(Reuters) – Wall Street’s main indexes opened lower on Tuesday as investors waited for a slew of data, including the crucial jobs report, to gauge whether the Federal Reserve will cut interest rates by early next year.

The Dow Jones Industrial Average fell 68.79 points, or 0.19%, at the open, to 36,135.65. The S&P 500 opened lower by 12.53 points, or 0.27%, at 4,557.25, while the Nasdaq Composite dropped 59.09 points, or 0.42%, to 14,126.40 at the opening bell.

(Reporting by Amruta Khandekar; Editing by Pooja Desai)

By Leah Douglas

(Reuters) -Six of the world’s largest dairy companies will soon begin disclosing their methane emissions as part of a new global alliance launched at the United Nations climate summit in Dubai on Tuesday.

Livestock is responsible for about 30% of global anthropogenic methane emissions, from sources like manure and cow burps, according to the U.N.’s Food and Agriculture Organization. Advocacy groups have said that tackling livestock methane should be a major priority at this year’s COP28 summit.

The six members of the Dairy Methane Action Alliance – Danone, Bel Group, General Mills, Lactalis USA, Kraft Heinz and Nestle – will begin reporting their methane emissions by mid-2024 and will write methane action plans by the end of that year.

Methane is nearly 30 times more potent than carbon dioxide, according to the U.S. Environmental Protection Agency, making it a major focus of attempts to curb global warming.

Reducing dairy methane emissions means providing both technical and financial support to farmers around the world to experiment with possible solutions, like feed additives, said Chris Adamo, vice president of government and public affairs at Danone, on a call with reporters.

“There’s not one silver bullet. We have to look at this full spectrum of different options for farms across different geographies,” he said.

Danone this year pledged to cut methane emissions from its fresh milk supply chain by 30% by 2030.

Cutting human-caused methane by 45% this decade would keep global warming under 2 degrees Celsius, according to a 2021 assessment by the Climate & Clean Air Coalition and the United Nations Environment Programme.

Companies involved in the new alliance do not need to pledge to reduce their methane emissions by a specific amount, but stronger measurement and reporting are key tools for the companies to eventually reduce their emissions, said Katie Anderson, senior director of the Environmental Defense Fund’s business-sector food and forest program, on the press call.

“This is driving more accountability,” Anderson said. EDF is convening the alliance.

Globally, food production accounts for about a third of global greenhouse gas emissions. Leaders of this year’s COP have pledged the summit will include action on food sector emissions.

___

For daily comprehensive coverage on COP28 in your inbox, sign up for the Reuters Sustainable Switch newsletter here.

(Reporting by Leah Douglas; Editing by Josie Kao)

LONDON (Reuters) – Enforcement action against crypto firms may have peaked after last month’s $4.3 billion settlement with Binance, as such cases provide companies with a “template” for how they should be governed, a senior U.S. regulator said on Tuesday.

Binance’s settlement with the Commodity Futures Trading Commission (CFTC) and Treasury Department, negotiated by the Justice Department, was for breaking U.S. anti-money laundering and sanctions laws.

U.S. regulators have brought several cases against crypto firms such as Binance, helping to establish “guardrails” to bring “order and structure” to the market, CFTC Commissioner Kristin Johnson told an FT crypto and digital assets summit.

“My hope would be that we have seen a spike, and what we will see going forward is that these early cases will really be a bit of cautionary tale for those firms that really do want to successfully operate in this ecosystem,” Johnson said.

She urged crypto firms to study the Binance settlement to see what sort of governance regulators look for at crypto firms.

“For those firms that really do want to successfully operate in this space, there is an increasingly clear template for how to operate. Take the hint,” Johnson said.

The CFTC will also be “deeply thoughtful” on requiring better disclosures at crypto firms that are vertically integrated, combining different activities under one roof.

(Reporting by Huw Jones; Editing by Mark Potter)

(Reuters) -CVS Health on Tuesday forecast 2024 revenue above market estimates and said it would shift to fixed rates for reimbursements from pharmacy benefit managers and insurers, to boost transparency amid scrutiny on high drug prices.

Out-of-pocket drug prices in the U.S. are decided by a complex, multi-tiered network including insurers, drugmakers, pharmacies and pharmacy benefit managers (PBMs), resulting in ambiguity around fees and markups to the original cost of the drug.

The new CVS model, called CostVantage, will have a fixed markup and fees to define drug cost and related reimbursement with contracted insurers and PBMs, the company said.

PBMs like CVS’ Caremark, which work as middlemen between insurers and drugmakers, have faced scrutiny over their role in surging healthcare costs, with the U.S. Federal Trade Commission also investigating their practices.

CVS’ new drug reimbursement model looks similar to that of Mark Cuban Cost Plus Drug Company, an online pharmacy launched by the billionaire which aims to drive down the cost of drugs broadly by selling them at a 15% markup over its cost, plus pharmacy fees.

Rhode Island-based CVS also said it would bring its portfolio of health services such as doctors clinics and pharmacies under an umbrella brand called CVS Healthspire.

The rebranding encompasses businesses the company built over the last few years such as the biosimilar unit, Cordavis, as well as recently acquired healthcare services firms Signify Health and Oak Street Health.

The company, which last month tempered its 2024 profit forecast for the third time, said it was counting on CostVantage, better margins under its government-supported Medicare Advantage insurance plans for older adults and other healthcare services to boost its earnings.

Evercore analyst Elizabeth Anderson said the forecast underscores the management’s confidence in the stability of medical costs and the company’s ability to offset challenges in 2024.It forecast revenue of at least $366 billion, ahead of analysts’ average estimate of $345.81 billion, according to LSEG data.

Shares of CVS rose nearly 3% in premarket trading.

(Reporting by Leroy Leo in Bengaluru; Editing by Sriraj Kalluvila and Devika Syamnath)

By Natalie Grover

London (Reuters) -Global benchmark Brent fell below $78 a barrel, not far off its July low, despite Saudi Arabia saying OPEC+ supply cuts can go beyond March if necessary.

Brent crude futures edged down by 67 cents, or 0.9%, to $77.36 a barrel by 1301 GMT. U.S. West Texas Intermediate crude futures lost 64 cents, or 0.9%, to $72.40.

There was a tepid attempt to push the market higher after days of declines following the OPEC+ announcement, said Tamas Varga of oil broker PVM, noting that he could see nothing in particular to explain the sudden decline in prices.

“Perhaps the realisation has set in that the underlying picture is still disappointing.”

Comments by Saudi Arabia’s energy minister that OPEC+ production cuts could continue past the first quarter of 2024 lent some price support, said OANDA analyst Kelvin Wong.

Oil prices had declined on Monday on doubts that OPEC+ supply cuts would have a significant impact, said CMC Markets analyst Tina Teng.

On Tuesday, however, the Kremlin said that the cuts agreed by the OPEC+ group will take time to kick in.

The Organization of the Petroleum Exporting Countries and allies including Russia, together known as OPEC+, agreed on Thursday to voluntary output cuts of about 2.2 million barrels per day (bpd) for the first quarter of 2024.

At least 1.3 million bpd of those cuts, however, were an extension of voluntary curbs that Saudi Arabia and Russia already had in place.

The additional cuts were below the 1 million bpd reduction that was already baked into market expectations in the run-up to the OPEC+ meeting, FGE analysts wrote in a note, adding that in practice they expect the overall OPEC+ cut to be closer to 500,000 bpd more than the reductions to fourth-quarter output.

Meanwhile, the resumption of fighting in the Israel-Hamas war has stoked supply concerns, as did attacks on three commercial vessels in international waters in the southern Red Sea.

There was a bright spot on the demand side, with European Central Bank board member Isabel Schnabel telling Reuters the bank can take further interest rate hikes off the table after a “remarkable” fall in inflation.

In the United States, however, data on Tuesday showed factory orders fell by more than analysts had expected in October and the most in more than three years, raising concerns about the health of U.S. demand.

That bolstered the view that increases to interest rates are beginning to limit spending, analysts said.

(Reporting by Natalie Grover, Emily Chow and Colleen HoweEditing by David Goodman)

ROME (Reuters) – Lamborghini reached a deal with unions to introduce a four-day week for its production workers, the labour associations and the company said on Tuesday, as more manufacturing groups re-consider the structure of the work week for their employees.

The FIOM and FIM-CISL unions said the agreement is “historical” as it is the first in the automotive industry in Europe to achieve a significant reduction in working hours without cutting wages, but rather increasing them.

The move comes at a time when many companies and public offices are changing how people work to improve employee well-being and promote company savings after the COVID-19 pandemic and rising costs.

Similar four-day week schemes adopted in other European countries, such as the UK, have found that employees worked more in less time, job retention and recruitment improved and sickness levels had gone down.

“Work less and work better, this is the principle that guided this negotiation, and which is part of a comprehensive reasoning,” a statement from FIOM and FIM-CISL said.

Production workers on a rotating two-shift schedule will alternate a five-day week with a four-day week, overall cutting 22 days of work each year, the unions said.

Those on a three-shift rota, which includes night shifts too, will have a 5-day week alternated with two 4-day weeks, cutting their yearly working days by 31.

The agreement reached with Lamborghini is part of a broader renegotiation of the framework contract used for workers of the car maker, a subsidiary of Germany’s Volkswagen, which also includes 500 new jobs, an increase of annual wages and further labour benefits.

In terms of pay, the deal includes a 50% increase in the current variable bonuses paid to workers as well as a one-off bonus of over 1000 euros ($1,081.80) to be paid this month.

Last week eyewear maker Essilorluxottica agreed with labour unions to test a four-day working week model in its Italian plants, for 20 weeks per year.

Other Italian groups, including aerospace and defence group Leonardo, are also in talks with unions to extend flexible working benefits to their production sites.

($1 = 0.9244 euros)

(Reporting by Giulio Piovaccari and Giulia Segreti, additional reporting by Elisa Anzolin; Editing by Sharon Singleton)

By Amanda Cooper

LONDON (Reuters) -The U.S. dollar stood near a one-week high against a basket of currencies on Tuesday, ahead of a flurry of employment data that could upend investor expectations for the interest rate outlook.

The yuan held steady in the face of a downgrade to the outlook for China’s credit rating from Moody’s, as major state-owned banks stepped in to stem any slide by selling dollars.

The euro took a modest early knock from comments by European Central Bank member Isabel Schnabel, who said in an interview with Reuters that interest rate hikes were off the table, given the recent “remarkable” fall in inflation.

Bitcoin held close to its highest since April last year, near $42,000, as a decline in the dollar in recent weeks has diverted cash into riskier assets.

Investors are keenly awaiting Friday’s U.S. non-farm payrolls report for November. But before then, the monthly JOLTS report – which captures monthly hirings and firings – lands on Tuesday and the private-sector ADP survey is due on Wednesday.

Both could shape expectations for Friday’s number and make for volatile trading in the run-up, given the power of monetary policy expectations to drive currencies right now.

“The market’s main focus now is still very much on what central banks are going to do next year in terms of policy. We’ve had this very dramatic dovish repricing of rate expectations for both the Fed and the ECB over the past week, so that’s certainly having an impact on FX markets,” MUFG currency strategist Lee Hardman said.

The dollar index was up 0.15%, around one-week highs.

Analysts said the dollar’s nudge up was in part due to a reversal of the heavy selloff in recent weeks that stripped 3% off the dollar index in November alone, its steepest monthly decline in a year.

CUTS PRICED IN

Traders have priced in at least 125 basis points worth of rate cuts from the Federal Reserve next year, with a good chance of 50 bps by June, according to CME’s FedWatch tool.

“The Fed will be reactive to the hard data and not anticipatory of it,” said Thierry Wizman, Macquarie’s global foreign exchange and interest rates strategist. “So as long as the activity data deteriorates and inflation retreats, convergence toward lower yields will resume.”

By comparison, futures show there is an 82% chance the ECB could deliver its first rate cut by next March. Inflation across the euro zone has fallen more quickly than most anticipated, as evidenced by last Thursday’s consumer price data.

The euro has lost 1.34% since then and the data was enough to persuade ECB board member Schnabel to change her stance on rate cuts. A month ago, she had insisted hikes must remain an option.

The euro was last down 0.1% at $1.082 and down 0.1% against the pound at 85.72 pence.

The yuan held steady after Moody’s decision to cut China’s credit outlook to “negative” on Tuesday, thanks in part to state-owned banks that were seen swapping yuan for U.S. dollars in the onshore swap market and selling those dollars in the spot market, two sources with knowledge of the matter said.

The offshore yuan was broadly steady at 7.154 per dollar, having traded at 7.16 earlier on.

Sterling was little changed at $1.2624, while the yen was steady, leaving the dollar at 147.11.

The Australian dollar fell 0.9% to $0.6558, below Monday’s four-month high, after the Reserve Bank of Australia (RBA) kept rates at a 12-year high of 4.35% on Tuesday, as widely expected, and noted that economic data received since November had been broadly in line with forecasts.

In cryptocurrencies, bitcoin was down 0.5% at $41,777, narrowly below Monday’s peak of $42,404, its highest since April 2022.

The world’s largest cryptocurrency has gained 150% this year, fuelled in part by optimism that U.S. regulators will soon approve exchange-traded spot bitcoin funds (ETFs), which could open the bitcoin market to millions more investors.

“$40,000 has acted like a magnet since bitcoin finally broke through $30,000 in late October,” said crypto-services firm Nexo co-founder Antoni Trenchev. “It was only a matter of time before the next round number succumbed as enthusiasm about a spot ETF reaches fever pitch.”

(Additional reporting by Rae Wee in SingaporeEditing by Sam Holmes, Christopher Cushing, Susan Fenton and Frances Kerry)

By Natalie Grover

London (Reuters) -Oil prices jumped by nearly 1% on Tuesday, lifted by uncertainty over voluntary output cuts by the OPEC+ group of producers, tensions in the Middle East and some encouraging economic signals in Europe.

Brent crude futures rose 63 cents, or 0.8%, to $78.66 a barrel by 0946 GMT. U.S. West Texas Intermediate crude futures were up 66 cents, or 0.9%, at $73.19.

Comments by Saudi Arabia’s energy minister that OPEC+ production cuts could continue past the first quarter of 2024 lent some price support, said OANDA analyst Kelvin Wong.

Oil prices had declined on Monday on doubts that OPEC+ supply cuts would have a significant impact, said CMC Markets analyst Tina Teng.

On Tuesday, however, the Kremlin said that the cuts agreed by the OPEC+ group will take time to kick in.

The Organization of the Petroleum Exporting Countries and allies including Russia, together known as OPEC+, agreed on Thursday to voluntary output cuts of about 2.2 million barrels per day (bpd) for the first quarter of 2024.

At least 1.3 million bpd of those cuts, however, were an extension of voluntary curbs that Saudi Arabia and Russia already had in place.

Meanwhile, the resumption of fighting in the Israel-Hamas war has stoked supply concerns, as did attacks on three commercial vessels in international waters in the southern Red Sea.

Those incidents followed a series of attacks in Middle East waters since war broke out between Israel and Palestinian militant group Hamas on Oct. 7.

There was a bright spot on the demand side, with European Central Bank board member Isabel Schnabel telling Reuters the bank can take further interest rate hikes off the table after a “remarkable” fall in inflation.

In the United States, however, data on Tuesday showed factory orders fell by more than analysts had expected in October and the most in more than three years, raising concerns about the health of U.S. demand.

That bolstered the view that increases to interest rates are beginning to limit spending, analysts said.

(Reporting by Natalie Grover, Emily Chow and Colleen HoweEditing by David Goodman)

By Amanda Cooper

LONDON (Reuters) – The U.S. dollar regained some ground on Tuesday and hovered near a one-week high against a basket of currencies, ahead of a flurry of employment data that could upend investor expectations for the outlook for interest rates.

The euro took an early knock from comments by European Central Bank member Isabel Schnabel, who said in an interview with Reuters that interest rate hikes were off the table, given the “remarkable” fall in inflation.

Bitcoin held close to its highest since April last year, near $42,000, as a decline in the dollar in recent weeks has diverted cash into riskier assets.

Investors are keenly awaiting Friday’s U.S. non-farm payrolls report for November. But before then, the monthly JOLTS report – which captures monthly hirings and firings – lands later on Tuesday and the private-sector ADP survey is due on Wednesday.

Both could shape expectations for Friday’s number and make for volatile trading in the run-up, given the power of monetary policy expectations to drive currencies right now.

“The market’s main focus now is still very much on what central banks are going to do next year in terms of policy. We’ve had this very dramatic dovish repricing of rate expectations for both the Fed and the ECB over the past week, so that’s certainly having an impact on FX markets,” MUFG currency strategist Lee Hardman said.

The dollar index was up 0.1%, around one-week highs.

Analysts said the dollar’s nudge up was in part due to a reversal of its heavy selloff in recent weeks, which saw the dollar index falling some 3% in November, its steepest monthly decline in a year.

“I think it’s maybe just a little bit of a reassessment as to the U.S. dollar having fallen too far, and too fast,” said Sean Callow, a senior currency strategist at Westpac.

CUTS PRICED IN

Traders have priced in at least 125 basis points worth of rate cuts from the Federal Reserve next year, with a good chance of 50 bps by June, according to CME’s FedWatch tool.

“The Fed will be reactive to the hard data and not anticipatory of it,” said Thierry Wizman, Macquarie’s global foreign exchange and interest rates strategist. “So as long as the activity data deteriorates and inflation retreats, convergence toward lower yields will resume.”

By comparison, futures show there is an 82% chance the ECB could deliver its first rate cut by next March. Inflation across the euro zone has fallen more quickly than most anticipated, as evidenced by last Thursday’s consumer price data.

The euro has lost 1.34% since then and the data was enough to persuade ECB board member Schnabel to change her stance on rate cuts. A month ago, she had insisted hikes must remain an option.

The euro was last down 0.1% at $1.0821 and down 0.1% against the pound at 85.715 pence.

Meanwhile, the yuan was unperturbed by a Moody’s decision to cut China’s credit outlook to “negative” on Tuesday. The ratings agency cited lower medium-term growth and the ongoing decline in the property sector.

In the offshore market, the yuan was broadly steady at 7.153 per dollar, having traded at 7.16 earlier on.

Sterling was little changed at $1.2628, while the yen strengthened, leaving the dollar down 0.1% at 147.05.

The Australian dollar fell 0.7% to $0.6576, below Monday’s four-month high, after the Reserve Bank of Australia (RBA) kept rates at a 12-year high of 4.35% on Tuesday, as widely expected, and noted that economic data received since November had been broadly in line with forecasts.

“The Aussie has had a great run in recent weeks and was arguably overbought over the near-term,” said Matt Simpson, senior market analyst at City Index.

In cryptocurrencies, bitcoin was last down 1.15% at $41,504, narrowly below Monday’s peak of $42,404, its highest since April 2022.

The world’s largest cryptocurrency has gained 150% this year, fuelled in part by optimism that U.S. regulators will soon approve exchange-traded spot bitcoin funds (ETFs), which could open the bitcoin market to millions more investors.

“$40,000 has acted like a magnet since bitcoin finally broke through $30,000 in late October,” said crypto-services firm Nexo co-founder Antoni Trenchev. “It was only a matter of time before the next round number succumbed as enthusiasm about a spot ETF reaches fever pitch.”

(Additioanl reporting by Rae Wee in Singapore; Editing by Sam Holmes, Christopher Cushing and Susan Fenton)

By Rae Wee

SINGAPORE (Reuters) -The U.S. dollar regained some ground on Tuesday and hovered near a one-week high against a basket of currencies, while the Australian dollar fell after its central bank left interest rates unchanged.

The Aussie was last down 0.63% at $0.6578 after the Reserve Bank of Australia (RBA) kept rates at a 12-year high of 4.35% on Tuesday, as widely expected, and noted that economic data received since November had been broadly in line with forecasts.

That left the Antipodean currency some distance away from Monday’s four-month top of $0.6690, which it hit on the back of the U.S. dollar’s decline over the past few sessions.

“The Aussie has had a great run in recent weeks and was arguably overbought over the near-term,” said Matt Simpson, senior market analyst at City Index.

“So we may be seeing a combination of profit-taking following the fact of the RBA’s hold, and the closure of pre-emptive bets that the RBA may have delivered a more hawkish statement.”

The decline in the Aussie also dragged the New Zealand dollar slightly lower, with the kiwi last down 0.25% to $0.6152.

Elsewhere, the greenback held broadly steady, keeping the euro pinned near a three-week low hit on Monday. The single currency last traded at $1.0835.

Sterling was little changed at $1.2628, some distance away from its recent three-month high, while the dollar index stood near a more than one-week high and was last at 103.61.

Analysts said the greenback’s move higher was in part due to a reversal of its heavy selloff in recent weeks, which saw the dollar index falling some 3% in November, its steepest monthly decline in a year.

“I think it’s maybe just a little bit of a reassessment as to the U.S. dollar having fallen too far, and too fast,” said Sean Callow, a senior currency strategist at Westpac.

HARD DATA

U.S. economic indicators this week, including November’s non-manufacturing ISM figures and the closely watched nonfarm payrolls report, will provide further clarity on the future path of interest rates.

Traders have all but priced in a rate cut from the Federal Reserve by the first half of next year.

“The Fed will be reactive to the hard data and not anticipatory of it,” said Thierry Wizman, Macquarie’s global foreign exchange and interest rates strategist. “So as long as the activity data deteriorates and inflation retreats, convergence toward lower yields will resume.”

Against the yen, the dollar fell 0.25% to 146.82, not far from a three-month low of 146.235 yen hit in the previous session.

Data on Tuesday showed core inflation in Tokyo slowed in November, underscoring the Bank of Japan’s view that cost-push pressures in the economy will gradually dissipate.

China’s yuan similarly held steady against the greenback, with the onshore yuan last at 7.1462 per dollar, underpinned by the sale of dollars by major state-owned banks.

In cryptocurrencies, bitcoin last stood at $41,806, not far from the previous session’s peak of $42,404, its highest level since April 2022.

The world’s largest cryptocurrency has charged roughly 153% higher this year on U.S. rate cut expectations and bets that American regulators will soon approve exchange-traded spot bitcoin funds (ETFs), opening the bitcoin market to millions more investors.

“$40,000 has acted like a magnet since Bitcoin finally broke through $30,000 in late October,” said crypto-services firm Nexo co-founder Antoni Trenchev. “It was only a matter of time before the next round number succumbed as enthusiasm about a spot ETF reaches fever pitch.”

(Reporting by Rae Wee; Editing by Sam Holmes and Christopher Cushing)