2024-06-18 05:34

MELBOURNE, June 18 (Reuters) - China's Premier Li Qiang was in Western Australia on Tuesday where he visited Fortescue's (FMG.AX) New Tab, opens new tab hydrogen research hub in Perth, as well as Australia's first lithium hydroxide production facility. Australia's resource rich state exports half the world's seaborne iron ore and accounts for half its lithium. It is also home to the operations of top global miners BHP (BHP.AX) New Tab, opens new tab and Rio Tinto (RIO.AX) New Tab, opens new tab. The world's fourth largest iron ore miner Fortescue has recently turned its hand to green energy and its Hazelmere hub is where it trials technology on hydrogen, ammonia and battery power for trains, ship engines, haul trucks and drill rigs. Among Australia's major miners, Fortescue has the most aggressive carbon reduction plans, aiming to be carbon neutral by 2030 for emissions it generates on site or through its power consumption. Miners have been stepping up efforts to find alternatives to diesel fuel which is the dominant source of fuel for vehicles on remote mine sites. The hub is where Fortescue developed the technology for its hydrogen-powered haul truck prototype, 'Europa,' which operated with hydrogen for the first time in May. The prototype was a tie up with global equipment maker Liebherr, and contains a 1.6 megawatt battery and 500 kilowatts of fuel cells and can store over 380 kilograms of liquid hydrogen. Li also visited Tianqi Lithium Energy Australia's (TLEA) lithium hydroxide plant which is owned 51% by Tianqi Lithium and 49% by Australian miner IGO Ltd. The plant is set to produce 24,000 tonnes of lithium hydroxide a year from its first train once fully ramped up, with a second, third, and fourth train under consideration. It is ironing out production issues, having produced 2,178 tonnes of the battery chemical in the three quarters to end March. TLEA also owns a 51% share of Australia's Greenbushes lithium mine, among the world's largest, with US miner Albemarle. ($1 = 1.5147 Australian dollars) Sign up here. https://www.reuters.com/markets/commodities/chinas-premier-li-visits-industry-western-australia-2024-06-18/

2024-06-18 05:32

RBA holds rates at 4.35% RBA sees narrow path for inflation to drop to 2-3% target Economists see risks to November rate cut outlook SYDNEY, June 18 (Reuters) - Australia's central bank debated whether to raise interest rates at a policy meeting on Tuesday given there were upside risks to inflation, but decided to stay the course in a sign the hurdles to a hike remained high. Wrapping up its June policy meeting, the Reserve Bank of Australia (RBA) kept rates at a 12-year high of 4.35% for a fifth straight meeting, but emphasised the need to be vigilant on inflation. "While recent data have been mixed, they have reinforced the need to remain vigilant to upside risks to inflation," the RBA Board said in a statement. At 3.6%, inflation remains well above the bank's target band. "We need a lot to go our way if we are going to bring inflation back down to the 2-3% target range," RBA Governor Michele Bullock said at a media conference after the decision. The Australian dollar ticked up 0.1% to $0.6622. Markets still imply no chance of another rise in rates, but did pare the probability of a cut as early as December to 44% from 65% before the decision. A rate cut is not fully priced in until April or May 2025. Bullock said recent data had rung some alarms about inflation, though this did not automatically mean the case for a rate hike was getting stronger. "They (the Board) wanted to make the point that they are alert to potential upside risks," she said. Markets have heavily wagered on a steady outcome even as the economy almost halted in the first quarter and wage growth unexpectedly slowed, with still elevated inflation preventing rate cuts in 2024. "The risks in the near term are still skewed towards another hike," said Shane Oliver, chief economist at AMP. "This makes the August RBA meeting, at which it will also review its economic forecasts, critical, and potentially live for a hike if June quarter inflation surprises on the upside." June quarter inflation figures are out on July 31, just before the Board meeting on August 5-6. Since the RBA's last meeting, data has come in largely as expected. The economy grew a meagre 0.1% on a quarterly basis, while wage growth slowed from 15-year highs and the labour market kept loosening at a slow pace. However, an upward revision to consumption in the first quarter and a jump in consumer inflation to a five-month high of 3.6% in April suggest the upside risks remain. The hope is that cost-of-living relief from governments, including billions in electricity rebates, will help bring headline inflation lower in the second half. Commonwealth Bank of Australia (CBA) and National Australia Bank both noted a risk to their calls for a rate cut in November. "The RBA Board does not want to lift the cash rate again," said Gareth Aird, CBA's head of Australian economics. "But given the challenging underlying inflation backdrop, as well as a labour market that is loosening more gradually than expected, the runway is shortening between now and November. The risk to our call is increasingly moving towards a later start date for an easing cycle." Sign up here. https://www.reuters.com/world/asia-pacific/australias-central-bank-vigilant-inflation-holds-rates-steady-2024-06-18/

2024-06-18 05:28

NEW YORK, June 18 (Reuters) - The dollar eased against the euro on Tuesday after retail sales data indicated signs of exhaustion among U.S. consumers, boosting the case for Federal Reserve rate cuts later this year. U.S. retail sales increased less than expected in May as lower prices for gasoline and motor vehicles weighed on receipts at service stations and auto dealerships. The trend in sales growth has been slowing as higher prices and interest rates force households to prioritize essentials and cut back on discretionary spending. "It may have come later than initially expected, but the tight financial conditions engineered by the Fed finally appear to be straining household budgets this year," said Stuart Cole, chief economist at Equiti Capital. "But a softer pace of consumption may actually be welcomed by the Fed, as it makes the task of returning CPI back to target that much easier, especially given the key role domestic consumption plays in driving U.S. economic activity," Cole said. The euro was 0.02% higher at $1.073625. The common currency slipped as low as $1.071 earlier in the session. Against a basket of currencies , the dollar was about flat at 105.30. "The softer-than-expected retail sales report increases the likelihood that the Fed starts to cut interest rates in a few months," Bill Adams, chief economist at Comerica Bank, said in a note. Fed Funds futures implied a 67% probability of at least one rate cut by the September Fed meeting, up from 63% a day ago. Philadelphia Fed President Patrick Harker said on Monday that he backs only one interest rate cut this year, but left the door open to changing his view depending on incoming data. A long list of Fed officials take to the podium at various venues later in the day, including the Boston Fed's Susan Collins and the Richmond Fed's Thomas Barkin. Last week, mild U.S. inflation readings contrasted with an overall hawkish stance by Fed officials, who trimmed their previous median projection for three quarter-point rate cuts this year to one. Last week's rally in the dollar was mostly driven by a sharp euro selloff after French President Emmanuel Macron called a shock snap election in response to his ruling centrist party's trouncing by Marine Le Pen's eurosceptic National Rally in the European Parliament elections. The euro has stabilised since. "Over the weekend, France's Le Pen said that she would be ready to work with President Macron and would not seek him out," said Mohit Kumar, chief economist for Europe at Jefferies. "A portion of the recent risk off moves have been driven by fears of 'Frexit' and euro area breakup," he said. "Those fears are overblown." The dollar was little changed against the yen at 157.81 yen , holding below Friday's six-week high of 158.26. Sterling was flat on the day at $1.2705 as investors waited for inflation figures on Wednesday and the Bank of England's interest rate decision the day after that. Meanwhile, the Aussie dollar was 0.6% higher after the Reserve Bank of Australia held rates steady on Tuesday. "The RBA's position was well-telegraphed: they're in wait-and-see mode until they get more inflation data," said NAB's Catril. In cryptocurrencies, bitcoin fell about 3% to $64,475, a one-month low. Sign up here. https://www.reuters.com/markets/currencies/dollar-wobbles-markets-await-more-fed-clues-rba-meeting-focus-2024-06-18/

2024-06-18 04:52

A look at the day ahead in European and global markets from Rae Wee The Reserve Bank of Australia (RBA) on Tuesday kept rates on hold, flagging stubborn domestic price pressures - a common theme that other central banks across the globe are grappling with. The RBA's rate decision capped an otherwise uneventful day for Asia, and with a light data calendar in Europe, the focus turns back to political turmoil in the bloc, though futures suggest markets may get some respite after last week's beating. Campaigning had kicked off on Monday for France's snap parliamentary election, which opinion polls suggest the far-right National Rally will win ahead of a left-wing alliance. President Emmanuel Macron's centrist group is trailing in third. In the United States, May's retail sales are the main figures to watch and markets will also have speeches from no fewer than six Fed officials. Expectations are for retail sales to have ticked slightly higher on a monthly basis in May after April's downside surprise, though the overall picture is still expected to point to slowing momentum in consumer spending. As for Fed speak, policymakers are likely to sing from the same hymn sheet as Chair Jerome Powell last week, with last week's benign inflation report possibly giving some leeway to sound a little more dovish. While the rest of the world looks to loosen monetary policy, in Japan, central bank governor Kazuo Ueda said interest rates could be raised next month depending on economic data, underscoring his resolve to further unwind massive stimulus. That would typically be welcome news for the yen , but the Japanese currency barely reacted and struggled on the weaker side of 157 per dollar on Tuesday. Perhaps investors have learnt their lesson not to keep their hopes too high when it comes to the Bank of Japan, especially after last week's policy decision, which was a damp squib for those betting on an immediate reduction in bond purchases. Key developments that could influence markets on Tuesday: - U.S. retail sales (May) - Fed's Barkin, Collins, Kugler, Logan, Musalem and Goolsbee speak - Euro zone final HICP (May) Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-06-18/

2024-06-18 04:39

MUMBAI, June 18 (Reuters) - The Indian rupee gained on Tuesday, boosted by dollar sales from state-run banks, likely on behalf of merchant clients, but traders expect the domestic currency's gains to be limited as importers may step in to cover hedging requirements. The rupee was at 83.4750 against the U.S. dollar as of 10:00 a.m. IST, up 0.08% from its close of 83.5550 on Friday. Indian financial markets were shut on Monday for a holiday. "We expected to see bids after the lower opening (on USD/INR) but state-run banks are on offer," a foreign exchange trader at a foreign bank said, adding that the dollar offers were most likely related to client orders. The rupee is likely to remain rangebound between 83.40 and 83.70 this week, Dilip Parmar, a foreign exchange research analyst at HDFC Securities, said. "Expecting minor depreciation before strength in the rupee," he added. Meanwhile, the dollar index was up 0.1% at 105.4 during Asian hours, with Asian currencies mostly rangebound ahead of U.S. retail sales data later in the day. The report could influence expectations of when the Federal Reserve may begin easing policy rates. "I think one rate cut would be appropriate by year's end," Philadelphia Fed President Patrick Harker said on Monday, referring to his base case of slowing but above-trend economic growth, a modest rise in unemployment, and a "long glide" back to target for U.S. inflation. While data has hinted that U.S. inflation may be cooling, Fed officials have maintained a cautious stance on the future trajectory of interest rates. Investors will also keep a tab on remarks from a slew of Fed policymakers later in the day. Sign up here. https://www.reuters.com/markets/currencies/rupee-ticks-higher-aided-by-state-run-banks-dollar-sales-2024-06-18/

2024-06-18 04:37

SYDNEY, June 18 (Reuters) - Australia's central bank held interest rates steady on Tuesday as expected, while reiterating that it was not ruling out further increases if needed to control inflation. Wrapping up its June policy meeting, the Reserve Bank of Australia (RBA) kept rates at a 12-year high of 4.35%, where they have been since a hike in November last year. Markets had wagered heavily on a steady outcome given the economy almost ground to a halt in the first quarter and wage growth had slowed by more than expected. Sign up here. https://www.reuters.com/markets/rates-bonds/australias-central-bank-holds-cash-rate-435-2024-06-18/