2024-05-29 11:15
BERLIN, May 29 (Reuters) - Germany's cabinet approved on Wednesday a bill to fast-track the construction of hydrogen infrastructure, import and production facilities as Berlin bets on the fuel to help decarbonise Europe's biggest economy, government sources said. The Hydrogen Acceleration Law will give infrastructure an "overriding public interest" status, meaning authorities will prioritize it in the approval process. Permitting procedures will be simplified and digitised and legal cases challenging hydrogen projects and environmental impact assessments will be shortened, according to the planned law, in the hope of a quick expansion of the fuel. Germany wants to expand reliance on hydrogen as a future energy source to cut greenhouse gas emissions for highly polluting industrial sectors that cannot be electrified such as steel and chemicals and cut dependency on imported fossil fuel. The acceleration will primarily benefit electrolysers, the devices that use energy to separate hydrogen from water, provided they can prove that they will use at least 80 percent renewable energy in the period up to the end of 2029. Last month, Germany's ruling coalition agreed to a financing mechanism for the country's future hydrogen network and offering protection for investors in case of bankruptcies. In March, the government said it would earmark up to 3.53 billion euros ($3.84 billion) of public funds to procure green hydrogen and its derivatives between 2027 and 2036. The bill does not include faster construction of new natural gas power plants that will be converted to hydrogen in the future, a key demand of the energy industry. ($1 = 0.9195 euros) Sign up here. https://www.reuters.com/sustainability/climate-energy/german-cabinet-approves-bill-accelerate-hydrogen-power-expansion-2024-05-29/
2024-05-29 11:08
May 29 (Reuters) - The consolidation wave in the U.S. energy sector that triggered $250 billion worth of deals in 2023 has stretched into this year, as companies look for opportunities to deploy their cash hoard and boost their reserves. The majority of energy executives polled in December by the Federal Reserve Bank of Dallas expected more oil deals worth $50 billion or higher to pop up in the next two years. In 2023, some 39 private companies were acquired by public companies, Enverus data showed. Below is a list of deals in the U.S. oil and gas sector so far this year: Sign up here. https://www.reuters.com/default/more-us-energy-deals-likely-2024-wave-consolidation-2024-01-24/
2024-05-29 11:02
LONDON, May 29 (Reuters) - Sterling hit its strongest level against the euro since before 2022's mini budget crisis on Wednesday, as the pound held steady while the single European currency dropped following German regional inflation data. The euro dropped as much as 0.3% to 84.48 pence, its lowest since August 2022, also trading lower against the dollar, after the data, which analysts at Capital Economics said suggested "both German and euro-zone (harmonised consumer price) inflation may come in a bit lower than expected." , Versus the dollar the pound was steady at $1.2762 on Wednesday, just shy of a two month high hit the previous day. The pound has been supported by signs that the British economy is picking up, while the Bank of England is unlikely to cut rates before August at the earliest. On a trade weighed basis it is at its highest since 24 June 2016, when Britain voted to leave the European Union, according to the latest BoE data, dated Friday. "This could be cited as evidence of market participants embracing the end of the Conservatives time in power and a welcome of a new Labour government but in all likelihood this is more about yield!" said MUFG FX analysts in a note. Following last week's inflation data, in which services inflation proved particularly sticky, markets pushed back their expectations for the first Bank of England rate cut, and now see September as the mostly likely start date, causing yields on British government bonds to rise. Economic data, most recently Tuesday's showing British retail sales bounced back in May, were also supporting the pound, said MUFG. "We continue to see a build-up of evidence pointing to a real GDP recovery that is more robust than expected as the UK finally works though the energy price shock from 2022-23." The strength of the pound on a trade weighted basis is partly a function of currency weakness in Asia. The pound hit a nine month high on China's yuan traded offshore on Tuesday, and is at its highest since 2008 on Japan's embattled yen. Sign up here. https://www.reuters.com/markets/currencies/euro-weakness-drives-pound-highest-since-august-2022-2024-05-29/
2024-05-29 10:49
SINGAPORE, May 29 (Reuters) - Thailand's new finance minister has caught investor attention with a more conciliatory approach to the central bank, opening a window for policy coordination to support battered markets. Thailand's economy, the second-largest in Southeast Asia and heavily dependent on tourism, has struggled as China's slowdown has held visitor numbers beneath pre-pandemic peaks, while decade-high interest rates throttle domestic spending. The government, pressing for urgent rate cuts, has been at loggerheads with monetary policymakers concerned about debt. Meanwhile, an underperforming economy and fractious politics have led foreign investors to sell down stocks and bonds. Some $5.5 billion in net outflows from Thai stocks last year has been followed by another $1.9 billion in net selling in 2024. The benchmark SET index (.SETI) New Tab, opens new tab is down 4% this year and touched three-year lows, making it the worst performer in Asia. A calmer tone from Pichai Chunhavajira, a former Bank of Thailand board member appointed finance minister last month is a potential circuit breaker, market participants say, which could give policymakers more room for stimulus and help sentiment. "Under FM Pichai, the government has been less combative toward the central bank as the administration appears to be leaning on fiscal spending and liquidity injections to support the economy," said Nicholas Chia, Asia macro strategist at Standard Chartered in Singapore. Thailand's cabinet this week approved a plan to boost the 2024 fiscal budget by 122 billion baht ($3.3 billion), to help finance a handout scheme, while Pichai said the government was planning other short-term measures to revive growth. Pichai has said he has a duty to work with the central bank and there are no plans to weaken its independence while public calls from Prime Minister Srettha Thavisin for rate cuts have paused. The central bank meets to set rates on June 12. "I think he (Pichai) certainly understands the culture of the people at the Bank of Thailand," former finance minister Thirachai Phuvanatnaranubala told the Reuters Global Markets Forum last week. "I think the opportunity for a better relationship going forward is now present." RATE WORRY Two main factors are keeping the Bank of Thailand from cutting. One is global: The U.S. Fed Funds rate is above 5% while Thai rates are at 2.5%. A cut in Thailand would likely add pressure on the baht , which has been sliding this year and is the region's second-worst after the Japanese yen with a 7% drop on the dollar. Another is structural: A 90% household debt-to-GDP ratio is high by regional standards, dampening the pass-through from lower interest rates to higher growth which was already fuzzy in an economy so exposed to world trends in travel and demand. "You can try to entice people to spend now by lowering the cost of money and hopefully they borrow more and then consume or invest," said Pongtharin Sapayanon, abrdn's head of Thai fixed income and asset allocation in Bangkok. "But the big, big assumption here is the capital that is raised from that goes into something productive," he said. Pongtharin is underweight on Thailand and expects at best a 25 basis point cut this year. Daniel Tan, portfolio manager at Grasshopper Asset Management, said that though the economy is growing more slowly than others in Asia, a cut may only come in mid-2025 against the backdrop of expected accelerated government spending. Still, some conditions are beginning to fall into place and better ties with the government may allow policymakers to act swiftly once the U.S. Federal Reserve begins to cut rates, which would likely come in tandem with investment. Inflation in Thailand has run below the central bank's target for a year and last month the finance ministry cut its growth target to 2.4% from 2.8% previously. Domestic banks last month cut lending rates by 25 basis points for vulnerable groups for a period of six months, following a plea from the prime minister. "We think these cuts by banks suggest they also see the economy as weak and needs monetary accommodation," said Charnon Boonnuch, an ASEAN economist at Nomura. Sign up here. https://www.reuters.com/markets/asia/thailands-new-finance-minister-may-steady-skittish-markets-2024-05-29/
2024-05-29 10:19
A look at the day ahead in U.S. and global markets from Mike Dolan World markets wobbled on Tuesday, with benchmark bond yields and volatility gauges jumping to their highest in almost four weeks, as more evidence of the stoic U.S. consumer alongside runaway tech stocks leaves the Federal Reserve with a conundrum. Also agitated by Tuesday's whopping $297 billion sale of Treasury notes and bills and a tepid investor response, 10-year benchmark yields hit their highest level since May 3. The VIX (.VIX) New Tab, opens new tab also jumped to near four week highs and the dollar (.DXY) New Tab, opens new tab firmed, especially on the yuan and euro . The rates market angst began with the latest readout on resilient U.S. households however. Confounding expectations of a slowdown this month, the Conference Board's monthly survey showed consumer confidence pushed higher again in May. Even though the survey revealed some anxiety about possible recession ahead, the surprising optimism centred on two main things. The first is plentiful jobs, as the unemployment rate has now stayed below 4% for 26 consecutive months, and rising stock markets. The survey's net reading of those who expect stock prices to keep rising over the next 12 months over those who see it falling is at its highest since 2018 - and may well be flattering the view of household finances and spending plans. And that tallies with Chicago Fed's national financial conditions index at its loosest setting since late 2021 - four months before the Fed starting tightening policy in March 2022. Although futures have dialed back about half a percent before Wednesday's open, the S&P500 (.SPX) New Tab, opens new tab is some 10% above the pre-Fed tightening peaks. And led by another 6% surge on Tuesday in artificial intelligence torchbearer Nvidia (NVDA.O) New Tab, opens new tab, the Nasdaq crossed 17,000 for the first time ever. Nvidia's latest leap put the AI chipmaker's market value at $2.8 trillion - leaving the world's third biggest company just $100 billion shy of Apple (AAPL.O) New Tab, opens new tab. The question for the Fed in all of this is whether the rising stock market is undermining its credit market tightening, despite benchmark borrowing and long-term mortgage rates being at their highest in a decade. If consumers feel their finances are rising anyway, it may struggle to get inflation back into its 2% box. Higher oil prices ahead of the weekend OPEC meeting won't help. Sticky inflation was also in evidence overseas, with Australian consumer prices gains unexpectedly picking up to a five-month high at 3.6% in April. There was better news for the European Central Bank, now widely expected to cut its interest rates as soon as June. Although annual rates of inflation in German states picked up in May, monthly rates mostly flatlined and banks increased their loans to companies by just 0.3% year-on-year in April, slower that the prior month. In Asia, Japan warned of possible rate hikes to support the yen and China's yuan and stocks underperformed. China's economy is set to grow 5% this year and in line with Beijing's target after a "strong" first quarter, the International Monetary Fund said on Wednesday. But it added that it expects slower growth in the years ahead. A busy summer of elections around the world kicked off with South Africans voting on Wednesday in a poll that could see the governing African National Congress lose its majority after 30 years in power. The rand edged higher into the vote. In busy dealmaking, BHP (BHP.AX) New Tab, opens new tab asked for more time to try to win over takeover target Anglo American (AAL.L) New Tab, opens new tab, hours before a deadline for the world's biggest miner to firm up its $49 billion offer. Anglo has rejected three proposals from BHP but last week agreed to a one-week extension to a deadline from the UK takeover watchdog for BHP to make a formal move or walk away. Energy markets were also abuzz. ConocoPhillips (COP.N) New Tab, opens new tab is in advanced talks to buy Marathon Oil (MRO.N) New Tab, opens new tab in an all-stock deal that could value the Houston-based company at a little over its $15 billion market value, the Financial Times reported on Wednesday. Hess (HES.N) New Tab, opens new tab shareholders on Tuesday approved the proposed $53 billion merger with Chevron (CVX.N) New Tab, opens new tab that paves the way for the No. 2 U.S. oil company to gain a prize asset and a foothold in rival Exxon Mobil's (XOM.N) New Tab, opens new tab massive Guyana discoveries. And shares of the UK Royal Mail's parent company International Distributions Services (IDSI.L) New Tab, opens new tab jumped 3.4% as it agreed to a 3.57 billion pound formal takeover offer by Czech billionaire Daniel Kretinsky. Key diary items that may provide direction to U.S. markets later on Wednesday: * Dallas Fed's May service sector survey, Richmond Fed may business survey * Federal Reserve releases Beige Book of economic conditions; New York Fed President John Williams and Atlanta Fed chief Raphael Bostic speak * US Treasury sells 7-year notes, 2-year floating rate notes * US corporate earnings: Salesforce, HP, Agilent Technologies * South African National Assembly Election Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-05-29/
2024-05-29 10:10
MUMBAI, May 29 (Reuters) - The Indian rupee logged its biggest daily decline against the U.S. dollar in nearly seven weeks on Wednesday, pressured by persistent dollar demand from importers and election-related risks. The rupee ended at 83.3450, down from 83.1775 in the previous session. It fell 0.2% on Wednesday, its biggest daily fall since April 12. The recent decline in the rupee has been "exacerbated" by month-end dollar buying by oil importers, said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm. "Significant uncertainty" looms for the rupee ahead of the impending election outcome, she said, pegging a "strong" support level for the domestic unit at 83.60. Indian equities struggled in the backdrop of uncertainty around the domestic election results. India's weeks-long general elections end on Saturday, with the ballots set to be counted on June 4. Analysts see a shock defeat for Prime Minister Narendra Modi as an unlikely event, but fear a market correction - like one witnessed two decades ago - in the event of an 'unclear' mandate. Ahead of the election outcome, S&P Global Ratings retained India's sovereign rating but raised its outlook to 'positive' from 'stable' citing the South Asian nation's strong economic fundamentals. Foreign investors have sold about $2.6 billion of Indian equities in May on a net basis so far. If the rupee breaches 83.60 convincingly, the possibility of a move towards the 84.20 mark cannot be ruled out, Sachdeva said. Asian currencies were all down on the day, with the 10-year U.S. Treasury yield climbing past 4.50%. The extent of rate cuts by the Federal Reserve expected in 2024 have declined as compared to earlier in the month, amid inflation remaining high. Investors await U.S. core April personal consumption expenditure (PCE) data due on Friday, which would help them gauge when the Fed will begin cutting borrowing costs. Sign up here. https://www.reuters.com/markets/currencies/rupee-sees-worst-day-7-weeks-importers-dollar-demand-election-risk-2024-05-29/
