2023-11-06 21:53
Nov 7 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. Tuesday will be one of the busiest days of the year for Asian markets in terms of top-tier regional economic data and events, and investors could not be going into it on a stronger footing. Asian and emerging market stocks rose more than 2% on Monday, bringing their gains over the last three trading sessions up to almost 6%. This is their best run in a year, powered by easing financial conditions in the form of lower U.S. bond yields and a weaker dollar, and renewed faith in the U.S. economic 'soft landing' scenario. Aggregate financial conditions across emerging markets and in China have slumped in recent days to their loosest in nearly two months, or in the case of India, the easiest in three months, Goldman Sachs financial conditions indices show. South Korean shares got an added injection of rocket fuel on Monday, surging 5.7% in their biggest leap since early 2020 after authorities re-imposed a ban on short-selling through the first half of 2024 to promote a "level playing field". Having under-performed global and developed market benchmarks last week, Asian stocks could be set to outperform this week. That is how markets played out on Monday, as the MSCI World Index and Wall Street eked out gains of no more than 0.3%. That may temper some of the bullishness across Asia on Tuesday, however, and there is certainly no shortage of event risk to keep investors and traders on their toes. Australia's central bank is expected to raise its benchmark cash rate by 25 basis points to 4.35%, the highest since 2011 and breaking a run of four meetings on hold. Sticky inflation is keeping a hawkish bias in Aussie money markets, which are pricing in at least one more quarter point hike next year. Also on Tuesday the Bank of Korea publishes the minutes from its last policy meeting, while on the data front consumer inflation figures from Taiwan and the Philippines, trade data from Taiwan, industrial production figures from Indonesia, and household spending figures from Japan are all on tap. The big one, however, could be China's trade report for October. Steep year-on-year declines in imports and exports for most of this year - especially imports - have been a pretty good barometer of the overall economy's underlying weakness. But a trough looks to have been reached, the trend is improving, and the economy grew faster than expected in the third quarter. China bulls will be hoping for more encouraging signs. Skeptical foreign investors will need more than one month of slowing imports and exports decline though. Figures on Monday showed that China recorded its first-ever quarterly deficit in foreign direct investment (FDI) since China's foreign exchange regulator began compiling the data in 1998. Here are key developments that could provide more direction to markets on Tuesday: - Australia central bank policy meeting - China trade (October) - Japan household spending (September) https://www.reuters.com/markets/asia/global-markets-view-asia-graphics-pix-2023-11-06/
2023-11-06 20:59
WASHINGTON, Nov 6 (Reuters) - Denmark's Orsted (ORSTED.CO) is still "committed" to developing offshore wind farms in the United States despite the company's cancellation of two projects off the coast of New Jersey, White House senior advisor John Podesta told Reuters on Monday. Podesta spoke with the company after its shock decision last week, he said in an interview. The discussion underscores the Biden administration's keen interest in offshore wind to further the nation's climate change goals by adding zero-emissions power generation. "Orsted is moving forward with one of its projects here. I think they remain committed to the U.S. market," Podesta said, referring to a project in New York. The world's biggest offshore wind company last week said it would cease all development on the New Jersey Ocean Wind projects, triggering anger from New Jersey Governor Phil Murphy. Podesta, who oversees implementation of Biden's landmark climate-change law, the Inflation Reduction Act, said early project proposals like Orsted's were hit with high interest rates and supply chain challenges, making U.S. project development around 25% more expensive than in Europe. Those costs will come down "over time, as more investment happens," he said. "We remain optimistic that at the end of the day it will be a good-news story and we'll get these projects on track." Podesta also said he spoke with Murphy after the decision. "Even though the economics have become more challenging than they were a year or two ago, I think they're still basically... on track and the region needs the power," he said. "We're going to ensure that there is success there and we're trying to do everything we can to make that happen." The administration has a goal of permitting 30 gigawatts of offshore wind capacity by 2030. Last week, a senior administration official said that target was still achievable despite widespread industry doubts. CALIFORNIA SOLAR PROJECTS RUNNING Also on Monday, the administration outlined its progress in meeting a congressional mandate to permit 25 gigawatts of renewable energy on public lands by 2025. Expanding renewable energy development on public lands is a key pillar of Biden's plan to decarbonize the U.S. electricity grid by 2035. In a statement, the Department of Interior said two major solar energy projects on federal land in Riverside County, California were fully operational. The projects, Oberon Solar and Arlington Solar, are capable of generating 864 megawatts of electricity combined. The agency also said it had achieved permitting milestones for transmission lines in the western U.S., including the approval of construction for a line in Arizona to connect solar energy to the grid. Interior said it had made progress on environmental reviews for eight other solar projects in California and Nevada. Interior's Bureau of Land Management is currently processing 66 utility-scale clean energy projects in western states, the agency said. https://www.reuters.com/sustainability/climate-energy/white-house-says-orsted-remains-committed-us-offshore-wind-2023-11-06/
2023-11-06 20:54
Nov 7 (Reuters) - Air New Zealand (AIR.NZ) said on Tuesday that a change in the servicing schedule of RTX's (RTX.N) Pratt & Whitney engines could significantly impact the airline's services for up to two years. The carrier in October had flagged a nominal financial impact in the first half of 2024 related to the engine issue. Pratt & Whitney said in July more than 1,000 engines must be removed from Airbus planes and checked for microscopic cracks. Air New Zealand warned in September the engine inspections would have a "significant" impact on its flight schedule from next year. The airline said on Tuesday it would pause flights connecting Auckland and Hobart from April 5 next year. It also plans a "service pause" for flights between Auckland and Seoul from the beginning of April. Air New Zealand added it will have to ground up to four aircraft at any one time due to the engine maintenance issues. The carrier said it will look at leasing additional aircraft, with the airline's latest leased 777-367ER aircraft about to enter service. "The company is also managing other supply chain issues which airlines globally are facing as it looks to put additional fleet cover in place," Air New Zealand CEO Greg Foran said. The airline has 17 A320/321neo jets in its fleet of 108 aircraft, servicing Australia and the Pacific Island markets and the domestic market in New Zealand. Air New Zealand's shares fell as much as 1.5% to NZ$0.67. https://www.reuters.com/business/aerospace-defense/air-new-zealand-flags-impact-operations-pratt-whitney-engine-issue-2023-11-06/
2023-11-06 20:31
Nov 6 (Reuters) - The United States is seeking to buy up to three million barrels of oil for delivery in January 2024 to replenish the country's strategic petroleum reserve, the Department of Energy said on Monday. "This is the second solicitation for January 2024 delivery as DOE aims to purchase oil when it can purchase at a good deal for taxpayers," it said in a statement. Last month the administration said it hoped to buy 6 million barrels of crude oil for delivery in December and January. https://www.reuters.com/business/energy/us-seeks-buy-up-3-mln-barrels-oil-reserve-jan-delivery-2023-11-06/
2023-11-06 20:29
Nov 6 (Reuters) - U.S. natural gas futures dropped about 7% to a one-week low on Monday on record output and forecasts for mild weather to continue through late November, keeping heating demand low and allowing utilities to keep injecting gas into storage for at least a couple more weeks. "Near-term weather forecasts have been revised notably warmer even as El Nino suggests warm winter temperatures along a longer horizon as well," analysts at energy consulting firm Gelber and Associates said in a note. Gelber noted the lack of a storage report this week from the U.S. Energy Information Administration (EIA) due to a planned systems upgrade has added to the market volatility. EIA will resume its regular schedule on Nov. 13. "The lack of available storage data this week has market participants paying special attention to weather forecasts in an effort to gain insight into how the withdrawal season will play out," analysts at Gelber said. Front-month gas futures for December delivery on the New York Mercantile Exchange fell 25.1 cents, or 7.1%, to settle at $3.264 per million British thermal units (mmBtu), their lowest close since Oct. 27. That was also the biggest one-day percentage decline since the contract lost about 7.2% on May 22. One bearish factor that has weighed on the futures market for most of this year has been lower spot or next-day prices at the Henry Hub benchmark in Louisiana. The spot market has traded below front-month futures for 176 out of 212 trading days so far this year, according to data from financial firm LSEG. Next-day prices at the Henry Hub fell about 4% to $3.00 per mmBtu for Monday. Analysts have said that so long as the futures market stays in contango - with second-month higher than front-month - and spot prices remain far enough below the front-month to cover margin and storage costs, traders should be able to lock in arbitrage profits by buying spot gas, storing it and selling a futures contract. That front-month to second-month contango rose to a record high for a third day in a row with the premium of January futures over December reaching around 30 cents per mmBtu. That premium could encourage some speculators to leave gas in storage for longer in hopes of higher prices later in the winter. Utilities, however, will start to pull gas from storage in mid to late November as daily heating demand for the fuel starts to exceed production. SUPPLY AND DEMAND LSEG said average gas output in the Lower 48 U.S. states rose to 107.3 billion cubic feet per day (bcfd) so far in November from a record 104.2 bcfd in October. On a daily basis, output hit an all-time high of 108.0 bcfd on Saturday, topping the prior daily record of 107.7 bcfd just two days earlier on Nov. 2. Meteorologists projected the weather would go from warmer than normal from Nov. 6 to 11 to near normal from Nov. 11 to 14 and then back to warmer than normal from Nov. 15 to 21. With seasonally colder weather coming, LSEG forecast U.S. gas demand in the Lower 48 states, including exports, would jump from 101.5 bcfd this week to 109.2 bcfd next week. The forecasts for next week was higher than LSEG's outlook on Friday. Gas flows to the seven big U.S. liquefied natural gas (LNG) export plants rose to an average of 14.3 bcfd so far in November, up from 13.7 bcfd in October and a record 14.0 bcfd in April. https://www.reuters.com/business/energy/us-natgas-prices-drop-7-record-output-mild-weather-2023-11-06/
2023-11-06 20:14
Saudi Arabia and Russia supply cuts to remain until year-end China's refinery throughput slows from record levels Euro zone recession fears amplified by PMI data HOUSTON, Nov 6 (Reuters) - Oil prices edged higher on Monday after top exporters Saudi Arabia and Russia reaffirmed their commitment to extra voluntary oil supply cuts until the end of the year. Brent crude futures settled 29 cents, or 0.34%, higher at $85.18 a barrel, while U.S. West Texas Intermediate crude was up 31 cents, or 0.4%, at $80.82. Saudi Arabia confirmed on Sunday it would continue its additional voluntary cut of 1 million barrels per day (bpd) in December to keep output around 9 million bpd, a ministry of energy source said. Russia also announced it would continue its additional voluntary cut of 300,000 bpd from its crude oil and petroleum product exports until the end of December. "The announcement shows that Saudi has its shoulder to the wheel as it looks to tighten markets and increases prices," John Kilduff, partner at Again Capital LLC in New York. The cuts could be extended into the first quarter of 2024 because of "seasonally weaker oil demand at the start of every year, ongoing economic growth concerns and the aim of producers and OPEC+ to support the oil market's stability and balance", said UBS strategist Giovanni Staunovo. Oil prices rebounded after both benchmarks lost about 6% in the week to Nov. 3, as supply concerns driven by Middle East tensions eased. U.N. agency leaders demanded a humanitarian ceasefire on Monday, a month into the war in Gaza, as health authorities in the enclave said the death toll from Israeli strikes now exceeded 10,000. A weaker dollar also helped oil prices. The dollar index fell as low as 104.84, the weakest since Sept. 20. A weaker dollar boosts demand for crude purchases by holders of foreign currency. However, an easing of crude throughput at Chinese and U.S. refineries hurt prices. Refinery runs are easing at Chinese refineries from record levels in the third quarter because of eroding profit margins and a scarcity of export quotas to the end of the year, traders and industry consultants told Reuters. Meanwhile, U.S. crude oil refiners this quarter will pull back from red-hot summer run rates as weak gasoline margins and plant overhauls cool operating goals, according to company statements and oil analysts. Investors will be watching for further economic data from China on Tuesday following weak October factory data last week. Macroeconomic concerns persist in Europe, where Purchasing Managers' Index (PMI) data showed the downturn in euro zone business activity accelerated in October as demand weakened further. The Bank of England Chief Economist Huw Pill said it might wait until the middle of next year before cutting interest rates from their current 15-year high. Lower borrowing cost is likely to boost spending and demand for crude oil. https://www.reuters.com/markets/commodities/oil-nudges-higher-after-saudi-arabia-russia-stick-output-cuts-2023-11-06/
