2023-11-28 07:10

BERLIN, Nov 28 (Reuters) - German consumer sentiment improved slightly heading into the Christmas month but remained at a very low level with no signs of sustainable recovery in Europe's biggest economy, a survey showed on Tuesday. The consumer sentiment index rose by 0.5 points to -27.8 points heading into December from a revised -28.3 the month before and above expectations of analysts polled by Reuters for a -27.9 reading. An improved willingness to buy and less appetite to save pushed the index, published jointly by the GfK institute and the Nuremberg Institute for Market Decisions (NIM), slightly upwards. "After three consecutive months of decline, consumer sentiment is stabilising as the year draws to a close," said Rolf Buerkl, consumption expert at NIM. "The mood is still characterised by uncertainty and concern." NOTE - The survey period was from Nov. 2-13, 2023. The consumer climate indicator forecasts the progress of real private consumption in the following month. An indicator reading above zero signals year-on-year growth in private consumption. A value below zero indicates a drop compared with the same period a year earlier. According to GfK, a one-point change in the indicator corresponds to a year-on-year change of 0.1% in private consumption. The "willingness to buy" indicator represents the balance between positive and negative responses to the question: "Do you think now is a good time to buy major items?" The income expectations sub-index reflects expectations about the development of household finances in the coming 12 months. The additional business cycle expectations index reflects respondents' assessment of the general economic situation over the next 12 months. https://www.reuters.com/markets/europe/german-consumer-sentiment-barely-improves-heading-into-holiday-season-gfk-2023-11-28/

2023-11-28 07:04

Nov 28 (Reuters) - Countries will be trying at this year's COP28 climate summit to resolve details over how to establish international trading for carbon offset credits. Here's what you need to know: WHAT ARE CARBON OFFSETS? Some governments and companies may struggle to reduce their planet-warming greenhouse gas emissions to meet their climate targets. Supporters of carbon offsets see them as key means to help meet these goals. These offsets allow one nation or company to offset some of their emissions by paying for actions to cut emissions elsewhere. These actions might include rural solar panel installations or converting a fleet of petrol buses to electric. But critics say offsets disincentivize countries and companies from taking stronger action themselves on global warming by allowing them to buy their way out of climate targets. Offsets are packaged and traded as credits, with one credit being equivalent to one metric ton of carbon dioxide. WHAT'S BEEN DECIDED SO FAR? At the COP26 climate summit in Glasgow, negotiators reached a breakthrough agreement to regulate trading of carbon credits, in schemes first envisioned in Article 6 of the 2015 Paris Agreement. Article 6 provides for two types of trading: bilateral deals in which nations have more freedom to set their terms, and trades within a centralized system overseen by a new U.N. body. The Glasgow agreement spelled out enough of the rules to allow for bilateral swaps of offsets, called "internationally transferable mitigation outcomes" or ITMOs for short. While these bilateral exchanges have yet to take place, there are several countries vying to complete the first transaction as soon as this year. The Swiss fossil fuel group KliK Foundation said that, while it would help to have COP28 spell out bilateral rules more explicitly, it will continue plans to purchase ITMOs regardless. "Had we waited for COP decisions, we would be nowhere," KliK managing director Marco Berg said. Setting up a multilateral trading scheme under the U.N. has been trickier, as negotiators and a recently formed supervisory body debate rules for issuing credits and how to account for them in trading. If the key points are resolved this year, the system could launch as soon as 2024. But experts say that seems unlikely, pushing a launch back to 2025. WHAT WILL BE DECIDED AT COP28? This year's discussions will focus more on setting up the U.N.-run multilateral scheme, including adopting standardized methodologies for determining how credits can be issued. For example, countries will need to decide if credits should be issued only for demonstrated emissions reductions, or if projects that aim to avoid releasing emissions can also qualify. These emissions avoidance efforts might include a nation choosing not to drill their oil reserves or a nonprofit protecting a forest that might otherwise be cut down. Protocols need to be agreed for countries to authorize private offset sales abroad, as well as when a country can revoke or revise that authorization - for example, if a project is discovered to be violating human rights. Negotiators will also look at whether reforestation efforts should be allowed within the multilateral scheme, and how to handle issues such as forests burning down after credits are sold. "Article 6 probably won't be at the top of the political agenda this year, even if carbon markets will still be a big topic for the private sector in particular," said Gilles Dufrasne of Carbon Market Watch. But that may help the Article 6 negotiations to "avoid extreme politicization" and allow the technical delegates to get key work done, the carbon trading association IETA said in a Nov. 16 written analysis. HOW DOES THIS RELATE TO EXISTING CARBON MARKETS? Separate from the offsets trading envisioned under the Paris Agreement, there are two existing types of carbon markets – compliance and voluntary. Compliance markets apply to companies and sectors where emissions cuts are mandatory by law. They most notably operate in the European Union, the U.S. state of California and some other countries. Rules vary, but they typically require companies to buy a permit for every tonne of carbon they emit - effectively forcing firms to pay when they pollute. Compliance markets globally are worth $865 billion as of 2022, according to London Stock Exchange Group. The EU's market makes up the vast majority of that sum, but it does not allow any international offset credits, such as those under Article 6. Some companies that are under no legal obligation to cut their emissions have set voluntary targets, which they can meet partially through buying credits on a voluntary carbon market. In 2021, the voluntary market was valued at about $2 billion worldwide. It is not yet clear how various existing carbon markets might play into the U.N.-run trading scheme, which also would depend on national laws. Some experts fear that voluntary credits sold internationally outside of the Paris Agreement system could result in two countries counting the same emission cuts toward their targets. https://www.reuters.com/business/environment/how-do-carbon-offsets-factor-into-un-cop28-climate-talks-2023-11-28/

2023-11-28 07:02

More than 100 businesses call for end to fossil fuel subsidies Expectations for some are low given geopolitical tension Companies say need progress on global carbon price LONDON, Nov 28 (Reuters) - Businesses say more ambitious policies are needed urgently to drive the transition to clean energy, including an end to fossil fuel subsidies and agreement on a global carbon price, as climate talks begin in Dubai this week. Their expectations the COP28 U.N. summit, beginning on Thursday, will deliver clear action are low as governments disagree over the future role of fossil fuels, leaders are distracted by war, and global economic weakness has led to backtracking across the world on climate promises. At COP28, more than 70,000 expected attendees will discuss the failure so far to stem planet-warming carbon emissions, as well as how to help the most vulnerable countries and pursue efforts that have dragged on for years to agree a global price on carbon dioxide that businesses say can guide decision-making. The U.N. talks will be the first global assessment of progress since the landmark Paris Agreement in 2015, which set a goal of limiting global warming to well below 2 degrees Celsius (3.6 degrees Fahrenheit), while aiming for a cap of 1.5C. In September, the United Nations said more action was needed to ensure global warming of no more than 2C above the pre-industrial average. "This COP we need to see accelerated action from all parties," Matt Bell, EY Global Climate Change and Sustainability Services Leader, said. While trumpeting their own efforts to reduce emissions, corporate executives also say that are limits to what business is willing to do without incentives or policy shifts from governments. "Business will drive this transition if appropriately motivated to do so," Bell said. Originally focused solely on talks between countries, the private sector has increased its presence at U.N. summits in recent years as governments seek the sector's financial backing to drive change in the real economy. COP28 President-designate Sultan Al Jaber, who is also head of the UAE's state oil company, has said he will include the oil and gas industry in the climate discussions, presenting the decision as a constructive way forward. Climate campaigners have questioned his appointment and raised concerns his position in the oil industry will prevent progress on curbing emissions. SUPPORT FOR RENEWABLES A group of 131 companies, with a combined $1 trillion in revenue, in October urged governments to commit to a full phase-out of unabated fossil fuels, a tripling of renewable energy and a doubling in the pace of energy efficiency reforms. A draft letter seen by Reuters shows strong support for the renewable energy goal, although geopolitical tensions, especially between the world's biggest polluters China and the United States, have dampened the hopes of many. "Our expectations for COP28 are limited," said Virginie Derue, head of ESG Research at French asset manager AXA Investment Managers, citing "the lack of international consensus over priority actions and the increased multi-polarity of the world that is slowing international collaboration." Consultants Accenture said a survey of 1,000 business leaders showed a need to focus on decarbonising the capital-intensive heavy industries, with 38% of respondents saying they could not afford to decarbonise in the current environment. "One thing is clear: the business case for low-carbon investments is often weak, and businesses are looking for government to help create the market incentives to change that," said Katherine Dixon, partner at consultants Bain & Company. The business and finance sectors have long called for a global carbon emissions price that they say would level the playing field for polluters and make the switch to low-carbon more cost-effective. "We are in need of a more global approach that would include a higher share of the economy," Victoria Leggett, head of Impact Investing at asset manager UBP. While such a deal is unlikely to be struck at COP28, smaller steps can be taken, including shoring up the fledgling market for trading carbon credits among companies. Confidence in voluntary carbon markets has fallen this year as critics question the environmental credibility of projects. "The last 10% of a (corporate) carbon reduction plan will always include some carbon removal credits," Leggett said, adding that "the market needs clarity on what that means." https://www.reuters.com/business/environment/gloomy-businesses-urge-cop28-act-carbon-price-fossil-fuel-subsidies-2023-11-28/

2023-11-28 06:57

JOHANNESBURG, Nov 28 (Reuters) - Impala Platinum (IMPJ.J) said on Tuesday it had temporarily halted operations at its Rustenburg mining complex in South Africa after 11 workers died in an incident at one of its underground shafts. The Johannesburg-based platinum miner said in a statement that 86 workers were involved in the incident at its No. 11 shaft and 75 injured workers had been admitted at four hospitals in the area. The company said all mining operations at the sprawling Rustenburg complex in South Africa's North West province had been suspended on Tuesday. "Today is the darkest day in the history of Impala and our hearts are heavy for the lives lost and the individuals affected by this devastating incident," CEO Nico Muller said in the statement. Impala is among South Africa platinum producers that operate some of the deepest and oldest mining shafts in the world. The suspension could be extended to Wednesday to allow the company to "mourn and heal emotionally", a company spokesperson said. https://www.reuters.com/world/africa/eleven-workers-dead-after-incident-impala-platinum-mine-rustenburg-enca-2023-11-28/

2023-11-28 06:50

US PCE data due on Thursday Gold hits highest since May 10 Dollar touched lowest since mid August Nov 28 (Reuters) - Gold rose for a fourth consecutive session on Tuesday and hit a more than six-month high, driven by a retreating dollar and expectations that the U.S. Federal Reserve has finished hiking interest rates. Spot gold gained 1.4% at $2,041.55 per ounce by 3:00 p.m. ET (2000 GMT), highest since May 10. U.S. gold futures for December delivery settled 1.4% higher at $2,040. The near-term outlook for gold remains bullish, with the dollar index in a downtrend on hopes the Fed will no longer raise interest rates and will maybe even cut them by springtime, said Jim Wyckoff, senior analyst at Kitco Metals. However, "if (U.S.) GDP numbers and inflation indicators are stronger than expected, it will dent traders' enthusiasm in bullion," Wyckoff added. Fed policymakers look increasingly comfortable closing out the year with interest rates on hold and waiting before cutting them. Lower rates reduce the opportunity cost of holding non-interest-bearing bullion. Fed Governor Christopher Waller said he is "increasingly confident" that policy is in the right spot. Making bullion less expensive for overseas buyers, the dollar index touched its lowest since mid-August. Investors will monitor Thursday's U.S. Personal Consumption Expenditures (PCE) data, the Fed's preferred inflation indicator. The focus is also on the revised U.S. third-quarter GDP figures scheduled for Wednesday. "A sense of caution ahead of another busy week for global financial markets is also lending support to the precious metal. Given how the $2,000 level proved an extremely tough resistance to conquer, gold could end up dipping without a potent fundamental catalyst," FXTM senior research analyst Lukman Otunuga said. Silver rose 1.4% to $24.97 per ounce, platinum was up 2.3% at $939.80. Palladium fell 1.4% to $1,055.59 per ounce. https://www.reuters.com/markets/commodities/gold-hits-6-month-peak-dollar-dip-bets-feds-rate-hike-pause-2023-11-28/

2023-11-28 06:45

NEW YORK/LONDON, Nov 28 (Reuters) - MSCI's global stock index advanced on Tuesday while the dollar fell as a Federal Reserve official signaled that the U.S. central bank was done raising rates and could even consider rate cuts if inflation keeps easing. The U.S. dollar index hit a 3-1/2 month low and was on track for its biggest monthly drop in a year as investors took the view that growth in the world's largest economy is starting to slow down, with the market starting to price in a rate cut by the first half of the year. Fed Governor Christopher Waller bolstered these bets by flagging the possibility of lowering the Fed policy rate in the months ahead if inflation continues to come down. Waller also said he was "increasingly confident" the current interest rate setting would prove adequate to lower inflation to the Fed's 2% target. Another Fed governor, Michelle Bowman, said the central bank will likely need to raise borrowing costs further in order to bring inflation back down to its target. Traders appeared to take their cues from Waller with increased bets for the first rate cut taking place as soon as March with the probability for a 25 basis-point cut last at nearly 33%, up from 21.5% on Monday, according to the latest data from CME Group's Fedwatch tool. The majority expected a cut of at least one notch in May, according to CME data. The market saw Waller's comments as the first sign the Fed "recognizes they might be able to cut rates next year" while other officials "took some of the euphoria" away, according to Anthony Saglimbene, Ameriprise chief market strategist. And Saglimbene said, "It's normal you'll see stocks consolidate in the last few days of a really strong month. ... For the rest of the year, momentum is biased to the upside." While trading in stocks was choppy, Wall Street indexes managed to close higher. The Dow Jones Industrial Average (.DJI) rose 83.51 points, or 0.24%, to 35,416.98, the S&P 500 (.SPX) gained 4.46 points, or 0.10%, to 4,554.89 and the Nasdaq Composite (.IXIC) added 40.73 points, or 0.29%, to 14,281.76. MSCI's gauge of stocks across the globe (.MIWD00000PUS) gained 0.27%. Also on Tuesday, a survey showed U.S. consumer confidence rose in November after three months of declines, though households still anticipated a recession over the next year. Later this week the spotlight will be on the U.S. October personal consumption expenditures report (PCE), which includes core PCE, which is the Fed's preferred measure of inflation. Also euro zone consumer inflation figures should give further clarity on where prices and monetary policy are headed there. After the Fed commentary, U.S. Treasury yields dipped with benchmark 10-year notes down 6 basis points to 4.328%, from 4.388% late on Monday. In currencies, the dollar index fell 0.368%, with the euro up 0.32% to $1.0988. The Japanese yen strengthened 0.82% versus the greenback at 147.47 per dollar, while Sterling was last trading at $1.2694, up 0.55% on the day. With some encouragement from the weaker dollar, spot gold prices were up 1.4% at $2,040.79 an ounce after hitting their highest level since May in their fourth consecutive gain. Oil prices settled higher on Tuesday on the possibility that OPEC+ will extend or deepen supply cuts, a storm-related drop in Kazakh oil output and the weaker U.S. dollar. U.S. crude settled up 2.07% at $76.41 per barrel and Brent settled at $81.68, up 2.13% on the day. https://www.reuters.com/markets/global-markets-wrapup-1-2023-11-28/