2024-02-20 06:09

Feb 20 (Reuters) - Bitcoin is riding high. The world's largest cryptocurrency has leapt 22% this year to $52,005, pushing it past a market value of $1 trillion mark for the first time since its record heyday of late 2021. Its resurgence has electrified the broader cryptocurrency market, including ether and other digital coins, which has now exceeded $2 trillion, as per data from CoinGecko. The sector has been bolstered by the U.S. regulatory approval of several spot bitcoin exchange-traded funds (ETFs), from BlackRock and Fidelity among others, which allow access to the crypto coin vis regular stock exchanges. The U.S. spot ETFs added 60,000 bitcoin in the first month of their launch, more than twice the miner production in the same period, brokerage Bernstein said. "The amount of flows far outstrips anyone's expectation," said Mark Connors, head of research at Canada's 3iQ Corp. Crypto trading volumes are also robust. Total spot trading volumes on centralized exchanges rose 4.4% to $1.4 trillion in January, recording the fourth consecutive monthly increase and the highest reading since June 2022, a report by London-based researcher CCData said. The resurgence of interest helped the largest listed crypto exchange Coinbase Global (COIN.O) , opens new tab post its first quarterly profit in two years last week . "The bitcoin appreciation is contributing to better spot bitcoin ETF flows, which is in turn driving bitcoin prices higher, and pulling other tokens higher as well," J.P.Morgan analysts said. $150,000 BITCOIN IN 2025? Many industry watchers say the outlook is looking bright at the moment, with investors buying bitcoin ahead of the blockchain's "halving" - a preplanned process that reduces mining rewards in half every four years - due in April. Gautam Chhugani, analyst at Bernstein, expects 2024 to be a break-out year for cryptocurrencies where bitcoin hits all-time highs followed by a peak of $150,000 by mid-2025. "This optimistic outlook is bolstered by the expectation of an upcoming halving event and the possibility of interest-rate reductions," CCData analysts said. While bitcoin remain 32% away from its record high of $69,000, it notched an all-time high against the Japanese yen at 7,919,000 yen last week. BEWARE GREEDY CORRECTION It's not all crypto high-fives: There are some signs the market is being led by investors driven by FOMO. CoinGlass' Crypto Fear & Greed Index, a scale of 0 to 100 where zero denotes "extreme fear" and 100 signals "extreme greed", hovered at 72. Usually when investors get too greedy, it signals the market is due for a correction. Riskier assets such as bitcoin could be threatened by persistently high interest rates; traders' have pushed back bets of a rate cut to June from March following a string of strong U.S. economic data. "While we remain bullish with liquidity rushing back into risk assets, inflation being sticky over 3% remains a downside risk and would also mean increased volatility across markets," analysts at crypto trading firm QCP Markets said. https://www.reuters.com/technology/cryptoverse-breezy-bitcoin-reclaims-1-trillion-crown-2024-02-20/

2024-02-20 06:06

MELBOURNE, Feb 20 (Reuters Breakingviews) - BHP (BHP.AX) , opens new tab boss Mike Henry has a simple point to make about nickel. On Tuesday, he was at pains to stress that mining and processing the metal is "far and away the smallest business" in the $153 billion company. That's true. But it also helped wipe out 86% , opens new tab of the excavator's earnings for the six months to the end of December. The near-50% drop over the past year in the price of one of the key ingredients for electric-vehicle batteries sent EBITDA at BHP's Western Australia Nickel unit almost $200 million into the red. It was not a big money-spinner to begin with, contributing just $100 million of BHP's $13.2 billion of EBITDA in the second half of 2022. Yet revenue and earnings are not the only metrics that count. The nickel market rout prompted the company to lop $2.5 billion after tax off the value it ascribes to the division. Another $3.2 billion came off the bottom line to bolster provisions to cover legal and other costs stemming from the tailings dam disaster nine years ago at its Samarco mine, jointly owned with Vale (VALE3.SA) , opens new tab. Earnings would have looked even worse were it not for the surprisingly robust iron ore price in the second half of the year. That helped EBITDA grow 5% compared with the latter half of 2022 and allowed Henry and his fellow board members to pay out 56% of underlying earnings in dividends, lower than the previous two six-month periods but a tad more than analysts were expecting. The charges, though, are a reminder to shareholders that the industry's fortunes aren't limited to, say, Chinese demand. Boom-and-bust commodity cycles and environmental costs remain outsized hazards. Follow @AntonyMCurrie , opens new tab on X CONTEXT NEWS BHP on Feb. 20 reported earnings for the six months to Dec. 31 of $927 million, 86% lower than the same period in 2022. Results included a $5.6 billion after-tax loss, announced on Feb. 15, from writing down by some $2.5 billion the carrying value of its Western Australia Nickel business and adding $3.2 billion to its provisions for claims stemming from the 2015 Samarco tailings dam in Brazil. Excluding these, the firm's underlying net income was $6.6 billion, 2% higher than the same period last year. Revenue grew 5% and underlying EBITDA increased 5%. BHP is paying a dividend of 72 cents a share for the period, equating to 56% of underlying net income. https://www.reuters.com/breakingviews/miner-bhp-brings-tail-risks-up-surface-2024-02-20/

2024-02-20 06:02

SEJONG, Feb 20 (Reuters) - South Korea hopes its push to reform currency trading will drive a large share of trading volumes from the non-deliverable forwards market to its spot currency market, a senior government official said on Tuesday. The remarks made in an interview reflect the latest official thinking after historic market reforms kicked off this year to court foreign investors and get on global indexes, with steps such as longer trading hours and wider foreign participation. "There is hedging demand but also those who just want to buy the won, they are forced to go to the NDF market," Shin Joong-beom, director general of the finance ministry's International Finance Bureau, told Reuters, referring to forex transactions. "We hope to move a big chunk of the NDF (to the spot deliverable market)." Foreign investors rely on the derivatives market known as the non-deliverable forwards to trade the won and manage their exposure to the currency offshore. The onshore market now trades from 9 a.m. to 3:30 p.m. But from July, South Korea will extend trading hours to run from 9 a.m. to 2 a.m., covering London business hours. The move will allow a broader range of global investors to participate in the interbank FX market. Starting this year, the government also began allowing some foreign financial institutions to participate directly in the local interbank currency market. About 20 foreign firms have applied to participate in South Korea's local interbank, said Shin, among them SSBT London, SSBT Hong Kong, HSBC Singapore, CA Paris, MUFG Tokyo and SC London. "Being able to provide the dollar/won spot exchange rate during the London fixing time is one of the very important factors for global fund investors who follow MSCI or WGBI," Shin said, as the value of global funds is assessed daily. The reforms will positively affect South Korea's efforts to get its stocks and bonds accepted into benchmark developed market indexes, Shin added, which could draw inflows of billions of dollars into Asia's fourth largest economy. South Korea has a long-standing bid to join the FTSE World Government Bond Index, and the league of developed market countries at MSCI. Shin's team was in talks with securities settlement house Euroclear, aiming to boost foreign investors' access to the won currency, he added. The Brussels-based settlement house, which completes transactions in stocks and bonds across Europe, said in August last year it would open an omnibus account for South Korean treasury bonds. "We're of course in talks with them to address any inconveniences faced by foreign investors," Shin said. "If there are, we would positively review to address them." https://www.reuters.com/markets/currencies/south-korea-talks-with-euroclear-boost-won-accessibility-fx-official-says-2024-02-20/

2024-02-20 05:44

LONDON, Feb 20 (Reuters) - The pound is playing catch-up with the dollar as investors beef up their bullish positions, and may get extra oomph from data this week showing British business activity is among the strongest in the developed world. Monthly surveys of business activity this week are expected to show the UK topped the league table in February, well ahead of the euro zone and beating even the United States, which in the last year has been one of the few major countries not to have shown a dip into contraction. This so-called "U.S. exceptionalism" has kept the dollar buoyant and investor confidence in a soft landing for the U.S. economy running high. Economists polled by Reuters expect an index of British business activity to have risen to 52.7 in early February, led by a surge in service-sector activity to its fastest pace since last May. Sterling is down just 0.9% against the dollar so far in 2024, having clawed back up from a 1.5% year-to-date loss two weeks ago. Just four months ago, the International Monetary Fund declared Britain would be the slowest-growing economy among the Group of Seven nations in 2024. A lot has changed since then, not least Germany tilting into actual recession and France barely growing. Data last week showed the UK, too, registered two straight quarters of negative growth last year. The euro has fallen to its weakest in six months against sterling , having lost around 2% in value against its cross-Channel rival since the start of the year. For the past few months, investors have enjoyed the pound's higher yield that has derived from the view that, even though the economy is sluggish, persistent inflation will mean the Bank of England will have to keep interest rates higher for longer. Weekly data from the Commodity Futures Trading Commission (CFTC) shows speculators lifted their bullish sterling position to $3.971 billion in the week to Feb 13, just shy of last July's nine-year high. Leveraged funds , which include hedge funds and money managers, have aggressively added to their long sterling positions since early December, and now hold their largest bet on a pound rally since October. Aside from the pound's yield appeal, investors may be taking heart finally from the data too. JPMorgan nudged up its 2024 UK growth forecast in January, while Deutsche Bank last week said it had made a modest upward tweak to its quarterly growth estimates. Bank of America has turned bullish on sterling and last week boosted its year-end target for the pound to $1.37 - some 8.5% above where it is trading right now. In a note last week, ING issued a reminder not to "get carried away" by signs of green shoots in the economy - the BoE is focussed on services and wage inflation right now - but acknowledged that the outlook for Britain's economy is starting to brighten. https://www.reuters.com/markets/currencies/investors-are-buying-back-into-pounds-pizazz-2024-02-20/

2024-02-20 05:36

A look at the day ahead in European and global markets from Tom Westbrook Europe's central bank has singled out wages as the single biggest risk to its crusade to contain inflation. Fourth-quarter negotiated wages data likely headlines the trading day. In the third-quarter last year negotiated wage growth was a record high 4.69%. By putting money in the pockets of those likely to spend it, pay hikes are good for demand. But that and higher costs for firms can put upward pressure on prices. Among recent settlements, wages rose by 4.5% for employees at Spanish stores of Carrefour (CARR.PA) , opens new tab and Ikea (IKEA.UL), 5% at French energy major TotalEnergies (TTEF.PA) , opens new tab and 6.6% for Dutch rail workers. French Uber drivers' minimum hourly rate rose 17.6%. Minimum wages were lifted by 3.4% in Germany, 3.8% in the Netherlands and 5% in Spain. Given policymakers' focus, a hot figure today would put a spanner in market pricing for 100 basis points of cuts from the European Central Bank this year. The mood is already jittery after the Asia session, with U.S. equity futures slipping and Treasury yields ticking higher. And steep cuts to mortgage rates in China has failed to help sentiment in battered mainland stock markets. The Shanghai Composite (.SSEC) , opens new tab struggled to do much better than flat and the blue chip CSI300 (.CSI300) , opens new tab fell 0.2%. Iron ore futures fell for a second straight session. South Korea's KOSPI (.KS11) , opens new tab lurched 1% lower, after striking a 20-month high in the previous session. Canadian inflation due later in the day could also be a bearer of bad news and has traders on edge after an upside U.S. CPI surprise last week. On the deal front, U.S. consumer bank Capital One plans to acquire U.S. credit card issuer Discover Financial Services (DFS.N) , opens new tab in an all-stock transaction valued at $35.3 billion. ANZ Bank (ANZ.AX) , opens new tab won approval from Australia's competition tribunal to go ahead with its $3.2 billion buyout of Suncorp's banking business. Its shares fell 2.4%, Suncorp's (SUN.AX) , opens new tab rose 6%. Key developments that could influence markets on Tuesday: Economics: European wages, Canadian CPI, U.S. leading index Earnings: InterContinental Hotels, Air Liquide, Walmart https://www.reuters.com/markets/europe/global-markets-view-europe-2024-02-20/

2024-02-20 05:17

Feb 20 (Reuters) - ExxonMobil (XOM.N) , opens new tab has warned it would withhold billions of dollars in climate-related investments in Europe unless Brussels cuts environmental red tape, which the company blames for the "deindustrialisation of the European economy", the Financial Times reported on Tuesday. Exxon had $20 billion set aside for decarbonisation projects between 2022 and 2027, the newspaper reported, citing an interview with Karen McKee, president of the company's product solutions division. McKee told the FT that Exxon was likely to prioritise "other parts of the world" due to increasing frustration at the regulatory burden linked to getting projects off the ground in Europe. https://www.reuters.com/markets/commodities/exxon-warns-eu-that-red-tape-might-push-it-invest-elsewhere-ft-reports-2024-02-20/