2024-06-26 05:39

MOSCOW, June 26 (Reuters) - Ukrainian shelling destroyed a radiation control post in Velyka Znamyanka in the Zaporizhzhia region, Russia's management of the Zaporizhzhia Nuclear Power Plant in Ukraine said on Wednesday. "(Zaporizhzhia Nuclear Power Plant) specialists carried out a number of compensatory measures to control the radiation situation in the area," the management said on the Telegram messaging app. Radiation levels, the management added, do not exceed safe levels. There was no immediate comment from Ukraine. Russian troops seized the Zaporizhzhia plant in the early days of Moscow's invasion on Ukraine in February 2022 invasion, and Moscow and Kyiv have since routinely accused each other of endangering safety around it. Sign up here. https://www.reuters.com/world/europe/russia-says-ukrainian-shelling-destroys-radiation-control-post-zaporizhzhia-2024-06-26/

2024-06-26 05:16

June 26 (Reuters) - President Emmanuel Macron's shock snap election has rocked France's bond market, the largest in the euro zone, as a strong showing for the far right and left wing parties in opinion polls exacerbates concerns about fiscal sustainability. Earlier in June, the risk premium France pays for its debt on top of Germany's neared levels last seen in 2012, during the euro zone debt crisis. The question is how much more turmoil the two-round elections on June 30 and July 7 could sow in bond markets. Here is a look at who holds France's government debt, key to how markets may react to any further political turmoil: KINDNESS OF STRANGERS Foreign investors own around 50% of France's overall government debt, much higher than around 28% in Italy, 30% in the U.S., 40% in Spain and 45% in Germany, according to data from Barclays and the U.S. Treasury. Foreign investors "are known to be quite volatile. Whenever there are issues, they get out of the market very, very quickly," said BofA rates strategist Erjon Satko. The high share of foreign ownership could mean it takes longer for France's borrowing costs to settle, Satko added. French borrowing costs initially jumped after Macron called the election. While markets have settled, the premium over Germany is still more than 20 bps wider than before the election announcement as spending plans from both Marine Le Pen's far-right National Rally and a left-wing alliance have spooked investors. Foreign non-bank investors, whether asset managers, pension funds or hedge funds, have been the biggest buyers of French bonds since mid-2022, when the ECB started raising interest rates, Barclays notes. And hedge funds - speculative investors that bet on price swings - accounted for just over 50% of French government bond trading volumes on electronic platform Tradeweb last year, as they became the dominant players across euro zone government bonds for the first time. REPEAT OF 2017? A big focus is Japanese investors - big buyers of foreign bonds, with most of their European holdings in France. Le Pen's pledges - now shelved - to pull France out of the European Union and euro rocked markets seven years ago. Ahead of France's 2017 presidential election, which Le Pen lost to Macron, Japanese investors sold some 26 billion euros ($27.89 billion) of French government bonds - a record - Barclays said. "There is a potential risk that you have some recurrence of the dynamics that you saw back in 2017," Barclays rates strategist Max Kitson said. Last week, Japan's Norinchukin Bank [RIC:RIC:NORB.UL] said it plans sell around 10 trillion yen ($62.6 billion) of U.S. and European government bonds to stem losses from bets that went awry given higher-for-longer overseas interest rates. Historically high currency hedging costs increase the risk of another round of Japanese selling after stable holdings for 15 months, Citi analysts reckon. NO DOOM LOOP French banks own just 7.7% of the country's debt, according to data from the country's debt management agency that takes into account fluctuations in the bonds' prices. That's less than the 9.8% recorded in 2014, after which the European Central Bank hoovered up euro zone government debt. Crucially, their domestic government debt holdings are also low relative to their assets, around 4% at the end of 2023, compared to around 16% in Italy and just under 10% in Spain, according to Deutsche Bank. "That's actually an advantage, because you can encourage domestic banks to buy more of the French government bond market if need be," Swiss Re's head of macro strategy Patrick Saner said. It also lessens the risk of government debt ructions spilling over into French banks, Saner added. A bank-sovereign bond "doom loop" was at the heart of the euro zone debt crisis. That's good news for French lenders, the biggest three of which have seen their shares fall 9-14% (BNPP.PA) New Tab, opens new tab, (SOGN.PA) New Tab, opens new tab, (CAGR.PA) New Tab, opens new tab since Macron called the election. To bring their investments back to pre-2015 levels, euro zone banks overall could buy an additional 616 billion euros of French debt across asset classes, BofA estimated late last year. Similarly, French insurance companies now hold 9.5% of the country's debt, down from 19.7% in 2014, according to the French debt management agency data. BofA's Satko said there was room for domestic investors to up their holdings of French debt. "For them it will mostly be about getting the timing right." ($1 = 0.9322 euros) Sign up here. https://www.reuters.com/business/finance/who-owns-frances-debt-why-it-matters-2024-06-26/

2024-06-26 04:34

A look at the day ahead in European and global markets from Ankur Banerjee A pinch of caution ahead of a U.S. inflation reading, a bit of exuberance in tech stocks following a comeback from Nvidia and a dash of hawkish rhetoric from Fed officials - and voila! You get a listless market searching for direction. Traders appear to be reticent in making major moves ahead of Friday's always crucial release of the U.S. personal consumption expenditures price index - the Federal Reserve's preferred measure of inflation. Economists polled by Reuters expect annual growth to ease to 2.6% in May, the slowest in over three years. Until then, market participants are taking cues from Fedspeak and so far policymakers are preaching patience, underscoring that the Fed is in no hurry to cut interest rates and putting a lid on any rate-cut excitement. Markets are pricing in just about two rate cuts this year with a cut in September priced in at around 67%, the CME FedWatch tool showed. Futures indicate European bourses are set for a higher opening, likely buoyed by a rally in tech stocks after Nvidia (NVDA.O) New Tab, opens new tab surged more than 6%, snapping a three-session slide that erased about $430 billion from its market value. With the economic calendar bare, markets may drift with quarter-end caution capping significant moves. Focus will also be on the euro as France gears up to vote this weekend. Over in Asia, tech shares rose, with Taiwan stocks (.TWII) New Tab, opens new tab up 0.24% while the Nikkei (.N225) New Tab, opens new tab surged 1.45% to its highest since early April, though gains were not enough to keep broader markets (.MIAPJ0000PUS) New Tab, opens new tab in positive territory. The yen vigil continued as the Japanese unit lurked just below 160 per dollar - a level that traders suspect could lead to another round of intervention after Tokyo spent some 9.8 trillion yen in late April and early May to support the currency. In corporate news, focus will be on Deliveroo (ROO.L) New Tab, opens new tab shares after Reuters reported that U.S. meal delivery group Doordash (DASH.O) New Tab, opens new tab flagged an interest in a takeover of its British peer last month. Key developments that could influence markets on Wednesday: Economic events: French consumer confidence for June, Swedish PPI data for May Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-06-26/

2024-06-26 03:52

Dollar nears two-month high US 10-year yields at two-week peak Fed's Bowman reiterates holding rates steady 'for some time' US PCE data due on Friday June 26 (Reuters) - Gold prices slipped 1% to their lowest level in more than two weeks on Wednesday, weighed by a stronger dollar and higher bond yields, while traders looked forward to U.S. inflation data due later this week. Spot gold was down 0.8%, at $2,301.16 per ounce by 2:03 p.m. ET (1803 GMT), its lowest since June 10. U.S. gold futures settled 0.8% lower, at $2,313.2. "At this point, market may very well be responding to the firmer U.S. dollar and we continue to price in the possibility that the U.S. Federal Reserve is unlikely to move (interest rates) earlier in the summer," said Bart Melek, head of commodity strategies at TD Securities. The dollar rose 0.4% to a near two-month peak against its rivals, making gold more expensive for other currency holders, while benchmark U.S. 10-year yields hit a near two-week high. USD/US/ The focus this week will be on the U.S. Personal Consumption Expenditures Price Index, the Fed's preferred inflation gauge, which could shed light on the central bank's interest-rate path. Also on the radar are U.S. first-quarter gross domestic product estimates and a crucial debate between President Joe Biden and Republican rival Donald Trump on Thursday. Data out on Tuesday showed U.S. consumer confidence eased in June amid worries about the economic outlook, but households remained upbeat about the labor market and expected inflation to moderate over the next year. Fed Governor Michelle Bowman said on Tuesday that holding the policy rate steady "for some time" would probably be enough to bring inflation under control, but reiterated a willingness to raise borrowing costs if needed. Higher interest rates increase the opportunity cost of holding non-yielding bullion. Elsewhere, spot silver lost 0.1% to $28.88 per ounce, palladium slipped 2%, to $929.25, while platinum climbed 3.1%, to $1,011.88. Sign up here. https://www.reuters.com/markets/commodities/gold-prices-muted-with-us-inflation-data-focus-2024-06-26/

2024-06-26 02:40

HOUSTON, June 25 (Reuters) - A newly formed company headed by a former Exxon Mobil (XOM.N) New Tab, opens new tab executive was selected to support the Guyana government and Exxon to create a new independent natural gas development in the country, Guyana's Ministry of Natural Resources said. Fulcrum LNG offered "the most comprehensive and technically sound proposal" among 17 bidders, the government said in a statement. The ministry has engaged the company along with Exxon to begin the project, with ongoing discussions in a preliminary stage, it said. Guyana wants to put together a plan to monetize its vast untapped natural gas resources and develop a second leg to its booming energy industry. The country is estimated to have 16 trillion cubic feet of gas off its Caribbean coast, according to the U.S. Energy Information Administration. Fulcrum LNG was founded by Jesus Bronchalo, who spent two decades at Exxon, recently as a vice president based in Guyana. Bronchalo left Exxon in the first half of 2023. Corporate records show he founded Fulcrum LNG in Nevada in July last year, acting as CEO, secretary, treasurer and director. The government of Guyana said that Bronchalo's past "relationship with Exxon was not seen as presenting a conflict of interest, since he had severed all ties with said company." Bronchalo did not reply to requests for comment. Exxon has not decided whether it will participate on the project to process and export gas. Guyana has said it would push forward the project, with or without Exxon. As "the development of the gas resource is not an immediate priority for the company, our government decided to seek a capable independent third-party operator to either work with ExxonMobil or carry out this activity on its own," the ministry said. Guyanese President Irfaan Ali last week said said an agreement with the government, that may or may not include Exxon, is not expected until next year. Exxon said that as "a corporate policy, we don’t comment on commercial matters – however, we remain committed to helping Guyana develop its natural gas resources, maximizing value for all stakeholders". Government officials said developing natural gas resources was a national priority, with the aim of exporting gas from an onshore facility to Brazil and using it to power the domestic industry or build a liquefied natural gas plant for exports. FORMER EXXON EXECUTIVE During his 2020-2023 term as VP in Guyana, Bronchalo was in charge of daily relations with the government and headed the bidding process for a gas-to-energy project designed to generate electricity for industry and residents. As Exxon's VP, he was the architect of the take-or-pay agreement in which Guyana will pay Exxon $55 million per year for the gas supply for the gas-to-energy project. Bronchalo was also involved in the bidding process in which Exxon awarded a 20-year lease agreement to the VESHI group to build a shorebase to support the company's offshore activities. Two of the initial partners of the shorebase were targets of a U.S. criminal investigation before the contract was awarded, Reuters revealed. The pair were sanctioned by the U.S. earlier this month. Chinese oil giant CNOOC, one of three members of a joint venture responsible for all the country's oil production, came in second from a list of 17 groups that submitted proposals to Guyana, the ministry said. Sign up here. https://www.reuters.com/business/energy/guyana-selects-former-exxon-execs-firm-engage-with-exxon-gas-project-2024-06-26/

2024-06-26 01:01

BHP taps solar to cut operations emissions Miner still sees a role for carbon capture Investors want more details of emissions-cut plan MELBOURNE, June 26 (Reuters) - BHP Group's (BHP.AX) New Tab, opens new tab operational carbon emissions are set for a "small increase" this financial year, an executive revealed on Wednesday, as the miner said its "non linear" path to net zero requires overcoming growth and technological challenges. Still, the world's largest listed miner is on track to cut those emissions by at least 30% by 2030, President for Climate Graham Winkelman told an investor briefing. BHP has the least ambitious near-term target among the four biggest iron ore miners, with the most aggressive, Fortescue (FMG.AX) New Tab, opens new tab, aiming for zero operational emissions over the same time frame. Iron ore is primarily used to make steel. BHP has earmarked $4 billion for operational carbon cuts by 2030. It had spent $122 million as at the end of its last fiscal year. The miner is increasing the use of solar power, particularly at its Chilean copper operations, and decarbonising its trucking fleets over the medium term. Emissions have climbed due to "organic growth", Winkelman said. Miners must dig deeper to maintain production levels for ore that is falling in metal content. That means more activity per metric ton of mined metal, which raises diesel consumption. The miner has been under pressure from investors to offer more detail on its carbon reduction plan, and to set a target for emissions reduction from customers. Steelmaking accounts for around 7% of global emissions. "We expect that BHP will want to join peers like Rio Tinto in keeping pace with investor expectations to clearly disclose forward expenditure, technologies, timelines and the policies needed towards zero emissions steel," said Naomi Hogan of the Australasian Centre for Corporate Responsibility. BHP, which has said customer emissions are out of its control, aims to support the industry's decarbonisation by developing technology and pathways capable of reducing emissions intensity by 30% by 2030. Such technology includes a tie-up with top iron ore producer Rio Tinto (RIO.AX) New Tab, opens new tab to produce environment-friendlier green iron at Australia's Port Kembla. The miner also expects carbon capture, utilisation and storage (CCUS) to abate emissions from blast furnace steelmaking which uses its coking coal. CCUS is as yet unproven for such use at commercial scale. Coking coal accounted for almost a fifth of BHP's underlying profit in the last financial year and was a driver in its attempt to buy Anglo American (AAL.L) New Tab, opens new tab in April. BHP is also looking at ammonia-fuelled ships and at methane drainage before mining which could help cut methane emissions by as much as half at its Australian coal mines. It has said it does not intend to rely on carbon offsets to reach its 2030 target. Still, CLSA analyst Baden Moore anticipates that BHP may need to build a carbon offset portfolio. "Longer term, I think carbon offsets are going to be a feature for a lot of these high emissions portfolios where there are hard-to-abate sectors," he said. BHP's Scope 3 or customer emissions last year stood at 370.5 million tons, around two-thirds of those of Rio Tinto. Its operational emissions stood at 9.8 million tonnes, around one third of Rio's levels. The miner is set to offer more details at its annual earnings briefing on Aug. 27. Sign up here. https://www.reuters.com/sustainability/boards-policy-regulation/bhp-groups-carbon-emissions-set-see-small-increase-2024-2024-06-25/