2024-09-20 04:58
SINGAPORE, Sept 20 (Reuters) - High-emitting industries are struggling to finance more than 450 large-scale low-carbon projects, with demand for green products still too weak to justify investment, according to data from the Industrial Transition Accelerator (ITA), a UN-backed initiative. Removing the "critical investment barrier" caused by low demand could unlock $700 billion in financing by 2030 and help decarbonise steel, chemicals, aluminium, aviation, shipping and cement, six sectors responsible for around a third of global CO2 emissions, ITA said late on Thursday. ITA was launched during COP28 climate talks in Dubai last year, and works with industries, investors and governments to promote the green transition of "hard-to-abate" sectors. The 473 proposed net-zero aligned projects across the six sectors cover around 80% of the emission cuts required by 2030 to meet Paris climate goals, but companies are finding it hard to bring them to fruition. "The number of announced projects is getting where we need it to be," said Faustine Delasalle, executive director of the ITA Secretariat. "Our biggest worry is the difficulty of translating announcements into actual construction." While firms are announcing projects in good faith and have the technologies required to decarbonise, they are struggling to make the business case, she added. One high-profile example was a decision in July by Shell (SHEL.L) , opens new tab to "pause" construction of a sustainable aviation fuel plant in Rotterdam. Government procurement is responsible for around a quarter of global steel demand and 40% of cement use, and will play a crucial role in building a market for green products. Policy interventions are also needed, including new product standards, carbon pricing mechanisms and even mandates that force consumers to buy green, said Delasalle. "We really need governments to improve the conditions to ensure the investment case is robust, and the investment case is robust when there is one simple thing - when you have a buyer ready to pay the price that you need." Sign up here. https://www.reuters.com/sustainability/climate-energy/scant-green-premium-stalls-over-450-low-carbon-projects-analysis-shows-2024-09-20/
2024-09-20 04:38
A look at the day ahead in European and global markets from Wayne Cole. It was left to the Bank of Japan (BOJ) to end "central banker week" by doing nothing on rates, though it did bring the yen into sharper focus. BOJ statements can be rather Delphic, so their latest was mercifully brief at five paragraphs of plain prose, including eight uses of "moderate" or "moderately" to describe the economic background. One notable passage was at the end, where it highlighted financial and foreign exchange markets in a clear reference to recent ructions in stocks and the yen. It noted that yen movements had become more likely to affect prices, implying a weaker currency would add more to inflation than in the past and, presumably, that might not be welcome anymore. That was enough to nudge the yen a little higher to 142.30 per dollar, but it's still down large for the week. EURJPY is up 1.7% for the week and the Aussie up 2.6%, so maybe carry trades are back on the menu. Markets will have to wait until BOJ Governor Ueda's presser at 3:30 p.m. (0630 GMT) to divine more on the outlook for tightening, particularly whether the October meeting is live for a hike. Markets have just 3 basis points of tightening priced in for October, though that is almost six weeks away so there's plenty of time for things to change. Most analysts polled by Reuters favour December for a hike of 25 basis points, though the market still only has 7 bp in the price. The Nikkei was largely unfazed and up 1.9% at the time of writing, while much of Asia tracked Wall Street's overnight rally, still basking in the Fed's outsized rate cut. Earlier, China's central bank surprised markets by not cutting its prime rates, then had to intervene in forex markets to stop the yuan from rising too fast past 16-month highs. Optimists argued the delay was so rate cuts could be included in a big stimulus package, but there's been talk of such a package in the works since the pandemic and none has materalised. Others suspect the PBOC is more concerned by falling bond yields and bank profit margins and will have to ease reserve requirements first. And a final word on the yield curve. For two years the inverse curve supposedly signalled certain recession, even as U.S. growth ran above trend. Now its the dis-inversion of the curve that economic orthodoxy says means a recession is inevitable, even as consumers keep spending, weekly jobless claims hit their lowest since May and the rather reliable Atlanta GDPNow measure points to Q3 growth of 2.9%. You can't have it all ways, and maybe the curve isn't infallible. Key developments that could influence markets on Friday: - UK August retail sales, Canada retail sales, German PPI, EU consumer confidence - Speech by Catherine Mann, external member of the BoE MPC - Conversation between ECB President Christine Lagarde and Kristalina Georgieva, Managing Director IMF - Federal Reserve Bank of Philadelphia President Patrick Harker speaks - Bank of Canada Governor Tiff Macklem gives speech Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-09-20/
2024-09-20 00:50
Dollar hits two-week high versus yen Dollar index gains ground after Fed's giant rate cut Sterling strengthens after British retail sales data Chinese yuan rises after lending rates left unchanged NEW YORK/LONDON, Sept 20 (Reuters) - The dollar strengthened against the yen on Friday, hitting its highest level in two weeks, after the Bank of Japan left interest rates unchanged and indicated that it was not in a hurry to hike them again. The BOJ could afford to spend time eyeing the fallout from global economic uncertainties, Governor Kazuo Ueda said in a press conference following the central bank's move, adding that its monetary policy decision will be based on "economic, price and financial developments." The BOJ kept rates steady at 0.25%, a move that was widely expected. The dollar rose as high as 144.50 yen , reaching its highest level since early September. It was last up 0.92% at 143.92. The euro also strengthened against the yen, gaining 0.93% to 160.59 . "We're seeing a little bit of consolidation in markets that got the dollar-yen move, which has been quite significant in the past few days since the Fed," said Shaun Osborne, chief FX strategist at Scotiabank in Toronto, referring to the Federal Reserve's decision on Wednesday to cut interest rates by half a percentage point. "The statement sounded perhaps a little bit more cautious than markets would have liked given the assumption that we will see another rate cut from the Bank of Japan before Christmas. I still think that's likely." The dollar has traded in a choppy fashion since the Fed kicked off its monetary policy easing cycle. Against the dollar, however, the euro weakened 0.01% to $1.115925. The U.S. dollar index , which measures the greenback against major currencies, gained slightly to 100.75 and just above a one-year low. "There's a sense in the market that the Bank of Japan doesn't need to hike rates and also we're turning more to the political situation in Japan," said Adam Button, chief currency analyst at ForexLive in Toronto. Markets imply nearly a 49% chance the Fed will deliver another 50-basis-point rate cut in November and have priced in 74.8 bps of cuts by the end of this year. The Fed's policy rate is expected by the end of 2025 to be at 2.85%, which is now thought to be the Fed's estimate of the neutral rate. That dovish outlook has bolstered hopes for continued U.S. economic growth and sparked a major rally in risk assets. Currencies leveraged to global growth and commodity prices also benefited, with the Australian dollar reaching as high as $0.68285 . It was last down 0.13% to $0.68060. "It runs counter-intuitive to what we've seen in the market, with a big cut from the Fed and the Bank of Japan holding rates. I think that the message really from dollar-yen is that the market is feeling better about global growth," Button said. China unexpectedly left benchmark lending rates unchanged at the monthly fixing on Friday. Beijing has been hinting at other stimulus measures, enabled in part by the Fed's aggressive easing that shoved the dollar to a 16-month low against the yuan . Major Chinese state-owned banks were seen buying dollars in the onshore spot foreign exchange market on Friday to prevent the yuan from appreciating too fast, two people with knowledge of the matter said. The dollar weakened 0.23% to 7.043 versus the offshore Chinese yuan. The Bank of England kept rates unchanged on Thursday, with its governor saying the central bank had to be "careful not to cut too fast or by too much." The pound was up 0.24% at $1.33180 , supported by the release on Friday of strong British retail sales data. Sign up here. https://www.reuters.com/markets/currencies/yen-nurses-losses-boj-meets-dollar-dogged-by-rate-outlook-2024-09-20/
2024-09-20 00:46
Oil benchmarks up more than 4% for the week Tensions in the Middle East also support prices Weaker Chinese demand could limit gains Sept 20 (Reuters) - Oil prices eased on Friday, but were on track to register gains for a second straight week following a large cut in U.S. interest rates and declining global stockpiles. Brent futures were down 32 cents, or 0.43%, at $74.56 a barrel at 1223 GMT while U.S. WTI crude futures fell 30 cents, or 0.42%, at $71.65. Still, both benchmarks were up more than 4% on the week. Prices have recovered after Brent fell below $69 for the first time in nearly three years on Sept. 10. "The market concluded that a sub-$70 level combined with hedge funds holding a record weak belief in higher prices of crude and fuel products would require a recession to be justified, a risk this week's bumper US rate cut helped reduce," Ole Hansen, head of commodity strategy at Saxo Bank, said. Prices rose more than 1% on Thursday following the U.S. central bank's decision to cut interest rates by half a percentage point on Wednesday. Interest rate cuts typically boost economic activity and energy demand, but some analysts view them as symptomic of a weak U.S. labour market. "U.S. interest cuts have supported risk sentiment, weakened the dollar and supported crude this week," UBS analyst Giovanni Staunovo said. "However, it takes time until rate cuts support economic activity and oil demand growth," he added. The Fed projected a further half point rate cut by year-end, a full point next year and a half point trim in 2026. Further support for oil prices came from a decline in U.S. crude inventories, which fell to a one-year low last week. A counter-seasonal oil market deficit of around 400,000 barrels per day (bpd) will support Brent crude prices in the $70 to $75 a barrel range during the next quarter, Citi analysts said on Thursday, but added prices could plunge in 2025. Rising tensions in the Middle East, raising the risk of supply disruption, further boosted the oil market. Walkie-talkies used by Lebanese armed group Hezbollah exploded on Wednesday following explosions of pagers the previous day. A slowing economy in major commodity consumer China, meanwhile, weighed on market sentiment. Refinery output in China slowed for a fifth month in August and industrial output growth hit a five-month low. Sign up here. https://www.reuters.com/business/energy/oil-prices-set-end-week-higher-after-us-rate-cut-2024-09-20/
2024-09-20 00:42
WASHINGTON, Sept 19 (Reuters) - Republican presidential candidate Donald Trump said on Thursday the U.S. Federal Reserve's decision to cut interest rates by half of a percentage point was "a political move." "It really is a political move. Most people thought it was going to be half of that number, which probably would have been the right thing to do," Trump said in an interview with Newsmax. The Federal Reserve on Wednesday kicked off what is expected to be a series of interest rate cuts with an unusually large half-percentage-point reduction. Trump said last month that U.S. presidents should have a say over decisions made by the Federal Reserve. The Fed chair and the other six members of its board of governors are nominated by the president, subject to confirmation by the Senate. The Fed enjoys substantial operational independence to make policy decisions that wield tremendous influence over the direction of the world's largest economy and global asset markets. Sign up here. https://www.reuters.com/world/us/trump-says-feds-rate-cut-was-political-move-2024-09-20/
2024-09-20 00:34
LIMA, Sept 19 (Reuters) - Peruvian authorities scrambled to roll out a plan to fight fires raging out of control across the nation, razing crops, damaging archaeological treasures and leaving several regions in a state of disaster on Thursday. Firefighters said battling the blazes has grown increasingly difficult. "We're tired," said a volunteer firefighter in the forests of the northern Amazonas region who declined to give his name. "We put the fire out, it lights back up. We put it out, the fire breaks out again." Firefighters in the area retreated from the flames on Thursday. "They're out of control," said Arturo Morales, another volunteer firefighter. "We need help." President Dina Boluarte on Wednesday declared a 60-day state of emergency in the San Martin, Amazonas and Ucayali regions, allocating extra resources to stop the fires from spreading. "We're rolling out everything we have," Boluarte said in a speech. She called on farmers to stop burning grasslands, which she said caused flames to spread out of control. Forest fires in Peru are frequent from August to November, either caused by farmers or those who are looking to illegally take over land, according to the government. Around 240 fires have broken out this season in 22 of the country's 25 regions, though more than 80% had been controlled by Wednesday. Some, however, are threatening to spark up again with dry weather, winds and their remote locations making them difficult to access. The flames have already reached seven archaeological sites, according to the culture ministry, and are threatening the Indigenous Shipibo-Konibo community in the Amazon. In total, nearly 2,300 hectares (5,680 acres) of farmland have burned and 140 people have been injured, according to official data through Wednesday. South America is currently being ravaged by fire from Brazil's Amazon rainforest through the world's largest wetlands to dry forests in Bolivia, breaking a previous record for the number of blazes seen in a year. Sign up here. https://www.reuters.com/world/americas/fires-burn-out-control-peru-hitting-crops-archaeological-sites-2024-09-20/
