2025-01-09 06:17
Euro hovers near 2-year low, investors wary may fall to $1 Sterling nurses steep losses, eyes on UK gilt prices Yen rooted near levels that brought intervention in July Investors gird for Trump tariff plans SINGAPORE, Jan 9 (Reuters) - The U.S. dollar charged ahead on Thursday, underpinned by rising Treasury yields, putting the yen, sterling and euro under pressure near multi-month lows amid the shifting threat of tariffs. The focus for markets in 2025 has been on U.S. President-elect Donald Trump's policies as he steps back into the White House on Jan. 20, with analysts expecting his policies to both bolster growth and add to price pressures. CNN on Wednesday reported that Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries. On Monday, the Washington Post said Trump was looking at more nuanced tariffs, which he later denied. The evolving threat of tariffs has led bond yields higher, with the yield on the benchmark 10-year U.S. Treasury note hitting 4.73% on Wednesday, its highest since April 25. It was at 4.6628% on Thursday. "Trump's shifting narrative on tariffs has undoubtedly had an effect on USD. It seems this capriciousness is something markets will have to adapt to over the coming four years," said Kieran Williams, head of Asia FX at InTouch Capital Markets. "While tariff talk is likely to support USD in the short term, they also introduce complexities with unknown implications." The bond market selloff has left the dollar standing tall and casting a shadow on the currency market. The euro eased to $1.030475, lurking close to the two-year low it hit last week as investors remain worried the single currency may fall to the key $1 mark this year due to tariff uncertainties. The pound slid nearly 0.5% to hit $1.2303 on Thursday, its weakest since April even as British government bond yields hit multi-year highs. While the drop in both sterling and gilt prices were much sharper in September 2022 during the turmoil that followed former Prime Minister Liz Truss' "mini-budget", sentiment remains jittery. "The moves are related to an ongoing concern about UK borrowing levels but I don't see enough of a reason for such a rapid market move," said Kyle Chapman, FX markets analyst at Ballinger Group. "I think that we are going to see some recovery quite quickly once the market calms." The dollar index , which measures the U.S. currency against six other units, stood at 109.11, just shy of the two-year high it touched last week. The index has risen 5% since the U.S. election in early November as traders braced for Trump's policies as well as adjusted expectations of a measured pace of U.S. interest rate cuts. The Federal Reserve last month jolted markets by projecting two rate cuts for 2025, down from four it had previously predicted, due to concerns about inflation as well as Trump administration policies. The minutes of the December meeting, released on Wednesday, showed the central bank flagged new inflation concerns and officials saw a rising risk the incoming administration's plans may slow economic growth and raise unemployment. With U.S. markets closed on Thursday, the spotlight will be on Friday's payrolls report as investors parse through data to gauge when the Fed will next cut rates. Non-farm payrolls likely increased by 160,000 jobs in December after surging by 227,000 in November, a Reuters survey showed. The yen strengthened a bit to 158.10 per dollar on the day, after touching a near six-month low of 158.55 on Wednesday, hovering near the key 160 mark that led to Tokyo intervening in the market last July. The yen dropped more than 10% against the dollar last year and has made a sputtering start to 2025, with traders wary of another bout of intervention ahead of the Bank of Japan's meeting later in the month. Sign up here. https://www.reuters.com/markets/currencies/buoyant-dollar-keeps-pound-euro-yen-under-pressure-2025-01-09/
2025-01-09 06:15
LITTLETON, Colorado, Jan 9 (Reuters) - Texas is dominating the development of renewable energy generation and battery capacity within the United States, and is estimated to have installed nearly 80% more combined solar, wind and battery capacity than the next largest state. The Lone Star state has 42,000 megawatts (MW) of wind power, 22,000 MW of solar farms and 6,500 MW of utility-scale battery capacity in place as of the end of 2024, data from Cleanview and the U.S. Energy Information Administration (EIA) shows. California has the next largest network of renewable generation and battery capacity, while Florida, Arizona and Colorado round out the top 5 list of U.S. states that are deploying renewables and batteries to boost power supplies. Below is a breakdown of the scale and growth rates of solar, wind and battery storage capacity across the United States. THE BIG 3 Texas's emergence as the country's clean energy leader has been fuelled by rapid capacity growth on multiple fronts. Since 2019, Texas power firms have boosted solar generation capacity by 800%, wind capacity by 50% and battery storage capacity by an eye-popping 5,500%, according to energy data portal Cleanview, using EIA and state-level data. In absolute terms, Texas has installed around 19,000 MW of solar, 14,000 MW of wind and 6,200 MW of battery capacity within the past five years. Those installations have resulted in wind and solar farms generating roughly 30% of the state's electricity in 2024, according to Ember, which is up from a combined solar and wind share of around 18% in 2019. California gets around 40% of its electricity from wind and solar sources, up from around 25% in 2019, thanks mainly to an aggressive climb in solar generation. Around 9,000 MW of solar capacity has been added to California's power system since 2019, to bring the state's total solar capacity footprint to around 21,500 MW in 2024. Over the same period, California's utility-scale battery network has grown from around 240 MW in 2019 to over 11,000 MW last year - the largest in the country. California's wind generation footprint has held largely steady at around 6,430 MW in recent years, resulting in a combined solar, wind and battery storage capacity of around 40,000 MW, EIA data shows. Florida has the third-largest footprint of renewables and battery capacity, but has no wind power capacity and so trails the top states in terms of cumulative solar, wind and battery capacity which is a combined 11,500 MW. That said, the state has boosted its solar footprint from less than 50 MW in 2019 to over 10,500 MW in 2024, which indicates strong current momentum for renewables output. Florida's battery capacity is currently around 575 MW, according to EIA, which places the state fifth overall in that category. However, the U.S. Department of Energy recently announced nearly $30 million in investments in battery storage capacity in the state to boost power sector resilience, which should boost overall battery capacity further. GROWTH MARKETS Arizona, Colorado, New Mexico and Nevada are the next largest states in terms of combined grid-scale renewables generation and battery storage capacity. Each of those states has roughly 7,500-8,300 MW of combined solar, wind and battery capacity, and each state's power sector looks set to add to both solar and battery capacity in the coming years. Arizona and Nevada have the largest battery storage networks of the lower-tier states - at around 2,000 MW and 1,125 MW respectively - which should allow local utilities to store surplus solar power for later distribution. In total across the United States, around 62,000 MW of grid-scale battery storage is expected to be deployed between 2024 and 2028, according to a report by consultancy Wood Mackenzie. An additional 10,000 MW of residential storage capacity and around 2,500 MW of commercial and industrial storage is also expected to emerge before the end of the decade. The opinions expressed here are those of the author, a market analyst for Reuters. Sign up here. https://www.reuters.com/business/energy/texas-tops-us-states-renewable-energy-battery-capacity-maguire-2025-01-09/
2025-01-09 05:57
US non-farm payrolls report due on Friday Gold ETFs drew first net inflow in four years in 2024, WGC says Gold hit a near four-week high in the last session Jan 9 (Reuters) - Gold prices rose to a near four-week high on Thursday, supported by safe-haven demand, while investors weighed how U.S. President-elect Donald Trump's policies would impact the economy and inflation. Spot gold inched up 0.4% to $2,672.77 per ounce, as of 1155 GMT. U.S. gold futures rose 0.8% to $2,690.30. "Safe-haven demand is modestly supporting gold, offsetting downside pressure coming from a stronger dollar and higher rates," UBS analyst Giovanni Staunovo said. The dollar index (.DXY) , opens new tab hovered near a one-week high, making gold less appealing for holders of other currencies, while the benchmark 10-year Treasury yield stayed near eight-month peaks. "Market uncertainty is likely to persist with the upcoming inauguration of Donald Trump as the next U.S. president," Staunovo said. Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries, CNN reported on Wednesday, citing sources familiar with the matter. Trump will take office on Jan. 20 and his proposed tariffs could potentially ignite trade wars and inflation. In such a scenario, gold, considered a hedge against inflation, is likely to perform well. Investors' focus now shifts to Friday's U.S. nonfarm payrolls for further clarity on the Federal Reserve's interest rate path. Non-farm payrolls likely rose by 160,000 jobs in December after surging by 227,000 in November, a Reuters survey showed. Gold hit a near four-week high on Wednesday after a weaker-than-expected U.S. private employment report hinted that the Fed may be less cautious about easing rates this year. However, minutes of the Fed's December policy meeting showed officials' concern that Trump's proposed tariffs and immigration policies may prolong the fight against rising prices. High rates reduce the non-yielding asset's appeal. The World Gold Council on Wednesday said physically-backed gold exchange-traded funds registered their first inflow in four years. Spot silver rose 0.8% to $30.34 per ounce, platinum was steady at $955.85 and palladium shed 0.1% to $927.75. Sign up here. https://www.reuters.com/markets/commodities/gold-retreats-focus-us-data-cues-feds-policy-path-2025-01-09/
2025-01-09 05:38
A look at the day ahead in European and global markets from Kevin Buckland The British bond market has become the focus of global investor attention, for some unenviable reasons. A 20-basis point spike in benchmark gilts this week to the highest since 2008 is being linked by analysts to a welling crisis of confidence in Britain's fiscal outlook, despite no obvious catalyst for the current wave of selling. Some are mulling the potential for a rout akin to the one that followed former premier Liz Truss' disastrous mini budget of September 2022. To be sure though, while the market views gilts as the centre of the bond storm, there are plenty more reasons to be a seller. The euro zone is bracing for elevated bond supply amid an acceleration in inflation, which helped German bund yields pop to a five-month high on Wednesday. And of bigger global consequence, the uncertain impact of incoming U.S. President Donald Trump's proposed tariffs and immigration curbs on inflation have both investors and Federal Reserve officials concerned. The economic data stateside is already flashing warning signs about the stickiness of price pressures, spurring traders to pare bets for Fed easing this year to just 41 basis points, shy of the 50 basis points Fed officials mooted just last month. Yields on benchmark Treasuries pushed to the highest since April at 4.73% before the notes found buyers. Caution is likely to win out today in Europe, heading into a market holiday in the United States that will shutter Wall Street and shorten Treasuries trading. There is also trade and output data from Germany on tap, along with euro-region retail sales figures. A parade of potentially revelatory central bank speak is in the pipeline as well, with Bank of England Deputy Governor Sarah Breeden giving a speech on the outlook for inflation and monetary policy at the University of Edinburgh business school. Fed Governor Michelle Bowman, Boston Fed President Susan Collins, Kansas City Fed President Jeffrey Schmid, Philly Fed President Patrick Harker and Richmond Fed President Thomas Barkin also take the podium at various venues. That's ahead of the big macro event of the week, which looms on Friday in the form of the monthly U.S. non-farm payrolls report. Key developments that could influence markets on Thursday: Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2025-01-09/
2025-01-09 05:26
SINGAPORE, Jan 9 (Reuters) - Saudi Arabia's crude oil supply to China is set to decline in February from the month before, trade sources said on Thursday, after the kingdom hiked its prices and as OPEC+ extended production cuts in the first quarter. State oil firm Saudi Aramco (2222.SE) , opens new tab will ship about 43.5 million barrels to China in February, a tally of allocations to Chinese refiners showed, down from January's 46 million barrels, a three-month high. China's state majors CNOOC and PetroChina (601857.SS) , opens new tab and private refiner Hengli Petrochemical (600346.SS) , opens new tab will be lifting less crude in February, while Saudi Aramco will increase its supply to Sinopec (600028.SS) , opens new tab and Sinochem, they said. Aramco declined to comment on its February allocation to China. OPEC+, which pumps about half the world's oil, decided in early December to push back the start of oil output rises by three months until April and extended the full unwinding of cuts by a year until the end of 2026 due to weak demand and booming production outside the group. With tighter supply, Aramco has also increased official selling prices to Asia for the first time in three months. Earlier this week, it raised the official selling price (OSP) for flagship Arab Light crude by 60 cents to $1.50 per barrel above the Oman/Dubai benchmark average, slightly above market expectations. Asian refineries, chiefly China and India, are looking to buy more Middle East grades after wider sanctions by Western countries tightened supplies and pushed up the prices of Russian and Iranian oil. Saudi Arabia is the No. 2 crude supplier to China after Russia. China's crude imports from Saudi Arabia totalled 72.27 million tons (1.44 million barrels per day) for the first 11 months of 2024, down 9.6% from the same period a year earlier, Chinese customs data showed in December. (1 metric ton = 7.3 barrels) Sign up here. https://www.reuters.com/business/energy/saudi-crude-oil-supply-china-set-fall-feb-vs-jan-sources-say-2025-01-09/
2025-01-09 05:04
Big Oil-backed Climate Investment among backers Morgan Stanley's 1GT fund, S2G Ventures also take part To help firm expand operations, develop new services LONDON, Jan 9 (Reuters) - Investors including Big Oil-backed Climate Investment and Morgan Stanley's 1GT fund have invested 115 million euros ($119.20 million) in Irish geophysical data firm XOCEAN to help it expand its operations. The company uses uncrewed surface vehicles to help maintain offshore wind and other energy infrastructure, including checking for pipeline leaks, as well as developing carbon capture and storage projects and conducting civil hydrography. Unlike traditional providers of such services which rely on crewed vessels that cost thousands of dollars a day even when bad weather forces them into port, the firm's technology allows clients to remotely control them and remain on-site for longer. The technology can also be delivered using what XOCEAN said was just 0.1% of the carbon emissions associated with manned vessels. Other backers in the growth equity round - which will help XOCEAN expand its fleet, develop new products and technology, and open new facilities - include Chicago-based venture investor S2G Ventures and CC Industries, owned by the Crown family. "Working with many of the world’s leading energy companies, XOCEAN has reimagined how the geophysical data central to unlocking the blue economy’s potential can be delivered," said Francis O'Sullivan, managing director at S2G, which helped structure the deal. The funding of XOCEAN is the first through the growth equity strategy of Climate Investment, an independent investor launched by members of the Oil and Gas Climate Initiative, some of which, such as Shell(SHEL.L) , opens new tab and BP (BP.L) , opens new tab, are already clients of the firm. "Several customers cited XOCEAN as their surveying 'platform of choice'," said Climate Investment's managing director for growth, Patrick Yip. Founded in Ireland in 2017, the company has more than 240 staff in offices in Ireland, Britain, the United States, Canada, Norway and Australia. ($1 = 0.9648 euros) Sign up here. https://www.reuters.com/sustainability/sustainable-finance-reporting/ocean-data-climate-tech-firm-xocean-raises-115-million-euros-2025-01-09/
