2025-05-23 08:42

Pound trades at highest since February 2022 UK retail sales top forecasts in April Sterling benefits from flows out of US dollar LONDON, May 23 (Reuters) - The pound traded at its highest in over three years on Friday, heading for its largest weekly gain against the dollar since early April, thanks in part to unexpectedly robust UK retail sales data and to ongoing investor unease around U.S. assets. Sunny weather boosted British consumer spending in April. Retail sales volumes jumped by 1.2% month-on-month, the Office for National Statistics said on Friday after a downwardly revised 0.1% increase in March. Economists had forecast a rise of 0.2%. Sign up here. Sterling has gained 1.5% this week and on Friday hit a high of $1.3468, the most since February 24, 2022, when Russia invaded Ukraine, sparking a global flood of money into safe-havens like the dollar. Just over three years later and the investor nervousness about the outlook for the global economy that would normally have funnelled cash into the dollar is sucking capital out of U.S. markets, which are now the epicentre of the uncertainty. U.S. President Donald Trump's erratic application of hefty tariffs on trading partners - even with the pauses and outlines of deals that have ensued - have generated the most uncertainty among investors in years. To boot, Trump's sweeping tax and spending bill that will strain U.S. government finances even further by adding trillions of dollars in debt, has made investors wary of long-dated government bonds, even those outside elsewhere, such as UK gilts. Higher gilt yields have made sterling more attractive to non-UK investors, but the concerns around public finances mean Britain has the highest government borrowing rates in the developed world, with 30-year gilt yields topping 5.5% on Friday, despite news that energy bills were set to drop. "This is a sign that the market remains wary of lending to the UK while the government still does not have control of public spending, even if the decline in the energy price cap is adding downward pressure on short term yields this morning," Kathleen Brooks, XTB research director, said. "The bond market has dictated UK fiscal policy before, and it could do so again now that bond markets remain volatile." Further underpinning sterling this week was Britain agreeing the most significant reset of ties with the European Union since Brexit on Monday, removing some trade barriers and collaborating on defence but also touching on sensitive issues including fishing rights. Data on Wednesday that showed UK consumer inflation picked up faster than expected in April, thereby reducing the Bank of England's ability to quickly cut rates to protect growth. The futures market shows traders see UK rates falling by around 38 basis points by the end of this year, which would imply one quarter-point cut and a roughly 50/50 chance of a second, compared with 50-bp drops in both U.S. and euro zone interest rates in that time. https://www.reuters.com/world/uk/pound-trades-highest-since-early-2022-boosted-by-unease-over-us-assets-2025-05-23/

2025-05-23 08:35

WARSAW, May 23 (Reuters) - Poland's copper mining tax will fall from next year under a new system that will provide deductions related to investment spending, Polish finance minister Andrzej Domanski said on Friday. The tax on mineral extraction, including copper, was introduced in 2012. Poland's biggest copper miner KGHM (KGH.WA) , opens new tab paid 3.87 billion zlotys in tax in 2024, according to its annual report. Sign up here. Domanski said the tax cut and the introduction of investment spending deductions would lower tax revenues by an estimated 10 billion zlotys ($2.66 billion) over ten years and reduce costs for copper producers by the same amount. "The fact that KGHM is a supplier of about 85% of copper in Europe is absolutely crucial," Minister of State Assets Jakub Jaworowski said. "By taking care of investments in Poland, by taking care of the development of KGHM, we also take care of the collective security of the West and the European Union." ($1 = 3.7545 zlotys) https://www.reuters.com/markets/europe/poland-cut-copper-mining-tax-2026-finance-minister-says-2025-05-23/

2025-05-23 07:48

Russian tanker group Sovcomflot posts $393 mln Q1 net loss U.S. imposed extra sanctions on Sovcomflot fleet in January Sovcomflot blames operational issues on sanctions Net loss shows the impact of Western sanctions on Russia May 23 (Reuters) - Russia's leading tanker group Sovcomflot (FLOT.MM) , opens new tab plunged to a net loss of $393 million in the first quarter, blaming the slump on new Western sanctions that have led to operational problems, lower revenues and some vessels sitting idle. Sovcomflot's financial pressures show the impact of sanctions on Moscow over the war in Ukraine at a time when Russia's economy is weakening and exporters are cutting back on rail shipments. Sign up here. Western countries imposed sanctions on Sovcomflot and its fleet in 2024 to try and reduce Russia's revenue from oil sales that can finance its military. In January, the United States added new Sovcomflot vessels to the list of sanctioned assets and withdrew a U.S. licence, granted last year, that had allowed some vessels in its fleet to operate despite sanctions. Sovcomflot, which reported a 49% year-on-year drop in first-quarter revenue to $278.5 million, said the January sanctions had made a particularly substantial impact, creating additional commercial and operational difficulties. "The intensification of Western sanctions has made it more difficult to operate the fleet and led to lower revenues and downtime for some sanctioned vessels," Sovcomflot said in a statement. Sovcomflot's earnings before interest, tax, depreciation and amortisation (EBITDA) fell almost 69% year-on-year to $105 million. Sovcomflot considers the sanctions to be illegal. The bulk of the net loss was marked as a non-cash loss under depreciation and amortisation, referring to ships being revalued. As all Sovcomflot's business is calculated in foreign currency, there were also foreign exchange losses due to the rouble's strengthening, said an industry analyst who declined to be named as they are not authorised to speak to media. "The results are bad, of course, but not terrible," the analyst said, adding that the revenue loss suggested Sovcomflot has raised the discounts it offers on transportation rates. The tightened U.S. sanctions, imposed by Joe Biden's administration, had briefly disrupted Russia's flourishing oil trade with China and India. Moscow's efforts to circumvent shipping sanctions last week saw Russia send a fighter jet into NATO airspace over the Baltic Sea during an attempt to stop a Russian-bound oil tanker thought to be part of Moscow's "shadow fleet". https://www.reuters.com/markets/europe/russias-sovcomflot-posted-net-loss-393-million-2025-05-23/

2025-05-23 07:30

MUMBAI, May 22 (Reuters) - (This May 22 story has been corrected to change 'BofA Research' to 'BofA Global Research' in paragraph 1) Bofa Global Research expects the Indian rupee to strengthen to 84 per U.S. dollar by December 2025 from a prior forecast of 87, joining peers in turning more bullish on the currency amid improving capital inflows and trade engagement. Sign up here. BofA expects the rupee to track broader weakness in the U.S. dollar and be supported by stable domestic fundamentals, it said on Thursday, adding that the Reserve Bank of India’s (RBI) pro-growth stance is likely to attract renewed equity inflows, The RBI cut rates in February and April this year to support growth, with traders pricing in a near-certain 25 basis-point reduction at the June meeting. A potential revival in economic activity could boost foreign interest in Indian stocks. After pulling out $13.5 billion from equities in the January-March period, foreign investors have already pumped in $2.5 billion so far this quarter. An improvement in India’s terms of trade, aided by lower oil prices, is expected to keep the current account deficit within a manageable range. Additionally, while India was flagged by the U.S. as a potential target for higher reciprocal tariffs, ongoing efforts to secure a trade agreement have helped ease those concerns to an extent, BofA said. "These factors are likely to support INR strength through the remainder of the year." BofA's forecast aligns with projections from Goldman Sachs and MUFG Bank. MUFG, which had earlier forecast the rupee at 87.5, revised its target about three weeks ago to 84. Around the same time, ANZ upgraded its December forecast for the rupee to 86 from earlier expectations of 88.5. "We see a mild appreciation bias for the rupee driven by dollar softness, an improving domestic growth outlook, the return of capital flows, and lower commodity prices," said Sakshi Gupta, principal economist at HDFC Bank. https://www.reuters.com/world/india/bofa-joins-peers-lifting-rupee-forecast-sees-84usd-by-december-2025-05-22/

2025-05-23 07:18

Trump's sweeping tax-cut bill passes US House, on way to Senate Gold up 4% so far this week Dollar has lost more than 1% this week May 23 (Reuters) - Gold prices rose 1% on Friday and were on track for their best week in six, boosted by a weaker dollar and as worries over the United States' worsening fiscal health sent investors towards safe-haven bullion. Spot gold was up 1% at $3,325.47 an ounce as of 1119 GMT. Bullion has risen 4% this week, its highest since April 7. Sign up here. U.S. gold futures gained 0.9% to $3,325.10. President Donald Trump's tax bill is supporting gold as there are concerns that this is negative for the fiscal situation of the dollar and some investors are diversifying out of treasury into gold, UBS analyst Giovanni Staunovo said. "We have also seen the 30-year Treasury bills rising strongly in recent weeks, so this shows caution regarding the fiscal situation as well and in this environment, obviously an asset being perceived as a safe haven is benefiting." The dollar (.DXY) , opens new tab slipped 0.5% and was heading for its biggest weekly drop since April 7, making greenback-priced gold cheaper for holders of other currencies. The Republican-controlled U.S. House of Representatives on Thursday passed a sweeping tax and spending bill that would enact much of Trump's policy agenda and saddle the country with trillions of dollars more in debt. Last week, Moody's cut the United States' top sovereign credit rating by one notch, citing concerns about its growing $36 trillion debt pile. Recent concerns about the U.S. deficit has weighed on risk appetite among investors this week, lifting demand for assets such as gold. Gold is used as a safe store of value during political and financial uncertainty. On the technical front, Spot gold is expected to retest a resistance of $3,335 per ounce, a break above which could lead to a gain to $3,366, according to Reuters technical analyst Wang Tao. Elsewhere, spot silver was steady at $33.07 an ounce, platinum gained 0.8% to $1,089.45 and palladium slipped 0.8% to $1,006.75. https://www.reuters.com/world/india/gold-heads-best-week-more-than-month-us-fiscal-worries-2025-05-23/

2025-05-23 07:04

Major Russian exporters cut back on rail cargoes, document shows Russian Railways blames reduced cargoes for cutting investment Russian economy slowing after military-fuelled growth spurt Russian Railways declines to comment on document seen by Reuters May 23 (Reuters) - Major Russian exporters including Rusal and Gazpromneft have cut the planned volume of commodities like metal and oil products they send by rail, a Russian Railways document seen by Reuters showed, the latest sign of subdued demand as the country's war economy slows. The state-owned rail monopoly intends to reduce 2025 spending by an additional 32.5 billion roubles ($408 million), or around 3.5%, to 858.4 billion roubles, due to the revised cargo forecast, according to the document dated March 20. It had already planned to spend 40% less on investment this year than in 2024 in the face of soaring interest payment costs. Sign up here. Russian Railways declined to comment. Its cargo volumes, which hit a 15-year low in 2024, are a useful gauge of the manufacturing health of Russia's export-driven economy. The document Reuters reviewed anticipates Russian Railways will transport 36.7 million metric tons less than the 1.24 billion tons initially projected for 2025. It named a dozen major companies contributing to reduced rail shipment volumes, including aluminium giant Rusal (RUAL.MM) , opens new tab and steelmakers Severstal (CHMF.MM) , opens new tab and MMK. Although total cargo volumes this year are still expected to be slightly higher than the 1.18 billion tons in 2024, they have fallen 6.8% year-on-year in the January to April period, according to data on its website. In the document, a presentation to Russian Railways' board from First Deputy CEO Vadim Mikhaylov, the company said its investment plan can be adjusted in exceptional circumstances and listed five main reasons to reduce spending, blaming factors outside its control. Tight monetary policy, with the Bank of Russia's key interest rate at 21% since October, has slowed the pace of construction, the document said. High rates have also led steel producers to reduce loading volumes, it said, naming Severstal, MMK, TMK (TRMK.MM) , opens new tab, NLMK and Evraz (EVRE.L) , opens new tab among companies contributing to reduced cargo volumes. TMK declined to comment. Evraz, MMK, NLMK and Severstal did not immediately respond to requests for comment. Russia's iron and steel industry, which contributes nearly 5% to the country's GDP, has seen export revenues plunge since losing access to high-margin markets because of Western sanctions, according to a report by Moscow-based consultancy Yakov and Partners. Steel production, exports and local demand dropped in 2024, according to the World Steel Association. Production has continued to drop this year, according to analytical firm Chermet Corporation. SLOWING ECONOMY Russian Railways highlighted in the document reduced demand in other sectors, such as from aluminium giant Rusal. Rusal said it was sticking to plans announced in November, without giving further details. Those plans include cutting annual aluminium output by 250,000 tons due to rising alumina prices. The document named increased sanctions on metal, forestry and oil companies - Gazpromneft (SIBN.MM) , opens new tab, Surgutneftegaz (SNGS.MM) , opens new tab and Tatneft (TATN.MM) , opens new tab - as a negative factor. Those three companies did not respond to requests for comment. Reduced exports of wood, fertiliser, metals and oil products to China have also hurt cargo volumes, the document showed. Trade turnover between Russia and China is down 7.5% since the start of the year. The document also blamed "the interference of third parties mainly in relation to oil refineries", a tacit reference to Ukrainian drone strikes on Russian energy facilities. ($1 = 79.6705 roubles) https://www.reuters.com/business/autos-transportation/russias-major-exporters-cut-rail-cargo-volumes-economy-slows-document-shows-2025-05-23/