2023-11-02 02:53

MUMBAI, Nov 2 (Reuters) - The Indian rupee is expected to open marginally higher on Thursday on the back of a fall in U.S. Treasury yields after a slightly dovish stance from the Federal Reserve. Non-deliverable forwards indicate rupee will open at around 83.24 to the U.S. dollar compared with the close of 83.28 in the previous session. The currency reached a record low of 83.2950 in the dying minutes of Wednesday's session. On the interbank order matching system, the rupee had dropped to 83.3675. "It will be a relief (for the rupee) that at least at open there will no fallout of what happened late yesterday," a forex spot dealer at a bank said. "It looks like that after the brief excitement yesterday, we will be back to a quiet day." The Fed kept the policy rate unchanged at 5.25-5.50%, in line with expectations. However, some analysts reckon that the tone of Fed Chair Jerome Powell's press conference was dovish. "We saw the FOMC (Federal Open Market Committee) statement and the press conference slightly dovish overall, and the market appeared to agree," Goldman Sachs said in a note. Goldman Sachs pointed out that the FOMC statement acknowledged the recent tightening in financial conditions, and that Powell laid out conditions under which the tightening would displace the need to hike. Powell further clarified that above-potential growth on its own would not be enough to warrant another rate hike, downplaying the 1% jump in one-year Michigan inflation expectations, Goldman Sachs said. The 10-year U.S. Treasury declined to 4.71%, a near 16-basis-point fall from what it was prior to the FOMC statement. The 2-year U.S. yield dropped below 5% and the odds of a Fed rate hike at the December meeting were down to 15%. Asian currencies and equities rallied. The Korean won climbed 1%. KEY INDICATORS: ** One-month non-deliverable rupee forward at 83.28; onshore one-month forward premium at 5.75 paisa ** Dollar index down at 106.32 ** Brent crude futures up 1% at $85.5 per barrel ** Ten-year U.S. note yield at 4.71% ** As per NSDL data, foreign investors sold a net $52 mln worth of Indian shares on Oct 31 ** NSDL data shows foreign investors bought a net $95.9 mln worth of Indian bonds on Oct 31 https://www.reuters.com/markets/currencies/rupee-inch-up-after-slightly-dovish-fed-us-yields-decline-2023-11-02/

2023-11-01 23:12

BRASILIA, Nov 1 (Reuters) - Brazil's central bank cut its benchmark interest rate by 50 basis points on Wednesday for the third time in a row and once again signaled more of the same for its upcoming meetings, but also flagged an "adverse" external backdrop for emerging economies. The bank's rate-setting committee, known as Copom, unanimously reduced its Selic benchmark interest rate to 12.25%, a move expected by all 40 economists polled by Reuters. "If the scenario evolves as expected, the committee members unanimously anticipate further reductions of the same magnitude in the next meetings, and judge that this pace is appropriate to keep the necessary contractionary monetary policy for the disinflationary process," said the central bank in its decision's statement. However, despite its expectation of keeping its pace of rate cuts, the bank mentioned an "adverse" global outlook that "requires caution on the conduct of monetary policy." The prospect of higher long-term U.S. interest rates has led to a tightening of global liquidity and strengthening of the dollar, adding to inflation pressures in emerging markets like Brazil. "Despite anticipating the next steps of 50 basis points, there appears to be less visibility and confidence regarding the overall extent of the cycle," said Daniel Cunha, chief strategist at brokerage BGC Liquidez. In its statement, the central bank also highlighted the persistence of elevated core inflation in several countries, alongside emerging geopolitical tensions following the outbreak of the Israel-Palestine conflict. Policymakers again reiterated that the overall extent of the easing cycle over time will depend on a range of factors, including the inflation dynamics and the output gap, emphasizing the need to maintain a tight policy until the disinflationary process solidifies and inflation expectations meet targets. Uncertainties about the global scenario and concerns about leftist President Luiz Inacio Lula da Silva's commitment to fiscal discipline had already caused economists polled by the central bank to tweak their estimates for the easing cycle, forecasting rates to end 2024 at 9.25%, up from 9% before. Last week, Lula said his government did not need to erase its primary budget deficit next year, as previously proposed to Congress under new fiscal rules, given the importance of public funding for priority projects and construction investments. His comments hobbled local markets and reignited concerns about a larger-than-estimated increase in Brazil's public debt. The central bank, which had already been pointing to market distrust of the government's fiscal targets as one of the reasons why long-term inflation expectations were not converging to the target, reaffirmed in its statement the importance of "firmly pursuing" the fiscal goals. Policymakers revised their inflation projections to 4.7% for this year, down from 5.0% before, now standing within the official target of 3.25% with a tolerance margin of 1.5 percentage points in either direction. Meanwhile, inflation forecasts for 2024 and 2025 have been increased to 3.6% and 3.2%, from 3.5% and 3.1% respectively. The inflation target for the upcoming year and beyond stands at 3%, with the same tolerance interval. https://www.reuters.com/markets/rates-bonds/brazil-central-bank-cuts-rates-by-50-bps-signals-further-reductions-ahead-2023-11-01/

2023-11-01 22:43

Federal Reserve keeps interest rates steady US Treasury increases size of most debt auctions Private payrolls rise less than expected in October Estee Lauder slumps on dour forecast Indexes up: Dow 0.67%, S&P 1.05%, Nasdaq 1.64% Nov 1 (Reuters) - Wall Street's major indexes closed higher on Wednesday with the Nasdaq's 1.6% advance leading gains, after the U.S. Federal Reserve kept interest rates unchanged and comments from its top official fueled investor optimism rate hikes were done even though the central bank left the door open for more. Fed Chair Jerome Powell said policy makers would proceed carefully although they were not yet confident financial conditions were restrictive enough to get inflation as low as the central bank would like. Trading was choppy at the start of Powell's press conference but the major equity indexes started to regain lost ground after about 20 minutes, then went on to hit session highs. This was because the Fed's top official "wasn't as assertive about higher-for-longer" rates as he has been in past press conferences, according to Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. Charlie Ripley, senior investment strategist for Allianz Investment Management, wrote that while there is still a potential risk for the Fed to raise rates again, Powell's commentary suggests that "the bar has become higher for rate hikes." Edward Moya, senior market analyst at Oanda wrote that while Powell insisted he was keeping options open for a hike "he didn’t seem very convincing." The Dow Jones Industrial Average (.DJI) rose 221.71 points, or 0.67%, to 33,274.58, the S&P 500 (.SPX) gained 44.06 points, or 1.05%, to 4,237.86 and the Nasdaq Composite (.IXIC) added 210.23 points, or 1.64%, to 13,061.47. Among the S&P 500's 11 major sectors only two lost ground with energy (.SPNY) falling 0.3% while consumer staples (.SPLRCS) edged down 0.06%. Top gainers were rate sensitive information technology (.SPLRCT), which rose 2% and communications services (.SPLRCL), which rose 1.8%. In individual stocks, Shares of Advanced Micro Devices (AMD.O) jumped almost 10% after an upbeat forecast for sales of chips for artificial intelligence signaled progress in its bid to catch up with market leader Nvidia (NVDA.O). Earlier, the stock market was boosted from falling bond yields after the U.S. Treasury Department said it will slow the pace of increases in its longer-dated debt auctions in the November-January quarter and expects it will need one more additional quarter of increases after this to meet its financing needs. Earnings season has been a mixed bag for stocks even though 79.7% of the 310 S&P 500 companies that had reported at the time of LSEG's latest update beat analyst expectations for the quarter while only 16.1% had fallen short of estimates. Still investors were disappointed by many quarterly updates. Estee Lauder (EL.N) shares tumbled 18.9% after the beauty products maker cut its annual profit outlook. And shares in Payroll processor Paycom Software (PAYC.N) sank 38.5% after it projected for downbeat fourth-quarter revenue. Tinder owner Match Group (MTCH.O) dropped 15.3% after it also forecast fourth-quarter revenue below estimates. Advancing issues outnumbered declining ones on the NYSE by a 2.36-to-1 ratio; on Nasdaq, a 1.20-to-1 ratio favored advancers. The S&P 500 posted 7 new 52-week highs and 30 new lows; the Nasdaq Composite recorded 24 new highs and 297 new lows. Trading was brisk on U.S. exchanges with 11.20 billion shares changing hands compared with the 10.67 billion average for the last 20 sessions. https://www.reuters.com/markets/us/futures-slip-investors-await-fed-rate-verdict-2023-11-01/

2023-11-01 22:09

NEW YORK, Nov 1 (Reuters) - Energy Transfer (ET.N) reported third quarter 2023 earnings that slightly missed Wall Street expectations, even as natural gas liquids (NGL) and crude transportation volumes hit a company record. Energy Transfer's third quarter 2023 adjusted earnings of $0.33 per share were just under the $0.34 per share expected by analysts, according to LSEG data. Energy Transfer's adjusted earnings before interest, taxes, depreciation and amortization in the quarter were $3.54 billion, compared with $3.09 billion last year. The company expects its full-year 2023 adjusted EBITDA to range between $13.5 billion and $13.6 billion, and its 2023 growth capital expenditures to be slightly below its previously announced guidance of $2.0 billion, it said. NGL transportation volumes were up 14%, a record for the company, while crude transportation volumes gained 23%, also a record, the company said. The company's NGL exports were up more than 20%, another record. September and October were the company's "best months ever" across its NGL export terminals because of increased U.S. and international demand, said Chief Executive Thomas Long during a conference call to announce the earnings. An expansion to the company's Nederland export terminal is expected to add up to 250,000 barrels per day (bpd) of export capacity and be in service in mid-2025, Long added. Construction for the expansion is underway. The company had previously said it would file an application for new export authorization for its Lake Charles LNG facility project. The U.S. Department of Energy denied a request from the company to extend a deadline to complete construction on the project. Energy Transfer hopes to hear a decision from the DOE by mid-first quarter 2024, executives said during the call. During the third quarter 2023, Energy Transfer placed into service its eighth fractionator at its Mont Belvieu, Texas, facility, bringing the company's total fractionation capacity at Mont Belvieu to over 1.15 million barrels per day (bpd). Also during the quarter, Energy Transfer announced it would acquire Crestwood Equity Partners (CEQP.N), which owns gathering and processing assets located in the Williston, Delaware, and Powder River basins. The transaction is expected to close on Nov. 3, the earnings release said. https://www.reuters.com/business/energy/energy-transfer-misses-estimates-q3-crude-ngl-volumes-hit-record-2023-11-01/

2023-11-01 21:57

MEXICO CITY, Nov 1 (Reuters) - Mexico's government on Wednesday unveiled a $3.4 billion recovery plan for the battered coastal resort of Acapulco, including tax breaks, humanitarian aid and reconstruction of infrastructure, and said it could spend more if necessary. Hurricane Otis slammed into Acapulco last week, devastating homes, hotels and other businesses, severing communications and temporarily leaving the city of 900,000 people incommunicado. The total investment needed for the recovery plan was estimated at 61.3 billion pesos ($3.4 billion), Finance Minister Rogelio Ramirez de la O told a press conference. Mexico expects to receive between $30 million and 60 million from a catastrophe bond that insures the country against earthquakes and hurricanes, Deputy Finance Minister Gabriel Yorio said. He added that Mexico has an extra 5 billion pesos in insurance that can be used for reconstruction. Otis left more than 100 people dead or missing, and the cost of damage could be as high as $15 billion, according to Enki Research, which tracks tropical storms and models the cost of their damage. Widespread looting broke out in Acapulco after the hurricane. Mexico has sent thousands of armed forces members to keep order and help distribute food and supplies. President Andres Manuel Lopez Obrador said the government would raise more money for Acapulco if needs be. "Fortunately, we have healthy public finances and unlimited resources when it comes to benefiting the people," he said. Many residents are still struggling to get food and water, and some have been reduced to washing in local waterways. The plan will bring forward social welfare payments by two months, waive electricity charges until February and provide household necessities for families whose houses were flooded. It also foresees the weekly provision of basic foodstuffs to some 250,000 families for three months, the president said. Major retailers including Walmart de Mexico and Soriana were working with the government on the plan, he said. The plan also included 10 billion pesos for rebuilding the city's shattered infrastructure. Acapulco and nearby Coyuca de Benitez will be exempt from paying taxes through February 2024, Lopez Obrador said. ($1 = 17.9332 Mexican pesos) https://www.reuters.com/world/americas/mexico-announces-plan-rebuild-acapulco-after-hurricane-2023-11-01/

2023-11-01 21:52

Nov 1 (Reuters) - Nutrien (NTR.TO) fell short of analysts' estimates for third-quarter profit on Wednesday, as lower potash prices weighed on the world's biggest fertilizer producer. Potash prices have been falling after shipments from Belarus and Russia resumed. These exports had been significantly restricted last year following Western sanctions imposed on Russia in response to its invasion of Ukraine. Demand for fertilizers was also weak during much of the year, analysts have said, as farmers waited for prices to settle down. Potash prices averaged $250 per tonne during the reported quarter, the company said, compared with $633 per tonne a year earlier. The company's U.S.-listed shares fell 3% after the bell. Nutrien said potash sales volumes, however, climbed 23% on strong sales in North America. Fertilizer inventories in the U.S. had been running low which should result in relatively robust demand, BofA Global Research analyst Steve Byrne had said ahead of the earnings. On an adjusted basis, Nutrien reported earnings of 35 cents per share for the three months ended Sept. 30, compared with the average analyst estimate of 64 cents, according to LSEG data. Nutrien, the top U.S. agricultural retailer, also narrowed its adjusted earnings forecast for 2023 to a range of $4.15 to $5.00 per share, compared with a range of $3.85 and $5.60 earlier. The company forecast fourth-quarter fertilizer demand would be up 5% to 10% year-on-year. Nutrien added it was lowering its nitrogen sales volume forecast due to the unplanned outages in the third quarter and pull-forward of a planned maintenance outage at its Borger site in the current quarter. https://www.reuters.com/markets/commodities/nutrien-misses-quarterly-profit-estimates-potash-prices-plummet-2023-11-01/