2024-08-08 07:22

Government spending, investment growth outpace consumer spending Economists see cbank rate cut as early as Aug. 15 Economy on track to meet full-year growth target - official MANILA, Aug 8 (Reuters) - The Philippine economy (PHGDP=ECI) , opens new tab expanded slightly faster than expected in the second quarter, with government spending and investments offsetting "anaemic" consumption growth as inflation weighed on households. Gross domestic product (GDP) (PHGDP=ECI) , opens new tab grew 6.3% from the April-June quarter last year, the statistics agency said. A rate cut next week could further prop up spending for the remainder of the year, economists said. The second-quarter expansion was the fastest since the 6.4% annual growth in the first quarter of 2023, beating the 6.2% estimate in a Reuters poll of economists and outpacing the upwardly revised 5.8% growth in the first three months of the year. Consumer spending grew 4.6% in the period, accounting for two-thirds of output. Investments increased 11.5% while government spending expanded by 10.5%. "The household final consumption expenditure continued to be a bit anaemic, the growth is not as strong as one would expect," Economic Planning Secretary Arsenio Balisacan told reporters. Consumer spending declined 0.1% quarter-on-quarter due to lower sales in restaurants and hotels, government data showed. First-half GDP growth averaged 6.0%, putting the economy on track to meet the full-year growth target of 6.0% to 7.0%, Balisacan said. Economists said lower borrowing costs could help prop up growth. "Loosening the monetary reins will help spur consumption and private investment, albeit with a bit of a lag," HSBC said in a research note. It projects the central bank will cut the policy rate by 25-basis points (bps) to 6.25% on Aug. 15 and another 25 bps later this year. Michael Ricafort, an economist at Rizal Commercial Banking Corp in Manila, said monetary easing can start next week as long as inflation would remain within the central bank's inflation target in the coming months. While higher-than-expected GDP growth gives room for the central bank to maintain its policy rate, monetary authorities can pursue an off-cycle rate cut when needed, said Ruben Carlo Asuncion, chief economist at Manila-based Union Bank. On a seasonally adjusted basis , the economy grew 0.5% quarter-on-quarter, slower than the previous quarter's 1.3% growth and below the 0.9% forecast in a Reuters poll. The GDP data followed an inflation report on Tuesday that showed consumer prices quickened at the fastest pace in nine months in July, prompting the central bank governor to say a rate cut at its next meeting on Aug. 15 would be "a little bit less likely." The 4.4% inflation rate, which was above market expectations, was outside the central bank's 2.0% to 4.0% target range for the year. Annual inflation in June was 3.7%. The economy also received a boost from a drop in unemployment rate, which stood at 3.1% in June, the lowest since December 2023, according to government data released on Wednesday. But agriculture, forestry and fishing remained a weak spot in the second quarter, shrinking 2.3% from a year earlier due to a prolonged dry spell caused by the El Nino weather pattern. Sign up here. https://www.reuters.com/markets/asia/philippines-economy-grows-63-q2-despite-anaemic-consumer-spending-2024-08-08/

2024-08-08 07:17

Bullion on track to snap a five-session losing streak Weekly jobless claims data due at 1230 GMT Gold to hit record once markets adjust to Fed policy pivot -analyst Aug 8 (Reuters) - Gold prices firmed on Thursday as the dollar and Treasury yields retreated on rising bets that the U.S. interest rate cut cycle may start in September, while investors awaited the weekly jobless claims data. Spot gold rose 1.2% to $2,410.69 per ounce by 1149 GMT, on track to snap a five-session losing streak. U.S. gold futures were up 0.7% at $2,450.40. The dollar index fell 0.1%, making bullion more affordable for overseas buyers. The 10-year U.S. Treasury yield also slipped. "Following Monday's deleveraging dump, gold has been stabilizing with the shallow correction providing investors with enough confidence to re-enter the market on the long side," said Ole Hansen, head of commodity strategy at Saxo Bank. Prices fell as much as 3% on Monday, caught in a global sell-off driven by fears of a U.S. recession. Continued U.S. data weakness and U.S. debt concerns will ultimately support gold prices, Hansen added. Brokerages including J.P. Morgan, Citigroup and Wells Fargo have forecast a 50-basis-point interest rate cut by the Fed in September after last week's U.S. jobs data. Market focus will be on weekly initial U.S. jobless claims data due at 1230 GMT. "Ultimately, gold should be able to post a new record high once nerves settle and markets have a firmer grip of the Fed’s policy pivot, and the ensuing pace of rate cuts." said Han Tan, chief market analyst at Exinity Group. Bullion is considered a hedge against geopolitical and economic uncertainties and tends to thrive in a low-interest-rate environment. The killing of senior members of militant groups Hamas and Hezbollah last week raised the possibility of retaliatory strikes by Iran against Israel. Spot silver rose 1.5% to $27.02 per ounce, platinum was down 0.3% at $916.35 and palladium gained 0.6% to $887.75. Sign up here. https://www.reuters.com/markets/commodities/gold-drifts-higher-mideast-tensions-us-rate-outlook-2024-08-08/

2024-08-08 06:42

MUMBAI, Aug 8 (Reuters) - The Reserve Bank of India (RBI) kept its key interest rate unchanged on Thursday, as widely expected, retaining its focus on bringing inflation down even as global market volatility left other major central banks poised to ease policy. The Monetary Policy Committee (MPC), which consists of three RBI and three external members, kept the repo rate (INREPO=ECI) , opens new tab unchanged at 6.50% for a ninth straight policy meeting. Four out of six MPC members voted in favour of the rate decision. The MPC last changed rates in February 2023, when the policy rate was raised to 6.50%. The monetary policy stance was retained at 'withdrawal of accommodation' to aid the MPC's focus on bringing inflation towards the target, with four of the six members voting in its favour. All 59 economists in the Reuters poll conducted in late July predicted the central bank would stand pat on rates. It is important for monetary policy to stay the course in bringing inflation down towards its 4% medium term target, RBI Governor Shaktikanta Das said, adding that India's food inflation remains "stubbornly" high. "Growth remains resilient, inflation has been trending downward and we have made progress in achieving price stability, but we have more distance to cover," Das said. Ensuring price stability is important for sustainable growth, Das said. "With growth remaining robust, the MPC still has room to hold on to policy stance to get confirmation on the disinflationary trend," said Upasna Bhardwaj, chief economist at Kotak Mahindra Bank. "We continue to expect scope for change in stance in the October policy with rate cuts beginning from December." After the RBI maintained its hawkish policy stance, Indian shares (.NSEI) , opens new tab, (.BSESN) , opens new tab fell but recovered later to trade flat. The 10-year benchmark bond yield < IN071034G=CC> rose slightly to 6.872% from 6.8678% before the policy decision, while the Indian rupee was nearly flat at 83.93 against the dollar. Investors were hopeful the RBI will soften its overall stance on inflation following the recent souring of global market sentiment and firmer expectations the Federal Reserve will cut interest rates in September. Global equities and currencies tanked early this week as the Bank of Japan hiked rates to their highest levels since 2008 last week and fears of a U.S. recession rose on the back of weak employment numbers. While Indian equities fared better, the rupee fell to all-time lows, prompting central bank intervention. There are significant challenges to medium term global growth, Das said in his policy statement, while acknowledging recent market volatility and the move towards rate cuts by several central banks. "We will remain watchful of all incoming domestic and external data," Das said at a press conference, giving no hint that global factors would alter the path of India's monetary policy. "Policy guidance reinforced that domestic considerations will be prioritised, despite a sharp buildup in rate cut pricing for the U.S. Federal Reserve," said Radhika Rao, senior economist at DBS Bank in Singapore. GROWTH, INFLATION FORECASTS UNCHANGED The RBI kept its growth forecast for fiscal 2025 unchanged at 7.2%, slower that the 8.2% expansion in fiscal 2024. Domestic economic activity remains resilient, Das said. The central bank also retained its inflation forecast at 4.5% in the current year. The annual retail inflation rate rose for the first time in five months in June, climbing above 5% on the back of a jump in food prices. Commenting on a decline in core inflation, which excludes volatile food and energy prices, Das said: "The public at large understands inflation more in terms of food inflation than the other components of headline inflation." "Therefore, we cannot and should not become complacent merely because core inflation has fallen considerably." Sign up here. https://www.reuters.com/markets/asia/indias-central-bank-holds-rates-again-expected-2024-08-08/

2024-08-08 06:34

FRANKFURT, Aug 8 (Reuters) - German utility Uniper (UN0k.DE) , opens new tab has sold sizeable quantities of its future hydropower output as part of a hedging strategy, the company said in a presentation for an analyst call on first half earnings on Thursday. Uniper has sold 75% of its German hydropower output for 2025 at an average price of 123 euros ($134.46) per megawatt hour (MWh) and 15% of the output in 2026 at an average of 87 euros/MWh, the presentation slides said. By comparison, the wholesale benchmark price for round-the-clock German power from all generation sources in 2025 closed at 95.7 euros on Wednesday, and at 88.3 euros for 2026, LSEG data showed. The discrepancies come from differently-priced fuel elements in the overall wholesale levels. Those levels also reflect fossil-generated power and renewable sources that are subject to national support schemes and hard-to-predict weather patterns. Producers use hedging to reduce the impact of price volatility and to lock in forward production prices considered favourable at a certain point in time. The wholesale market uses the rates to track price trends and assess a utility's physical asset position. Uniper has so far sold 95% of its 2024 German output at 45 euros after achieving an average price of 34 euros for sales of its 2023 output, it said. The company also operates coal, gas-fired, and nuclear plants elsewhere in Europe as well as wind and solar power generation units that were not reflected. Regarding Nordic prices, Uniper said it sold 55% of nuclear and hydropower in the region for 2025 and 30% of output for 2026 at average prices of 39 euros and 37 euros, respectively, having achieved 47 euros for 80% of 2024 output, and 41 euros in 2023. ($1 = 0.9147 euros) Sign up here. https://www.reuters.com/markets/commodities/uniper-sells-german-hydropower-2025-2026-part-hedging-strategy-2024-08-08/

2024-08-08 06:22

Aug 8 (Reuters) - Harbour Energy (HBR.L) , opens new tab, the largest British North Sea oil and gas producer, reported a net profit for the first half of the year from a year-earlier loss and narrowed its full-year 2024 total production outlook on Thursday. Following a spike in energy prices in 2022, Britain imposed an energy profit levy (EPL) on oil and gas producers which raised the tax rate to 75% and wiped out most of their profit, including at Harbour. The new Labour government announced last week it will increase EPL by 3% to 38% starting Nov. 1, bringing the headline rate of tax on oil and gas activity to 78%, among the highest in the world. Harbour last year struck a $11.2 billion deal for Wintershall Dea's non-Russian oil and gas assets with an aim to cut its dependence on the UK. It expects to complete the deal early in the fourth-quarter. Harbour said on Thursday its profit before tax for the first six months totalled $392 million. It made a net tax payment of $157 million in the period primarily in relation to EPL. Shares of the company were up 1.7% at 289.10p. The London-listed company said production for the reported six-month period fell nearly 19% to 159 thousand barrels of oil equivalent per day (kboepd), versus the previous six months, partly due to prolonged shutdown at its East Irish Sea operation and the start of the significant planned UK maintenance shutdown in May. Weakness in production was offset by rise in crude prices. Harbour said realised crude prices, post-hedging, for the reported period climbed nearly 12% to $85 per barrel. The company expects 2024 production to be 155 to 165 kboepd, the mid-point of which is higher than a previous forecast of 150 to 165 kboepd. "This reflects good progress to date on the maintenance shutdowns and our UK capital projects which are on track to materially increase production in the fourth quarter," the company said , opens new tab in a statement. Sign up here. https://www.reuters.com/business/energy/harbour-energy-narrows-full-year-production-outlook-2024-08-08/

2024-08-08 06:16

ATLANTA, Aug 8 (Reuters) - Tropical Storm Debby was downgraded to a tropical depression on Thursday after leaving at least seven people dead in its wake across the U.S. southeast this week. Debby is currently spiraling northward toward Virginia, Maryland, Pennsylvania and New York, where it's forecast to spawn a few tornadoes and threaten more flash flooding on some already soaked patches of the U.S., forecasters said. The National Weather Service said in a bulletin that while Debby would continue to weaken through Sunday, "heavy rain, flash and river flooding effects will continue over the next two days as the storm begins its northeastward acceleration." Debby made landfall on Thursday for a second time this week, arriving on shore again near Bulls Bay, South Carolina, three days after slamming into Florida's Gulf Coast as a Category 1 hurricane, then traveling across northern Florida and Georgia to the Atlantic Coast. Debby could spawn a few tornadoes in North Carolina and Virginia later Thursday and early Friday, including in the vicinity of Washington, D.C., the NWS said. Debby was forecast to bring another 3 inches (7 cm) of rain on Thursday to parts of eastern South Carolina, the National Hurricane Center said, with total amounts in some spots exceeding 25 inches (64 cm) since Monday. Rainfall totals could reach 15 inches (38 cm) in southeastern North Carolina and 10 inches (25 cm) in parts of Virginia. South Carolina Governor Henry McMaster said there had been no storm-related deaths in his state as of Thursday afternoon, but he urged residents to remain cautious about venturing out as the state faces the threat of river flooding. "It's not over yet. We've passed some dangers, but there are still plenty, so don't let your guard down yet," McMaster said at a press conference. More than 45,000 customers were without power in North Carolina and Virginia Thursday night, according to the tracking site, Poweroutage.us. A tornado killed one man when his house collapsed as it tore through eastern North Carolina and damaged at least 10 houses, a church and a school in Wilson County, North Carolina, early on Thursday, county officials reported on social media. By the weekend, Debby could produce up to 6 inches (15 cm) of rain from Maryland into northern Vermont. But New York City will avoid the worst of the storm, said Josh Weiss, a forecaster with the weather service. In Bulloch County, Georgia, about 50 miles (80 km) northwest of Savannah, four dams burst on Wednesday as a result of floodwaters, and officials warned the Cypress Lake Dam was at risk of failure on Thursday. That forced the evacuation of local residents after homes were flooded and roads made impassable as lakes and creeks overflowed, the Bulloch County Sheriff's Office reported. Sign up here. https://www.reuters.com/world/us/south-carolina-braces-deluge-tropical-storm-debby-makes-landfall-2024-08-08/