Aurelia Butler

Property website Rightmove (OTC:RTMVY) said on Monday that asking prices for homes rose 0.1% in February compared a year earlier, the first annual increase since August 2023. Prices increased by 0.9% from January, broadly in line with the 10-year average of a monthly 1.0% rise in February.After a slowdown, Britain’s property sector has picked up in recent months as mortgage interest rates fell on expectations that the Bank of England will lower borrowing costs this year.A measure of agreed sales in the first six weeks of 2024 was up 16% from a year earlier and was 3% higher compared with 2019, before the coronavirus pandemic, Rightmove said. Properties coming onto the market and buyer enquiries increased by 7%. Tim Bannister, Rightmove’s director of property science, said he was only cautiously optimistic with mortgage rates still elevated in historical terms.BoE officials have said they need to see further evidence of inflation pressures easing before cutting rates, despite the economy falling into a recession late last year. “While the mortgage market has recovered its stability, there are growing signs that the room for lenders to reduce rates further is narrowing, and that rates will settle at elevated levels for the near future,” Rightmove said. Monday’s survey chimed with other signs of an improvement in Britain’s housing market. The Royal Institution of Chartered Surveyors reported this month the biggest jump in new buyer enquiries in nearly two years. Mortgage lenders Nationwide and Halifax both reported a rise in house prices in January. More

(Reuters) -Westpac Banking Corp said it sees scope for monetary policy in Australia to become less restrictive within the next year, while reporting a drop in its first-quarter unaudited net profit versus the prior six-months’ quarterly average.Westpac’s shares were down 0.2% at A$24.515 as at 2324 GMT, after having fallen as much as 0.9% earlier in the session. Australia’s No. 2 mortgage provider says it expects the economy to remain resilient, supported by low unemployment and healthy balance sheets in the corporate sector.The country’s central bank has jacked up interest rates by 425 basis points since May 2022 to tame inflation, which is still well above the target of 2-3%. “The economic slowdown, combined with abating inflationary pressures, should provide scope for monetary policy to become less restrictive within the next year,” CEO Peter King said. The lender’s unaudited net profit for the three months ended Dec. 31 was A$1.5 billion ($978.60 million), down 6% from the quarterly average for the prior six months. It cited the impact of notable items related to hedge accounting as a reason for the fall in profit.”The massive exposure to the property sector coupled with a rapid rise in interest rates is now starting to bite,” said Brad Smoling, managing director at Smoling Stockbroking. “If we don’t have a reduction of interest rates this will be a major issue for Westpac and other Australian Banks to deal with,” Smoling added. Westpac’s margins also took a hit as nearly two years of high interest rates raised cost of mortgage repayments. That along with sticky inflation spurred intense competition among banks, which has flattened their profit margins.The lender’s core net interest margin for the three months ended Dec. 31 was 1.80%, down 4 basis points from second half of 2023.”From a credit quality perspective, we saw a reduction in business stress while a rise in 90+ day mortgage delinquencies reflects the tougher economic environment,” King said. Mortgage payments delayed for more than 90 days in terms of the bank’s total loan book for Australia stood at 0.95% as of end of December. That was 9 basis points higher than at the end of September. Henry Jennings, a senior analyst at Marcustoday Financial Newsletter, said a slight rise in the 90+ day delinquencies was hardly unexpected and shows the bank is managing the current economic environment well. The bank’s common equity tier 1 ratio, a closely watched measure of spare cash, stood at 12.3% as at December-end, down from 12.4% as at September-end.($1 = 1.5328 Australian dollars) More

(Reuters) – A look at the day ahead in Asian markets.China’s markets open on Monday after the Lunar New Year holiday, with investors hoping positive momentum across the region last week can continue despite signs that U.S. inflation, and therefore interest rates, may be stickier than thought.Asian stocks are on a decent run – the MSCI Asia & Pacific ex-Japan index posted its best week of the year last week, a gain of 2%, and its longest weekly winning streak in over a year of four ‘up’ weeks in a row. Was it a coincidence that China was closed? Investors may draw their conclusions on Monday as China reopens for trading. There are signs that the China gloom may be lifting, even if only temporarily. Equities have rebounded from five-year lows, and official figures on Sunday showed that tourism revenues in the Lunar New Year holidays beat pre-COVID levels.The data will offer relief to policymakers battling slowing growth, deflation risks, weak consumer demand and a property sector collapse, although the sustainability of the tourism boost remains uncertain.China’s central bank on Sunday left a key policy rate unchanged as expected when rolling over maturing medium-term loans, an indication that benchmark loan prime rates will also be kept on hold later this week.Beijing is striking a delicate balancing act to support the economy at a time when signs of persistent deflationary pressure call for more stimulus. But aggressive easing risks reviving depreciation pressure on the yuan and capital outflows.Surprisingly hot U.S. producer and consumer price inflation figures last week pushed up Treasury yields, strengthened the dollar and raised doubts on how much the Fed will cut rates this year. Is a second wave of inflation forming?This general tightening of financial conditions could temper any optimism in Asian market trading on Monday. Goldman Sachs’s emerging market financial conditions index last week touched its highest level in three months.The boom in Japanese markets, meanwhile, shows no sign of fading. The Nikkei rose 4.3% last week and is now up 15% so far this year, supported by growing optimism around corporate Japan’s earnings prospects, and a very weak currency.With the Nikkei within a few hundred points of new all-time highs, the market is probably ripe for a spot of profit-taking. But if the dollar holds above 150 yen and launches another test of its recent 33-year peak around 152 yen, a fresh record is on the cards.Asia’s economic calendar highlights on Monday are Thailand’s fourth-quarter GDP and Japanese machinery orders. China’s foreign direct investment data could also be released.Interest rate decisions in South Korea and Indonesia, a flood of PMI reports from across the continent, and Reserve Bank of Australia meeting minutes will help set the tone later in the week.Here are key developments that could provide more direction to markets on Monday:- Thailand GDP (Q4)- Thailand trade (January)- Japan machinery orders (December) (By Jamie McGeever; editing by Diane Craft) More

OSLO (Reuters) -Norway has agreed to help facilitate the transfer of frozen tax funds earmarked for the Palestinian Authority (PA) that were collected by Israel, the Norwegian government said on Sunday, providing vital funding to the Western-backed entity.Under interim peace accords reached in the 1990s, Israel’s finance ministry collects tax on behalf of the Palestinians and makes monthly transfers to the PA, but a dispute broke out over payments in the wake of the Oct. 7 attack by Hamas.The temporary solution will allow payments to resume and prevent a financial collapse for the PA, enabling it to pay salaries and provide essential services such as schools and healthcare, Norway said.”This is critical to promoting stability in the region and for the Palestinian Authority to have legitimacy among its people,” Norwegian Prime Minister Jonas Gahr Stoere said.Under the solution agreed with Israel and Palestinian officials, Norway will serve as an intermediary for holding revenues that Israel has withheld since Oct. 7.”The Palestinian Authority is then willing to accept the other funds,” Norway said.The portion of the revenue Norway will keep equals the portion that Israel estimates for Gaza, said a Norwegian foreign ministry spokesperson.Accessing the revenue is key to the survival of the PA, which exercises limited self-rule in the Israeli-occupied West Bank. Several Western countries, including the United States, also want the PA to play a role in the administration of the Gaza Strip should the war come to an end.On Nov. 2, Israel said it would proceed with a tax revenue transfer to the PA in the West Bank but would withhold funds bound for Gaza, ruled by Hamas but where the PA helps cover public sector wages as well as medicine and social assistance programmes.But on Nov. 6, the PA said it wanted the money in full and would not accept conditions that prevent it from paying its staff. It is estimated to spend some 30% of its budget in Gaza.On Jan. 21, Israeli officials said the Israeli cabinet had approved a plan for frozen tax funds earmarked for the Gaza Strip to be held by Norway instead of transferred to the PA. More

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According to the report, the devaluation of the peso currency carried out by President Javier Milei shortly after his inauguration in early December – and the price hikes caused by it – exacerbated poverty levels, which closed the year at 49.5%.”The true inheritance of the caste model: Six out of every 10 Argentines are poor,” Milei, a libertarian, said in a social media post late on Saturday.Milei took office promising to “dollarize” the economy, tame an annual inflation rate of more than 200%, eliminate the fiscal deficit and end benefits for Argentina’s political dynasties, which Milei calls “the caste.” In December, his government rolled out sweeping economic reforms, primarily a 54% peso devaluation against the U.S. dollar, causing Argentines’ incomes to collapse as prices shot up.Other measures included slashing energy and transportation subsidies and rolling out tax hikes aimed at reaching fiscal balance.On Friday, Argentina’s economy ministry reported a January budget surplus of 518.41 billion pesos ($620.85 million), the first time the number has been in the green since August 2012. Reuters was not immediately able to see a copy of the report. UCA did not respond to a request for comment.($1 = 835.00 Argentine pesos) More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Since the Federal Reserve’s January policy meeting, chair Jay Powell has pushed back against market bets on rapid interest rate cuts. Some analysts expect that pushback to continue when minutes of that meeting are published on Wednesday, particularly given recent signs of stubborn inflationary pressures.The Fed kept rates on hold at the current range of 5.25 to 5.5 per cent last month, and reiterated that policymakers expect to cut rates only three times this year. Before the meeting, the market had been pricing in as many as five cuts in 2024, betting that the central bank would start easing policy in the first half of the year. The meeting, and two higher than expected inflation reports since have brought market expectations closer in line with the Fed’s. Peter Tchir, head of macro strategy at Academy Securities, expects the Fed will re-emphasise its hawkishness, maintaining that there is more progress to be made on inflation before officials are prepared to cut interest rates. While the minutes do reflect what was said at the last meeting, it is generally understood that the Fed can highlight certain discussions in order to convey policy messages, according to Tchir. “Minutes are a policy tool in their own right, rather than simply reflecting the meeting,” he said. “I think we’re going to see this ongoing hawkish tilt, pushing back against the market which got ahead of itself in terms of rate cuts. Now we’ve seen CPI and PPI come in hot, the Fed will make sure the minutes push back on those rate cut expectations,” Tchir added. Kate DuguidIs activity still slowing in the eurozone? Data released on Tuesday is expected to show that the eurozone’s economic downturn eased in February, though most analysts say it will take several months for the region to return to growth. Economists polled by Reuters expect S&P Global’s flash eurozone composite purchasing managers’ index, a closely watched measure of business activity across the bloc, to rise to 48.9 in February — below the 50 threshold that separates expansion from contraction but an improvement on last month’s reading of 47.9.Nomura economist George Buckley said: “The euro area PMIs have been materially weak since mid-2023. We think this might continue in February.”The data will be closely scrutinised by the European Central Bank, which investors expect to begin cutting interest rates around June. With inflation on the retreat, monetary policy is now “constraining growth”. Emmanuel Cau, head of the European equity strategy at Barclays, argues that the much stronger performance of the US — where gross domestic product rose 3.3 per cent in the final quarter of 2023 — had overshadowed improving conditions across the Atlantic.“Without getting carried away, we see some green shoots in the [European] economy,” said Cau, adding that the bank’s economists expect a small acceleration in GDP growth into mid-year from the “current quasi-recession level”.The European Commission agrees, though it last week downgraded its forecasts for eurozone growth this year. The Commission now expects GDP to rise 0.8 per cent in 2024, down from 1.2 per cent in its autumn forecast. George SteerIs the UK rebounding after slipping into recession? After the UK economy slipped into a technical recession in the second half of last year, investors will be watching business activity data next week for signs of a recovery.Economists polled by Reuters forecast that S&P’s composite PMI index will show continued expansion in February on Thursday, slipping slightly to 52.7 from 52.9 the previous month. A reading above 50 indicates a majority of businesses reporting improved activity.A weaker PMI reading could fuel fears of a further downturn after a larger than expected 0.3 per cent fall in fourth-quarter GDP reported this week. That could prompt investors to increase their bets on how much the Bank of England will cut interest rates this year, as they did after this week’s lower than expected inflation figures and disappointing GDP release.However, Philip Shaw, an economist at Investec, expects the index to rise to 53.4, fuelled by an acceleration in services activity. He expects the manufacturing sector to remain stuck in a downturn, with the index barely moved from the previous month to 47.5.Shaw explained that growth in the services sector should be helped by “looser financial conditions” as borrowing costs decline on expectations of rate cuts. “January’s cut in Employees’ National Insurance Contributions probably gave the economy a bit of additional momentum as well,” he said. Shaw also expects a further improvement in consumer confidence helped by lower than expected inflation in January and the easing of mortgage rates. Such figures would “hint at good prospects of an increase in GDP over the first quarter, signalling an end to the recession during the second half of last year”, he added. Valentina Romei More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Geologists are signalling the start of a new energy “gold rush” for a previously neglected carbon-free resource — hydrogen generated naturally within Earth.As much as 5tn tonnes of hydrogen exists in underground reservoirs worldwide, according to an unpublished study by the US Geological Survey. Previewing the results at the American Association for the Advancement of Science annual meeting in Denver, project leader Geoffrey Ellis said: “Most hydrogen is likely inaccessible, but a few per cent recovery would still supply all projected demand — 500mn tonnes a year — for hundreds of years.”The demand for hydrogen as a fuel and industrial raw material, particularly to make ammonia for fertiliser production, has been mainly met so far by chemically reforming gas that is made up largely of methane, known as “blue hydrogen” when the carbon emissions are captured or “grey hydrogen” when they are not. A smaller amount is made by splitting water through electrolysis using renewable energy sources, known as “green hydrogen”.But Mengli Zhang of the Colorado School of Mines said tapping natural hydrogen — also known as geologic or gold hydrogen — would be cleaner and cheaper than blue or green hydrogen. “A gold rush for gold hydrogen is coming,” she told the conference.The prospect is beginning to attract interest from investors. US start-up Koloma raised $91mn last year from funds including Bill Gates’s Breakthrough Energy Ventures. “Geologic hydrogen represents an extraordinary opportunity to produce clean hydrogen in a way that is not only low carbon, but also low land footprint, low water footprint and low energy consumption,” said Paul Harraka, Koloma’s chief business officer.US company Natural Hydrogen Energy has drilled an exploratory well in Nebraska. “It will take a couple of years to ramp up to commercial production,” said Viacheslav Zgonnik, chief executive. “We are doing everything we can to get there faster.”Previous scientific opinion held that little pure hydrogen was likely to exist near Earth’s surface because it would be consumed by subterranean microbes or destroyed in geochemical processes. But geologists now believe hydrogen is generated in large quantities when certain iron-rich minerals react with water, Alexis Templeton of the University of Colorado, Boulder, told the AAAS conference.Hydrogen requires different geological conditions from oil and natural gasfields. “We haven’t looked for hydrogen resources in the right places with the right tools,” said Ellis.Geologists are now finding natural hydrogen reserves around the world. This month researchers reported that more than 200 tonnes of hydrogen a year were flowing from the Bulqizë chromite mine in Albania. The village of Bourakébougou in Mali is often seen as the birthplace of natural hydrogen extraction. Since 2012, almost pure hydrogen has flowed from a borehole there with no diminution of pressure, giving villagers their first electricity supply.Ellis said the Bourakébougou gas well may have inspired a hydrogen rush comparable with the birth of the petroleum industry in 1859, when Edwin Drake drove a pipe into the ground at Titusville, Pennsylvania and struck oil.Climate CapitalWhere climate change meets business, markets and politics. Explore the FT’s coverage here.Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here More