2023-11-10 19:32
NEW YORK, Nov 10 (Reuters) - A still-jittery bond market is clouding the outlook for a rally in U.S. stocks, analysts tracking measures of market volatility said. Stocks and bonds have been in a tight relationship over the last few months, with the S&P 500 index (.SPX) surging nearly 7% in the last 10 sessions while the benchmark 10-year Treasury yield has tumbled 37 basis points from a 16-year high. At the same time, the Cboe Volatility Index, (.VIX), which measures expectations for stock gyrations, has fallen to a seven-week low of 14.13. While such a retreat in Wall Street's "fear gauge" would normally be a green light for stocks, there's a catch: it has not been reflected in the most closely watched measure of Treasury volatility expectations, the MOVE index (.MOVE), which remains near its recent high. That could be a problem if Treasury yields - which move inversely to bond prices - resume a climb that has pressured stocks since the summer. "Equity markets have been the tail that's being wagged by the rate market dog," said Alex Kosoglyadov, managing director of equity derivatives at Nomura. The MOVE index is nearly eight times higher than its equity-focused counterpart. That compares to a three-decade average in which the MOVE has been just under five times the value of the VIX. "Rates are ultimately the foundation of the house, and if the foundation is moving around dynamically, I don't know how you can make the case that the VIX is going to 12," Tallbacken Capital Advisors CEO Michael Purves said. A significant drop in Treasury market volatility would be great news for stock market bulls, Purves said. "That would be huge," he said. https://www.reuters.com/business/finance/investors-wary-lingering-treasury-volatility-us-stocks-rally-2023-11-10/
2023-11-10 18:57
BRASILIA, Nov 10 (Reuters) - A plan to recover degraded pastures in farm powerhouse Brazil will be officially announced as government policy and presented at the COP-28 climate summit in Dubai by President Luiz Inacio Lula da Silva, an official said. The plan, which is being devised by the Agriculture Ministry, has been submitted to Lula for approval, Carlos Augustin, special advisor to Agriculture Minister Carlos Favaro, told Reuters. Lula is expected to formally announce it on Nov. 22, ahead of the summit in the following week. The timing coincides with efforts by Brazil, also the largest global producer and exporter of sugar, coffee and orange juice, and a top supplier of chicken, to improve its environment record as the country braces for new EU regulations banning deforestation-linked commodities. The new policy aims at giving farmers financial incentives to buy or lease degraded land, most of which is currently used for low-tech cattle ranching, Augustin said. As part of the initiative, development bank BNDES could set up a fund to attract foreign capital, which in turn could be directed to land recovery efforts. "We have millions of hectares of land that are degraded, unproductive, that we can recover," Lula said during a meeting with soybean crusher lobby Abiove this week. Soybean and beef production in Brazil, the world's biggest supplier of both, is frequently associated with deforestation in endangered biomes like the Amazon and the Cerrado. According to Augustin, Brazil has 200 million hectares of land dedicated to livestock farming, and 200 million head of cattle, a low average. While some livestock farming is more productive, much of this land is practically unused. "If you double this average, you have 100 million hectares for farming with the same livestock production," he said. The government's proposal should bolster overall land productivity in the country, avoiding the need to expand land use and allowing Brazil to produce more food on the already available areas. According to Augustin, the administration wants farmers to invest in soil recovery, use of biological inputs, promote no-till farming and other sustainable techniques to be eligible for subsidized loans under the policy. As Brazilian food importers, Japan, South Korea, China and Saudi Arabia have shown interest backing investments of this type. "It's also a question of food security. The world is interested in increasing food production." https://www.reuters.com/world/americas/brazils-lula-present-pastureland-recovery-policy-cop-28-2023-11-10/
2023-11-10 18:40
SAINT-ETIENNE-AU-MONT, France, Nov 10 (Reuters) - Days of heavy rains in northern France have caused local rivers to overflow and flood houses and fields, prompting the evacuation of residents, with some having to be airlifted to safety. More than 100 towns are on red alert, and some 200 schools in the region have been shut. Rescue workers have also had to evacuate cattle. "It's catastrophic," said 32-year old farmer Gaetan Guche, whose poultry farm has been flooded, with up to 60 centimetres of water at times over the past five days. Some chickens have been killed by the water, and he is worried about the others, fearing the spread of disease amid the humidity. "We have to wait for the water to go down before we can see the whole damage. But I've had losses in chickens, financial losses in terms of seeds and equipment, and so today, it's really hard." Nearby, strawberry farmer Jean-Loup Mionnet, whose fields are partly submerged in water, said next spring's harvest was compromised, fearing he will have few to no strawberries. "We've never seen something like that," said campsite owner Jean-Marc Joyez in the village of Enquin-sur-Baillons, where many houses are flooded and roads submerged. Environment Minister Christophe Bechu said dozens of towns would be considered in a situation of natural disaster, which makes it easier for those whose homes or businesses were flooded to benefit from insurance coverage. https://www.reuters.com/world/europe/heavy-rains-flood-homes-northern-france-2023-11-10/
2023-11-10 18:38
LIMA, Nov 10 (Reuters) - Peru's economy may have shrunk for a third straight quarter from July to September, the central bank's chief economist said on Friday, as the Andean nation struggles to claw its way out of a recession. The world's No. 2 copper producer slid into a technical recession earlier this year after two quarters of negative growth due to the adverse impacts of the El Nino weather phenomenon, lower private investment and lingering effects from earlier social conflicts. "With the recent information, it is possible that we may have a negative growth rate in the third quarter," the bank's chief economist Adrian Armas said in a presentation. The central bank in September slashed its growth forecasts for 2023 to 0.9% from the previously forecast 2.2%, a projection that now faces "downward pressure," said Armas. The comments came a day after the bank lowered Peru's benchmark interest rate by 25 basis points to 7.00%, its third consecutive cut as the monetary authority eases borrowing costs in an effort to resuscitate the economy. The economy could see a turnaround in the fourth quarter, Peru's economy minister said on Thursday while announcing a package of stimulus measures aimed at boosting investments, particularly in the country's critical mining sector. The new measures are "fundamental" not just to attracting investment but also to recovering declining confidence within the business community, Armas said on Friday. Peru's national statistics agency is scheduled to next report official GDP data on November 15. https://www.reuters.com/world/americas/peru-central-bank-says-economy-could-have-shrunk-third-quarter-2023-11-10/
2023-11-10 18:27
Nov 10 (Reuters) - U.S. energy firms this week cut the number of oil rigs operating for a second week in a row to the lowest since January 2022, energy services firm Baker Hughes (BKR.O) said in its closely followed report on Friday. The combined oil and natural gas rig count, traditionally an early indicator of future output, fell by two to 616 in the week to Nov. 10, the lowest since February 2022. , , Baker Hughes said that puts the total rig count down 163, or 21%, below this time last year. The number of active rigs has dropped since December due to weaker energy prices and as many firms return profits to investors and pay down debt rather than spending to boost production. However, U.S. oil and gas production is still set to hit record highs this year as demand grows and the industry boosts efficiency to offset the impact of the lower prices. The number of oil rigs fell by two to 494 this week, while gas rigs were unchanged at 118. U.S. oil futures were down about 4% so far this year after gaining about 7% in 2022. U.S. gas futures , meanwhile, have plunged about 32% so far this year after rising about 20% last year. Despite lower prices for oil and gas, independent exploration and production companies tracked by U.S. financial services firm TD Cowen were set to raise spending by about 20% this year, a slight increase from earlier expectations of a 19% hike. Spending rose about 40% in 2022 and 4% in 2021. Much of the extra spending, however, is going towards rising inflation-related costs for labor and equipment. U.S. oil and gas output is expected to rise to record highs in 2023, although the Energy Information Administration (EIA) slightly cut its forecasts this week. Crude production was on track to rise from 11.9 million barrels per day (bpd) in 2022 to 12.9 million bpd in 2023 and 13.2 million bpd in 2024. That compares with a record 12.3 million bpd in 2019. Gas production was set to rise from a record 99.6 billion cubic feet per day (bcfd) in 2022 to 103.7 bcfd in 2023 and 105.1 bcfd in 2024. https://www.reuters.com/business/energy/us-drillers-cut-oil-rigs-lowest-since-jan-2022-second-week-baker-hughes-2023-11-10/
2023-11-10 16:18
MUMBAI, Nov 10 (Reuters) - Financial technology and data provider LSEG said on Friday it had resolved a technical incident that affected its Indian foreign exchange trading platform earlier in the day and was investigating what had happened. "Due to a technical incident that impacted some of LSEG's client authentication services, some customers experienced issues accessing FXT, impacting their ability to trade on FX Matching between 06:33 GMT and 07:03 GMT," LSEG said in an emailed statement. "The issue has been resolved and normal service restored. Root cause analysis is in progress," it added. A source had earlier told Reuters that the Reserve Bank of India (RBI) was seeking an explanation from LSEG about an outage in the spot foreign exchange market. Speaking on condition of anonymity as the matter was sensitive, the source said the central bank "has sought a root cause analysis of the issue. Whether standard operating procedures were followed and a business continuity plan was put in place when the system went down". "They are keen to find out if the issue was due to a system failure or some human error," the source said. RBI did not respond to a Reuters request for comment. Six traders said there was a system outage for about 10 minutes on the spot dollar/rupee trading platform during which they had been unable to transact. LSEG said earlier on Friday that all indices compiled by FTSE Russell, which it also owns, were hit by a technical issue that prevented them being published for forty minutes. LSEG is among the few entities other than banks that is authorised by the RBI to operate an electronic trading platform, or ETP, for transactions in the spot foreign exchange market. It is part of the London Stock Exchange Group. Thomson Reuters, which owns Reuters News, has been a shareholder in LSEG since 2021. LSEG also pays Reuters for news stories. https://www.reuters.com/technology/india-cenbank-asks-lseg-explain-forex-system-outage-source-2023-11-10/
