2024-03-21 04:54

HONG KONG, March 21 (Reuters) - The Hong Kong Monetary Authority (HKMA) left its base rate charged through the overnight discount window unchanged at 5.75% on Thursday, tracking a move by the U.S. Federal Reserve to keep rates steady. Fed Chair Jerome Powell said on Wednesday recent high inflation readings had not changed the underlying "story" of slowly easing price pressures in the U.S. as the central bank stayed on track for three interest rate cuts this year and affirmed that solid economic growth will continue. HKMA said the Fed might cut rates three times for a total of 75 basis points this year, but the actual timing and the interest rate path thereafter remain uncertain and the high interest rate environment may last for some time. "The financial and monetary markets of Hong Kong continue to operate in a smooth and orderly manner," HKMA said , opens new tab in a statement. "The Hong Kong dollar exchange rate remains stable, and the Hong Kong dollar interbank rates might remain high for some time," HKMA said, adding the public should manage the relevant risks when making property purchase, mortgage or other borrowing decisions. HSBC Holdings said its best lending rate in Hong Kong remains unchanged at 5.875%. Hong Kong's monetary policy moves in lock-step with the United States as the city's currency is pegged to the greenback in a tight range of 7.75-7.85 per dollar. Get a look at the day ahead in Asian and global markets with the Morning Bid Asia newsletter. Sign up here. https://www.reuters.com/markets/asia/hong-kong-central-bank-keeps-key-rate-unchanged-tracking-fed-move-2024-03-21/

2024-03-21 04:40

MUMBAI, March 21 (Reuters) - The Indian rupee rose on Thursday, tracking its Asian peers after the U.S. Federal Reserve kept its rate projections for 2024 unchanged, prompting investors to raise bets on the possibility of the first rate cut coming in June. The rupee was at 83.1175 against the U.S. dollar as of 10:05 a.m. IST, higher by 0.05% from its close of 83.1575 in the previous session. The currency had dropped to a two-month low on Wednesday due to dollar demand from importers, including local oil companies. The dollar index was little changed at 103.2, after dropping 0.5% on Wednesday. Most Asian currencies rose on Thursday, led by the Korean won's 1.1% jump. The Fed's fresh dot plot indicated policymakers expect three rate cuts this year, unchanged from their forecast in December. That lifted the odds of rate cuts starting in June to nearly 75% from about 59% a day earlier, according to CME's FedWatch tool. U.S. bond yields fell after the Fed's decision, with the 2-year yield last quoted at 4.58% in Asia trading, down 12 basis points from its close on Tuesday. The 10-year yield also edged lower and was last quoted at 4.25%. "Soft US yields are likely to lift the rupee ... but corporate dollar outflows before the financial year-end may exert downward pressure," said Arnob Biswas, head of foreign exchange research at SMC Global Securities. Meanwhile, dollar-rupee forward premiums rose with the 1-year implied yield up 3 basis points at 1.64%, aided by the higher odds of a Fed rate cut in June. The bias on both the rupee and forward premiums is tilted higher for the day, a foreign exchange trader at a state-run bank said. But the key is if local dollar demand continues to curb the rupee's gains, the trader added. 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/rupee-tracks-asian-peers-gains-higher-june-fed-rate-cut-bets-forward-premiums-2024-03-21/

2024-03-21 04:39

US business activity for March held steady, prices up German economy likely in recession in Q1 -Bundesbank UK economy moving in right direction for cuts -BoE March 21 (Reuters) - Oil prices settled slightly lower on Thursday, pressured by weaker U.S. gasoline demand data and reports of a United Nations draft resolution calling for a ceasefire in Gaza. Brent crude futures for May settled down 17 cents, or 0.2%, to $85.78 a barrel, while U.S. West Texas Intermediate futures for May settled own 20 cents, or 0.3%, to $81.07 a barrel after a fall of about 1.8% in the previous session. Crude inventories in the United States, the world's biggest oil consumer, unexpectedly declined last week, the U.S. Energy Information Administration (EIA) reported on Wednesday. Though gasoline inventories fell for a seventh week, down 3.3 million barrels to 230.8 million, gasoline product supplied, a proxy for product demand, slipped below 9 million barrels. The fall suggested that gasoline markets, which had underpinned a recent market rally, may have been overbought, according to Bob Yawger, director of energy futures at Mizuho. Oil prices also were pressured by confirmation that the U.S. drafted a U.N. resolution calling for a ceasefire that would allow the release of 40 Israeli hostages in return for hundreds of Palestinians detained in Israeli jails, Yawger added. Investors also took heart from the U.S. central bank, which held interest rates in a range of 5.25% to 5.50% on Wednesday, but kept to an outlook for three rate cuts this year. Lower rates could boost economic growth, in good news for oil sales. U.S. business activity held steady in March, but prices increased across the board, suggesting that inflation could remain elevated after picking up at the start of the year. Supporting prices, U.S. Labor Department data on Thursday showed the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting that job growth remained strong in March. Ukrainian attacks on Russian refineries also prompted investors to trade crude at higher prices, factoring in that the strikes could hit global petroleum supplies. Ukrainian drones have targeted at least seven Russian refineries this month. The attacks have shut down 7%, or around 370,500 barrels per day, of Russian refining capacity, according to Reuters calculations. Analysts say prolonged disruptions could force Russian producers to reduce supply if they are unable to export crude oil and face storage constraints. Elsewhere, Germany's economy was likely in recession in the first quarter of 2024 as weak consumption and anaemic industrial demand continue to push the recovery further into the future, the central bank said in a regular economic report on Thursday. Also on Thursday, the Bank of England's governor said Britain's economy is "moving in the right direction" for the central bank to start cutting interest rates. 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/oil-rebounds-us-crude-gasoline-stockpile-drops-provide-some-support-2024-03-21/

2024-03-21 03:35

Spot Asia LNG prices have eased by a quarter since start of year Increasing spot purchases to lift Asia LNG demand - analyst China, India could see annual imports rise by 10% - analysts SINGAPORE, March 21 (Reuters) - Price-sensitive liquefied natural gas buyers from China, India and parts of Southeast Asia are snapping up more spot shipments of the fuel to power industries and generate electricity after prices have fallen to the lowest level in nearly three years. The price-led demand revival could push LNG imports by the world's top buyer China beyond its record volume of 78.8 million metric tons in 2021 and also raise India's imports by about 10% this year, analysts said, tightening global supplies and ultimately lifting prices. Spot LNG imports by Asian buyers increased by nearly a third in the first quarter of the year to 161 cargoes, according to data from S&P Global Commodity Insights, when spot Asian prices averaged $9.82 per million British thermal units (mmBtu). This is up from 125 in the same period of 2023, when prices averaged $18.75/mmBtu. Thailand's Gulf Energy Development (GULF.BK) , opens new tab said it received its first-ever LNG cargo in February, while industry sources said Hong Kong-listed China Resources Gas (1193.HK) , opens new tab will receive its first shipment in March. PetroVietnam Gas (GAS.HM) , opens new tab had also sought two spot shipments to be delivered from April, nine months after taking Vietnam's first LNG cargo. "We've seen some buy tenders coming in more frequently given lower Asian LNG prices, especially from price-sensitive buyers like India, Vietnam and China," said Ryhana Rasidi, LNG analyst at data analytics firm Kpler. "For this year, we believe that the increasing spot demand will contribute to raising overall Asian LNG demand." China Resources Gas and PetroVietnam Gas did not respond to requests for comment. Global gas markets have more supply after weaker-than-expected demand due to a mild winter and high stockpiles in the U.S., Europe and Japan. Asian LNG prices were at $8.30/mmBtu earlier this month, the lowest levels since April 2021, before seeing a slight boost to $8.60/mmBtu due to the spot buying. That is still far below the record $70/mmBtu hit in August 2022 following Russia's invasion of Ukraine that led some price-sensitive Asian buyers to switch to other fuels like oil and liquefied petroleum gas. COMPETITIVE PRICES Pallavi Jain Govil, a senior official at India's energy ministry, said Asian spot LNG prices of $11/mmBtu and below were competitive. "We are committed to doubling gas in our power mix in the next six years so we plan to import more LNG," she told Reuters this week on the sidelines of the CERAweek energy conference in Houston. India's LNG imports could rise by about 2 million to 3 million tons this year to 24 million to 25 million tons, analysts said, with the increase by Asia's fourth-biggest buyer driven mostly by spot purchases. LNG was traditionally sold through long-term contracts but the spot market has become more active, accounting for about 35% of global trade by 2022, up from 5% in 2000, according to the latest data from trade association International Group of Liquefied Natural Gas Importers. For some importers, the Asian spot price for April delivery had been lower than their oil-linked long-term contract prices, which range from $10-12/mmBtu, a Rystad Energy report said. In China, ICIS forecasts Chinese spot LNG purchases at 17 million tons in 2024, a 1 million to 2 million ton increase from last year when Asian spot prices averaged at $17.68/mmBtu. Increased LNG imports in China and India are not expected to significantly dent coal demand, as overall power demand continues to grow and both countries continue to prioritise domestically produced fuel, including coal. "In China, demand will mainly come from industrial and commercial users," said Alex Siow, lead Asia gas and LNG analyst at pricing agency ICIS. "If those players are unrestrained by price, they will buy gas." 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/lower-lng-prices-trigger-surge-asian-spot-market-purchases-2024-03-21/

2024-03-21 02:21

Reliance won't take SCF oil shipments since US sanctions imposed More Indian refiners plan to shun use of SCF ships for imports NEW DELHI/MOSCOW, March 20 (Reuters) - (This content was partly produced in Russia where the law restricts coverage of Russian military operations in Ukraine) India's Reliance Industries (RELI.NS) , opens new tab, operator of the world's biggest refining complex, will not buy Russian oil loaded on tankers operated by shipper Sovcomflot (SCF) after recent U.S. sanctions, according to two sources familiar with the matter. The development adds to oil export problems for Russia as its oil firms may face difficulties finding ships to sell surplus oil after recent Ukrainian drone attacks on the state's refineries. Russian companies are already struggling to collect payments for oil exports due to banking restrictions. The U.S. has imposed wide-ranging sanctions on Russia since its invasion of Ukraine two years ago. In February, the U.S. imposed sanctions on Sovcomflot and 14 crude oil tankers involved in Russian oil transportation. Reliance, a large buyer of Russian Urals oil, has requested that the new supplies not be shipped by Sovcomflot-operated tankers, according to the sources, who declined to be named due to the sensitivity of the matter. Sovcomflot and Reliance representatives didn't respond to Reuters' requests for comment. Meanwhile, more Indian refiners plan to shun the use of Sovcomflot vessels, which may weigh on India's import of Russian oil and leave Russia with fewer outlets to place its flagship product, three sources in India's government and refining sector said. Indian refiners, seeking to avoid any backlash from Washington, are being "extra cautious" due to tighter scrutiny of Russian oil deals by banks and U.S. authorities. The refiners want to prevent the involvement of entities that are directly or indirectly sanctioned, the sources said. "Our preference is that refiners should not take oil in sanctioned vessels, because of our political and commercial interests and the U.S. sanctions," one of the sources in India's government said. The source added that the government would decide on the entry of the sanctioned vessels or Sovcomflot ships to Indian ports. India oil and shipping ministries did not respond to Reuters request for comments. Since October last year, the United States has imposed a raft of sanctions on entities, shippers, traders, and vessels for violating a price cap on Russian oil. One of the refining sources said that India's crude imports from Russian may decline as the number of vessels would be reduced and that could jack up freight costs. "SCF actively offer their vessels, but traders are wary of fixing any as buyers and even ports may reject the cargo", one trader in the Russian oil market said, adding that more Sovcomflot vessels were committed for voyages to China now. 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/commodities/indias-reliance-refusing-sovcomflot-oil-shipments-after-sanctions-sources-say-2024-03-20/

2024-03-21 00:58

NEW YORK/LONDON, March 21 (Reuters) - The dollar rose on Thursday after the Swiss National Bank's surprise interest rate cut bolstered global risk sentiment and underscored the appeal of the greenback amid strong U.S. economic growth. Sterling slid after the Bank of England (BoE) kept its benchmark interest rate on hold as expected. But after the Federal Reserve projected a less restrictive policy stance than expected on Wednesday, risk assets worldwide soared, as did the outlook for investment flows to the U.S. The SNB's loosening of monetary policy suggests inflation is under control and other central banks will soon make their policies more accommodative, which has boosted the dollar, said Karl Schamotta, chief market strategist at Corpay in Toronto. "The U.S. does remain the only game in town in global markets offering higher yields, in nominal and real terms, than any of the other major economic blocks," he said. "The flow of currency into the United States remains essentially unstoppable at this point given the optimism around where the U.S. economy is headed." The dollar index , a measure of the U.S. currency against six major trading partners, rose 0.75% . The euro fell 0.51% to $ 1.0862 . Fed Chair Jerome Powell said on Wednesday recent high inflation readings had not changed the overall story of slowly easing U.S. price pressures. Fed policymakers now expect the U.S. economy to grow 2.1% in 2024, above what's considered its long-run potential and a substantial upgrade from the 1.4% growth seen in December. "The big question from here for the dollar will be does the pace of inflation that we saw in January and February sustain or does it start to slow down?" said Brian Daingerfield, head of G10 FX strategy at NatWest Markets in Stamford, Connecticut. "There wasn't any clear step in the dovish direction like you could argue was shown from the Bank of England today and was obviously delivered by the Swiss National Bank," he said. The differential in U.S. interest rates and those of other major economies also helped the dollar. The yield on benchmark 10-year Treasury notes rose 0.4 basis points to 4.273%. The BoE's interest rate setters voted 8-1 to keep borrowing costs at a 16-year high of 5.25% as two officials who had previously called for higher rates changed their stance. Governor Andrew Bailey said there had been "further encouraging signs that inflation is coming down" but he also said the BoE needed more certainty that price pressures in the economy were fully under control. Sterling was last 0.99% lower at $1.266. The BoE's decision came a day after data showed inflation fell to its lowest level in almost two-and-a-half years - even if it remains higher than the bank wants. The Swiss franc fell sharply against the dollar and sank to its weakest point since July 2023 against the euro, after the SNB unexpectedly cut rates. The euro climbed against the Swiss franc to 0.979, on track to its biggest single day since March 2023. It was last up 0.70% to 0.9753. The dollar rose 1.26% against the Swiss franc to 0.8981 as the Swiss currency hit its lowest since November. The SNB cut its main interest rate by 25 basis points to 1.50%, making it the first major central bank to dial back tighter monetary policy aimed at tackling inflation. The rate cut was the Swiss central bank's first in nine years. A majority of analysts polled by Reuters had expected the SNB to keep rates on hold. The yen steadied against a strengthening dollar as it drew some support from expectations of further rate hikes from the Bank of Japan later this year and some jaw-boning efforts from Japanese government officials. The dollar was last 0.28% higher against the yen at 151.655, after the Japanese currency rallied in Asian trading and reversed some of its heavy losses in the wake of this week's BOJ policy shift. 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/dollar-slips-fed-stays-course-aussie-jumps-jobs-data-2024-03-21/