2024-03-21 19:33

MILAN, March 21(Reuters) - Italy's biggest utility Enel (ENEI.MI) , opens new tab said on Thursday its net debt would fall further as a results of several disposals already signed or in the works, allowing the company to meet its guidance for 2024. The group is also confident it can increase its core profit this year in line with the guidance indicated in November and hinted at the possibility of raising its dividend. Presenting its results for last year, Enel said its net financial debt at the end of December stood at 60.2 billion euros from 60.7 billion euros at the end of 2022. The ratio between net debt and earnings before interest, taxes, depreciation and amortisation (EBITDA) fell to 2.7 last year from 3.1. Asset sales to be completed in the coming months are expected to reduce net debt by 6.3 billion euros and, together with cost discipline, bring the ratio with EBITDA down to the group's goal of 2.4, Enel Chief Financial Officer Stefano De Angelis said. Among deals awaiting final approval by all the relevant authorities is the $2.9 billion sale of Enel's equity stakes in two Peruvian assets to China Southern Power Grid International (CSGI). Enel Chief Executive Flavio Cattaneo said the completion of the transaction would likely come soon. "All the most relevant authorisations have been released... you will have not to wait for long for an announcement," Cattaneo said, speaking with analysts. CORE PROFIT RISES The CEO ruled out the payment of a special dividend linked to a recent sale of distribution assets in Italy, but said the group may raise its dividend already starting from 2024 results after paying 0.43 euros per share this year. Enel's core profit rose 12% last year, just beating analysts' expectations thanks to growth at its retail business in Italy where it benefited from higher power production from renewable sources and contracts based on increased prices. Ordinary earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at 22 billion euros ($23.9 billion) in 2023 compared with an estimate of 21.8 billion euros coming from analysts pooled by LSEG. Some analysts have expressed concerns that European utilities including Enel could suffer due to a fall in power prices in Europe compared with last year, which could give customers scope to switch to other suppliers. The Enel CFO said the group was not concerned about power price trends and was also putting in place measures to retain customers. ($1 = 0.9209 euros) The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. https://www.reuters.com/business/energy/enel-posts-12-rise-2023-core-profit-thanks-renewables-2024-03-21/

2024-03-21 19:20

Canadian dollar weakens 0.3% against greenback Trades in range of 1.3457 to 1.3541 Quantitative tightening likely over in 2025, BoC says Bond yields rise across the curve TORONTO, March 21 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Thursday as the Bank of Canada welcomed signs of cooler inflation and data showing continued strength in the U.S. economy helped the greenback notch broad-based gains. The loonie was trading 0.3% lower at 1.3535 to the U.S. dollar, or 73.88 U.S. cents, after trading in a range of 1.3457 to 1.3541. The currency was shedding some of the gains it posted on Wednesday when the release of the Federal Reserve's latest policy statement and updated economic projections briefly weighed on the greenback. "The U.S. dollar went down the staircase and then took the elevator back up," said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC. "Nearly every economic data (point) that was released today for the U.S. was stronger than expected." The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, while sales of previously owned homes increased by the most in a year in February, signs the economy remained on solid footing in the first quarter. Bank of Canada Deputy Governor Toni Gravelle said the central bank is likely to wrap up its quantitative tightening (QT) program in 2025, later than some analysts have expected, and that February's inflation figures were "very encouraging." Data on Tuesday showed Canadian inflation cooling to an annual rate of 2.8% last month, its slowest pace since June. The U.S. dollar (.DXY) , opens new tab rose against a basket of major currencies, while the price of oil , one of Canada's major exports, settled 0.25% lower at $81.07 a barrel on weaker U.S. gasoline demand data. Canadian government bond yields rose across the curve. The 10-year was up 2.9 basis points at 3.514%, after earlier touching a one-week low at 3.428%. Keep up with the latest medical breakthroughs and healthcare trends with the Reuters Health Rounds newsletter. Sign up here. https://www.reuters.com/markets/currencies/c-weakens-us-data-bolsters-greenback-2024-03-21/

2024-03-21 19:13

GENEVA, March 21 (Reuters) - The World Trade Organization is struggling to find an ambassador to lead negotiations on fixing its hobbled dispute system by the year-end, trade sources said, as the body's chief urged countries to keep striving for a deal. The commitment to continue such efforts in 2024 was one of the few concrete outcomes at the WTO Abu Dhabi meeting last month which has some minor successes but failed to strike major global agreements. The talks are aimed at agreeing reforms to the WTO's top appeals court, known as the Appellate Body, which has been idle since 2019 due to U.S. blockages of judge appointments. The lack of an Appellate Body has left dozens of trade disputes worth billions of dollars unresolved. But days before the Abu Dhabi meeting, the talks' previous facilitator Marco Molina from Guatemala who has been widely praised , opens new tab for developing a new interest-based negotiating method was dismissed by his government. The global trade watchdog had hoped to propose a replacement at its General Council meeting in Geneva on Thursday and Friday but three ambassadors declined, trade sources said. The countries included Botswana and Honduras, they said. Their Geneva delegations did not immediately respond to a comment request. "It's a lot of work and this is very difficult to land so it's fair enough they said no," said one WTO delegate, who is not authorised to speak publicly. Agreements at the global body are difficult to strike since all 166 of its members must agree. At the WTO meeting on Thursday which is the body's first major gathering since Abu Dhabi, some countries rued "abuse" of this consensus principle, referring to when just one country holds negotiations hostage by blocking a deal, sometimes in order to force progress on other topics. However, Director-General Ngozi Okonjo-Iweala struck an upbeat tone and urged countries to keep working on talks including dispute reforms and cutting fisheries subsidies. "We must regroup and reinvigorate how we engage in the coming weeks and months to complete the unfinished business as soon as possible," she said. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/world/wto-hits-road-block-over-advancing-dispute-reform-talks-2024-03-21/

2024-03-21 16:48

Weekly jobless claims drop 2,000 to 210,000 Continuing claims increase 4,000 to 1.807 million Business activity holds steady in March Existing home sales surge 9.5% in February WASHINGTON, March 21 (Reuters) - The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, while sales of previously owned homes increased by the most in a year in February, signs the economy remained on solid footing in the first quarter. That was underscored by other data on Thursday showing business activity stable in March, though inflation picked up. Even a gauge of future economic activity turned positive in February for the time in two years. The United States continues to outshine its global peers, thanks to labor market resilience. The Federal Reserve on Wednesday left interest rates unchanged, with policymakers upgrading their growth forecasts for this year and indicating they still expected to lower borrowing costs three times by year end. Economists said the upbeat economic reports made it more unlikely that the U.S. central bank would start cutting rates before June. "Companies are not laying off workers and the labor market remains relatively strong," said Christopher Rupkey, chief economist at FWDBONDS in New York. "And now there are signs of life for existing home sales. This makes easing monetary policy at this juncture more problematic." Initial claims for state unemployment benefits dropped 2,000 to a seasonally adjusted 210,000 for the week ended March 16, the Labor Department said. Economists polled by Reuters had forecast 215,000 claims in the latest week. Claims have been mostly bouncing around in a 200,000-213,000 range since February. Despite a flurry of high-profile layoffs at the start of the year, employers have largely been hoarding labor after struggling to find workers during and after the COVID-19 pandemic. Unadjusted claims decreased 12,730 to 189,992 last week. Applications in California plunged by 5,369, while filings in Oregon fell 2,580. They more than offset notable increases in Michigan and Missouri. Fed Chair Jerome Powell told reporters on Wednesday he did not see "cracks" in the labor market, which he described as "in good shape," noting that "the extreme imbalances that we saw in the early parts of the pandemic recovery have mostly been resolved." The U.S. central bank has raised its benchmark interest rate by 525 basis points to the current 5.25%-5.50% range since March 2022. The claims data covered the period during which the government surveyed business establishments for the nonfarm payrolls portion of March's employment report. Claims rose marginally between the February and March survey weeks. The economy added 275,000 jobs in February. Data next week on the number of people receiving benefits after an initial week of aid, a proxy for hiring, will offer more clues on the health of the labor market in March. The so-called continuing claims increased 4,000 to 1.807 million during the week ending March 9, the claims report on Thursday showed. "The labor market is gradually rebalancing, but the adjustment appears to be coming from less hiring rather than a surge in firings," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. "We expect job growth to slow somewhat but the unemployment rate to remain low this year." HOUSING SUPPLY IMPROVES Stocks on Wall Street were trading higher. The dollar was steady versus a basket of currencies. U.S. Treasury prices fell. In a separate report on Thursday, the National Association of Realtors said existing home sales jumped 9.5% last month to a seasonally adjusted annual rate of 4.38 million units, the highest level since February 2023. The monthly increase in sales was also the largest since February 2023. Economists had forecast home resales would fall to a rate of 3.94 million units. Sales were boosted by an improvement in housing supply, with inventory surging 5.9% to 1.07 million units, the highest for any February since 2020. Supply was up 10.3% from one year ago. Home resales, which account for a large portion of U.S. housing sales, fell 3.3% on a year-on-year basis in February. The housing market has been battered by the Fed's aggressive monetary policy stance as it fights inflation, and the signs of improvement in supply, together with retreating mortgage rates, bode well for the spring selling season. Nonetheless, housing inventory is still well below the nearly 2 million units before the pandemic. Homes in many areas, especially in the Northeast, continue to receive multiple offers, pushing out first-time buyers, who accounted for only 26% of transactions last month. That share is well below the 40% that economists and realtors say is needed for a robust housing market. A fifth of the homes sold last month were above listing price. Many homeowners have mortgages with rates below 4%, discouraging them from selling their houses, contributing to the supply crunch and higher home prices. The median existing home price increased 5.7% from a year earlier to $384,500 in February. Home prices increased in all four regions, and could remain elevated with supply still likely to lag demand. "If broader activity remains strong, a further normalization of home sales and new listings could be an indication that homebuyers are adapting to a higher level of rates," said Veronica Clark, an economist at Citigroup in New York. The increase in sales means more brokers' commissions, which should boost the residential investment component in the gross domestic product report. Goldman Sachs raised its first-quarter GDP growth estimate to a 1.9% annualized rate from a 1.7% pace. The economy grew at a 3.2% rate in the fourth quarter. The economy's improving prospects for this year were reflected in a fourth report from the Conference Board showing its leading economic index rebounded 0.1% in February after declining 0.4% in January. That was the first increase since February 2022. "The economy is poised to continue in expansion mode," said Priscilla Thiagamoorthy, a senior economist a BMO Capital Markets in Toronto. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/us/us-weekly-jobless-claims-unexpectedly-fall-2024-03-21/

2024-03-21 15:43

March 21 (Reuters) - The Conference Board said on Thursday its Leading Economic Index for the United States rose last month for the first time in two years on the strength of hours worked at U.S. factories and the surging stock market, among other factors, but the gauge of future activity still signals some headwinds to growth remain. The business research group's index rose 0.1% in February to 102.8, exceeding estimates in a Reuters poll of economists for a decline of 0.2%. It was the first increase in the index since February 2022 and comes a month after the organization abandoned its prediction that the economy would fall into a recession. Justyna Zabinska-La Monica, senior manager for Business Cycle Indicators, said the Conference Board's credit gauge and residential construction also helped drive the index higher, but measures of consumer expectations and new orders for U.S. manufacturers have yet to recover. "Despite February's increase, the Index still suggests some headwinds to growth going forward," she said. "The Conference Board expects annualized US (gross domestic product) growth to slow over the Q2 to Q3 2024 period, as rising consumer debt and elevated interest rates weigh on consumer spending." An Atlanta Fed model tracking U.S. economic growth currently sees first-quarter output rising at a 2.1% annualized rate, down from 3.2% in the fourth quarter of 2023, but still above the 1.8% rate that Fed policymakers see as the economy's long-term potential. Fed officials, in fact, on Wednesday raised their estimates for GDP growth this year to 2.1% from 1.4% as projected in December. Growth estimates for the next two years were also revised higher. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/us/conference-boards-leading-indicators-index-rises-first-time-2-years-2024-03-21/

2024-03-21 15:32

NEW YORK, March 21 (Reuters) - A key bond market signal of an upcoming recession has flashed red continuously for the longest time ever, even if the U.S. economy is far from showing signs of a growth contraction. The part of the Treasury yield curve that plots two-year and 10-year yields has been continuously inverted - meaning that short-term bonds yield more than longer ones - since early July 2022. That exceeds a record 624 day inversion in 1978, Deutsche Bank said in a note on Thursday. A 2/10 curve inversion is a time-honored signal of an upcoming recession. Short-term bonds yield more than longer maturities because investors expect interest rates to remain high in the short term as the Federal Reserve battles inflation, while long yields are lower on expectations the central bank will cut interest rates to stimulate a weakening economy. An inverted yield curve is also by itself typically bad for economic activity and financial markets because higher short-term yields lift borrowing costs on consumer and commercial loans, while lower compensation for long-term lending discourages risk-taking. This time around, however, even if the curve remains deeply inverted after a sharp increase in interest rates, a recession has not materialized and the U.S. economy continues to surprise on the upside. This week the Fed kept its outlook unchanged for three interest rate cuts this year, as it expects inflation to decline despite still strong economic activity. This is partly because of high consumer savings as the economy exited the Covid-19 pandemic, which provided a buffer against rising borrowing costs, Jim Reid at Deutsche Bank wrote in the note. Also, the Fed managed to contain last year's banking turmoil - which was a result of changes in the shape of the yield curve - by offering emergency liquidity measures. "So far so good," said Reid. "However, an inverted yield curve should ultimately be a significant headwind for an economy, as capitalism works best when there is a positive return for taking more risk with lending and investments further out the curve," he said. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/markets/rates-bonds/us-treasury-key-yield-curve-inversion-becomes-longest-record-2024-03-21/