2024-03-12 09:41
LONDON, March 12 (Reuters) - The chance of a UK interest rate cut in the next few months is "severely underpriced", investment bank Morgan Stanley said on Tuesday, after UK jobs market data showed wages growing at their slowest rate since 2022. "The chances of a 2Q rate cut look severely underpriced to us," Morgan Stanley said in a research note, adding that the UK labour market no longer looked "tight". "Our base case remains a May start to the cutting cycle, but we look for firmer BoE guidance next week. In the absence of that, the start of the cutting cycle could slip towards August. We look for 100 basis points of cuts this year," the bank said. https://www.reuters.com/markets/europe/chances-q2-uk-rate-cut-severely-underpriced-morgan-stanley-says-2024-03-12/
2024-03-12 07:14
BERLIN, March 11 (Reuters) - German inflation eased in February to 2.7%, the federal statistics office said on Tuesday, confirming preliminary data. German consumer prices, harmonised to compare with other European Union countries, had risen by 3.1% year-on-year in January. The statistics office gives more detailed monthly data , opens new tab on its website. https://www.reuters.com/markets/europe/german-inflation-eases-27-february-2024-03-12/
2024-03-12 06:58
NEW YORK, March 12 (Reuters) - A gauge of global stocks was set to snap a two-session fall on Tuesday, rising along with Treasury yields after data showed U.S. inflation remained sticky in February, indicating the Federal Reserve could keep interest rates higher for longer than is currently expected. The consumer price index (CPI) rose 0.4% last month amid higher costs for gasoline and shelter, the Labor Department said, matching the estimate of economists polled by Reuters, after climbing 0.3% in January. In the 12 months through February, the CPI increased by 3.2%, just above the 3.1% estimate, after advancing 3.1% through January. On Wall Street, the S&P 500 registered another record high, buoyed in part by a surge in Oracle (ORCL.N) , opens new tab shares. The Dow Jones Industrial Average (.DJI) , opens new tab rose 235.83 points, or 0.61%, to 39,005.49, the S&P 500 (.SPX) , opens new tab gained 57.33 points, or 1.12%, to 5,175.27 and the Nasdaq Composite (.IXIC) , opens new tab increased 246.36 points, or 1.54%, to 16,265.64. U.S. Treasury yields also advanced after the data, with the yield on benchmark U.S. 10-year notes up 4.9 basis points to 4.153% after reaching a session high of 4.172% following a soft auction of $39 billion by the Treasury. "The hotter inflation is an indication that the consumer is doing well, that there's pricing power in this economy that companies are taking advantage of, and the other data tells us that it's not hurting somewhat," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle. "However, the bond market has to factor in what is the Fed's reaction function going to be to a somewhat more robust economy. And that's higher for longer and that's where you have to have rates come up kind of across the board." The 2-year note yield, which typically moves in step with interest rate expectations, rose 5.9 basis points to 4.5925%. Market expectations for the timing of the Fed's first rate cut remained largely unchanged, pricing in a 69.8% chance of a cut of at least 25 basis points in June, according to CME's FedWatch Tool , opens new tab, down from 71.7% in the prior session. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab rose 7.08 points, or 0.92%, to 775.85 following two straight declines. In Europe, the STOXX 600 (.STOXX) , opens new tab index closed up 1% at a record, while the broad FTSEurofirst 300 index (.FTEU3) , opens new tab rose 19.77 points, or 0.99% The dollar also strengthened after the data. The dollar index gained 0.17% at 102.96, with the euro down 0.06% at $1.0919. The Japanese yen weakened further against the greenback and was last off 0.5% against the greenback at 147.67 per dollar. The yen had earlier softened against the dollar before the US inflation data after Bank of Japan Governor Kazuo Ueda gave a slightly bleaker assessment of the country's economy than he had in January, dampening hopes the central bank might abandon its negative rate policy when it meets this month. Sterling was down 0.16% at $1.279 after data showed UK wage growth cooled slightly more than expected last month, putting a bit more pressure on the Bank of England to cut rates sooner rather than later. In commodities, U.S. crude settled down 0.47% to $77.56 a barrel and Brent settled down 0.35% to $81.92 per barrel, as the market weighed the inflation data and a higher-than-expected forecast for U.S. crude oil production. 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/global-markets-wrapup-1-2024-03-12/
2024-03-12 06:58
U.S. core CPI rises 0.4% in February, higher than expected Fed funds futures slightly trim rate cut expectations for June Yen falls after BOJ gives bleak assessment of economy NEW YORK, March 12 (Reuters) - The U.S. dollar rose in choppy trading on Tuesday, after data showed hotter-than-expected inflation last month for the world's largest economy, slightly paring back expectations of an interest rate cut by the Federal Reserve at its June policy meeting. It was a volatile session, with the U.S. dollar initially jumping after the data, then falling and eventually rising after the market digested the report. The dollar index was last up 0.2% at 102.95 . The Labor Department report showed that the Consumer Price Index (CPI) rose 0.4% in February, in line with the forecast for a 0.4% increase. On a year-on-year basis, the CPI gained 3.2%, compared with the estimated 3.1% rise. Excluding volatile food and energy components, the core figure rose 0.4% month-on-month in February, compared with an estimated 0.3% rise. Annually, it gained 3.8%, compared with the forecast of a 3.7% increase. "The CPI wasn't a significant surprise, but it's firmer than expected. While some of the details of the report were encouraging, it still suggests that we're not quite at the point that the Fed should be comfortable cutting rates," said Vassili Serebriakov, FX strategist at UBS in New York. "It probably keeps the debate alive about the June cut, but probably more immediately this plays into what the Fed will be projecting in terms of the dot plot at the next meeting. We'll probably be discussing the possibility that there may be less than three cuts." U.S. rate futures have priced in a 69% chance of a rate cut at the June policy meeting, according to the LSEG's rate probability app. That was at roughly 71% late on Monday. The market has also factored in two more cuts of 25 basis points each for the year, taking down the fed funds rate to 4.49% by the end of 2024. Next on the agenda for currency investors would be U.S. retail sales, an indication of consumer spending which has been resilient so far, and producer prices. Against the yen, the dollar was up 0.5% at 147.66 . The yen fell after Bank of Japan Governor Kazuo Ueda offered a slightly bleaker assessment of the country's economy than he had in January, while Finance Minister Shunichi Suzuki said Japan was not at a stage where it could declare deflation as beaten. Their remarks come ahead of the BOJ's policy meeting next week. Japan's largest trade union confederation, Rengo, has demanded pay rises of 5.85% this year, topping 5% for the first time in 30 years. One-week implied volatility on dollar/yen , which measures expectations for price swings in the currency pair, jumped to 12.115% on Tuesday, its highest level since December, and was last at 10.877. Elsewhere, the euro was flat at $1.0925, after hitting a roughly two-month high last week. Analysts expect the European Central Bank to communicate on Wednesday the outcome of discussions on the Eurosystem’s operational framework review. Money markets fully price in a first ECB rate cut by June and a total of 100 basis points of easing by year-end. In cryptocurrencies, bitcoin was down 1.3% to $71,197, but remained just a whisker away from a record high set in the previous session. Ether peaked at $4,093.70, its highest since 2021, though later pared some of those gains to stand at $3,971.50, down 1.5%. (This story has been refiled to fix a typo in the analyst quote and to remove the extraneous article 'a' in paragraph 5) 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-guard-boj-speculation-keeps-yen-supported-2024-03-12/
2024-03-12 06:23
March 12 (Reuters) - It will take some time until production at Tesla's (TSLA.O) , opens new tab German gigafactory near Berlin will fully resume, plant head Andre Thierig said late on Monday. "It will certainly take some time until we have fully resumed production, but the most important step has been taken," Thierig said. On Monday the power firm in charge of fixing a week-long outage said the factory had been reconnected to the electricity grid. https://www.reuters.com/business/autos-transportation/tesla-says-it-will-take-some-time-production-german-factory-fully-resume-2024-03-12/
2024-03-12 06:12
Pension fund HESTA proposes new candidates to Woodside Woodside eyeing 15% reduction in scope 1 and 2 emissions by 2025 March 12 (Reuters) - HESTA, one of Australia's largest pension funds, has urged the country's largest oil and gas firm Woodside Energy (WDS.AX) , opens new tab to consider appointing new directors who are equipped to manage climate-related challenges, it said on Tuesday. The fund pushed the energy giant's board to undertake its own due diligence of HESTA's listed and other potential director candidates with similar skills, through its existing internal processes. HESTA, which owns 0.8% stake in Woodside as of March 8, said ongoing strong governance, culture and capabilities are required for the company to support the energy transition. "As part of this engagement, we shared with Woodside for their consideration, independent and highly credentialed potential director candidates, whose new energy and business transformation skills we believe would add to the board’s current capabilities," HESTA said in a statement. Woodside has been facing opposition from environmental groups and activist investors over their climate goals and massive investment into growth projects. "We have engaged extensively and listened carefully to feedback from our shareholders, who have asked for more detailed information about our climate action plans and the role of gas in a lower carbon world," Woodside CEO Meg O'Neill said at an investor briefing on Tuesday. HESTA, that manages assets worth about A$81 billion (about $54 billion), said it believes Woodside should prioritise adding new energy and business transformation skills to its board. Woodside, one of Australia’s largest carbon , opens new tab emitters, is targeting a 15% reduction to its net equity scope 1 and 2 greenhouse gas emissions by 2025, and is planning new measures to curb scope 3 pollution. The move by HESTA is a latest sign of pension funds trying to flex their muscles to influence board-level decisions at companies and comes months after AustralianSuper, the country's largest pension fund, blocked Brookfield's take-private bid for Origin Energy (ORG.AX) , opens new tab. ($1 = 1.5129 Australian dollars) https://www.reuters.com/sustainability/boards-policy-regulation/woodside-investor-hesta-calls-appointment-climate-skilled-directors-2024-03-12/
