2024-07-16 21:50

July 17 (Reuters) - A look at the day ahead in Asian markets. A mixed day in world markets on Monday suggests there will be no clear narrative driving Asian markets at the open on Tuesday, with investors still leaning on U.S. earnings, remarks from Fed officials and signals from China's 'third plenum' for guidance. There are key events and data releases that will move asset markets in their respective countries, namely an interest rate decision and guidance from Indonesia's central bank, and inflation figures from New Zealand. But otherwise, it's a mixed bag. For example, gold jumped 2% to a record high of $2,469 an ounce on Tuesday yet the dollar rose and the 10-year U.S. Treasury yield slid to a four-month low of 4.16%. The U.S. yield curve paused its recent steepening trend too - having turned positive on Monday for the first time since January, the 2s/30s curve inverted again on Tuesday. The 6 basis point reversal was pretty steep, with no obvious trigger. Asian stocks could get a lift from Wall Street's rise after figures showed that U.S. retail sales in June were much stronger than economists had expected. The Dow notched a record closing high, while Big Tech struggled to close in the green. These retail sales numbers may have boosted optimism about the U.S. economy - the Atlanta Fed's GDPNow Q2 tracking estimate rose to 2.5% from 2.0% - but not world oil prices. Worries over weak demand from China pushed oil to a one-month low. Japanese markets are up and running again after Monday's holiday. Bond yields slipped to their lowest in nearly three weeks, with the 10-year JGB yield down to 1.02% on Tuesday. This likely contributed to the yen's fall back below 158 per dollar. Bank of Japan data on Tuesday suggested that Tokyo may have spent an additional 2.14 trillion yen ($13.5 billion) on foreign exchange market intervention to shore up the yen on Friday. This would follow the estimated 3.37-3.57 trillion yen spent intervening on Thursday. According to International Monetary Fund Chief Economist Pierre-Olivier Gourinchas, the Bank of Japan's biggest challenge is not maintaining the yen's value but maintaining price stability and keeping inflation within its target. Gourinchas was speaking after the IMF cut Japan's economic growth forecast due to temporary auto output disruptions and weak private investment in the first quarter, but welcomed recent bumper pay hikes that should lift household incomes. The IMF's outlook for China was the exact opposite. The IMF significantly hiked its 2024 and 2025 growth forecasts to 5.0% and 4.5%, respectively. But perhaps unsurprisingly, given Monday's alarmingly weak Q2 data, Gourinchas said risks are very much to the downside. Little wonder that bond yields and the yuan remain under constant downward pressure, and investors will be hoping the ruling Communist Party's third plenum offers concrete signs that further support for the economy is coming. Here are key developments that could provide more direction to markets on Wednesday: - Indonesia interest rate decision - New Zealand inflation (Q2) - China's third plenum Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-07-16/

2024-07-16 21:42

July 16 (Reuters) - Brazil's central bank has all options on the table regarding future interest rate decisions, monetary policy director Gabriel Galipolo said on Tuesday. "We have all options open because uncertainty has increased, making us more data-dependent," he said at a credit cooperatives forum in Goias state. Galipolo stressed, when asked what could lead the bank to resume rate cuts, that policymakers are not providing any guidance in a more challenging environment marked by a stronger labor market and pressure on the Brazilian real . The central bank paused an easing cycle in June following seven consecutive reductions that lowered the benchmark Selic interest rate to 10.5%. Seen as a favorite to take the bank's helm when Governor Roberto Campos Neto's term ends in December, the director expressed discomfort with market inflation expectations diverging from the official target despite current benign inflation data. He also noted that Brazil's tight labor market, which has not yet pushed up wages and inflation, suggests a more costly and gradual disinflation process. While acknowledging that domestic issues contribute to the weakening of the country's currency, he highlighted that expectations that U.S. interest rates would stay higher for a longer period has fundamentally strengthened the U.S. dollar globally. Galipolo said the Brazilian real faces more volatility because it is a liquid currency. Year-to-date, the real has lost more than 10% against the U.S. dollar. Sign up here. https://www.reuters.com/world/americas/brazils-central-bank-keeps-all-policy-options-open-says-director-2024-07-16/

2024-07-16 21:29

TORONTO, July 16 (Reuters) - Torrential rain on Tuesday triggered flash flooding in parts of Toronto, Canada's financial center, causing power outages, disrupting traffic and forcing airlines to curtail service. Toronto Hydro, the local power distribution company, said it was responding to scattered outages that it suspected were caused by flooding at a transmission station. At 3 p.m., about 123,000 customers were without power, it said. Billy Bishop Airport, situated on an island off downtown Toronto, said the underwater pedestrian tunnel leading to the passenger terminal, was flooded and temporarily closed. At least some flights were delayed or canceled. At lunchtime, many of downtown Toronto's normally bustling restaurants were darkened, with kitchen workers and waiters gathered outside, chatting and waiting for the lights to come back. With traffic lights out, cars and delivery trucks backed on city streets, snarling some intersections. Across the world, intense rain storms are becoming more common because of climate change, weather experts say, putting a heavy strain on infrastructure that in many cities is not designed to handle heavy, sustained downpours. The Toronto Transit Commission, which operates subway, bus and trolley service, said trains were bypassing Union Station, the city's main rail terminal. Go Transit, which operates train service to and from Toronto's suburbs, said the flooding had caused some disruptions. Parts of the Don Valley Parkway, a major highway running east of downtown, resembled a river soon after the rains began, with images showing cars stalled out in the brownish waters several feet (dozens of cm) deep. Brandon Rolle, 24 said he was stuck inside his car on the Don Valley Parkway for two hours before the fire service came to rescue him. But his car was still stuck on the flooded highway until it could be towed off, he said. "They're saying they have to wait until the water recedes," he said. The rains stopped around midday, and Environment Canada forecast partly cloudy skies for the rest of Tuesday. Toronto Mayor Olivia Chow in a televised briefing said emergency services were not affected by the flooding, but there was some water in parts of the City Hall. Trading on the Toronto Stock Exchange proceeded as normal, the TSX said. (This story has been refiled to fix the name to the Toronto Transit Commission, in paragraph 6) Sign up here. https://www.reuters.com/world/americas/torrential-rains-flood-toronto-causing-power-outages-traffic-disruption-2024-07-16/

2024-07-16 21:01

HOUSTON, July 16 (Reuters) - Restaurants in and around Houston on Monday filed a class action seeking more than $100 million from U.S. power provider CenterPoint Energy (CNP.N) , opens new tab, alleging incompetence and negligence in the utility's efforts to restore power quickly following Hurricane Beryl. About 2.3 million of CenterPoint's customers lost power last week after Hurricane Beryl knocked down trees and electricity infrastructure with its 80 mph winds. About 93,000 remained without power on Tuesday, eight days after the hurricane. The case alleges that CenterPoint, the state's largest power provider, has failed for years to invest in infrastructure, and to inspect, maintain and upgrade equipment and to train personnel. It also alleges that the utility did not have a competent storm plan in place and failed to adequately respond to the storm once it impacted the area. Tony Buzbee, a lawyer on behalf of the plaintiffs, said in an Instagram post the case makes claims for negligence and gross negligence for "CenterPoint's repeated failure to do what any reasonable and competent electricity provider would do and should do." CenterPoint said it remains focused on restoration efforts, adding that the company does not comment on potential litigation. Texas Governor Greg Abbott on Tuesday sent a letter to CenterPoint's chief executive officer directing him to improve the company's preparation and response practices for the next severe weather event in Southeast Texas. Abbott requested that CenterPoint provide his office with a plan by July 31 to address power issues including ways to eliminate vegetation, ensure sufficient number of pre-staged workers, accelerate electric pole replacements and improve communication with customers. He said he will issue an executive order that imposes certain requirements on CenterPoint if it fails to submit a plan by that date. Sign up here. https://www.reuters.com/world/us/texas-restaurants-sue-utility-centerpoint-over-response-hurricane-beryl-2024-07-16/

2024-07-16 20:49

July 16 (Reuters) - U.S. pipeline operator Energy Transfer (ET.N) , opens new tab and fuel distributor Sunoco (SUN.N) , opens new tab on Tuesday said they would form a joint venture combining their crude oil and produced water-gathering assets in the Permian Basin. Dallas-based Sunoco is an affiliate of Energy Transfer, which billionaire Kelcy Warren controls. The joint venture, formed on July 1, is expected to be immediately accretive to distributable cash flow for both Energy Transfer and Sunoco. It will operate more than 5,000 miles of crude oil and water gathering pipelines with crude oil storage capacity exceeding 11 million barrels. Energy Transfer will hold a 67.5% interest in the joint venture, with Sunoco holding the remaining 32.5%. Sign up here. https://www.reuters.com/markets/deals/energy-transfer-sunoco-form-joint-venture-permian-crude-businesses-2024-07-16/

2024-07-16 20:30

July 16 (Reuters) - Canada's TC Energy (TRP.TO) , opens new tab said on Tuesday a free trade arbitration tribunal had tossed out its claim to recover more than $15 billion from the U.S. government for the cancellation of its Keystone XL project. The pipeline operator had submitted a formal request for arbitration under the North American Free Trade Agreement (NAFTA) in 2021. U.S. President Joe Biden had canceled the pipeline's permit a year after the NAFTA was terminated in July 2020. The pact was then replaced by the United States-Mexico-Canada Agreement (USMCA). TC Energy said the tribunal determined it did not have the authority to decide if the revocation of the Presidential Permit violated the obligations outlined under the NAFTA. "This ruling does not align with our expectations and views of the plain interpretation of the protections NAFTA and the USMCA were designed to offer," TC Energy said on Tuesday. Keystone XL would have carried 830,000 barrels per day of oil from Alberta in Canada to the U.S. Midwest, but was held up for more than a decade by environmental opposition and regulatory hurdles, before its permit was revoked. In 2022, Alberta, Canada's largest oil-producing province, had also initiated a trade challenge to recover its investment of about C$1.3 billion ($949.95 million) in the pipeline. ($1 = 1.3685 Canadian dollars) Sign up here. https://www.reuters.com/business/energy/tc-energy-says-its-15-bln-claim-keystone-xl-project-thrown-out-by-us-tribunal-2024-07-16/