2024-09-16 23:30
Sept 16 (Reuters) - Goldman Sachs reiterated its optimistic outlook on gold prices on Monday, citing central bank demand and the imminent interest rate cut from the U.S. Federal Reserve at its policy meeting this week. Gold prices rose to an all-time high at $2,589.6 an ounce on Monday, supported by a weaker dollar and the prospect of a big rate reduction by the Fed. Markets are currently pricing in a 33% chance of a 25-basis-point U.S. rate cut at the Fed's Sept. 17-18 meeting, and a 67% chance of a 50-bps cut, the CME FedWatch tool , opens new tab showed. "While we see some tactical downside to gold prices under our economists' base case of a 25bp Fed cut on Wednesday, we reiterate our long gold trading recommendation and our price target of $2,700/toz by early 2025," the investment bank said in a note. Goldman Sachs noted that while a structurally higher demand from central banks has reset the relationship at the price level, changes in interest rates continue to drive fluctuations in gold prices. It also indicated that exchange-traded funds backed by physical gold are consistently rising as the Federal Reserve's policy rate diminishes. Sign up here. https://www.reuters.com/markets/commodities/goldman-sachs-reiterates-bullish-view-gold-prices-amid-fed-rate-cut-hopes-2024-09-16/
2024-09-16 23:05
LONDON, Sept 17 (Reuters) - Demand for London's most expensive homes cooled last month as high earners worried about the possibility of tax increases by Britain's new centre-left government, a property data firm said on Tuesday. LonRes said sales of property in prime central locations in the British capital were down by 7.5% compared with the same month a year earlier while new sales instructions had risen by 8.1%. The average selling price for prime property was 4.2% lower than a year ago. A post-election bounce in the market in July ended quickly as attention turned to the possibility of tax increases when Labour finance minister Rachel Reeves announces her first budget on Oct. 30, Nick Gregori, head of research at LonRes, said. "The negative sentiment is amplified at the top end of the market, with more specific budget fears in the form of 'non-dom' and other tax changes," Gregori said, referring to the scrapping of tax breaks on some rich taxpayers' overseas income announced in March by the previous Conservative government. Prime Minister Keir Starmer said last month the budget would be "painful" and "those with the broader shoulders should bear the heavier burden", adding to speculation about increases in taxes paid by the wealthiest contributors. Gregori said that while some estate agents reported strong appetite from overseas buyers, others suggested some current international residents were looking to sell. Sign up here. https://www.reuters.com/world/uk/londons-high-end-property-market-cools-worries-about-tax-hit-2024-09-16/
2024-09-16 22:35
NEW YORK, Sept 16 (Reuters) - Investors were more bearish than ever on crude oil last week, deepening a months-long selloff that pressured prices to multi-year lows amid growing concerns of weak demand in top consuming nations. Negative sentiment swept oil markets so strongly that short positions on Brent crude overtook long positions for the first time, data from the Intercontinental Exchange showed on Friday. Short positions - bets on lower prices - totaled 164,223 contracts, while long positions, or bets on higher prices, amounted to 151,543 contracts, the data showed. "This historic speculative selling pressure prompted a more than $10/bbl collapse in crude prices between late-August and this past Tuesday," Commodity Context analyst Rory Johnston wrote. Investors' oil outlook has soured as demand growth for the commodity has failed to meet the lofty levels of recent years, pressured by turmoil in top importer China's economy. Supplies have also overwhelmed markets this year, with U.S. oil producers pumping record amounts of oil. Brent crude futures settled below $70 a barrel on Sept. 10 for the first time since December 2021. They closed at $72.75 a barrel on Tuesday, down more than 20% since this year's peak of more than $90 a barrel in mid-April. Hedge funds were particularly bearish on diesel as prices approached their lowest levels in three years, TACenergy traders wrote on Monday. Money managers increased short bets on U.S. ultra-low sulfur diesel futures by more than 12,000 contracts to 65,084 contracts in the week to Sept. 10, data from the Commodity Futures Trading Commission showed. ULSD futures slumped to $2.04 per gallon last week, their lowest since December 2021, dragged down by weak economic activity and growing use of alternative fuels. Record-low sentiment in speculative markets could mean that the months-long slump in oil prices is nearing its end, going by historical patterns, market participants said. "Extreme positions by speculators are known to be reliable contrary indicators as when everyone gets on the same side of the boat, that's when it tips over," U.S. fuel distributor TACenergy said. They cautioned that it is hard to predict when positioning will reverse, but markets could see sharp volatility when it does. "With so much combined short interest, when the bidding does start, you can expect there to be some fast price spikes," TACenergy said. Sign up here. https://www.reuters.com/markets/commodities/investors-turned-more-bearish-oil-last-week-than-ever-2024-09-16/
2024-09-16 21:47
Sept 17 (Reuters) - A look at the day ahead in Asian markets. If deepening gloom around China and a surging Japanese yen are the local market drivers in Asia, the Fed's upcoming interest rate decision hangs heavily over world markets as growing hopes for a 50 basis point cut push the dollar to new lows for the year. Wall Street lost ground on Monday even as bond yields edged lower, with jitters beginning to bubble up as Wednesday's Fed decision draws closer. Rates traders are now putting a 60% probability on a half percentage point cut and expect 120 bps of easing over the three remaining policy meetings this year. That effectively implies two of them will deliver 50 bps cuts. This front-loaded dovishness is weighing heavily on the dollar, especially against the yen. The Japanese currency on Monday hit its strongest level since July last year, with the dollar falling below 140.00 yen before regaining that threshold. Indeed the MSCI index for emerging market currencies, which dates back to 2009, hit a lifetime high on Monday. The decline in U.S. implied rates and yields is putting Hong Kong interbank rates under downward pressure too. The overnight Hong Kong interbank offered rate or 'Hibor' on Monday hit a one-year low around 2.44%, and one-year Hibor touched its lowest in two years near 4.07%. Amidst all this, China's outlook continues to darken. A "downward spiral", reckons SocGen. "From bad to worse" and "a vicious cycle," says Barclays. "Things could get worse before they get better," warns Morgan Stanley. These are some of the reactions from analysts at global brokerages to the latest wave of weak economic data that shows not only is the world's second largest economy in deep trouble, but the global spillover cannot be ignored either. Economists at Goldman Sachs and Citi lowered their 2024 GDP growth forecasts for China to 4.7%, a level notably below Beijing's target of around 5%. Others may well follow suit, and for most of those that don't, the risk to their outlook is firmly to the downside. Uniformly weak industrial, consumer and house price data on Saturday followed soft bank lending figures on Friday, bolstering the case for aggressive stimulus to shore up demand and growth. The trouble is few analysts expect Beijing to deliver the scale of fiscal and monetary support required. Some analysts point to the U.S. and European housing crashes in the Global Financial Crisis and say it could be a decade before China fully emerges from its property sector implosion. The Chinese 10-year bond yield fell below 2.05% on Monday for the first time ever, nearing a much more symbolically significant break below 2.00%. The two-year yield around 1.35% is near the lows plumbed at the height of the pandemic. Here are key developments that could provide more direction to Asian markets on Tuesday: - India wholesale price inflation (August) - Indonesia trade (August) - Japan tertiary index (July) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-09-16/
2024-09-16 21:28
Sept 16 (Reuters) - The U.S. Department of Energy has made a conditional loan guarantee of up to $1.56 billion to Wabash Valley Resources to help build a low-emissions ammonia production facility in Indiana, the government body said on Monday. The project would repurpose a power plant to produce 500,000 metric tons of ammonia annually by utilizing petcoke, a waste product generated during the oil-refining process, and permanently store carbon dioxide underground, it said. The company must satisfy certain technical, legal, environmental, and financial conditions before the DOE can fund the loan guarantee, the statement said. WHY IT'S IMPORTANT Global production of ammonia, used widely to produce fertilizers, contributes to 1% to 2% of global carbon dioxide emissions. Direct emissions from the U.S. agricultural sector contribute to nearly 10% of total U.S. emissions. The project will be the first to domestically produce low-emissions ammonia for local farmers in the corn belt region of the U.S., primarily comprising Midwestern states, according to the Energy Department. KEY CONTEXT Fertilizer prices have remained volatile over the past few years after Russia's invasion of Ukraine upended global supplies. Several fertilizer companies are setting up ammonia plants in the U.S. to tap into subsidies from the Inflation Reduction Act. Major oil companies such as Exxon Mobil (XOM.N) , opens new tab have signed agreements with fertilizer producers to store CO2 generated from industrial activities inside deep injection wells as part of their endeavor to curb emissions. QUOTE "This low-carbon ammonia would be cost-competitive compared to existing ammonia imports, helping to drive down costs for local businesses and consumers," the energy department said in a letter. NUMBERS The conditional commitment would be part of the $2.4 billion investment that Wabash Valley aims to secure for the project, expected to be completed in 2026. The facility would store 1.6 million metric tonnes of CO2 annually once it becomes fully operational. Sign up here. https://www.reuters.com/business/energy/us-offers-156-bln-conditional-loan-indiana-ammonia-facility-2024-09-16/
2024-09-16 21:00
Line isolated for residual product to burn off Over 5,000 CenterPoint Energy customers initially without power Texas Railroad Commission investigating the incident Sept 16 (Reuters) - A natural gas liquids (NGL) pipeline owned by Energy Transfer (ET.N) , opens new tab caught fire in La Porte, Texas, on Monday morning, the company said in a statement, knocking out power to thousands of homes and businesses and prompting a widespread evacuation. Videos posted by a local news station early in the day showed a massive flame near streets and businesses. The line had been isolated by midday for residual product to burn off, Energy Transfer said, adding that it did not have a timeline for how long that process would take. First responders by mid-afternoon estimated it would take a few more hours to extinguish the fire, city officials said. The evacuation area, which at one point had been a half-mile radius, by then was reduced and included 941 addresses, they added. The fire occurred at a valve station on a 20-inch (50.8-cm) pipeline used to carry NGLs, according to Energy Transfer. NGLs can be used as inputs for petrochemical plants or burned for space heating and cooking, among other uses. The company also said it was aware of reports that an unknown passenger car entered its right-of-way and struck the valve location. The City of La Porte said the cause was undetermined and under investigation. A volunteer firefighter experienced heat stress and was treated at the scene, the nearby City of Pasadena said in a statement. Otherwise, no injuries were reported. The Texas Railroad Commission (RRC), which regulates the state's oil and gas industry, said it was investigating the fire. It said the incident occurred in a pipeline corridor, and that other pipeline operators in the area had been notified of the incident and were set to ensure the safety of their systems. Over 5,000 CenterPoint Energy (CNP.N) , opens new tab customers were without power shortly after the incident, according to a posting on the company's website. That number fell to around 1,600 by midday. "When it is safe to do so, our electric crews will go into the area to assess the damage to our transmission and distribution power lines, poles and equipment and begin restoring service to impacted customers as safely and quickly as possible," the company said. A nearby Walmart (WMT.N) , opens new tab store was evacuated and closed following the incident. Students attending schools near the scene of the fire were safe and sheltering in place, the La Porte Independent School District said. Sign up here. https://www.reuters.com/world/us/pipeline-fire-erupts-la-porte-texas-prompting-evacuations-2024-09-16/
