2024-08-30 13:40

Aug 30 (Reuters) - U.S. bond funds racked up solid inflows in the week to Aug. 28 thanks to a robust purchase in government bond funds, driven by bets of a Federal Reserve interest rate cut in September and investor caution over geopolitical tensions in the Middle East. According to LSEG data, U.S. bond funds witnessed a net $9.58 billion worth of purchases during the week, the largest inflow for a week since July 17. Traders have fully priced in a cut in September, with a 67% chance of a 25 basis point reduction and a 33% chance of a bigger 50 bp easing, the CME Fed Watch tool , opens new tab showed. Investors channelled a hefty $5.42 billion into U.S. government bond funds, booking their largest weekly net purchase since Oct. 2023. They scooped up U.S. short/intermediate government and Treasury funds of $4.84 billion in their largest weekly net purchase since March 2023. U.S. short/intermediate investment-grade funds had $1.89 billion worth of inflows. At the same time, money market funds secured a fourth weekly inflow in a row, to the tune of about $10.62 billion. Simultaneously, U.S. equity funds observed a net $2.83 billion worth of sales during the week following net purchases of $6.58 billion in the previous week. Investors pulled $1.35 billion out of large-cap funds in a partial redemption of $5.33 billion worth of net purchases in the prior week. Mid-cap and multi-cap funds also lost $798 million and $168 million, respectively, in outflows. Small-cap funds still gained a second weekly inflow, which amounted to $1.03 billion on a net basis. By sector, investors shed consumer staples, healthcare and utilities sector funds of a notable $528 million, $337 million and $208 million, respectively. The financials sector, meanwhile, gained a third weekly inflow, worth about $783 million. Sign up here. https://www.reuters.com/markets/us/us-bond-funds-see-sharp-inflows-amid-bets-rate-cut-2024-08-30/

2024-08-30 12:46

Aug 30 (Reuters) - India's economy grew by 6.7% in the April-June quarter from a year earlier, compared with 7.8% growth in the previous quarter, government data showed on Friday. A Reuters poll had predicted a 6.9% expansion in India's gross domestic product for the quarter ending June 30. COMMENTARY SWATI ARORA, ECONOMIST, HDFC BANK, MUMBAI "Slowdown in GDP emerged as expected. On the positive side, upbeat private consumption expenditure reflects recovery in rural demand as gauged by high frequency indicators of two wheelers and tractor sales, and FMCG sales data." "For the coming quarters, we expect GDP growth to range between 6.5% and 7.0%." TERESA JOHN, LEAD ECONOMIST, NIRMAL BANG, MUMBAI "Growth is seeing some cyclical moderation, but both GVA (Gross Value Added) and GDP growth were better than our expectation." "Growth is now only marginally below the long-term trend. If this trend sustains for one more quarter, we see downside risks to the RBI's estimate of 7.2% GDP growth." GARIMA KAPOOR, ECONOMIST, INSTITUTIONAL EQUITIES, ELARA SECURITIES, MUMBAI "The disruption due to elections and heat wave led to moderation in services growth." "The risk of government spending undershooting the Budget estimates this year, amid rural urban divide in consumption demand, will weigh on full-year GDP estimate." UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI "While the Q1 FY25 GDP growth has come in softer than expectations, the GVA (Gross Value Added) has remained firm, with non-farm growth holding up well." "We retain our GDP growth expectations of 6.9% in FY 2025, aided largely by rural demand and government spending, while closely watching the likely fatigue in urban demand, private capex and the pace of global slowdown." Sign up here. https://www.reuters.com/world/india/view-indias-economy-grows-67-yy-april-june-quarter-2024-08-30/

2024-08-30 12:37

Steel division loses CEO, chairman as crisis intensifies Workers request extraordinary supervisory board meeting Government says no plans to take stake in Thyssenkrupp FRANKFURT/DUESSELDORF, Aug 30 (Reuters) - Thyssenkrupp's (TKAG.DE) , opens new tab planned sale of its steel business is at risk over uncertainty following a leadership crisis at the unit, the head of the German conglomerate's works council said on Friday. The unit, a storied name in industry and a symbol of Germany's economic rise, has been hit by a combination of weak demand, cheaper Asian products and pressure to decarbonise that have knocked its competitiveness. "Uncertainty among the workforce is at a maximum. Fears about the future of employees and that of the company can be felt everywhere," said Tekin Nasikkol, who also sits on Thyssenkrupp's 20-seat supervisory board. His comments come after Thyssenkrupp Steel Europe (TKSE) said late on Thursday its chairman, chief executive and five other supervisory and management board members would leave, reflecting a deepening dispute over the steel unit's future. Thyssenkrupp shares were flat at 1232 GMT after falling as much as 1.8% earlier. The Alfried Krupp von Bohlen und Halbach foundation, Thyssenkrupp's top shareholder with a 21% stake, also declined to comment. At the core of the clash lies the question over how deep job and capacity cuts at TKSE should be, and how much money the business needs ahead of a partial sale to Czech billionaire Daniel Kretinsky. "Of course, one could argue that now, tough decisions are more likely," said Christian Obst of brokerage Baader Bank, adding that eroded trust in management could also be a risk. Kretinsky's energy holding EPH declined to comment. 'CLEAR MESSAGE' A business plan presented earlier month, and rubber-stamped by consultancies Roland Berger and McKinsey, did not go far enough for Thyssenkrupp CEO Miguel Lopez, who is tasked to finally get a sale of TKSE done after numerous failed attempts. "Mr. Lopez will now implement this strategy all the more swiftly and consistently. That is the clear message of yesterday's development," said Marc Tuengler of DSW, a lobby group that represents Thyssenkrupp's private shareholders. Works council head Nasikkol said the government should now get involved to help solve the dispute that has engulfed Germany's largest steelmaker and its roughly 27,000 employees. Economy Minister Robert Habeck said in a statement all stakeholders needed to ensure the company returns to calmer waters and set aside their differences. A government spokesperson said there were no plans currently for the state to become a shareholder in Thyssenkrupp, something unions have called for in the past to support the struggling business. Kretinsky recently bought a 20% stake in TKSE and there are concerns over what the current crisis means for ongoing talks for him to buy a further 30% from Thyssenkrupp, according to people familiar with the matter. "It can be assumed that the talks with Mr Kretinsky regarding a 50:50 joint venture are now really picking up speed," DSW's Tuengler said. Labour representatives on Thyssenkrupp's supervisory board have requested an extraordinary board meeting to discuss the current crisis, a spokesperson for the IG Metall union said. ($1 = 0.9020 euros) Sign up here. https://www.reuters.com/markets/commodities/thyssenkrupp-works-council-says-steel-leadership-crisis-puts-sale-risk-2024-08-30/

2024-08-30 11:53

Salvage operation of MV Sounion to start in coming days Efforts made to speed up process due to environmental concerns EU ASPIDES ships to protect and escort the vessel ATHENS, Aug 30 (Reuters) - A salvage operation to recover a Greek registered oil tanker stranded in the Red Sea after an attack by Houthi militants is expected to start in the coming days, two sources with knowledge of the matter said on Friday. What was decided yesterday is an initial gameplan, of the operation starting in 48 hours," one of the sources said. A second source said the operation was likely to be complex, since Houthis had rigged the vessel with explosives. At stake is the safe removal of a tanker laden with about 1 million barrels of crude that if spilled could cause an environmental catastrophe in an area that is particularly dangerous to access. Efforts are being made to speed up the process, sources said. Yemen's Houthi militants carried out multiple assaults, including planting bombs on the already disabled 900-foot (274.2-metre) Sounion. On Wednesday, the Iran-aligned militants said they would allow salvage crews to tow the ship - which has been on fire since Aug. 23 - to safety. The sources said the priority of the operation - whether to tow the vessel to a port or arrange a transfer of its cargo - depended on an inspection of the vessel. "It is not an easy task, transferring the oil cargo to another ship, when there are explosives on it ," said one of the sources. "In any case, (EU monitoring mission) ASPIDES ships will protect and escort the vessel to a safe port." Greece has also been in touch with Saudi Arabia, a key player in the region, to ask for assistance. "Delta Tankers is doing everything it can to move the vessel (and cargo). For security reasons, we are not in a position to comment further," a spokesperson for the Athens-based tanker operator said. There had been conflicting accounts earlier in the week over whether the Sounion had started leaking its cargo. The EU's ASPIDES team insisted it had not, while the U.S. later rowed back on initial comments to say some of the spillage was not from the cargo, but from the vessel itself and where it had been hit. If a spill occurs, it has the potential to be among the largest from a ship in recorded history. "Houthis have agreed to allow its towing because at the end of the day any environmental disaster would affect their region," said a shipping industry source. Sign up here. https://www.reuters.com/world/middle-east/salvage-stricken-oil-tanker-red-sea-expected-coming-days-say-sources-2024-08-30/

2024-08-30 11:46

Gold posts a 2% monthly gain Palladium up over 4% in August Asia physical demand remains lacklustre Aug 30 (Reuters) - Gold slipped 1% on Friday as the dollar and Treasury yields firmed after U.S. inflation data matched expectations, but the bullion is set for a monthly gain as a September interest rate cut by the Federal Reserve remains in play. Spot gold fell 0.9% to $2,497.53 per ounce as of 01:42 p.m. ET (1742 GMT) and U.S. gold futures settled 1.3% lower at $2,527.6. Bullion gained 2% this month after prices rallied to an all-time high of $2,531.60 on Aug. 20. Data earlier in the day from the Commerce Department showed the personal consumption expenditures (PCE) price index rose 0.2% last month, matching economists' forecasts. The PCE data confirms inflation is no longer the Fed's main concern, as they have shifted their focus to unemployment, which further validates the potential rate cuts in September, said Alex Ebkarian, chief operating officer at Allegiance Gold. Investors now look ahead to the U.S. non-farm payroll report due next week. "Next week will solidify whether or not we have a 50- or 25-basis-point interest rate cut at the September meeting," said Phillip Streible, chief market strategist at Blue Line Futures. Traders slightly raised bets of a 25-basis-point rate reduction by the Fed next month to 69%, with a 50-bps cut possibility coming down to 31% following the inflation report, according to the CME FedWatch tool , opens new tab. Physical demand remained lacklustre is top Asian consumers as new import quotas failed to lift Chinese demand. "Systematic trend followers are effectively max-long. We also think that Shanghai positioning is near its record highs. That is despite the fact that physical demand in China has been fairly weak and inflows from Chinese gold ETFs as well," said Daniel Ghali, commodity strategist at TD Securities. Downside risks are significantly more elevated in the near term, given the fact that positioning looks extremely stretched, Ghali said. Spot silver eased 2.2% to $28.78 per ounce and platinum fell 1.2% to $926.65. Both the metals registered monthly losses. Palladium retreated 1.7% to $963.34, but posted a 4.3% monthly gain. Sign up here. https://www.reuters.com/markets/commodities/gold-prices-set-second-monthly-gain-us-inflation-data-focus-2024-08-30/

2024-08-30 11:40

Power outages hit Caracas, Venezuelan states Blackout disrupted major oil terminal Government blames opposition without providing evidence CARACAS/BARQUISIMETO, Venezuela, Aug 30 (Reuters) - Power had returned to some parts of Venezuela on Friday evening after capital Caracas and much of the rest of the country were plunged into a blackout that the government blamed on sabotage by the opposition, without providing evidence. President Nicolas Maduro, who is locked in a dispute with the opposition over the outcome of a July 28 presidential election, has often held his political rivals responsible for what he says are "attacks" on the power grid, accusations the opposition has always denied. The blackout was the result of an attack on the Guri Reservoir, Venezuela's largest hydroelectric project, Maduro said on state television on Friday evening, as he blamed the opposition and what he said were fascists in the United States. Maduro offered no evidence for his claims, but said the attack had been focused on transmission lines. A rapid investigation was taking place, he added. "I won't say more because it is being investigated," Maduro said, adding that it was an attack of significant magnitude. Authorities had prevented an attack on election day and another planned for Friday night, Maduro added. Venezuela last suffered national blackouts in 2019, with some lasting as long as three days. Authorities also attributed those power outages to attacks on the network and on Guri by saboteurs and opponents of Maduro's government. "We are normalizing, regularizing, step-by-step... We are better prepared and in better conditions than in 2019," Maduro said. All 24 of the country's states reported a total or partial loss of electricity supply, Freddy Nanez, the minister of communication and information, said on state television early on Friday morning, blaming "sabotage". By about 1pm local time (1600 GMT), power had returned to some parts of western city Maracaibo, central city Valencia, eastern city Puerto Ordaz and capital Caracas, according to Reuters witnesses. In other places power was intermittent or remained off. The blackout hit some operations of state oil company PDVSA, including its largest terminal, Jose, where vessel loading and discharging was interrupted by the outage, according to sources and a shipping document seen by Reuters. A key oil upgrader that produces exportable crude, Petropiar, was also affected. About 70% of Venezuela's oil exports are handled through Jose, which does not have its own power system. Most of U.S. firm Chevron's (CVX.N) , opens new tab Venezuelan crude exports go out from Petropiar. PDVSA's largest refining complex Paraguana was unaffected, as its own power plant was in service, the sources said, and the impact was minimal in Orinoco Belt as many operations have their own generators. QUICK REACTION In the western city of Barquisimeto, residents stocked up on gasoline and food in the afternoon. Lawyer Alexa Rivas, 29, avoided what she said were five kilometer (three mile)-long lines at urban gas stations by driving to a service station outside the city. "I can't be without gasoline, I have a 3-year-old boy and my mom is 70, I need to have reserves for any emergency," she said. "We've lived through two national blackouts, it makes us very nervous." Critics have long blamed power cuts on deteriorating infrastructure amid the country's fiscal woes. Senior opposition figure Juan Pablo Guanipa scoffed at the sabotage accusations on Friday. "This narrative isn't believed by even the most radical Chavistas," Guanipa said on X, referring to loyalists of the ruling socialists. Venezuela's government and opposition both say their candidate won last month's election, with the electoral authority and Supreme Court backing Maduro. Authorities have not released full vote tallies despite international calls to do so. Arrests of opposition figures have risen sharply over the last week. The opposition's former presidential candidate Edmundo Gonzalez and opposition leader Maria Corina Machado are being investigated for incitement and other crimes by Attorney General Tarek Saab. Gonzalez has ignored two summons to testify about a website where the opposition has posted what it says is more than 80% of ballot box vote tallies, which show a resounding win for him. Gonzalez was cited for a third time on Friday but did not apparently testify. Asked what would happen next in the case, Saab said in a text message: "We'll see." Sign up here. https://www.reuters.com/business/energy/venezuelas-capital-caracas-other-regions-face-power-outage-2024-08-30/