2024-09-12 12:50

LONDON, Sept 12 (Reuters) - The European Central Bank cut interest rates again on Thursday as inflation slows and economic growth falters, but provided almost no clues about its next step, even as investors bet on steady policy easing in the months ahead. The ECB cut its deposit rate by 25 basis points (bps) to 3.50%, as expected, following a similar cut in June, as inflation is now within striking distance of its 2% target and the domestic economy skirts a recession. The refinancing rate, meanwhile, was cut by a much bigger 60 basis points to 3.65% in a long-flagged technical adjustment. The euro briefly touched a session high after the rate decision and was last stood around $1.1028 . Government bond yields in the euro area were little changed , and European stocks held higher (.STOXX) , opens new tab. An index of euro area banks (.SX7E) , opens new tab was up 1.8%. Money markets priced in roughly 40 bps of further easing by year end and a roughly 42% chance of a quarter point move in October. COMMENTS: HUSSAIN MEHDI, DIRECTOR INVESTMENT STRATEGY, HSBC ASSET MANAGEMENT, UK: "A rate cut at this meeting wasn't in doubt. Cooling economic data in the bloc – especially a big drop in wage growth – and a dramatic repricing of U.S. rate expectations over the summer has weakened the hawks' influence in our view. For the time being, we think the global economic outlook of further disinflation and central bank easing is a decent environment for risk assets... But the outlook remains highly uncertain. The risk of a hard landing remains fairly high, as policy rates remain in restrictive territory. Market volatility is likely to be a key feature heading into 2025." YAEL SELFIN, CHIEF ECONOMIST, KMPG, UK: "Looking ahead, the path for interest rates remains uncertain. While there is widespread consensus on the Governing Council that policy restrictiveness should be eased, divergent views remain around the pace of cuts. We expect a further one in December this year, taking the deposit rate down to 3.25%. If the outlook weakens further, it will strengthen the case of more dovish policymakers to increase the pace of cuts in 2025, towards a terminal rate of around 2.25%." LINDSAY JAMES, INVESTMENT STRATEGIST, QUILTER INVESTORS, LONDON: "Today's news is sure to provide some relief to consumers and businesses, which could help the continent on its way towards an improved economic recovery, but whether the ECB can cut rates again this year remains to be seen." "The ECB has much less wiggle-room than other central banks, so although a further cut in October is not entirely off the cards, the ECB will as always remain heavily reliant on the data that comes out between now and then." "Ensuring inflation continues to head in the right direction, and particularly making more of a dent in core inflation, will be top of its agenda." NEIL BIRRELL, CIO, PREMIER MITON INVESTORS, UK: "The rate cut from the ECB was well telegraphed. They will be looking ahead to the prospects for growth, rather than over their shoulder at inflation. It’s all about how steep the path to lower rates will be at the remaining meetings this year and through next year. "Like most other regions, the euro zone economy could do with some stimulus, and this is a step along that path. Economic data over the next few weeks will determine the timing of the next policy move." CARSTEN BRZESKI, GLOBAL HEAD OF MACRO, ING, FRANKFURT: "Looking ahead, we expect the ECB to eventually step up the pace of further rate cuts. Not this year, but next year. Why not this year? Because currently, German wage negotiations and increasing selling price expectations still point to some stickiness of inflation. And given that the ECB’s track record of predicting inflation on its way up is rather weak, the ECB will want to be entirely sure before engaging in more aggressive rate cuts." SYLVAIN BROYER, CHIEF EMEA ECONOMIST, S&P GLOBAL RATINGS, LONDON: "As expected, the ECB has implemented a 25-bp rate cut with no additional policy guidance. With wage growth far outpacing productivity and service inflation picking up again, the Governing Council has no reason to accelerate the pace of cutting rates or committing to further rate cuts at this stage." "The upcoming 35-bp reduction in the repo rate is unlikely to have a significant impact. While it may serve as a ceiling for money market rates in the long term, banks currently have little incentive to tap the markets, as their liquidity needs are being fully met by the ECB." MARCHEL ALEXANDROVICH, ECONOMIST, SALTMARSH ECONOMICS, LONDON: "As expected, the ECB cuts interest rates by 25 bps, and more or less, repeats its statement from June by 'not pre-committing to a particular policy path.'" "The new forecasts show a combination of slightly weaker GDP growth and slightly higher underlying inflation." "Overall, we think the ECB is laying the groundwork for further easing in Q4." Sign up here. https://www.reuters.com/markets/rates-bonds/view-ecb-delivers-second-rate-cut-year-2024-09-12/

2024-09-12 12:48

NEW ORLEANS, Sept 12 (Reuters) - Storm Francine barreled across the U.S. South on Thursday, pounding the region with heavy rains and gusty winds while causing widespread power outages for hundreds of thousands of homes and businesses. It had weakened from a Category 2 hurricane to a tropical depression as it moved northeastward over central Mississippi, but still packed winds of 35 miles per hour (55 km per hour) and threatened areas with dangerous storm surges early on Thursday, the National Hurricane Center said in an advisory. It was expected to weaken further and become a post-tropical cyclone later in the day, the center added. In the low-lying, coastal Louisiana city of Houma in Terrebonne Parish, where the storm made landfall on Wednesday evening with winds near 100 mph (160 kph), Christine Bundy, 72, was hooking up a new generator she had just bought. "A Cat. 2 is nothing," she told Reuters by telephone on Thursday. "This house has been through every storm since 1975." It took the deadly hurricane Ida, a Category 4 storm that hit Louisiana in 2021, to earn Bundy's respect and fear. "Ida took our roof off, tore up the fence and everything," she said. "With this one, we're just cleaning up a little." Heavy rains were expected throughout the day in Louisiana, Mississippi, Alabama and the Florida panhandle after many spots were inundated with downpours for hours. In all, some spots could see as much as 12 inches (30 cm) of rain before the storm completely subsides, the National Weather Service said. Government offices, schools and libraries were closed throughout the region as widespread flooding was reported. “Our drainage system just couldn’t keep up,” said Jennifer Van Vrancken, a councilwoman in Jefferson Parish, which encompasses part of the New Orleans metropolitan area. “This will be a flood where people remember getting water inside their homes.” Residents in New Orleans were asked to conserve water on Thursday due to a major failure to its sewage treatment plant. The storm left more than 400,000 homes and businesses without power, and dozens of people had to be rescued from floodwaters across the three-state region. Just to the south of New Orleans in Lafourche Parish, more than two dozen people, including small children, were rescued from rising flood waters on Wednesday evening, the local sheriff's office said online. New Orleans' iconic French Quarter neighborhood, known for its tourist bars and restaurants, was locked down on Wednesday with a noticeable police presence and very few pedestrians. Carnival Cruise Line’s Valor cruise ship was being held at sea as it awaits the reopening of its home port in New Orleans. Louisiana Governor Jeff Landry and President Joe Biden each declared a state of emergency in anticipation of the storm, freeing up emergency management resources and potential financial aid in the event of serious damage. In Metaire, about 8 miles from central New Orleans, Richard Ayla was bagging leaves in his muddy yard where water swelled up from the street and nearly swamped his cars, which he moved up against the house. "We got some water on the side in our kitchen, but I’m not sure if it was from the yard or through the ceiling," said Ayla, a remodeling contractor. "We got some roof damage and leaks.” In Dulac, Louisiana, a coastal fishing community 70 miles (110 km) southwest of New Orleans, fisherman Barry Rogers rode out the storm on his 80-foot-long (24-meter-long) shrimp boat rather than in his home. "It was a lot worse than the weatherman said it was going to be," said Rogers. "It moved pretty good." Sign up here. https://www.reuters.com/world/us/storm-francine-races-into-louisiana-slamming-state-with-rain-wind-2024-09-12/

2024-09-12 12:45

Storm cut 730,000 barrels of oil, 992 million cubic feet of gas Texas energy export ports reopen, Louisiana ports remain closed Grain terminals lack power, shippers await port reopenings HOUSTON/CHICAGO, Sept 12 (Reuters) - U.S. Gulf of Mexico oil producers on Thursday were conducting safety checks and preparing to restart some output after Hurricane Francine disrupted operations, while a Louisiana oil refinery ramped up production and export ports reopened. Francine missed Texas and hit the Louisiana coast on Wednesday with up to 100 mph winds (161 kph), knocking out power to up to 375,000 customers and bringing heavy rains and flooding to the state. Its winds dropped quickly and the storm was over southern Mississippi on Thursday where another 14,000 customers were without power. As drillers began to assess damage, the extent of Francine's impact on energy production emerged with new, higher estimates of lost output from the 169 offshore platforms evacuated. Energy producers reported on Thursday they had shut-in 42%, or 730,000 barrels per day (bpd) of Gulf of Mexico oil production and 53%, or nearly 992 million cubic feet of natural gas, offshore regulator Bureau of Safety and Environmental Enforcement said. Those losses helped boost U.S. crude futures 2.5% to $68.97 per barrel on Thursday and natural gas futures nearly 4% to $2.357 per million British thermal units. The storm likely disrupted about 1.5 million barrels of Gulf of Mexico production, analysts at UBS estimated, and will reduce the region's monthly oil production by 50,000 bpd. Chevron (CVX.N) , opens new tab began conducting aerial inspections of its offshore oil and gas platforms and expects to return evacuated offshore staff and ramp up production after safety checks, a spokesperson said. Exxon Mobil (XOM.N) , opens new tab was increasing production at its 522,500-bpd refinery in Baton Rouge, Louisiana, after cutting its rates to 20% ahead of the storm, sources said. Gas flows to liquefied natural gas (LNG) export plants were on track to fall to 11.7 billion cubic feet per day on Thursday from about 12.7 bcfd on Tuesday and 13.4 bcfd a week ago, data from financial firm LSEG showed. Most of that reduction was due to a sharp drop in flows at Cameron LNG in Louisiana to 0.6 bcfd on Thursday, from 1.9 bcfd on Tuesday. Operator Sempra Infrastructure (SRE.N) , opens new tab did not reply to requests for comment. Louisiana ports including Cameron, Lake Charles, New Orleans, Plaquemines and St. Bernard reopened with restrictions, according to the U.S. Coast Guard. Meanwhile in Texas, the Port of Corpus Christi, the largest oil export port by volume, lifted restrictions, and ports in Freeport, Houston, and as far north as Sabine reopened, the Coast Guard said. Several grain facilities remained without power after Hurricane Francine came ashore, though there was little major damage, the North American Export Grain Association and the National Grain and Feed Association said on Thursday night, citing reports from members. The U.S. Department of Agriculture's Federal Grain Inspection Service, which ensures that crops meet quality standards, will perform official inspection and weighing services when all the export facilities are up and running, the groups said. "As companies clean up after the storm, facilities are eagerly awaiting the U.S. Coast Guard to re-open port traffic to the Mississippi River as soon as it is deemed safe to do so,” the groups said. Sign up here. https://www.reuters.com/markets/commodities/operations-key-texas-ports-restored-storm-francine-moves-inland-2024-09-12/

2024-09-12 12:34

BELO HORIZONTE, Brazil, Sept 12 (Reuters) - Brazilian miner Vale (VALE3.SA) , opens new tab expects that by 2030 some 10% of its iron ore output will come from the reuse of mine waste known as tailings, an executive told Reuters, reducing the amount of potentially dangerous material still stored in dams. In 2024, the mining giant expects to recover about 7 million metric tons of iron ore through its "circular mining" program, Vale's executive vice president of technical affairs, Rafael Bittar, said in an interview on Wednesday. He did not provide specific projections for how much iron ore will be produced from tailings and waste by 2030, but the expected increase in Vale's overall production implies the volume will likely jump in coming years. The firm, one of the world's largest iron ore producers, on Wednesday revised its 2024 outlook upwards and now expects to produce up to 330 million tons this year. From 2030 onwards, it sees annual output of more than 360 million tons. "This program aims to reuse waste that is already in our dams," Bittar said on the sidelines of a mining conference. "This is a reality and it will come very strongly (for the industry), so we anticipated it and designed this program." Vale's initiative to reduce its tailing volumes gained ground after the fatal collapse of two dams in Mariana and Brumadinho in 2015 and 2019, respectively, which jointly killed hundreds and caused severe environmental damages. Part of Vale's tailings are stored in dams. Since the disasters, the firm has been working to eliminate all its upstream dams, which are seen as riskier. Last year alone, Vale generated 48.5 million tons of iron ore tailings. Sign up here. https://www.reuters.com/markets/commodities/vale-sees-10-its-iron-ore-production-coming-tailings-by-2030-2024-09-12/

2024-09-12 12:25

Sept 12 (Reuters) - U.S. chemicals maker Dow (DOW.N) , opens new tab lowered its third-quarter revenue forecast on Thursday due to an unplanned event at one of its plants in Texas. The company's CEO, Jim Fitterling, said a significant unplanned event occurred in late July at one of its ethylene crackers in the Texas plant. Dow is also experiencing higher input costs and margin compression in Europe, he added. The company expects its third-quarter revenue to be approximately $10.6 billion, compared with the prior view of $11.1 billion. Wall Street estimated a revenue of $11 billion for the third quarter. Shares of the company fell 2.9% in premarket trading. Sign up here. https://www.reuters.com/markets/commodities/chemicals-maker-dow-lowers-q3-revenue-forecast-unplanned-event-texas-plant-2024-09-12/

2024-09-12 12:22

FRANKFURT, Sept 12 (Reuters) - The European Central Bank cut its interest rates on Thursday, saying lower inflation and economic growth were allowing it to take its foot off the brake slightly. The second rate cut in three months marks a gradual normalisation in the ECB's policy after the worst bout of inflation in a generation forced it to jack up borrowing costs to record highs last year. "Based on the Governing Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission, it is now appropriate to take another step in moderating the degree of monetary policy restriction," the ECB said. The euro zone's central bank did not explicitly hint at a further rate reduction in October and noted that "domestic inflation remains high". But it added that "labour cost pressures are moderating, and profits are partially buffering the impact of higher wages on inflation". Thursday's cut lowers the rate that the ECB pays on bank deposits from 3.75% to 3.50% - a level the vast majority of economists still consider restrictive, or dampening economic activity. Money markets are pricing in several more cuts of the same size, leaving the deposit rate at 2.0% or 2.25% by June 2025. The rate at which banks can borrow from the ECB at weekly auctions was lowered by a larger increment - from 4.25% to 3.65% - in line with a decision taken earlier this year to diminish the penalty for lenders that use that facility. The rate on daily cash auctions was lowered to 3.90% from 4.50%. ECB President Christine Lagarde will be certain to face questions about the future path for rates at a news conference due to start at 1245 GMT. Sign up here. https://www.reuters.com/markets/rates-bonds/ecb-cuts-rates-growth-inflation-slow-2024-09-12/