2025-03-25 07:34

FCA aims to balance risk-taking with growth opportunities Labour government supports FCA's growth-focused strategy FCA plans to streamline outdated guidance and rules LONDON, March 25 (Reuters) - Britain's Financial Conduct Authority will reassess its attitude towards financial firms' risk-taking in order to spur growth, the watchdog said on Tuesday, as it set out its next five-year strategy. The FCA's plan is focused on four previously announced priorities: helping consumers, fighting crime, supporting growth and being a "smarter" regulator. Sign up here. As part of that the regulator will "look again at our collective attitude toward risk," FCA Chair Ashley Alder said in its strategy announcement. "Too often the focus has been on the risks of a decision taken rather than the lost opportunity of taking none. We want to change that," he said. The FCA's updated mission statement will be likely welcomed by Britain's Labour government, which is betting on faster growth in financial services to help kickstart a lacklustre economy, where growth is expected to roughly halve in 2025 to about 1%. The watchdog's strategy document released on Tuesday gave few details of concrete changes it will make to how it assesses firms' risk taking, but said it will ensure "less intensive supervision for those demonstrably seeking to do the right thing". The FCA and sister regulator the Prudential Regulation Authority have secondary objectives to promote the domestic and international competitiveness of the UK financial industry. With Chancellor Rachel Reeves pushing to keep fragile fiscal plans intact, the regulators face increasing pressure to loosen red tape on financial firms, which contribute 110 billion pounds in taxes per year or 12% of all UK tax receipts. The FCA said the industry had given "clear feedback" that now was not the time for widespread changes to its rules. The regulator has pledged to avoid a "widespread overhaul" and said it would engage with the industry to strike an appropriate balance. The regulator earlier on Tuesday said it is weighing changes to disclosure rules on mortgages, lending and savings products to give clearer information to consumers. The watchdog said it wanted to retire hundreds of pages of outdated guidance and supervisory publications as part of a broader plan to streamline demands on financial firms, which it said would give product providers more flexibility to tailor communications to customers' needs and preferences. It also said it would review parts of its credit advertising rules, such as lengthy terms and conditions. https://www.reuters.com/world/uk/britains-fca-may-change-disclosure-rules-bolster-consumer-information-2025-03-25/

2025-03-25 07:08

Some $1.1 billion went unaccounted for in Mongolia Main partner firm belonged to local boss's aunt -sources His mother worked for Customs administration -sources LONDON, March 25 (Reuters) - Trafigura's top executive in Mongolia, who has been suspended while a billion-dollar fraud scheme at the Swiss trading house is investigated, loaned over $500 million of Trafigura’s money to a firm owned by his aunt, Reuters has found. The firm, called Lex Oil, is Trafigura’s principal counterparty in Mongolia. It belonged to Erdenetuul, the aunt of Trafigura’s suspended local boss, Jononbayar Erdenesuren, according to three sources close to Trafigura and an ownership document. Trafigura said last October that it had recorded a $1.1 billion loss after an internal review found that some employees in its Mongolian petroleum products supply business engaged in "serious misconduct", including manipulating data and documents to inflate sums being paid by Trafigura and to conceal overdue receivables. Sign up here. The company said its principal counterparty owed Trafigura "a substantial portion" of the money, but did not name the counterparty or any individuals as the investigation is ongoing. According to the sources, Jononbayar sold fuel and loaned hundreds of millions of dollars to his aunt’s company. The sources interviewed by Reuters said Trafigura's risk department should have assessed family connections for possible conflicts of interest, casting doubts on the rigour of oversight at one of the world’s largest energy and commodity traders. Two banking sources briefed by the company said their main concern regarding the matter was that Trafigura would uncover more fraud. Reuters' reporting is based on three sources close to Trafigura familiar with the details of its Mongolia operations, the two banking sources, as well as an undated document from Mongolia’s Department of State Registration showing Lex's ownership details. A Trafigura spokesperson said an external investigation was ongoing. The company declined to answer questions posed by Reuters on the status of the investigation, on which, if any, staff have been suspended or terminated, or on whether it was aware of Jononbayar’s links to its main trading partner. Jononbayar has been with Trafigura since 2012, the three sources close to Trafigura said, and his LinkedIn profile shows. He is among a small, unspecified number of employees who were suspended last year, according to people familiar with the matter. Jononbayar, his aunt, Lex Oil, and a lawyer for the firm did not reply to requests for comment via LinkedIn or email. Reuters was unable to identify a lawyer representing Jononbayar. CUSTOMS LINK In addition to his business dealings with his aunt’s firm, Jononbayar’s mother, Erdenesuren, Erdenetuul's sister, worked in the Customs General Administration of Mongolia (CGAM), which oversees fuel imports, the three sources said. Trafigura became Mongolia's key fuel supplier around 2014, according to the same sources. Erdenesuren worked in the CGAM’s risk department for several years until 2018, the sources said. Erdenesuren and CGAM did not respond to Reuters' requests for comment on LinkedIn or by email. Trafigura has not named any employees in its statements on the matter, saying in a statement in October only that it was taking "appropriate disciplinary action". An internal investigation by Trafigura found no evidence that Lex or Trafigura received preferential treatment from the CGAM, the three sources said. In October, Trafigura said it had performed a risk review of its global network, identified higher-risk locations which it did not name, and that the review of those places resulted in no significant findings. EARLIER SCANDAL Suffering a $1.1 billion hit in one of its smallest markets has rattled Trafigura's bank trade financiers, the banking sources said, especially as it followed an unconnected nickel fraud in Singapore that cost the company almost $600 million. Trafigura has released few details about the latest incident, but has determined the serious misconduct by individuals in its Mongolian business took place between 2019 and 2023. Lex Oil was set up in 2019, according to its website, and forged a partnership with Trafigura, the three trading sources said. Lex received credit from Trafigura with which it provided credit to local fuel users so they could buy diesel, which Lex and Trafigura were importing from Russia and Singapore, according to two trading sources. Reuters was unable to find documents showing that Trafigura loaned funds to Lex. The business was jolted by the onset of the COVID pandemic in 2020, which halted Mongolia's coal exports to China and therefore hit its mining activity and the sector’s demand for fuel. Yet Lex Oil continued to import and blend fuel, and to lend to local firms, building up debt to Trafigura, according to the trading sources. In its annual report in December Trafigura said it had found evidence of "deliberate manipulation of data and documents and concealment of overdue receivables". It booked a $358 million loss related to Mongolia for 2024. Erdenetuul sold Lex Oil in 2022 to her husband, Dashnyam Chinbat, according to a screenshot of the ownership document. He did not respond to a Reuters request for comment. These records have since been deleted from the government website, however, the ownership change still features on Mongolian non-profit database OpenDataLab, which tracks disclosures by the government. A Mongolian government source said the country's new government, elected last year, had launched an investigation into the case, but that it was too early to disclose findings. In its annual report Trafigura said the wrongdoing in Mongolia had been detected due to the company’s “increased scrutiny” in recent years. “We are significantly building on and extending this work as a matter of urgency,” it said. https://www.reuters.com/markets/commodities/aunt-trafiguras-mongolia-boss-ran-main-partner-firm-2025-03-25/

2025-03-25 06:46

JOHANNESBURG, March 25 (Reuters) - South Africa's rand extended its recent rally on Tuesday, as markets continued to look for clarity on U.S. President Donald Trump's tariff plans. At 1400 GMT, the rand traded at 18.19 against the U.S. dollar , about 0.4% stronger than Monday's close. Sign up here. The dollar was down around 0.3% against a basket of currencies as investors awaited clarity on the next round of Trump tariffs expected to take effect on April 2. Domestic data released earlier showed South Africa's composite leading business cycle indicator rose 0.9% month on month in January. The indicator collects data on vehicle sales, business confidence, money supply and other factors in Africa's most industrialised economy. On the stock market, the Top-40 (.JTOPI) , opens new tab index was up about 0.8%. South Africa's benchmark 2030 government bond was slightly weaker, with the yield up 1.5 basis points to 9.15%. https://www.reuters.com/world/africa/south-african-rand-firms-markets-await-leading-indicator-data-2025-03-25/

2025-03-25 06:33

Rupiah at its weakest level in more than two decades Analysts say poor gov't communication fuels market concerns Rupiah seen remaining weak ahead of holiday starting on Friday JAKARTA, March 25 (Reuters) - Indonesia's central bank stepped into the currency market to defend the rupiah on Tuesday, as growing concerns over politics, government spending and capital flight pushed the rupiah to its lowest levels since the Asian financial crisis. The rupiah weakened as much as 0.54% to a low of 16,640 per dollar in morning trade, extending a slide that has been driven by global market uncertainties and concerns over Indonesia's fiscal health and growth outlook. Sign up here. A central bank official told Reuters Bank Indonesia (BI) had intervened in the spot currency, bond markets and in domestic non-deliverable forwards as the rupiah careened towards 2-1/2-decade lows. Its all-time low was 16,800 in June 1998, during the Asian Financial Crisis, data from LSEG shows. "Global uncertainty is still related to the impact of Trump's tariff policy and geopolitical turmoil, including the impact of the trade war on China and many other emerging market countries in Asia," said Fitra Jusdiman, BI's director of monetary and securities asset management. U.S. President Donald Trump has already imposed tariffs on major trading partners, including China, Mexico, and Canada, and has said he will impose more tariffs early next month. Genuine foreign exchange demand from the domestic market for repatriation purposes and other payments also contributed to the rupiah's weakness on Tuesday, BI's head of monetary management Edi Susianto told Reuters separately. "We have entered the market boldly to maintain the balance of FX supply and demand in the market," he said. The rupiah later pared its losses and was trading at 16,590 to the dollar of 0515 GMT. BI has been intervening in the FX market every month this year, ensuring the rupiah's slide is gradual. Still, it has fallen 3% versus the dollar so far this year as foreigners pull billions of dollars from the stock market (.JKSE) , opens new tab. However, concerns over the country's fiscal health linger following weak state revenues at the start of the year, while the government plans huge spending to reach 8% economic growth by 2029. The same concerns have also slammed Indonesia's main stock index , sending it to its lowest intraday level in three years on Monday. It was trading 1% higher on Tuesday. Lack of clear communication from authorities on the fiscal situation and spending programmes have compounded investors' concerns, analysts said. "Conciliatory guidance from the authorities on the fiscal situation and a growth-supportive stance might help to restore confidence in the near-term," said DBS Bank economist Radhika Rao in an e-mail. Indonesia's presidential communication office held a meeting on Monday with economists and financial market analysts to gain input on communication strategy. Meanwhile, the rupiah is expected to remain weak ahead of a long 11-day holiday in Indonesia to celebrate Eid Al-Fitr, which will start at end of this week, SMBC economist Ryota Abe said. The outlook for the economy may remain gloomy if BI continues to keep interest rates high to defend the currency, he added. BI maintained its benchmark interest rate at 5.75% in its February's meeting with a focus on managing rupiah stability, while waiting for the opportunity to slash rates. Indonesian businesses have been responding to the weak rupiah since the end of last year by tightening their material imports, Indonesian employers association Chairwoman Shinta Kamdani told Reuters. https://www.reuters.com/markets/currencies/indonesia-cbank-says-rupiah-weakness-reflects-global-domestic-factors-2025-03-25/

2025-03-25 06:30

Dollar dips after hitting three-week high Stocks rise modestly after strong rally German business sentiment improves NEW YORK, March 25 (Reuters) - Global stocks were slightly higher on Tuesday, after a sharp rally in the prior session on hopes that U.S. President Donald Trump would take a more measured approach on tariffs, while the dollar edged down from a three-week high. European shares paced the advance, while stocks on Wall Street closed with a minor climb after alternating between modest gains and losses throughout the session, in the wake of a sharp climb on Monday after Trump indicated that not all of his threatened levies would be imposed on April 2 and some countries may get breaks. Sign up here. "Consumers are still pessimistic about their income prospects, they're still worried about tariffs," said Vinny Bleau, director of fixed-income capital markets at Raymond James in Memphis, Tennessee. "The narrative seems to be shifting more toward the fact that tariffs are going to impact growth more than inflation." After initially opening higher, U.S. stocks lost ground after a reading on consumer confidence from the Conference , opens new tab Board , opens new tab fell 7.2 points to 92.9 in March, below the 94.0 estimate, the latest in a string of sentiment readings that have shown cooling. The Dow Jones Industrial Average (.DJI) , opens new tab rose 4.18 points, or 0.01%, to 42,587.50, the S&P 500 (.SPX) , opens new tab added 9.08 points, or 0.16%, to 5,776.65 and the Nasdaq Composite (.IXIC) , opens new tab gained 83.26 points, or 0.46%, to 18,271.86. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab rose 1.74 points, or 0.2%, to 853.47 while the pan-European STOXX 600 (.STOXX) , opens new tab index closed up 0.67%, buoyed by a survey from the Ifo Institute that showed German business morale rose in March. Stocks have shown signs of bottoming in recent days, after coming under pressure due to uncertainty over the tariff outlook and the potential to slow the global economy and dent corporate profits. The dollar index , which has strengthened on the tariff expectations and which measures the greenback against a basket of currencies, shed 0.1% to 104.19 after climbing to a three-week high of 104.46. The euro was down 0.06% at $1.0793. Against the Japanese yen , the dollar weakened 0.54% to 149.88 while sterling strengthened 0.18% to $1.2942. U.S. Treasury yields were slightly lower as investors also assessed the possible impact of tariffs on the Federal Reserve's monetary policy. Fed Governor Adriana Kugler said the central bank's current policy remains restrictive and well-positioned, but progress toward the 2% inflation goal has slowed and the latest move higher in goods inflation data is "unhelpful." Federal Reserve Bank of New York President John Williams said firms and households are “experiencing heightened uncertainty” about what lies ahead for the economy. The comments come after Atlanta Federal Reserve President Raphael Bostic said on Monday he sees only one cut of 25 basis points from the Fed this year. The yield on benchmark U.S. 10-year notes dipped 1.6 basis points to 4.315%. Yields briefly extended declines after a sale of $69 billion in two-year notes . Crude prices reversed an earlier advance after the U.S. reached separate agreements with Ukraine and Russia to ensure safe navigation in the Black Sea and to implement a ban on attacks by the two countries on each other's energy facilities. U.S. crude settled down 0.16% at $69 a barrel and Brent settled at $73.02 per barrel, up 0.03% on the day. https://www.reuters.com/markets/global-markets-wrapup-1-2025-03-25/

2025-03-25 06:27

LITTLETON, Colorado, March 25 (Reuters) - U.S. power producers emitted over 304 million metric tons of carbon dioxide (CO2) from power generation over the first two months of 2025, which was the highest for that period since 2019, according to data from energy think tank Ember. The emissions tally marked a 9% rise from the same period last year and was the first reading above 300 million tons in six years for the opening two months of the year. Sign up here. The rise in emissions exceeded the 6% rise in total electricity output over the same period, and was driven by a jump in coal-fired power use alongside output cuts to plants fuelled by natural gas, which has rallied in price this year. Higher coal use and lower gas generation indicates that power producers would rather raise emissions than incur a financial hit from higher gas costs, as they are under pressure to lift output, maintain profits and keep energy costs in check. Power pollution levels could climb even more steeply this summer if gas prices remain elevated, as the peak period for U.S. power production is during the hottest months of the year when air conditioning demand is highest. PAN-AMERICAN COAL The main driver of the emissions rise was a steep climb in the use of coal-fired power production to the highest since 2022. On average, U.S. coal-fired power generation during January 1 to March 22 was 21% higher than on the same dates in 2024, LSEG data shows. Coal-fired production in the Southwest Power Pool, which spans from North Dakota down to Arkansas, rose 32% on the year, while coal production in the PJM system - covering Pennsylvania, New Jersey and Maryland - climbed by 27%, LSEG data shows. The Electric Reliability Council of Texas (ERCOT) lifted coal-fired output by 23% from a year ago, while the power producers across North and South Carolina lifted coal-fired production by 21%. The Midcontinent Independent System Operator (MISO), the Northwest Power Pool and the Tennessee Valley Authority all also boosted coal production by double digits from the year before. GAS PRICE PRESSURE A climb in U.S. benchmark natural gas prices to two-year highs so far in 2025 has helped spur the higher coal use seen across the country. So far in 2025, Henry Hub natural gas futures have averaged around $3.86 per million British thermal units (MMBtu), which is 82% more than during the same period in 2024, according to LSEG. In contrast, U.S. coal prices for the first quarter of 2025 are up by around 7% from a year ago to $76 per ton. To avoid the margin hit from buying and burning such expensive gas, power producers with the ability to use both coal and gas within their networks have opted to trim gas-fired generation and raise coal-fired production. For the U.S. power system as a whole, total gas-fired generation declined by 2% from January 1 through March 22 in 2025 compared to a year ago, while coal-fired output has climbed by over 20%. Power generators in ERCOT, PJM, MISO and the Northwest Power Pool also cut gas-fired production so far this year compared to the same dates in 2024. EMISSIONS IMPACT Emissions from coal and gas-fired power production have followed the trends in generation. Emissions from coal-fired generation were 137.5 million tons of CO2 for the first two months of 2025, up 21% from a year ago and the highest since 2022, according to Ember. Gas-fired emissions were 155.7 million tons, down 1% from the same period in 2024. During the next couple of months, overall power emissions are likely to decline due to reduced demand for power for heating. However, demand for cooling systems is set to jump sharply from June, which will place fresh pressure on power firms to boost production from whatever sources are available. And if gas prices remain elevated and coal prices remain relatively cheap by then, a fresh surge in emissions can be expected as power firms opt to deploy the most cost effective means to boost output while they seek to protect profit margins. The opinions expressed here are those of the author, a market analyst for Reuters. https://www.reuters.com/markets/commodities/us-power-firms-lift-coal-pollution-protect-profits-so-far-2025-maguire-2025-03-25/