2024-08-06 21:48

Aug 7 (Reuters) - A look at the day ahead in Asian markets. Investors in Asia will be hoping that the recovery in global sentiment and risk assets on Tuesday extends into Wednesday, although the rebound in U.S. bond yields and the dollar may cool some of that optimism. Nothing epitomized 'Turnaround Tuesday' more than the whoosh in Japanese stocks - a day after tumbling 12% in their second biggest fall on record, stocks rallied 10% for their third biggest rise on record. In some ways, however, day-to-day swings of that magnitude based on not a lot of fresh or major market-moving news are red flags. They're typical of more protracted and volatile downturns, and many investors are retaining a cautious stance. That said, any respite is welcome. Implied yen volatility remains elevated but eased off on Tuesday, and Wall Street and MSCI's emerging, Asian and world stock indices all gained more than 1%. Fears of impending U.S. recession will have been allayed further too, as the Atlanta Fed's GDPNow growth tracker estimate for third quarter GDP growth was raised to 2.9% from 2.6%. Little wonder that U.S. bond yields and the dollar rose. That's a twin dynamic that is rarely positive for emerging markets, but if it is part of a broader market recovery and cooling off in volatility then investors may be more forgiving. Emerging market participants will also note that the steep fall in U.S. yields in recent weeks has more than offset the decline in stock prices. So much so that emerging market financial conditions are now the loosest since January, according to Goldman Sachs. Wednesday's calendar in Asia includes Chinese trade figures for July, the latest FX reserves holdings from China, Japan and Hong Kong, and earnings reports from Singapore's top bank DBS and Japan's SoftBank Group. China's trade data will be under even particular scrutiny given the ratcheting up of U.S. trade and tariff tensions. Export growth is seen quickening, a potential silver lining to the world's second-largest economy still struggling under a property sector bust, weak consumer demand and the threat of deflation. Monthly changes in countries' FX reserves holdings rarely have an immediate impact on financial markets, but anyone with an interest in the dollar's reserve status will cast an eye towards the latest updates from Beijing, Tokyo and Hong Kong. That's nearly $5 trillion of reserves, 40% of the global total. China holds the world's largest stash, with $3.22 trillion, and Japan is the largest overseas holder of U.S. Treasuries, with $1.13 trillion. Several leading policymakers in the Asia and Pacific region are scheduled to speak on Wednesday, including Reserve Bank of Australia assistant governor Sarah Hunter, Bank of Japan deputy governor Uchida Shinichi and Bank of Thailand governor Sethaput Suthiwartnarueput. Here are key developments that could provide more direction to Asian markets on Wednesday: - China trade (July) - China, Japan, Hong Kong FX reserves (July) - Softbank earnings (Q1) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-08-06/

2024-08-06 21:15

Aug 7 (Reuters) - A drone launched by Ukraine hit an ambulance near the town of Sudzha in Russia's Kursk region, killing the driver and a paramedic, the acting governor of the southwestern region said on Wednesday. Alexei Smirnov, the acting governor, said in a post on the Telegram messaging app that a doctor was also wounded. Reuters could not independently verify the report. There was no immediate comment from Ukraine. Both sides deny targeting civilians in the war that Moscow launched with its full-scale invasion on Ukraine in February 2022. Sign up here. https://www.reuters.com/world/europe/ukraine-drone-attack-kills-ambulance-paramedic-driver-russias-kursk-local-2024-08-06/

2024-08-06 20:31

NEW YORK, Aug 6 (Reuters) - U.S. oil refiner Phillips 66 (PSX.N) , opens new tab is cutting more jobs to advance its strategic priorities and improve workforce efficiency, the company said on Tuesday. Phillips 66 spokesperson Al Ortiz confirmed that some jobs were being eliminated. "Phillips 66 continues to look to ways to position our organization to help advance its strategic priorities and enable more efficient ways of working," a company spokesperson said. The latest round of layoffs will affect less than 1% of the company's employees across several locations. Phillips 66 had around 13,700 employees as of 2023. Activist investor Elliott Investment Management took a $1 billion stake in Phillip 66 in November and called for the refiner to improve its oil refining business. A total of 430 employee and contractor roles around the globe would change as part of its 2024 realignment and outsourcing, Phillips 66 said last August. The Houston-based refiner reduced its headcount by 1,100 amid a cost-cutting effort in 2022, and deepened the cuts by eliminating 175 positions last year. The company spokesperson did not say the positions impacted are hourly or salaried positions. Three sources with the United Steelworkers union (USW), which represents hourly refinery workers, said Phillips 66 has not sought meetings about possible layoffs of union members as required in most USW contracts. The USW does not represent salaried employees of the company. Last week, Phillips 66's second-quarter results beat analyst expectations, partly due to strong refining utilization and low costs, even as the industry grappled with lower margins due to a tepid summer driving season. The refiner plans to wind down refining utilization in the coming months on expectations that U.S. fuel markets will soften. Sign up here. https://www.reuters.com/business/energy/oil-refiner-phillips-66-plans-job-cuts-2024-08-06/

2024-08-06 20:22

NEW YORK, Aug 6 (Reuters) - An epic unwinding of the yen-funded carry trade that has reverberated through global markets may have further to go, analysts said on Tuesday. Days of havoc in global markets have analysts rushing to calculate the size of a global carry trade in which investors have borrowed money from economies with low interest rates, such as Japan or Switzerland, to fund investments in higher-yielding assets elsewhere. The strategy, which kept money flowing into global risk assets for years, was shaken after the Bank of Japan raised interest rates last week, forcing some investors to abandon the trade as the yen surged higher. The resulting unwind sparked huge losses in global stock markets and saw Japan’s Nikkei notch its worst day since 1987. "I’d guess the carry trade is only about 50% unwound,” wrote James Malcolm, a UBS Japan macro strategist based in London, in a Tuesday note to clients. Malcolm estimates the dollar-yen carry trade grew to at least $500 billion at its peak. He calculated that some $200 billion of the carry trade has been unwound over the last two to three weeks. “How much the carry trade could unwind depends not so much on the level of the interest rate differential but the change in the interest rate differential,” he said. Comparing the current move with the carry trade unwind of 1998 suggests more unwinds could be ahead, he said. Shaun Osborne of Scotiabank echoed that sentiment, noting that two gauges of the carry trade - the Bloomberg G10 Carry Index and the Bloomberg GSAM FX Carry Index - had shed around 5%, only half of what they lost in three notable carry trade unwinds in the past. "The adjustment in carry positioning over the past few weeks has been rapid but it may have further to run,” he said in a Tuesday note. Hedge funds and other speculative investors, whose positioning is captured in a weekly report by the Commodity Futures Trading Commission, have only reduced their short yen positions by about 50%, Osborne said. The latest report was released last week. The report “is a small window on FX positioning but the data along with the (so far) relatively limited correction in carry trade index returns suggest that there is more room for the carry trade to unwind in the short run," he said. "That would suggest more volatility in risk assets ahead and more strength in the JPY ahead." Sign up here. https://www.reuters.com/markets/global-markets-carrytrade-2024-08-06/

2024-08-06 20:03

RIO DE JANEIRO, Aug 6 (Reuters) - Brazilian state-run oil company Petrobras has appointed a new "super manager," Wagner Victer, tasked with boosting capital expenditure, to meet demands from Brazil's President Luiz Inacio Lula da Silva, sources said. Lula considers Petrobras an engine for job creation and development, but the company has faced hurdles to invest in the past year because of difficulties with environmental licenses and suppliers. Victer will oversee and coordinate the $102 billion 2024-2028 investment plan, two sources familiar with the matter said. Of this, $18.5 billion is expected for this year, mostly in exploration and production. Petrobras did not respond to a request for comment. The company created the position to help turn the company into a driver of Brazil's economy while maintaining profitability, the sources added, speaking on the condition of anonymity. Victer's appointment comes after Magda Chambriard became the company's top executive in May, promising to speed up the company's investments, in line with Lula's wishes. Having spent 37 years at Petrobras, one of the sources said, Victer was seen as someone who would be able to bring management of different parts of the company together, speeding up internal procedures. Last year, Petrobras invested $12.7 billion, about 21% less than planned. Victer's appointment is part of a broader shakeup, as Chambriard swapped several directors and managers since taking office. Victer will also oversee production in the Buzios pre-salt oil field in the Santos Basin. By 2028, production there could be quadrupled, the company has said. In June, the field produced 874,800 barrels of oil equivalent per day. Sign up here. https://www.reuters.com/business/energy/new-super-manager-brazils-petrobras-is-tasked-with-boosting-investment-sources-2024-08-06/

2024-08-06 19:40

NEW YORK, Aug 6 (Reuters) - The U.S. Energy Information Administration on Tuesday forecast a larger decline in natural gas output this year compared with earlier estimates, citing record-low prices earlier in 2024 that forced producers to curtail gas production. U.S. natural gas output will average around 103.3 billion cubic feet per day (bcfd) this year, the EIA said in its August edition of the short-term energy outlook report. That compares with 103.8 bcfd produced last year, and is a slight downgrade from a forecast of 103.5 bcfd in the July edition of the report. Gas consumption is now expected to average 89.8 bcfd this year, up from the prior forecast of 89.4 bcfd. For next year, the agency is forecasting production of 104.6 bcfd, down from its prior forecast of 105.2 bcfd. Consumption forecast for next year was unchanged at around 89.2 bcfd. Sign up here. https://www.reuters.com/business/energy/eia-forecasts-larger-decline-us-natural-gas-output-2024-2024-08-06/