2024-09-19 04:43
SINGAPORE, Sept 19 (Reuters) - Japan's Mitsui O.S.K. Lines, Norway's Yara and Singapore's Global Centre for Maritime Decarbonisation said they had jointly completed an ammonia cargo transfer operation in Australia that will pave the way for ammonia bunkering in the region. Ammonia is one of several alternative fuels that shipping companies are exploring to reduce carbon emissions, though its bunkering infrastructure is still in preliminary development. The Pilbara region in Australia's northwest is expected to become an ammonia bunkering hub in the future due to the Dampier port's experience with exporting ammonia, Mitsui O.S.K Lines (9104.T) , opens new tab said in its statement. The trial was conducted to simulate bunkering conditions at the Dampier port, an ammonia production region, and marked the world's first ship-to-ship transfer of ammonia to have taken place for vessels at anchorage, the companies said this week. "The successful ship-to-ship transfer of ammonia is a critical learning step forward in enabling ammonia bunkering operations in a port environment as global shipping moves to effective use of clean ammonia as a fuel," said Murali Srinivasan, senior vice president and commercial head at Yara (YAR.OL) , opens new tab. During the trial, two ship-to-ship transfers consisting of 4,000 cubic meters of ammonia took place between a gas carrier owned by Mitsui O.S.K Lines and another carrier owned by Navigator Gas. The transfers were led by the Global Centre for Maritime Decarbonisation, which has been conducting trials and studies to enable alternative fuels for refuelling ships. Sign up here. https://www.reuters.com/sustainability/climate-energy/global-consortium-pioneers-ammonia-cargo-transfer-between-ships-australian-port-2024-09-19/
2024-09-19 04:38
A look at the day ahead in European and global markets from Rae Wee With the Federal Reserve's highly anticipated rate cut done and dusted, the Bank of England (BoE) is next up in the rate decision spotlight, although Thursday's outcome looks unlikely to be a head-turner. The BoE doesn't have the luxury of claiming "greater confidence" - as the Fed highlighted in its statement - that domestic inflation is coming to heel. Certainly not with Britain's services inflation running hot at an annual 5.6%. That all but cements the case for a steady outcome later in the day, with rates likely to be left unchanged at 5.0%. If anything, policymakers at the BoE are likely to reiterate their "careful" stance against easing too fast or too soon. Still, stock futures point to a positive open for Europe, with EUROSTOXX 50 futures and FTSE futures up sharply, as the equities markets' exuberance over the outsized Fed rate cut spills over from Asia. However, the currency market reaction was a classic case of "buy the rumour, sell the fact". The dollar clawed back its losses against most of its peers, surging more than 1% against the yen at one point. Thursday's focus may end up less on the BoE's rate decision than on next year's target for reducing its balance sheet of gilts, which became bloated during the pandemic. The market widely expects it to target another 100 billion pound ($132 billion) reduction over the next 12 months. That could be a potential boon for the bond market, since repeating that target would mean a 75% reduction in active gilt sales due to a large schedule of maturing debt that would run off automatically. Another area of note on Thursday was a broad fall in Chinese bond yields, on expectations that Beijing could soon announce more policy easing to prop up its ailing economy now that the Fed is out of the way. Stocks in Hong Kong and China also reversed early losses and traded higher in anticipation of further stimulus measures. Key developments that could influence markets on Thursday: - Bank of England rate decision - U.S. weekly jobless claims Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-09-19/
2024-09-19 04:08
JAKARTA, Sept 19 (Reuters) - Indonesia's parliament on Thursday passed President-elect Prabowo Subianto's maiden budget for 2025, with spending set at 3,621.3 trillion rupiah ($237 billion) and the fiscal deficit projected to be 2.53% of gross domestic product. The budget assumes economic growth of 5.2%, a small increase from 2024's forecast of 5.1%, and a revenue target of 3,005.1 trillion rupiah. The budget accommodates key programmes of Prabowo's incoming government, including a free meal policy for children which will cost 71 trillion rupiah, free health check-ups, the building of hospitals and renovating schools, and food security initiatives. Prabowo will start his five-year term on Oct. 20. ($1 = 15,272 rupiah) Sign up here. https://www.reuters.com/world/asia-pacific/indonesias-parliament-passes-prabowos-maiden-budget-2024-09-19/
2024-09-19 03:33
ORLANDO, Florida, Sept 18 (Reuters) - Beyond the immediate headlines generated by the Fed's 50 basis point interest rate cut, it is policymakers' revised outlook for the fed funds rate's eventual destination, and how soon it takes to get there, that matters more. Broadly speaking, the Fed indicated on Wednesday it will emerge from its restrictive policy stance a little sooner than previously indicated, and the eventual 'neutral' level of policy will be slightly higher. The Fed is essentially signaling a slightly faster and shallower easing cycle. The first part of that may point to alarm over the labor market or economy, but the second part suggests officials have increasing confidence in the economy's resilience. Officials are hoping that bolder, quicker action from a position of relative strength will best protect the labor market and growth, which will hopefully steer the economy away from recession. In short, the Fed thinks the 'soft landing' is still in sight. This may explain why bond yields rose and stocks eventually fell on Wednesday, as some of the more optimistic hopes for lower rates over the longer term evaporated. HIGHLY RESTRICTIVE The Fed lowered its fed funds target range to 4.75-5.00%, the midpoint being 4.875%. It also raised its median projection for the longer run fed funds rate to 2.9% from 2.8% in June. That's a small change, but 2.9% is the highest since 2018 and significantly up from 2.5% in December where it had been virtually unchanged for years. What's more, the median Fed official's estimate has the policy rate down at 2.9% in just over two years, by the end of 2026. Recent Staff Economic Projections indicated the longer run fed funds rate, or neutral rate, would not be reached for at least three years. Implicitly, the Fed had previously been admitting that policy would remain in restrictive territory - that is, above 'neutral' - for a considerable length of time. That was the essence of the 'higher for longer' view on interest rates. Now though, the higher projected 'terminal' rate in theory reduces the amount of policy restriction that has to be removed before policy becomes stimulative. Most analysts agree policy has been highly restrictive for some time. In a research note published earlier this month Fed economists estimated the real rate of interest in March was about 1.15 percentage points above the natural rate, "at about the same level that prevailed before the 2001 and 2008 recessions." The real fed funds rate adjusted for annual consumer inflation is the highest in 17 years. Strategists at JP Morgan, meanwhile, noted this week that when set against estimates of 'R-Star', policy was more restrictive than at any time in the past 30 years in real terms. R-STAR, FLOATING IN THE SKY 'R-Star' is the real rate of interest that neither stimulates nor crimps economic activity when the economy is at full employment. Assuming the Fed's 2% inflation goal is reached, and bearing in mind the Fed's new long-run policy rate forecast of 2.9%, Fed officials see R-Star at around 0.9%. R-Star is often dismissed or derided because it is a theoretical, unknowable number that is always changing. But as New York Fed President John Williams noted in July, it is either explicitly or implicitly "at the core of any macroeconomic model or framework one can imagine." Investors can't ignore it. Taking into account the new fed funds midpoint rate of 4.875% and policymakers' new long-term forecast of 2.9%, it can reasonably be inferred that Fed policy is now restrictive by around 200 basis points. Put another way, the fed funds rate won't be considered neutral until it is reduced by another 200 basis points or so, which the Fed signaled it intends to do by the end of 2026. That's not set in stone, and Chair Jerome Powell stressed that upcoming Fed decisions will be data-dependent and on a meeting-by-meeting basis. Investors will make up their own minds, of course, but the Fed on Wednesday signaled it won't fall behind the curve and remains confident in a soft landing. (The opinions expressed here are those of the author, a columnist for Reuters.) Sign up here. https://www.reuters.com/markets/rates-bonds/fed-sees-higher-terminal-rate-reached-sooner-mcgeever-2024-09-19/
2024-09-19 00:48
HANOI, Sept 19 (Reuters) - A tropical storm is forecast to make landfall in central Vietnam late on Thursday, bringing torrential rains that could trigger dangerous floods, the weather agency said, shortly after northern regions were hit by the powerful Typhoon Yagi. Storm No.4, as it is known in Vietnam, is forecast to hit the coast from Quang Tri to Quang Nam province in the evening with wind gusts of up to 102 kph (63 mph), the agency said in a report. Due to the possible impact of the storm, Dong Hoi airport in the north central coast will be shut from 1500 to 2200 local time (0800 to 1500 GMT) on Thursday, Vietnam's civil aviation authority (CAAV) said. The Southeast Asian country has been reeling from the impacts of Typhoon Yagi, the strongest storm to hit Asia this year, which made landfall in northern Vietnam nearly two weeks ago. The typhoon killed more than 290 people and caused property damages of around $1.6 billion. Storm No.4 will trigger rains of between 100 to 300 millimetres (4 to 12 inches) from Thursday to Friday in central Vietnam, including in the tourism destination of Danang, the agency said. Rains will also hit the Central Highlands, home to Vietnam's largest coffee growing area, it said. Sign up here. https://www.reuters.com/world/asia-pacific/tropical-storm-make-landfall-central-vietnam-late-thursday-2024-09-19/
2024-09-19 00:48
Prices rise as market participants digest Fed rate cuts Declining stockpiles improve analysts forecasts on oil prices Flare-up in Middle East tensions also supporting oil Weak demand in China still a concern for oil investors NEW YORK, Sept 19 (Reuters) - Oil prices extended their recent recovery rally and rose more than 1% on Thursday as a large cut in U.S. interest rates and declining global stockpiles helped offset some of the demand concerns arising from weak consumption in China. Brent futures settled at $74.88 a barrel, up by $1.23, or 1.7%. U.S. crude gained $1.04, or 1.5%, to $71.95 a barrel. Prices have been recovering after Brent fell below $69 for the first time in nearly three years on Sept. 10, and both benchmarks have registered gains in five of the seven sessions since then. The U.S. central bank cut interest rates by half a percentage point on Wednesday. Interest rate cuts typically boost economic activity and energy demand, but some also saw the large cut as a sign of a weak U.S. labor market. The Bank of England on Thursday held interest rates at 5.0%. Declining global crude stockpiles should support oil prices going forward, pushing Brent back above $80 in the coming months, UBS analysts said in a note to clients. Crude inventories in the U.S., the world's top producer, fell to a one-year low last week, government data showed on Wednesday. The decline in inventories could accelerate next week as U.S. exports should rebound significantly from the disruptions caused by Hurricane Francine last week, strategists at Macquarie told clients. 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. Crude prices were also being boosted by rising tensions in the Middle East, said Tim Snyder, chief economist at Matador Economics. Walkie-talkies used by Lebanese armed group Hezbollah exploded on Wednesday following similar explosions of pagers the previous day. Security sources said Israeli spy agency Mossad was responsible, but Israeli officials did not comment on the attacks. Weak demand from China's slowing economy was limiting oil's gains, said Alex Hodes, oil analyst at brokerage StoneX. Refinery output in China slowed for a fifth month in August, statistics bureau data showed over the weekend. China's industrial output growth also slowed to a five-month low last month, and retail sales and new home prices weakened further. Sign up here. https://www.reuters.com/business/energy/oil-prices-fall-us-rate-cut-fails-boost-market-sentiment-2024-09-19/
