2023-11-09 02:24

TOKYO, Nov 9 (Reuters) - The Bank of Japan may end its negative interest rate policy as early as January, and keep raising short-term borrowing costs if the economy can weather risks from overseas uncertainties, said former central bank executive Eiji Maeda. The BOJ last month revised up its price estimates to project inflation to hit 1.9% in both fiscal 2024 and 2025, as measured by an index that strips away the effects of volatile fresh food and fuel costs. The "surprisingly big" upgrade in the projections means inflation is already on course to sustainably hit the BOJ's 2% target, said Maeda, who is in close contact with policymakers. The central bank could revise up its price forecasts again in January, which would allow policymakers to justify pulling short-term interest rates out of negative territory, he said. "There's a chance the BOJ could end negative rates as early as January next year, if it judges that inflationary pressure is heightening," Maeda told Reuters in an interview on Wednesday. "The BOJ could also end yield curve control. In doing so, it may put in place a guidance pledging to buy government bonds nimbly to counter any spike in long-term rates," he added. As part of efforts to reflate growth, the BOJ sets a 0% target for the 10-year bond yield under yield curve control (YCC). It also applies a charge to a pool of excess reserves to guide short-term rates at -0.1% under its negative-rate policy. The BOJ has pledged to keep both policies in place until sustained achievement of its 2% price target comes into sight. If the BOJ decides to end negative rates, that would mean Japan will see inflation stabilise near 2%, and require raising short-term borrowing costs to levels seen as neither stimulating nor cooling the economy, Maeda said. Such neutral interest rates, estimated by the level of inflation expectations and the economy's output gap, will most likely stand somewhere near 2%, Maeda said. "After pushing short-term rates to zero from negative territory, the BOJ could raise interest rates gradually in a pace of once every few months with a close eye on economic and price developments," he said. "Given uncertainty over the overseas economic outlook, the BOJ will basically tread slowly and carefully, even if it were to keep raising short-term rates." Before adopting negative rates and YCC in 2016, the BOJ was pushing down long-term rates solely with a huge asset-buying programme called "quantitative and qualitative easing" (QQE). "After ending negative rates, the BOJ's policy would look quite similar to when it just had QQE," Maeda said. The head of think tank Chibagin Research Institute, Maeda oversaw the BOJ's monetary policy drafting as its executive director until May 2020. https://www.reuters.com/markets/asia/boj-may-end-negative-rates-january-ex-central-bank-executive-says-2023-11-09/

2023-11-09 00:45

Nov 8 (Reuters) - Argentine national oil company YPF swung to a loss in the third quarter, hurt by lower local fuel prices and higher operating costs, the company said on Wednesday, The result was significantly behind analyst expectations. Net loss in the period totaled $137 million, compared with a $693 million profit in the prior-year third quarter, and missing an LSEG-compiled analyst forecast for a net profit of around $175 million. The state-run producer's revenue fell about 16% to $4.5 billion during the July-to-September period, due in part to a drop in local fuel prices in dollars, YPF said in a statement. In August, Argentina froze fuel prices in a bid to tame surging triple-digit inflation. Operating costs grew 11% year-on-year, while earnings before interest, taxes, depreciation and amortization (EBITDA), or core earnings, slid 37% to $992 million for the quarter. The loss comes despite the steady uptick in production from western Argentina's massive Vaca Muerta shale formation, one of the biggest in the world. YPF said total oil and gas production increased 3% in the third quarter, with crude output up 5.4%. The company added that its north Vaca Muerta pipeline should be fully operational this month, and that its ramp-up will likely be gradual and kick off early next year. YPF shares closed down 1%. In September, a U.S. judge ruled that Argentina must pay about $16 billion to minority shareholders of YPF arising from the government's 2012 seizure of a majority stake in the company. At the time, the government of Argentina, which is in dire financial straits marked by scarcity of foreign exchange reserves, pledged an immediate appeal. https://www.reuters.com/business/energy/argentinas-ypf-swings-net-loss-amid-dampened-local-oil-prices-2023-11-08/

2023-11-08 23:58

Nov 8 (Reuters) - Canada's Suncor Energy (SU.TO) beat market estimates for third-quarter profit on Wednesday, helped by strong refining margins and higher sales volumes from its oil sands operations. Demand for refined products remained stable during the quarter after the voluntary production cut from top OPEC+ oil producers Saudi Arabia and Russia. The company's refinery utilization averaged 99%, higher than the 85% in the second quarter. Refinery throughput declined marginally to 463,200 barrels per day (bpd) compared with a year earlier. Peer Cenovus Energy (CVE.TO) also reported a rise in its quarterly profit last week, helped by a jump in refinery throughput as operations at two major U.S. plants improved following extensive rebuilds. Suncor's total upstream production fell to 690,500 barrels of oil equivalent per day (boepd), compared with 724,100 boepd a year earlier due to international asset divestments. The company had sold its British oil and gas business to Norway Equinor (EQNR.OL) earlier in March. Its net production of synthetic crude, a processed form of raw and heavy bitumen, rose to 469,300 bpd, compared with 405,100 bpd a year ago, due to lower maintenance activities. Suncor said its Terra Nova offshore site would return to service in the fourth quarter. On an adjusted basis, the company earned C$1.52 per share in the quarter ended Sept. 30, compared with analysts' average estimate of C$1.36 per share, according to LSEG data. The company reported a net profit of C$1.54 billion, compared with a year-ago loss of C$609 million when it was hit by impairment charges. https://www.reuters.com/business/energy/suncors-quarterly-profit-tops-estimates-stable-demand-refined-products-2023-11-08/

2023-11-08 23:58

Warner Bros Discovery falls on disappointing outlook Lucid Group drops on production forecast cut Eli Lilly climbs after FDA approves weight-loss treatment Dow down 0.12%, S&P 500 up 0.10%, Nasdaq up 0.08% Nov 8 (Reuters) - The S&P 500 and Nasdaq eked out small gains on Wednesday to extend their recent winning streaks as investors weighed Federal Reserve officials' recent comments for signals on the path of interest rates and focused on the direction of Treasury yields. U.S. Treasury yields have retreated sharply since the benchmark 10-year Treasury note topped 5% in late October, as comments from Fed officials and softer labor data led to growing expectations the central bank had reached the end of its rate-hike cycle. That drop has helped fuel a stock rally that has given the S&P 500 (.SPX) and the Nasdaq (.IXIC) their longest streak of gains in two years through Wednesday's close at eight and nine sessions, respectively. Markets are pricing in about a 50% chance of a rate cut of at least 25 basis points as soon as May, according to the CME Group's FedWatch Tool, up from about 41% a week earlier. Still, comments from several central bank officials over the past few days left the door open for additional hikes, causing some uncertainty among investors. "Everyone kind of knows we're either going to get one more hike or they're done and they're probably done," said Jason Ware, chief investment officer at Albion Financial Group. "If we get a recession stocks have a different valuation, earnings look different. If we don't then we're probably in the context of a new early stage bull market here," he said. "That's the question that investors are going to be asking themselves while watching yields - the information we get between now and the end of the year on yields and economic data as it relates to recession is going to drive the tape." The Dow Jones Industrial Average (.DJI) fell 40.33 points, or 0.12%, to 34,112.27; the S&P 500 (.SPX) gained 4.40 points, or 0.10 %, at 4,382.78; and the Nasdaq Composite (.IXIC) added 10.56 points, or 0.08 %, at 13,650.41. The Dow's decline snapped a seven-session winning streak. Meanwhile, Fed Chair Jerome Powell did not comment on monetary policy in opening remarks at the U.S central bank statistics conference on Wednesday. He is scheduled to speak at another conference on Thursday. Longer-dated yields fell and the 10-year Treasury yield was down on the day after a $40 billion auction analysts viewed as acceptable given the increased size. Eli Lilly (LLY.N) shares climbed 3.2% after the U.S. Food and Drug Administration approved the drugmaker's weight loss treatment. In earnings, Warner Bros Discovery (WBD.O) plunged 19% after the media and entertainment conglomerate said Hollywood strikes and a weak advertising market could hurt 2024 earnings, weighing on peer Paramount Global (PARA.O). Take-Two Interactive Software (TTWO.O) jumped 5.2% after the company said it would release a trailer early next month for the latest installment in its best-selling "Grand Theft Auto" videogame franchise. Electric vehicle maker Lucid Group (LCID.O) stumbled 8.1% after trimming its production forecast. Declining issues outnumbered advancers by a 1.3-to-1 ratio on the NYSE while on the Nasdaq declining issues outnumbered advancers by a 1.7-to-1 ratio on the Nasdaq. The S&P 500 posted 17 new 52-week highs and eight new lows while the Nasdaq recorded 53 new highs and 206 new lows. Volume on U.S. exchanges was 10.27 billion shares, compared with the 10.95 billion average for the full session over the last 20 trading days. https://www.reuters.com/markets/us/futures-take-breather-ahead-powell-remarks-2023-11-08/

2023-11-08 23:51

Nov 8 (Reuters) - U.S. agricultural chemical and seed company Corteva (CTVA.N) on Wednesday reported a smaller third-quarter loss, helped by higher prices for its seeds. Though global crop prices have scaled back from last year, they remained elevated compared to historical averages. Corteva's third-quarter seed net sales rose to $878 million from $862 million a year earlier. However, sales volumes declined as a result of its exit from Russia and lower-than-expected corn planted area in Brazil. Its crop protection segment, which sells insecticide and herbicide, reported an 11% drop in sales to $1.71 billion due to a decline in both volumes and prices. The Indianapolis-based company had lowered its 2023 net sales forecast in October due to increased destocking propelled by a rise in carrying cost of stock for distributors, driven by higher interest rates and improved product availability. According to analysts, farmers have delayed purchases of crop protection products closer to the day of application, resulting in a fall in prices. Rival FMC Corp (FMC.N) also flagged lower sales in South America, last month. Corteva posted a net loss of $321 million, or 45 cents per share, in the quarter ended Sept. 30, compared with a loss of $331 million, or 46 cents per share, a year earlier. https://www.reuters.com/markets/commodities/corteva-posts-smaller-quarterly-loss-2023-11-08/

2023-11-08 23:30

Nov 8 (Reuters) - Natural gas distributor Atmos Energy (ATO.N) reported a rise in fourth-quarter profit on Wednesday, helped by higher prices and customer growth in its distribution unit, and forecast higher earnings in 2024. The company's shares rose 1.2% in extended trade. Atmos delivers natural gas to more than 3 million distribution customers in over 1,400 communities across nine states located primarily in the south of U.S. For fiscal 2024, the company expects per-share profit between $6.45 and $6.65 and capital expenditure of $2.9 billion. It earned $6.10 per share in fiscal 2023. The company said its consolidated operating income rose to $154.1 million for the reported quarter compared with $105.4 million a year earlier, due to favorable outcomes in rate cases, a formal process used to determine the amounts to be charged to customers for electricity, natural gas, private water and steam services provided by regulated utilities. The Dallas-based company posted a net income of $118.5 million, or 80 cents per share, for the quarter, compared with $71.6 million, or 51 cents per share, a year earlier. The company also raised its fiscal 2024 dividend by 8.8% to $3.22 per share. https://www.reuters.com/business/energy/atmos-energys-profit-climbs-higher-prices-2023-11-08/