“By 2023, that source of demand will be gone,” Ducrozet said, adding that reinvestments of maturing bonds can mitigate but not eliminate risk.
At the ECB’s March meeting, the strategist believes the ECB is likely to announce a more rapid reduction in the regular asset purchase program, opening the possibility of a hike in interest rates in the second half of the year 2022.
Ducrozet said the pain threshold for the ECB to change course is relatively high when it comes to peripheral bond spreads.
A majority of ECB Governing Council members believe that some volatility could be the price of policy normalization, Ducrozet said, adding that in absolute terms, eurozone bond yields, spreads and average sovereign funding costs remain historically low.
When it comes to Italian government bonds, there is no “fixed pain threshold”, Ducrozet said, but Pictet WM sees the “danger zone” for 10-year BTP spreads on Bund at around 250 basis points. This is well above the current level of 156 basis points.
Oil prices were down, with indirect talks between the United States and Iran to revive the nuclear deal expected later on Tuesday. A new deal could allow more than a million barrels a day of Iranian oil to return to the market.
“As the eyes of the world are on the conflict between Ukraine and Russia, a deal emerges as a distinct possibility in nuclear talks with Iran,” Commerzbank said.
“Oil sanctions against Iran could potentially be eased by the middle of the year, allowing Iranian oil exports to return in the second half of the year.”
While other base metals fell, aluminum rose 1.2% and is on course for a record high due to supply issues.
A set of bullish factors have conspired to push the light metal higher: fears that new sanctions against Russia could weigh on the country’s aluminum exports are one factor; another is rising energy prices that have put some foundries out of business; and the latest factor is a new outbreak of Covid-19 in Guangxi, China, a key aluminum producing region. A major city in the province has been quarantined, threatening to disrupt aluminum production.
Aluminum’s path to higher prices looks clear for Goldman Sachs, buoyed by rising electric vehicle sales and supply constrained by weather-related costs.
Tight natural gas and coal markets have forced power rationing in China and Europe over the past six months, with aluminum smelters most at risk. The rationing “has put the aluminum market on a path to depletion by 2023,” said Goldman Sachs, which raised its 12-month forecast to $4,000/tonne from $3,500/tonne. tonne.
DOW JONES NEWSPLUS
BP sets target to maintain hydrocarbon profits through 2030 while cutting production
BP PLC said on Tuesday it would aim to maintain profits from hydrocarbon production through 2030, even though production is expected to fall 40% by the end of the decade from 2019 levels.
The British oil and gas giant wants annual earnings before interest, tax, depreciation and amortization of hydrocarbons to stay at around $33 billion until 2025, then keep it in the $30-35 billion range until in 2030. BP said this will be achieved through a continued focus on cost and performance, and disciplined investment in high-margin opportunities.
BNP Paribas aims for higher returns for its shareholders until 2025
BNP Paribas SA plans to increase the proportion of profits it pays out to shareholders until 2025, joining a cohort of European lenders to boost shareholder returns after the European Central Bank lifted restrictions on the payouts it imposed at the start of the coronavirus pandemic.
The French bank said on Tuesday it was aiming for a 60% payout rate under its new plan from 2022 to 2025, including a minimum cash payout of 50%.
Ocado’s pre-tax loss for fiscal 2021 widened significantly on investment costs
Ocado Group PLC on Tuesday announced a significantly widened pre-tax loss for the financial year 2021 due to increased investment in its solutions business and said it expects to return to mid-year revenue growth. adolescence in 2022.
The online grocer and retail technology specialist reported a pre-tax loss of £176.9m ($239.5m) compared to a loss of £52.3m for the same period one year earlier.
EDF lowers its estimate of nuclear production for the second time in 2022
Electricité de France SA said on Monday evening that it had reduced its nuclear generation estimate for France in 2022 for the second time this year.
The French public service had already reduced its production forecasts on January 13 after discovering defects in five reactors at its Civaux and Penly sites.
TUI 1Q revenues increased; Said summer bookings are strong
TUI AG said on Tuesday that revenue increased for the first quarter of fiscal 2022 and that it expects a strong summer season in 2022 due to robust booking dynamics in all markets.
Revenue for the period ended Dec. 31 was €2.37 billion ($2.71 billion) compared to €468.1 million a year earlier.
Ericsson to review internal investigation into past compliance issues in Iraq
Ericsson AB said on Tuesday it would consider an investigation into past compliance issues in Iraq after receiving questions from the media about it.
The Swedish telecommunications equipment company said it conducted an internal investigation with outside counsel in 2019 to address compliance concerns about its operations in Iraq.
UK retail sales rose in January 2022 despite inflation
Retail sales rebounded in January 2022 despite rising prices, according to the latest report from the British Retail Consortium and the KPMG Retails Sales Monitor.
Total retail sales rose 8.1% in January on a like-for-like basis from January 2021, when they rose 7.1%, the report said.
European car sales set to grow in 2022 as chips fade
Car sales in Europe are expected to return to growth after two years of decline, and chip supplies are expected to stabilize, the European Automobile Manufacturers Association said on Tuesday.
Auto sales fell in 2021, even compared to the weak comparison of the first part of the Covid-19 pandemic the previous year, due to a shortage of semiconductor chips which slowed production , said the industry lobby group.
Aker Solutions lifts forecast and sees record order potential this year
Aker Solutions ASA on Tuesday raised its revenue forecast and said 2022 could be a record year for orders amid strong tenders and an expected increase in oil and gas investment.
The energy industry service provider reported a net profit attributable to shareholders of NOK 62 million ($7.0 million) in the fourth quarter, compared with a net loss of NOK 852 million a year earlier. Turnover increased by 26% to NOK 8.67 billion.
Sasol to Report Mixed First Half Revenues
sasol ltd. said on Tuesday that it expects to post a mixed performance for the first half of the 2022 financial year, as improved prices were offset by lower production due to difficulties in its South African value chains. .
The South African chemicals and energy group said it expects to report adjusted earnings before interest, tax, depreciation and amortization for the six months ended December 31 of between R30.9 billion and R32.7 billion ( $1.99 billion to $2.11 billion) compared to ZAR18. 0.6 billion for the comparable half-year.
Biden says Nord Stream 2 pipeline won’t go ahead if Russia invades Ukraine
President Biden has said Russia’s Nord Stream 2 gas pipeline to Germany will be suspended if Russia invades Ukraine, with the German chancellor offering her support but not explicitly saying the project will be halted.
“If Russia invades, that means tanks and troops crossing the Ukrainian border, again, then there will be no more Nord Stream 2. We will end it,” Biden said during a briefing. joint appearance with Chancellor Olaf Scholz. of Germany after the leaders’ meeting at the White House. “I promise you we will be able to do that.”
US agrees to lift Trump-era tariffs on Japanese steel
WASHINGTON — The United States said Monday it had agreed to lift import duties on Japanese steel imposed by the Trump administration, removing a long-standing irritant in bilateral relations between the two allies.
The move follows a similar deal with the European Union in October and comes as the Biden administration steps up efforts to strengthen economic ties with countries in the Asia-Pacific region to counter China’s growing influence. .
Talking markets: Struggling Chinese developers may find little relief in policy easing
Stressed Chinese property developers could face new headwinds this year, even as Beijing eases policy support for the sector, with few options on the table for companies carrying some of the heaviest corporate debt loads in the world. country.
A year after Beijing moved to curb property speculation and rein in colossal corporate debt, prompting sales of heavyweights like China Evergrande Group and Kaisa Group Holdings Ltd., signs of relief in the industry are few.
Reserve Bank of Australia is expected to raise its key rate four times by the end of the year
SYDNEY – The Reserve Bank of Australia could raise interest rates four times in a row at the end of 2022 given the economy’s current upward trajectory, according to economist John Edwards, a former member of the policy-making council. central bank policies.
At present, the RBA has the luxury of waiting to see how the economic data develops, but will be on the move by August, embarking on a steady stream of increases in the official exchange rate, Mr. Edwards in an interview.
Investors Gobble Up Dividend Stocks During Market Turmoil
Boring companies have been hot during the stock market’s winter slump.
(MORE TO BE FOLLOWED) Dow Jones Newswires
February 08, 2022 06:06 ET (11:06 GMT)
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