2024-01-15 12:57

LONDON, Jan 15 (Reuters) - Sterling slid on Monday in a risk-off trading day, ahead of a busy week for data with markets expecting Britain's employment and inflation figures to provide clues on when the Bank of England (BoE) will start loosening monetary policy. With U.S. markets closed for a public holiday, European shares fell and government bond yields rose on warnings against premature rate cuts from the European Central Bank (ECB). Investors are awaiting a slew of UK economic data this week, including job figures on Tuesday, inflation data on Wednesday and retail sales numbers on Friday. Risk-sensitive sterling fell 0.17% to $1.2729, but stayed within sight of its late December peak of $1.2825, which was the highest since August. Against the euro , it slipped 0.15% to 86.02 pence, pulling back from a three-week high against the single currency hit last week. "Sterling is moving lower amidst generalized risk negativity -GBP remains a high beta play- while markets likely speculate on near-term data risks," said Jeremy Stretch, head of G10 FX Strategy at CIBC Capital Markets. "We would expect average hourly earnings, CPI, and retail spending to all undershoot expectations this week." Money markets are pricing in around 130 basis points of interest rate cuts from the BoE by the end of the year, with a first cut likely in May, according to LSE Group data. Stretch said that he expects the BoE to be slow to cut rates, with a likely first cut in August, as the central bank fears both persistent inflation and the risk of additional fiscal easing in the UK March budget. "The slower BoE reaction function does not necessarily guarantee sterling support as BoE reticence comes as macro performance looks set to remain relatively lacklustre," he said. Data last Friday showed Britain's economy grew slightly more strongly than expected in November but remained at risk of slipping into a mild recession, a potential blow for Prime Minister Rishi Sunak before an election expected in 2024. https://www.reuters.com/markets/europe/sterling-slides-risk-off-trading-ahead-busy-uk-data-week-2024-01-15/

2024-01-15 12:04

BERLIN, Jan 15 (Reuters) - Thousands of tractors and trucks and about 10,000 people blocked the avenue leading to Berlin's Brandenburg Gate on Monday, capping a week of protests against higher taxes for farmers that have become a flashpoint for anti-government anger. Vehicles that arrived overnight from across Germany parked nose-to-tail along the route, and crowds of farmers wrapped up against the cold waved German flags and held up banners marked with slogans including "Without farmers, no future". The protests have heaped pressure on Chancellor Olaf Scholz's coalition as it struggles to fix a budget mess and contain right-wing groups. By Sunday evening, police warned that the avenue was already full and called on protesters to gather at other locations, including by the Olympic Stadium in the western district of Charlottenburg. The protests surged in response to a government decision to phase out a tax break on agricultural diesel as it tried to balance its 2024 budget after a constitutional court ruling in November threw its spending plans into disarray. Facing a fierce backlash, the government has already agreed not to scrap a tax rebate on new agricultural vehicles and to spread the scrapping of the agricultural diesel subsidy over several years. But farmers, with the vocal backing of the opposition conservatives and the far-right, say this does not go far enough. "Without stability in the countryside, without agriculture our country has no future," Farmers' Union president Joachim Rukwied said from a chilly stage in front of the Brandenburg Gate. "That's why we are prepared to take to the streets." He thanked Finance Minister Christian Lindner, standing next to him on the stage, for attending the rally. The government has taken a conciliatory tone amid concerns that political debate is becoming radicalised and that demonstrations could turn violent. "I have respect for every politician who is prepared to come to us," Rukwied said, though some in the crowd could be heard to jeer. Demonstration leaders will meet coalition party leaders later for talks. The governing parties are at odds over how best to meet farmers' demands. Agriculture Minister Cem Ozdemir, a Green, has suggested financial rewards for humane animal husbandry, while some Social Democrats want to offer higher produce prices, and Lindner's Free Democrats want to cut administrative overheads. Berlin's main west-east avenue and several bus and tram lines closed for the protest. Around 1,300 officers were out patrolling the demonstration, police said. Disruption caused by protests and train strikes last week hurt coalition parties in the polls and propelled the far-right Alternative for Germany party to new heights. In a video podcast on Saturday, Scholz said the government had listened to farmers' demands and compromised. "We've taken the farmers' arguments to heart and revised our proposals. A good compromise," he said. https://www.reuters.com/world/europe/german-farmers-kick-off-protest-over-higher-taxes-berlin-2024-01-15/

2024-01-15 11:37

MILAN, Jan 15 (Reuters) - An Italian court on Monday cleared the way for energy companies to cut off gas supplies to steel company Acciaierie d'Italia (ADI), majority owned by multinational steel giant ArcelorMittal (MT.LU), over mounting debts. Weighed down by an increase in energy prices and a drop in rolled steel coil prices, ADI has run short of cash and has accumulated a huge debt pile with suppliers, particularly energy giant Eni (ENI.MI). Italian gas infrastructure firm Snam Rete Gas (SRG.MI) had asked for the gas supply to be stopped because ADI accumulated more than 200 million euros ($220 million) in outstanding payments. The administrative court (TAR) of the Lombardy region rejected on Monday ADI's appeal against Snam's request, effectively ending an extension that had been granted by judges in October to the business previously known as Ilva. ADI said in a statement it would appeal the decision before the Council of State, a higher administrative court. Snam was not immediately available to comment. The ruling is a headache for Prime Minister Giorgia Meloni's government, which is trying to avoid the closure of ADI, which would cost thousands of jobs and have serious knock-on effects for the Italian manufacturing sector. ADI's main plant in the southern Italian city of Taranto is one of the largest in Europe, and is a major employer in Italy's under-developed south. ArcelorMittal (MT.LU), the world's second largest steelmaker, owns 62% of the group. State-owned investment agency Invitalia has the remaining 38%. Italian industry minister Adolfo Urso said on Thursday "drastic action" was needed to relaunch the business after ArcelorMittal rejected a government plan to keep it afloat. The Meloni government is seeking an agreement with ArcelorMittal that would facilitate the company's exit from ADI without triggering a legal dispute, according to people familiar with the matter. As a short-term solution the government is considering placing the business under special administration, appointing one or more commissioners to avoid it being shut down. This would be similar to Chapter 11 bankruptcy in the United States, allowing a business or individual to reorganize its debts and obligations. It could also help the government buy time while looking for a new industrial partner for ADI. Some 8,200 people directly work at the company's plant in Taranto, while a further 3,500 are employed in related industries. Production has been reduced in recent months, with some parts shut down and many workers on furlough. https://www.reuters.com/business/energy/italian-court-clears-way-cut-gas-supplies-former-ilva-steel-works-2024-01-15/

2024-01-15 11:32

SRINAGAR, India, Jan 15 (Reuters) - A lack of snowfall has led to empty ski resorts and holiday cancellations in the Indian Himalayas, with scientists linking the "unusual" winter to the El Nino weather phenomenon. The dry spell in Kashmir has pushed skiers to skip the popular resort of Gulmarg, one of the highest in the world, and left hotels in the scenic region waiting for fresh falls to draw tourists to the panoramic views of snow-capped peaks. Scientists said that this winter's conditions in northern India have not been seen for about a decade, marked by the absence of snowfall in the mountains and biting cold made worse by thick fog in the plains. "Fifty percent of the season is already gone," said Farhat Naik, 35, a Gulmarg snowboard instructor, ruing at the sight of dry, barren land that would normally be covered in a knee-deep layer of snow. "We are now hoping for snowfall in February first week," he said, adding that all his European and American clients have cancelled their trips due to a lack of snow - a blow to the tourism and agriculture focused economy of the region. Travel industry executives in the neighbouring states of Himachal Pradesh and Uttarakhand also complained of cancellations. Bookings have dropped to 20% for Blue Poppy Resort in the ski resort of Auli, in Uttarakhand, its owner Kushaal Sangwan said. "Our cancellations have jumped and people cancel (just) days before the booking if there is no snow." Winter snow and rain in northern India, including the Himalayas, is brought by a weather pattern known as the western disturbances - frequent extra-tropical storms that originate in the Mediterranean Sea. There are usually many such storms during winter but they have been largely absent this season, said R.K. Jenamani, a senior scientist at the India Meteorological Department (IMD). "When there's no weather system, how can there be (snow)," he said. The disappearance of western disturbances is linked to changing wind patterns and rising temperatures due to the active El Nino weather phenomenon and also climate change, said Gufran Beig, a former chief scientist at the Indian Institute of Tropical Meteorology. The current weather was very unusual for this time, Beig said. "It's January and it is still very cold in Delhi ... there is excess moisture in the air but there's also no snow ... It's been one of the most polluted and prolonged stretches of winter." https://www.reuters.com/world/india/no-snow-tourists-cancel-holidays-indian-ski-resorts-run-dry-2024-01-15/

2024-01-15 11:10

LONDON, Jan 15 (Reuters) - Global hedge funds kicked off the largest net selling of U.S. financial stocks in 16 weeks just as earning season started in the week ending Jan. 11, a Goldman Sachs (GS.N) note to clients said. Hedge funds exited long positions and added short bets that stock prices would fall in banks, insurance companies and financial intermediaries before bank earnings were released on Friday, said the Goldman note dated Jan. 12 and seen by Reuters on Monday. The note, written by Goldman's prime brokerage which serves hedge funds, tracked trading activity from Friday Jan. 5 to Thursday Jan. 11. U.S. banks' shares fell on Friday after major lenders reported lower profits in a choppy fourth quarter clouded by special charges and job cuts, with signs an income boost from high interest rates is waning and some consumer loans are starting to sour. The S&P 500 banks index (.SPXBK) closed over 1% down after earlier hitting its lowest level since Dec. 14. JPMorgan Chase (JPM.N) and Bank of America (BAC.N) posted a drop in fourth-quarter profit, while Wells Fargo (WFC.N) posted higher fourth-quarter profit but warned that its net interest income could fall 7% to 9% this year, sending its shares down more than 3% on Friday. Financials, consumer companies that make products that people buy but don't necessarily need and healthcare stocks were sold, the Goldman note said. Shorting activity focused on the finance sector was particularly elevated, said the bank. This was also true for real estate and the travel and leisure industries, it added. U.S. markets are closed on Monday for the Martin Luther King holiday. https://www.reuters.com/business/finance/hedgeflow-hedge-fund-shorts-banks-financials-reach-4-month-peak-goldman-2024-01-15/

2024-01-15 10:55

PARIS, Jan 15 (Reuters) - The French island of La Reunion was placed under cyclone alert on Monday morning and citizens were urged to stay inside, cut power, stop using tap water and stay in the safest room of their houses due to a cyclone named Belal. One homeless person, who was not in a safe shelter, died in the storms, authorities said, while adding that the exact causes of the death were not yet confirmed. "Do not go out on whatever pretext, even if the weather is calm. This is probably the eye of the cyclone", authorities said. Users on Monday morning posted on social media videos of heavy winds and rainfall, while the actual damage caused by the cyclone hitting the shores of the island wasn't immediately clear. Under the so-called violet alert, France's most serious, even emergency services on the island - in the Indian Ocean east of Madagascar - were not allowed to leave their bases from 6 a.m. (0200 GMT). The alert was lowered to red from 1 p.m. local time, enabling first responders to resume their work while people were still urged to stay inside. A total of 100,000 customers were without electricity and 37,000 people were without water due to precautionary cuts, Reunion perfect Jerome Filippini told franceinfo radio, adding that the number of affected households was likely to rise. According to Meteo France, the storm is expected to reach its peak on Monday, with speeds of around 200 kilometres per hour (124 miles per hour) at low altitudes, and 250 kph in inhabited areas located higher up the island. Cyclonic sea waves of up to 12-15 metres (39-49 feet) are also expected. https://www.reuters.com/world/europe/la-reunion-declares-highest-weather-emergency-cyclone-belal-approaches-2024-01-15/