2025-03-26 07:26

JOHANNESBURG, March 26 (Reuters) - South Africa's rand edged higher early on Wednesday, as investors mulled over U.S. President Donald Trump's reciprocal tariff plans which they fear will cause an economic slowdown. At 0707 GMT, the rand traded at 18.25 against the dollar , about 0.2% stronger than its previous closing level. Sign up here. The dollar was little changed against a basket of currencies. Investors feared that Trump's reciprocal tariffs, expected to take effect on April 2, are likely to be inflationary, potentially slowing economic growth and intensifying trade tensions. However, Trump said on Monday that not all of his threatened duties would be imposed next week and some countries may get breaks. "Increasingly, one gets the sense that the US economy is slowing and that the Trump administration does not want to exacerbate a downturn through the harsh imposition of tariffs," ETM Analytics said in a research note. Like other risk sensitive currencies, the rand often takes cues from global drivers like U.S. policies and economic data, in the absence of major local drivers. On the stock market, the Top-40 (.JTOPI) , opens new tab index was up about 0.1%. South Africa's benchmark 2030 government bond was marginally stronger in early deals, with the yield down 0.5 basis point to 9.14%. https://www.reuters.com/markets/currencies/south-african-rand-gains-amid-unease-over-trumps-tariff-plans-2025-03-26/

2025-03-26 07:14

Stocks fall as tariff uncertainty weighs US durable goods orders rise 0.9%, beating expectations Dollar index strengthens, on pace for fifth gain in six sessions NEW YORK, March 26 (Reuters) - Global stocks dropped for the first time in three sessions on Wednesday and the U.S. dollar resumed its ascent as investors awaited the next tariff announcement from U.S. President Donald Trump. Trump was scheduled to hold a press conference at 4 p.m. EDT (2000 GMT) and has recently confirmed the auto tariffs will be on cars. Sign up here. On Wall Street, U.S. stocks ended sharply lower, as the technology (.SPLRCT) , opens new tab sector dropped 2.46% to weigh heavily. Each of the three major U.S. indexes snapped a three-session streak of gains. Stocks had shown signs of bottoming in recent days after coming under pressure due to uncertainty over the tariff outlook and its potential to slow the global economy and dent corporate profits. The major U.S. indexes are on track for their first back-to-back monthly declines since the two-month period that ended in October 2023. The Dow Jones Industrial Average (.DJI) , opens new tab fell 132.71 points, or 0.31%, to 42,454.79, the S&P 500 (.SPX) , opens new tab fell 64.45 points, or 1.12%, to 5,712.20 and the Nasdaq Composite (.IXIC) , opens new tab fell 372.84 points, or 2.04%, to 17,899.02. The U.S. Commerce Department said orders for durable goods increased 0.9% versus the estimate of economists polled by Reuters for a 1% fall, as businesses rushed to place orders for primary metals and fabricated metal products ahead of the anticipated tariffs. Trump said on Monday automobile tariffs were coming soon, even as he indicated not all of his threatened levies would be imposed on April 2 and some countries may get exemptions. He also slapped 25% secondary tariffs on any country that buys oil or gas from Venezuela. "The conviction level amongst investors that April 2nd is going to be the clearing event now in terms of dealing with changes to trade-related policy seems to be pretty low in terms of that probability so there's likely to be a persistency in terms of the ongoing rollout of these types of headlines and policies that seem to have a little bit more staying power," said Matt Stucky, chief portfolio manager for equities at Northwestern Mutual Wealth Management in Milwaukee, Wisconsin. The dollar index , which measures the greenback against a basket of currencies, rose 0.33% to 104.56, with the euro down 0.37% at $1.0751. After dipping on Tuesday, the greenback is on track for its fifth gain in six sessions. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab fell 7.84 points, or 0.92%, to 845.65, while the pan-European STOXX 600 (.STOXX) , opens new tab index closed down 0.7% as the coming tariffs spurred caution. European stocks have outperformed their U.S. counterparts this year, largely on hopes a German spending package could spur growth and help counter the levies. The STOXX 600 was poised for its biggest percentage gain since the fourth quarter of 2022. Against the Japanese yen , the dollar strengthened 0.43% to 150.55. Bank of Japan Governor Kazuo Ueda said the central bank must raise interest rates if persistent increases in food costs lead to broad-based inflation. New Bank of Japan board member Junko Koeda said the country's real interest rates are currently "extremely low," as inflation accelerates backed by solid growth in wages, but declined to comment on how soon the central bank should raise interest rates. Sterling weakened 0.45% to $1.2885 after British finance minister Rachel Reeves cut the government's plans for spending increases to get back on track towards her fiscal targets. Earlier data showed British inflation slowed more than expected in February. U.S. Treasury yields were higher, with the yield on benchmark U.S. 10-year notes up 4.2 basis points to 4.333%, after briefly paring declines following an auction of $70 billion in five-year notes . Multiple Fed officials have recently cautioned against the Fed moving too quickly to cut rates in light of the uncertain environment, including Minneapolis Federal Reserve Bank President Neel Kashkari and St. Louis Fed President Alberto Musalem on Wednesday. U.S. crude settled up 0.94% to $69.65 a barrel and Brent settled at $73.79 per barrel, up 1.05% on the day after government data showed U.S. crude oil and fuel inventories fell last week. Oil was also supported by mounting concerns about tighter global supply following the U.S. threat of tariffs on nations buying Venezuelan crude. https://www.reuters.com/markets/global-markets-wrapup-1-2025-03-26/

2025-03-26 06:50

Rift opened in 2018 during Musk bid to take Tesla private Saudi Arabia's PIF invested in EV startup Lucid after rift Kingdom is Gulf region's largest market Feud started easing after Trump elected RIYADH, March 26 (Reuters) - Tesla will start sales in Saudi Arabia next month, the electric carmaker said on its website, signalling CEO Elon Musk and the kingdom have healed a rift that dates back to the billionaire's short-lived bid in 2018 to take the company private. Tesla (TSLA.O) , opens new tab sells in other Middle Eastern countries, but not in Saudi Arabia, the Gulf region's largest market, where EVs only account for 1% of total car sales. The brand has had considerable success in neighbouring United Arab Emirates, where most ride-hailing apps offer electric vehicles. Sign up here. The dispute started when Musk tweeted in 2018 he had "funding secured" to take Tesla private after a meeting with Saudi Arabia's sovereign wealth fund, the Public Investment Fund. That tweet eventually led to a lawsuit from investors when a bid failed to materialise, during which tense text messages between Musk and PIF head Yasir al-Rumayyan were made public. Tensions have eased since the autumn, when Musk took a high-profile role in U.S. President Donald Trump's election campaign and then new administration. Trump said this month he would likely make his first trip abroad to Saudi Arabia, after asking the kingdom in January to spend upwards of $1 trillion in the U.S. economy, over four years, including military purchases. EVs from China's BYD and PIF-backed Lucid (LCID.O) , opens new tab are already available in the Saudi market. EV sales have been slow in Saudi Arabia, with a 2024 report from consultants PwC putting them at just 1% of all car sales. LAUNCH SCHEDULED FOR APRIL 10 Tesla's launch event in Riyadh, scheduled for April 10, will display its EVs and products powered by solar energy, the post said. "Experience the future of autonomous driving with Cybercab, and meet Optimus, our humanoid robot, as we showcase what's next in AI and robotics," it added. On April 11, it will open pop-up stores in Riyadh, Jeddah, and Dammam, Tesla said in a later statement, adding it would announce further details of its plans for Saudi Arabia in the coming weeks, with investment planned for 2025 and beyond. Invitations to the launch event asked guests to indicate which Tesla car model they were interested in. A month after the feud with Musk went public, the PIF announced a $1-billion-plus investment in Lucid, becoming the majority investor in one of the EV startups looking to challenge Tesla. PIF, which has assets under management of $925 billion, has also invested in a domestic EV brand that is yet to launch called Ceer. Yet large gas-guzzling vehicles remain the norm on Saudi roads where fuel is cheap and EV charging infrastructure remains a rarity, making traversing its long desert roads almost impossible in an EV. The launch comes as Tesla has seen EV sales slump in Europe, blamed on Musk's support for far right politicians, and the brand has been targeted by protesters in the United States over his spearheading of sweeping cuts to the federal government. WARMING TIES In one of the first signs of improving relations, Musk appeared alongside Rumayyan and Trump in ringside seats at a UFC mixed martial arts match in New York in November. A few weeks earlier, Musk had made a surprise appearance at Riyadh's Future Investment Initiative summit via video link. A U.S. jury found in 2023 that Musk was not liable for misleading investors when he tweeted funding was secured to take Tesla private. Musk testified it was the PIF that had wanted to take Tesla private when he posted that tweet, and a series of tense text messages between him and Rumayyan emerged during the case. "You are throwing me under the bus," Musk wrote in a text to Rumayyan, according to court documents. Tesla's sales in Europe are down 42.6% so far this year, data showed on Tuesday, even as demand for EVs rises. Activists across the U.S. have staged so-called "Tesla Takedown" demonstrations over Musk's role leading the Department of Government Efficiency, which has cut thousands of jobs, frozen foreign aid and cancelled thousands of programmes and contracts. https://www.reuters.com/business/autos-transportation/tesla-says-it-will-launch-saudi-arabia-next-month-2025-03-26/

2025-03-26 06:38

Recent rise in inflation driven mostly by one-off factors Expects underlying inflation to converge toward BOJ's target BOJ must hike rates if food costs lead to broader inflation BOJ to take 'stronger' steps if inflation overshoots forecast Ueda warns of overseas uncertainities as Trump tariffs loom TOKYO, March 26 (Reuters) - The Bank of Japan must raise interest rates if persistent increases in food costs lead to broad-based inflation, Governor Kazuo Ueda said on Wednesday, signalling the bank's resolve to continue weaning the economy off monetary support. Ueda said Japan's recent "very high" inflation was driven mostly by temporary factors such as rising import costs and food prices, which are likely to dissipate and thus not a reason to tighten monetary policy. Sign up here. But there is a chance that sustained rises in food costs could push up prices for other goods and services, he said. "If such moves lead to broad-based inflation across the economy, we must respond by raising interest rates," Ueda told parliament. Ueda also said the BOJ will take "stronger steps" to whittle down monetary support if inflation overshoots its projections, signalling the chance of hiking rates sooner or more aggressively than initially expected. Japan's core consumer inflation hit 3.0% in February and has exceeded the central bank's target for nearly three years, with recent rises driven largely by steady gains in food prices. The BOJ has stressed the need to focus on underlying inflation, or the long-term price trend that strips away the effect of temporary factors, in deciding the timing and pace of further rate hikes. Ueda said underlying inflation, which the BOJ determines by looking at various indicators, is heading towards but remains "just a bit" short of 2%. "We expect underlying inflation to gradually converge toward 2% even when temporary rises in food prices disappear," as a tightening job market and improvements in the economy lead to sustained rises in wages and inflation, Ueda said. "We are always vigilant to the possibility that underlying inflation could accelerate at a pace faster than we expect," Ueda said. The impact of rising food prices on underlying inflation will likely be a key point of debate when the BOJ's board issues fresh quarterly economic projections at its next policy meeting on April 30-May 1. OVERSEAS UNCERTAINTIES Another complication is U.S. President Donald Trump's tariff policies, as higher levies on automobiles could deal a huge blow to Japan's export-reliant economy, analysts say. While prospects of higher wages will likely underpin consumption, the BOJ must also scrutinise how growing overseas uncertainties could affect consumer confidence, Ueda said. The yield on the benchmark 10-year Japanese government bond (JGB) briefly hit 1.585% on Wednesday, the highest level since October 2008, due in part to market expectations of further rate hikes by the BOJ. In judging whether underlying inflation is on course to hit 2%, the BOJ is focusing particularly on whether wages will keep rising at the current pace of around 3%, Ueda said. "What's important is for wage gains to be sustained and broaden," Ueda said, stressing the need to scrutinise whether bumper pay hikes offered by big firms will spread to smaller firms. "It's also important for wage gains to be properly reflected in services prices" and heighten long-term inflation expectations, he said. A leading indicator of Japan's service-sector inflation hit 3.0% in February, data showed on Wednesday, keeping alive expectations of further BOJ rate hikes. The BOJ raised its short-term policy rate to 0.5% in January on the view Japan was on the cusp of sustainably achieving its 2% inflation target backed by solid wage gains. Ueda has said the central bank will keep raising interest rates if prospects of higher wages lead to broader price hikes, not just for goods but also for services. A Reuters poll this month showed many analysts expect the BOJ's next rate hike to come in the third quarter, most likely in July. https://www.reuters.com/markets/rates-bonds/boj-keep-raising-interest-rates-if-economy-track-governor-ueda-says-2025-03-26/

2025-03-26 06:31

March 26 (Reuters) - Russia launched an overnight drone attack on the Ukrainian port of Mykolaiv, which provides the country with access to the Black Sea, and struck Kryvyi Rih in what Ukrainian officials said on Wednesday was the war's biggest drone attack on the city. The United States reached separate deals on Tuesday with Ukraine and Russia to pause their attacks over the Black Sea and against each other's energy targets, but it was not clear when and how the deals would come into force. Sign up here. The mayor of Mykolaiv said there were emergency power outages early on Wednesday in the city, following a report by the region's governor that seven drones were destroyed overnight over the region. It was not immediately clear whether the power cuts were precautionary or a result of the overnight attack on Mykolaiv. Russia also attacked the central Ukrainian city of Kryvyi Rih, igniting fires and damaging buildings but causing no deaths, the head of the city's military administration said. The Ukrainian military said its air defence units had shot down 56 of 117 drones launched by Russia in the overnight attack. It noted that 48 drones were lost, referring to the Ukrainian military's redirecting them with electronic warfare. "Apparently, this is how the occupiers 'want peace'," Oleksandr Vilkul, the head of the military administration, wrote on the Telegram messaging app, describing it as the war's biggest drone attack on the city. "Most importantly, there were no deaths or injuries." Reuters could not independently verify the reports from Mykolaiv and Kryvyi Rih. The size of the attack on Kryvyi Rih and what was targeted there were not immediately clear. Vilkul had reported at least 15 explosions in Kryvyi Rih, President Volodymyr Zelenskiy's hometown and a frequent target of Russian attacks. There was no immediate comment from Russia, but the Russian defence ministry said that its air defence units destroyed nine Ukrainian drones overnight, including two over the waters of the Black Sea. https://www.reuters.com/world/europe/russia-launches-drone-attack-ukraine-port-providing-access-black-sea-officials-2025-03-26/

2025-03-26 06:30

BEIJING, March 26 (Reuters) - China released plans on Wednesday to expand its carbon trading market into the steel, cement and aluminium smelting industries, a move that will require an additional 1,500 firms to purchase credits to cover their emissions, the environment ministry said. The expansion will bring the total volume of climate-warming carbon dioxide covered by the trading scheme to 8 billion metric tons, more than 60% of China's total emissions, ministry spokesman Pei Xiaofei said at a briefing. Sign up here. Incorporating new sectors into the scheme would not only support China's climate goals but also create a market mechanism to help heavy industries close outdated, polluting plants and adopt low-carbon technologies, Pei said. China's emissions trading scheme, launched in 2021, currently covers around 5 billion metric tons of carbon dioxide emissions from more than 2,200 power companies. Each firm included in the scheme is allocated a quota of free emission allowances based on government-set industry benchmarks. If their emissions exceed the quota, they must purchase additional allowances on the market. For the new sectors, only the worst performers will have to buy additional allowances on the market during the implementation phase, with initial quotas set at levels high enough to cover all their 2024 emissions. Quotas will be gradually reduced, but the gap will be kept within a small range in order to limit the economic impact, the environment ministry said in a separate note published on Wednesday. https://www.reuters.com/sustainability/china-expand-carbon-trading-market-steel-cement-aluminium-2025-03-26/