2024-09-13 10:27
LONDON, Sept 13 (Reuters) - Britain's approval of its first new deep coal mine in decades was unlawful, London's High Court ruled on Friday following a legal challenge brought by environmental campaigners. Friends of the Earth and South Lakeland Action on Climate Change challenged the previous Conservative government's 2022 approval of a coking coal mine in northwest England. Britain dropped its defence of the legal challenges after a Supreme Court ruling earlier this year said planning authorities must consider the impact of burning, not just extracting, fossil fuels when deciding whether to approve projects. Friday's ruling is the first case to be decided since the Supreme Court decision, Friends of the Earth senior lawyer Niall Toru said. "That the ruling today has gone against the mining company could have ramifications internationally, as there are cases abroad where challenges are being made against fossil fuel projects on a very similar basis," Toru added. Developer West Cumbria Mining fought the case and said the project – which planned to extract coking coal for manufacturing steel, rather than to generate electricity – would be "a unique 'net zero' mine". West Cumbria Mining's lawyer James Strachan said in court filings that the development would not cause a net increase in greenhouse gas emissions, as the use of coking coal extracted from the mine is driven by demand for steel. Judge David Holgate, however, said in a written ruling on Friday that "the assumption that the proposed mine would not produce a net increase in greenhouse gas emissions, or would be a net zero mine, is legally flawed". A spokesperson for West Cumbria Mining said the company "will consider the implications of the High Court judgment and has no comment to make at this time". Sign up here. https://www.reuters.com/world/uk/britains-approval-new-coal-mine-unlawful-court-rules-2024-09-13/
2024-09-13 10:20
LONDON, Sept 13 (Reuters) - The British pound gained slightly on Friday, adding to Thursday's rise off a three-week low against the dollar, as the focus shifted to next week's UK inflation data and central bank meeting. Sterling edged up on the day at $1.3146, just above the $1.3127 it reached on Thursday, when it closed 0.6% higher. The Bank of England is widely expected to keep interest rates on hold next week, with futures markets implying around an 80% chance that rates remain unchanged, after a 25 basis-point rate cut last month. "We expect the MPC to maintain Bank Rate at 5.00% on 19th Sept meeting and expect the Committee to opt to maintain the current £100bn pace of stock reduction," analysts at Goldman Sachs said, referring to the Monetary Policy Committee. The next key input for the BoE will be UK inflation data released on Wednesday, the day before its policy announcement. On Wednesday this week, data from Britain's Office for National Statistics showed the UK economy stagnated in July, sending the pound to its lowest since Aug. 20. A Reuters poll of economists had forecast a 0.2% month-on-month expansion. The British economy has however still shown more solid growth than the euro zone since the beginning of the year. Against the euro , the pound was flat at 84.42 pence. The European Central Bank lowered interest rates by 25 basis points on Thursday and signalled a "declining path" for borrowing costs in the months ahead as inflation slows and economic growth in the euro zone dwindles. Meanwhile, media reports reignited speculation about an outsized Federal Reserve rate cut next week. Goldman Sachs analysts expect the BoE's Monetary Policy Committee to reevaluate its cautious approach later this year, seeing "compelling reasons for the MPC to accelerate the pace of easing as wage pressures moderate and underlying services inflation falls back." They also anticipate sequential rate cuts from November until Bank Rate reaches 3% in September 2025. Sign up here. https://www.reuters.com/markets/currencies/sterling-slightly-up-ahead-uk-inflation-data-boe-meeting-next-week-2024-09-13/
2024-09-13 10:20
Nov 22 (Reuters) - J.P.Morgan on Friday predicted a decline in oil prices during President-elect Donald Trump's upcoming term, citing his commitment to defeating inflation by reducing energy prices. The investment bank anticipates a large surplus of 1.3 million barrels per day and an average Brent price of $73 in 2025, falling to below $60 by 2026. However, it expects prices to end 2025 below $70, with West Texas Intermediate at $64. By 2026, the average Brent forecast is $61 and WTI at $57, assuming that OPEC+ maintains current production levels. The bank sees global oil demand growth decelerating from 1.3 mbd this year to 1.1 mbd next year, adding that China is expected to lead oil demand growth for the last time before India takes the lead in 2026. "Trump’s energy agenda presents downside risks to oil prices from deregulation and increased U.S. production, while also posing upside risks by exerting pressure on Iran, Venezuela, and possibly Russia to limit their oil exports and revenues," J.P.Morgan said. In 2026, some OPEC members may consider increasing oil production, given the pattern of periodic oil market volatility over the past decade, particularly in 2014 and 2020. This could potentially trigger another market reset starting in 2026, the bank noted. The Organization of the Petroleum Exporting Countries and its allies led by Russia, the group known as OPEC+, which pumps around half the world's oil, has already delayed a plan to gradually lift production by several months this year. OPEC+ members are slated to convene on Dec. 1. Brent futures rose 94 cents, or 1.3%, to settle at $75.17 a barrel. U.S. West Texas Intermediate crude rose $1.14, or 1.6%, to settle at $71.24. The following is a list of the latest brokerage forecasts for 2024 and 2025 average prices per barrel for Brent and WTI (in $ per barrel): * indicates end-of-period forecast # current as of given date, may not indicate date of revision ** JPMorgan 2025 Brent and WTI forecasts were introduced in Nov, 2023. For a table of crude price forecasts as per Reuters latest monthly poll, see Sign up here. https://www.reuters.com/markets/commodities/bofa-lowers-2025-brent-forecast-by-5bbl-softer-demand-2024-09-06/
2024-09-13 10:17
MUMBAI, Sept 13 (Reuters) - The Indian rupee strengthened on Friday as Asian currencies benefited from the weakness in the U.S. dollar as the odds of a outsized Federal Reserve rate cut next week rose after media reports said the decision is likely to be a close call. The rupee closed at 83.8875 against the U.S. dollar, up from its close at 83.9650 in the previous session. The currency strengthened nearly 0.1% week-on-week, its best weekly performance since the week ended June 25. The dollar index dipped below the 101 handle on Friday and was down 0.2% on the day, while the Korean won and the Malaysian ringgit led gains among Asian currencies. Broad-based interbank dollar offers helped the rupee on Friday, but 83.85 continues to be a strong resistance level for the currency, a foreign exchange trader at a state-run bank said. The chances of a 50-basis point rate cut by the Fed rose to 43%, up from 14% a day earlier, which drove U.S. bond yields lower. The odds rose after reports from the Wall Street Journal and Financial Times said an outsized rate reduction is still an option. Dollar-rupee forward premiums benefited from the decline, with the one-year implied yield rising 5 bps to 2.28%, its highest level in 16 months. "Unless the Fed surprises with a hawkish cut, we think even a dovish 25bp move (i.e., signalling large easing and perhaps 50bp cuts ahead) can prevent a sustainable dollar recovery," ING Bank said in a note. Investors will also keep an eye on the Bank of Japan's (BOJ)interest rate decision next Friday, where it's expected to keep rates steady at 0.25%. The BOJ's rate hike in July had sparked a rally in the yen, leading to an unwinding of global carry trades, sparking volatility across financial markets. Sign up here. https://www.reuters.com/markets/currencies/rupee-ends-higher-logs-strongest-weekly-rise-since-late-june-2024-09-13/
2024-09-13 10:08
Sept 13 (Reuters) - A look at the day ahead in U.S. and global markets by Amanda Cooper. What a difference a day makes. Just 24 hours ago, investors were coming to terms with the idea that a half-point rate cut next week from the Federal Reserve was unlikely and a quarter-point drop was much more in line with a soft-landing scenario. A couple of articles by closely followed Fed correspondents in the Financial Times and the Wall Street Journal overnight, along with comments from influential former Fed official Bill Dudley, have been enough to flip those assumptions on their head. It's now pretty much 50/50 as to whether the Fed goes 25 basis points or 50 on Sept. 18. This 180-switch hasn't puffed up U.S. stock futures or given bitcoin a bid so far, but rather has pushed gold to yet another record high above $2,570 an ounce. Gold has gained nearly 25% in value this year, fuelled by a heady cocktail of the prospect of lower U.S. interest rates, falling inflation, a weaker dollar and a highly volatile geopolitical backdrop. Investors are currently sitting on one of their largest bullish positions in gold futures on record. Weekly data from the U.S. markets regulator shows non-commercial investors - a category that can include individual investors, some hedge funds and financial institutions - hold 287,558 gold futures contracts, worth around $73 billion based on the current spot price. CENTRAL BANKS STILL ADDING GOLD It hasn't just been skittish investors adding to their rainy-day bullion holdings either. Central banks around the world, which tend to be in it for long-term, are still adding gold to their reserves at breakneck speed following 2023's splurge - the second highest for the official sector on record. Exchange-traded funds have recorded positive inflows for four straight months to the end of August after years of almost unmitigated outflows. Because gold does not bear any interest of its own, it can compete more effectively for investor cash when U.S. rates are falling. In fact, in five out of the last seven Fed easing cycles going back to 1982, gold has rallied in the six months following the first cut. The possible dull element in this otherwise glittery picture is the impact of an seemingly unstoppable rally on actual consumers of gold. Retail investors, jewellers and industrial users are highly price sensitive. But for now, particularly with a juicy half-point cut in the offing from the Fed now believed to be more likely, gold is retaining its shine. Key developments that should provide more direction to U.S. markets later on Friday: * August import/export prices * University of Michigan Sept preliminary consumer sentiment Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-pix-2024-09-13/
2024-09-13 09:36
LONDON, Sept 13 (Reuters) - The British public's expectations for inflation over the coming year dropped to their lowest in three years in August, a Bank of England survey showed on Friday, likely reassuring policymakers ahead of next week's interest rate decision. The central bank closely watches surveys of public inflation expectations as a guide to future inflation trends. When it cut interest rates from a 16-year high of 5.25% on Aug. 1, the BoE's Monetary Policy Committee said it expected recent falls in inflation expectations to lead to lower future wage demands and smaller price increases by businesses. The BoE's quarterly inflation attitudes survey showed that inflation expectations for the coming 12 months fell to 2.7% in August, the lowest since August 2021, from 2.8% in May. Expectations for the following 12 months were unchanged at 2.6% while expectations for five years ahead rose to a nine-month high of 3.2% from 3.1% The survey of more than 2,000 people aged 16 to 75 took place between Aug. 2 and Aug. 6, just after the most recent rate cut. Economists polled by Reuters this week predicted the BoE would leave interest rates unchanged at 5% on Sept. 19 but cut rates to 4.75% on Nov. 7 after its next meeting. Consumer price inflation returned to its 2% target in May and June but edged up to 2.2% in July and the BoE forecasts it will rise to around 2.75% by the end of this year before drifting lower. The BoE's gauge of public satisfaction with its control of inflation - which tends to track recent inflation - rose to +4 in August from -4 in May. This was its highest since February 2022, when Russia's full-scale invasion of Ukraine caused energy prices to soar in most of Europe. Sign up here. https://www.reuters.com/world/uk/uk-publics-inflation-expectations-fall-3-year-low-boe-survey-shows-2024-09-13/
