2024-07-24 11:09

July 24 (Reuters) - Thermo Fisher (TMO.N) , opens new tab on Wednesday raised its annual profit outlook and posted a better-than-expected second-quarter profit, banking on improved demand for its tools and services used in clinical trials. Contract drug manufacturers witnessed cut back on spending by their biotech clients in 2023 amid rising interest rates. The public funding environment for early-stage biotechs is expected to improve in the second half of this year, on hopes of interest rate cuts from the Federal Reserves in September. Some analysts have noted that funding for biotechs could stabilize due to a strong 2023 for regulatory approvals in the United States. The forecast raise from Thermo comes a day after rival Danaher (DHR.N) , opens new tab said that it witnessed "positive momentum" for its products and services used to develop biological drugs. Yet, it reaffirmed that core revenue is expected to be down low-single digits this year. Thermo Fisher now expects annual profit in a range of $21.29 to $22.07 per share, compared with previous forecast of $21.14 to $22.02 per share. Yet, shares of the medical equipment maker fell 3% to $535 in premarket trading as the raised forecast came in below analysts' expectations of $21.70 per share for the year, according to LSEG data. On an adjusted basis, the Waltham, Massachusetts-based company earned $5.37 per share for the quarter ended June 29, compared with analysts' expectations of $5.12 per share. Sales in its laboratory and biopharma services segment, which provides products used in clinical trials, came in at $5.76 billion, above analysts' expectations of $5.48 billion. Revenue from that segment makes up more than half of Thermo Fisher's total sales, which were $10.54 billion for the quarter, slightly beating estimates of $10.51 billion. Sign up here. https://www.reuters.com/business/healthcare-pharmaceuticals/thermo-fisher-lifts-profit-forecast-biotech-demand-shows-signs-improvement-2024-07-24/

2024-07-24 10:51

LONDON/TOKYO, July 24 (Reuters) - Japanese official buying to defend the yen is fast becoming a standard feature of the FX landscape in 2024, but authorities in Tokyo have switched up their methods, making it even trickier for investors to second-guess when and how they might step in. The novel intervention tactics may have wrongfooted traders enough to help Japan's financial authorities turn the tide on their currency, which hit its weakest against the dollar since 1986 just four weeks ago. The Bank of Japan, at the Ministry of Finance's behest, likely spent nearly 6 trillion yen ($38.4 billion) this month in shoring up the yen. As the dollar traded at 38-year highs around 160 yen two weeks ago, authorities in Tokyo warned almost daily they would step in should volatility prove excessive or the level of the Japanese currency not reflect the underlying economic and monetary-policy reality. Another round of intervention was, therefore, hardly a surprise. There has been no official confirmation of intervention, but when the first round of a one-two punch arrived on July 11, traders believe the BOJ pounced on weak U.S. inflation data that hit the dollar - selling dollars into the slide in the U.S. currency, rather than into weakness in the yen. The dollar/yen pair , which is now below 155 yen, dropped in minutes to around 158.3 from 161, immediately raising suspicion among traders of intervention. "It appears the MOF and BOJ may have turned 'momentum trader', grabbing their moment to hit the market when it was at its most vulnerable," Chris Weston, market strategist at Pepperstone said at the time. Typically, the BOJ would step in when U.S. Treasury yields and the dollar were rising. "This time wasn't like that. In fact, it was during a sell-off of the dollar, which caused dollar/yen to drop, that we saw this unusual shift in the yen," Hiroyuki Machida, director of Japan FX and commodities sales at ANZ, said. "Assuming that the dramatic and abrupt movement of the yen over a short span of time was a result of intervention, then it was indeed unlike patterns we’ve seen in the past," Machida said. A second round of suspected official buying on July 12 made investors nervous enough that another rally in the yen on July 15 was initially pinned on intervention that market data subsequently showed had most likely not taken place. Bank of America, which has argued for some time that the BOJ could opt for routine intervention, like the Swiss National Bank, say Japanese authorities may have had three aims in mind: maximising the impact, upping the element of surprise and warding off any excess speculative moves. JOB DONE? It seems to have worked. The yen has strengthened by almost 4% this month and options positioning is starting to shift. Traders are less confident than they have been for some time that the yen is on a one-way street to more weakness. The derivatives market shows the premium in the price of options to buy the yen in one month's time is growing relative to the price of sell options - an indication that traders are turning more bullish. The principal driver of the 30% drop in the yen in the last four years has been the discount in interest rates in Japan to those elsewhere, but, most notably, in the United States. The BOJ meets on July 31 to set monetary policy and a very mixed bag of economic data means the chances of a hike from 0.1% are about 50/50. The Federal Reserve, meanwhile, is all but certain to cut rates by a quarter point when it meets in September to a range of 5.00-5.25%. MUFG FX strategist Lee Hardman said July's moves in the currency "suggest a change in strategy from Japan to be more proactive rather than reactive when providing support for the yen." Speculators still hold one of the biggest bets against the yen on record . At nearly $12 billion, it has more than doubled since the start of 2024 alone. ANZ's Machida said with a bearish position of this size, the prospect of more unpredictable intervention was "terrifying." "It's incredibly painful. You might have been sitting pretty, thinking you’d made a profit at 161 yen, but now it's at 156 yen. If the Bank of Japan were to step in at this level, at 156 yen, you’d probably just want to throw in the towel." ($1 = 156.1000 yen) Sign up here. https://www.reuters.com/markets/currencies/investors-foxed-by-japans-revamped-fx-intervention-blueprint-2024-07-24/

2024-07-24 10:44

SAO PAULO, July 24 (Reuters) - Santander Brasil's (SANB3.SA) , opens new tab second-quarter recurring net profit jumped 44.3% on a yearly basis, the bank reported on Wednesday, topping market forecasts helped by higher lending and fees. WHY IT'S IMPORTANT Santander Brasil is one of Brazil's largest banks and typically its first big private lender to publish quarterly results, setting the tone for upcoming reports from peers Itau Unibanco (ITUB4.SA) , opens new tab and Bradesco . Latin America's largest economy is a key market for Spanish parent Banco Santander (SAN.MC) , opens new tab, which reported its own second-quarter results earlier in the day, raising profitability goals after strong growth at its main retail business. BY THE NUMBERS Santander Brasil's quarterly bottom line came in at 3.33 billion reais ($596.23 million), up 44.3% year-on-year and above the 3.19 billion expected by analysts polled by LSEG. Net interest income (NII) - earnings on loans minus deposit costs - rose 10.6% to 14.75 billion reais. Return on average equity, a gauge of profitability, hit 15.5%, up 4.3 percentage points. Allowance for loan losses fell 1.4% to 5.89 billion reais, while the bank's consolidated loan book increased 7.8% to 665.59 billion reais. ADDITIONAL CONTEXT Santander Brasil in recent years has focused on being more selective in its lending as credit conditions deteriorated. It reported some poor results while implementing the strategy but has been saying the worst is now behind it. KEY QUOTES "We delivered a clear expansion of client NII driven by higher volumes, with market NII at positive levels. Fees also grew consistently," chief executive Mario Leao said in a statement. "In short, we are building a robust, diversified and enduring portfolio, capable of generating sustainable results." ($1 = 5.5851 reais) Sign up here. https://www.reuters.com/business/finance/santander-brasils-net-profit-up-44-q2-beating-forecasts-2024-07-24/

2024-07-24 10:39

LONDON, July 24 (Reuters) - Sterling gained on the euro on Wednesday after a survey showed British business activity this month was stronger than in euro zone economies, while it held steady on the dollar and tumbled against a rebounding Japanese yen. The euro was last down 0.1% on the pound at 84.04 pence not far from its two year low of 83.84 pence hit earlier in July. British business activity picked up this month, bolstered by the fastest manufacturing growth in two years and the strongest inflow of new orders since April 2023, PMI survey data showed Wednesday. In contrast, growth in euro zone business activity stalled. "The divergence in economic fortunes is being reflected by currency markets so far this morning," said Nick Rees, FX Market analyst at Monex Europe. The pound has been supported in recent months by better-than expected economic data, some stability from a new government, and also the Bank of England being slower to cut rates than some peers, including the European Central Bank, due to fears about sticky services inflation. The BoE next meets in August, and markets see around a 45% chance of them cutting rates. Rees said Wednesday's data would do little to push the BoE towards or away from an August cut as it showed a mixed picture regarding the pass through from wages to inflation. The pound was flat on the dollar at $1.29075. Sterling's most dramatic move was against the Japanese yen, tumbling 0.55% to 199.67 yen, having been above 207 earlier this month. The yen has been strengthening broadly after likely official intervention to prop it up earlier in July, a rise in volatility causing traders to unwind yen-funded 'carry trades' that have hurt the currency, and a possibility of a rate increase from the Bank of Japan next week. It could go further, and Nomura strategists, on Wednesday recommended a short GBP/JPY trade to clients, targeting 190.50 per pound by end-September. Behind the idea, they said were: softening UK data, an under priced August BoE rate cut and BOJ July rate hike, shaky broad risk appetite and stretched long sterling positioning. Sign up here. https://www.reuters.com/markets/currencies/pound-gains-euro-after-mixed-activity-data-tumbles-yen-2024-07-24/

2024-07-24 10:39

Fed to cut rates twice this year, economists say Medium to long-term outlook for gold remains supportive - analyst US GDP data due on Thursday, PCE on Friday July 24 (Reuters) - Gold prices drifted higher on Wednesday, as market participants assessed the timing and number of U.S. interest rate cuts and awaited U.S. economic data for further clarity on monetary policy. Spot gold was up 0.4% at $2,417.63 per ounce, as of 1208 GMT. U.S. gold futures gained 0.5% to $2,418.20. "The medium to long-term view for gold still remains supportive because we are instilling two rate cuts this year starting from September... and in the background, geopolitical tension will continue to support gold as a safe haven investment," said ANZ commodity strategist Soni Kumari. The Fed will cut rates just twice this year, in September and December, as resilient U.S. consumer demand warrants a cautious approach despite easing inflation, according to a Reuters poll. The U.S. GDP data on Thursday and personal consumption expenditure (PCE) price index data on Friday could help investors calibrate their expectations of when rate cuts might begin. Lower interest rates reduce the opportunity cost of holding non-yielding gold. Investors are also closely watching developments in the U.S. election campaign, as Vice President Kamala Harris is expected to be the Democratic Party's candidate to face Republican Donald Trump. "Many see Donald Trump as the favourite to win, meaning a more protectionist administration in Washington," Ricardo Evangelista, senior analyst at ActivTrades said in a note. "This scenario entails a stronger dollar, as more expensive imports could increase inflation and drive higher interest rates, creating headwinds for the precious metal's price." Meanwhile, India slashed import duties on gold and silver to 6% from 15%. "In the second half of 2024, we are going to see strong physical demand coming from the favorable cut in import duty," Kumari said. In addition, the monsoon is going to be above average and that will support rural income, giving them surplus money to buy gold, she added. Spot silver rose 0.4% to $29.34 per ounce, platinum firmed 2.1% at $963.60 and palladium added 1.7% to $941.30. Sign up here. https://www.reuters.com/markets/commodities/gold-prices-flat-investors-focus-us-economic-data-2024-07-24/

2024-07-24 10:31

OSLO, July 24 (Reuters) - Norway's Equinor (EQNR.OL) , opens new tab is still considering reducing its 80% stake in Britain's Rosebank oilfield as it seeks to bring the share in line with that of its other assets, Chief Financial Officer Torgrim Reitan told Reuters on Wednesday. The current 80% ownership is higher than Equinor likes to have in a single asset, Reitan said on the sidelines of the company's second quarter results presentation. "Rosebank is a good and very profitable project. It is a process we are working on and there is progress," he added. The Rosebank project to develop one of the last known major oil reservoirs in Britain has been a lightning rod for climate activists calling for a halt to fossil fuel production activity. Reuters last month reported that Equinor had suspended its Rosebank sales process ahead of the British election, with the new Labour Party government looking to increase taxation of the oil and gas sector. Reitan said Equinor had a good dialogue with the Labour Party. "What is important to us is that the deduction rights for investments against tax must be maintained in the future," he said. Overall, Labour's manifesto on energy contained many positives such as a focus on facilitating increased activity and ensuring that Britain was an attractive place to invest, the CFO added. The $3.8 billion Rosebank project, of which Ithaca Energy (ITH.L) , opens new tab owns 20%, is set to come on stream in 2026-2027, Equinor has said. The company plans to invest some 10 billion pounds in the UK by 2030 across oil, gas, renewables and other energy related projects, Reitan said. "But we depend on a good tax system that is predictable and business friendly," he added. Sign up here. https://www.reuters.com/business/energy/equinor-still-considering-reducing-rosebank-oilfield-stake-cfo-says-2024-07-24/