2025-08-18 17:48
BRASILIA, Aug 18 (Reuters) - Brazil's central bank is still assessing whether the benchmark interest rate at 15% is appropriate to bring inflation down to its 3% target, economic policy director Diogo Guillen said on Monday. Policymakers kept rates unchanged in late July at a near 20-year high after 450 basis points in hikes since last September. They signaled borrowing costs would remain steady for a "very prolonged" period. Sign up here. Speaking at an event hosted by Warren Investimentos, Guillen stressed that the guidance signaled more rate holds. "We are still evaluating whether this is the appropriate rate to bring inflation to target," he said. "Once that rate is determined, it will remain unchanged for a very long period." Guillen acknowledged recent downside surprises in consumer prices readings, but said the key issue with inflation is it remains above target, with expectations and projections also unanchored from the official goal. Prices were up 5.23% in the 12 months through July, down from 5.35% in the previous month and below forecasts. Guillen emphasized economic growth is losing steam, as expected following the central bank's tightening stance. https://www.reuters.com/world/americas/brazil-central-bank-still-assessing-if-15-interest-rate-is-appropriate-says-2025-08-18/
2025-08-18 17:16
Loonie trades in a range of 1.3784 to 1.3831. Price of oil increases 0.5% Housing starts rise 4% in July 10-year yield hits a near three-week high TORONTO, Aug 18 (Reuters) - The Canadian dollar was barely changed against its U.S. counterpart on Monday as oil prices rose and investors awaited domestic inflation data that could guide expectations for the Bank of Canada policy outlook. The loonie was trading nearly unchanged at 1.3814 per U.S. dollar, or 72.39 U.S. cents, after moving in a range of 1.3784 to 1.3831. Sign up here. Canada's consumer price index report for July is due on Tuesday. Economists expect the annual rate of increase in consumer prices to ease to 1.8% from 1.9% in June, but measures of underlying inflation that are closely tracked by the BoC are forecast to remain well above the central bank's 2% target. "Tomorrow’s Canadian inflation report should remain too hot for comfort," Karl Schamotta, chief market strategist at Corpay, said in a note. "The central bank’s preferred trim and median core measures are likely to hold close to the 3% threshold for now as retaliatory tariffs and still-resilient consumer spending levels translate into upward pressure on prices." Investors see a 68% chance that the BoC would leave interest rates unchanged at its next policy decision on September 17. The central bank has been on hold since lowering the benchmark rate to 2.75% in March. The price of oil , one of Canada's major exports, was up 0.5% at $63.11 a barrel, while the U.S. dollar (.DXY) , opens new tab notched gains against a basket of major currencies. Canadian housing starts unexpectedly rose in July, advancing 4% from the previous month, data from the national housing agency showed. Data on Friday from the U.S. Commodity Futures Trading Commission showed that speculators have raised their bearish bets on the Canadian dollar to the highest level since June. The Canadian 10-year yield was up 2.7 basis points at 3.489%, after earlier touching its highest level since July 30 at 3.506%. https://www.reuters.com/world/americas/canadian-dollar-steadies-ahead-domestic-inflation-data-2025-08-18/
2025-08-18 13:29
Swedish policy rate seen on hold at 2.00% Ten of 19 analysts see no more cuts this year Nine analysts see final cut in September Link to poll data: STOCKHOLM, Aug 18 (Reuters) - Sweden's central bank will keep its policy rate unchanged at 2.0% on August 20 with analysts almost evenly divided over whether the Riksbank has done easing in this cycle or whether there is one more cut to come this year, a poll by Reuters showed on Monday. None of the analysts in the poll saw a change in the policy rate this week as the Riksbank balances a stuttering economy with headline inflation running well above the central bank's 2% goal. Sign up here. Ten of 19 analysts expected no change this year or through at least the first half of 2026. "Economic ... growth remains weak," Nomura said in a note. "However, above-target inflation should prevent further policy rate cuts." Sweden's economy has stalled, expanding a meagre 0.1% in the second quarter after a small contraction in the first three months of the year. Cutting the key rate in mid-June, the Riksbank said it might be possible to ease policy further this year to boost growth. However, inflation has proven stubborn with headline consumer prices running too hot. In July, inflation was 3.0%. Central banks are trying to work out whether current price pressures will be temporary, giving them room to help struggling households and businesses, or more long-lasting. In Sweden, rate-cut enthusiasts argue that seasonal and technical factors will mean inflation will fall back after the summer, while growth will continue to disappoint amid geopolitical uncertainty. Nine analysts saw a cut in September this year. "Our base case remains one last cut in September," Bank of America said in a note. "The big picture remains a very clear inflation undershoot next year." The Riksbank will publish its rate decision on August 20, but will not update its forecasts - including its forecast for the rate path ahead. https://www.reuters.com/markets/currencies/swedish-central-bank-seen-keeping-rates-hold-this-week-reuters-poll-shows-2025-08-18/
2025-08-18 13:06
LONDON, Aug 18 (Reuters) - Hedge funds bought U.S. stocks at the fastest pace in seven weeks during the week to August 15, in anticipation of a long awaited interest rate cut expected from the Federal Reserve in September, according to a Goldman Sachs (GS.N) , opens new tab client note. Hedge funds bought indices and financial products that rise and fall on economic health, said the Goldman note seen by Reuters on Monday. Sign up here. That move into U.S. shares comes ahead of the Federal Reserve's annual central bank gathering in Jackson Hole later this week at which Fed chief Jerome Powell could shed more light on the rate outlook. Investors price in a roughly 85% chance of a 25-basis-point Fed cut next month, money market pricing suggests. Recent data has suggested that while U.S. tariffs have not filtered into headline consumer prices yet, jobs market weakness could nudge the central bank to take a more dovish stance. According to the Goldman note, speculators dumped defensive stocks meant to do well in harsher economic circumstances, such as health care and consumer staples. They also exited trades on utilities stocks which are often used as a proxy for interest rate trading. Utilities, staples and health care stocks were sold in the largest amounts in four months, said Goldman. Financials stocks were also modestly net sold yet saw the largest increase in gross trading activity since November 2024 and the second largest in five years. All geographic regions benefited from hedge fund stock buying except for Europe. https://www.reuters.com/markets/wealth/hedge-funds-snap-up-us-stocks-ahead-likely-fed-rate-cuts-says-goldman-sachs-2025-08-18/
2025-08-18 12:53
BRASILIA, Aug 18 (Reuters) - Brazil's economic activity contracted in June, central bank data showed on Monday, reinforcing signs of a slowdown under the weight of high borrowing costs. The IBC-Br index, a proxy for gross domestic product, fell 0.1% in June from May on a seasonally adjusted basis, missing the 0.05% increase forecast in a Reuters poll of economists. Sign up here. The decline was driven by a 2.3% drop in the farming sector, detailed central bank data showed. Excluding farming, the index - which also incorporates central bank estimates for industry and services along with production-related taxes - would have posted a 0.1% rise. In the second quarter, the IBC-Br grew 0.3% from the prior three months. Official GDP figures for the period will be released on September 2 by statistics agency IBGE. Brazil's benchmark Selic rate stands at 15%, near a two-decade high, as policymakers seek to rein in annual inflation that has persistently exceeded the 3% target, though it has more recently shown signs of easing. When keeping rates unchanged in late July, the central bank said the outlook for Latin America's largest economy pointed to moderating growth, while data across sectors and indicators remained mixed. https://www.reuters.com/world/americas/brazil-gdp-proxy-dips-june-weaker-farming-sector-2025-08-18/
2025-08-18 12:38
Treasury yields slip from more than two-week high Zelenskiy to meet Trump in Washington later on Monday Aug 18 (Reuters) - Gold prices eked out gains on Monday, helped by lower U.S. Treasury yields, while market players awaited U.S. President Donald Trump's meeting with Ukrainian President Volodymyr Zelenskiy and European leaders later in the day. Spot gold was 0.4% higher at $3,347.57 per ounce at 1214 GMT, after hitting its lowest level since August 1 earlier in the session. U.S. gold futures for December delivery rose 0.3% to $3,393.70. Sign up here. "The firm tone to gold prices has returned today with the market nudging the $3,350 level (as) the combination of soft yields and a weaker dollar would for sure create a tailwind for gold," said independent analyst Ross Norman. Benchmark 10-year U.S. Treasury yields fell from more than two-week highs. European leaders are set to join Zelenskiy for talks with Trump later on Monday on ways to end the war between Russia and Ukraine. Russia would relinquish tiny pockets of occupied Ukraine and Kyiv would cede swathes of its eastern land which Moscow has been unable to capture, under peace proposals discussed by Russia's Vladimir Putin and Trump at their Alaska summit on Friday, sources briefed on Moscow's thinking said. "Front-running the geopolitical news would be unwise just now given that almost any outcome is conceivable. If there was a sense that tensions over Ukraine were easing, then we might expect some modest softness in gold prices," Norman added. Investors are also looking ahead to the Federal Reserve's annual symposium in Jackson Hole, Wyoming for more cues on the path of U.S. interest rates. Economists polled by Reuters largely expect the Fed to announce a rate cut in September, its first this year, with a possible second cut by year-end. Non-yielding bullion, considered a safe-haven asset during periods of geopolitical and economic uncertainty, tends to perform well in a low-interest-rate environment. Elsewhere, spot silver was up 0.3% at $38.10 per ounce, while platinum fell 0.5% to $1,329.09, after hitting its lowest in nearly a week earlier in the session. Spot palladium gained 0.8% to $1,121.06. It fell to its lowest level since July 10 earlier in the session. https://www.reuters.com/world/china/gold-gains-soft-yields-focus-trump-zelenskiy-meeting-2025-08-18/
