2024-08-19 11:19

MOSCOW, Aug 19 (Reuters) - Russia has complained to Germany over its investigation into the 2022 explosions that ruptured the Nord Stream gas pipelines, the RIA state news agency reported on Monday, after a key suspect escaped arrest in Poland. German media reported last week that German prosecutors had identified a Ukrainian diving instructor as a suspect in the Nord Stream sabotage attack and had issued a warrant to arrest him in Poland. Poland received the German warrant but the suspect had already left the country as Germany did not include his name in a database of wanted persons, Polish prosecutors told Reuters. Moscow believes the German investigation will be closed without identifying those responsible, RIA cited Oleg Tyapkin, the head of the European department at the Russian foreign ministry, as saying. "We have raised the issue of Germany and other affected countries fulfilling their obligations under the U.N. anti-terrorist conventions," Tyapkin said. "We have officially made corresponding claims on this matter bilaterally, including to Berlin." Russian Foreign Minister Sergei Lavrov later told the Izvestia media outlet: "Germany must reply to all the questions." Germany's prosecutor general declined to comment on the RIA report when contacted by Reuters. A spokesperson for the German foreign ministry rejected the complaint. "We are in touch with Russian authorities," he said, without going into detail on the ongoing probe. The multi-billion dollar Nord Stream 1 and 2 pipelines transporting gas under the Baltic Sea were ruptured by a series of blasts in September 2022, seven months after Russia launched a full-scale invasion of Ukraine. No one has claimed responsibility for the blasts. Russia has repeatedly said the attack was carried out by the United States and Britain, both of whom have denied this. Lavrov, without providing evidence, said that it was ultimately Washington that issued the order to blow up the pipelines. The New York Times, The Washington Post and the Wall Street Journal have reported that Ukraine - which has repeatedly denied involvement - was behind the attack. Lavrov, the Russian foreign minister, said such reports were meant to divert public attention from the real perpetrators of the "terrorist act". "It is a shame for Germany to simply silently accept how it was deprived of the long-term basis of energy, and therefore economic prosperity, which was the key to its development for many, many decades in the form of a stable supply of Russian gas at reasonable prices," he said. Sign up here. https://www.reuters.com/world/europe/russia-files-complaint-germany-over-nord-stream-sabotage-investigation-ria-2024-08-19/

2024-08-19 11:02

LONDON, Aug 19 (Reuters) - Investors fleeing the copper market are likely to be sidelined for many months, leaving the field clear for physical players who expect demand in top consumer China and elsewhere to deteriorate over coming months and weigh on prices. A fund buying frenzy, based on an expected shortage of copper relative to demand, sparked a rally on the London Metal Exchange (LME) earlier this year, which quickened as momentum traders entered the fray to lift prices to a record high above $11,100 a metric ton in May. At the same time, commodity traders were buying on the LME to deliver against their commitments to sell copper on COMEX, part of CME Group (CME.O) , opens new tab. However, copper has dropped nearly 20% since as persistently weak manufacturing activity led the physical market to reassert control, with consumers putting purchases on hold and producers and traders delivering surplus metal to LME-registered warehouses. "Updates to demand and refined production have pushed the market to a surplus sooner than expected," said Macquarie analyst Alice Fox, who expects copper surpluses of 265,000 metric tons this year, 305,000 tons in 2025 and 436,000 in 2026. Fox said prices may recover in the fourth quarter if exchange stocks are drawn down. "However, absent faster global growth boosting demand, the more sizeable surpluses in 2025 and 2026 mean this rally is likely to be short-lived," Fox said, adding that prices could fall back towards $8,000. BURNT FINGERS LME copper hit 4-1/2 month lows of $8,714 a ton in early August as U.S. recession fears and concern the Federal Reserve has kept interest rates too high exacerbated negative sentiment from soaring inventories and lacklustre demand. China consumes more than half of global refined copper supplies, estimated at around 26 million tons this year. But much of the copper used in China is for wiring in household goods which are then exported. A housing market slump and China's stagnant manufacturing sector highlight the headwinds copper demand faces. "If you strip out exports, domestic demand in China looks to be anaemic. There's no copper shortage," said BNP Paribas analyst David Wilson, who expects a surplus of between 150,000 and 200,000 tons this year. "Product fabricators have destocked. If you are a manufacturer and unsure about the outlook for demand and exports, you are not going to restock aggressively." Data from the International Copper Study Group (ICSG) showed a copper market surplus of 416,000 tons between January and May, laying bare the idea of large deficits this year. Copper inventories in warehouses registered with the LME, a market of last resort, have risen to five-year highs above 300,000 tons, up around 200% since mid-May. Most of the metal was delivered to LME warehouses in Korea and Taiwan. It came from Chinese producers unable to sell their wares to the domestic market and aiming to take advantage of LME prices above those on the Shanghai Futures Exchange . Copper stocks in the South Korean cities of Busan and Gwangyang and Taiwan's Kaohsiung totalling 239,100 tons now comprise 78% of total copper stocks in the LME system compared with 31,925 tons and 31% on May 16. The threat of a prolonged strike at BHP's (BHP.AX) , opens new tab Escondida copper mine in Chile, which produced nearly 5% of the world's copper in 2023, raised concerns last week about tighter supplies but a settlement on Sunday dispelled the fears. Over the longer term however, deficits are predicted as structural changes to copper consumption from new technologies linked to AI and the energy transition accelerate. "We still see copper as the backbone for decarbonisation," said Glencore (GLEN.L) , opens new tab CEO Gary Nagle at a recent briefing. "Spending on AI data centres, renewable infrastructure is very copper hungry, very copper intensive." Sign up here. https://www.reuters.com/markets/commodities/physical-buyers-win-battle-copper-market-funds-retreat-2024-08-19/

2024-08-19 10:27

Aug 19 (Reuters) - Sterling touched a one-month high against the dollar on Monday, as growing bets around U.S. interest rate cuts pushed the greenback lower against other major currencies. Investors are awaiting speeches from Federal Reserve Chair Jerome Powell and Bank of England (BoE) Governor Andrew Bailey on Friday at the central bankers' gathering in Jackson Hole, Wyoming for clues on the outlook for monetary policies in the U.S. and UK. Expectations of a dovish tilt in minutes of the Fed's July meeting, due on Wednesday, and Powell's upcoming speech pushed the dollar to a seven-month low against major currencies. The pound in turn was up 0.2% at $1.2963, after earlier in the session touching a one-month high of $1.2975. "The bulls will be eyeing the 1.3000 level, as they will the 17 July highs of 1.3044. Volatility markets suggest a break of 1.3044 through the week is a 12% probability," noted Chris Weston, head research at broker Pepperstone. Against the euro , sterling touched a more than two-week high of 85.09 pence per euro. It was last at 85.15 pence The British currency has rebounded 2.3% since touching a one-month low of $1.2666 on Aug. 8, helped by a recovery in broader market sentiment as well as data pointing to momentum in the UK economy and easing inflation. Money markets show traders are pricing in a 39% chance of the BoE cutting rates by 25 basis points (bps) to 4.75% in September, and see rate cuts of 44 bps by the end of this year. The BoE cut rates from a 16-year high of 5.25% at the start of this month. August PMI readings on Thursday could offer fresh clues on the state of UK business activity. Sign up here. https://www.reuters.com/markets/currencies/sterling-hits-one-month-high-fed-rate-cut-bets-weigh-dollar-2024-08-19/

2024-08-19 10:24

MUMBAI, Aug 19 (Reuters) - The Indian rupee closed stronger on Monday, aided by a rally in Asian currencies that helped the local unit touch its highest in two weeks. The rupee closed at 83.87 against the U.S. dollar, up from its close at 83.94 on Friday. The currency hit 83.85 during the session, its highest since Aug. 6. The rupee saw choppy price action during the day as importers' dollar bids pulled it off its fortnightly peak before it rose again towards the end of the session. Despite the uptick on Monday, the rupee's recent gains have largely been shallow due to outflows from local equities and strong dollar demand from local corporates, traders said. Overseas investors have net sold $2.5 billion of Indian stocks over August so far. A broadly weaker dollar helped lift Asian currencies, which were up by 0.4% to 1.1%. The dollar index touched a low of 102, its weakest level in more than 6 months. "Seems like speculators are looking to explore some broad dollar weakness ahead of what should be the first Fed cut on 18 September," ING Bank said in a note. Investors are currently pricing in 95 basis points of rate cuts by the Federal Reserve over 2024. Remarks from Fed policymakers, including Chair Jerome Powell who is slated to speak on Friday, will be in focus this week to gauge the pace and extent of U.S. policy easing. Investors will also pay attention the minutes of the Fed's most recent meeting due on Wednesday. Dollar-rupee far forward premiums were nearly unchanged on Monday. A dovish tone from Fed officials may spur an uptick given that the Indian central bank is broadly expected to keep policy rates unchanged this year, traders said. Sign up here. https://www.reuters.com/markets/currencies/rupee-ends-higher-following-choppy-price-action-asia-fx-rally-helps-2024-08-19/

2024-08-19 10:19

A look at the day ahead in U.S. and global markets from Samuel Indyk The volatility that rocked markets in early August appears to be back under control, and with the Kansas City Fed's Jackson Hole Symposium set to kick off on Thursday, things could stay that way until later in the week. U.S. Federal Reserve Chair Jerome Powell is set to headline the event when he delivers remarks on the first full day on Friday, and it will be a good chance for him to give an updated assessment of the monetary policy outlook, halfway between the July and September meetings. Futures are fully pricing a quarter-point rate cut next month, while a larger 50 basis point move is given almost a 30% chance. The size of the move will likely be determined by the evolution of data in the coming weeks. The calendar looks light over the next five days, with only weekly jobless claims data and flash PMIs for August on the docket, so Fed speakers could get more attention. In comments over the weekend, U.S. policymakers Mary Daly and Austan Goolsbee both left the door open for easing as soon as September. Daly told the Financial Times that it was time to consider adjusting borrowing costs from the current 5.25%-5.5% range that rates have been held at for a year, saying it was important to prevent the labor market from tipping into a downturn. That's helped push the dollar lower across the board. The dollar index , which measures the currency against six others, was last down 0.3%, hitting its lowest level since Jan. 5. Against the yen , it was down around 1%. In a possible indication that the unwinding of yen-funded carry trades could be further along than previously thought, speculators have done some hefty repositioning in the currency in the last few weeks. The latest weekly data from the U.S. CFTC showed speculators have now turned net long for the first time since 2021, having been almost record short the yen just five weeks ago. The Bank of Japan's July rate hike and soft U.S. jobs and inflation data have completely flipped the script for Japan's currency, which hit its weakest level in 38 years last month. Meanwhile, global equities (.MIWO00000PUS) , opens new tab, coming off their biggest weekly jump this year, are eking out a 0.1% gain, while U.S. futures , are little changed. Europe's STOXX 600 (.STOXX) , opens new tab is flat. The VIX index (.VIX) , opens new tab, Wall Street's closely-watched gauge of investor worries, is up slightly on Monday but is still below 16, having jumped to over 65 on Aug. 5, its highest level since the COVID-19 spike in March 2020. Key developments that should provide more direction to U.S. markets later on Monday: * Federal Reserve Governor Christopher Waller set to speak * U.S. to sell 13-, 26-week bills * U.S. corporate earnings: Estee Lauder, Palo Alto Networks Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-pix-2024-08-19/

2024-08-19 10:11

HOUSTON, Aug 19 (Reuters) - A looming labor dispute at Canada's two main railroads is unlikely to significantly reduce oil exports to the United States due to excess capacity on Trans Mountain and other pipelines, people close to the matter said. North American shippers such as fertilizer supplier Nutrien (NTR.TO) , opens new tab and U.S. logistics firm C.H. Robinson (CHRW.O) , opens new tab are bracing for simultaneous stoppages at the Canadian operations of Canadian National Railway (CNR.TO) , opens new tab and Canadian Pacific Kansas City (CP.TO) , opens new tab (CPKC) that could cost the nation's economy billions of dollars. A strike or lockout could start on Thursday. But oil exports may be largely unscathed. U.S. rail imports of Canadian crude have fallen sharply in recent years, averaging around 55,000 barrels per day in May, U.S. Energy Information Administration data showed, the lowest since the pandemic price crash in 2020. The U.S. imports about 4.2 million bpd from Canada, mostly by pipeline. "Anybody receiving crude by rail right now is figuring out what alternatives they have, whether it's an alternative grade that can be substituted on the pipeline, or if a buyer is willing to take something else," said Elliot Apland at MarbleRock Advisors, which helps negotiate rail supply-chain contracts. Prices of Canada's Western Canadian Select crude typically fall during export logjams. However, Trans Mountain's expansion in May and available capacity on other pipes should limit deep discounting, industry experts and analysts said. "Crude-by-rail is not as essential to the Canadian market as it was prior to the Trans Mountain expansion," said Jeremy Irwin, a senior oil markets analyst at consultancy Energy Aspects. Trans Mountain's expansion nearly tripled the flow of crude from landlocked Alberta to the Pacific coast, to 890,000 bpd. Maintenance at U.S. Midwest refineries, which buy and process Canadian crude, will also free pipeline space for additional barrels, Irwin added. WCS for September delivery in Hardisty, Alberta, settled on Friday at $12.25 a barrel below U.S. West Texas intermediate crude, according to brokerage CalRock, compared to an average $18.65 discount in 2023. The relatively small discount indicates little market concern about moving Canadian crude. "We're closely monitoring the situation and putting plans in place to mitigate any impacts if a strike or lockout were to happen," a spokesperson at producer Cenovus Energy (CVE.TO) , opens new tab said. ConocoPhillips (COP.N) , opens new tab Canada said it ships refined product on CPKC and other rail carriers, but has flexibility to manage a sustained strike. The company does not expect any impact to its Surmont oil-sands production. REFINED PRODUCTS Canadian propane relies mainly on rail to reach domestic and export markets. Any stoppage could significantly reduce deliveries for fuel and chemical manufacturing. AltaGas' (ALA.TO) , opens new tab Ridley Island Propane Export Terminal in British Columbia has stocked up on propane, Energy Aspects' Irwin noted. Some companies that use generators for electricity on job sites have been stockpiling diesel, Irwin said, adding that a rail stoppage longer than two weeks could strand some diesel at Alberta refineries. Those refineries include Imperial Oil's (IMO.TO) , opens new tab Strathcona, Suncor Energy's (SU.TO) , opens new tab Edmonton, Shell's (SHEL.L) , opens new tab Scotford Complex, North West Redwater's Sturgeon refinery and Cenovus' Lloydminster refinery. Canada's gasoline markets tend to be localized and production stays in the region. Many major gasoline markets are connected directly to refineries by pipelines, while railways and trucks also distribute gasoline in other regions. "Everyone is trying to get the inventories to a point where they could free rail logistics for 14 days and still be OK, said a senior industry executive who declined to be identified. Sign up here. https://www.reuters.com/business/energy/oil-pipeline-capacity-spare-canadian-exports-looming-rail-dispute-2024-08-19/