2025-03-21 21:20

March 21 (Reuters) - Brazil's former central bank chief Roberto Campos Neto said on Friday that part of the sharp depreciation of the country's currency late last year was driven by companies acting ahead of a dividend tax they believed would take effect in 2025. Speaking at an event hosted by XP Private Bank in Miami, he said the Brazilian real rebound this year was partly supported by consequences of that same movement. Sign up here. After losing more than 20% in 2024, the currency of Latin America's largest economy has surged nearly 8% year-to-date. Appointed by former President Jair Bolsonaro to lead the central bank, Campos Neto left the post at the end of December and was succeeded by current Governor Gabriel Galipolo. Under a 2021 law granting the monetary authority autonomy, he remained at the helm of the bank for half of current President Luiz Inacio Lula da Silva's term. Earlier this week, Lula unveiled a bill to tax all dividends sent abroad, whether to companies or individuals, as part of a compensation for a long-promised plan to exempt the middle class from paying income tax. Campos Neto said many companies had anticipated sending money abroad for dividend payments, and that some banks were even facilitating these operations by lending money to firms so the funds could be transferred as dividends. "But then, once you pay the dividends, when you send the money out, you don't want to have the carry against you," he said, referring to a situation where the interest rate differential between two currencies moves unfavorably for an investor. Such carry trades involve borrowing in a low-yielding currency and investing in a higher-yielding currency to profit from the rate spread. "So part of the money that was sent out in December had to go back in the future contract in January because you want the money out, but being out, you want to have the carry of the real. So I knew part of the money that was going to be sent out would reverse in January," added Campos Neto. https://www.reuters.com/markets/currencies/brazils-tax-dividend-fear-helped-currency-drop-reflects-rebound-says-campos-neto-2025-03-21/

2025-03-21 21:08

Opposition pledges to repeal carbon pricing scheme ahead of election 14 oil and gas CEOs say in letter they want provincial govts to set carbon regulations Five of six members of oil sands producers' Pathway Alliance sign letter Pathway Alliance's C$16 bln carbon capture project discussion slows CALGARY, March 21 (Reuters) - The future of Canada's six-year-old carbon pricing system is on shaky ground after 14 oil and gas CEOs and the political opposition leader this week called for its repeal. Scrapping the system, which aims to reduce pollution by giving heavy industry a financial incentive to cut carbon emissions, however, puts the viability of the high-profile Pathways Alliance carbon capture project in doubt. Canada is grappling with changing priorities as U.S. President Donald Trump's tariff threats spur calls to find new markets for energy. The shifting political tides have emboldened some in Canada who believe the country has for too long prioritized its climate goals over the economy. Sign up here. Conservative Leader Pierre Poilievre made the federal carbon system a potential ballot issue on Monday, pledging to repeal it if he wins an election expected on April 28. The system, in place since 2019, aims to reduce pollution by giving heavy industry a financial incentive to cut carbon emissions. Poilievre said he would scrap the federal rules and replace them with expanded federal incentives such as tax credits to encourage companies to cut pollution. Carbon pricing decisions would then be left to individual provinces. Under the current law, industrial operations whose emissions exceed a permitted threshold must either pay the government or buy carbon credits to offset their impact. The system is designed to become more stringent over time, with the price of carbon increasing at specified intervals. Canada's newly sworn-in Liberal Prime Minister Mark Carney, who is narrowly leading polls against Poilievre's Conservatives, told reporters on Tuesday the country needs industrial carbon pricing if it wants to grow its trade volumes with allies. Britain, for example, has said it plans to implement a carbon levy , opens new tab on products imported from countries with less strict climate policies. In an open letter this week, 14 Canadian oil and gas CEOs said the federal scheme should be repealed to allow provincial governments to "set more suitable carbon regulations." And on Friday, the Pathways Alliance, a group of Canada's six biggest oil sands producers that proposed a C$16 billion ($11.47 billion) carbon capture and storage project aimed at significantly reducing the industry's greenhouse gas pollution, added to the criticism. Pathways posted a statement on its website emphasizing the need for federal policies that will "grow Canada's oil sands" and called for doing away with the "uncompetitive industrial carbon pricing system." Many provinces, including the oil-producing province of Alberta, already have their own industrial carbon pricing system in place. Under current rules, provincial systems must be as stringent as the federal system. The CEOs argued in the letter that the national scheme puts the country at a competitive disadvantage compared with jurisdictions that do not have one, such as the U.S. Many analysts, however, say large-scale corporate investments in decarbonization do not make sense without the financial incentive of a price on emissions. "Until there is clarity on the future of policy . . . we are unlikely to see that (Pathways) investment materialized," said Michael Bernstein, CEO of the think-tank Clean Prosperity. DISCUSSIONS SLOWED The oil sands industry is Canada's heaviest-emitting sector, and the Pathways proposed project would be one of the largest carbon capture and storage developments in the world, if completed. Pathways filed regulatory applications for a pipeline to transport carbon last March, but it has not made a final investment decision to go ahead with the project. Five of the Alliance's six member companies — Canadian Natural Resources (CNQ.TO) , opens new tab, Suncor Energy (SU.TO) , opens new tab, Imperial Oil (IMO.TO) , opens new tab, Cenovus Energy (CVE.TO) , opens new tab and MEG Energy (MEG.TO) , opens new tab — signed the CEO letter urging the repeal of the industrial carbon price. The five companies did not respond to queries for comment. The sixth member of Pathways, ConocoPhillips Canada (COP.N) , opens new tab, did not sign the CEO letter. A company spokesman said in an email on Friday that ConocoPhillips' commitment to the Pathways Alliance remains unchanged. The letter was also signed by the CEOs of ARC Resources (ARX.TO) , opens new tab, Veren (VRN.TO) , opens new tab, Pembina Pipeline (PPL.TO) , opens new tab, Enbridge (ENB.TO) , opens new tab, Whitecap Resources (WCP.TO) , opens new tab, TC Energy (TRP.TO) , opens new tab, Tourmaline Oil (TOU.TO) , opens new tab, Strathcona Resources (SCR.TO) , opens new tab and South Bow Corp (SOBO.TO) , opens new tab. In an interview with Reuters this month, the CEO of Canadian Natural Resources acknowledged challenges related to the looming election and uncertainty about the future of energy and climate policy. "If you look at that combined with the views of the administration in the U.S., on tariffs and so forth, those discussions on Pathways have slowed somewhat," CEO Scott Stauth said. In recent months, Pathways has been in talks with the federal government to provide a backstop to the industrial carbon price, aiming to insure against a future government eliminating carbon pricing. No agreement has been reached. A weakened carbon pricing system would leave governments with little way to incentivize projects like the Pathways plan, other than through direct subsidization, said Chris Severson-Baker, executive director of clean energy think-tank the Pembina Institute. "It (Pathways) might just end up becoming another thing the taxpayers are paying for." https://www.reuters.com/markets/carbon/canadian-opposition-oil-ceos-call-scrapping-federal-carbon-price-system-2025-03-21/

2025-03-21 20:58

MEXICO CITY/BUENOS AIRES, March 21 (Reuters) - The Bank of Mexico will likely cut its benchmark interest rate by 50 basis points at its meeting on March 27, taking it to 9%, according to a Reuters poll on Friday, amid slowing inflation and a weak outlook for the economy. Of 25 economists surveyed, 23 expect the central bank to deliver a cut of 50 bps, as it did in February, speeding up a rate-cutting cycle that began last year when the rate was a record 11.25%. Sign up here. The other two economists expected Banxico, as Mexico's central bank is known, to hold its rate steady. That would be in line with the U.S. Federal Reserve decision this week to hold rates. The Fed highlighted uncertainty around U.S. President Donald Trump's shifting tariff policies. At the last monetary policy meeting, Banxico said it would consider future rate adjustments similar to its February cut of half a percentage point if the inflation outlook allows. The annual headline inflation rate has been falling since reaching 8.7% in 2022, its highest level in more than two decades. Inflation hit 3.77% in the 12 months through February, within Banxico's official target of 3% plus or minus a percentage point. On Monday, the national statistics agency will release data that is expected to show inflation slowing in the first half of March. "The inflation scenario hasn't changed," said James Salazar, deputy director of economic analysis at CIBanco, whose forecast was included in the poll. "That provides grounds and consolidates the idea that another 50-basis-point cut is coming." While economic growth does not fall under Banxico's remit, analysts believe a weak outlook for Latin America's second-largest economy, weighed down by Trump's tariff threats, could put additional pressure on the governing board to continue reducing borrowing costs. Mexico's gross domestic product shrank in the fourth quarter for the first time in more than three years, contracting 0.6%. Of 17 analysts who shared forecasts for Banxico's subsequent decision on May 15, all but one foresee another rate cut at that meeting, although the group was divided on the magnitude. The key rate is expected to close the year at 8.25%, which would be its lowest level in nearly three years, according to the median of 19 forecasts received for the final quarter of 2025. https://www.reuters.com/world/americas/mexicos-central-bank-seen-cutting-key-rate-90-next-week-2025-03-21/

2025-03-21 20:47

ORLANDO, Florida, March 21 (Reuters) - TRADING DAY Late push lifts Nasdaq to first gain in 5 weeks Sign up here. Many of the world's major central banks sent a strong message this week that the uncertainty caused by U.S. President Donald Trump's trade wars is weighing on growth, stoking inflation, and dramatically reducing visibility on the interest rate outlook. It's a highly unpredictable and nervy environment for investors to navigate, as reflected by the lack of clear direction across world markets this week. The MSCI World equity index snapped a four-week losing streak for a rise of 0.7%, the S&P 500 rose 0.5%, the Nasdaq eked out a gain of 0.17% - just avoiding its worst run since the 2022 bear market - while European stocks gained more than 1% for their best week in five weeks. U.S. high yield credit spreads tightened from the previous week's six-month wides but gold rose, while Treasury yields edged lower yet the dollar crept higher. Those hoping for more clarity on the political, policy or data fronts next week may be disappointed - trading could be every bit as messy and lacking in direction, especially with the end of the quarter approaching. It's not just quarter end looming either - attention is also turning to April 2, when President Trump is expected to announce more tariffs, including reciprocal levies on many countries. As policymakers made clear this week, the uncertainty is weighing on businesses and consumers, and potentially putting a freeze on investment, hiring and spending. Investors may decide to put their plans on ice too. One of the strongest investment trends this year has been the reallocation of capital out of Wall Street to markets overseas. U.S. stocks have underperformed the rest of the world by around 13 percentage points. Europe has been a particular beneficiary of these flows due to Germany's historic fiscal policy shift that may substantially boost German - and euro zone - growth. But how much juice is left in that transatlantic swing and the reversal of the 'U.S. exceptionalism' trade, at least in the near term? European Central Bank President Christine Lagarde warned that the immediate outlook is gloomy thanks to the trade fog. And stateside, Fed officials Austan Goolsbee and John Williams on Friday drove home the stagflation warnings that the U.S. central bank made earlier in the week. Next week promises to be just as nervy. And foggy. I'd love to hear from you, so please reach out to me with comments at [email protected]. You can also follow me at @ReutersJamie and @reutersjamie.bsky.social. [Latest Market Data segment] This Week's Key Market Moves Charts of the Week Not one, but two charts of the week this week. The first highlights the scale of Wall Street's underperformance this year, and how quickly the 'U.S. exceptionalism' narrative has faded. Big Tech, which powered the rally in recent years, is lagging even more. The second shows what a quarter it has been for gold bugs. The yellow metal is up 15%, its best quarter since 2016. If it can stretch that out to over 16% by March 31, it will be its best quarter since 1986. What could move markets on Monday? Here are some of the best things I read this week: Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. Trading Day is also sent by email every weekday morning. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here. https://www.reuters.com/markets/global-markets-trading-day-2025-03-21/

2025-03-21 20:40

Nike dips on bleak revenue outlook FedEx tumbles after results, outlook Boeing jumps after fighter jet contract award Indexes up: Dow 0.08%, S&P 0.08%, Nasdaq 0.52% NEW YORK, March 21 (Reuters) - The S&P and Dow eked out slight gains on Friday, erasing earlier losses after comments from U.S. President Donald Trump provided hope that previously announced tariffs expected to begin in early April may not be as burdensome as feared. Trump said there will be flexibility on tariffs and that his top trade chief plans to speak with his Chinese counterpart next week. The president also reiterated his plan to use duties as a way to narrow the U.S. trade deficit with China. Sign up here. Markets have been under pressure in recent weeks as changing announcements about the timing and size of tariffs have clouded the outlook for corporate profits as well as the Federal Reserve's monetary policy path. Stocks have shown some signs of bottoming this week, however, with the S&P climbing more than 1% on Wednesday in the wake of the Fed's latest policy announcement. The central bank kept rates unchanged and signaled two cuts were likely this year. Even so, Michael Arone, chief investment strategist for the U.S. SPDR Business at State Street Global Advisors in Boston, said it was concerning that investors' attempts to rally the stock market had largely failed. "The reasons are the continued uncertainty around trade policy from the Trump administration, continued concerns about a U.S. economic growth scare and ultimately uncertainty about what the path of monetary policy looks like," Arone said. Chicago Federal Reserve President Austan Goolsbee said the central bank needs more time to "sort through" how Trump's policies play out in the economy, while New York Fed President John Williams echoed Goolsbee's comments and said there was no rush to change monetary policy right now. The Dow Jones Industrial Average (.DJI) , opens new tab rose 32.03 points, or 0.08%, to 41,985.35, the S&P 500 (.SPX) , opens new tab gained 4.67 points, or 0.08%, to 5,667.56 and the Nasdaq Composite (.IXIC) , opens new tab gained 92.43 points, or 0.52%, to 17,784.05. The S&P was down as much as 1.06% earlier in the day. For the week, the S&P 500 gained 0.5%, the Nasdaq rose 0.17%, and the Dow climbed 1.2%. It was the largest weekly gain for the Dow in two months, while the Nasdaq and S&P 500 managed to barely snap four-week streaks of declines. With earnings season set to begin next month, multiple companies have been reducing their forecasts. FedEx (FDX.N) , opens new tab slumped 6.45% after the package delivery company cut its full-year profit and revenue forecasts, citing continued weakness and uncertainty in the U.S. industrial economy. Peer UPS (UPS.N) , opens new tab declined 1.61%. Delivery firms are often seen as a bellwether for the global economy given their reach into a wide swath of different industries. The delivery companies weighed on the Dow Jones Transport Index (.DJT) , opens new tab, which dropped as much as 2.7% during the session before closing down only 0.2%. Nike (NKE.N) , opens new tab slid 5.46% as the worst performer among Dow Industrial components after the sports apparel maker projected a sharper decline in fourth-quarter revenue than analysts had anticipated. The materials (.SPLRCM) , opens new tab sector, off 1% on the session, was weighed down by a 5.78% tumble in shares of Nucor Corp (NUE.N) , opens new tab after the company forecast first-quarter profit below estimates. Boeing (BA.N) , opens new tab climbed 3.06% after Trump awarded the planemaker a contract to build the U.S. Air Force's most sophisticated fighter jet, beating out rival Lockheed Martin (LMT.N) , opens new tab, which slumped 5.79%. Friday's session also marked the simultaneous expiry of quarterly derivatives contracts tied to stocks, index options and futures, also known as "triple witching", which can exacerbate market volatility. Declining issues outnumbered advancers by a 1.93-to-1 ratio on the New York Stock Exchange and by a 1.42-to-1 ratio on Nasdaq. The S&P 500 posted nine new 52-week highs and 16 new lows, while the Nasdaq Composite recorded 38 new highs and 188 new lows. Volume on U.S. exchanges was 21.05 billion shares, compared with the 16.47 billion average for the full session over the last 20 trading days, and the busiest trading day since January 7. https://www.reuters.com/markets/us/futures-slip-tariff-woes-fedex-falls-after-cutting-forecast-2025-03-21/

2025-03-21 19:30

BOSTON, March 21 (Reuters) - The founder of a cryptocurrency financial services firm pleaded guilty on Friday to U.S. charges that he participated in a wide-ranging scheme to manipulate the market for digital tokens on behalf of client companies. Aleksei Andriunin, the founder and CEO of cryptocurrency "market maker" Gotbit, and his company entered guilty pleas in federal court in Boston to charges that they conspired to commit market manipulation and committed wire fraud. Sign up here. The pleas by the Russian national and his company came less than a month after Andriunin, 26, was extradited from Portugal, where he had been residing at the time of his arrest in October as part of a probe into the crypto sector. They were among 15 people and three firms charged following a novel investigation dubbed "Operation Token Mirrors," in which the FBI for the first time directed the creation of its own digital token to help catch fraudsters in the crypto market. According to their plea deals , opens new tab, prosecutors have agreed to recommend that Andriunin receive up to two years in prison when he is sentenced on June 16, prosecutors said. Gotbit agreed , opens new tab to forfeit about $23 million in cryptocurrency. Andriunin's lawyer did not respond to a request for comment. Prosecutors said that from 2018 to 2024, Gotbit engaged in "wash trading," a form of sham trading, and market manipulation on behalf of several cryptocurrency clients to help artificially inflate trading volume for their tokens. The indictment , opens new tab cited a 2019 interview published online in which Andriunin described developing a code to wash trade cryptocurrencies to artificially inflate trading volume so they could get listed and trade on larger cryptocurrency exchanges. Prosecutors said Gotbit made wash trades worth millions of dollars and received tens of millions of dollars in proceeds for its services for cryptocurrencies including Saitama and Robo Inu. Individuals associated with those cryptocurrencies have also been charged. https://www.reuters.com/technology/cryptocurrency-firm-founder-pleads-guilty-us-market-manipulation-scheme-2025-03-21/