2025-01-08 07:00

JAKARTA, Jan 8 (Reuters) - Indonesia has clamped down on exports of used cooking oil (UCO) and palm oil residue to ensure supply to domestic cooking oil and biodiesel industries, the government said in a new regulation on Wednesday. The step by the world's top producer and exporter of palm oil aims to help attain a new mandate starting from this year, of mixing 40% of palm oil-based fuel with diesel fuel, called B40, up from 35% previously, it said. Authorities in Indonesia have been looking into ways to curb UCO exports, but the extent of the tightening was not immediately clear. Last month, an official alleged that some cooking oil sold under a government programme called "Minyakita" had been mislabelled as UCO and shipped overseas for biodiesel feedstock, media said. The new regulation, which takes effect immediately, requires all exporters of palm oil residue and UCO, including palm oil mill effluent (POME), to acquire an export allocation from the government. Such allocations will be set at a meeting of officials of ministries such as trade and that which coordinates food affairs. POME can be used to produce biogas, fertiliser, and fuel. Indonesia's exports of UCO and palm oil residue from January to November 2024 stood at 3.95 million metric tons, down 13.75% from the corresponding 2023 period, data from Statistics Indonesia showed. However, government officials have repeatedly said there were signs of scarcity of the Minyakita product, citing retailers' sale of such items at about a tenth higher than the government's maximum retail price. Indonesia mandates all palm oil exporters to sell some of their crude palm oil domestically at a capped price to be made into Minyakita cooking oil, which is then sold at a regulated, affordable price. Some in the palm oil industry have expressed concern the B40 mandate could disrupt exports. Sign up here. https://www.reuters.com/markets/commodities/indonesia-curbs-exports-used-cooking-oil-palm-residue-help-domestic-users-2025-01-08/

2025-01-08 06:18

Ten-year Treasury yields ease from multi-month highs in holiday-shortened session Analysts point to UK economic woes, Trump uncertainty for bond rout Stocks sold into US holiday Thursday; crucial jobs report on Friday TOKYO, Jan 9 (Reuters) - A global bond rout eased on Thursday and the dollar held steady near its highest levels in more than a year, although stocks continued to fall with most Asian indexes down on the day. The benchmark 10-year U.S. Treasury yield eased to 4.6648% in Asia from an overnight peak of 4.73%, which was the highest level since April 2024. Equivalent-maturity Japanese government bond yields started the day by rising 1 basis point to the highest since May 2011 at 1.185%, but later followed the wider trend and were flat as of 0537 GMT. Similar-dated Australian sovereign yields matched Wednesday's peak of 4.546%, which is also the highest level since late November, but were last at 4.491%. All eyes are now turning to UK bonds, which have been at the centre of the selloff, with growing concern about Britain's economic and fiscal health, despite no obvious trigger for this week's 20-bps surge in 10-year gilt yields . "Clearly there is reason to watch the UK bond market intently, and the recent trend is certainly concerning," Chris Weston, head of research at Pepperstone, said. "However, we can take some assurances that the BoE (Bank of England) is more prepared this time around." Sterling sagged 0.26% to $1.23325, extending its 0.9% slump from Wednesday. The U.S. dollar index , which gauges the currency against sterling, the euro and four other major peers, edged up to 109.07, sitting not too far from the highest level since November 2022 of 109.54, reached a week ago. PRESSURE POINTS The latest boost for the dollar and U.S. Treasury yields follows recent signs of resilience in the U.S. economy and inflation, which had prompted markets to reduce expectations for Federal Reserve rate cuts this year. Minutes of the Fed's December policy meeting, released on Wednesday, showed officials were concerned that President-elect Donald Trump's proposed tariffs and immigration policies may prolong the fight against inflation. Selling in Treasuries on Wednesday accelerated after a CNN report Trump was considering declaring a national economic emergency to provide a legal justification for a series of universal levies on allies and adversaries. Markets are fully pricing in just one 25-bp rate cut in 2025, and see around a 60% chance of a second. All that has combined to make global stock market sentiment fragile, and Asian equities were mostly in the red on Thursday. Japan's Nikkei (.N225) , opens new tab dropped 1.2%, with the additional headwind of a rebounding yen, which added about 0.2% to 158.08 per dollar following its slide to a nearly six-month trough of 158.55 per dollar on Wednesday. Australia's stock benchmark (.AXJO) , opens new tab slipped 0.5%, while Taiwanese shares (.TWII) , opens new tab lost 1.1%. Hong Kong's Hang Sang (.HSI) , opens new tab and mainland Chinese blue chips (.CSI300) , opens new tab were both little changed. U.S. S&P 500 futures (.EScv1) , opens new tab pointed 0.2% lower, after the cash index (.SPX) , opens new tab eked out a 0.2% gain overnight. Pan-European STOXX 50 futures were slightly lower, though UK FTSE futures added 0.2%. U.S. stock markets are closed on Thursday and Treasuries have a shortened session to mark a national day of mourning following the death of former President Jimmy Carter. On Friday, the closely watched U.S. monthly payrolls report will provide clues on the Fed policy outlook. China's yuan steadied near a 16-month low against the dollar as the nation's central bank announced a record amount of offshore yuan bill sales to support the currency. "This move underscores Chinese policymakers' unwavering preference for currency stability," said Shoki Omori, a strategist at Mizuho Securities, predicting the Chinese currency will firm to 7.22 per dollar by year-end. The onshore yuan traded little changed at 7.3310 per dollar, but was not far from the previous day's low of 7.3322, the weakest since September 2023. Oil prices edged lower, pressured by recent dollar strength and large builds in U.S. fuel inventories last week. Brent crude futures eased 4 cents to $76.11 a barrel. U.S. West Texas Intermediate crude fell 8 cents to $73.24. Gold prices edged down 0.1% to around $2,659 an ounce from an overnight peak of $2,670.10, its highest level since Dec. 13. Leading cryptocurrency bitcoin was steady around $94,508, following a two-day slide of 7%. ($1 = 7.3314 Chinese yuan) Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2025-01-08/

2025-01-08 06:03

LITTLETON, Colorado, Jan 8 (Reuters) - For the first time, over 1 billion metric tons of carbon dioxide (CO2) was discharged from U.S. gas-fired power stations in a single year during 2024, marking a new pollution threshold for the world's largest gas producer and consumer. The 1.003 billion ton emissions figure is 3.6% up from 2023, and marks a 40% jump in gas-fired power generation emissions since 2015, according to data from Ember. Those numbers look large, but lack important context. Discharge from the U.S. fleet of coal-fired power stations was just under 620 million tons last year, a record low due to the smallest coal-fired power generation level on record. And as U.S. coal plants discharge 77% more CO2 per unit of electricity than gas-fired plants, the lower coal generation totals reveal that the U.S. power system has actually made steep cuts to overall pollution even as gas emissions have climbed. COAL VS CLEAN Thanks to the cuts to coal use, total U.S. power emissions from all fossil fuels were up only 0.5% in 2024 from 2023 to 1.64 billion tons, and were down 19% since 2015. What's more, that emissions load has declined despite total electricity generation climbing to all-time highs in 2024. A rapid climb in electricity generation from clean power - including from solar, wind, hydro and nuclear assets - has helped meet much of the rise in consumption in recent years. Total clean electricity generation was 35% higher in 2024 than in 2015, thanks mainly to a nearly eightfold rise in solar generation and a more than doubling in output from wind farms during that period. But fossil fuels remain the backbone of the U.S. generation system, supplying just over 58% of all electricity last year. Natural gas accounted for a record 73% of that fossil share, while coal plants supplied the remaining 26% or so. Power firms plan to make further cuts to coal use over the remainder of this decade, while adding more renewables to the generation mix to ensure total electricity supplies continue to climb in line with demand. But power suppliers are also set to become even more reliant on natural gas, especially for system-balancing needs whenever intermittent output from renewable energy sources falls short of overall demand needs. GAS FIX Over 30 U.S. states rely on natural gas for 30% or more of their electricity needs, according to Ember. Thirteen of those states rely on gas for 50% or more of their electricity, while an additional nine states use gas for between 15% and 30% of their electricity. On top of that, nearly 50 gas-fired plants are in pre-construction or are under construction across the U.S., according to Global Energy Monitor, with a combined capacity of close to 30,000 megawatts. That heavy reliance on legacy and new power plants and pipelines means that natural gas will remain integral to the U.S. power system for decades, even as renewable generation totals continue to climb. That in turn means that overall emissions from natural gas use in the U.S. will also continue to climb. But some of those gas plants will be used to replace retiring coal power stations, which on average have already been operating for 45 years according to the U.S. Energy Information Administration. That means even as more gas capacity comes on line, some of the highest-polluting U.S. coal plants will be shuttered over roughly the same period, which should help cap overall fossil fuel pollution even as the U.S. power system gets ever gassier. The opinions expressed here are those of the author, a market analyst for Reuters. Sign up here. https://www.reuters.com/sustainability/climate-energy/us-gas-fired-power-boom-reveals-key-emissions-payoff-2024-maguire-2025-01-08/

2025-01-08 05:46

Dollar index rises along with U.S. yields Dollar/yen within striking distance of 160 Pound tumbles to 8-1/2-month low NEW YORK, Jan 8 (Reuters) - The U.S. dollar rose for a second straight session on Wednesday as U.S. bond yields continued their recent advance, following a report that President-elect Donald Trump was contemplating the use of emergency measures to allow for a new tariff program. The yield on the benchmark 10-year U.S. Treasury note hit 4.73%, its highest level since April 25, after CNN reported Trump is considering declaring a national economic emergency in order to provide legal footing for a series of universal tariffs on allies and adversaries. Investors are anticipating Trump policies such as deregulation and lower taxes will boost economic growth, but there are concerns it, along with yet to be confirmed tariff actions, could cause a reacceleration in inflation. On Monday, the Washington Post said Trump was looking at more nuanced tariffs, which he later denied. "This feeds into this whole theme of a strong dollar and even with the disappointing ADP (employment data), the dollar is still firmer on the day," said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. "What it means is people ought not to resist this, it is a genuine move that hasn't exhausted yet." Earlier data on the U.S. labor market was conflicting, as the ADP National Employment Report showed U.S. private payrolls growth slowed sharply in December to 122,000, from 146,000 in the prior month. Economists polled by Reuters had forecast a gain of 140,000. However, weekly initial jobless claims fell to an 11-month low of 201,000 and below the estimate of 218,000 in a Reuters poll of economists. The dollar index , which measures the greenback against a basket of currencies, rose 0.28% to 109.00, after hitting a more than 2-year high of 109.54 last week, with the euro down 0.2% at $1.0318. The data was released ahead of Friday's key monthly employment report from the U.S. government. Markets are now pricing in just 39 basis points of easing from the Federal Reserve this year, with a first interest rate cut likely to happen in June. Fed Governor Christopher Waller said on Wednesday that inflation should continue to fall in 2025 and allow the U.S. central bank to further reduce interest rates, though at an uncertain pace. The greenback held on to gains after minutes from the Fed's Dec. 17-18 meeting, which showed policymakers agreed inflation was likely to continue slowing this year but also saw a rising risk that price pressures could remains sticky as they grappled with the potential effect of Trump's policies. Sterling weakened 0.87% to $1.2364 after falling to $1.2321, its lowest level since April 22 and the second-weakest of the year even as it occurred alongside a sharp selloff in British stocks and government bonds, with the 10-year gilt yield hitting a 16-1/2-year high. Against the yen , the dollar strengthened 0.25% to 158.41 and moved closer to the 160 level that has sparked Japanese authorities to intervene to support the currency. Japan's consumer sentiment deteriorated in December, a government survey showed, casting doubt on the Bank of Japan's view that solid household spending will buttress the economy and justify a further rise in interest rates. Sign up here. https://www.reuters.com/markets/currencies/dollar-follows-yields-higher-strong-us-data-2025-01-08/

2025-01-08 05:40

Deficit rose by nearly 18% in Jan-Nov period compared to same period in 2023 Vietnam's dong fell sharply from late Oct to lowest levels against dollar Vietnam has fourth-largest surplus among all US trade partners Communist-run nation is major exporter to US, monitored over currency manipulation risks HANOI, Jan 8 (Reuters) - The U.S. trade deficit with Vietnam exceeded $110 billion in the first 11 months of 2024, latest U.S. figures show, as exports from the Southeast Asian industrial hub grew amid a record fall of its currency against the dollar. The latest reading, released on Tuesday by the U.S. statistics agency, showed a nearly 18% rise in the deficit compared with the same period the previous year. The data confirms the Communist-run country has the fourth highest commercial surplus with the United States, topped only by China, the European Union and Mexico. The large gap is seen by analysts as a major risk for the export-reliant nation amid threats from President-elect Donald Trump to impose tariffs of up to 20% on all U.S. imports. That risk has been compounded by a sharp fall of Vietnam's dong in recent months, with the dong trading near its lowest ever levels against the dollar. The trend is closely watched in Washington as Vietnam is one of the countries under scrutiny for potential currency manipulation. Vietnam, which counts the U.S. as its biggest market, is home to big export-focussed industrial operations of U.S. multinationals such as Apple (AAPL.O) , opens new tab, Google (GOOGL.O) , opens new tab, Nike (NKE.N) , opens new tab and Intel (INTC.O) , opens new tab. Latest seasonally adjusted trade figures show that in the January-November period Vietnam accumulated a commercial surplus with the U.S. of $111.6 billion, up from $94.8 billion in the same period in 2023. Unadjusted data pointed to a larger gap of $113.1 billion. In November, the trade gap expanded by another $11.3 billion, accelerating from October, as Vietnam's exports to the U.S. rose, the adjusted data show, possibly supported by the weak dong. "If the U.S. perceives that Vietnam is deliberately keeping the dong weak to gain an unfair trade advantage, it could trigger renewed accusations of currency manipulation," said Leif Schneider, head of international law firm Luther in Vietnam. Trump ended his first term in the White House with Treasury declarations of Vietnam and Switzerland as currency manipulators over their market interventions to weaken the value of their currencies. Vietnam's central bank has said it was ready to intervene in the foreign exchange market in case of adverse economic impacts from currency moves, and has sold dollars in the past to strengthen the dong. On Tuesday, before new trade figures were released, the bank said it would monitor Trump's policies and adjust accordingly. The dong's most recent depreciation against the dollar is broadly in line with other major currencies. Sign up here. https://www.reuters.com/markets/us-trade-deficit-with-vietnam-soars-beyond-110-billion-weak-dong-boosts-exports-2025-01-08/

2025-01-08 05:32

A look at the day ahead in European and global markets from Ankur Banerjee The dollar stood tall on Wednesday boosted by elevated Treasury yields after strong U.S. data rekindled worries of a rebound in inflation, leaving European stocks staring at a weak open as traders brace for diverging policy paths. While traders are getting used to the idea of a measured interest rate cutting cycle from the U.S. Federal Reserve, they expect deep cuts from the European Central Bank even after data on Tuesday showed euro zone inflation accelerated in December. Markets are pricing in 99 basis points of easing from the ECB this year, while they expect the Fed to lower borrowing costs by 37.5 bps by the end of 2025, with the first cut fully priced in only in July. Benchmark 10-year Treasury yields hit an eight-month high on Tuesday after data pointed to a U.S. economy that remained resilient with a stable labour market but showed signs of inflation risk re-emerging. EURO PARITY WORRIES That has left the euro pinned close to the two-year low it touched on the first trading day of 2025. The single currency sank 6% last year as weak economic conditions in the region and political turmoil in France and Germany weighed. Speculators are sitting on bearish positions in euros worth $9 billion, below the four-year-high of $10 billion they were sitting on in early December, showed weekly data from the U.S. markets regulator . A Reuters poll of market strategists last month showed the euro will remain weak in the near term but will likely not fall to parity with the U.S. dollar in the coming months, though the spectre of tariffs from the U.S. looms large. Europe's premier index (.STOXX) , opens new tab will hope to shake off a muted open, having made a steady start to 2025 after rising 6% in 2024. Bond yields, though, may weigh on tech stocks (.SX8P) , opens new tab after they touched a more than five-month high on Tuesday. META REVERSAL In corporate news, Meta Platforms (META.O) , opens new tab on Tuesday scrapped its U.S. fact-checking program and reduced curbs on discussion around contentious topics, its biggest overhaul of its approach to managing political content in recent memory. The change comes as CEO Mark Zuckerberg has been signalling a desire to mend political fences ahead of the administration of President-elect Donald Trump. The changes will affect Facebook, Instagram and Threads, three of the world's biggest social media platforms with more than 3 billion users globally. Key developments that could influence markets on Wednesday: Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2025-01-08/