2023-12-18 05:52

European stock markets fall, Wall Street indexes rise Oil gains, Treasury yields rise with rates in focus U.S. inflation data to test market doves NEW YORK Dec 18 (Reuters) - MSCI's global equity index advanced slightly, oil prices rallied on supply concerns and U.S. Treasury yields rose on Monday as investors digested mixed messages from the Federal Reserve about the prospects for 2024 interest rate cuts. Oil prices climbed after Iranian-backed Houthi militants stepped up attacks on vessels in the Red Sea, raising concerns about supply disruptions. Chicago Federal Reserve President Austan Goolsbee on Monday pushed back against market bets on interest rate cuts. Also pushing back against expectations for cuts on Monday was Cleveland Fed President Loretta Mester, who votes on policy in 2024 until her June retirement. This was after investors on Wednesday and Thursday had celebrated dovish comments from Fed chair Jerome Powell when the central bank's meeting ended with interest rate projections from Fed officials showing an average expectation for three quarters of a percentage points of rate cuts in 2024. Pushbacks on bets for a Fed pivot to easing had started on Friday when the Fed's New York President John Williams said it was "premature" to speculate about rate cuts. Some traders saw the most recent comments as efforts to dampen over-enthusiastic reactions to expectations for easing. “They want to continue to make it a mystery,” said Tom di Galoma, managing director and co-head of global rates trading at BTIG in New York. “I think the Fed is completely done and there will be a lot of reasons for Fed rate cuts by mid-year,” he added, pointing to the economy being “due for a major slowdown in 2024.” On Wall Street, the Dow Jones Industrial Average (.DJI) rose 0.86 points, or 0%, to 37,306.02, the S&P 500 (.SPX) gained 21.37 points, or 0.45%, to 4,740.56 and the Nasdaq Composite (.IXIC) added 90.89 points, or 0.61%, to 14,904.81. MSCI's gauge of stocks across the globe (.MIWD00000PUS) gained 0.13%. The pan-European STOXX 600 index (.STOXX) earlier closed down 0.27%. In bonds, longer-dated U.S. Treasury yields rose in reaction to Goolsbee's comments on Monday. Benchmark 10-year notes were up 1.5 basis points to 3.943%, from 3.928% late Friday. The 30-year bond was last up 2.5 basis points to yield 4.0521%. The 2-year note was last was up 0.2 basis points to yield 4.4569%. However, the U.S. dollar eased against the euro, extending last week's fall, as the U.S. currency remains under pressure from last week's signals about the possibility of rate cuts. The dollar index , which measures the greenback against a basket of major currencies, fell 0.097%, while the euro was up 0.24% at $1.092. Sterling was last trading at $1.2644, down 0.24% on the day. "The amount of pushback we've started to see post-Powell's press conference is clearly a risk to that downside USD view, though that pushback on the idea of cuts as soon as March seems largely to be falling on deaf ears thus far," said Michael Brown, market analyst at Trader X in London. The Japanese yen weakened 0.51% versus the greenback at 142.90 per dollar as the Bank of Japan (BOJ) kicked off a two-day meeting that could be crucial in determining the timing of the end of the central bank’s ultra-loose stance on rates. Also on investors' minds this week is the U.S. reading on core personal consumption expenditure (PCE) index due out on Friday as it will be closely watched for clues around the Fed's future policy decisions. In commodities, oil closed higher after the Yemeni Houthi militant group Red Sea attacks disrupted maritime trade. Oil major BP said it temporarily paused transit there and other shipping firms also said they would avoid the route. U.S. crude settled up 1.46% to $72.47 per barrel after rising as much as 3.96% earlier in the day and Brent finished at $77.95, up 1.83% on the day. In precious metals, gold gained ground as traders purchased bullion on price dips, while their focus shifted to key the upcoming inflation data for signals on the Fed's plans. Spot gold added 0.4% to $2,026.62 an ounce. U.S. gold futures gained 0.58% to $2,026.30 an ounce. https://www.reuters.com/markets/global-markets-wrapup-1-2023-12-18/

2023-12-18 05:32

A look at the day ahead in European and global markets from Wayne Cole. It's been a subdued start to the week in Asia with the Nikkei leading losses and markets cautious in case the Bank of Japan (BOJ) springs a surprise at its policy meeting on Monday and Tuesday. The mood was not helped by news that North Korea fired what appeared to be a long-range ballistic missile on Monday, although South Korean shares were just a fraction lower. Analysts polled by Reuters doubt the BOJ will move to unwind its uber-easy policy this week, but one-fifth thought January was likely while the majority saw negative rates ending in April. There have been conflicting reports about how serious the bank is considering a change, and it is possible that policy makers will discuss when and under what circumstances they will tighten. The BOJ has shocked markets before with sudden policy moves, and the risk was reflected in a jump in implied volatility for dollar/yen. Markets assume it is only a matter of time before negative rates are abandoned, which would make the BOJ one of the very few major central banks in the world tightening policy next year. While some Federal Reserve officials have tried to rein in expectations on easing, futures imply a 74% chance of a first easing as soon as March, and May has almost two cuts priced in. In all, around 140 basis points of easing is implied for 2024, partly on the assumption the Fed will have to ease just to stop real rates from rising as inflation cools. That outlook underlines the stakes for the Fed's favoured inflation measure due out on Friday, where analysts see the balance of risks as tilted towards a soft number. A rise of only 0.1% in the core PCE would see the six-month annualised pace of inflation slow to just 2.1% and almost at the Fed's target of 2%. There are also consumer price readings from Japan, Canada and the UK out this week, which will offer a glimpse of the inflationary pulse globally. Investors are clearly betting the ECB will also act to offset rising real rates and have almost 34 basis points of cuts priced in for April, along with 147 for the whole year. Such aggressive pricing could be tested later Monday when usually hawkish ECB board member Isabel Schnabel speaks, given it was her sudden conversion to dovishness that sent bond yields diving earlier this month. Key developments that could influence markets on Monday: - Appearance by ECB members Lane and Schnabel, Bank of England Deputy Governor Broadbent and Norway Central Bank Governor Bache - German Ifo survey for Dec - Fed's Goolsbee appears on CNBC https://www.reuters.com/markets/europe/global-markets-view-europe-2023-12-18/

2023-12-18 04:39

BEIJING/MUMBAI, Dec 18 (Reuters) - Asian fertiliser buyers are seeking alternatives to Chinese supplies on concerns the world's top exporter has become an increasingly unreliable supplier after curbs on shipments to protect its domestic market, buyers and analysts said. China is the world's biggest exporter of phosphate and a major supplier of urea, but since 2021 it has imposed measures including export quotas and lengthy inspection requirements on the fertiliser ingredients to cool domestic prices. Urea exports plunged 24% to 2.8 million metric tons in 2022 from the year before and though higher this year, remain below the previous years' average level. Phosphate exports were brisk earlier in the year but have also been throttled back in recent months, leading to a squeeze in global supply that has pushed up prices. The Chinese government's growing intervention in the exports means the country will be an even less reliable supplier in 2024, said Josh Linville, director of fertiliser at brokerage StoneX Group Inc. "Normally, market factors call the shots on what happens. Now, we have to try and figure out what the central government is thinking and its reaction can swing heavily from side to side. Buyers will have to diversify," he said. U.S prices for di-ammonium phosphate (DAP), a global benchmark for the industry, have risen 26% since mid-July to $617.30 per ton, according to LSEG data. "The limitations imposed by China are pushing up urea and di-ammonium phosphate prices, but we don't anticipate significant increases," said a senior official with a New Delhi-based fertiliser company. India is one of the world's top fertiliser buyers. Chinese urea exports to the country in the first half of the 2023/24 year starting in April plunged 58% from a year ago to 335,963 tons, according to data compiled by India's trade ministry. However, readily available product from alternative suppliers including Russia, Oman, and the United Arab Emirates are offsetting the lower shipments from China, added the official. MARKET IN LIMBO Malaysian buyers are also switching away from China, buying up phosphate from Vietnam and Egypt, said Teo Tee Seng, managing director of fertilizer and agrochemicals supplier Behn Meyer Agricare in Kuala Lumpur. "The global market has been in limbo due to China's export restrictions," he said. China's DAP and mono-ammonium phosphate (MAP) sales have slowed in recent months amid declining domestic production, said traders and analysts. In October exports of DAP dropped by 12.5% from a year earlier while MAP exports were down 10%, Chinese customs data shows. "Our normal supplier has reduced their packing size to 8 kilogrammes now, it used to be 25 kilogrammes," said Malaysian importer Ng Wei Houng. South Korea, which has complained to China over delays in urea exports, is also looking for alternatives. It uses urea both as a fertiliser and as a diesel fuel additive. "We are diversifying to receive imports from countries like Vietnam, Indonesia and Saudi Arabia and will continue this trend going forward," said an official from a major South Korean urea distributor, who declined to be identified as he was not authorised to speak to media. Seoul expanded its urea reserve to protect against the rising volatility, securing additional supplies from Vietnam, the government said this month. Urea exports from China next year are expected to increase incrementally from 2023 to around 4 million tons, analysts said, but shipments will remain tight into the first half of the year. China has asked 15 major fertiliser trading firms to limit their total exports in 2024 to 944,000 metric tons, and is expected to issue quotas to other manufacturers, said Gavin Ju, principal fertiliser analyst at CRU Group. China's National Development and Reform Commission did not respond to a request for comment on its quota allocations. https://www.reuters.com/markets/commodities/asian-fertiliser-buyers-turn-away-key-exporter-china-amid-growing-curbs-2023-12-18/

2023-12-18 04:35

Oil gains nearly 1% in early Asian trade Russia to deepen oil export cuts in Dec by 50,000 bpd or more Shipping firms avoiding Suez Canal amid attacks on vessels SINGAPORE, Dec 18 (Reuters) - Oil prices rose in Asian trade on Monday, rising nearly 1% in early trade, supported by lower exports from Russia and as attacks by the Houthis on ships in the Red Sea raised concerns of oil supply disruption. Brent crude futures climbed 32 cents, or 0.4%, to $76.87 a barrel by 0413 GMT, while U.S. West Texas Intermediate crude was at $71.77 a barrel, up 34 cents, or 0.5%. "The bad weather in Russia has played a part in the stronger open this morning as has the Houthis attack on ships close to Yemen," IG analyst Tony Sycamore said. Russia said on Sunday it would deepen oil export cuts in December by potentially 50,000 barrels per day or more, earlier than promised, as the world's biggest exporters try to support global oil prices. This comes after Moscow suspended about two-thirds of loadings of its main export grade Urals crude from ports due to a storm and scheduled maintenance on Friday. Shipping firms, including the world's biggest container shipping lines MSC and A.P. Moller-Maersk (MAERSKb.CO), said over weekend that they would avoid the Suez Canal as Houthi militants in Yemen stepped up their assaults on commercial vessels in the Red Sea. Bab al-Mandab is one of the world's most important routes for global seaborne commodity shipments, particularly crude oil and fuel from the Gulf bound westward for the Mediterranean via the Suez Canal or the nearby SUMED pipeline, as well as commodities heading eastward for Asia, including Russian oil. Both Brent and WTI ended their longest streak of weekly declines in half a decade with a small gain last week after a U.S. Federal Reserve meeting last week raised hopes that interest rate hikes are over and cuts are on their way. "I think just as importantly however is last week's dovish Fed meeting which removes the tail risks of a hard landing for the U.S. economy and for crude oil demand going forward," IG's Sycamore added. "Not to mention the technical picture in crude oil supports a recovery into the $76/78 area," he added, referring to WTI prices. Crude oil was also supported by a weakened dollar and larger-than-expected U.S. inventory data, said CMC Markets analyst Tina Teng in a note, as a weaker dollar makes dollar-denominated oil cheaper for foreign buyers. Analysts said that oil inventories at Cushing, Oklahoma, the top U.S. storage hub, rebounded last month after nearing operational lows due to improved pricing at the hub that pulled in barrels from Texas' Permian basin and higher Canadian crude flows. The recent influx of crude from both the locations has pushed Cushing inventories higher for eight straight weeks, reaching 30.8 million barrels. https://www.reuters.com/markets/commodities/oil-climbs-nearly-1-drop-russia-exports-red-sea-jitters-2023-12-18/

2023-12-18 04:02

BENGALURU, Dec 18 (Reuters) - Indian construction materials maker Ambuja Cements (ABUJ.NS) will invest 60 billion rupees (nearly $723 million) in renewable power projects, the company said on Monday. The investment will be funded internally and is expected to target a capacity of 1,000 megawatts (MW) through solar and wind power projects in Gujarat and Rajasthan, it said in an exchange filing, without providing details on the funding process. The Adani Group-owned company added that the capacity from solar power and wind power projects will be achieved by fiscal 2026, and add to its existing capacity of 84 MW. These projects will increase the company's total green power capacity to 60% from the existing 19%, it said. Earlier this month, Ambuja Cements acquired a majority stake in Sanghi Industries (SNGI.NS) for 51.85 billion rupees. Last month, bigger rival UltraTech Cement (ULTC.NS) said it will acquire the cement business of Kesoram Industries (KSRM.NS) in an all-stock deal valued at 53.79 billion rupees. ($1 = 83.0070 Indian rupees) https://www.reuters.com/sustainability/sustainable-finance-reporting/indias-ambuja-cements-invest-723-mln-green-power-production-2023-12-18/

2023-12-18 03:07

MUMBAI, Dec 18 (Reuters) - The Indian rupee on Monday will likely face challenges amid weakness in Asian peers after top Federal Reserve officials downplayed expectations of imminent interest rate cuts. Non-deliverable forwards (NDFs) indicate the rupee will open at around 83.02-83.04 to the U.S. dollar, compared with its previous closing at 83.00. The rupee on Friday had its best session in more than eight months, attributed to inflows, stop losses and most importantly the Reserve Bank of India's decision not to intervene. While Asian currencies are down and NDFs indicate a quiet open, "it could very well be" that rupee "does well, based on momentum", a foreign exchange trader at a bank said. "I would think traders would want to know what is the RBI's tolerance" for how much USD/INR can drop, he said. Asian currencies were down 0.2-0.4% after Fed officials pushed back on bets that the U.S. central bank will cut rates aggressively next year. New York Fed President John Williams said the Fed "isn't really talking about rate cuts right now" and it's "premature" to speculate about them, in a CNBC interview. These comments "seem highly orchestrated" and intended to stop prevent financial conditions from "getting too euphoric", said Chris Weston, head of research at Melbourne-based broker Pepperstone. Williams was the first official to comment after Fed's interest rate projections and Chair Jerome Powell's remarks last week led investors to factor in a total of 150 basis points of rate cuts next year. Further, Atlanta Fed President Raphael Bostic said Friday the U.S. central bank can begin reducing interest rates "sometime in the third quarter" of 2024 if inflation falls". Investors, meanwhile, have priced in a high probability of rate cuts in March 2024. U.S. Treasury yields near maturity rose on Friday, prompting the dollar to rise against its major peers. KEY INDICATORS: ** One-month non-deliverable rupee forward at 83.10; onshore one-month forward premium at 7.5 paisa ** Dollar index at 102.54 ** Brent crude futures up 0.5% at $76.9 per barrel ** Ten-year U.S. note yield at 3.93% ** As per NSDL data, foreign investors bought a net $416.8mln worth of Indian shares on Dec. 14 ** NSDL data shows foreign investors bought a net $185.3mln worth of Indian bonds on Dec. 14 https://www.reuters.com/markets/currencies/rupee-rally-confronted-by-pushback-fed-officials-rate-cuts-2023-12-18/