2024-06-11 05:35

NEW YORK, June 11 (Reuters) - The Nasdaq and the S&P 500 rose on Tuesday to end at all-time highs, reversing early losses as investors prepared for upcoming inflation data and the U.S. Federal Reserve's policy meeting. Benchmark Treasury yields extended their decline ahead of the Labor Department's Consumer Price Index (CPI) report. Apple (AAPL.O) New Tab, opens new tab shares helped put the tech-heavy Nasdaq out front, while the blue-chip Dow Jones Industrial Average ended lower. The S&P 500 also turned green as Fed policy makers convened for their two-day policy meeting. "Investors are playing it safe, with tomorrow’s CPI report even though it's expected to show a slight decline," said Sam Stovall, chief investment strategist of CFRA Research in New York. "(But) we continue to see all-time highs, and you don’t want to make emotional decision," Stovall added. "CPI could come in weaker than expected, and the Fed could sound optimistic that at least one rate cut could occur before year-end." While investors expect no change to the Fed funds target rate, the Federal Open Markets Committee (FOMC) is expected to release its Summary of Economic Projections, which should help illuminate the central bank's forward policy path. The data-reliant Fed will watch whether the CPI data due early Wednesday shows, as expected, that inflation was still meandering down toward the central bank's 2% annual target. The report follows Friday's hotter-than-expected U.S. wage growth numbers. French President Emanuel Macron's announcement that he will call a flash election kept adding fuel to the fire of a tumultuous year in geopolitics, which has boosted the dollar. "With Europe leaning to the right, with Modi losing his majority, and Mexico’s election, change is in the air," Stovall said, "more uncertainty in Europe will add to the strength of the U.S. dollar." The Dow Jones Industrial Average (.DJI) New Tab, opens new tab fell 120.62 points, or 0.31%, to 38,747.42, the S&P 500 (.SPX) New Tab, opens new tab gained 14.53 points, or 0.27%, to 5,375.32 and the Nasdaq Composite (.IXIC) New Tab, opens new tab added 151.02 points, or 0.88%, to 17,343.55. European shares extended the previous session's losses sparked by political uncertainties in France, as investors turned their focus to the Fed. The pan-European STOXX 600 index (.STOXX) New Tab, opens new tab lost 0.93% and MSCI's gauge of stocks across the globe (.MIWD00000PUS) New Tab, opens new tab shed 0.06%. Emerging market stocks lost 0.41%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) New Tab, opens new tab closed 0.64% lower, while Japan's Nikkei (.N225) New Tab, opens new tab rose 0.25%. U.S. Treasury yields dipped after a well-received auction ahead of the CPI data. Benchmark 10-year notes last rose 18/32 in price to yield 4.3981%, from 4.469% late on Monday. The 30-year bond last rose 33/32 in price to yield 4.5318%, from 4.595% late on Monday. The dollar gained some ground against a basket of world currencies, touching a four-week high in anticipation of the CPI inflation report, while the euro dropped amid political turmoil brought about by far right gains in European elections and the snap election in France. The dollar index (.DXY) New Tab, opens new tab rose 0.09%, with the euro down 0.22% to $1.0739. The Japanese yen weakened 0.03% to 157.11 per dollar, while sterling was last trading at $1.274, up 0.08% on the day. Crude oil prices edged higher after the Energy Information Administration (EIA) raised its world oil demand forecast. U.S. crude rose 0.21% to settle at $77.90 per barrel, while Brent settled at $81.92 per barrel, up 0.36% on the day. Gold prices reversed an earlier drop and were last modestly higher as investors kept their focus on the Fed's economic outlook. Spot gold added 0.2% to $2,315.46 an ounce. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-06-11/

2024-06-11 04:54

LAUNCESTON, Australia, June 11 (Reuters) - The strength in China's iron ore imports this year stands in stark contrast to the weakness in steel production and demand, setting up a dilemma as to how the contradiction will be resolved. China, which buys about 75% of global seaborne iron ore, imported 102.3 million metric tons in May, according to customs data, marking a third straight month of arrivals of more than 100 million tons. For the first five months of the year, imports of the key steel raw material were 513.75 million tons, a gain of 7%. However, China's crude steel output fell in April to 85.94 million tons, down 2.6% from March and 7.2% from the same month in 2023, according to official data. In the first four months of 2024, China produced 343.67 million tons of crude steel, down 3% year-on-year. While official numbers for May are yet to be released, data from the China Iron and Steel Association, which represents the country's biggest mills, suggest steel output is unlikely to have staged much of a recovery last month. Steel mills are also suffering from weak margins, with data from price reporting agency Argus showing that in the last 10 days of May, profits for producing hot-rolled coil dropped by 20 yuan ($2.76) a ton to between 50 and 100 yuan. Sentiment among steelmakers has yet to be lifted by Beijing's ongoing efforts to boost the key housing construction industry. Steel demand and industry sentiment may rise in the second half as stimulus measures start to have an impact, but for now the reality of soft demand for steel is outweighing hopes for a recovery. This begs the question as to how long iron ore imports can remain at robust levels. The rising imports haven't been used to make more steel -rather they have been used to rebuild inventories. Port stockpiles monitored by consultants SteelHome rose to 147.3 million tons in the week to June 7, the highest in 25 months. They have been climbing steadily since reaching a seven-year low of 104.9 million tons in the last week of October, and are now 42.4 million tons higher. The rise in inventories over the last seven months works out to an average gain of 6.06 million tons a month, which goes some way to explaining the recent strength in iron ore imports. There is still some scope for stockpiles to rise further before they reach the record high of 160.6 million tons from May 2018. PRICE IMPACT There is also a solid correlation between iron ore prices and China's imports, and part of the strong import story can be ascribed to the decline in prices between the start of the year and the low so far this year in April. Iron ore contracts traded on the Singapore Exchange hit an 18-month high of $143.60 a ton on Jan. 3 before falling to $98.36 on April 4. This means that the bulk of the iron ore delivered up until the end of May was bought while prices were dropping. However, since the April low prices have recovered, reaching a high of $119.64 a ton on May 6. Since then the weaker sentiment in the steel sector has weighed on iron ore, with the contract ending at $107.06 on Monday. In the absence of rising steel demand in China, steel mills are known to suffer weak margins if iron ore prices are above $100 a ton. This implies that the most likely way for the current divergence between iron ore imports and weak steel output to be resolved is through lower iron ore prices and import volumes. Of course, any signs that steel demand is actually strengthening will change the market dynamics, but so far these signs are missing in action. The opinions expressed here are those of the author, a columnist for Reuters. Sign up here. https://www.reuters.com/markets/commodities/chinas-strong-iron-ore-imports-contrast-with-weak-steel-output-russell-2024-06-11/

2024-06-11 04:45

TOKYO, June 11 (Reuters) - Battery storage company Eku Energy aims to expand its global energy storage capacity to 9 gigawatt-hours by 2028 from about 1.3 GWh now, to help hasten the energy transition and maximise the use of renewables, the head of its Japanese unit said. Eku Energy, jointly owned by Macquarie Group's (MQG.AX) New Tab, opens new tab green investment fund and Canadian pension fund British Columbia Investment Management, in April announced its first project in Japan to build a 30 megawatts/120 MWh battery energy storage system in Miyazaki prefecture on the southern island of Kyushu. As resource-poor Japan expands renewable energy to meet decarbonisation goals and enhance energy security, battery usage is expected to rise to smooth out the intermittent supply of solar and wind energy. Eku Energy has agreed a 20-year offtake agreement for the latest project with utility Tokyo Gas (9531.T) New Tab, opens new tab. Construction is scheduled to begin later this year, with an aim to begin operation in July 2026. It is capable of storing enough electricity to power about 63,000 households for four hours. "We are targeting to expand our battery energy storage system capacity worldwide to 9 GWh by 2028, up from the current around 1.3 GWh already in operation or announced," Kentaro Ono, Eku Energy Japan's managing director, told Reuters last week. The company is developing energy storage in Britain, Australia, Italy and Japan. There is no Japan-specific target, but Eku Energy aims to develop a significant number of projects because the country is the world's fourth-largest electricity consumer and a power trading market system is being put in place, Ono said. Battery storage is expanding rapidly worldwide, led by China and the United States. Japan, which lags behind, is expected to see growth thanks to government support and institutional changes such as the development of a market for adjusting electricity supply and demand. In Japan, as renewable energy deployment expands, output cut requests from utilities to balance power supply and demand have become more frequent nationwide, wasting potential clean energy that could otherwise be utilised. Sign up here. https://www.reuters.com/sustainability/climate-energy/eku-energy-aims-expand-its-global-battery-storage-9-gwh-by-2028-2024-06-11/

2024-06-11 04:38

A look at the day ahead in European and global markets from Wayne Cole. Asian markets have been cautiously gauging the fallout from the success of right-wing parties in the European Union and what it might mean for the cohesion of the bloc. EUROSTOXX 50 futures did edge up 0.2%, steadying after Monday's retreat, while FTSE futures were all but flat. The euro also held at $1.0766 and above the one-month low of $1.0733. French President Emmanuel Macron was reportedly trying to line up left-wing and centrist parties against the right, but so far with little success. The first opinion poll suggested the far-right National Rally party could win the snap election, but fall short of an absolute majority. Markets are mixed across Asia, with Japan, South Korea and Taiwan all up, while China slipped as it caught up with post-payrolls pressure after a holiday on Monday. Beijing also set the yuan at a seven-month low to reflect gains for the U.S. dollar as investors trim wagers on Federal Reserve rate cuts. The Fed meets on Wednesday and many analysts now assume its dot plot projection will no longer show three rate cuts for this year but two, or even just a single move. Then again, fewer cuts this year might mean the easing is back loaded into 2025 and those plots shift to four cuts from three. Note the Bank of Japan holds its meeting on Friday amid much talk it will taper monthly bond buying by a trillion yen to 5 trillion, as a step toward a hike of 10 basis points in July. Elsewhere, markets gave a muted reaction to Apple's (AAPL.O) New Tab, opens new tab long-awaited AI strategy, which integrates "Apple Intelligence" technology across a suite of apps. The iPhone maker's shares were down 0.3% in after hours trade. Optimists noted the software requires at least an iPhone 15 Pro or Pro Max and could drive customers to upgrade their hardware as a result. Key developments that could influence markets on Tuesday: - UK May Claimant count, April wages and unemployment data - Various ECB officials speak, including chief economist Philip Lane and French central bank chief Francois Villeroy de Galhau - Bank of Finland press conference on the outlook for the Finnish economy - U.S. NFIB Small Business Optimism Survey Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-06-11/

2024-06-11 04:36

MADRID, June 11 (Reuters) - Spanish holding firm Criteria said on Monday it had not reached an agreement with Abu Dhabi's TAQA (TAQA.AD) New Tab, opens new tab over a potential joint takeover bid for Spanish gas firm Naturgy (NTGY.MC) New Tab, opens new tab. El Mundo newspaper had earlier reported, citing people familiar with the talks, that TAQA had decided to drop the joint bid with Criteria, which owns a 26.7% stake in the gas company. "Regarding the conversations held between CriteriaCaixa and TAQA with a view to a possible cooperation agreement relating to Naturgy ... these negotiations have been terminated without reaching any agreement," Criteria said in a filing to market supervisor CNMV. Criteria added it was "exploring new options" to support Naturgy's transformation plan and reaffirmed its commitment as a long-term investor in the company's industrial project. "Discussions on a potential cooperation agreement with Criteria Caixa and the possible acquisition of shares ... in Naturgy have ended and a transaction will not take place," TAQA confirmed in a regulatory filing on Tuesday. Naturgy declined to comment. TAQA was in talks with Naturgy's three largest shareholders - Criteria and private equity funds CVC and GIP, which each own more than 20% - with a view to a possible takeover bid, it said in April. It then said there was no guarantee a deal would happen and, if it were to, under what terms. It added it had not approached Naturgy directly. CVC and GIP declined to comment. Australian fund IFM, which holds a 15% stake in Naturgy, declined to comment. TAQA, a power and water utility founded in 2005, was set to acquire Spain's largest gas firm, together with contracts with Algeria and also a long-term contract to import some 3 billion cubic metres (bcm) of Russian liquefied natural gas (LNG) every year. With Naturgy's market value at 24.3 billion euros ($26.14 billion) on Monday, the move would have been one of the largest takeovers by a sovereign wealth fund. ($1 = 0.9297 euro) Sign up here. https://www.reuters.com/business/energy/abu-dhabis-taqa-drops-takeover-plan-spains-naturgy-report-says-2024-06-10/

2024-06-11 04:35

MUMBAI, June 11 (Reuters) - The Indian rupee was nearly flat on Tuesday, with traders expecting the currency to largely move sideways as the Reserve Bank of India continued to hurdle sharp declines that also helped cool near-term volatility expectations. The rupee was at 83.4975 against the U.S. dollar as of 09:50 a.m. IST, barely changed from its previous close at 83.5050. The rupee remained in a narrow band on Monday, with likely intervention from the RBI limiting weakness in the currency, traders said. The central bank's interventions have also helped drive down the dollar-rupee pair's near-term volatility expectations. The 1-month implied volatility has declined to 2.20%, down from a 6-month peak of 3.35% at the end of May in the lead-up to India's national election outcome on June 4. Don't think the rupee will move "much below 83.50" as dollar sale offers from state-run banks, likely on behalf of RBI, continued to linger, a foreign exchange trader at a foreign bank said. The dollar index was at 105.1, while most Asian currencies slipped in the lead-up to the closely watched U.S. inflation data and the Federal Reserve policy decision due on Wednesday. While the U.S. central bank is widely expected to keep policy rates unchanged, investors will pay attention to Fed Chair Powell's commentary and any updates to the interest rate dot plot. Interest rate futures are currently pricing in about 38 basis points of rate cuts over 2024, down from nearly 50 last week. Price action on the rupee is likely to be similar to the previous session with a "close watch on the RBI and the 83.50 level", said Anil Bhansali, head of treasury at Finrex Treasury Advisors. Sign up here. https://www.reuters.com/markets/currencies/rupee-flat-volatility-expectations-drop-rbi-maintains-grip-2024-06-11/