 bps touched last year - the widest in two decades. The yen traded as low as 155.74 this week. It is down 9.4% on the dollar this year and has lost more than 33% of its value in three years. This year the U.S. dollar index is up 4.3%. "When the dust settles, you're still looking at a significant interest-rate differential," said Bart Wakabayashi, branch manager at State Street in Tokyo. JOB DONE Market focus at the BOJ meeting falls mostly on three elements: policymakers' inflation forecasts - where a rise would imply higher rates - governor Ueda's tone at his news conference, and the central bank's plans for bond buying. On all fronts investors see the central bank's ability to move or surprise markets as limited, particularly as it already made a landmark exit from negative rates at its meeting in March. Inflation is nascent and, at 2.7%, is far lower than in the West. Sharp rises in borrowing rates would be disruptive for Japan's heavily indebted government and economy and so are likely to be avoided. Government bonds offer yields far below foreign sovereigns, which draw a constant flow of Japanese money abroad, weighing on the yen. The market is also so dominated by the BOJ, which owns more than half Japan's quadrillion or so yen of debt on issue, that an unwinding is expected to take years, at least. Even if the BOJ were to cut its 6 trillion yen a month purchases by around one trillion yen, it would only lift the 10-year yield about two basis points, said Nomura strategist Naka Matsuzawa - hardly enough to shift investment flows. "Basically, I think the BOJ has done its job in (the) March meeting, including supporting the yen," he said. To be sure, the speculators in the currency market hold their largest short yen position for 17 years, meaning a policy surprise would likely spook them and drive the yen up sharply. Intervention would also clear out shorts, but on its own is seen as unlikely to be able to reverse the yen's course. Even large bursts of yen buying is just a drop in the bucket compared to the $7.5 trillion that change hands daily in the foreign exchange market. Japan is estimated to have spent as much as $60 billion defending the currency in 2022. "Intervention would definitely help dislodge speculative positioning in the short term," said Citi's Nathan Swami. "However, it might not fundamentally change the path of the currency…as we saw in the last rounds of interventions in September and October 2022, the yen did strengthen significantly initially post-intervention but might have provided longer term yen bears better entry levels to re-enter." ($1 = 155.4600 yen) Sign up here. https://www.reuters.com/markets/currencies/yen-has-yield-problem-boj-cant-easily-fix-2024-04-25/

2024-04-25 07:23

DUBAI, April 25 (Reuters) - A small number of people in the United Arab Emirates have shown symptoms associated with contaminated water after heavy rains and floods, the health ministry said. The statement, carried by the state news agency late on Wednesday, did not say exactly how many people had been affected or what exactly they were treated for. There have been "a very limited number of cases that showed some symptoms of being affected by the mixed water" and they received hospital treatment, the ministry said. It did not say what the water had been contaminated with. The UAE was hit by record rains on April 16 that brought parts of the Gulf country to a standstill, heavily flooding some neighbourhoods, including in Dubai and northern cities. Four people died in the floods. Sign up here. https://www.reuters.com/world/middle-east/uae-reports-illness-linked-contaminated-water-after-floods-2024-04-25/

2024-04-25 07:19

BENGALURU, April 25 (Reuters) - South Korea's Hyundai Motor Group will launch its first India-manufactured electric vehicles by 2025 as the parent of the Hyundai (005380.KS) New Tab, opens new tab and Kia (000270.KS) New Tab, opens new tab brands looks to boost its presence in the nascent space dominated by Tata Motors (TAMO.NS) New Tab, opens new tab. Production of Hyundai's locally manufactured EVs will begin by the end of 2024 and will be launched by 2025, along with Kia's India-made EV, the Hyundai Motor Group said in a statement on Thursday, adding that it would unveil five models by 2030. Both brands will use batteries made by Exide Energy Solutions to power their EVs, they had said earlier this month. India is the biggest market outside North America and Europe for Hyundai, where its unit is headed for a $3 billion IPO – the country's largest. Hyundai, India's no. 2 carmaker, known for its top-selling 'Creta' sport utility vehicle, currently sells two electric models in India, the Kona and IONIQ 5, neither of which are produced in the country. Kia's lone electric offering, the EV6, is imported. The company also reaffirmed Hyundai's target of reaching annual production of 1 million by 2025, adding it would expand capacity at Kia to 432,000 from about 300,000. The combined capacity will grow to 1.5 million units. Earlier this year, Hyundai completed the acquisition of a former Chevrolet plant in western Maharashtra state as part of its push to get production to 1 million units. The announcements came during Hyundai Motor Group Executive Chair Euisun Chung's visit to India – his second in less than a year. Sign up here. https://www.reuters.com/business/autos-transportation/south-koreas-hyundai-kia-launch-first-india-made-evs-next-year-2024-04-25/

2024-04-25 06:57

Adjusted pretax profit $7.53 bln vs poll $7.2 bln European gas price halved in first quarter Trading division profit $887 mln vs expected $592 mln OSLO, April 25 (Reuters) - Equinor (EQNR.OL) New Tab, opens new tab posted a sharp fall in first-quarter profit on Thursday, hit by tumbling natural gas prices in Europe, though strong energy trading and rising output limited the decline. The Norwegian oil and gas producer's adjusted earnings before tax for January-March fell almost 37% to $7.53 billion but beat the $7.2 billion forecast in a poll New Tab, opens new tab of 22 analysts compiled by Equinor. "Production on the Norwegian continental shelf was high,and the international portfolio contributed with solid production growth," Equinor CEO Anders Opedal said in a statement. The company overtook Russia's Gazprom (GAZP.MM) New Tab, opens new tab as Europe's biggest supplier of natural gas in 2022 when Moscow's invasion of Ukraine upended decades-long energy ties. The Dutch TTF front-month gas contract , Europe's benchmark, averaged 27.51 euros per megawatt hour (MWh) in the first quarter, down from 52.73 euros/MWh a year earlier, reflecting a mild winter and well-filled storage sites. "Equinor's operating income beat the market consensus due to slightly higher output in the United States and strong results from both liquids and LNG trading," RBC analyst Biraj Borkhataria said in a note. Equinor pumped 2.16 million barrels of oil equivalent per day in the first quarter, in line with expectations in the analyst poll, and maintained a projection that this year's oil and gas output will remain flat against 2023. International oil and gas output rose by 3% from a year earlier, helped by last year's acquisition of Suncor Energy's British North Sea oil and gas assets and a 1% rise in domestic production. Equinor's Market, Midstream and Processing (MMP) division, which includes its trading business, posted a profit of $887 million, down from $1.3 billion a year ago but ahead of a poll forecast of $592 million. The MMP result exceeded Equinor's guidance range of between $400 million and $800 million, which the group said was thanks to strong results from liquids and LNG trading. Sign up here. https://www.reuters.com/business/energy/equinor-q1-profit-beats-forecast-2024-04-25/