2024-05-21 06:01

LITTLETON, Colorado, May 21 (Reuters) - Turkey overtook Germany to become Europe's largest producer of coal-fired electricity over the first four months of 2024, data from energy think tank Ember shows. Turkey's 36 terawatt hours (TWh) of coal-fired electricity output through April exceeded the 34.6 TWh produced by Germany's utilities over the same period, as well as the 31.3 TWh of coal-fired electricity in Europe's third-largest coal user, Poland. The main driver of Turkey's ascendance in regional coal rankings was a steep drop in Germany's coal use during the January-April window, which was 32% lower than the same period in 2023 and the lowest for that time frame on record. Turkey's coal-fired output total was roughly 3% less than during the same months in 2023, but was the second-highest tally for that period on record and marked a roughly 6% climb from the first four months of 2019. In contrast, German and Polish coal-fired generation through April was down 42% and 19.4%, respectively, from the same months in 2019, indicating a sustained drive within major northern European economies to trim coal use in power generation over the past five years. If utilities in Germany and Poland make further cuts to coal use this year, 2024 may mark a turning point in Europe's energy transition efforts by shifting emissions focus away from established industrial economies to regional emerging markets where coal remains a key power fuel. CLEAN DIVERGENCE Rapid recent expansions to clean energy generation capacity in Germany, Poland and other wealthy economies in northern and western Europe have been instrumental to coal's reduced status in those power systems. Between 2022 and 2023, clean generation capacity expanded by 9% in Germany, 21.4% in Poland, 21% in the Netherlands, 9.6% in Italy and by 8% in Spain, according to Ember, thanks in part to large government subsidies designed to aid energy transition efforts away from fossil fuels. In contrast, clean generation capacity in Turkey expanded by 4.5% from 2022 to 2023, where a widening government budget deficit has constrained subsidy spending. Clean generation capacity growth in 2023 was also limited in Czechia (1.1%), Romania (1.4%) and Serbia (3.6%), highlighting a widening clean power development gap between wealthy and developing nations in the European region. COAL RELIANCE In addition to sluggish clean energy generation capacity growth, Turkey, Czechia and Serbia, along with Bulgaria, are home to some of Europe's most coal-reliant power systems. Over the first four months of 2024, coal accounted for an average of 34% of total electricity generation in Turkey, 35% in Czechia, around 30% in Bulgaria, and 59% in Serbia. Those averages compare to 21% in Germany and around 13% for Europe as a whole. Turkey's coal reliance is strengthened by the country's pace of economic growth, which is one of the fastest in Europe. Turkey's real gross domestic product expanded by an average of 4.5% a year from 2019 through 2024, according to data and estimates from the International Monetary Fund. That growth pace is 3.5 times faster that the European average, and around 1.6 times faster than the global average, and means that the country's total energy requirements have expanded by a similar degree. Turkey's utilities have struggled to keep up with such a strong expansion in energy demand, and have been forced to maintain a heavy reliance on coal plants to generate a major share of total electricity. Recent shortfalls in local output from hydropower dams due to drought have also heightened the need for coal power. To meet sustained high levels of coal use, Turkey has had to boost coal imports, which in 2023 totalled 24.2 million metric tons, according to ship-tracking firm Kpler. That total was the country's second-highest on record, made Turkey the ninth-largest importer globally, and by far the largest importer in Europe. EMISSIONS TOLL As a result of sustained high coal-fired generation, total emissions of carbon dioxide (CO2) from Turkey's coal-fired plants were just over 36 million metric tons during the January to April window, Ember data shows. That total surpassed the 35.8 million tons emitted by German plants and 32.2 million tons by Poland's coal plants. Along with the steady emissions from the nearby coal plants of Bulgaria and Serbia, Turkey's roughly 10 million tons of coal emissions a month means that Southern Europe is now a major source of coal emissions on the continent. And if that high emissions pace is sustained while power systems elsewhere in Europe continue to cut back on coal use, Turkey could quickly emerge as a key contrarian in regional coal cutting efforts which may impede the entire region's energy transition efforts. Sign up here. https://www.reuters.com/business/energy/turkey-becomes-europes-largest-coal-fired-electricity-producer-maguire-2024-05-21/

2024-05-21 06:00

NEW YORK, May 21 (Reuters) - Wall Street ended modestly higher and U.S. Treasury yields dipped on Tuesday amid the doldrums ahead of a holiday weekend and a lack of substantial market catalysts. All three major U.S. indexes advanced and the S&P 500 and the Nasdaq reached all-time closing highs in advance of Nvidia Corp's (NVDA.O) New Tab, opens new tab quarterly results and in anticipation of the release of the minutes U.S. Federal Reserve's most recent monetary policy meeting, both expected on Wednesday. "A lot of people are just waiting for Nvidia to report," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "And it shouldn’t have a broad effect, but it will, it will influence on how the market trades." "There’s been so much emphasis placed on AI, every company seems to be talking about incorporating it into their operations," Pavlik added. Fed Governor Christopher Waller on Tuesday calmed fears of a rate hike, saying recent economic data indicates the Fed's restrictive policy is working as directed. Atlanta Fed Chair Raphael Bostic said the central bank needs to exercise caution ahead of its first rate cut to lead to pent-up spending and send inflation "bouncing around." Minutes from the Federal Open Markets Committee's most recent meeting are due to be released on Wednesday, and they will be parsed for clues regarding timing and extent of policy-easing this year. "(The Fed) is willing to think about rate cuts but we’re not there yet, those are the same thoughts we took away from their last meeting," Pavlik said. "It's akin to asking your parents to take you to Disney World and they say ‘we'll think about it.’ At least they’re not saying ‘no.’" The Dow Jones Industrial Average (.DJI) New Tab, opens new tab rose 66.22 points, or 0.17%, to 39,872.99, the S&P 500 (.SPX) New Tab, opens new tab gained 13.28 points, or 0.25%, to 5,321.41 and the Nasdaq Composite (.IXIC) New Tab, opens new tab added 37.75 points, or 0.22%, to 16,832.62. European shares ended slightly lower, easing back from record highs as investors, cautious over central bank policy, awaited economic data. The pan-European STOXX 600 index (.STOXX) New Tab, opens new tab lost 0.18% and MSCI's gauge of stocks across the globe (.MIWD00000PUS) New Tab, opens new tab shed 0.03%. Emerging market stocks lost 0.79%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) New Tab, opens new tab closed 0.91% lower, while Japan's Nikkei (.N225) New Tab, opens new tab lost 0.31%. U.S. Treasury yields dipped as investors awaited the Fed minutes, eager for any clues regarding the timing of rate cuts. Benchmark 10-year notes last rose 6/32 in price to yield 4.4139%, from 4.437% late on Friday. The 30-year bond last rose 11/32 in price to yield 4.552%, from 4.573% late on Friday. The dollar held firm against a basket of world currencies, after investors parsed commentary of Fed officials. The dollar index (.DXY) New Tab, opens new tab rose 0.06%, with the euro down 0.01% at $1.0854. The Japanese yen strengthened 0.05% versus the greenback at 156.20 per dollar, while Sterling was last trading at $1.2709, up 0.04% on the day. Cryptocurrencies climbed amid signs that the U.S. Securities and Exchange Commission may approve a spot ether exchange-traded fund. Ethereum was last up 6.3%, while bitcoin reversed an earlier gain, inching 0.2% lower. Oil prices dipped, extending losses as the prospect of lingering inflation and "higher for longer" interest rates raised concerns over dampening demand. U.S. crude dropped 0.68% to settle at $79.26 per barrel and Brent settled at $82.88 per barrel, down 0.99% on the day. Gold prices backed away from an all-time high as the greenback held its ground. Spot gold dropped 0.1% to $2,422.58 an ounce. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-05-21/

2024-05-21 05:49

Foxconn asked to voluntarily cut 30% of power use, sources say Province where Foxconn supplies Apple urged energy savings Apple increased Vietnam suppliers by 40% to 35 last year HANOI/TAIPEI, May 21 (Reuters) - Vietnamese officials have called on Apple supplier Foxconn (2317.TW) New Tab, opens new tab to voluntarily reduce power use by 30% at its assembly plants in the north of the country where there were electricity outages last year, two people familiar with the matter said. The request for energy-saving measures, which two other industry sources said was sent to multiple manufacturers, is precautionary and aimed at averting a repeat of last summer when power shortage led to over a billion dollars in lost output. The request to Foxconn was "an encouragement", not a requirement and has not had any impact on production, one of the people said. Vietnam is increasingly welcoming multinational companies, some spreading their risk from traditional manufacturing base China amid rising trade tension with the U.S. Last month, Apple (AAPL.O) New Tab, opens new tab promised further spending in the country where over the past year it has raised its number of suppliers to 35 from 25. The southeast Asian nation relies on foreign investment for economic growth and has been trying to attract energy-intensive industries, such as semiconductor manufacturing. However, a heat wave last May and June triggered a power shortage that interrupted business in the north, causing $1.4 billion worth of loss, or 0.3% of gross domestic product, World Bank preliminary estimates showed. In March, Prime Minister Pham Minh Chinh pledged to foreign investors that power shortages would not happen again. The government has asked coal-fired power plants to delay maintenance to meet higher electricity demand in the hottest months, one of the people said. The people did not specify who sent the requests, when the request to Foxconn was sent or for how long the voluntary cut in electricity use would be needed. One person said the request was open-ended. All sources asked to remain anonymous because the matter was not public. Apple did not respond to a request for comment. COORDINATION Foxconn, formally Hon Hai Precision Industry, is the world's largest contract electronics manufacturer. It has half a dozen plants in northern Vietnam including in Bac Giang province where local authorities said it assembles Apple MacBooks and iPads. State-owned provincial power distributor Bac Giang Power Company (BG PC) said in March it had asked industrial parks and authorities "to coordinate in implementing electricity savings," showed a statement on the website of power regulator ERAV. BG PC Deputy Director Do Binh Duong, in a separate statement, said "adjustment of power loads, adjustment of production plans and electricity saving implementation of enterprises will have a great impact on the power system". The Ministry of Industry and Trade and state-owned power provider Vietnam Electricity (EVN), of which BG PC is a unit, did not respond to requests for comment. Energy-saving measures appear to differ nationwide. An official at an industrial park in another northern province said manufacturers have been asked to reduce power consumption on some days this month. Weather conditions are less challenging than in 2023 but authorities have boosted imports of coal and encouraged energy-saving to avoid shortages. In March, foreign chambers of commerce urged the government to guarantee power supply, with South Korean's KoCham saying semiconductor companies had delayed investment decisions because of power supply risk. Sign up here. https://www.reuters.com/technology/apple-supplier-foxconn-among-firms-asked-cut-power-use-vietnam-sources-say-2024-05-21/

2024-05-21 05:28

NEW YORK, May 21 (Reuters) - The U.S. dollar edged up against the euro on Tuesday, as Federal Reserve policymakers said it is prudent for the U.S. central bank to wait several more months to ensure that inflation really is back on a path to the 2% target before commencing interest rate cuts. Against other currencies, the greenback was mostly flat ahead of the U.S. Memorial Day holiday next week. "Amid a paucity of economic data catalysts this week, trading ranges have narrowed across currency markets. The dollar remains on a solid footing however, bolstered by a drumbeat of high for long messages from Fed officials," said Karl Schamotta, chief market strategist, at Corpay in Toronto. Fed Governor Christopher Waller told the Peterson Institute for International Economics in Washington, on Tuesday, he would need to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy. Waller, however, did put a pin in any speculation that interest rates may need to rise again for demand to soften enough to ease price pressures further, saying the latest inflation data is "reassuring" and the probability of a rate hike is "very low." Atlanta Fed Chair Raphael Bostic also spoke on Tuesday and warned against cutting rates too quickly. The Fed, he said, needs to be cautious about approving its first rate cut to be sure it does not touch off pent-up spending among businesses and households, and put the central bank in a position where inflation starts "bouncing around." "Fed speakers are driving the market - and they, so far, haven't said anything traders didn't expect," said Helen Given, FX trader, at Monex USA in Washington. "Barring a surprise from the FOMC (Federal Open Market Committee) minutes tomorrow afternoon, it's likely that this could stay a fairly quiet week." Fed Chair Jerome Powell, in his press briefing after the Fed held rates steady earlier this month, also ruled out rate hikes. "What that does is it takes out the tail-risk scenario that the Fed is still thinking about hikes because they are effectively questioning their assumption that rates are restrictive enough," said Vishal Khanduja, co-head of Broad Markets Fixed Income at Morgan Stanley Investment Management. The euro was 0.05% lower at $1.0852. Investors will be watching Thursday's data from the European Central Bank negotiated wage tracker and the euro zone Purchasing Managers' Index which could provide further clues about the monetary cycle in the euro area. On Tuesday, the U.S. currency slipped 0.04% against the Japanese yen to 156.20. This dollar-yen pair has moved in tight ranges in the past couple of trading days after a tumultuous start to May in the wake of suspected rounds of currency interventions by Tokyo to prop up the yen. Fears of intervention from Japanese authorities have deterred traders from pushing the yen to new lows. The yen dropped to more than 160 per dollar on April 29, its weakest in 34 years. CRYPTO GAINS In cryptocurrencies, ether was set for its largest two-day gain in nearly two years and bitcoin approached a record high on speculation about the outcome of applications for U.S. spot exchange-traded funds that would track the world's second-biggest cryptocurrency. Ether was 6.5% higher at $3,728.70 after earlier hitting $3,838.80, its highest level since mid March. It surged nearly 14% in the previous session - its largest daily percentage gain since November 2022. Bitcoin broke above the $70,000 level and was last trading up 0.25% higher at $69,707. It hit its all-time high at $73,803.25 in March. (This story has been refiled to fix the spelling of Morgan Stanley official's last name to Khanduja, not Khanduha, in paragraph 10) Sign up here. https://www.reuters.com/markets/currencies/dollar-steady-ether-fuels-crypto-rally-2024-05-21/

2024-05-21 05:18

C.bank governor position strong, Thirachai tells Reuters forum PM strained ties with public pressure on c.bank - Thirachai says new finmin must find way to convince c.bank on rates Thirachai: current interest rate a little too high BENGALURU, May 21 (Reuters) - Thailand's new finance minister has refrained from pressuring the central bank and has a chance to improve relations amid a longstanding disagreement on interest rates, former finance minister Thirachai Phuvanatnaranubala said on Tuesday. Speaking in the Reuters Global Markets Forum, Thirachai said Prime Minister Srettha Thavisin's repeated public push for a rate cut had created unnecessary strain and new Finance Minister Pichai Chunhavajira was in a position to smooth things over. "The new finance minister must try to find a way to convince the Bank of Thailand there is a need for a more relaxed monetary policy," Thirachai, who is also former central bank deputy governor, told the Reuters forum. For months, Srettha has been at odds with the central bank, which has refused to bow to his pressure to cut rates, currently at a more than decade-high of 2.50%. The next rate review is on June 12. Srettha and his ruling Pheu Thai Party maintain the current monetary policy stance is hurting an economy he says is in crisis. Srettha, a real estate mogul and political newcomer, has repeatedly said he respects the central bank's independence. Pheu Thai and previous incarnations also founded by influential former premier Thaksin Shinawatra have dominated politics for the past two decades and have clashed previously with the BOT on rates. Billionaire Thaksin has officially retired but remains a towering figure in Thai politics, with sway over the current government. His politician daughter and Pheu Thai leader Paetongtarn Shinawatra recently caused a stir, calling the BOT's independence an "obstacle" in resolving economic problems. STRONG POSITION Thirachai was at the BOT the last time a Thai central bank governor was sacked in 2001, by Thaksin, a move he said would be difficult to repeat now. "The position of the governor is fairly strong because Thailand has a tradition of giving weight and protection to the Bank of Thailand," he said. "We had amended the law to make it difficult for the government, for any government, to remove the central bank governor, unless there is a real, apparent, necessary cause." New Finance Minister Pichai Chunhavajira has recently said he is more worried about people's access to finance than the level of interest rates. On Tuesday, he reiterated the government's position that economic stimulus was needed. Thirachai said he believed the current interest rate of 2.50% was perhaps a little high and in his opinion, monetary policy should be more relaxed. He said there should be no concern over weakness of the baht currency if there were to be a rate cut. The BOT has said a rate cut could give the economy a short-term boost, but that benefit would be outweighed by potential long-term negative impacts it might create on the economy, which needed to be restructured. (This story is refiled to fix a spelling in the penultimate paragraph) Sign up here. https://www.reuters.com/markets/rates-bonds/new-thai-finance-minister-has-chance-improve-strained-cbank-ties-says-ex-finmin-2024-05-21/

2024-05-21 05:10

NEW YORK, May 21 (Reuters) - Traders are pricing in a big move for Nvidia’s shares after the chipmaker reports earnings on Wednesday, though expectations for volatility are more muted than in the past, U.S. options markets show. Nvidia's options are primed for an 8.7% swing in either direction by Friday, according to data from options analytics firm Trade Alert. That would translate to a market cap swing of $200 billion - larger than the market capitalization for about 90% of S&P 500 companies. While massive by most measures, that implied move would fall far short of the 16.4% jump Nvidia’s shares notched after the company’s most recent quarterly earnings report. It is also less aggressive than the average 12% move traders had priced for the last eight quarters. "Volatility and expectations had been a fair amount higher the last time around," said Chris Murphy, co-head of derivative strategy at Susquehanna Financial Group. Nvidia, up about 87% this year, is seen as a bellwether of the burgeoning AI industry and has a market value of about $2.3 trillion, making it the third-largest company on Wall Street, behind Microsoft and Apple. Wall Street is betting on a blowout quarterly report from Nvidia. Investor interest has spread out to other beneficiaries of the AI theme in recent months. "AI benefits are broadening out to power, commodities and utilities," BofA strategists including Gonzalo Asis wrote in a note on Monday. "It's not just about NVDA anymore." BofA’s strategists expect the company to drive 9% of the S&P 500 earnings growth over the next 12 months, compared to 37% over the last 12 months. That’s not to say the upcoming earnings report is expected to be uneventful for the company’s share price. Matt Amberson, founder of options analytics service ORATS, noted that implied volatility for out of the money calls is roughly equal to that of out of the money puts. That suggests options traders are not writing off the possibility of more upside for the stock, despite its already-hefty year-to-date gains. "Traders expect up moves to be as violent as down moves," Amberson said. Nvidia is expected to post earnings of $5.59 a share, and a rise in quarterly revenue to $24.65 billion from $7.19 billion a year ago, according to LSEG data. Steve Sosnick, chief strategist at Interactive Brokers, said a downturn in Nvidia could test investors’ resolve regarding the broader AI trade. "Yes, the rally has broadened out, but I'm not sure how sturdy it would be if Nvidia sold off hard," he said. "There is a lot riding on the AI trade," Sosnick said. Sign up here. https://www.reuters.com/technology/nvidia-earnings-could-spark-200-billion-swing-shares-options-show-2024-05-21/