2024-08-01 11:46
BRUSSELS, Aug 1 (Reuters) - There seems to be no immediate risk to the security of oil supply to Hungary and Slovakia as sanctions imposed by Ukraine on Russian oil producer Lukoil (LKOH.MM) , opens new tab do not affect the transit of oil via Ukraine to Hungary, the European Commission said on Thursday. In a letter addressed to foreign ministers of Hungary and Slovakia, European Commission Vice President for Trade Valdis Dombrovskis said that according to information received from Hungary's MOL (MOLB.BU) , opens new tab, the importer of the Russian oil, the oil becomes property of the trading companies at the Russian-Ukrainian border, and is therefore not subject to sanctions. "Commission services have preliminarily concluded that urgent consultations do not appear to be warranted as there is no current indication of an immediate risk to the security of supply," the letter, seen by Reuters, said. Slovakia and Hungary - two countries that have opposed western allies' military aid to Ukraine as it fights Russia's invasion - have been complaining about Kyiv's move to put Lukoil on its sanctions list last month, saying it prevented them from buying Russian oil for their refineries, threatening security of supply. Sign up here. https://www.reuters.com/business/energy/no-threat-oil-supply-security-hungary-slovakia-eu-commission-says-2024-08-01/
2024-08-01 11:41
Aug 1 (Reuters) - Intercontinental Exchange (ICE.N) , opens new tab reported an estimate-beating profit rise of 9% in the second quarter on Thursday, helped by strong performance in its exchange business as trading remained robust. The conflict in the Middle East has changed the landscape for global commodity and energy markets, significantly raising volatility and bumping up trades as investors assess the impact of shifting supply chains. Trading volumes at exchanges typically do better in times of market fluctuation, as investors rejig portfolios or when there is a broad-based rally, which encourages riskier trades. Energy trading volumes surged 31% in the second quarter, with gains across segments including oil, gasoil as well as other crude and refined products. Natural gas average daily volumes jumped 36%. Total revenue from ICE's exchange business, the biggest component of its income base, jumped to $1.25 billion in the reported quarter, up from $1.09 billion in the year-ago period. High interest rates have dampened investor expectations of a rebound in the U.S. IPO market in 2024, which has been marked by uneven post-debut performances of some high-profile names that came forward with new listings in the second quarter. Microsoft-backed cybersecurity company Rubrik (RBRK.N) , opens new tab opened at $38.6 per share in its April market debut, but closed nearly 4% below that price on Wednesday. The listings unit, a part of ICE's exchange segment, saw a 3% fall in second-quarter revenue, even though the NYSE has raked in more from IPO proceeds in the first half of 2024, compared to the last two years. The company reported adjusted earnings of $876 million, or $1.52 per share, in the quarter ended June 30, compared to $802 million, or $1.43 apiece last year. Analysts had expected a profit of $1.49 per share in the second quarter. Sign up here. https://www.reuters.com/business/finance/nyse-parent-ice-second-quarter-profit-rises-stronger-trading-2024-08-01/
2024-08-01 11:37
BEIJING, Aug 1 (Reuters) - Thirty people were killed and 35 are still missing in rains and storms in the wake of Typhoon Gaemi which swept into southern China last week, the state broadcaster said on Thursday. The dead and missing were from the city of Zixing in Hunan province, CCTV said. Extreme weather fuelled by the most powerful tropical cyclone to hit China this year affected almost 90,000 people, damaging about 1,400 homes and tearing up about 1,300 roads, the People's Daily said earlier this week. Zixing has received record rain since Friday, with 24-hour rainfall exceeding 645 mm (25.3 inches) at one spot. Sign up here. https://www.reuters.com/world/china/remnants-typhoon-gaemi-leave-30-dead-chinas-hunan-cctv-reports-2024-08-01/
2024-08-01 11:37
Aug 1 (Reuters) - U.S. oil and gas producer ConocoPhillips (COP.N) , opens new tab posted a second-quarter profit that beat Wall Street estimates on Thursday, benefiting from higher output and oil prices. The beat comes as ConocoPhillips is pursuing a $22.5 billion takeover of Marathon Oil (MRO.N) , opens new tab, one of the largest deals of the quarter that is currently under review by the Federal Trade Commission. The combination would create a company pumping 2.26 million barrels of oil and gas per day, and add 1.32 billion barrels of proved reserves to ConocoPhillips' 6.8 billion. However, ConocoPhillips' third-quarter production is expected to be lower than that in the second quarter due to the impact of planned turnarounds in Canada, Lower 48, Alaska, Norway, Malaysia and Qatar. It forecast its full-year output to be between 1.93 million and 1.94 million barrels of oil equivalent per day (boepd), compared with its prior range of 1.91 million to 1.95 million boepd. Still lower than its second-quarter production, which rose to 1.95 million boepd from 1.81 million boepd in the year-ago quarter. The company updated its capital expenditure for the year to reflect progress on its project in Alaska and increased Lower 48 partner-operated activity. ConocoPhillips' total average realized prices rose 4% to $56.56 per barrel of oil equivalent (boe) in the reported quarter. The Houston, Texas-based company posted adjusted earnings of $1.98 per share for the quarter ended June 30, compared with analysts' average estimate of $1.96, according to LSEG data. Sign up here. https://www.reuters.com/business/energy/conocophillips-reports-q2-profit-beat-2024-08-01/
2024-08-01 11:26
By David Milliken, Andy Bruce and Suban Abdulla LONDON, Aug 1 (Reuters) - The Bank of England cut interest rates from a 16-year high on Thursday after a narrow vote in favour from policymakers divided over whether inflation pressures had eased sufficiently. Governor Andrew Bailey - who led the 5-4 decision to lower rates by a quarter-point to 5% - said the BoE's Monetary Policy Committee would move cautiously going forward. "We need to make sure make sure inflation stays low, and be careful not to cut interest rates too quickly or by too much," he said in a statement alongside the decision. Thursday's decision was in line with the forecast in a Reuters poll of economists but financial markets had only seen just over a 60% chance of a cut. Rates have been on hold for almost a full year - the longest period rates have been left unchanged at the peak of a BoE tightening cycle since 2001 - and this is the first cut in rates since March 2020, at the start of the COVID-19 pandemic. In June the BoE voted 7-2 to keep rates on hold, and minutes of the most recent meeting showed the decision to cut rates had been "finely balanced" for some members - echoing the language used previously when rates were kept unchanged. None of the policymakers who changed their vote at this meeting - Governor Andrew Bailey and Deputy Governors Sarah Breeden and Clare Lombardelli - had spoken publicly about monetary policy since the BoE's last meeting in June. Speaking opportunities had been limited by an election campaign which ended on July 4, which brought the Labour Party to power with a large majority. The BoE said policymakers had been briefed on the government's public sector pay and fiscal policy announcements this week, but their impact would only be incorporated into the BoE's forecasts after the Oct. 30 budget. British consumer price inflation returned to the BoE's 2% target in May and stayed there in June, down from a 41-year high of 11.1% struck in October 2022. This leaves British inflation lower than in the euro zone - where the European Central Bank cut rates in June - and the United States, where on Wednesday the Federal Reserve kept interest rates steady but opened the door to a September cut. INFLATION TO RISE However, the BoE expects headline inflation to rise to 2.75% in the final quarter of the year as the effect of last year's steep falls in energy prices fades, before returning to its 2% target in early 2026 and later sinking below. The long time lags for interest rates to affect inflation mean the BoE is more focused on what it sees as medium term drivers of inflation: services prices, wage growth and more general tightness in the labour market. Services inflation came in well above the BoE's forecasts in June, but the BoE put this down to "volatile components" and regulated prices that were influenced by high headline CPI earlier in the year. Wage growth at nearly 6% is almost double the rate the BoE views as consistent with 2% inflation but is slowing in line with the central bank's expectations. The BoE now thinks Britain's economy will expand by around 1.25% this year, revised up from its previous forecast of 0.5%, reflecting stronger-than-expected growth during the first half of this year. Unemployment will rise slightly as high interest rates continue to bear down on growth, the forecasts showed, reducing upward pressure on inflation. However, the BoE acknowledged the risk that inflation pressures might prove more persistent and keep inflation above target for longer than its main forecast. Before the meeting, financial markets priced in two quarter-point cuts by the BoE this year. The BoE forecasts were based on market expectations which show interest rates falling to about 3.7% by the end of 2026. Next month the BoE will also need to decide whether it continues the 100 billion pound a year reduction in its bond holdings built up between 2009 and 2020. In its report on Thursday, the BoE stuck with its assessment that these sales had a limited impact on the gilt market, and that the high level of interest rates gave it scope to fine tune monetary conditions if the impact proved greater in the future. The BoE estimated that its bond sales had contributed 0.1-0.2 percentage points to a 2.75 percentage point rise in 10-year gilt yields between February 2022 and June 2024. (([email protected] , opens new tab)) Keywords: BRITAIN BOE/ Sign up here. https://www.reuters.com/markets/rates-bonds/bank-england-cuts-rates-16-year-high-careful-future-moves-2024-08-01/
2024-08-01 10:09
A look at the day ahead in U.S. and global markets from Mike Dolan The Federal Reserve left Wall Street with little doubt about a first U.S. interest rate cut in seven weeks' time, but multiple cross-currents from the earnings season, Japan and China, and domestic politics all make for a noisy start to August. The backdrop of falling rates clearly dominated on Wednesday as Fed boss Jerome Powell said a first cut could come as soon as September, putting the central bank near the end of a more-than-two-year battle against inflation just before the election. Aided by a benign Treasury debt sale schedule, bond markets have rallied hard. Two-year yields plunged as low as 4.25%, their lowest since February and completing a drop of more than 50 basis points for July alone. Five-year yields fell below 4% for the first time in four months and the 10-year benchmark is also flirting with 4%. With further evidence of a cooling labor market as the backdrop ahead of Friday's July employment report, futures markets now price as much as 70bp of Fed easing by year-end. The signals sent benchmark borrowing rates tumbling across the world, despite the Bank of Japan's jarring move in the opposite direction earlier on Wednesday. And the Bank of England may also be poised to make its first cut of the cycle later today - with markets leaning to cut in what will likely be split decision among BoE policymakers. Sterling fell to its lowest in advance of the news. With the yen stabilising somewhat just below 150 per dollar after Wednesday's BOJ-related surge, the dollar index (.DXY) , opens new tab was firmer despite the Fed optimism. Adding to the sense of monetary easing and ebbing world growth were further signs of China's economy struggling. The Caixin/S&P Global manufacturing PMI fell sharply back into contraction territory, its lowest reading since October and missing forecasts for a continued expansion. That news knocked Chinese stocks (.CSI300) , opens new tab back into the red, while Japan's Nikkei (.N225) , opens new tab skidded more than 2% in a delayed reaction to the previous day's BoJ move and yen spike. Although lifted by the Fed view, Wall Street stocks were also being sideswiped in the thick of the earnings season. Chipmakers across the world rose sharply on Wednesday, aided by Microsoft's big spend on artificial intelligence capacity despite the latter's stock stumbling on its own earnings outlook. AI-bellwether Nvidia (NVDA.O) , opens new tab soared 13% and added $330 billion in market cap in just one day - the biggest such gain in history. Other global chipmakers advanced on reports the U.S. government may exempt firms in allied countries from additional chip curbs on China. And Meta (META.O) , opens new tab wowed the gallery overnight with its quarterly update, sending its stock up 7% ahead of Thursday's opening bell and steadying the ship for the so-called Magnificent Seven mega caps - which had wobbled over the past week. The Facebook parent beat market expectations for second-quarter revenue and issued a rosy sales forecast for the third quarter, crucially indicating that robust digital-ad spending on its social media platforms could cover the cost of its AI spend. Apple (AAPL.O) , opens new tab and Amazon (AMZN.O) , opens new tab will report earnings after the bell on Thursday. The upshot on Thursday is that S&P500 and Nasdaq futures were higher again before the bell after the prior days' index surges of more than 1% and 2% respectively. Partly on dour factory news but also on some disappointing regional earnings, European stocks bucked that trend and fell back earlier. Euro zone manufacturing activity remained mired in contraction in July, with output declining at its fastest pace this year, according to an updated Purchasing Managers' survey. The U.S. equivalent surveys from ISM and S&PGlobal are due out later too. Oil prices , meantime, held Wednesday's jump on rising Middle East tensions as the OPEC+ producer group held its latest meeting. Key developments that should provide more direction to U.S. markets later on Thursday: * Bank of England policy decision, quarterly monetary policy report and press conference * OPEC+ ministerial panel meets in London to review oil policy * US July manufacturing surveys from ISM and S&P Global, weekly jobless claims, Q2 unit labor costs and productivity estimates, * US corporate earnings: Apple, Amazon, Intel, Clorox, Prudential Financial, Motorola Solutions, Microchip Technology, Consolidated Edison, Booking, Biogen, Bio Rad, Moderna, Regeneron, Cigna, Ventas, Conocophillips, Dominion Energy, Xcel Energy, Alliant Energy, Coterra Energy, Entergy, Camden Property, Kimco, Federal Realty Investment Trust, Regency Centers, Ameren, Mettler-Toledo, Hershey, GoDaddy, EOG, Gen Digital, AMETEK, Eaton, Intercontinental Exchange, WW Grainger, Southern, etc Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-08-01/
