Petrobras considers canceling FPSO tender after high bid, sources say
RIO DE JANEIRO, Feb 21 (Reuters) - Brazil's state-run oil firm Petrobras (PETR4.SA), opens new tab is considering canceling a tender to charter a production storage and offloading vessel (FPSO) from India's Shapoorji Pallonji Energy, two sources with knowledge of the matter told Reuters.
The state-run firm believes the bid by the Indian shipbuilding firm was too high, at $1.5 million per day, and also complained the FPSO would not have enough of its parts built in Brazil, said the sources.
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Reuters
5 hours ago
- Reuters
TRADING DAY London calling, stocks crawling higher
ORLANDO, Florida, June 9 (Reuters) - TRADING DAY Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist I'm excited to announce that I'm now part of Reuters Open Interest (ROI), an essential new source for data-driven, expert commentary on market and economic trends. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X. Trade tensions, policy uncertainty and shaky economic data continue to cloud the near-term outlook for world growth, but they remain on the back burner for now as investors kick off the week by pushing global stock markets higher. In my column today I look at why the dollar has depreciated significantly this year regardless of how U.S. stocks and bonds have performed. The main reason? Hedging. More on that below, but first, a roundup of the main market moves. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves London calling, stocks crawling higher It was a fairly quiet start to the week across global markets on Monday, with strong equity gains in Asia followed by a grind higher on Wall Street which lifted the MSCI World index to a fresh record high. The main areas of focus for investors were China's economic 'data dump' for May, then the high-level U.S.-China trade talks in London. The two are connected - the U.S. is a less important market for China than it used to be, underscored in May's trade figures from Beijing and reflected in the lack of concrete progress from the negotiations in London. China's total exports rose 4.8% in May from a year earlier but this masks a huge split between the U.S. and the rest of the world. Exports to the U.S. plunged 34.4% year-on-year in value terms, the sharpest drop since February 2020 just before the pandemic, while exports to the rest of the world rose 11.4%. Monthly data are volatile, of course, and May's figures were also distorted by tariffs. Still, U.S.-bound shipments worth $28.8 billion last month were just 9% of the total $316 billion. Economist Phil Suttle notes that is less than half the average share in the decade leading up to President Donald Trump's first trade war. The London talks are expected to continue on Tuesday. But as was the case following Trump's telephone call with Chinese leader Xi Jinping on Thursday, there is little indication of a significant breakthrough, far less China bending to U.S. demands. "U.S. Treasury Secretaries who live in unbalanced economies might not want to throw barbs such as the 'most unbalanced in modern history' at China without first looking at some data," Suttle wrote on Monday. "The choice to fight an opponent should be conditioned on a clear-headed view of its strengths and weaknesses. The U.S. has done a marvelous job of (once again) deluding itself on this front," Suttle added. Still, divisions between the two countries and the threat to global supply chains are proving no barrier to rising stock markets. Japan's Nikkei and the MSCI emerging and Asia ex-Japan indexes rose around 1%, Hong Kong-listed tech stocks rose nearly 3%, and Wall Street closed in the green. Meanwhile, the dollar's trend this year of declining despite U.S. stocks and bonds rising was on full display on Monday. Wall Street closed slightly higher and Treasury yields fell as much as 5 basis points at the short end of the curve, yet the dollar slipped. Many analysts say one of the main reasons for this is non-U.S. investor hedging - more on that below. Dollar floored as investors seek that extra hedge All three major U.S. asset classes – stocks, bonds and the currency – have had a turbulent 2025 thus far, but only one has failed to weather the storm: the dollar. Hedging may be a major reason why. Wall Street's three main indices and the ICE BofA U.S. Treasury index are all slightly higher for the year to date, despite the post-'Liberation Day' volatility, while the dollar has steadily ground lower, losing around 10% of its value against a basket of major currencies and breaking long-standing correlations along the way. The dollar was perhaps primed for a fall. It's easy to forget, but only a few months ago the 'U.S. exceptionalism' narrative was alive and well, and the dollar scaling heights rarely seen in the past two decades. But that narrative has evaporated, as U.S. President Donald Trump's controversial economic policies and isolationist posture on the global stage have made investors reconsider their exposure to U.S. assets. But why is the dollar feeling the burn more than stocks or bonds? Non-U.S. investors often protect themselves against sharp currency fluctuations via the forward, futures or options markets. The difference now is that the risk premium being built into U.S. assets is pushing them – especially equity holders – to hedge their dollar exposure more than they have in the past. Foreign investors have long hedged their bond exposure, with dollar hedge ratios traditionally around 70% to 100%, according to Morgan Stanley, as currency moves can easily wipe out modest bond returns. But non-U.S. equity investors have been much more loath to pay for protection, with dollar hedge ratios averaging between 10% and 30%. This is partly because the dollar was traditionally seen as a 'natural' hedge against stock market exposure, as it would typically rise in 'risk off' periods when stocks fell. The dollar would also normally appreciate when the U.S. economy and markets were thriving – the so-called 'Dollar Smile' – giving an additional boost to U.S. equity returns in good times. A good barometer of global 'real money' investors' view on the dollar is how willing foreign pension and insurance funds are to hedge their dollar-denominated assets. Recent data on Danish funds' currency hedging is revealing. Danish funds' U.S. asset hedge ratio surged to around 75% from around 65% between February and April. According to Deutsche Bank analysts, that 10 percentage point rise is the largest two-month increase in over a decade. Anecdotal evidence suggests similar shifts are taking place across Scandinavia, the euro zone and Canada, regions where dollar exposure is also high. The $266 billion Ontario Teachers' Pension Plan reported a $6.9 billion foreign currency gain last year, mainly due to the stronger dollar. Unless the fund has increased its hedging ratio this year, it will be sitting on huge foreign currency losses. "Investors had embraced U.S. exceptionalism and were overweight U.S. assets. But now, investors are increasing their hedging," says Sophia Drossos, economist and strategist at the hedge fund Point72. And there is a lot of dollar exposure to hedge. At the end of March foreign investors held $33 trillion of U.S. securities, with $18.4 trillion in equities and $14.6 trillion in debt instruments. The dollar's malaise has upended its traditional relationships with stocks and bonds. Its generally negative correlation with stocks has reversed, as has the usually positive correlation with bonds. The divergence with Treasuries has gained more attention, with the dollar diving as yields have risen. But as Deutsche Bank's George Saravelos notes, the correlation breakdown with stocks is "very unusual". When Wall Street has fallen this year the dollar has fallen too, but at a much faster pace. And when Wall Street has risen the dollar has also bounced, but only slightly. This has led to the strongest positive correlation between the dollar and S&P 500 in years, though that's a bit deceptive, as the dollar is sharply down on the year while stocks are mildly stronger. Of course, what we could be seeing is simply a rebalancing. Saravelos estimates that global fixed income and equity managers' dollar exposure was at near record-high levels in the run-up to the recent trade war. This was a "cyclical" phenomenon over the last couple of years rather than a deep-rooted structural one based on fundamentals, meaning it could be reversed relatively quickly. But, regardless, the dollar's hedging headwind seems likely to persist. "Given the size of foreign holdings of both stocks and bonds, even a modest uptick in hedge ratios could prove a considerable FX flow," Morgan Stanley's FX strategy team wrote last month. "As long as uncertainty and volatility persist, we think that hedge ratios are likely to rise as investors ride out the storm." What could move markets tomorrow? Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias.
Wales Online
11 hours ago
- Wales Online
Nigel Farage on 20mph, coal mining and steel, as he explains vision for future for Wales
Our community members are treated to special offers, promotions and adverts from us and our partners. You can check out at any time. More info Reform UK leader NIgel Farage has spoken about his vision for the future of Wales, at a press conference today. He took to the stage just after 12pm in Port Talbot, with less than a year until the Senedd elections. His introduction had to be hastily rewritten given the UK Government's announcement, which went live at noon, that the winter fuel payment cuts are being partially reversed. Mr Farage said that Labour "knowing this press conference was taking place", announced they would make a fuel payment announcement at noon, as he was due to speak, but called it a "step in the right direction". He also announced independent councillors Andrew Barry and David Hughes, both members of Merthyr Tydfil council, have joined Reform UK, as they also took to the stage to explain how they had become disillusioned and moved to Reform. The most recent poll for Wales suggests his party is in line to take its first seats in the Senedd at the election in May 2026. Its only representation in Wales at the moment is with councillors, but a YouGov/Barn Cymru poll which asked people their voting intention for the Welsh Parliament in May put Reform UK in second with 25% of the vote. They were only behind Plaid Cymru who were projected to get 30% of the vote and ahead of Labour's 18%, reports Wales Online. In an opinion piece for WalesOnline, the party leader has given his first glimpses of policies ahead of the election. Mr Farage has said the party would allow coal mining again in Wales and says its long term plan is to "reopen the Port Talbot steelworks". The steelworks, owned by Tata, have not closed but its remaining blast furnaces were closed in 2024, with work now ongoing to build an electric arc furnace which will recycle previously-used steel. Thousands of jobs are being lost as part of the change. The Indian-owned company said the blast furnaces were at the end of their operational lives and too expensive to replace. The Port Talbot steelworks were, the company said, losing £1m a day before the blast furnaces were turned off. Reform UK say it would "use Welsh Development Grants to support real industry. We'll redirect economic funding from consultants and NGOs to actual factory floors, machinery, and industrial jobs in places like Llanelli, Shotton, and Ebbw Vale". Nigel Farage has also said the party would also set up "regional technical colleges" for people to have a "path into proper trade". (Image: Getty Images) The party would also, it says, stop any building being used for asylum seeker accommodation, end funding to the Welsh Refugee Council and scrap the Welsh Government's "Nation of Sanctuary". It also vowed to set up an Elon Musk style department to cut costs. "A Reform UK Senedd will also save hundreds of millions each year by cutting bureaucracy, waste and bad management. The establishment of Welsh DOGE will help us uncover where there is woke and wasteful spending and we will make sure those funds are redirected to frontline services," Mr Farage pledges. During the press conference Mr Farage also took aim at the controversial 20mph policy, saying he would reverse it. as he said he doubted the electric arc furnace at the Port Talbot Tata site would "every be switched on", but says their plan is to "reindustrialise Wales". He says in the coming years more steel will be needed and the UK should produce its own steel, and its own coal. "I'm not saying let's open all the pits, there are certain types of coal for certain types of uses, for the blast furnaces, we can use here," Mr Farage said, insisting it would be a small scale, specific mining and not like the "heydays of mining in Wales". Mr Farage also said there would be no going back on devolution, but criticised the running of Wales since. In response, a Welsh Labour spokesperson said: "Nigel Farage has no plans for steel - just a camera crew. You can't restart a blast furnace with a press conference. "Nigel Farage says that hopefully they mightthey'll bring back mining. The people of Wales will see through the false hope and false promises of a public-school boy from England who does not understand them and does not understand Wales. "His answer is to bring back the mines. The only thing Nigel Farage is trying to mine is votes from communities that have already gone through tough times. Nigel Farage has today brought his fantasy politics and magic money tree to Port Talbot. He's gambling with real people's livelihoods." Sign up for the North Wales Live newsletter sent twice daily to your inbox Find out what's happening near you
Reuters
12 hours ago
- Reuters
US wholesale inventories in April revised higher
WASHINGTON, June 9 (Reuters) - U.S. wholesale inventories increased in April amid stockpiling of prescription medication in anticipation of tariffs from the Trump administration. Stocks at wholesalers rose 0.2% instead of being unchanged, as estimated last month, the Commerce Department's Census Bureau said on Monday. Economists polled by Reuters had expected last month's estimate would be unrevised. Inventories, a key part of gross domestic product, climbed 0.3% in March. They advanced 2.3% on a year-over-year basis in April. Wholesale stocks of prescription medication surged 1.3% in April. There were also increases in apparel, motor vehicle, groceries and professional equipment inventories. President Donald Trump has said he would impose tariffs on imports of pharmaceutical products that have long been spared from past trade disputes due to the potential for harm to patients. Apart from drugmakers, businesses front-loaded imports in the first quarter, seeking to avoid Trump's sweeping duties on foreign goods, resulting in a large trade deficit that subtracted a record 4.90 percentage points from GDP. The front-running faded in April, leading to a record decline in imports and the overall trade deficit. While the contraction in the deficit at face value suggests trade could significantly add to gross domestic product in the second quarter, economists say some of the boost could be offset by low inventories. Inventory accumulation increased at a rate of $163.0 billion in the first quarter. The economy contracted at a 0.2% annualized rate in the January-March period, the first GDP decline in three years. It grew at a 2.4% pace in the fourth quarter. Sales at wholesalers edged up 0.1% in April after jumping 0.8% in March. At April's sales pace it would take wholesalers 1.30 months to clear shelves, unchanged from March.
