The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1019 ET - Sterling shows little reaction after U.K. Prime Minister Andy Burnham announced plans to reform pensions in a speech Tuesday, as widely expected. From 2030 the government will adjust the triple lock on pensions, which ensures state pensions rise in line with average earnings, inflation or 2.5%, whichever is highest. Instead pensions will rise every year in line with inflation, or 2.5%. Burnham scrapped the earnings element, saying state pensions would hold their value "relative to earnings over time." He also pledged to build a national care service, create a public body to invest in the electricity grid and strengthen control of water companies. Sterling falls 0.2% to $1.3222 and is flat at 0.8573 per euro, both little changed from levels before the speech. (renae.dyer@wsj.com)
1016 ET - Flat Canadian GDP in July and an advance estimate for modest growth in August support the view that the economy shifted into a lower gear in 3Q but continued to grow, Oxford Economics' Michael Davenport says. He expects that new U.S.-Canada tariffs, tighter financial conditions, and a shrinking population should further weaken growth for Canada in late 2026 and early 2027. Excess slack in the economy and a soft growth outlook lessen upside risks to inflation but Davenport notes that if oil prices remain elevated in the near term as expected, it will likely lead the Bank of Canada to lift interest rates in October and December as insurance against a more persistent pickup in underlying inflation. (robb.stewart@wsj.com; @RobbMStewart)
1005 ET - U.K. utilities shares edge lower as investors react to Prime Minister Andy Burnham's proposal for a new public body to invest in Britain's electricity grid, AJ Bell's Russ Mould writes. Reports before market open Tuesday suggested GB Grid would increase competition for new grid projects. Prime Minister Burnham confirmed the plans in his afternoon address to the ruling Labour Party's annual conference Tuesday. The FTSE 100 utilities sector fell 1.2% at the open, before paring losses to trade down 0.15%. "While the market reaction suggests this is not considered to be an existential threat just yet, there will be concern that this is the first step on the road to renationalisation of the electricity network," Mould says. (josephmichael.stonor@wsj.com)
0943 ET - Ether rises to a one-week high, supported by improved risk sentiment and institutional demand. Risk appetite is helped by a pullback in oil prices on signs that Gulf countries are managing to export significant oil volumes out the region. Meanwhile, U.S. spot ether exchange traded funds attracted about $689.8 million in net inflows during the week ended September 25, showing a clear improvement in institutional demand compared with the weaker flow environment seen earlier in the month, Zaye Capital Markets analyst Naeem Aslam says in a note. If ETF demand stays strong and Treasury yields soften, ether could rise further, he says. Ether rises 2% to as high as $2,747, LSEG data show. (renae.dyer@wsj.com)
0934 ET - Weather in the U.S. is expected to bring only mild temperatures for most of the country, in turn limiting consumer demand for natural gas. According to the latest forecasts from the NOAA's Climate Prediction Center, the eastern half of the U.S. is expected to have "near-normal" temperatures over the next two weeks, which in turn limits how much power people have to use to stay comfortable. "Much of the long range weather data maintains a relatively bearish weather pattern," says NatGasWeather.com in a note. The "Super El Niño" that's expected this winter may keep conditions mild but wet in much of the country. Natural gas futures sink 1.3% to $3.065 per mmBtu. (kirk.maltais@wsj.com)
0926 ET - The restart of the East-West pipeline in Saudi Arabia and the resumption of Red Sea oil exports has crude oil futures down 2% to $90.74 a barrel. This and oil tanker movement seen on the Strait of Hormuz are weighing on crude, although sentiment that any major developments in the U.S.-Iran conflict will wait until after November's midterm elections is expected to limit downward momentum, says Ritterbusch and Associates in a note. Brent crude falls 1.9% to $103.24 a barrel. (kirk.maltais@wsj.com)
0841 ET - A temporary policy aimed at reducing U.K. household energy costs could lower inflationary pressures and could be viewed positively by markets, Deutsche Bank economists Sanjay Raja and Maui Brennan say in a note. Such a move could reduce the need for higher interest rates by the Bank of England, the economists say. Markets price in a 79% chance of a BOE rate increase in November, and fully price in four rate hikes by July 2027, LSEG data show. (miriam.mukuru@wsj.com)
0805 ET - Oil prices retreat on signs of recovering crude exports from major Middle Eastern producers, with Brent crude below $105 a barrel. In afternoon European trading, front-month Brent futures for November are down 1% to $104.19 a barrel, while the December contract falls 1.4% to $96.49 a barrel. The U.S. oil gauge WTI is down 1.5% to $91.18 a barrel. In September, crude exports from the Gulf region reached 80% of prewar levels, according to data from Kpler. Meanwhile, Saudi Arabia resumed exporting oil via its East-West pipeline after repairing damage caused by drone strikes, pointing to an improving supply situation. "The fact that oil prices remain so high is likely due to market participants' scepticism that, given the tense atmosphere between the parties to the conflict, this high level of market supply will be sustainable," says Barbara Lambrecht, commodity analyst at Commerzbank. (giulia.petroni@wsj.com)
0548 ET - Vestas Wind Systems' third-quarter order intake looks light, according to Deutsche Bank. The bank estimates that power solutions orders are down 28% on year and 3% sequentially, based on disclosed orders so far. "While the quarter is not over, we think it's very difficult for VWS to reach consensus expectations here," analyst John Kim writes. The bank expects the Danish wind-turbine maker's third quarter to reflect a more normalized level of project execution in onshore versus the second quarter. Additionally, some offshore issues are holding back power solutions profitability. Service margins could come in at 16%, in line with management's guide for 15.5%-17.5%. Deutsche Bank retains its hold rating on the stock and lowers its target price to 205 Danish kroner from 215 kroner. Shares fall 4.4% to 190.50 kroner. (dominic.chopping@wsj.com)
0505 ET - TotalEnergies' updated strategy largely met expectations, J.P. Morgan's Matthew Lofting writes in a note. The French energy major positioned its portfolio integration and diversification as a way of capturing value throughout the cycle, and during geopolitical disruption, he says. Overall, TotalEnergies' long-term fundamentals are well placed, he adds. Shares are down 1.2% at 79.03 euros. (adam.whittaker@wsj.com)
0449 ET - Legrand's new data-center offering will be key to deliver on its growth plans, UBS analysts say in a research note. The French supplier of electrical equipment outlined its plans to transition to so-called low voltage direct current architectures to enable the next generation of AI data centers. Legrand showcased its offering at an industry fair in Singapore, which seemed credible, and the company expects to be able to take orders for the equipment in the second half of next year, UBS says. While its demonstration seemed credible, a fully commercialized offering by the end of 2027 is now key, the analysts say. Shares jump 7.6%. (adria.calatayud@wsj.com)
0433 ET - Legrand's higher merger-and-acquisition ambitions, paired with its first explicit asset-sale program, suggest the French electrical-equipment maker is taking a more active approach toward reshaping its portfolio, Jefferies analysts say. This should come as little surprise given that the company has stepped up dealmaking activity over the past couple of years, the analysts say. The company now expects deals to contribute around 5% to sales on average through the end of the decade, up from between 3% and 5% previously, and to clean up its portfolio by shedding businesses that generate between 500 million and 1 billion euros in sales. Moreover, its new sales growth targets should be taken well given that the company tends to be conservative in its guidance, the analysts add. Shares rise 6.9%.
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