2025-03-25 15:23

US debt affordability expected to worsen Central role of dollar, Treasury market sustain top rating But they may not be enough to offset fiscal weakening DOGE cuts, tariff revenue unlikely to curb deficit growth NEW YORK, March 25 (Reuters) - Ratings agency Moody's said on Tuesday that the U.S.' fiscal strength is on track for a continued multi-year decline as budget deficits widen and debt becomes less affordable. The agency said in a report that the country's fiscal health deteriorated further since Moody's lowered its outlook on the U.S. triple-A rating in November 2023. Sign up here. The report comes amid heightened uncertainty in U.S. financial markets as President Donald Trump's decision to impose punitive tariffs on key trading partners has sparked investor fears of higher price pressures and a sharp economic slowdown. "Even in a very positive and low probability economic and financial scenario, debt affordability remains materially weaker than for other Aaa-rated and highly rated sovereigns," Moody's said. It projects debt to gross domestic product, a key ratio in assessing a country's finances, will rise to around 130% by 2035 from nearly 100% in 2025. Debt affordability will worsen at a faster rate, with interest payments accounting for 30% of revenue by 2035 from 9% in 2021, it said. Moody's is the last among major ratings agencies to keep a top, triple-A rating for U.S. sovereign debt, though it lowered its outlook in late 2023 due to wider fiscal deficits and higher interest debt payments. Fitch cut the U.S. sovereign rating by one notch to AA+ from AAA in 2023, citing fiscal deterioration and repeated down-the-wire debt ceiling negotiations that threaten the government’s ability to pay its bills. It was the second major rating agency to strip the United States of its top triple-A rating, after Standard & Poor's did so after the 2011 debt ceiling crisis. Investors use credit ratings to assess the risk profile of companies and governments when they raise financing in debt capital markets. Generally, the lower a borrower's rating, the higher its financing costs. Moody's said on Tuesday that lower U.S. debt affordability has meant that the central role of the dollar and the Treasury market in global financial markets has become more critical in supporting the triple-A rating. However, the potential negative economic impact of tariffs as well as the prospect of unfunded tax cuts complicates the picture. "We see diminished prospects that these strengths will continue to offset widening fiscal deficits and declining debt affordability," it said. Republicans are pushing a $4.5 trillion tax cut extension, but its impact on deficits remains uncertain without major spending cuts, which could clash with Trump’s pledges to protect social programs. Moody's said large spending cuts that require bipartisan support in Congress will be politically difficult to implement. Other spending cuts, such as the ones spearheaded by the newly established Department of Government Efficiency, led by Elon Musk to reduce wasteful spending, are minor compared to mandatory expenditures and are unlikely to generate substantial savings in the short term. Tariffs may offer temporary revenue support, but over time, persistently high tariffs are likely to hinder growth, counteracting their positive effect on revenues, it said. https://www.reuters.com/markets/us/moodys-says-us-fiscal-strength-course-continued-decline-2025-03-25/

2025-03-25 12:48

CAIRO, March 25 (Reuters) - Two tankers, one carrying 100,000 metric tons of crude oil and another carrying 5,600 tons of gasoline have arrived at the Syrian port city of Baniyas, Syrian state news agency SANA reported on Tuesday. Syria is suffering from severe power shortages, with state-supplied electricity available for only two or three hours a day in most areas. Damage to the electricity grid means that generating or supplying more power is only part of the problem. Sign up here. Damascus used to receive the bulk of its oil for power generation from Iran, but supplies have been cut off since Islamist Hayat Tahrir al-Sham led the ouster of Tehran-allied former president Bashar al-Assad in December. The interim government has pledged to quickly ramp up power supply, partly by importing electricity from Jordan and using floating power barges that have yet to arrive. The state news agency did not say from where the tonnage came. https://www.reuters.com/business/energy/tankers-with-crude-oil-gasoline-arrive-syrias-baniyas-state-news-agency-reports-2025-03-25/

2025-03-25 12:40

BRASILIA, March 25 (Reuters) - Brazil Planning Minister Simone Tebet said on Tuesday that she believes that conditions should be in place for the central bank to deliver interest-rate cuts in the second half of the year, even if the move is small. "Depending on foreign policy, which we do not control, I have the impression that as early as the second half of this year we may start to see a decline, even if minimal, in interest rates in Brazil," she said, stressing that domestic policy was "under control, with public accounts in order." Sign up here. The forecast contrasts with the outlook of private economists polled weekly by the central bank, who see the Selic rate peaking at 15% this year, with easing only beginning at the first policy meeting next year. Tebet also said in an interview with a government radio station that Brazil's economic growth should exceed government forecasts, though it is unlikely to reach 3% expansion this year. The government's latest projection sees Latin America's largest economy rising 2.3% this year, slowing from 3.4% growth in 2024. Brazil's central bank has reiterated that an economic slowdown is necessary to bring inflation to its official 3% target. Since beginning its tightening cycle in September, the central bank has raised its benchmark interest rate by 375 basis points to 14.25%, signaling another hike in May, albeit smaller than the increase of 100 basis points applied last week. Policymakers said in the minutes of its latest policy decision released on Tuesday that heightened uncertainty prevented them from providing guidance beyond the next meeting. Tebet said she sees no inflationary impact from recent measures announced by President Luiz Inacio Lula da Silva to boost consumption, including a broader income-tax exemption to cover the middle class. According to the minister, the move is not surprising as it fulfills a presidential campaign promise. https://www.reuters.com/world/americas/brazil-planning-minister-sees-room-rate-cuts-second-half-year-2025-03-25/

2025-03-25 12:38

LAUSANNE, March 25 (Reuters) - Global commodity trader Gunvor's chief executive Torbjorn Tornqvist does not see oil demand keeping up with supply at current rates, he said in a keynote interview at the Financial Times Commodities Global Summit in Switzerland on Tuesday. "We are gradually, slowly, moving into a slacker environment," he said at the summit in Lausanne. Sign up here. "If producers produce what they do today, the increases come as planned, we don't see demand catching up with that." The Organisation of Petroleum Exporting Countries and allies (OPEC+) will likely stick to a plan to raise oil output for a second consecutive month in May, four sources told Reuters on Monday. However, Tornqvist said that a backwardated market structure - where future prices are lower than those for prompt delivery - and a lack of oil in floating storage had helped to balance oil prices. "Prices have been stuck in the range of low $70s, and that's probably a fair price," he said, but added that if there are no interferences to supply anywhere then prices could move a bit lower. https://www.reuters.com/business/energy/gunvor-ceo-tornqvist-does-not-see-oil-demand-keeping-up-with-supply-growth-2025-03-25/

2025-03-25 12:36

March 25 (Reuters) - Natural gas flows to Freeport LNG's export plant in Texas were set to rise on Tuesday after a lightning strike on a pipeline caused the plant to shut on Monday, data from financial firm LSEG showed. Freeport is one of the most closely watched LNG export plants in the world because the start and stop of its operations often cause price swings in global gas markets. Sign up here. When flows to Freeport drop, gas prices in the U.S. usually decline due to the export plant's lower demand for the fuel, while prices in Europe usually increase due to a drop in LNG supplies available to global markets from the plant. That is what happened with U.S. gas prices on Monday. LSEG said the amount of gas flowing to Freeport was on track to rise to 1.7 billion cubic feet per day (bcfd) on Tuesday, up from 0.1 bcfd on Monday. That compares with an average of 2.0 bcfd during the prior seven days (February 17-23). Freeport said in a filing with Texas environmental regulators Monday afternoon that it shut the three liquefaction trains at the plant early Monday morning "due to an interruption of feed gas supply from the upstream (pretreatment facility)." Freeport did not comment on the cause of that feedgas interruption, however, Boardwalk Pipelines' Gulf South Pipeline unit, which delivers gas to the plant, told customers on Monday that it could not deliver gas to the location following a lightning strike. The three liquefaction trains at Freeport are capable of turning about 2.1 bcfd of gas into LNG. One billion cubic feet of gas is enough to supply about 5 million U.S. homes for a day. https://www.reuters.com/business/energy/freeport-lng-texas-set-return-service-after-lightning-strike-lseg-data-shows-2025-03-25/

2025-03-25 12:17

US says both sides agree to maritime, energy ceasefires Russia says Washington must 'order' Zelenskiy to comply Kremlin says deal requires lifting of some sanctions Zelenskiy says there is no such requirement Trump cites progress despite 'tremendous animosity' WASHINGTON/MOSCOW/KYIV, March 25 (Reuters) - The United States reached deals on Tuesday with Ukraine and Russia to pause their attacks at sea and against energy targets, with Washington agreeing to push to lift some sanctions against Moscow. The separate agreements are the first formal commitments by the two warring sides since the inauguration of President Donald Trump, who is pushing for an end to the warin Ukraine and a rapid rapprochement with Moscow that has alarmed Kyiv and European countries. Sign up here. The U.S. agreement with Russia goes further than the agreement with Ukraine, with Washington committing to help seek the lifting of international sanctions on Russian agriculture and fertiliser exports, long a Russian demand. The Kremlin said the Black Sea agreements would not come into effect unless links between some Russian banks and the international financial system were restored. Ukrainian President Volodymyr Zelenskiy said this was untrue, and that the deals did not require sanctions relief to come into force. "Unfortunately, even now, even today, on the very day of negotiations, we see how the Russians have already begun to manipulate," Zelenskiy said in his nightly video address. "They are already trying to distort agreements and, in fact, deceive both our intermediaries and the entire world." Kyiv and Moscow both said they would rely on Washington to enforce the deals, while expressing scepticism that the other side would abide by them. "We will need clear guarantees," said Russian Foreign Minister Sergei Lavrov. "And given the sad experience of agreements with just Kyiv, the guarantees can only be the result of an order from Washington to Zelenskiy and his team to do one thing and not the other." Zelenskiy said the truce agreements would take effect immediately, and that if Russia violated them he would ask Trump to impose additional sanctions on Moscow and provide more weapons for Ukraine. "We have no faith in the Russians, but we will be constructive," he said. The deals were reached after parallel talks in Saudi Arabia that followed separate phone calls last week between Trump and the two presidents, Zelenskiy and Vladimir Putin. Putin rejected Trump's proposal for a full ceasefire lasting 30 days, which Ukraine had previously endorsed. "We are making a lot of progress," Trump told reporters on Tuesday, while adding there was "tremendous animosity" in the talks. "There's a lot of hatred, as you can probably tell, and it allows for people to get together, mediated, arbitrated, and see if we can get it stopped. And I think it will work." Washington has softened its rhetoric towards Russia in recent days, with Trump envoy Steve Witkoff saying he did not "regard Putin as a bad guy," alarming European officials who consider the Russian leader a dangerous enemy. Ukrainian Defence Minister Rustem Umerov said Kyiv would regard any movement of Russian military vessels outside the eastern part of the Black Sea as a violation and a threat, in which case Ukraine would have full right to self-defence. PAUSE ON ATTACKS ON ENERGY FACILITIES Russia has attacked Ukraine's power grid with missiles and drones throughout the war, arguing that civil energy infrastructure is a legitimate target because it helps Ukraine's fighting capability. More recently, Ukraine has been launching long-range strikes on Russian oil and gas targets, which it says provide fuel for Russia's troops and income to fund its war effort. The Kremlin said the pause in attacks on energy would last for 30 days from March 18, when Putin first discussed it with Trump. Ukraine had said last week it would accept such a pause only after a formal agreement. The agreement on a truce at sea addresses an issue that was critical early in the war, when Russia imposed a de facto naval blockade on Ukraine, one of the world's biggest grain exporters, worsening a global food crisis. More recently, maritime battles have been a comparatively small part of the war since Russia withdrew its naval forces from the eastern Black Sea after a number of successful Ukrainian attacks. Kyiv has been able to reopen its ports and resume exports at around pre-war levels, despite the collapse of a previous U.N.-brokered Black Sea shipping agreement, but its ports have come under regular air attack. Zelenskiy said the agreement would bar such strikes. Moscow said the agreement would require sanctions relief including restoring links between Russia's agricultural export bank and the SWIFT international payments system. That and other steps could require agreement from European countries. Trump has been pressing Moscow and Kyiv to bring a rapid end to the war, a goal he promised to achieve when he ran for president last year. Ukraine and its European allies fear Trump could strike a hasty deal with Putin that undermines their security and caves in to Russian demands, including for Kyiv to abandon its NATO ambitions and give up land claimed by Moscow. https://www.reuters.com/world/europe/russia-us-are-studying-outcome-talks-ukraine-riyadh-kremlin-says-2025-03-25/