2024-08-15 15:40

JERUSALEM, Aug 15 (Reuters) - Israel's inflation rate kept climbing in July, data from the Central Bureau of Statistics showed on Thursday, reducing the likelihood of further interest rate reductions anytime soon. The annual inflation rate rose to 3.2% last month, above expectations of 3.1% in a Reuters poll and up from 2.9% in June to exceed the government's 1-3% annual target range. The consumer price index rose by a slightly higher than expected 0.6% in July from June, bolstered by higher costs of fresh produce, food, housing, transport and entertainment. These were partly offset by declines in clothing and footwear and furniture. After cutting its benchmark interest rate in January, the Bank of Israel left the rate unchanged at subsequent meetings in February, April, May and July, citing geopolitical tensions, rising price pressures and looser fiscal policy due to Israel's war with the Palestinian militant group Hamas. It next decides on rates on Aug. 28. Sign up here. https://www.reuters.com/markets/rates-bonds/israel-cpi-gains-further-breach-target-hits-32-annual-rate-july-2024-08-15/

2024-08-15 13:43

Aug 15 (Reuters) - U.S. retail sales rose more than expected in July, which could help to allay financial market fears of a sharp economic slowdown that were fanned by a jump in the unemployment rate. Meanwhile another report showing a smaller than expected increase in the number of American's filing for unemployment benefits last week showed resilience rather than deterioration in labor market conditions and lifted stock futures, Treasury yields and the dollar. Futures traders raised the odds to about 75% that the Federal Reserve will ease by just 25 basis points in September, after the Commerce Department said retail sales increased 1.0% last month after a downwardly revised 0.2% drop in June. Economists polled by Reuters had forecast retail sales advancing 0.3% after previously being reported as unchanged. MARKET REACTION: STOCKS: S&P 500 <.SPX> opened more than 1% higher BONDS: The yield on benchmark U.S. 10-year notes rose to 3.947%, the two-year note yield jumped to 4.097% FOREX: The dollar index turned 0.5% higher COMMENTS: DAVID DOYLE, HEAD OF ECONOMICS, MACQUARIE, TORONTO "The report isn't quite as favorable for disinflation as what occurred in June, but that report set a very high standard." "Overall the report provides more reinforcement that the disinflation trend remains in tact. It should provide the FOMC with increased evidence that the upturn in underlying inflation that occurred in 1Q24 was temporary and has reversed course." "There is nothing in here that should prevent the Fed from proceeding with a rate cut in September. The pace of magnitude of easing will depend broadly on incoming data with inflation and employment figures taking on particular importance. Our baseline for a September cut is for this to be 25 bps." TOM GRAFF, CIO, FACET, PHOENIX, MARYLAND "Retail sales is a very volatile number month-to-month, so we should be careful putting too much weight on any one release. That being said, this number does not indicate some kind of slowdown is imminent. “Note also that Walmart in their earnings release today raised their 2024 outlook, which further bolsters the idea that consumers are still spending at a reasonable clip. “On these margins, this means there is less pressure on the Fed to cut rates rapidly. We are of the belief that the Fed is prepared to cut rates toward neutral relatively quickly. However, the Powell Fed has rarely acted quickly at pivot points in the past. A dramatic 50bps cut to start off this cutting cycle would be quite a departure for him, and therefore is unlikely without more worrisome data.” PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK “Today’s key data was retail sales, which showed that the pulse of the American consumer is obviously much stronger than expected.” “This diminishes fears of a recession any time soon and it is good news in terms of stocks but may not be good news for the bond market.” “With this report, we’re back to square one, with the Fed probably cutting rates by 25 basis points in September. Chances are diminishing for a more robust 50-basis-point cut.” “Today’s retail sales are positive for corporate America. It means consumers are not hibernating. It bodes well for corporate earnings but in terms of what the Fed will or will not do, it raises a red flag.” STEVE WYETT, CHIEF INVESTMENT STRATEGIST, BOK FINANCIAL, TULSA, OKLAHOMA "The overall message that I would take from this number is that the angst that the market was feeling a week and a half ago after a weaker than expected employment report and this idea that the Fed was dropping behind and that the economy was sliding into a recession and we built in 50 basis points in easing in September is just backing that off." "The economy is not going into a recession imminently. This will take 50 basis points in September off the table. Still think that 25 basis points make sense just because inflation continues to ease and we got a couple of good reports, PPI and CPI adding to that." "We have the all-important employment data before the next Fed meeting but this should reduce the feelings that the economy is imminently going into a recession." "The early calls during that market volatility for the Fed to do something on an emergency basis now look even further out of line than what we felt they were at the time they were made." CHRIS LARKIN, MANAGING DIRECTOR, TRADING AND INVESTING, E*TRADE FROM MORGAN STANLEY, NEW YORK "Today didn’t deliver any major curveballs. More data like this could ease concerns that the economy is tilting toward recession and take pressure off the Fed to cut rates more aggressively than they’d like to." BRET KENWELL, U.S. INVESTMENT ANALYST AT ETORO, PETOSKEY, MICHIGAN (via email) "The retail sales report beat expectations across the board, with strong headline figures and stronger-than-expected control group sales — the most stringent cut of data within the report. We’re back to an environment where good news is good news and bad news is bad news." "Given the recent worries over the labor market, today’s lower-than-expected jobless claims data is another positive and marks the second consecutive miss for this report. Combined with a strong retail sales report, investors are breathing a sigh of relief this morning, letting recent worries of economic softness subside. While it would still be appropriate for the Fed to lower rates next month, today’s reports should buy them some time until the September meeting." Sign up here. https://www.reuters.com/markets/view-strong-data-takes-50-bp-cut-september-off-table-2024-08-15/

2024-08-15 12:58

ATHENS, Aug 15 (Reuters) - Investigators suspect a faulty power cable may have caused Greece's worst wildfire this year, said sources close to a probe over the blaze that killed one woman and torched 10,000 hectares near Athens, covering a total area about the size of Paris. The blaze, which began on Aug. 11, broke out from a forest off Varnavas town, 35 km (22 miles) from the capital and into Athens' northern suburbs, some of which had never seen a wildfire before, within a day. Authorities have questioned Varnavas residents as part of their investigation into what caused the blaze. A 76-year old man said a wooden electricity pillar outside his home, which had a loose cable fastened to it with a hanger, could have triggered it, officials said. That scenario was the leading one in the probe, which should be concluded over the coming months, an official with knowledge of the investigation said. Arson was also being considered. A fire brigade official who declined to be named said an area close to the electricity pole had been determined as the starting point of the blaze. Wildfires have been a common feature of Greek summers for years, with many attributed to voluntary or involuntary arson, short-circuits or occasionally, to natural causes. The country registered more than 8,000 forest fires in 2023. In recent years, the risk of such fires has been raised by climate change, which has brought hotter weather and less rain. A prosecutor has deployed engineers to look into the latest wildfire's cause. Greece's power network operator HEDNO, said it had found no evidence of a malfunction. "We have no indication that anything wrong such as a short-circuit happened," an official at HEDNO told Reuters adding that only the relevant authorities were responsible for determining the fire's cause. Local media cited residents who had heard explosions before the fire broke out. Others said there were initially two fires. Milder winds have calmed the blaze which covered a distance of 40 kilometres (24.85 miles) before reaching the Athens' suburbs of Penteli and Vrilissia, where one woman was killed. Still, flare-ups were possible, officials have warned, as winds are expected to pick up again. Sunday's fast moving fire broke out amid a week-long high fire risk alert due to high temperatures and gale force winds. Greece had its warmest winter on record this year and was on track for its hottest summer with scant rain in many areas, a recipe for fire disasters, according to firefighters. "The fire started very far from here, probably from a power line and in no time it burned everything," 78-year old Varnavas resident Giannis Tsiminis told Reuters on Wednesday. Sign up here. https://www.reuters.com/world/europe/faulty-power-cable-may-have-caused-greeces-worst-wildfire-this-year-2024-08-15/

2024-08-15 12:41

HELSINKI, Aug 15 (Reuters) - Fortum (FORTUM.HE) , opens new tab doesn't believe investing in new nuclear generation capacity is feasible at current low Nordic power prices, its chief executive said on Thursday, after the Finnish utility surprised markets with better than expected second quarter results. Fortum is among companies eyeing possible deals from the Swedish government's goal to build 2,500 MW of new nuclear power by 2035 - the equivalent of two new reactors - and 10 new reactors a decade later to help tackle climate change. On Monday, a commission appointed by the Swedish government put a price tag of around 400 billion crowns ($38 billion) on the new nuclear plans and proposed a financing and risk sharing model, which would include state loans, a price hedging agreement and a mechanism to share risk and gains. Sweden and Finland are both considering introducing new nuclear power to serve as steady base load for intermittent renewables. Fortum's Chief Executive Markus Rauramo welcomed the Swedish government's report but said more details were needed before any investments could go forward. "With today's market prices, new nuclear is not feasible," he told a conference call after the company's quarterly results on Thursday. Shares in Fortum were up 1.2% in afternoon trade after the company reported a 233 million euro ($256.51 million) operating profit for the April to June period. That was down from 262 million a year earlier, but beat a forecast of 200 million euros in a company-provided poll , opens new tab as higher hydro volumes and the divestment of Fortum's Indian solar portfolio helped offset a decline in revenue from its power generation unit due to a drop in spot prices. "The main reason for the lower Generation result was the lower achieved power price, but this was partly offset by higher hydro volumes and improved results in the renewables and decarbonisation businesses," Rauramo said in a statement. Benchmark Nordic power prices have fallen this year due in part to a surge in wind and solar power output. Spot prices have averaged 42.01 euros/MWh this year, down from 56.44 euros/MWh in 2023 and 135.86 euros/MWh during the energy crisis in 2022. Fortum also said it was on track with its goal to lower its recurring fixed costs by 100 million euros by the end of 2025, expecting to reach 50 million euros in cost reductions by the end of this year. Its shares have gained 10% this year. Sign up here. https://www.reuters.com/business/energy/finlands-fortum-says-new-nuclear-not-feasible-current-prices-2024-08-15/

2024-08-15 12:27

BUKAVU, Democratic Republic of Congo, Aug 15 (Reuters) - Democratic Republic of Congo has lifted a suspension of mining activities in the South Kivu province, with the exception of gold extraction, the region's governor said in a statement on Thursday. Gold, tin ore cassiterite and hi-tech mineral coltan from the eastern province are mostly mined by so-called "artisanal" miners using rudimentary means. Congo's gold production is systematically underreported, and tons of the precious metal are smuggled into global supply chains through its eastern neighbours. Governor Jean-Jacques Purusi Sadiki in July suspended all mining activities in the restive region and ordered companies and operators to leave mining sites. He said at the time the decision was taken due to "disorder caused by the mining operators", without elaborating. After a meeting with mining operators it was decided to lift the suspension, a statement published by a government spokesperson said. The statement urged cooperatives, mining companies and gold-buying outlets to sort out their situation with the tax authorities, adding that consultations with players in the industry will continue. "The aim is to transform the mining sector into a genuine lever for stability, wealth creation for all and the socio-economic development of South Kivu province," it added. Sign up here. https://www.reuters.com/markets/commodities/mining-suspension-congos-south-kivu-lifted-governor-says-2024-08-15/

2024-08-15 12:22

SAO PAULO, Aug 15 (Reuters) - Brazil's Petrobras (PETR4.SA) , opens new tab will invest 870 million reais ($159 million) to resume operations at its Araucaria fertilizer plant in Parana state, it said on Thursday, in a move that was approved in June. Activities at the plant, which makes urea and ammonia, were halted in 2020. Production is expected to resume in the second half of 2025, the state-run oil company said in a securities filing. ($1 = 5.4639 reais) Sign up here. https://www.reuters.com/markets/commodities/petrobras-invest-160-million-resume-fertilizer-plant-operations-2024-08-15/