Category: Economy

UPDATE 1-Investors shed safe-haven German Bunds as ECB fortifies the euro zone

* German 30-year yields rise to five-month high

* Long-end Italy/Germany spread at tightest since March

* U.S. payroll numbers show 2.5 mln jobs added

* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr (Adds graphic, updates prices)

By Abhinav Ramnarayan

LONDON, June 5 (Reuters) – Safe-haven German government bonds sold off for a second day on Friday, with yields reaching their highest levels in months, after the European Central Bank’s support for the euro zone helped boost sentiment towards the region.

Southern European borrowing costs fell further and the gap between long-dated Italian and German bond yields shrunk to its narrowest since the first coronavirus-related market rout in late March.

The ECB approved a bigger-than-expected expansion of its stimulus package on Thursday to prop up an economy plunged by the coronavirus pandemic into its worst recession since World War Two.

“If you think about what the ECB has done, it is dramatically supporting the euro through reducing tail risk. Peripheral spreads will keep tightening, especially at the long end,” said Peter Chatwell, Mizuho’s head of rates.

The gap between Italian and German 30-year bond yields was at its narrowest since March 27 at 211 basis points.

Long-dated 30-year German government bond yields rose six basis points to 0.24%, the highest level since January. The bonds were trading at a negative yield just 10 days ago.

“Yesterday, Christine (Lagarde) fired yet another bazooka – almost doubling the size of the purchase programme. That means a lot of support for Italy,” said Gregory Perdon, co-chief investment officer at Arbuthnot Latham.

Italy’s benchmark 10-year bond yields were at 1.42% on Friday, close to Thursday’s two-month low and half of mid-March’s level, when worries around the spread of the novel coronavirus were at their most elevated.

Greek 10-year yields were also at their lowest levels since March at 1.35%.

Employment data from the United States, meanwhile, showed over 2.5 million jobs being added, an improvement from a dire figure the month before and adding to the positive sentiment.

Source: Read Full Article

EMERGING MARKETS-Latam stocks, FX fall from near 3-month highs as risk rally pauses

    * Brazil's real falls after gaining 5% over two days
    * Mexican peso tracks oil prices lower
    * Argentine industrial output plummets in April

 (Adds details, updates prices)
    By Susan Mathew and Ambar Warrick
    June 4 (Reuters) - Latin American stocks and currencies came
off near three-month highs on Thursday as a recent rally in risk
assets, driven by hopes of a post-coronavirus economic recovery,
lost steam.
    MSCI's index of Latam stocks and currencies
 broke a three-day winning streak, falling more
than 1% each.
    Still, analysts said risk assets held more upside strength,
with economic indicators across the globe indicating the worst
of the COVID-19 pandemic had passed. 
    Expectations of more stimulus measures, along with optimism
over a resurgence in economic activity, had driven emerging
market assets higher over the past weeks.
    Brazil's real broke a two-day rally that drove the
currency up about 5%, to trade 0.4% lower. The central
bank on Wednesday signaled that policymakers may be prepared to
cut interest rates more than they have previously indicated.

    A Reuters poll showed that along with broader emerging
market peers, Latam currencies are on a recovery path but depend
heavily on calmer domestic politics and signs of economic
recovery.   
    Brazil is moving aggressively to open its economy even as it
posts a record number of coronavirus -deaths. Latin America has
become a hot spot in the outbreak, with Brazil in the No. 2 spot
globally in the number of infections; Mexico overtook the United
States in daily reported deaths this week.

    Mexico's peso fell 0.5% against a steady dollar as
oil prices declined.
    The country's mining chamber on Wednesday said output will
likely fall by about 17% in 2020. Mexico had restarted the
mining industry last month after deeming it an essential sector.

    Chile's peso fell slightly, a day after the country's
central bank said it would gradually scale back its foreign
exchange intervention program in the non-deliverable forward
markets and speak with its U.S. and Chinese counterparts to
broaden the country's foreign exchange lines.   
    "We expect the CLP to underperform its peers in the near
term as the (central bank) buys dollars, although we think it is
likely to continue trading with the broad macro environment and
find support from (U.S.) Treasury sales," said Citigroup
analysts.
    Argentina's peso traded flat, while stocks
fell more than 1% as markets continued watch for the country to
restructure its sovereign debt.
    The country's April industrial output fell 33.5% from the
same month last year, as measures to contain the virus stymied
economic activity.
    Key Latin American stock indexes and currencies:
    
    Stock indexes             Latest     Daily % change
 MSCI Emerging Markets          988.26              0.02
                                        
 MSCI LatAm                    1974.75             -1.14
                                        
 Brazil Bovespa               93985.89              1.06
                                        
 Mexico IPC                   37843.63             -1.17
                                        
 Chile IPSA                    3844.14               0.3
                                        
 Argentina MerVal             43129.89            -1.649
                                        
 Colombia COLCAP               1159.02              0.08
                                        
                                                        
       Currencies             Latest     Daily % change
 Brazil real                    5.1030             -0.39
                                        
 Mexico peso                   21.8730             -0.53
                                        
 Chile peso                      771.5             -0.16
                                        
 Colombia peso                  3588.3              0.49
 Peru sol                       3.4317             -0.87
                                        
 Argentina peso                68.8900             -0.12
 (interbank)                            
                                        
 
    

 (Reporting by Susan Mathew in Bengaluru; editing by Jonathan
Oatis and Leslie Adler)

Source: Read Full Article

CEE MARKETS-Currencies, stocks ease, with eyes on ECB stimulus moves

    BUCHAREST, June 4 (Reuters) - Central European currencies
fell on Thursday, with the crown and zloty leading regional
losses, as investors focused on the European Central Bank's
policy meeting, which is expected to  approve more aid to the
coronavirus-hit euro zone.
    The economic crisis caused by the new virus pandemic had
hammered currencies in the region, which is the main trading
partner of the euro zone, but a new risk-on mood has partly
helped them to recoup a significant part of their losses.
    By 0910 GMT, the Czech crown and the Polish zloty
 fell by 0.6% on the day to as low as 26.73 and 4.44
against the euro respectively.
    Czech National Bank Governor Jiri Rusnok said in a radio
interview on Thursday the crown was likely to stabilise around 
current levels it reached after recent strengthening.
   
    Hungary's forint eased 0.2% and the Romanian leu
edged down 0.1%. 
    Market watchers expect the ECB to increase bond purchases by
500 billion euros, but a key question is whether it will act on
Thursday or hold out until July as a deal on European Union-wide
fiscal support strengthens the case for patience.
    "Trade is pretty sluggish right now. The general focus is
now on the ECB's next policy moves and their timing," said one
dealer in Bucharest. 
    Stocks also fell, with Budapest's leading losses with
a 0.9% decline. MOL and OTP Bank fell 1.74%
and 3.16% respectively.
    Elsewhere, Romania's finance ministry plans to sell 700
million lei worth of 2027 treasury bonds and an additional 500
million lei of 2023 debt.
             CEE        SNAPSHOT     AT                         
             MARKETS                1129 CET            
                        CURRENCIES                              
                        Latest      Previous  Daily     Change
                        bid         close     change    in 2020
 Czech                     26.7300   26.5510    -0.67%    -4.86%
 crown                                                  
 Hungary                  345.5500  344.8000    -0.22%    -4.17%
 forint                                                 
 Polish                     4.4430    4.4100    -0.74%    -4.20%
 zloty                                                  
 Romanian                   4.8370    4.8315    -0.11%    -1.01%
 leu                                                    
 Croatian                   7.5720    7.5715    -0.01%    -1.67%
 kuna                                                   
 Serbian                  117.6100  117.6200    +0.01%    -0.03%
 dinar                                                  
 Note:       calculated from                  1800 CET          
 daily                                                  
 change                                                 
                                                                
                        Latest      Previous  Daily     Change
                                    close     change    in 2020
 Prague                     932.89  927.5300    +0.58%   -16.38%
 Budapest                 36937.69  37317.04    -1.02%   -19.84%
 Warsaw                    1758.90   1766.85    -0.45%   -18.19%
 Bucharest                 8927.32   8981.80    -0.61%   -10.52%
 Ljubljana                  861.34    860.56    +0.09%    -6.97%
 Zagreb                    1669.26   1673.45    -0.25%   -17.26%
 Belgrade    <.BELEX15      676.28    678.37    -0.31%   -15.64%
             >                                          
 Sofia                      456.92    458.87    -0.42%   -19.58%
                                                                
                        Yield       Yield     Spread    Daily
                        (bid)       change    vs Bund   change
                                                        in
 Czech                                                  spread
 Republic                                               
   2-year    <CZ2YT=RR      0.1000    0.0570   +072bps     +4bps
             >                                          
   5-year    <CZ5YT=RR      0.3870    0.0240   +097bps     +3bps
             >                                          
   10-year   <CZ10YT=R      0.7840    0.0700   +114bps     +8bps
             R>                                         
 Poland                                                         
   2-year    <PL2YT=RR      0.2260   -0.0140   +085bps     -3bps
             >                                          
   5-year    <PL5YT=RR      0.7810    0.0170   +136bps     +3bps
             >                                          
   10-year   <PL10YT=R      1.3810    0.0250   +174bps     +3bps
             R>                                         
             FORWARD                                            
                        3x6         6x9       9x12      3M
                                                        interban
                                                        k
 Czech Rep           <        0.27      0.28      0.30      0.34
             PRIBOR=>                                   
 Hungary             <        0.78      0.73      0.68      0.90
             BUBOR=>                                    
 Poland              <        0.26      0.28      0.30      0.27
             WIBOR=>                                    
 Note: FRA   are for ask prices                                 
 quotes                                                 
 *****************************************************          
 *********                                              
 
 (Editing by Larry King)

Source: Read Full Article

MORNING BID-Sultans of stimulus

A look at the day ahead from Senior FX Correspondent, Saikat Chatterjee. The views expressed are his own.

The beleaguered U.S. dollar got some respite on Thursday as Wednesday’s ADP jobs survey showed 2.8 million jobs being lost, far short of forecasts of 9 million lost, and the ISM non-manufacturing PMI also beat estimates, though it continues to show a contraction. Neither data set would be considered decent under normal circumstances, but market moves show how starved investors are for any evidence of a turnaround that would justify the current elevated market valuations.

U.S. weekly jobless claims are also expected to recede on Friday, but an analysis of 44 countries by economists at Deutsche Bank put the U.S. economy the second worst in unemployment relative to its 10-year average, behind only Colombia. For currency markets that is a long-term negative for the dollar. But even in the short term, the prospects don’t look good. The latest Reuters poll of over 60 analysts predicts the dollar will weaken over the next six months.

Hopes of more stimulus has widened the chasm between market valuations and the real economy, despite expectations for a slow economic recovery, growing concern over U.S.-China tensions, U.S. civil unrest and rising coronavirus infections. On Wednesday, the Federal Reserve widened its municipal liquidity program to include more businesses and Australia offered a stimulus package for construction. Major U.S. stocks ended higher on Wednesday, with the S&P 500 and the Nasdaq near their record closing highs in February and 10-year U.S. treasury yields approached a two-month high of 0.75%. At a price-to-earnings multiple of 22, valuations for the S&P 500 are at their highest level in more than two decades. Although investors remain surprised at the stock market’s resilience, a case can be made for stretched valuations — the risk-free rate for valuing future streams of corporate cash flows is essentially zero as central banks support virtually every corner of the bond market.

And then there is the European Central Bank. Pressure is growing on policymakers to deliver more stimulus in the face of a record rate of economic contraction in the first quarter. Interest rates are widely expected to remain unchanged at its deposit rate of minus 0.5%, but many economists expect the 750 billion-euro Pandemic Emergency Purchase Programme to rise by 500 billion euros. The German coalition government agreed overnight on a 130 billion-euro fiscal stimulus program for its economy after a recovery fund proposal last week by Europe gave the struggling euro a shot in the arm.

The latest policy actions have resulted in a seven-day winning streak for the euro against the U.S. dollar, a move last seen only in December 2013. The euro’s rise to near 1.08 against the Swiss franc has also eased pressure on the Swiss central bank, whose rate of weekly interventions dropped to its lowest since February.

The dollar’s gains have pushed emerging-market currencies lower with the wider index snapping a four-day winning streak to slip 0.25%. The biggest declines came in South Africa’s rand and Mexico’s peso, both down 0.7%, but both still on track for healthy weekly gains. (Editing by Larry King)

Source: Read Full Article

EMERGING MARKETS-Brazil's real on a tear amid bleak outlook

    By Susan Mathew
    June 3 (Reuters) - Brazil's real surged 2.6% on Wednesday
after industrial output in the country fell less than expected,
while other Latin American currencies joined a rally in risk
assets on hopes of a strong economic recovery from a
pandemic-induced recession.
    Industrial production in Brazil fell 18.8% in April at its
fastest pace on record due to coronavirus containment measures,
but the drop was less than the estimated 29.2% slide.
 
    "It still highlights that GDP will fall dramatically in Q2 –
perhaps by 10-12% quarter on quarter," warned William Jackson,
chief emerging markets economist at Capital Economics.
    "It will also provide (the monetary policy committee) with
plenty of reason to cut interest rates further later this
month."
    The real extended gains after firming 3% on Tuesday.
The currency has been one of the most worst performing emerging
market currencies this year, but a recent bout of risk appetite
has lifted the real from record lows, even as pandemic and
political woes persist.
    Hopes of an economic recovery gained momentum as service
sector PMIs from some countries showed improvement as economies
restarted more businesses after a pandemic induced stall, while
the U.S. labor market appeared to stabilize as private payrolls
fall less than expected.
    Sao Paulo listed stocks extended gains to a fourth
session with beaten down airline stocks Azul and Gol
 among the top gainers. 
    Most other Latam stocks also rose, tracking Wall Street
higher, while currencies made strong gains against a weaker
dollar. 
    Chile's peso hit an over 4-month high as copper
prices rallied, while Mexico's peso rose for a fifth
straight session.     
    Argentina's debt restructuring saga continued. A prominent
group of the countries creditors said its restructuring proposal
was in line with an International Monetary Fund assessment of
what would be sustainable, and called for a deal to help the
country avoid a costly default. 
    
    Key Latin American stock indexes and currencies at 1355 GMT:
  Stock indexes           Latest   Daily %
                                   change
 MSCI Emerging Markets     985.00     1.81
                                   
 MSCI LatAm               1973.58     3.77
                                   
 Brazil Bovespa          93135.06     2.29
                                   
 Mexico IPC              37869.88     1.09
                                   
 Chile IPSA               3797.17     1.25
                                   
 Argentina MerVal               -        -
                                   
 Colombia COLCAP          1125.66     0.71
                                   
                                          
      Currencies          Latest   Daily %
                                   change
 Brazil real               5.0767     2.60
                                   
 Mexico peso              21.5760     0.95
                                   
 Chile peso                 766.5     1.79
                                   
 Colombia peso            3574.14     1.51
                                   
 Peru sol                  3.3768     0.53
                                   
 Argentina peso           68.8000    -0.12
 (interbank)                       
                                   
 
 (Reporting by Susan Mathew in Bengaluru;
Editing by Alistair Bell)

Source: Read Full Article

GIC in talks to buy StorageMart stake

SINGAPORE (BLOOMBERG) – Singaporean sovereign wealth fund GIC is in talks to acquire a stake in StorageMart, which describes itself as the largest privately owned storage company in the world, according to people with knowledge of the matter.

Although a deal has yet to be finalised, the potential transaction is slated to value StorageMart at more than US$2.5 billion (S$3.5 billion), including debt, some of the people said. Rosewood Investment may participate in the deal, one of them said.

Representatives for StorageMart, GIC and Rosewood either declined to comment or didn’t immediately respond to requests for comment.

Columbia, Missouri-based StorageMart last month said it added 549 climate-controlled storage units in its latest facility located in Fredericksburg, Virginia. It has about 225 locations in the US, Canada and the UK, its website shows.

StorageMart, a family-operated business led by chief executive officer Mike Burnam and President Cris Burnam, counts TKG, an affiliate of Kroenke Group, among its backers. TKG was founded by Stanley Kroenke, a billionaire whose other holdings include the NFL’s Los Angeles Rams, the NBA’s Denver Nuggets and Arsenal Football Club.

Mr Kroenke sponsored one of the first CMBS issuances of 2019, a US$644 million single asset, single borrower backed by 101 StorageMart-branded self-storage properties.

GIC has been an active participant across the US property market. In December, it entered a joint venture with mall-operator RPT Realty and in 2018, it formed a joint venture with Tricon Capital Group and the Teacher Retirement System of Texas to snap up US.rental homes.

Rosewood is an investment firm based in New York, according to filings.

Storage is set to be among the real estate sectors least impacted by the Covid-19 pandemic, in part due to strong ongoing demand and expectations for only a modest decline in construction activity, according to research provider Green Street Advisors LLC.

Publicly-traded Reits including Public Storage and Extra Space Storage Inc have each fallen less than 7 per cent this year, faring better than the broader Bloomberg US Reits index, which has declined about 14 per cent.

Source: Read Full Article

UPDATE 1-Indian carmakers offer teasers as RBI softens stance, sources say

(Updates with Maruti quotes)

By Nupur Anand and Swati Bhat

MUMBAI, June 2 (Reuters) – Carmakers Maruti Suzuki , Hyundai and Mercedes Benz are offering buyers “teaser loans”, a move sources said followed a softening of the Indian central bank’s stance on the products in the face of a coronavirus crisis induced economic slump.

Although the Reserve Bank of India (RBI) never banned teaser loans, which offer low interest rates for a limited period before rapidly rising, its obvious disapproval had kept banks from offering them in the past, bankers said.

Maruti Suzuki, Hyundai and Daimler’s Mercedes Benz have all teamed up with banks to offer purchase schemes involving teaser deals, recent press releases show.

Maruti Suzuki India was hopeful there would be “an uptick in demand” as a result of its scheme, Shashank Srivastava, an executive at the carmaker, told Reuters.

A recent company survey of 150,000 customers showed a clear desire for “flexible financing”, Srivastava added.

Hyundai, Mercedes Benz and the RBI did not respond to requests for comment.

The RBI has previously said the terms on such loans were not transparent, warning that similar products had been instrumental in the U.S. subprime crisis of 2007-2008.

Five banking sources told Reuters there was a consensus among lenders and automakers that promotional teaser loans were needed to revive car sales, which automakers have warned could fall as much as 45% this fiscal year in a worst-case scenario.

“People will require some easier terms due to COVID-19 and thereafter they can pay higher, so it’s a scheme which is in line with the times,” one of three sources aware of the RBI’S change in position told Reuters.

Banking sources also said India’s Finance Ministry is pressuring banks to increase lending, although they are already saddled with over $120 billion of bad loans.

This burden is likely to rise in the wake of a two-month lockdown that has pummeled India’s economy.

The Finance Ministry did not immediately respond to a request for comment.

“There is a huge demand from the market to bring back promotion-led loans,” the retail head of a private bank that is considering launching a similar scheme said.

“After all, what other option do we have right now?”

One bank was considering using teaser loan schemes for mortgages to attract borrowers, a banker at the state-owned lender said.

A Mumbai-based ex-banker, who declined to be named, said there was a risk that teaser loans would eventually lead to more bad loans at Indian banks.

“Both the bank and the borrower should be aware and beware.” (Reporting by Nupur Anand and Swati Bhat; Editing by Alexandra Ulmer, Simon Cameron-Moore and Alexander Smith)

Source: Read Full Article

GLOBAL MARKETS-Asia stocks hit 3-month peaks, resilient to U.S. rioting

* Asian stock markets : tmsnrt.rs/2zpUAr4

* Asia markets swing higher, Nikkei at 3-mth peak

* China surveys show growth at home, subdued exports

* S&P 500 futures bounce, though riots add to economic woe

* Busy week sees ECB meet, U.S. payrolls report

By Wayne Cole

SYDNEY, June 1 (Reuters) – Asian shares pushed to three-month highs on Monday as progress on opening up economies helped offset jitters over riots in U.S. cities and unease over Washington’s power struggle with Beijing.

There was also relief that while President Donald Trump began the process of ending special U.S. treatment for Hong Kong to punish China, he left their trade deal intact.

“With specific and verifiable measures against China appearing to be weak, markets may draw hollow consolation that the U.S. is treading carefully,” said analysts at Mizuho in a note.

After a cautious start Asian markets were led higher by China on signs parts of the domestic economy were picking up. Hong Kong managed to rally 3.6%, while Chinese blue chips put on 2.4%.

An official business survey from China showed its factory activity grew at a slower pace in May but momentum in the services and construction sectors quickened.

A private survey showed a return to growth in May, though exports remained depressed.

That helped lift MSCI’s broadest index of Asia-Pacific shares outside Japan 2.1% to its highest since early March. Japan’s Nikkei added 0.7% to also reach a three-month peak.

E-Mini futures for the S&P 500 recovered to be flat, having been down 1% in early trade. EUROSTOXX 50 futures firmed 1.4% and FTSE futures 1.1%.

The resilience was notable given major U.S. cities were cleaning up streets strewn with broken glass and burned out cars as curfews failed to stop confrontations between activists and law enforcement.

The turmoil was a fresh setback for the economy which was only just emerging from a downturn akin to the Great Depression. Following poor data on spending and trade out on Friday, the Atlanta Federal Reserve estimated economic output could drop a staggering 51% annualised in the second quarter.

The May jobs report due out on Friday is forecast to show the unemployment rate surged to 19.8%, smashing April’s record 14.7%. Payrolls are expected to drop by 7.4 million, on top of the 20.5 million jobs lost the previous month.

YEARS, NOT MONTHS

“Current unemployment numbers go far beyond what has been experienced in any post-war recession,” wrote Barclays economist Christian Keller in a note.

“To the extent that some sectors may never return to pre-pandemic business-as-usual, labour faces a substantial challenge to reallocate workers,” he added. “Such a process could be a matter of years rather than months or quarters and in the meantime it would weigh on consumer demand.”

Bond investors suspect economies will need massive amounts of central bank support long after they reopen and that is keeping yields super low even as governments borrow much more.

Yields on U.S. 10-year notes were trading steady at 0.66% having recovered from a blip up to 0.74% last month when the market absorbed a tidal wave of new issuance.

The decline in U.S. yields has been a burden for the dollar, but the world’s reserve currency also tends to benefit from safe-haven status to limit the losses.

Early Monday, the dollar was 0.2% softer on a basket of peers at 98.018 having touched an 11-week low of 97.944 on Friday. It was also down on the yen at 107.52.

Much of the dollar’s recent decline has come against the euro which has been broadly boosted by plans for an EU stimulus package. The single currency was last up at $1.1131, after climbing 1.8% last week.

Markets are awaiting a meeting of the European Central Bank on Thursday where it is widely expected to raise its asset buying by around 500 billion euros to 1.25 trillion.

In commodity markets, gold added 0.9% to $1,1742 an ounce .

Oil prices initially eased on worries about U.S. demand, but found support from reports Russia had no objection to the next meeting of OPEC and its allies being brought forward to June 4 from the following week.

Brent crude futures were off 22 cents at $37.62 a barrel, while U.S. crude fell 19 cents to $35.30.

Source: Read Full Article

CANADA FX DEBT-Loonie notches weekly gain as investors look past bleak data

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar dips 0.1% against greenback
    * Loonie touches strongest intraday since March 12 at 1.3714
    * Canada's April GDP falls 11% in flash estimate
    * Canadian bond yields decline across flatter curve

    By Fergal Smith
    TORONTO, May 29 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Friday but largely kept hold of
this week's rally as investors took in stride bleak domestic GDP
data and looked ahead to a policy decision next week from the
Bank of Canada.
    The loonie          was trading 0.1% lower at 1.3775 to the
greenback, or 72.60 U.S. cents. The currency touched its
strongest intraday level since March 12 at 1.3714.
    For the week, the loonie was up 1.6% as investors grew more
optimistic about economic recovery, while it ended higher for
the second straight month.
    Canada's GDP fell at an annualized rate of 8.2% in the first
quarter and an estimated 11% month-over-month in April, when the
coronavirus outbreak shuttered non-essential businesses across
the country. [            
    "Our expectation is for a 40% plunge in Q2 as the economy is
devastated by the lockdowns," said Ryan Brecht, a senior
economist at Action Economics. "The easing of those measures so
far in May suggests that the economy bottomed out in April."
    The price of oil, one of Canada's major exports, was
bolstered by growing fuel demand even as investors worried about
worsening Washington-Beijing relations. U.S. crude oil futures
       settled 5.3% higher at $35.49 a barrel.
    A Bank of Canada interest rate decision is set for next
Wednesday, when Tiff Macklem will take over as governor. The
current governor, Stephen Poloz, is due to retire next Tuesday. 
    "Poloz on the way out has generally been quite optimistic,"
said Amo Sahota, director at Klarity FX in San Francisco. "Are
we going to get a change in tone?"
    Canada's central bank will hold interest rates at a record
low of 0.25% until at least the end of next year, a Reuters poll
showed.             
    Canada's 10-year government bond yield             eased 2.4
basis points to 0.536%.

 (Reporting by Fergal Smith
Editing by Paul Simao and Grant McCool)

Source: Read Full Article

RMB confirms Total's $15 bln funding for Mozambique LNG project

JOHANNESBURG, May 28 (Reuters) – South Africa’s Rand Merchant Bank (RMB) confirmed on Thursday that it is part of a consortium of banks providing $15 billion funding for French energy major Total’s Mozambique liquefied natural gas (LNG) project.

Sources told Reuters last week that Total had secured $14.4 billion in funding for the project with a group of about 20 lenders.

RMB, owned by FirstRand Bank, said the signing of $15 billion in financing was scheduled for June.

“It will be a remarkable achievement in the circumstances,” Jonathan Ross, head of oil and gas coverage at RMB, said in a statement, adding that other projects have experienced delays.

“The backdrop could not have been worse for Total and partners to raise huge volumes of long tenor funding – the economic fallout of COVID-19 has put enormous pressure on banks’ funding and capital and has triggered an oil price crash.”

Exxon Mobil in early April delayed approval of its $30 billion Rovuma LNG project in Mozambique as the COVID-19 pandemic forced the industry to rein in spending.

Total concluded the acquisition of Anadarko’s 26.5% interest in the Mozambique LNG project for $3.9 billion in September. It is expected to start production in 2024. (Reporting by Helen Reid Editing by David Goodman )

Source: Read Full Article