2024-08-21 07:19

Gold hit a record high of $2,531.60 on Tuesday Dollar falls to more than seven month low U.S. 10-year yields slip to more than 2-week low Palladium scales more than one-month peak Aug 21 (Reuters) - Gold prices regained lost ground on Wednesday to hover close to their all-time highs after minutes from the U.S. Federal Reserve's last meeting showed officials strongly leaned towards an interest rate cut at their September policy meeting. Spot gold was up 0.1% at $2,516.01 per ounce as of 2:42 p.m. ET (1842 GMT) after hitting a record high of $2,531.60 on Tuesday. U.S. gold futures settled 0.1% lower at $2,547.50. "Gold is closing at the highs after Fed minutes indicated that 'a vast majority' of the committee was prepared to cut rates in September," said Tai Wong, a New York-based independent metals trader. "I am cautiously optimistic because all the market-friendly news is already out there. Gold is likely to grind higher but unlikely to accelerate aggressively without an unforeseen event driver." At the July meeting, "the vast majority" of policymakers "observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting," according to the minutes. Following the Fed minutes, the dollar extended losses to a more than seven-month low, while benchmark U.S. 10-year bond yields fell to a more than two-week low. Market's focus will now turn to Fed Chair Jerome Powell's keynote speech at the Jackson Hole symposium on Friday. Elsewhere, spot silver rose 0.6% to $29.61 per ounce. Platinum gained 2.6% to $970.75 and palladium rose 2.7% to $951.00, its highest level in over a month. "There has been more interest in PGMs as the fundamentals are expected to improve, so prices started to move higher and particularly palladium investors needed to cover their shorts," said Bart Melek, head of commodity strategies at TD Securities. The auto-catalyst metals also got a lift after Ford Motor (F.N) , opens new tab said it was killing a planned three-row electric SUV and pushing back a new electric version of its best-selling pickup, the F-150. Both platinum and palladium are used by automakers in catalytic converters to clean car exhaust fumes. Sign up here. https://www.reuters.com/markets/commodities/gold-holds-below-record-high-investors-await-clarity-fed-cuts-2024-08-21/

2024-08-21 06:47

SANTIAGO, Aug 21 (Reuters) - Chile's SQM (SQMA.SN) , opens new tab, the world's second-largest lithium producer, reported a bigger-than-expected 63.2% slide in its quarterly profit on Wednesday due to weak prices of the battery metal, which it expects will continue for the rest of the year. The miner, which also produces fertilizers and industrial chemicals, posted a second-quarter net profit of $213.6 million, or 75 cents a share, missing analysts' estimates of $296.7 million, or 95 cents a share, according to LSEG data. Its revenue of $1.3 billion in the quarter was in line with expectations, based on LSEG data. SQM produces the white metal in the Atacama salt flat of northern Chile, home to the world's highest lithium concentration in brine, giving it an advantage of low-cost production. But while it posted record-high quarterly sales volume of lithium, its results were dragged down by a significant drop in the metal's prices and CEO Ricardo Ramos said that trend will continue. "We see this pricing trend continuing in the second half of this year, with current lithium price indices in China nearly 20% lower than the average lithium price indices in the second quarter of 2024," he said. A basket of lithium prices tracked by Benchmark Mineral Intelligence shows they have fallen about 70% over the past year because of weaker-than-expected global demand for electric vehicles, due in part to high borrowing costs and global uncertainty. INVESTMENT PLAN Ramos said some lithium producers may reduce output since the low prices made projects economically unviable. But he told an earnings call SQM was maintaining its lithium capex and that it did not consider the current price environment reflective of long-term lithium prices. "We are really clear the price will be different in the future. That's why we have a clear investment plan in lithium," he said. Ramos said in the results report SQM will continue with its expansion plans, although it is reevaluating specific markets and initiatives that may be "less attractive in the near term under these conditions." U.S. rival Albemarle (ALB.N) , opens new tab, which also operates in Atacama, said last month it would cut costs after posting a second-quarter loss. Investors are also closely watching for updates on SQM's timeline to close a deal with Chile's state-run Codelco that will give the state copper giant a majority stake in a joint venture to mine lithium in the Atacama salt flat. The companies have said they are aiming to secure regulatory approvals by mid-2025. A Chilean court is analyzing an argument against the deal, after China's Tianqi Lithium (002466.SZ) , opens new tab, which owns about a fifth of SQM, challenged the financial regulator's decision to allow the joint venture to move forward without a vote by shareholders. Ramos said on Wednesday the company was "very optimistic" about the court's decision, but that there was no new information on the issue. Sign up here. https://www.reuters.com/markets/commodities/chiles-sqm-posts-63-slump-profit-expects-weak-lithium-prices-stay-2024-08-21/

2024-08-21 06:29

Aug 21 (Reuters) - British transport company Mobico (MCG.L) , opens new tab posted on Wednesday a 28.1% jump in its first-half profit, buoyed by passenger growth and higher pricing. Mobico, the owner of National Express, logged an adjusted operating profit of 25.4 million pounds ($33.07 million) for the six-month period ended June 30. ($1 = 0.7680 pounds) Sign up here. https://www.reuters.com/markets/europe/uk-transport-group-mobicos-h1-profit-jumps-28-higher-demand-pricing-2024-08-21/

2024-08-21 06:22

Instant payment option covers 95% of Swiss retail transactions Swiss play catch-up with Europe's more advanced instant payments Instant payments reduce settlement risk, could boost business Swiss remain attached to physical cash payments survey shows ZURICH, Aug 21 (Reuters) - Swiss companies and consumers are now able to make instant electronic payments, catching up with other European financial centres where the ultra-fast transfers are increasingly popular. Instant payments allow credit transfers within 10 seconds of a payment being made rather than waiting for days for the transaction to clear. They have been in use in Europe since 2017 and in the U.S. since last year. In Europe, the use of instant payments has risen from 5.2% of all credit transfers in October 2019 to 17.8% in February this year, according to the European Central Bank. Around 60 financial institutions are able to receive and process instant payments, covering more than 95% of Swiss retail payment transactions, the Swiss National Bank said on Wednesday, having launched its scheme with financial systems provider SIX. In the coming months, further banks will announce similar services, the SNB said, with all financial institutions in Switzerland expected to be on board by the end of 2026. Despite the rise of mobile payment apps, the Swiss remain attached to physical cash, which remains the most accepted method of payment by companies with physical points of sale, according to an SNB survey earlier this year. "This market launch represents a further important milestone and reflects the collective stakeholder commitment to the future of cashless payments in Switzerland," the SNB said. While traditional payments are still possible, the central bank expects instant payments to become established in the medium term, the central bank added. Instant payments reduce settlement risk as the transfer is instantaneous and final, while both parties have an up to date account balance at all times, making planning and budgeting easier. The speeding up of payments could also boost economic development, as companies can more rapidly reinvest the money they receive. Sign up here. https://www.reuters.com/business/finance/swiss-launch-instant-payments-scheme-2024-08-21/

2024-08-21 06:16

Global, US stocks tick up Weak dollar lifts euro above $1.11 for first time this year US jobs revised down, all eyes on Fed's Powell on Friday Oil down, gold holds near record high Aug 21 (Reuters) - Global shares idled on Wednesday after a lengthy rebound propelled them towards recent record highs, and as investors awaited confirmation that the U.S. Federal Reserve would cut interest rates as expected. Fed officials last month were strongly leaning toward an interest-rate cut at their September policy meeting, according to the minutes of the July 30-31 gathering. Fed Chair Jerome Powell is expected to further cement the view that the central bank is about to start loosening credit conditions after taming the worst outbreak of inflation in 40 years when he speaks on Friday at the Fed's Jackson Hole conference in Wyoming. Oil prices dipped, while dollar weakness on the prospect of rate cuts kept gold near Tuesday's record high. On Wall Street, the Dow Jones Industrial Average (.DJI) , opens new tab rose 0.13%, to 40,889, the S&P 500 (.SPX) , opens new tab gained 0.42%, to 5,620 and the Nasdaq Composite (.IXIC) , opens new tab gained 0.57%, to 17,918. The MSCI All Country index for global stocks (.MIWD00000PUS) , opens new tab gained 0.4%, standing near its mid-July record high and up 13.9% for the year. In Europe, the STOXX (.STOXX) , opens new tab index of 600 companies was up about 0.3%, also nearing its all-time high, reached on June 7. Stocks have been on a roller-coaster ride this month after investors took fright following U.S. jobs data that raised the prospect of recession in the world's biggest economy. Those worries have given way to bets on a soft landing cushioned by cuts in U.S. borrowing costs expected to start in September. U.S. employers added far fewer jobs than originally reported in the year through March, the Labor Department said on Wednesday, underscoring the growing concerns the Fed has about the health of the labor market. The labor report "helps underpin the futures market assessment that the Fed will cut rates when it meets on Sept. 18," Quincy Krosby, chief global strategist for LPL Financial, said in an email. Interest-rate futures have fully priced in a 25-basis-point U.S. rate cut next month, with a one-in-three chance of a 50-bp cut. Almost 100 bps of cuts are priced in for this year, and another 100 bps next year. U.S. Treasury yields drifted lower. The yield on benchmark U.S. 10-year notes fell 2.3 basis points to 3.795%, from 3.818% late on Tuesday. The 2-year yield, which typically moves in step with interest-rate expectations, fell 6.9 bp to 3.9305%, from 4% late on Tuesday. A potentially unique situation beckons with material rate cuts without a recession, unlike the backdrop for cutting borrowing costs in five of the past seven cutting cycles, said Ross Yarrow, U.S. equities managing director at investment bank Baird. "If we get a scenario where the Fed is cutting, inflation is falling and employment continues to rise, it really does start to look like a Goldilocks scenario," Yarrow added. "So I think the rebound in equities and their prospects from here are actually pretty good." Markets may still be constrained, said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. "We see markets are range-bound until after the November (U.S.) elections," Samana wrote in an email. STOCKS SLIDE IN ASIA Earlier in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab fell 0.3%. Hong Kong's Hang Seng (.HSI) , opens new tab was down 0.7% with JD.com (9618.HK) , opens new tab dropping 8.7% as top shareholder Walmart (WMT.N) , opens new tab moved to sell its large stake. Japan's Nikkei (.N225) , opens new tab fell 0.3% as a recovery from its collapse in early August runs into resistance around the 38,000 level. The falling dollar has spurred gold to record highs and returned the yen to 145.135 per dollar from last month's 38-year trough. The euro is also up around 3% in August and, at around $1.115, is at its highest since early December. Gold prices hovered around $2,510 an ounce, near record levels touched on Tuesday. Oil prices fell again on Wednesday. U.S. crude lost 1.69% to $71.93 a barrel and Brent fell to $76.05 per barrel, down 1.49%. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1pix-2024-08-21/

2024-08-21 06:12

Kyat currency plunges as conflict deepens Price of imported household essentials skyrocket Junta 'simply printing more kyats', shadow government says Aug 21 (Reuters) - A rapid depreciation of Myanmar's currency is pushing up the prices of essentials, including food and medicine, crippling ordinary households in the Southeast Asian country wrecked by civil war and a crumbling economy. The Myanmar kyat has been extremely volatile in recent days, plunging to a low of 7,500 to the dollar in the black market last week from 5,000 earlier in the month, according to four foreign exchange traders. The plunge followed reports that the Myanmar junta was printing more kyat to prop up the currency, two traders said. "People are frantically buying (Thai) baht and selling kyat," said a money transfer agent in neighbouring Thailand who asked not to be named. "The only ones selling baht are those sending money back to Myanmar from Thailand." The kyat has since recovered to around 6,000 to the dollar in the black market while the central bank's official reference rate was 2,100 on Tuesday, with an online market trading rate of 3,400. But prices of essentials have not come down, six residents said. The kyat's fall, rising transportation costs and disruptions in border trade have sent costs of some medicines and groceries soaring in Myanmar's main cities in recent weeks, they said. All six, who include traders, pharmaceutical officials, a doctor and Myanmar residents, asked not to be named fearing retribution from the junta. "It used to cost about 25,000 kyat ($11.94) per week for our household groceries until about a month ago but now it costs about 40,000 kyat," said a 27-year-old housewife from Naypyitaw, Myanmar's capital. A spokesman for Myanmar's military government did not respond to calls seeking comment. Once seen as a promising frontier market, Myanmar has been torn by violence since the military's 2021 overthrow of an elected government, which triggered an investor exodus, Western sanctions and protests that have grown into a nationwide armed rebellion. The junta has steadily lost control of vast areas of the country of 55 million people, including key trade routes with China and Thailand, and has struggled to manage the economy. Poverty in Myanmar is more widespread than at any time in the last six years and economic growth is likely to remain at a 1% in the current fiscal year, the World Bank said in June. 'NO SYSTEM IN PLACE' At the same time, household incomes have declined - after adjusting for inflation - and unemployment has expanded, the World Bank said in June, underlining growing pressures for large sections of the population. "It's chaotic and 100% caused by the regime's economic policy and decision making," said analyst David Mathieson, referring to the rising inflation and other economic woes. The junta has taken a heavy-handed approach in its attempt to stabilise the currency and the economy. Since June, it has arrested at least 56 people, including gold traders, foreign exchange dealers, and agents selling foreign real estate, to try and stem the kyat's slide. With the currency in falling, the cost of imported products, including essentials like cooking oil that is brought in from Thailand, has jumped in recent weeks, two grocers said. A rise in transportation costs, due to a shortage of imported fuel that led to long queues in several parts of the country last week, has further impacted retail prices, they said. "The price has doubled or tripled, due to transportation costs," said a grocery store owner in Mawlamyine, a city in southern Myanmar, referring to some vegetables. Medicines, including blood glucose strips used by diabetes patients, have become between 10% and 30% more expensive in the last month, two pharma officials and a doctor said. Yet, even at inflated prices, the availability of certain medicines is limited due to the impact of ongoing fighting on border trade, they said. The National Unity Government (NUG), comprising former lawmakers and other junta opponents, said the military has no proper plan to manage the current economic situation. "They have no system in place and are simply printing more kyats, which is fuelling inflation and creating an economic crisis like we've never seen before," said spokesman Kyaw Zaw . ($1 = 2,093.7000 kyat) Sign up here. https://www.reuters.com/markets/asia/myanmar-households-crippled-currency-tumbles-record-low-2024-08-21/