2024-01-02 04:59

HOUSTON, Jan 2 (Reuters) - Oil prices closed the first trading session of 2024 lower as expectations for interest rate cuts waned and on easing concerns that tensions in the Red Sea will disrupt supplies. Brent crude settled at $75.89, down by $1.15 or 1.5%. U.S. West Texas Intermediate crude settled at $70.38 a barrel, down by $1.27 or 1.8%. Prices fell as investors tempered expectations about interest-rate cuts in 2024. Lower interest rates reduce consumer borrowing costs, which can boost economic growth and oil demand. The dollar also strengthened on Tuesday, while stock prices slipped, further pressuring oil lower. A stronger dollar makes oil more expensive for investors holding other currencies. Oil prices had climbed around $2 in earlier trading following attacks on vessels in the Red Sea by Houthi rebels over the weekend, and the reported arrival of an Iranian warship on Monday. "The market is correcting itself in so far as there have been no supply disruptions and they think it is unlikely that the Iranian warship will engage with American warships," said Andrew Lipow, president of Lipow Oil Associates. "Clearly, the oil market will move higher if shots are fired," Lipow added. On Sunday, U.S. helicopters repelled an attack by Iran-backed Houthi forces on a container vessel operated by Danish shipper Maersk (MAERSKb.CO) in the Red Sea. On Monday, an Iranian warship had entered the Red Sea, according to the semi-official Tasnim news agency. Denmark's Maersk (MAERSKb.CO) and German rival Hapag-Lloyd (HLAG.DE) said their container ships would keep avoiding the Red Sea route that gives access to the Suez Canal. A wider conflict could close crucial waterways for oil transportation. A Reuters survey of economists and analysts predicted Brent crude would average $82.56 a barrel this year, up slightly from the 2023 average of $82.17, with weak global growth expected to cap demand. Geopolitical tensions, however, could support prices. In China, investor expectations of economic stimulus measures rose after manufacturing activity shrank in December for a third month, government data showed on Sunday. Any such stimulus could boost oil demand and support crude prices. Separately, OPEC+ plans to hold a meeting of its Joint Ministerial Monitoring Committee (JMMC) in early February, though an exact date has not been decided, three sources from the alliance said. https://www.reuters.com/markets/commodities/oil-jumps-1-new-year-after-us-forces-repel-houthis-red-sea-2024-01-02/

2024-01-02 04:56

SYDNEY, Jan 2 (Reuters) - Heavy rains triggered flash flooding across parts of Australia's east on Tuesday, inundating roads, cutting off towns and damaging properties, as authorities advised residents in low-lying areas to move to higher ground. Several regions across southeastern Queensland and northern New South Wales have picked up at least two months' worth of rainfall over the last three days. Springbrook in Queensland received 514 mm (20 inches) of rain over the last 48 hours, more than double the January average. Queensland Deputy Premier Cameron Dick urged people to stay off roads until the weather cleared. "Roads will be dangerous and life-threatening flash flooding could occur in places you don't anticipate," Dick said during a press briefing. Rainfall of up to 350 mm (14 inches) is forecast over the next 24 hours, with the Bureau of Meteorology issuing a severe weather warning stretching over 250 kms (155 miles) across the Wide Bay Burnett region and southeast of Queensland. "With these quick bursts of intense rainfall, the rivers and creeks are rising extremely quickly and catching people unaware," Queensland emergency services Deputy Commissioner Kevin Walsh said. "The next 24 hours are important." In neighbouring New South Wales state, dozens of people were rescued from campgrounds, which usually become crowded during the holiday weeks, cut off by floodwater. Television footage showed rescue crews wading through waist-high water, cars stuck in flood waters, fallen trees on top of roofs and water running through houses. Some regions pounded by the wild weather were already hit by another storm over the Christmas holidays that killed 10 people and knocked off power for tens of thousands. About 11,000 properties are still without power. Climate change has amplified Australia's weather extremes in recent years, experts say. The El Nino weather phenomenon, which can provoke wildfires, cyclones and prolonged drought, is also affecting the country during its December-February summer. https://www.reuters.com/world/asia-pacific/relentless-rains-wreak-havoc-across-australias-east-2024-01-02/

2024-01-02 04:45

MUMBAI, Jan 2 (Reuters) - The Indian rupee weakened on Tuesday, tracking a drop in Asian peers, amid tepid risk appetite as attention turns to key U.S. economic data due this week. The rupee was at 83.33 against the U.S. dollar as of 10:10 a.m. IST, down 0.1% from its previous close at 83.2075. The Korean won and Thai baht led losses among Asian currencies and, declining 1% and 0.3%, respectively. The dollar index rose to 101.56. The rupee's decline was "largely driven by global cues," a foreign exchange trader at a state-run bank said, adding that the losses are likely to be contained as "good offers (to sell dollars) are present at these levels." The week is peppered with economic data releases in the United States, including the ISM manufacturing PMI on Wednesday, initial jobless claims on Thursday, and unemployment data on Friday. Investors are also eyeing the minutes of the U.S. Federal Reserve's December policy meeting to be released on Thursday, for cues on policymakers' thinking about the interest rate trajectory. Mounting expectations of rate cuts have maintained pressure on the dollar, which had fallen to its lowest in 5 months in the previous week. The dollar-rupee pair is expected to "remain in the range with 83.40 being a near term top ... as RBI continues to keep a strong presence," in the market, Anil Bhansali, head of treasury at Finrex Treasury Advisors said. While inflows into India could be muted at the start of the new year, traders expect to see a pick up from the second week, which should aid the rupee. Overseas investors net bought $28.7 billion worth of Indian equities and bonds in 2023, of which $10.1 billion was in December alone. https://www.reuters.com/markets/currencies/rupee-drops-pressured-by-weaker-asian-peers-data-heavy-week-2024-01-02/

2024-01-02 04:33

SHANGHAI, Jan 2 (Reuters) - China's yuan eased against the dollar on the first trading day of the year on Tuesday, pressured by rising bets of monetary easing after factory activity reinforced the uneven nature of the recovery in the world's second-biggest economy. Official data showed that China's manufacturing activity shrank for a third straight month in December and weakened more than expected, while a separate private survey showed an expansion at a quicker pace. "Policy support should remain a tailwind over the coming months," economists at Capital Economics said in a note. "The Central Economic Work Conference in early December suggest more fiscal support and monetary easing measures are on the way." The economists said the latest move by major commercial banks to lower deposit rates should pave the way for further reductions to lending rates. They are forecasting 20 basis points of policy rate cuts and one more reserve requirement ratio (RRR) reduction in the first half of this year. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate , around which the yuan is allowed to trade in a 2% band, at 7.0770 per dollar, 57 pips firmer than the previous fix of 7.0827. The central bank continued its months-long trend of setting the official guidance rate at levels firmer than market projections seen in 2023, traders and analysts said, a move widely seen by markets as an attempt to keep the yuan stable. On Tuesday, the midpoint fixing was 201 pips stronger than Reuters estimate of 7.0971. In the spot market, the onshore yuan opened at 7.1072 per dollar and was changing hands at 7.1262 at midday, 284 pips weaker than the previous late session close. The yuan finished 2023 down 2.8% against the dollar for its second straight yearly drop, dragged down by a sputtering economic recovery and monetary policy divergence with other major economies. With the U.S. Federal Reserve now signaling that it may start cutting interest rates soon, market watchers expect yield differentials between the world's two largest economies would start to narrow and alleviate some of the downward pressure on the Chinese currency this year. Markets are now pricing in an 86% chance of Fed rate cuts to start from March, according to CME FedWatch tool, with over 150 basis points of easing anticipated in the year. By midday, the global dollar index (.DXY) stood at 101.545, while the offshore yuan was trading at 7.132 per dollar. The yuan market at 0354 GMT: ONSHORE SPOT: Key indexes: *Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The People's Bank of China (PBOC) allows the exchange rate to rise or fall 2% from official midpoint rate it sets each morning. OFFSHORE CNH MARKET *Premium for offshore spot over onshore **Figure reflects difference from PBOC's official midpoint, since non-deliverable forwards are settled against the midpoint. . https://www.reuters.com/markets/currencies/chinas-yuan-down-first-trading-day-2024-policy-easing-eyed-2024-01-02/

2024-01-02 04:10

LATEST DEVELOPMENTS: Two Hamas armed wing commanders in Lebanon also killed in drone attack, Palestinian Islamist group's Al Aqsa TV reports. Iran's foreign ministry says assassination of Palestinian Hamas deputy leader in Beirut drone attack will undoubtedly increase motivation to fight Israel in the wider region. Lebanon to submit complaint to UN Security Council over drone strike and all 'new Israeli violations of Lebanese sovereignty', prime minister's office says. BEIRUT/CAIRO/GAZA, Jan 2 (Reuters) - Israel killed Hamas deputy leader Saleh al-Arouri in a drone strike in Lebanon's capital Beirut on Tuesday, Lebanese and Palestinian security sources said, as its tanks and warplanes pummelled Gaza in further "high-intensity" warfare against the Islamist militant group in the enclave. Arouri, 57, was the first senior Hamas political leader to be assassinated since Israel launched a shattering air and ground offensive against Gaza's Hamas rulers almost three months ago after a shock Hamas militant rampage into Israeli towns. His killing could heighten the risk of the Israel-Hamas war spreading well beyond the Gaza Strip. Lebanon's heavily armed Hezbollah group, a Hamas ally, has been exchanging near-daily fire with Israel across Lebanon's southern border since the war in Gaza began. Hamas radio and TV and Lebanon's pro-Iranian Mayadeen TV confirmed word from security sources that Arouri, a member of the Palestinian Islamist movement's politburo based abroad and a co-founder of Hamas' military wing, the Izz-el-Deen al-Qassam Brigades, had been killed when a drone struck a Hamas office in south Beirut. In all, the drone attack killed six people in the city's southern suburb of Dahiyeh, a Hezbollah redoubt, the Lebanese state news agency said. Two security sources said the drone targeted a meeting and Hamas' Al Aqsa TV said commanders of the group's armed wing in Lebanon - Samir Findi Abu Amer and Azzam Al-Aqraa Abu Ammar - were among the dead. Asked to confirm that Israel was behind Arouri's slaying, Israeli military spokesman Daniel Hagari told a media briefing: "We are focused on killing Hamas." He declined to elaborate. Mark Regev, an adviser to the Israeli Prime Minister Benjamin Netanyahu, said in an interview with MSNBC TV that Israel "has not taken responsibility for this attack." "But whoever did it, it must be clear - this was not an attack on the Lebanese state," he said. "Whoever did this did a surgical strike against the Hamas leadership". Israel had accused Arouri of ordering and supervising Hamas attacks in the Israeli-occupied West Bank for years. "I am waiting for martyrdom (death) and I think I have lived too long," Arouri said in August 2023, alluding to Israeli threats to eliminate Hamas leaders whether in Gaza or abroad. Arouri had spent time recently in both Lebanon and Qatar, where a Hamas official said he was at "the heart of negotiations" conducted by Cairo and Doha over ways of resolving the Gaza conflict, and the release of hostages Hamas took in its Oct. 7 incursion into Israel. Lebanese caretaker premier Najib Mikati condemned the attack as a "new Israeli crime" and an attempt to pull Lebanon into war. His office said he asked his foreign minister to file a complaint to the U.N. Security Council over all "new Israeli violations of Lebanese sovereignty". Nasser Kanaani, spokesperson for the foreign ministry of Iran, a major supporter of Hamas and Hezbollah, said Arouri's killing would "undoubtedly ignite another surge in the veins of resistance and the motivation to fight against the Zionist occupiers, not only in Palestine but also in the region and among all freedom-seekers worldwide". In a televised speech in August, Hezbollah leader Hassan Nasrallah had warned Israel against carrying out any assassinations on Lebanese soil, vowing a "severe reaction". Hundreds of Palestinians took to the streets of Ramallah and other towns in the West Bank to condemn Arouri's killing, chanting, "Revenge, revenge, Qassam!" The Gaza war was triggered by a shock cross-border Hamas assault on Israeli towns on Oct. 7 that Israel says killed 1,200 people with some 240 hostages spirited back to Gaza - the bloodiest single day in the Jewish state's 75-year history. The Gaza health ministry said 207 people had been killed in the past 24 hours, bringing the total recorded Palestinian death toll to 22,185 in nearly three months of war in Gaza, the most lethal chapter of the decades-long Israel-Palestinian conflict. Israeli Defence Minister Yoav Gallant said operations around Khan Younis, southern Gaza's main city, concentrated on areas above the tunnel network where Hamas leaders were believed to be hiding. "We are reaching them all ways. There already is engagement and there are (Israeli) hostages there too, sadly," he told troops in Gaza in footage shown on Israeli television. Civilian casualties have mounted in south Gaza as the brunt of Israel's offensive has shifted there from the north. Israel says it tries to avoid harm to civilians and blames Hamas for embedding fighters among them, an accusation Hamas denies. The United States, Israel's main supporter, has been urging it to rein in its air and ground blitz, which has demolished vast tracts of densely populated Gaza, in favour of more targeted strikes focusing on Hamas leaders. Israel has announced plans to pull back some troops, hinting at a new phase in the war amid a rising global outcry over the plight of Gaza civilians, although also warned its offensive has many months to run. Israeli bombardments have engulfed Gaza's 2.3 million residents in a humanitarian disaster in which thousands have been left destitute and threatened by famine due to a lack of food supplies. HAMAS RESPONSE TO CEASEFIRE PROPOSAL Shortly before Arouri's killing, Hamas' paramount leader Ismail Haniyeh, who is also based outside Gaza, said the movement had delivered its response to an Egyptian-Qatari ceasefire proposal. He reiterated that Hamas' conditions entailed "a complete cessation" of Israel's offensive in exchange for further releases of hostages. Israel believes 129 hostages remain in Gaza after some were released during a brief truce in late November and others were killed during air strikes and rescue or escape attempts. Israel has vowed to keep fighting until it has wiped out Hamas but it is unclear what it plans to do with the enclave should it succeed, and where that leaves the prospect of an independent Palestinian state. Gaza residents said Israeli warplanes and tanks stepped up bombardments of eastern and northern districts of Khan Younis, where tens of thousands of displaced Palestinians have sought refuge after being forced to flee their homes elsewhere. In the Gaza Strip's north, Gallant said, Israel had destroyed 12 Hamas regiments and only a few thousand militants remained out of 15,000-18,000 that had been based in the area. Others had fled to the south, he said. (This story has been corrected to fix the name of a suburb to say 'Dahiyeh', not 'Daliyeh', in paragraph 5) https://www.reuters.com/world/middle-east/israels-aircraft-tanks-step-up-strikes-it-plans-reduce-troops-2024-01-02/

2024-01-02 03:54

MANILA, Jan 2 (Reuters) - The Philippines is hopeful of being taken off the money laundering 'grey list' of the Financial Action Task Force (FATF) of this year, the country's Anti-Money Laundering Council said on Tuesday. The FATF, an intergovernmental organisation combating money laundering and terrorism financing, added the Philippines to the list in June 2021 for several reasons, including risk of money laundering from casino junkets and lack of prosecution for terrorism funding cases. The Philippines has yet to address several issues flagged by the FATF, Executive Director of the Anti-Money Laundering Council, Matthew David, told a presidential palace press conference. "The most challenging action item is terrorism financing prosecution. We need to file more terrorism financing cases," he said. The longer the Philippines is on the grey list, the higher chance it has of being downgraded to the black list, David said. Being blacklisted by the FATF could result in more stringent requirements and higher transaction costs for millions of Filipinos living and working abroad who send billions of dollars to the Philippines in remittances. https://www.reuters.com/markets/asia/philippines-hopeful-exiting-global-money-laundering-grey-list-2024-01-02/