2025-06-11 12:54

FRANKFURT, June 11 (Reuters) - The dollar continued to lose market share as the world's dominant currency last year but mostly smaller rivals and gold benefited rather than the euro, an ECB report showed on Wednesday. However, an acceleration in the selling of dollar assets since April because of erratic U.S. economic policy provides an opportunity for the single currency, ECB President Christine Lagarde has said, provided the 20-nation bloc finally pushes ahead with key integration steps including joint borrowing. Sign up here. In 2024 alone, the dollar lost 2 percentage points from its share of global foreign exchange holdings and while the euro made small gains, the Japanese yen and the Canadian dollar were the big winners, the ECB said on Wednesday. Although the dollar still had a 58% market share of global foreign exchange reserves by end-2024, this is down by 10 percentage points in the past decade. Meanwhile, the euro's share has hovered at just below a fifth. Another big winner last year was gold, with central banks increasing their stock by more than 1,000 metric tons, a record pace and double the average annual level seen in the previous decade, the ECB said. "Survey data suggest that two-thirds of central banks invested in gold for purposes of diversification, while two-fifths did so as protection against geopolitical risk," it said. When all foreign reserves are added together, gold accounted for 20%, and the euro 16%, the ECB added. However, there have been signs since April that euro assets may finally be benefiting. Treasury yields have risen but the dollar has weakened sharply against the euro, a highly unusual correlation which appears to suggest that investors are questioning the dollar's status as the world's premier asset and demanding a higher risk premium to hold U.S. assets. JOINT DEBT The euro zone, however, lacks a truly liquid, large-scale safe asset since debt is issued by individual countries, leaving the bloc's debt market fragmented unless more joint bonds are issued. Renowned economists Olivier Blanchard and Angel Ubide recently proposed that European countries create separate revenue streams to repay joint 'blue' bonds and national 'red' ones. "The conditions today are far more favourable, especially if the scale of blue bond issuance were to be calibrated in a prudent manner," ECB chief economist Philip Lane said on Wednesday. He also revived his own proposal for a synthetic euro zone bond, effectively a portfolio of different government bonds sold in tranches. But Europe's banking system is also fragmented and the EU lacks a capital market union with harmonised rules and large, cross-border players. Moreover, the region lacks military defence capabilities to provide the sort of geopolitical assurance that reserve managers demand. https://www.reuters.com/business/finance/dollar-keeps-losing-market-share-euro-is-no-winner-either-ecb-study-2025-06-11/

2025-06-11 12:47

UK long-term borrowing costs hold higher Sterling stays close to 3-year high vs dollar Analysts say fiscal worries likely to persist LONDON, June 11 (Reuters) - Britain's borrowing costs rose and sterling stayed close to recent three-year peaks against the dollar on Wednesday, as a multi-year spending review underlined fiscal challenges even as pressure mounts to boost the economy. British finance minister Rachel Reeves delivered a spending review dividing up more than 2 trillion pounds ($2.7 trillion) of public spending, with the government's departmental budgets to grow by 2.3% a year in real terms. Sign up here. Britain's 10-year gilt yield was up as much as 7 basis points (bps), rising ahead of the review, but fell back after weaker-than-expected U.S. inflation numbers prompted a broad rally in government bond markets. It was last up 2 bps to 4.56% , still underperforming its peers. Bond yields across other big European government markets were slightly lower on the day , . Sterling was last up 0.2% at $1.353 as the dollar fell against major currencies following the U.S. data . Ahead of that report, sterling had showed a muted reaction to the spending review and was just a touch softer against the euro at 84.77 pence . "The spending review itself was about the allocation of an existing spending total, in other words how you cut the cake,” said Investec chief economist Philip Shaw. CONSTRAINED Analysts said the main takeaway for markets from Reeves' speech was confirmation that the UK remains constrained in spending, raising the prospect of tax increases later this year. "Were the chancellor to raise taxes, then that could weigh on demand. But presumably that would be offset by an increase in spending, so the picture really isn't very clear," said Shaw. Investors are left grappling with a darkening economic outlook with the potential for more rapid rate cuts, implying downward pressure on borrowing costs and fiscal worries that are putting upward pressure on yields. "It is very difficult to manage this balance. Because typically what happens is when you have economic growth which is a bit soggy, that tends to bring down bond yields," said Jason Da Silva, director of global investment strategy at Arbuthnot Latham. "But the increasing fiscal spend and government debt being extremely high is a headwind for (UK government) bonds," he added. Concerns about the UK's weak fiscal position have weighed on UK assets in recent months, and Britain's 30-year bonds remain the highest in the Group of Seven industrialised economies. Sterling and UK equities meanwhile have been cushioned by bearishness towards U.S. assets given President Donald Trump’s tariff policy and a murky economic outlook, prompting global investors to diversify away from U.S. markets. The FTSE 100 (.FTSE) , opens new tab is a fraction away from a fresh record high it last reached in March, having risen almost 9% so far in 2025. In contrast the U.S. benchmark S&P 500 is up almost 3% (.SPX) , opens new tab. Meanwhile sterling has rallied almost 8% so far this year versus the dollar. The Bank of England delivers its next policy decision next week, with markets betting on no change to the bank rate, though weak jobs data on Tuesday raised the prospect of more rate cuts by the end of the year. https://www.reuters.com/world/uk/sterling-steady-gilts-yields-hold-higher-reeves-delivers-spending-review-2025-06-11/

2025-06-11 12:29

BRUSSELS, June 11 (Reuters) - European Union countries may demand that Brussels simplify the EU's methane emissions law, which has stoked concerns from companies that it could hamper imports of U.S. liquefied natural gas, according to a document seen by Reuters. From this year, the EU requires importers of oil and gas to monitor and report the methane emissions associated with these imports. Methane, which escapes from leaky gas infrastructure, is the second-biggest cause of climate change after carbon dioxide emissions. Sign up here. Draft conclusions from a meeting of EU countries' energy ministers on Monday showed governments are preparing to ask the European Commission to add the methane law to its "simplification" drive to cut bureaucracy for companies. The draft asked the Commission to quickly assess which EU energy laws can be simplified, "in order to decrease the administrative burden on Member States, industry and citizens, for example the methane regulation as it might impact the cooperation with economic operators from outside of the EU". The conclusions are still being drafted by Poland, which holds the EU's rotating presidency, and could change before ministers adopt them on Monday. The EU agreed its methane law last May, but the policy has come under increased scrutiny as the EU attempts to quit Russian gas - and to buy more U.S. liquefied natural gas to replace it. Washington and Brussels have each indicated that EU purchases of U.S. LNG could form part of a broader U.S.-EU trade deal. U.S. President Donald Trump has set a July 9 deadline for the EU to reach a deal and avert steep tariffs. Romania and Slovakia are among countries warning that the methane law could disrupt gas imports. Some U.S. LNG firms have warned they will struggle to comply with the EU law, since the fragmented nature of the country's industry means they cannot track emissions along their entire value chains, down to specific gas wells. Environmental groups have rejected this idea, arguing that systems exist which can digitally trace gas through the value chain, in line with the EU law's demands. In a letter to U.S. and EU officials this month, seen by Reuters, U.S. industry group LNG Allies asked for a trade deal to ensure U.S. gas exporters are deemed to be following "equivalent" methane rules to those of the EU, and therefore automatically comply with the methane law. https://www.reuters.com/sustainability/boards-policy-regulation/eu-countries-consider-softening-methane-emissions-law-gas-imports-2025-06-11/

2025-06-11 12:19

Pemex is often months behind on payments for oil and gas State company's commercial arm PMI is seen as more reliable Hokchi Energy is owed some $380 mln by Pemex, source says MEXICO CITY, June 11 (Reuters) - Mexico's Hokchi Energy, frustrated by months of delayed payments for its oil and gas from state company Pemex, has sought to change its contract so it can do business directly with the company's commercial arm, PMI Comercio Internacional, three sources familiar with the matter said. Hokchi Energy's bid to change who buys its production highlights the challenges of doing business with Pemex, even as the government wants to attract private investment to help the state company increase output. Sign up here. PMI, which exports crude oil and imports refined fuels such as gasoline and diesel, is widely seen as a more reliable business partner than Pemex, one source said. The attempt to change the contract is the latest twist in a long-running saga of Pemex's delayed payments to Hokchi Energy, one of Mexico's largest oil and gas producers, which is among a growing number of companies reluctant to work with Pemex, the world's most indebted energy company. One source said Pemex owes Hokchi Energy over $300 million. Under the proposed new contract, Hokchi Energy would sell directly to PMI, in the same way as if it were selling to any global trader, the sources said. Under the existing contract, Hokchi Energy sells its production to Pemex and is dependent on getting paid by Pemex, which can use the production in its own refineries or sell it via PMI to buyers worldwide. The sources said that Hokchi Energy had already tried twice to change terms of the contract, making its second attempt earlier this year in hopes Mexico's new government would be more inclined to accommodate the request, but the request was denied. All sources spoke on the condition of anonymity because the matter is commercially sensitive. Mexican Energy Minister Luz Elena Gonzalez denied the request this year, according to the other two sources. Neither the energy ministry nor Pemex responded to a request for comment. Hokchi Energy operates the shallow-water Hokchi field in the Salina del Istmo basin in the Gulf of Mexico, secured through the 2014 landmark energy reform that opened the country up to private investment. The field produces some 23,000 barrels of oil equivalent per day. Hokchi Energy said in a statement that "our dialogue with Pemex is constant and productive" and "our operations have been maintained." Harbour Energy, which also has a stake in the field, declined to comment. The total debt Pemex owes to Hokchi Energy amounts to around $380 million, said the second source, adding that the exact value fluctuates because it is for crude, which is priced daily. Pemex itself disclosed debts invoiced to the company of $92.41 million in 2024 and $88.66 million this year, official data from March showed. The source said the real debt is higher than disclosed because some outstanding invoices have not been included. In 2023, Hokchi Energy took legal action against Pemex to demand it pay the money it owed. Hokchi Energy filed another lawsuit in recent months, the second source added. Pemex has for years struggled to pay providers for everything from hydrocarbon productions to services and infrastructure, according to interviews with dozens of separate sources across the sector. In dire need of new investment and technology, Pemex's production has been declining as older fields are being depleted and newer discoveries have largely disappointed. Reuters reported last month that Pemex planned to open old wells in a bid to boost output. Pemex also owes some $20 billion to service providers like Baker Hughes, Halliburton and SLB, official filings show, as well as smaller Mexican companies, some of which have warned that they could go bankrupt as a result of Pemex not paying. Even when owed substantial amounts, companies are reluctant to speak out or take legal action for fear of being penalized by the state behemoth that dominates the energy market, the industry sources said. Mexican President Claudia Sheinbaum has repeatedly said that her government was working on various payment mechanisms to address the issue. Despite unprecedented support from her predecessor and political mentor, energy nationalist President Andres Manuel Lopez Obrador, Pemex still has a financial debt of some $101 billion. https://www.reuters.com/business/energy/frustrated-by-mexicos-pemex-hokchi-energy-pushed-change-who-buys-its-oil-sources-2025-06-11/

2025-06-11 12:03

WASHINGTON, June 11 (Reuters) - Oklo (OKLO.N) , opens new tab, a U.S. company hoping to build micro nuclear power plants, said on Wednesday the energy logistics agency of the Defense Department has issued a notice of intent to award a power purchase agreement for a pilot reactor. WHY IT'S IMPORTANT Nuclear power companies are seeking U.S. military contracts after President Donald Trump signed executive orders last month on boosting nuclear power. Sign up here. In his first administration Trump also directed agencies to develop small nuclear reactors on military bases but that did not result in plants coming on line. Oklo's project for the Air Force would produce up to 75 megawatts of electricity and usable heat. That's tiny compared to today's 1,000 MW on average reactors, but developers hope the smaller unit can be replicated easily in factories. IS THE AGREEMENT FINAL? No, but under the terms of the notice, Oklo would design, construct, own, and operate the power plant, delivering electricity and heat at Eielson Air Force Base in Alaska, under a long-term agreement. The value of the deal was not disclosed. The U.S. Nuclear Regulatory Commission denied Oklo an operating license in 2022. Oklo plans to reapply late in 2025 and hopes to receive one in 2027. Last month, Trump directed the NRC to issue licenses within 18 months. WHAT HAPPENED THE FIRST TIME? In 2023, the U.S. military made an initial agreement for Oklo to build a microreactor at Eielson by the end of 2027. But later that year the military withdrew the intent to award Oklo a more than $100 million contract. PROLIFERATION CONCERNS Some non-proliferation experts worry because Oklo's project would extract energy from plutonium which can be used in a nuclear weapon. Oklo says the plutonium would be wrapped up in other highly-radioactive substances which would make it nearly impossible use as fissile material. https://www.reuters.com/business/energy/oklo-moves-closer-nuclear-power-agreement-with-us-air-force-2025-06-11/

2025-06-11 11:59

Congo declared four-month export ban in February Ban pushed Glencore to declare force majeure on some contracts Some clients still receiving deliveries while others are not LONDON, June 11 (Reuters) - Glencore (GLEN.L) , opens new tab declared force majeure on some deliveries of cobalt from Democratic Republic of Congo days after the government suspended exports of the battery material, three sources familiar with the matter told Reuters. Congo, the world's largest cobalt producing country, introduced a four-month ban on all cobalt exports in February in an attempt to curb a supply glut that helped send prices to nine-year lows and stifled its tax revenues. Sign up here. As a result of the ban, London-listed Glencore took the rare step of declaring force majeure on some supply agreements for cobalt produced at its Congolese operations, invoking a measure meant for unforeseeable circumstances that prevent a contract's execution, the sources said. Glencore declined a Reuters request for comment. Glencore, the world's second-largest cobalt producing company, mined 35,100 metric tons of cobalt contained in concentrate and hydroxide at its Congo operations last year. Many of its customers are still receiving cobalt under their contracts, the sources said. And while others are not, it was unclear to what extent the supply issue had affected their operations. Cobalt is a byproduct of copper production in Congo, which accounted for 220,000 tons, or 78%, of global cobalt output last year. In metal form, it is used to manufacture parts for aerospace and military equipment. Most of the cobalt produced in Congo, however, comes in the form of hydroxide and is used to make chemicals for batteries used in electric vehicles and mobile devices. Growing surpluses - partly due to lower than expected demand for electric vehicles and a supply surge from operations owned by China's CMOC Group (603993.SS) , opens new tab - drove down cobalt prices to nearly $10 a pound or $22,000 a ton in February. Congo's export ban and a force majeure declaration in March by Eurasian Resources Group have since helped prices recover by around 35% to trade at $15.8 cents or a pound or $34,832 a ton on Wednesday . Congo has not said whether the export suspension will be extended when the ban ends on June 22, or if the government would look at export quotas. https://www.reuters.com/world/africa/glencore-halted-some-cobalt-deliveries-over-congo-export-ban-2025-06-11/