2023-12-11 10:44
LONDON, Dec 11 (Reuters) - Global hedge funds sold financial stocks for a 10th week running in the week ending Dec. 8 and now have the lowest exposure to the sector since March 2020, when the COVID-19 crisis roiled markets, a Goldman Sachs (GS.N) note said. Speculators ditched long positions on insurance stocks while switching out of buy positions and adding short bets on financial services and banks, the note dated Dec. 8 said. A long position anticipates a stock price increase whereas a short bet anticipates a fall. Banks including Goldman Sachs and Morgan Stanley (MS.N) initiated 3,000 job cuts at the start of 2023. In Europe, Barclays (BARC.L) is considering cutting up to 2,000 back-office jobs in addition to layoffs across its UK retail, corporate and investment bank, a source with direct knowledge of the proposals told Reuters last month, while rival Lloyds (LLOY.L) has put 2,500 jobs at risk. A dearth of deal making combined with economic uncertainty would shrink bonus pools and result in further job cuts next year, executives, consultants and headhunters have told Reuters. Elsewhere, hedge funds working with Goldman Sachs' prime brokerage turned long. Net buying in macroeconomic products reached the highest in nearly five months, the bank said. America was the most net bought region, while developed markets in Asia was the most net sold. Technology, financials and staples were the most net sold global sectors, the Goldman note said. Consumer discretionary, commercial services and real estate were the most globally net bought, it added. https://www.reuters.com/business/finance/hedge-flow-hedge-funds-have-lowest-exposure-financials-since-march-2020-goldman-2023-12-11/
2023-12-11 10:41
MOSCOW, Dec 11 (Reuters) - The Russian rouble strengthened on Monday, soaring past 91 against the dollar to a one-week high, supported by currency controls and high interest rates as the market gears up for Russia's final rate decision of the year this week. The central bank is widely expected to raise borrowing costs again at its meeting on Dec. 15, by 100 basis points to 16%. The market is also likely to pay close attention to a speech by President Vladimir Putin on Thursday. Putin, who last week said he would run again for election next year, faces numerous economic challenges, but the West's limited success in imposing an oil price cap is easing pressure for now. By 1023 GMT the rouble had strengthened by 1.2% against the dollar to 90.80 , its strongest since Dec. 4. It had gained 0.7% to trade at 97.93 versus the euro and firmed 1.2% against the yuan to 12.63. "The rouble is a bit surprising as it is not showing December's traditional weakness," said Alor Broker's Alexei Antonov. "The technical picture for the rouble has improved significantly." The rouble has weakened for two weeks running after the end of the month-end tax period. It had previously registered seven weeks of gains, rebounding from more than 100 to the dollar thanks to reduced capital outflows since Putin's October introduction of forced conversion of some foreign currency revenue by exporters. Brent crude oil , a global benchmark for Russia's main export, was down 0.3% at $75.62 a barrel. Russian stock indexes were mixed. The dollar-denominated RTS index (.IRTS) was up 0.8% at 1,062.6 points. The rouble-based MOEX Russian index (.IMOEX) was 0.5% down at 3,063.4 points. https://www.reuters.com/markets/currencies/russian-rouble-strengthens-towards-91-vs-dollar-2023-12-11/
2023-12-11 10:31
SINGAPORE, Dec 11 (Reuters) - China's State Power Investment Corp announced a 42 billion yuan ($5.85 billion) investment plan in northeast China to produce fuel from hydrogen produced from wind power, according to a company official and a local government report. The projects, that include a 3.5 gigawatt wind power plant, a 164,000 metric ton per year hydrogen-making facility and 400,000 tpy each of sustainable aviation fuel (SAF) and methanol, will be built in Qiqihaer city of Heilongjiang province, according to a report carried on the city's official WeChat platform. SPIC will first build a 10,000-tpy pilot plant making SAF from wind power based hydrogen applying technology from Tsing Energy Development Co, the report said, billing the project the first of its kind in China. The report did not give a timeline building these plants, but a senior Chinese industry executive familiar with the investment told Reuters the SAF plant is slated for first fuel in late 2025. The official, who declined to be named as these details are not public, said the technology involves blending hydrogen with carbon dioxide derived from corn-based ethanol. Once the pilot project becomes successful it will be expanded to 400,000 tons annually by around 2030, the official added. A SPIC representative confirmed the city government's report, but declined to comment on the timelines of project building. State-run SPIC has the largest renewables resources among China's state utilities, operating a total of 160-GW installed clean power capacity. ($1 = 7.1758 Chinese yuan renminbi) https://www.reuters.com/sustainability/climate-energy/chinas-spic-plans-59-bln-investment-turning-green-hydrogen-into-fuel-2023-12-11/
2023-12-11 10:31
COPENHAGEN, Dec 11 (Reuters) - Danish shipping company Maersk (MAERSKb.CO) said on Monday that its services in Israel were operational and stable, and that it was watching developments in the country closely given the ongoing war with Palestinian militant group Hamas. "Bookings for ocean, rail, road and air services to and from Israel... continue to be accepted and facilitated," Maersk said in a statement. https://www.reuters.com/business/autos-transportation/maersk-says-its-services-israel-are-operational-stable-2023-12-11/
2023-12-11 09:13
NAPERVILLE, Ill., Dec 10 (Reuters) - Speculators axed a chunk of their plentiful short positions in Chicago-traded wheat last week with China on a U.S. buying spree, but their net short remains historically heavy. Most-active CBOT wheat futures surged more than 10% in the week ended Dec. 5, and money managers disposed of 21,402 gross wheat shorts, cutting their net short to 96,222 futures and options contracts from 119,986 a week earlier. In the prior week, money managers’ gross shorts in CBOT wheat futures and options occupied a record share of total open interest, which is near average levels for the date. That share eased in the latest week, though the associated short covering was much weaker than the episode seen in June, for example. China this month has bought more than 1 million metric tons of U.S. soft red winter wheat, which is highly unusual in such a short span. This helped CBOT wheat notch an eight-session winning streak through Dec. 7, the first such instance in over 11 years. A price decline on Friday rendered wheat unchanged over the last three sessions, though Wednesday and Thursday’s gains were accompanied by the strongest trading volumes ever seen in December. In response to the recent demand, the U.S. Department of Agriculture on Friday increased its estimate for 2023-24 U.S. wheat exports, but the number still represents a 52-year low. Global wheat projections were near expectations, unsupportive of the recent bullish sentiment. Money managers significantly reduced their net short in CBOT corn futures and options through Dec. 5 to 160,533 contracts from 206,478 a week earlier, though the new position remains tied for the date’s most bearish. Short covering was a bit more prominent, but funds added nearly 20,000 new gross longs, the most for any week since July. March corn futures were up 3.6% in the week ended Dec. 5, which started with contract lows on Nov. 29. Strength in wheat and decent U.S. corn export demand offered support, though potential scenarios for Brazil’s upcoming second corn crop may also be in consideration as key areas are dry. SOYBEANS AND PRODUCTS The dry weather in Brazil’s center-west has stoked fears for the in-progress soybean crop, but speculators’ concerns have eased since mid-November as they were net sellers of soybeans for a third consecutive week through Dec. 5. Money managers slashed their net long in CBOT soybean futures and options during the week to 36,633 contracts from 67,562 in the prior week, their largest net selling week since April. CBOT soybeans had fallen 3% during that week, though they were net unchanged in the last three sessions. Some dry areas of Brazil have had some showers, and forecasts as of Friday continued showing additional rain chances, though model runs were inconsistent. USDA cut Brazil’s soybean crop by 2 million tons to 161 million on Friday, but it raised the previous crop by the same amount to 160 million tons, effectively offsetting the current losses. Money managers were also net sellers of CBOT soybean product futures and options in the week ended Dec. 5. They cut their sizable net long in soymeal to 118,182 contracts from 135,798 a week earlier, and they extended their net short in soyoil to 17,902 contracts from 4,720, marking their first bearish oil view during December since 2018. CBOT soymeal fell 3% in the last three sessions, hitting seven-week lows on Thursday. Soyoil was unchanged and corn futures dropped 1% between Wednesday and Friday. Karen Braun is a market analyst for Reuters. Views expressed above are her own. https://www.reuters.com/markets/us/funds-chip-away-huge-cbot-grain-shorts-amid-demand-driven-rally-2023-12-11/
2023-12-11 07:36
Dec 11 (Reuters) - Goldman Sachs now projects two interest rate cuts by the U.S. Federal Reserve next year, advancing its expectation for the first cut to the third quarter, citing cooling inflation. The brokerage had earlier predicted the Fed to begin cutting rates next December. Two cuts would imply a Federal Funds Rate of 4.875% by the end of 2024, compared to its previous forecast of 5.13%. While data on Friday showed a stronger-than-expected U.S. labor market, traders bet that the Fed will still proceed with interest-rate cuts next year amid declining prices. They expect the first cut to occur in March. FEDWATCH "Healthy growth and labor market data suggest that insurance cuts are not imminent... But the better inflation news does suggest that normalization cuts could come a bit earlier," Goldman Sachs economist Jan Hatzius said in a note dated Dec. 10. Inflation data last month showed U.S. consumer prices were unchanged in October as Americans paid less for gasoline, and the annual rise in underlying inflation was the smallest in two years. Goldman Sachs believes some participants might "pencil in more cuts than before in response to the inflation news, but others might hold back to avoid encouraging the market to price too many cuts too soon." "Our own inflation forecast is a touch lower, but FOMC (Federal Open Market Committee) participants will likely still prefer to err on the side of being less optimistic," adds Hatzius. https://www.reuters.com/markets/rates-bonds/goldman-sachs-sees-fed-delivering-its-first-rate-cut-q3-2024-2023-12-11/
