2025-12-15 06:32

BoE, ECB, BOJ set to announce rate decisions US nonfarm payrolls, inflation data due Yen rises; New Zealand dollar falls Trump says leaning towards Warsh or Hassett for Fed Chair SINGAPORE, Dec 15 (Reuters) - The yen rose on Monday ahead of a crucial week which will see rate decisions from major central banks, as well as key U.S. data that could guide the policy outlook for the Federal Reserve in the new year. The Japanese currency was last 0.5% stronger at 155.08 per dollar, extending its gains from earlier in the session after the Bank of Japan (BOJ) said on Monday most of the Japanese companies it surveyed expected to raise wages in fiscal 2026 at about the same rate as in the current year. Sign up here. Bloomberg News, meanwhile, reported that the BOJ was set to start selling its ETF holdings as early as January. Earlier on Monday, a closely watched survey separately showed that big Japanese manufacturers' business sentiment hit a four-year high in the three months to December. "The data reinforced BOJ rate hike expectations, though markets are already expecting a hike on Friday," said Christopher Wong, a currency strategist at OCBC, who added that attention will be on guidance from Governor Kazuo Ueda regarding future tightening. "Any meaningful recovery for the yen would require not just the BOJ to follow through with stronger guidance and a show of commitment, but also for policymakers to demonstrate fiscal prudence and for the U.S. dollar to stay soft." Moves in the New Zealand dollar were similarly more pronounced than the rest of its peers on Monday, after the country's top central banker pushed back on expectations of rate hikes next year. The kiwi last traded 0.36% lower at $0.5781. Elsewhere, rate decisions from the Bank of England (BoE) and the European Central Bank (ECB) are also due this week. Markets have almost fully priced in a cut by the BoE as still-elevated inflation in the UK shows signs of easing, while expectations are for the ECB to stand pat. Traders have begun speculating that a rate hike could be on the cards for the ECB in 2026. Sterling eased 0.13% to $1.3364, while the euro was down 0.06% at $1.1733. "In terms of the BoE, I think it's going to be very interesting. I think it's going to be a finely balanced decision to cut," said Joseph Capurso, a currency strategist at Commonwealth Bank of Australia. "The risk is that the inflation data that comes out this week may take out some of the pricing for follow-up rate cuts." British inflation data is due on Wednesday. KEY US DATA ON DECK Over in the United States, a host of data delayed by the historic government shutdown is set to be released, giving investors a long-anticipated view of the world's largest economy. The November jobs report is due on Tuesday, while inflation figures are out on Thursday. Against a basket of currencies, the dollar held close to a roughly two-month low hit last week and stood at 98.37. "This upcoming data is somewhat dated as well, and also is affected by the government shutdown, so there's a lot of noise in data," said Sim Moh Siong, a currency strategist at Bank of Singapore. "From policymakers' perspective... this set of data, whatever the outcome is, they will probably interpret it more carefully than usual. The main thing you want to do is to tease out the trend in terms of the labour market in the U.S.." A divided Federal Reserve cut rates last week, but Chair Jerome Powell signalled borrowing costs were unlikely to drop further in the near term as policymakers await more economic clarity. U.S. President Donald Trump said on Friday he was leaning towards either former Fed Governor Kevin Warsh or National Economic Council Director Kevin Hassett to lead the central bank next year. In Asia, data on Monday showed China's factory output and retail sales grew at their weakest pace in more than a year in November, compounding challenges for policymakers who are struggling to find fresh ways to keep the $19 trillion economy humming. The Australian dollar , often used as a liquid proxy for the yuan, was down 0.17% to $0.6643, though the onshore yuan strengthened to a more than one-year high of 7.0497 per dollar. https://www.reuters.com/world/asia-pacific/currencies-guard-ahead-major-central-bank-decisions-us-data-releases-2025-12-15/

2025-12-15 06:08

MPC expected to vote 5-4 to lower Bank Rate to 3.75% Bailey is likely to change his vote to back a rate cut Policymakers are split on inflation-jobs risk balance UK inflation highest in Group of Seven LONDON, Dec 15 (Reuters) - The Bank of England looks set for a knife-edge vote on interest rates this week with Governor Andrew Bailey expected to change his view and tip the balance for a cut. Barring a major surprise in economic data ahead of Thursday's announcement, the BoE's policymakers will vote 5-4 to lower the central bank's benchmark rate to 3.75% from 4.0% according to most analysts polled by Reuters. Sign up here. That would be the first reduction since August and would take borrowing costs to a three-year low. With Britain's inflation rate still the highest among the Group of Seven economies, BoE policymakers voted 5-4 in November to keep borrowing costs on hold. MPC SPLIT, GOVERNOR VOTE IS KEY Public comments from Monetary Policy Committee members since then have suggested that they remain split on whether job losses or inflation pressures pose the biggest risk to the economy. However, Bailey has spoken only briefly about interest rates since he hinted last month at the possibility of voting for a rate cut if there was evidence of falling inflation. Subsequently, Britain's headline inflation rate eased to 3.6% in the 12 months to October - still a long way above the BoE's 2% target but its first fall since May. Data for November due on Wednesday - a few hours before the MPC's vote - is expected to show inflation edged down further to 3.5%, according to the Reuters poll. Similarly, pay growth has slowed and is expected to ease off again in fresh figures on Tuesday. On the same day, S&P Global's survey of purchasing managers will give an early sense of how businesses are responding to finance minister Rachel Reeves' budget on November 26. Andrew Goodwin, chief UK economist at Oxford Economics, said Thursday's rates decision was probably a much closer call than the 90% probability of a cut which is priced by investors. "But it's notable that Bailey has chosen not to push back against expectations of a December cut," Goodwin said. With Britain's inflation rate still close to double its 2% target, the BoE has been unable to move as quickly as the European Central Bank to bring down borrowing costs. The ECB's benchmark borrowing rate now stands at 2%, half that of the BoE. Now, as major central banks signal that they might be close to halting their rate cuts - the Federal Reserve last week signalled one more next year while the ECB might already be done - the BoE is expected to adopt a cautious stance in 2026. Investors and most analysts polled by Reuters currently expect only one rate cut in 2026. Dani Stoilova, Europe economist with BNP Paribas, said the BoE was likely to remain wary about inflation and it might drop its guidance that rates are likely to fall gradually after a cut on Thursday. "Specifically, removing reference to a 'gradual downward path' would maintain the broader message but give the MPC more flexibility," she wrote in a note to clients. While Reeves' budget is likely to lower inflation by around half a percentage point, that impact will be temporary. Britain's economy slowed before the budget as consumers and businesses worried about tax increases. That feeling of uncertainty might have shifted to the political outlook with Prime Minister Keir Starmer's shaky authority over his Labour Party facing a test in local elections in May. "While the BoE is unlikely to embed this rising uncertainty in its projections just yet, we think it adds to the list of potential downside risks that support the case for a December cut," Stoilova said. https://www.reuters.com/world/uk/bank-england-heads-close-vote-likely-rate-cut-2025-12-15/

2025-12-15 06:07

European Commission expected to make announcement on Tuesday Ban could be pushed back 5 years or softened indefinitely -sources Most significant climb-down on EU green policies of past 5 years EV makers say reneging on ban would yield more ground to China BRUSSELS/LONDON/STOCKHOLM, Dec 15 (Reuters) - The European Commission is expected on Tuesday to reverse the EU's effective ban on sales of new combustion-engine cars from 2035, bowing to intense pressure from Germany, Italy and European automakers struggling against Chinese and U.S. rivals. The move, the details of which are still being hashed out by EU officials ahead of its unveiling, could see the effective ban pushed back by five years or softened indefinitely, official and industry sources said. Sign up here. The likely revision to the 2023 law requiring all new cars and vans sold in the 27-nation bloc from 2035 to be CO2 emission-free would be the European Union's most significant climb-down from its green policies of the past five years. "The European Commission will be putting forward a clear proposal to abolish the ban on combustion engines," Manfred Weber, head of the European Parliament's largest group, the European People's Party, said on Friday. "It was a serious industrial policy mistake." Reneging on the ban has divided the sector. Traditional automakers like Volkswagen (VOWG.DE) , opens new tab and Fiat-owner Stellantis (STLAM.MI) , opens new tab have pushed hard for targets to be eased amid fierce competition from lower-cost Chinese rivals. The EV sector, however, sees it as yielding more ground to China in the electrification shift. "The technology is ready, charging infrastructure is ready, and consumers are ready," said EV maker Polestar's (PSNY.O) , opens new tab CEO Michael Lohscheller. "So what are we waiting for?" COMBUSTION ENGINES AROUND FOR 'REST OF CENTURY' The 2023 law was designed to accelerate a transition from combustion engines to batteries or fuel cells and fine automakers who failed to meet the targets. Meeting the targets means selling more electric vehicles, where European carmakers lag Tesla (TSLA.O) , opens new tab and Chinese producers like BYD (002594.SZ) , opens new tab and Geely (GEELY.UL). Europe's carmakers are making EVs, but say demand has lagged expectations as consumers are reluctant to buy more expensive EVs and charging infrastructure is insufficient. EU tariffs on Chinese-built EVs have only slightly eased the pressure. "It's not a sustainable reality today in Europe," Ford (F.N) , opens new tab CEO Jim Farley told reporters in France last week, announcing a partnership with Renault (RENA.PA) , opens new tab to help cut EV costs. Industry needs were "not well balanced" with EU CO2 targets, he said. The EU granted the sector "breathing space" in March, allowing automakers to comply with 2025 targets over three years. But automakers want to continue selling combustion-engine models alongside plug-in hybrids, range extender EVs with 'CO2-neutral' fuels - including biofuels made from agricultural residues and waste such as used cooking oil. Commission President Ursula von der Leyen said in October she was open to use of e-fuels and "advanced biofuels". "We recommend a multi-technology approach," said Todd Anderson, chief technology officer at combustion-engine fuel systems maker Phinia (PHIN.N) , opens new tab, adding the internal combustion engine will "be around for the rest of the century." DIVIDED OPINION The EV industry meanwhile argues the move will undermine investment and push the EU even further behind China. "It's definitely going to have an effect," said Rick Wilmer, CEO of charging hardware and software provider ChargePoint (CHPT.N) , opens new tab. Automakers want the 2030 target of a 55% reduction in car emissions to be phased over several years and to drop the 50% reduction for vans. Germany wants sustainable practices like using low-carbon steel to count towards CO2 emission reductions. The European Commission will also detail a plan to boost the share of EVs in corporate fleets, notably company cars, which make up about 60% of Europe's new car sales. The auto industry wants incentives, pointing to Belgium as a country where subsidies have worked, rather than mandatory targets. The Commission is likely to propose establishing a new regulatory category for small EVs that would enjoy lower taxes and earn extra credits towards meeting CO2 targets. Environmental campaign groups say the EU should stick to its 2035 target, arguing biofuels are in short supply, are not truly CO2-neutral and supplying them would be prohibitively expensive. "Europe needs to stay the course on electric," said William Todts, executive director of clean transport advocacy group T&E. "It's clear electric is the future." https://www.reuters.com/sustainability/climate-energy/eu-yields-pressure-automakers-it-rethinks-2035-combustion-car-ban-2025-12-15/

2025-12-15 06:00

Kast has pledged crackdowns on crime, migration He is a veteran right-wing politician Supported Pinochet in 1988 referendum SANTIAGO, Dec 15 (Reuters) - After falling short in two previous presidential runs, Jose Antonio Kast finally secured the Chilean presidency on Sunday, a sign of how his far-right, anti-immigrant views have gained a wave of new support amid fears about increased crime. Kast, 59, easily beat leftist presidential candidate Jeannette Jara, winning 58% of the vote and steering the South American country toward its sharpest rightward shift since the end of the military dictatorship in 1990. Sign up here. He lost to leftist President Gabriel Boric in the election in 2021, a time when Kast's hardline policies were out of step with an electorate rattled by the COVID-19 pandemic, widespread protests against inequality, and hopes of drafting a new constitution. But now sentiment has shifted and Kast's proposals are resonating with voters who are overwhelmingly concerned about crime and immigration. While Chile remains one of the safest countries in Latin America, an influx of organized crime has led to a rising murder rate and hurt economic growth, with a recent spike in high-profile incidents like kidnappings and assassinations. As well as promising a crime crackdown, Kast has vowed to build border walls and form a specialized police force modeled on U.S. Immigration and Customs Enforcement and tasked with tracking down and deporting migrants in the country illegally. Government data shows the majority are Venezuelans. "This government caused chaos, this government caused disorder, this government caused insecurity," Kast said at the end of the recent campaign. "We're going to do the opposite. We're going to create order, security and trust." DRAWING INSPIRATION FROM EL SALVADOR Kast has taken inspiration from the U.S. for his tough-on-borders approach, and last year visited the mega-prison system built by El Salvador's President Nayib Bukele, a model his platform calls for emulating. The Chilean politician's success makes his country the latest in Latin America to tilt right after Bolivia's election in August and President Javier Milei's success in Argentina's midterm vote in October. Like Milei, Kast - a Catholic with nine children - has expressed strong objections to abortion. He has previously said he would repeal Chile's limited abortion rights and ban sales of the morning-after pill, though he largely focused on other issues during his campaign. Polls show public opinion overwhelmingly supports maintaining existing abortion rights. His economic plan involves more flexible labor laws, corporate tax cuts and less regulation - though he is expected to moderate planned spending cuts widely seen as unrealistic. LINKS TO PINOCHET Kast is the son of a German immigrant, a Nazi party member and army lieutenant who fled to South America after World War Two, where he eventually founded a lucrative sausage business in Paine, south of Santiago. Kast has said his father was a forced Nazi conscript. The president-elect has been married to Maria Pia Adriasola, a lawyer who has frequently campaigned at his side, for more than three decades. His eldest brother, Miguel Kast, was a government minister and central bank president in the early 1980s under the dictatorship of General Augusto Pinochet, during which more than 40,000 people were executed, detained and disappeared, or tortured. One of the "Chicago Boys" who pioneered shock-therapy economics, he pushed deregulation and privatizations. As a law student, Jose Antonio Kast campaigned for the "yes" vote in a referendum on whether Pinochet should remain in power in 1988, a vote that Pinochet lost. After serving as a congressman for the right-wing Independent Democratic Union (UDI) party for more than a decade, Kast stepped down in 2016 to pursue the presidency as an independent but ended up winning less than 10% of the vote. He gained more traction in 2021 running under the banner of his self-founded Republican Party. His style is quite different to that of Milei or Bukele, said Nicholas Watson, Latin America managing director at Teneo. "He is much less flamboyant and more reserved. He is also more of a political insider; he has not burst onto the political scene in the way that Milei did." As such, Chileans view Kast as a familiar face with more than two decades of political experience, said David Altman, a political scientist at Chile's Pontifical Catholic University, adding that Kast benefited from growing rejection of Boric's incumbent government. "It's not that people became more fascist in the space of four years," Altman said. "People abandoned the left and as there essentially was not a political center, they went right. It was the only place where they could land." https://www.reuters.com/world/americas/who-is-jose-antonio-kast-far-right-front-runner-chiles-presidency-2025-11-17/

2025-12-15 05:52

LAGOS, Dec 15 (Reuters) - Nigeria’s richest man Aliko Dangote escalated his fight with regulators on Sunday, accusing them of enabling cheap fuel imports that threaten local refineries. Nigeria is Africa’s biggest oil producer but relies heavily on imports and Dangote’s refinery was meant to change that. Sign up here. Dangote said if imports continue unchecked, they will threaten jobs, investment and energy security. Speaking at his 650,000-barrel-per-day oil refinery in Lagos, Dangote said imports were being used “to checkmate domestic potential”, creating jobs abroad while Nigeria struggles to industrialise. “You don’t use imports to checkmate domestic potential,” he told reporters. Dangote called for an official inquiry into Farouk Ahmed, head of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, citing concerns over his management of the sector and allegations of private expenditures exceeding legitimate earnings. Ahmed did not immediately respond to a request for comment, but he has previously said Dangote refinery wants a monopoly on petroleum products sales, but the refinery's output can not meet local demand. Last month, the regulator urged the president to drop plans to ban imports of refined petroleum products because local output cannot meet the national demand of 55 million litres daily. Dangote disputes this, saying the regulator was distorting the refinery's actual capacity by reporting offtake statistics instead of the true production data. The refinery, designed to end Nigeria’s reliance on imported fuel and save billions in foreign exchange, says it has been unable to secure all the required crude it needs because the regulator has failed to implement a rule that guarantees crude supply to local refiners before exports Dangote said the refinery imports 100 million barrels of crude oil annually — a figure expected to double after expansion of the refinery and limited domestic supply. Despite these hurdles, Dangote vowed to continue with expansion plans for the facility and safeguard his investment, which he said is "too big to fail". He also reiterated plans to list the company on the local stock market and pay dividends in U.S. dollars so “every Nigerian can own a piece of the economy.” Nigeria, Africa’s top oil producer, has long depended on imports due to mothballed state refineries. https://www.reuters.com/world/africa/nigerias-richest-man-dangote-escalates-oil-fight-with-regulator-seeks-corruption-2025-12-15/

2025-12-15 05:45

China tells GCC conditions are ripe for free trade deal FM Wang Yi says China-GCC FTA will signal importance of free trade China, Saudi seek closer coordination on wider diplomacy, security issues Wang emphasises energy and investment cooperation with Saudi Arabia BEIJING, Dec 15 (Reuters) - China's foreign minister has pressed the Gulf Cooperation Council to conclude long-running talks on a free trade agreement with China, attributing the urgency to rising protectionism and unilateralism as free trade comes "under attack", according to a Monday statement from the ministry. Chinese Foreign Minister Wang Yi is on a three-nation tour in the Middle East that began in the United Arab Emirates and is expected to end in Jordan. He met GCC Secretary-General Jasem Mohamed Albudaiwi in Riyadh on Sunday, when he also met top Saudi officials separately. Sign up here. "The talks have lasted for more than 20 years, and conditions for all aspects are basically mature, it is time to make a final decision," he said during a meeting with Albudaiwi, according to the Chinese foreign ministry. A successful FTA will send a "strong signal to the world about defending multilateralism," Wang said, adding that China was supportive of the bloc strengthening its strategic autonomy and coordination, and advancing its integration process. China has interests in deepening cooperation in economy, trade, investment and other fields with the GCC as well, Wang said. CLOSER COORDINATION WITH SAUDI China and Saudi Arabia agreed to closer communication and coordination on regional and international issues, with Beijing lauding Riyadh's role in Middle East diplomacy and security, other statements following a meeting between the nations' foreign ministers showed. Wang's meeting with Saudi Arabia's Foreign Minister Prince Faisal bin Farhan Al-Saud also took place on Sunday in the Saudi capital. A joint statement published by China's official news agency Xinhua did not elaborate on the issues where the two countries would strengthen coordination, but mentioned China's support for Saudi Arabia and Iran enhancing their relations as well as support from both sides for the "comprehensive and just settlement" of the Palestinian issue. "(China) appreciates Saudi Arabia's leading role and efforts to achieve regional and international security and stability," said the statement released on Monday. Wang told his Saudi counterpart that China regarded Saudi Arabia as a "priority for Middle East diplomacy" and an important partner in global diplomacy, a Chinese foreign ministry statement on Monday said. He also encouraged more cooperation in energy and investments, as well as in the fields of new energy and green transformation. In a separate meeting with Saudi Crown Prince Mohammed bin Salman, Wang underscored China's readiness to play a part as the "most reliable partner" in the Middle Eastern country's revitalisation, as well as "inject more stabilising factors" to realise peace and security in the region, another foreign ministry statement showed. The countries have agreed to mutually exempt visas for diplomatic and special passport holders from both sides, according to the joint statement. https://www.reuters.com/world/china/china-saudi-arabia-agree-strengthen-coordination-regional-global-matters-2025-12-15/