2024-08-01 04:33
Aug 1 (Reuters) - A look at the day ahead in European and global markets from Stella Qiu All eyes are on the Bank of England today, now that the Bank of Japan delivered its second interest rate hike in 17 years and the U.S. Federal Reserve gave its clearest hint that it could lower rates in September. The majority of economists expect Britain's central bank to cut rates from their 16-year high. Markets put the chance at a more restrained 58%, with the doubt not surprising given policymakers have not spoken publicly for more than two months due to rules in the run-up to Britain's July 4 election. The uncertainty has weighed on European assets a little whereas Asian shares have mostly rallied, tracking a technology-driven rebound on Wall Street. European shares are poised for a subdued open, with the FTSE futures up 0.3% and EUROSTOXX 50 futures flat. Also due later on Thursday are manufacturing surveys for the UK, Germany and France as well as unemployment data for the euro zone. Any softness there would help build the case for another rate cut in Europe. In Asia, the yen rallied to 4-1/2-month highs but soon ran into resistance. Still, the upward trend remained intact on expectations for more central bank rate hikes, sending the Nikkei (.N225) , opens new tab 2.6% lower. Chinese shares also turned lower after a private survey showed the manufacturing sector shrank in July, adding to doubt about the country's growth momentum. Elsewhere, stocks basked in tech euphoria though it remains to be seen whether their extraordinary comeback can be sustained. Nvidia surged 13% while earnings results from Meta exceeded expectations, pushing its shares up 7% after the bell. Results from Apple and Amazon will be ones to watch later in the day. One thing investors are sure of is that a rate cut from the Fed in September - be it 25 basis points or even 50 - will underpin risk sentiment. Key developments that could influence markets on Thursday: Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-08-01/
2024-08-01 00:41
SEOUL, August 1 (Reuters) - SK Innovation Co Ltd (096770.KS) , opens new tab, owner of South Korea's top refiner SK Energy, said on Thursday it expects strong refining margins in the second half of this year as OPEC+ production cuts buoy oil prices and demand for transportation, cooling, and industrial use picks up as the peak oil demand season begins The company posted an operating loss of 46 billion won ($33.6 million) for the April-June period, versus a 107 billion won loss a year earlier. That compared with an average analyst forecast of 295 billion won profit compiled by LSEG SmartEstimate. Second-quarter revenue rose 0.4% to 18.8 trillion won, slightly lower than analyst estimates. Shares in SK Innovation were trading up 1.7%, versus the benchmark KOSPI's (.KS11) , opens new tab 0.5% rise in early trade. ($1 = 1,369.0500 won) Sign up here. https://www.reuters.com/markets/commodities/sk-innovation-expects-strong-refining-margins-h2-backed-by-higher-oil-prices-2024-08-01/
2024-07-31 23:51
SAO PAULO, July 31 (Reuters) - Brazil's central bank on Wednesday kept interest rates unchanged at a second consecutive policy meeting, as expected, flagging a need for "more vigilance" in monetary policy due to worsening inflation expectations and recent market swings. The bank's rate-setting committee, known as Copom, held the Selic benchmark interest rate at 10.50% in a unanimous decision, in line with forecasts from all 40 economists polled by Reuters. Inflation has outpaced expectations and Brazil's currency has depreciated nearly 4% since the bank's last policy meeting in mid-June, flirting with more than two-year lows amid investor concerns about fiscal discipline. "The Committee judges that the domestic and international environments require even greater caution on the conduct of monetary policy," wrote policymakers in their policy statement. "In particular, the inflationary impacts of the movements of market variables and inflation expectations, if persistent, corroborate the need for more vigilance," they added. Citi analysts said they still expect the Selic rate to be held at 10.50% in coming meetings, despite the rising risks on the inflation outlook. "The unquestionable deterioration in the inflation outlook pushed Copom to escalate the hawkish tone, although not yet indicating an imminent interest rate hike," Citi analysts wrote in a report. Inflation projections for this year climbed to 4.10% in the latest central bank survey, more than a full percentage point above the 3.0% center of the official policy target. Sticky services inflation also pushed up consumer prices more than forecast in the month to mid-July, driven up higher fuel and airfare costs. Rafaela Vitoria, chief-economist at lender Inter, said the committee had a "cautions tone, stressing the need to keep monetary policy in a contractionary territory until the disinflation process is consolidated". The central bank kept rates unchanged even as Brazil's President Luiz Inacio Lula da Silva has repeatedly pushed for a lower Selic. At an official event in Mato Grosso state on Wednesday, Lula said minutes before the central bank decision that inflation is under control and that interest rates need to be reduced. The central bank on Wednesday raised its base scenario inflation projections to 4.2% this year and 3.6% for 2025, up from 4% and 3.4% previously. The monetary authority on Wednesday published its first price increase projections for the first quarter of 2026, seeing an inflation rate of 3.4% under its base scenario. Sign up here. https://www.reuters.com/markets/rates-bonds/brazil-holds-interest-rates-expected-flags-greater-caution-2024-07-31/
2024-07-31 23:11
NEW YORK, July 31 (Reuters) - The S&P 500 and Nasdaq scored their biggest daily percentage gains since Feb. 22 and the Dow rose on Wednesday as chip stocks rallied and the Federal Reserve kept U.S. interest rates unchanged while signaling possible easing in September if inflation cools. Seven out of the 11 S&P 500 sectors advanced, led by technology and consumer discretionary stocks. Healthcare, real estate and consumer staples were the weakest. The Fed kept its benchmark overnight interest rate in the 5.25%-5.50% range as it ended its two-day policymaking meeting on Wednesday, but opened the door to easing in September, seven weeks shy of the November U.S. elections. The benchmark U.S. 10-year note yield fell 9.8 basis points to 4.043%. The Dow Jones Industrial Average (.DJI) , opens new tab rose 0.24% to 40,842.79, the S&P 500 (.SPX) , opens new tab gained 1.58% to 5,522.30 and the Nasdaq Composite (.IXIC) , opens new tab advanced 2.64% to 17,599.40. "It was the worst kept secret on the planet that the Fed was not going to cut in July," said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma. "The Fed is going to have its day in the sun in September with a 25 or 50 basis point cut, but I would not be surprised if that is already priced into stocks." During his press conference, Fed Chair Jerome Powell said policymakers discussed the case for cutting rates, but a "strong majority" agreed that now was not the appropriate time. "The statement didn't move the needle at all," said Mark Malek, chief investment officer at Siebert Next in New York, referring to the Fed's official statement. "But listening to him speak, it's clear they're all locked and loaded for September rate cut and they're going to maintain their optionality." Data released early Wednesday showed July U.S. private payrolls increased far less than expected, indicating an easing in persistent labor market tightness. For the month, the S&P 500 climbed 1.1%, the Dow jumped 4.4%, while the Nasdaq lost 0.8%. Nvidia (NVDA.O) , opens new tab jumped nearly 13%, helped by a rosy 2024 sales forecast for artificial intelligence chips by peer Advanced Micro Devices (AMD.O) , opens new tab, whose shares also gained 4.3%. The Philadelphia SE Semiconductor index (.SOX) , opens new tab rose finished up nearly 7%. U.S. President Joe Biden's administration plans to unveil a new rule next month that will expand U.S. powers to stop exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers, two sources familiar with the matter told Reuters. Microsoft dipped 1% after it posted massive AI-related expenses. Meta (META.O) , opens new tab jumped 5% after the bell as its earnings beat market expectations. Apple (AAPL.O) , opens new tab and Amazon.com (AMZN.O) , opens new tab, which will report earnings on Thursday, closed up 1.5% and 2.9%, respectively. Advancing issues outnumbered decliners by a 2.23-to-1 ratio on the NYSE. On the Nasdaq, 2,603 stocks rose and 1,648 fell as advancing issues outnumbered decliners by 1.58-to-1. The S&P 500 posted 68 new 52-week highs and one new low while the Nasdaq Composite recorded 168 new highs and 104 new lows. Total volume on U.S. exchanges was 13.3 billion, compared with the 20-day moving average of 13.27 billion. Sign up here. https://www.reuters.com/markets/us/nasdaq-futures-lead-amd-boosts-chips-before-fed-verdict-microsoft-drops-2024-07-31/
2024-07-31 23:03
BoE expected to vote 5-4 to cut rates to 5% from 5.25% Markets see 33% chance that rates will stay on hold CPI back at 2% but services and wage inflation still high Few MPC speeches since June meeting due to election Rate decision at 1100 GMT, press conference at 1130 GMT LONDON, Aug 1 (Reuters) - The Bank of England looks in a position to cut interest rates on Thursday after holding them at a 16-year high of 5.25% for the past year, though markets and economists are far from certain the British central bank will take the plunge. Economists polled by Reuters last week overwhelmingly expected a quarter-point cut but think the vote will be close on the BoE's Monetary Policy Committee, with only a 5-4 majority in favour. Late on Wednesday, financial markets were pricing in a 66% chance of a quarter-point cut, and then expected one more quarter-point cut before the end of the year. "It's certainly going to be a finely balanced decision. You can see that from the market pricing," said Jack Meaning, chief UK economist at Barclays. In June, the MPC voted 7-2 to keep rates on hold, but minutes of the meeting recorded that several of those who voted to hold had been close to voting for a cut. How those policymakers' views have shifted since then is hard to tell. Only one potential swing voter - chief economist Huw Pill - spoke during the two-and-a-half week window between the end of Britain's election campaign on July 4 and the start of the BoE's pre-decision quiet period last week. There has also been a change of personnel - with former OECD and finance ministry chief economist Clare Lombardelli succeeding Ben Broadbent as deputy governor, giving the MPC a female majority for the first time. 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. However, the BoE expects headline inflation to edge up over the coming months and is more focused on what it sees as the medium-term drivers of inflation: services prices, wages and more general tightness in the labour market. Services price inflation is the biggest sticking point. At 5.7% in June, it has fallen much less than the BoE forecast three months ago. The question for policymakers is whether that represents greater medium-term pressures, or is due to one-off effects such as a surge in hotel prices during concert tours by artists such as U.S. singer Taylor Swift. NO TIME TO DELAY? Meaning, a former BoE economist, said policymakers would be wrong to delay a rate cut until September. "There is always a reason to wait a little bit longer ... (but) if you wait until it's absolutely conclusive, then you've probably waited too long," he said. By September, official data is likely to show headline inflation back above 2% - superficially making a rate-cut look ill-timed - and, unlike in August, there is no scheduled press conference for Governor Andrew Bailey to explain the decision. Moreover, updated BoE forecasts on Thursday are likely to still show inflation falling back below its 2% target in the medium term - making a rate cut necessary sooner rather than later, given the time it takes for lower rates to affect prices. The September meeting is also when the MPC must hold an annual vote on the pace at which it reverses past quantitative easing - a decision that it tries to keep distinct from its regular votes on interest rates. However, it is possible the MPC will opt for caution. Bailey in June said that policymakers "need to be sure that inflation will stay low" before cutting rates, and Pill last month said wages and services prices continued to show "uncomfortable strength". Growth so far this year has also been stronger than the BoE or most economists expected "While it will be a very close call, the economy's recent strength and the stickiness of services inflation leads us to think that the Bank of England will wait," said Ruth Gregory, deputy chief UK economist at Capital Economics. Sign up here. https://www.reuters.com/world/uk/bank-england-close-cutting-rates-16-year-high-2024-07-31/
2024-07-31 22:27
July 31 (Reuters) - Privately held infrastructure firm WhiteWater and its partners have decided to move forward with the construction of the Blackcomb Pipeline natural gas pipeline in Texas, the company said on Wednesday. The pipeline is expected to transport up to 2.5 billion cubic feet per day (Bcfpd) of natural gas through about 365 miles from the Permian Basin in West Texas to Agua Dulce in South Texas. WhiteWater, MPLX (MPLX.N) , opens new tab and Enbridge (ENB.TO) , opens new tab through WPC, their joint venture that owns the Whistler Pipeline, reached a final investment decision with an affiliate of Targa Resources (TRGP.N) , opens new tab on the construction. A shortage in pipeline capacity has plagued natural gas producers in the Permian who have resorted to flaring to deal with the excess gas. The Blackcomb Pipeline will be constructed and operated by WhiteWater and is expected to be in service in the second half of 2026, subject to regulatory approvals. Sign up here. https://www.reuters.com/business/energy/whitewater-partners-move-forward-with-blackcomb-pipeline-construction-2024-07-31/
