2023-11-21 22:13

OTTAWA, Nov 21 (Reuters) - Canada will finance investment tax credits for carbon capture and storage (CCS) and for net-zero energy technologies, following through on previously announced subsidies meant to attract more green investment, its Fall Economic Statement (FES) said on Tuesday. The financing of two of the investment tax credit (ITC) programs, and the legislation of the labor requirements that will be tied to them, was reported exclusively by Reuters on Monday. CCS is seen as key to decarbonizing Canada's oil sands. Canada is the world's fourth-biggest petroleum producer. Prime Minister Justin Trudeau has said he wants Canada to be a leading global supplier of green technology. The ITCs and contracts for difference are meant to help Canada compete with the United States, which is offering generous incentives through the Inflation Reduction Act introduced more than a year ago. U.S. President Joe Biden has lauded the $430 billion IRA passed in August 2022 as an economic powerhouse. Bank of America estimates it has already spurred $132 billion of investment across more than 270 new clean-energy projects. ITCs for clean hydrogen and for clean technology manufacturing will be launched after the spring budget, according to the FES, while those for clean electricity will follow at the end of next year. The FES on Tuesday also announced a new ITC covering 30% of an investment in waste biomass that produces heat and electricity, and covering 15% of waste biomass that produces electricity. Through the Canada Growth Fund, Canada will ramp up contracts for difference, which help guarantee the future price of carbon credits for investors. The FES stipulates that the fund will allocate, on a priority basis, up to C$7 billion ($5.1 billion) of its C$15 billion in capital. "These contracts have the potential to get some of Canada’s most promising industrial emissions reduction projects off the ground, creating good jobs for Canadians," said Michael Bernstein, executive director of Clean Prosperity, a climate policy advocacy group. "Today's announcement is an important step for stimulating Canadian low-carbon economic growth, and for climate action," Bernstein said. ($1 = 1.3718 Canadian dollars) https://www.reuters.com/business/energy/canada-begin-financing-carbon-capture-says-it-will-ramp-up-contracts-difference-2023-11-21/

2023-11-21 21:47

Nov 22 (Reuters) - A look at the day ahead in Asian markets from Lewis Krauskopf, markets correspondent. A rally in stocks took a breather ahead of Wednesday's session in Asia as U.S. investors mostly shrugged off minutes from the Federal Reserve's latest meeting. With the path of interest rates foremost in investors' minds, the market was keen for any clues into thinking at the U.S. central bank. Minutes released on Tuesday showed that Fed officials agreed at their last meeting they could take a cautious approach to raising rates moving forward, and would only need to increase them if incoming information showed insufficient progress in lowering inflation. Still, major U.S. equity indexes ended lower on the day. The S&P 500 ended down 0.2%, while the tech-heavy Nasdaq Composite (.IXIC) fell 0.6% as both indexes snapped five-day winning streaks. Despite the day's declines, stocks have soared in November, with the S&P 500 and MSCI's all country index (.MIWD00000PUS) both up over 8% this month. The next immediate focus was on Nvidia (NVDA.O). Reaction to the U.S. chip heavyweight's quarterly report, out on Tuesday after the close of U.S. markets, was potentially set to ripple through markets globally, as well as through Asia's semiconductor industry. Nvidia is at the heart of the fervor over artificial intelligence in markets this year. Its shares have been one of the Magnificent Seven megacap stocks whose massive gains have propelled equity indexes higher this year, with Nvidia hitting a record high this week ahead of its results. Equities will be looking for direction after a largely tepid session on Tuesday. Japan's Nikkei(.N225) ended marginally lower on Tuesday but was still near three-decade highs. In Chinese equities, the blue-chip CSI 300 Index (.CSI300) edged up 0.1%, while the Shanghai Composite Index (.SSEC) was largely flat, trimming early gains. The yen was last little changed against the dollar at 148.34 per dollar. Earlier in Tuesday's session, the greenback hit its lowest level against the Japanese currency in about two months. In U.S. Treasuries, whose moves have been driving asset prices broadly, the benchmark 10-year Treasury yield edged down to 4.41%, continuing its slide for most of November. Trading volumes were poised to slow over the rest of the week, with the Thanksgiving holiday on Thursday in the U.S. Here are key developments that could provide more direction to markets on Wednesday: - Singapore GDP (Q3) - Taiwan jobless rate data (Oct) - US weekly jobless claims https://www.reuters.com/markets/asia/global-markets-view-asia-graphics-pix-2023-11-21/

2023-11-21 21:25

WASHINGTON, Nov 21 (Reuters) - U.S. Federal Reserve officials agreed at their last policy meeting that they would proceed "carefully" and only raise interest rates if progress in controlling inflation faltered, the minutes of the Oct. 31-Nov. 1 gathering showed on Tuesday. "All participants agreed that the Committee was in a position to proceed carefully," according to the minutes, which appeared to show support for more rate hikes dissipating within the U.S. central bank's Federal Open Market Committee, and the baseline shifting to one in which its benchmark overnight interest rate remains steady absent a bad inflation surprise. Inflation has been slowing - consumer prices did not rise at all on a month-to-month basis in October - and while the Fed has not declared its fight against rapid price increases over, the tenor of the discussion has been shifting towards a focus on how long to keep the policy rate in the current 5.25%-5.50% range. "Participants noted that further tightening of monetary policy would be appropriate if incoming information indicated that progress toward the Committee's inflation objective was insufficient," said the minutes, a statement that indicated it will take an unexpected shock of some degree to prompt a further rate increase. That sentence did not appear in the minutes of the Fed's prior meeting in September, when "a majority of participants" still judged that another rate increase would be needed in a tightening cycle that has pushed the policy rate 5.25 percentage points higher in the past 20 months. The latest policy meeting readout, by contrast, said that "all participants judged it appropriate to maintain" the current rate setting, a stance that will be clarified at the Fed's Dec. 12-13 meeting when policymakers issue a new set of detailed projections for interest rates and the economy. The document drew little reaction in financial markets, largely affirming the view that the Fed is done raising rates but won't explicitly say so until more officials become convinced inflation won't rebound. Contracts tied to the federal funds rate continued to show a near-zero probability of further increases. Odds of a rate cut at the Fed's April 30-May 1, 2024 meeting rose slightly to roughly 60%, from about 57% before the release of the minutes, according to the CME Group's FedWatch Tool. U.S. stocks added slightly to losses and closed lower following the release of the minutes, while the U.S. dollar (.DXY) edged higher against a basket of currencies. U.S. Treasury yields slipped. The minutes showed U.S. central bank policymakers wrestling with conflicting economic signals that have made risks to the economy "more two-sided," with rekindled inflation still a concern, but worries as well about clamping down on credit too far and damaging the economy's prospects. U.S. economic growth had just registered an outsized 4.9% annualized gain in the third quarter, a seemingly inflationary pace. But financial markets had driven interest rates higher for households, businesses and the U.S. government, threatening to curb economic and job growth more than might be necessary to return inflation to the Fed's 2% target. "Participants commented on the significant tightening in financial conditions in recent months, driven by higher longer-term yields," the minutes said. Still, inflation "remained well above" the central bank's target, likely requiring Fed policy "to remain at a restrictive stance for some time until inflation is clearly moving down sustainably." "The overall tone of the FOMC minutes was cautiously hawkish - the commitment to remaining in restrictive territory for 'some time' was the clearest takeaway," said Ian Lyngen, strategist with BMO Capital Markets. NO VICTORY DECLARATION Fed Chair Jerome Powell had made liberal use of the "careful" concept at his last press conference in describing the central bank's efforts to balance still-elevated inflation with a sense the economy was about to slow. There's good reason to be cautious, with the Fed possibly on the verge of pulling off the unexpected by navigating out of the worst inflationary surge in 40 years without doing major damage to the economy. A New York Fed staff study released on Tuesday suggested in fact that the U.S. central bank's late start in raising interest rates, with the first hike coming a year after prices began a sharp rise, allowed the economy to bank more growth with the same progress on lowering inflation than would have been the case if rate increases had started sooner. There's little appetite among policymakers, however, to declare victory yet, or to give investors much direct guidance about what will happen next. "Inflation has given us a few head fakes. If it becomes appropriate to tighten policy further, we will not hesitate to do so," Powell said at an International Monetary Fund research conference earlier this month. "We will continue to move carefully, however, allowing us to address both the risk of being misled by a few good months of data, and the risk of over-tightening." https://www.reuters.com/markets/us/fed-minutes-likely-anchor-careful-approach-policy-2023-11-21/

2023-11-21 21:16

NEW YORK, Nov 21 (Reuters) - Binance chief Changpeng Zhao stepped down and pleaded guilty to breaking U.S. anti-money laundering laws as part of a $4.3 billion settlement resolving a years-long probe into the world's largest crypto exchange, prosecutors said on Tuesday. The deal, which will see Zhao personally pay $50 million, was described by prosecutors as one of the largest corporate penalties in U.S. history. It is another blow to the crypto industry that has been beset by investigations and comes on the heels of the recent fraud conviction of FTX founder Sam Bankman-Fried. But several legal experts said it was a good outcome for Zhao, leaving his vast wealth intact and allowing him to retain his stake in Binance, the exchange he founded in 2017. Binance broke U.S. anti-money laundering and sanctions laws and failed to report more than 100,000 suspicious transactions with organizations the U.S. described as terrorist groups including Hamas, al Qaeda and the Islamic State of Iraq and Syria, authorities said. The exchange also never reported transactions with websites devoted to selling child sexual abuse materials and was one of the largest recipients of ransomware proceeds, they said. "Binance made it easy for criminals to move their stolen funds and illicit proceeds on its exchanges," U.S. Attorney General Merrick Garland said on Tuesday. "Binance also did more than just fail to comply with federal law. It pretended to comply." Some of the charges, which are both criminal and civil, relate to practices that Reuters reported first in a series of articles in 2022. The Justice Department, which negotiated the settlement with the Commodity Futures Trading Commission (CFTC) and the Treasury Department, is seeking an 18-month prison sentence for Zhao, the maximum suggested under federal guidelines, the New York Times reported. Binance's former chief compliance officer Samuel Lim was charged by the CFTC, the agency said. Neither Lim nor his lawyers responded to requests for comment. Binance will pay $1.81 billion within 15 months, and a further $2.51 billion forfeiture as part of the deal, prosecutors said. Zhao, a billionaire, was born in China and moved to Canada at the age of 12. He pleaded guilty in a Seattle court on Tuesday afternoon. "Today, I stepped down as CEO of Binance," Zhao said on social media after the settlement was announced. "Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself." While authorities have probed Zhao and Binance for years, Zhao's exit marks a dramatic development for one of the most powerful figures in the crypto industry, and for Binance. The deal raises questions over the future of the crypto exchange, which he has tightly controlled. Richard Teng, a longtime Binance executive, will take over at Binance, Zhao said in his post. "These resolutions acknowledge our company’s responsibility for historical, criminal compliance violations, and allow our company to turn the page," Binance said in a statement. In a separate statement, Teng said that his focus would be on "reassuring users that they can remain confident in the financial strength, security and safety of the company." ZHAO RETAINS BINANCE STAKE Vanderbilt University law professor Yesha Yadav said while the fine was extremely large it appeared manageable for Binance. "This deal...looks designed to give Binance the chance to live another day, while removing CZ, a figurehead who has been so intrinsically linked to the growth of a business model," she said. Since Zhao appears to be retaining his stake in Binance, however, it's possible he may still be able to exert influence on the company, Yadav added. Zhao is worth $10.2 billion, according to Forbes. Given the seriousness of the violations and actors involved, Zhao appears to have "come out of this looking pretty good" as the U.S. government likely had to entice him to come to the U.S., said Robert Frenchman of Mukasey Frenchman LLP. "He still has enormous wealth," Frenchman said. "He isn't likely to spend too much time in a U.S. jail. He retains his ownership stake in Binance, a company that has now resolved some of its biggest legal issues." Prosecutors likely weighed those benefits for Zhao against the possibility that he may not have otherwise surrendered and the desire to convince Binance to agree to pay a hefty sum, said Jeffrey Cohen, an assistant professor at Boston College Law School and former federal prosecutor. "If you can get a good number for a corporate fine and the cost is that the individual defendants take a slightly lesser penalty, the government makes that calculation," Cohen said. 'POTENTIALLY ILLEGAL' Binance has been under the Justice Department's scrutiny since at least 2018, Reuters reported last year, just one of a string of legal headaches it faces in the United States. Federal prosecutors asked the company in December 2020 to provide internal records about its anti-money laundering efforts, along with communications involving Zhao. The CFTC filed its civil charges against Binance in March, alleging it failed to implement an effective anti-money laundering program to detect and prevent terrorist financing. Internally, Binance officers and employees acknowledged that the platform facilitated "potentially illegal activities," the CFTC alleged. In February 2019, Binance's Lim received information on transactions by the militant Palestinian group Hamas on Binance, the CFTC wrote. Lim, a Singaporean, "explained to a colleague that terrorists usually send ‘small sums’ as ‘large sums constitute money laundering'," the CFTC said in its March lawsuit. Daniel Silva, a partner at law firm Buchalter and former federal prosecutor said the allegations likely could have supported charges against Zhao carrying stiffer penalties like fraud or money laundering. "He was at risk of much more serious charges, and so this resolution is a very favorable one for him," Silva said. Even so, a guilty plea involving the CEO of a company is rare and underscores the Justice Department's push under Democratic leadership for charges against executives. "The government is beating a drum on the issue of individual accountability," said Kit Addleman, a partner with Haynes Boone law firm in Dallas. She noted the size of the fines make clear the U.S. government wants to rein in the crypto sector, describing the financial size of the deal as "staggering". For nearly two years, a team of Reuters reporters has been investigating Binance. More coverage: Binance kept weak money-laundering checks even as it promised tougher compliance How Binance became a hub for hackers, fraudsters and drug traffickers How Binance CEO and aides plotted to dodge regulators in U.S. and UK Binance's books are a black box, filings show, as crypto giant tries to rally confidence Binance commingled customer funds and company revenue, former insiders say https://www.reuters.com/markets/us/us-authorities-set-unveil-settlement-with-binance-source-2023-11-21/

2023-11-21 21:14

LONDON, Nov 21 (Reuters) - Crypto investors have welcomed the prospect of a resolution of a long-running U.S. criminal investigation into Binance, reckoning any deal that allows the major exchange to continue operating would remove a nagging risk to the wider market. The U.S. Justice Department (DOJ) is seeking over $4 billion from Binance as part of a proposed resolution of its probe, Bloomberg reported on Monday, citing people familiar with the discussions. A source familiar with the investigation told Reuters the investigation was nearing its conclusion, without elaborating. An announcement on the resolution may come as soon as the end of this month, Bloomberg reported. Bitcoin , the top crypto and a barometer for wider sentiment, was unmoved by the news and was on Tuesday trading down about 2.6%. Binance's in-house token BNB, the fourth-biggest digital coin, climbed 4.6% on Tuesday, adding to gains of as much as 6% a day earlier. The market reaction reflects an expectation that a $4 billion payment would be manageable for Binance, four crypto investors and market participants said. Such a settlement would allow Binance to continue to operate, sparing the market a sell-off sparked by any chaotic unwinding, two of the people said. "We see this news as a positive development," said Anatoly Crachilov, chief executive of London-based Nickel Digital Asset Management, a client of Binance. A settlement of around $4 billion is "something that potentially Binance can handle," Crachilov said, citing publicly available information on its trading volumes and commissions as evidence that it has been "generating billions." The exact extent of Binance's cash reserves are unknown. As a private company, it does not disclose basic financial information such as revenue and profit. It has said it is profitable and debt-free. Binance and the DOJ did not immediately respond to requests for comment. The DOJ has been investigating Binance and its billionaire CEO Changpeng Zhao since at least 2018 over potential charges including money laundering conspiracy and criminal sanctions violations, Reuters reported last year. RISK REMOVAL? Despite a falling market share this year, Binance has long dominated crypto. Last month it controlled around a third of crypto spot and half of derivatives trading, according to CCData. Its status has for years left investors wary of risks to the wider market from a string of regulatory and legal headaches facing Binance. Bitcoin fell as much as 6%, for example, after Binance and Zhao were sued by the U.S. Securities and Exchange Commission in June for allegedly evading U.S. federal securities laws. Binance has denied the SEC's allegations. Any resolution of the DOJ probe would remove the risk to the crypto market of Binance's sudden collapse, said Sui Chung, CEO of crypto index provider CF Benchmarks. "Binance disappearing overnight remains a potential systemic risk to the crypto market," Chung said. "But if there is a settlement, that won't be the case ... Any changes to Binance would be orderly." Other investors cited the personal wealth of Zhao as being sufficient to cover any settlement with the DOJ. "This can easily be swallowed by CZ himself," said Samed Bouaynaya of London-based Altana Digital Assets Fund. https://www.reuters.com/technology/crypto-investors-cheer-talk-binance-criminal-probe-resolution-2023-11-21/

2023-11-21 21:13

OTTAWA, Nov 21 (Reuters) - Canada will finance investment tax credits for carbon capture and storage (CCS) and for net-zero energy technologies, following through on previously announced subsidies meant to attract more green investment, its Fall Economic Statement (FES) said on Tuesday. CCS is seen as key to decarbonizing Canada's oil sands. Canada is the world's fourth-biggest petroleum producer. Prime Minister Justin Trudeau has said he wants Canada to be a key supplier of green technology. The ITCs and contracts for difference are meant to help Canada compete with the United States, which is offering generous incentives through the Inflation Reduction Act introduced more than a year ago. The financing of two of the investment tax credit (ITC) programs, and the legislation of the labor requirements that will be tied to them, was reported exclusively by Reuters on Monday. ITCs for clean hydrogen and for clean technology manufacturing will be launched after the spring budget, according to the FES, while those for clean electricity will follow at the end of next year. The FES on Tuesday also announced a new ITC covering 30% of an investment in waste biomass that produces heat and electricity, and covering 15% of waste biomass that produces electricity. Through the Canada Growth Fund, Canada will ramp up contracts for difference, which help guarantee the future price of carbon credits for investors. The FES stipulates that the fund will allocate, on a priority basis, up to C$7 billion of its C$15 billion in capital. ([email protected]; +1-647-480-7889) Keywords: CANADA BUDGET/CLEAN TECH https://www.reuters.com/business/energy/canada-begin-financing-carbon-capture-says-will-ramp-up-contracts-difference-2023-11-21/