2024-08-28 11:12
Aug 28 (Reuters) - Sterling dipped from two-year highs touched against the dollar but made further ground versus the euro on Wednesday as investors focussed the prospect of diverging monetary policies in the United States and Britain. The pound slipped 0.3% to $1.3218, having climbed to its strongest level since March 22 at $1.3269 on Tuesday. It was also on track for a 3.2% rise in August, its biggest monthly gain since Novemeber 2023. Soft U.S. economic data and Federal Reserve Chair Jerome Powell's comments last week fuelled bets that the U.S. central bank will soon start on a series of interest rate cuts, pushing the dollar lower against a swathe of currencies. The pound also benefited from improving domestic economic data and a cautious tone struck by Bank of England (BoE) Governor Andrew Bailey last week on further rate cuts. The BoE cut its main interest rate by 25 basis points (bps) to 5% in early August, and traders see further rate cuts of 41 bps by the end of the year. The Fed however is seen cutting rates by 103 bps across the three policy meetings that is left this year, market pricing shows. Traders are also debating a possibility of a large 50 bps rate cut next month. Meanwhile, Prime Minister Keir Starmer said on Tuesday it would take a long time to rebuild Britain and rid it of the rot he says took hold under the previous Conservative government, warning "things will get worse before they get better". "The markets seem to be focused on diverging monetary policies but diverging fiscal policies (mild consolidation in the UK vs on-going laxity in the US) will possibly mean less divergence in monetary policy than markets are pricing," said Colin Asher, senior economist at Mizuho. Against the euro, the pound rose for a sixth straight session and traded at a near one-month high. Euro/sterling was last down 0.2% at 84.18 pence per euro. Sign up here. https://www.reuters.com/markets/currencies/sterling-dips-against-dollar-continues-rise-versus-euro-2024-08-28/
2024-08-28 11:09
Aug 28 (Reuters) - The interest rate for the most popular U.S. home loan slid to its lowest in 16 months, after Federal Reserve Chair Jerome Powell signaled the central bank was ready to lower borrowing costs next month to keep the job market from weakening further. The average contract rate on a 30-year fixed-rate mortgage fell 6 basis points in the week ended Aug. 23, to 6.44%, the Mortgage Bankers Association said on Wednesday. That was the lowest since April 2023. The decline in mortgage rates, by 38 basis points in four weeks, has kept refinancing applications elevated, as homeowners who bought when rates were even higher moved to lock in lower monthly payments. The MBA 30-year average rate topped out at 7.9% last October. Mortgage applications and purchase applications edged up just 0.5% and 1% respectively, as would-be homebuyers hold out for a further drop in rates. Interest-rate futures reflect bets the Fed will cut short-term rates by a full percentage point by the end of this year. Rising borrowing costs and a limited number of new and existing homes offered for sale have helped make home ownership increasingly out of reach for many. Democratic presidential nominee Kamala Harris and her Republican rival Donald Trump have made housing affordability integral to their pitch to voters in the November presidential election, with both promising to reduce costs for Americans in different ways. Sign up here. https://www.reuters.com/markets/us/us-30-year-mortgage-rate-falls-lowest-since-april-2023-2024-08-28/
2024-08-28 10:55
Company is working with partner Ithaca to develop Rosebank field Labour has said it will hike windfall tax by 3 percentage points STAVANGER, Norway, Aug 28 (Reuters) - Norway's Equinor (EQNR.OL) , opens new tab may reconsider investing in oil and gas in Britain if the Labour government changes the industry's tax regime, a top company executive told Reuters. Equinor's head of international operations said it may not be as attractive to invest in the British oil and gas sector if taxation of oil companies changes, as is expected. "We need to look at our appetite to invest further in the UK based on the fiscal regime ... it could be that the economics are really, really hard impacted," Philippe Francois Mathieu said in an interview on the sidelines of an energy conference. "And in that case, we need to look into what we want to do further with the Rosebank project," he added, referring to the huge oilfield off the Shetland islands which it is developing with Ithaca Energy (ITH.L) , opens new tab. The companies have decided to invest $3.8 billion in the first phase of the project - the largest oil project offshore Britain in recent years - with an eye on a second phase of development, with more investments after that. Asked what were the implications for Rosebank, Mathieu said: "As of today, we are continuing Rosebank. "What we need to understand before we communicate, or even to strategise, and decide internally what the future for us in the UK looks like, is to understand the fiscal regime by the new Labour government," he said. "That's going to determine what appetite to invest more in the UK we have." Labour, which won elections in July, said in its election manifesto it would halt new oil and gas exploration licences and hike by 3 percentage points a windfall tax first imposed on oil companies in 2022, after energy prices spiked following Russia's invasion of Ukraine. The current 35% windfall tax, which will run until 2029, brings the total tax burden on producers to 75%, among the highest in the world. The government of Prime Minister Keir Starmer will present its first budget in October. Aside from Rosebank, the Norwegian state-controlled company also operates the Mariner field in the North Sea, which produces some 25,000-30,000 barrels per day. Equinor has an 80% stake in Rosebank and operates the field. It has already suspended efforts to sell a stake in the field to an external partner, sources told Reuters in June. Sign up here. https://www.reuters.com/business/energy/equinor-may-reconsider-investing-uk-oil-sector-if-tax-regimes-changes-2024-08-28/
2024-08-28 10:49
MOSCOW, Aug 28 (Reuters) - European consumers will face higher prices unless Kyiv agrees to extend a deal on Russian gas transit via Ukraine once it expires on Dec. 31, the Kremlin said on Wednesday. Ukraine has repeatedly said it has no plans for a new gas transit deal with Russia amid the ongoing military conflict. Kremlin spokesman Dmitry Peskov told reporters on a daily conference call that if Kyiv did not extend the deal, Russia could find alternative routes, such as the planned Turkish gas hub. "There are (other) routes, but, of course, such decisions by the Ukrainian side will cause serious damage to the interests of European consumers, those who still want to buy more guaranteed, more affordable... Russian gas," Peskov said. He also said that Europe will have to pay more for gas from other sellers, including liquefied natural gas supplied by the United States. Most recipients of Russian gas via Ukraine have said they have been preparing for flows to cease at the end of this year when the transit deal between Ukraine and Russia expires, given that Ukraine has said it does not want to renew it. Another option is for Gazprom to supply some of the gas via another route, for example via TurkStream, Bulgaria, Serbia or Hungary. However, capacity via these routes is limited. The EU and Ukraine have also asked Azerbaijan to facilitate discussions with Russia regarding the gas transit deal. Sign up here. https://www.reuters.com/world/europe/kremlin-says-europe-will-pay-more-unless-ukraine-extends-gas-transit-deal-2024-08-28/
2024-08-28 10:46
BENGHAZI, Libya, Aug 28 (Reuters) - Libya's oilfield closures spread on Wednesday as the Sarir field almost completely halted output, two field engineers told Reuters, amid a political dispute over control of the central bank and oil revenue. Authorities in the east, where most of Libya's oilfields lie, declared on Monday that all production and exports would be halted. Sarir was producing about 209,000 barrels per day (bpd) before output was reduced, the engineers said. Force majeure had already been announced on exports at the 300,000 bpd Sharara oilfield and this week Reuters has reported disruptions at El Feel, Amal, Nafoora and Abu Attifel. In July, Libya, an OPEC member, was producing about 1.18 million barrels of oil per day. The move to shut off Libya's main source of revenue comes in response to the Tripoli-based Presidency Council sacking Central Bank of Libya (CBL) chief Sadiq al-Kabir, prompting rival armed factions to mobilise. Prime Minister Abdulhamid al-Dbeibah, installed through a U.N.-backed process in 2021 and head of the Tripoli-based Government of National Unity, said this week that oilfields should not be allowed to be shut "under flimsy pretexts". On Tuesday, U.S. Africa Command General Michael Langley and Chargé d'Affaires Jeremy Berndt met Khalifa Haftar, the head of a force called the Libyan National Army that controls the country's east and south. "The United States urges all Libyan stakeholders to engage constructively in dialogue," with support from the United Nations Support Mission in Libya and the international community, the U.S. Embassy in Libya said on social media platform X. Benchmark Brent oil prices were down 1.2% to $78.35 per barrel as of 1039 GMT as concerns about Chinese demand and risks of a broader economic slowdown offset concerns about potential supply losses from Libya and elsewhere. Sign up here. https://www.reuters.com/world/africa/libyas-oilfield-closures-spread-standoff-over-central-bank-2024-08-28/
2024-08-28 10:12
MUMBAI, Aug 28 (Reuters) - The Indian rupee weakened slightly on Wednesday, tracking a dip in most Asian currencies, but managed to hold above its all-time low, supported by mild dollar sales from state-run banks. The rupee closed at 83.9525 against the U.S. dollar, a tad lower than its close at 83.9250 in the previous session. While the currency touched an intraday low of 83.9675, it managed to hold above its all-time low, underpinned by "intermittent offers (on USD/INR)" by state-run banks, a senior trader at a foreign bank said. Routine interventions by the Reserve Bank of India (RBI) this month have ensured that the rupee does not fall to 84, a psychological support level for the currency, traders said. Wedged between strong dollar demand from importers and tepid portfolio flows, on one hand, and the RBI's interventions on the other, the rupee has hovered between 83.65 and its record low of 83.9725 so far in August. Overseas investors have sold $1.3 billion of local stocks on a net basis this month, compared with nearly $7 billion of inflows over the previous two months. "The rupee has followed a consistent pattern in recent sessions - opening strong only to lose ground as dollar buying picks up," Amit Pabari, managing director at FX advisory firm CR Forex, said. The dollar index was up 0.2% at 100.8 on Wednesday, while most Asian currencies slipped, led by the Korean won, which declined 0.3%. Traders expect the rupee to find mild relief later this week, supported by up to $3 billion of inflows related to changes in the MSCI index, which tracks emerging markets equities. U.S. personal consumption expenditure (PCE) inflation data on Friday is a closely watched global cue this week as it may help investors gauge whether the Federal Reserve is likely to deliver a 25 or 50 basis point rate cut at its September meeting. Sign up here. https://www.reuters.com/markets/currencies/rupee-holds-above-record-low-supported-by-state-run-banks-dollar-sales-2024-08-28/
