2024-08-28 04:41

A look at the day ahead in European and global markets from Tom Westbrook Nvidia (NVDA.O) , opens new tab is holding the investment world in thrall ahead of an earnings report later today that, even if it delivers the expected doubling of second-quarter revenue, may not satisfy investors accustomed to market-moving outperformance. The chipmaker's market value was around $390 billion on the eve of the launch of artificial intelligence (AI) chatbot, ChatGPT, less than two years ago. Now it is nearly $3.2 trillion, and in June it swaggered, briefly, to a turn as the most valuable company on earth, powered by chips that provide the hardware behind the AI computing boom. Sheer size and its position as an industry bellwether mean its earnings, due after the U.S. close on Wednesday, can move the entire market. Trade in Asia was light and moves modest ahead of the release, and European equity futures were flat. Europe's data and reporting calendar is mostly bare, with Eurozone broad money growth seen rising to 2.7%, while markets are focused on Nvidia's results ahead of European and U.S. inflation measures due later in the week. Options prices show traders have braced for a near 10% swing in Nvidia's shares when they trade on Thursday, translating in dollar terms to more than $300 billion in market value - likely the largest ever market move on an earnings report. That would dwarf the market capitalisation of 95% of S&P 500 constituents, according to LSEG data, and probably send shockwaves through the global semiconductor sector. Elsewhere, sterling sat near a 2-1/2 year high on Wednesday as one of the biggest beneficiaries of a slide in the dollar. Traders anticipate about 100 basis points of U.S. interest rate cuts this year against only 40 bps in Britain. As the markets await Nvidia's turn at centre stage, fans of Oasis, which signed its first record deal in 1993 just a few weeks after Nvidia's founding, can join the scramble for Mancunian hotel rooms after the announcement of planned Oasis reunion shows next year. Key developments that could influence markets on Wednesday: Earnings: Nvidia Economics: Eurozone M3 growth, French unemployment Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-08-28/

2024-08-28 02:54

MUMBAI, Aug 28 (Reuters) - The Indian rupee is expected to open marginally lower on Wednesday, in the wake of a decline in other Asian currencies, and is likely to hold a narrow range amid the central bank's intervention. The one-month non-deliverable forward indicated that the rupee will be a tad lower than its close of 83.9250 to the U.S. dollar in the previous session. The rupee has been directionless amid depressed volatility. Most market participants reckon its breakout from the current narrow range, when it happens, will be to the downside. The seemingly persistent demand from importers, lacklustre portfolio flows and the rupee's propensity to underperform when the dollar struggles are fuelling the bearish outlook. "The sense is that we will get to 84 and that, in most likelihood, should mean a new leg higher (for dollar/rupee)," a currency trader at a bank said. "Obviously if the Reserve Bank of India doggedly continues to defend 84, then there is not much anybody can do." The RBI's repeated intervention near 83.94-83.97 has helped the rupee stay on the right side of the 84 level. FED RATE CUTS Asian currencies were down on the day and the dollar index was just shy of the year-to-date low, with the focus squarely on the U.S. interest rate outlook. After Federal Reserve Chair Jerome Powell hinted at a September rate cut, investors are looking to gauge the size of the cut and the extent of the easing cycle. The U.S. core PCE data due Friday and other data points that indicate the health of the labour market hold the key to what will happen at the Fed's next meeting. The dollar and forex markets seem to be looking for the next catalyst, whether it be the Fed or global growth expectations, MUFG Bank said in a note. KEY INDICATORS: ** One-month non-deliverable rupee forward at 84.02; onshore one-month forward premium at 7 paisa ** Dollar index at 100.66 ** Brent crude futures at $79.6 per barrel ** Ten-year U.S. note yield at 3.83% ** As per NSDL data, foreign investors bought a net $115.6 million worth of Indian shares on Aug. 26 ** NSDL data shows foreign investors bought a net $244.1 million worth of Indian bonds on Aug. 26 Sign up here. https://www.reuters.com/markets/currencies/rupee-may-weaken-slightly-tracking-peers-rbi-fed-view-key-2024-08-28/

2024-08-27 23:05

RIO DE JANEIRO, Aug 27 (Reuters) - Brazilian miner Vale's (VALE3.SA) , opens new tab decision this week to announce a new chief executive sought to avoid further market speculation over other potential candidates, the company's chairman told Reuters on Tuesday. Vale said on Monday that Chief Financial Officer Gustavo Pimenta would take the reins of the company as its next CEO, wrapping up a turbulent succession process months ahead of the company's own deadline. Shares of Vale gained 3% on Tuesday, as many analysts welcomed the leadership shakeup. Brazil's top miner, privatized more than a quarter of a century ago, is a major producer of iron ore, pellets and nickel in addition to running mines that tap manganese, cobalt, copper, gold and silver. Vale disclosed this year a leadership succession schedule calling for three finalists for the top job to be approved by its board by late September, and then a final pick unveiled by early December in time for a key investor event. "After many discussions regarding the succession process, the board had met, understanding that the earlier the choice was made, in a responsible manner, the better it would be," Chairman Daniel Stieler said in an interview at Vale's Rio de Janeiro headquarters. Revealing the pick of Pimenta in August removed "some of the noise of candidate names that had been surging all the time," but were never evaluated by the board, Stieler said. Pimenta, the chief financial officer since 2021, should start his new role later this year, Stieler said without providing a specific date. The chairman noted the unanimous board decision to pick Pimenta, following previous divisions over whether to renew current CEO Eduardo Bartolomeo's contract. The company also lost two independent board members earlier this year, with one arguing the succession process had been "manipulated." President Luiz Inacio Lula da Silva and other government officials have often criticized the firm's strategy, especially concerning ongoing repairs related to two deadly tailings dam collapses over the past decade. Stieler stressed that government officials "really welcomed" the CEO choice, adding that Pimenta's communication skills will help better convey the company's value to Brazil. Sign up here. https://www.reuters.com/markets/commodities/miner-vales-chairman-says-board-prioritized-ceo-choice-avoid-market-noises-2024-08-27/

2024-08-27 22:59

SINGAPORE, Aug 27 (Reuters) - CNPC, Asia's top oil producer, is reviewing its global strategy as it looks to revive dealmaking, eyeing gas liquefaction and deepsea drilling as well as building on its record of producing more from aging wells, the head of its research arm said. China National Petroleum Corp (CNPC) and its listed arm PetroChina face stagnant oil output at home and a scarcity of new projects globally to boost reserves even as slowing economic growth and surging EV usage erode domestic demand, although mounting geopolitical barriers limit its room to manoeuvre. CNPC may rekindle investing in large oil and gas assets as an operator, as it did two decades ago with its $4 billion purchase of Canada's PetroKazakhstan and its takeover of Devon Energy's operations in Indonesia, said Lu Ruquan, who is director of CNPC's Economics and Technology Research Institute (ETRI) and is involved in strategy discussions. The shift in strategy for Asia's biggest oil producer would be a return to the more acquisitive 1990s and 2000s when it moved into Sudan and Chad and carried out the Kazakh and Indonesian deals. Lu likened the company's three decades of overseas investment to "a vessel sailing to midstream", as he described the need for CNPC to embark on more global acquisitions. "One needs to paddle harder, or else it will retreat backward," said Lu, the former head of strategy and development at the group's acquisition arm CNPC International before moving to ETRI, offering a rare glimpse into the strategic thinking of one of China's most powerful state enterprises. CNPC has the firepower to make an impact on the oil and gas deals landscape, with PetroChina alone holding $37.5 billion in cash equivalents in 2023. CNPC may try to expand on its liquefied natural gas (LNG) investments in Qatar, Lu said, following on from last year's deal that chains a small stake in QatarEnergy's massive gas liquefaction plants with a multi-year offtake agreement. CNPC will also scout for opportunities in South American deep sea acreage adjacent to fields in Guyana where China's CNOOC Ltd (0883.HK) , opens new tab, part of an Exxon Mobil-led consortium, struck massive new discoveries, he said. PetroChina produces more than Exxon Mobil but its share of output from global operations shrank to 11% last year, according to company data, from a peak of nearly 14% in 2019. Chinese companies limited their global acquisitions after the 2014/15 oil price collapse. Lu cautioned that given sanctions constraints in key hydrocarbon-rich targets such as Venezuela, Iran and Russia, more practical options include extending existing contracts such as those in Kazakhstan and Indonesia, which are nearing expiration. "PetroChina's biggest strength is to extract more oil out of aging fields," he said, a capability developed over decades at the vast and still-productive Daqing field in northeast China. Analysts at Wood Mackenzie predict a revival in international acquisitions by national oil companies (NOCs) after last year's two-decade low as the industry refocuses on oil and gas amid a slowdown in energy transition activity. "International business development remains a major priority for China's largest NOCs, but they have adopted a cautious approach to deal-making in recent years," Woodmac said. CNPC may be facing the highest geopolitical hurdles since it first ventured overseas in 1993, said Lu. Chinese companies have refrained from new investments in Russia as other global firms exited following Russia's war with Ukraine, although China is one of Russia's biggest oil clients and a fast growing buyer of natural gas. Strained relations with the United States have hindered opportunities there, where $250 billion in deals were made during last year's industry consolidation. CNPC and PetroChina do not own any U.S. producing assets and PetroChina delisted from the New York Stock Exchange in 2022 because of auditing scrutiny. Lu also cautioned its alliances combining CNPC's construction and engineering expertise with oil majors' commercial and legal acumen, such as at Kashagan in Kazakhstan with Chevron, have limits as a business model. "It's challenging to safeguard your interest and access sufficient operational information as a small investor. We would need strong commercial and legal skills which happen to be our weak links," he said. Sign up here. https://www.reuters.com/markets/commodities/once-acquisitive-chinese-oil-giant-looks-revive-global-dealmaking-2024-08-27/

2024-08-27 22:29

Aug 27 (Reuters) - Bitcoin fell 6.4% to $58,777 at 2218 GMT on Tuesday. Bitcoin, the world's biggest and best-known cryptocurrency, is down 20.3% from the year's high of $73,794 on March 14. Sign up here. https://www.reuters.com/technology/bitcoin-falls-64-58777-2024-08-27/

2024-08-27 22:01

Aug 28 (Reuters) - A look at the day ahead in Asian markets. The mood across Asian markets on Wednesday is likely to be one of caution, for two main reasons that should keep markets in relatively narrow ranges - lingering concern over the health of the U.S. economy, and Nvidia's earnings later in the day. U.S. and world stocks climbed higher on Tuesday but only slightly, while the dollar dipped again and Treasury yields were little-changed across the curve. None of that offers investors in Asia much to run with on Wednesday. Given the lack of obvious global catalysts, regional events may take on added weight on Wednesday. Bank of Japan Deputy Governor Ryozo Himino is scheduled to speak. This follows BOJ Governor Kazuo Ueda's first public remarks last week since the central bank's 'hawkish hike' in July. Ueda's tone on Friday was also hawkish, indicating that current rates are still well below 'neutral'. This strengthens the case for further tightening this year beyond the mere 7 basis points of hikes rates markets are currently discounting. The main economic indicator across the Asia/Pacific region on Wednesday will be Australian inflation. Economists polled by Reuters expect annual weighted consumer price inflation to have slowed to 3.4% in July from 3.8% in June. That would be the lowest since February and closer to getting inflation back in the central bank's 2%-3% target range for the first time since 2021. The Reserve Bank of Australia has held its cash rate at 4.35% since November last year, and last cut rates nearly five years ago. The Aussie swaps market shows no rate cut is fully priced until December, with 100 bps of easing in total expected by the end of next year. Thailand's deputy finance minister Julapun Amornvivat and central bank governor Sethaput Suthiwartnarueput, meanwhile, both speak at a business seminar on Wednesday. This comes amid continued friction between the government and central bank over the path for interest rates. The Bank of Thailand last week left rates on hold at 2.50% for a fifth meeting. But newly-sworn in Prime Minister Paetongtarn Shinawatra has called central bank independence an "obstacle" to economic growth, and her predecessor repeatedly called for rates to be cut. Despite being an extremely low-yielding currency, the Thai baht has rallied strongly in recent weeks, perhaps because of the central bank's refusal to cut rates just yet. It is now the only one of seven key Asian currencies to be up against the U.S. dollar so far this year. Indeed, if there is one discernible global driver for investors in Asia on Wednesday it is the U.S. dollar's persistent weakness, as the currency slipped to a fresh low for the year against a basket of major currencies. Here are key developments that could provide more direction to Asian markets on Wednesday: - Australia inflation (July) - BOJ Deputy Governor Ryozo Himino speaks - Bank of Thailand Governor Suthiwartnarueput speaks Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-08-27/