2025-02-28 18:26

Loonie touches weakest since February 4 Gains 0.6% in February Canadian GDP increases 2.6% in Q4 Bond yields ease, tracking U.S. Treasuries TORONTO, Feb 28 (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Friday as investors assessed domestic data that showed stronger-than-expected economic growth and awaited the potential implementation of U.S. trade tariffs. The loonie was trading nearly unchanged at 1.4440 per U.S. dollar, or 69.25 U.S. cents, after touching its weakest intraday level since February 4 at to 1.4453. For the week, the currency was on track to decline 1.5%. Still, it was up 0.6% since the start of February after recovering from a 22-year low earlier in the month. Canada's gross domestic product expanded by 2.6% on an annualized basis in the fourth quarter, surpassing expectations for an increase of 1.8%, helped by a jump in consumer spending. "The Canadian economy has certainly faced some headwinds but it exited 2024 in a stronger position than believed," said Adam Button, chief currency analyst at ForexLive. "Canadian consumers continue to reach into their wallets and spend though I expect tariff threats to reverse some of that in Q1." Canada and Mexico sought to show U.S. President Donald Trump's administration evidence of progress in curbing the flow of fentanyl opioids into the U.S. ahead of a March 4 deadline for punishing 25% tariffs on their goods imports. "Markets remain somewhat skeptical that, if it comes to it, 25% tariffs will be in place for long," Shaun Osborne, chief currency strategist at Scotiabank, said in a note. "The economic consequences for Canada from high tariffs are significant but they are non-negligible for the U.S." Canadian bond yields fell across the curve, tracking moves in U.S. Treasuries after U.S. data showed annual inflation subsided last month. The 10-year was down 4.3 basis points at 2.924%, after earlier touching its lowest level since February 3 at 2.904%. Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-clings-monthly-gain-gdp-beats-estimates-2025-02-28/

2025-02-28 17:33

Feb 28 (Reuters) - Britain's financial watchdog said on Friday a four-year prison sentence has been issued in the UK's first case involving unregistered cryptoasset activity. London-based Olumide Osunkoya, 46, was found guilty of operating unregistered crypto ATMs for transactions worth 2.5 million pounds ($3.2 million) across several locations within the UK between December 2021 and March 2022, the Financial Conduct Authority (FCA) said in a statement. "(This) sends a clear message: those who flout our rules, seek to evade detection and engage in criminal activity will face serious consequences," said Therese Chambers, joint executive director of enforcement and market oversight at the FCA. Osunkoya was also convicted and sentenced for forgery, using false identity documents, and possessing criminal property at the court hearing. Financial watchdogs are clamping down on crypto ATM networks, which enable the purchase or conversion of money into cryptoassets. Germany's financial regulator said in August they had seized almost 250,000 euros in cash in a nationwide operation targeting cryptocurrency ATMs. ($1 = 0.7947 pounds) Sign up here. https://www.reuters.com/world/uk/uk-sentences-individual-first-unregistered-cryptoasset-case-2025-02-28/

2025-02-28 17:06

Inflation slowed but progress has been slow Drop in consumer spending flags growth concerns Coming policy choice could be tough for the Fed Feb 28 (Reuters) - New data may point to emerging tension between the U.S. Federal Reserve's dual inflation and employment goals, as price pressures remained sticky in January while consumer spending slowed more than expected. Traders maintained bets the Fed will cut interest rates by a quarter of a percentage point at its June and September meetings this year, but analysts noted the situation seemed to have become more complex and could present policymakers with a difficult decision in the weeks ahead. Hints of slowing growth alongside inflation still stuck above the Fed's 2% target, "presents a dilemma for the Fed...if you add them together, that equals stagflation," said Peter Cardillo, chief market economist for Spartan Capital Securities in New York. "The Fed now has a lot of worrying to do.” Stagflation refers to the combination of slow growth and high inflation that forces policymakers to potentially choose between cutting rates by more, at the margin, to support economic growth and jobs, or maintaining tighter monetary policy to ensure inflation returns to target. Policymakers began pointing to that possibility this week. "The Fed could have to balance inflation risks against growth concerns," Kansas City Fed President Jeffrey Schmid said in comments this week that noted what he felt were upside risks to inflation and concerns that uncertainty about the economic outlook could begin to weigh on growth. "There are risks that could make our monetary policy decisions increasingly difficult." Schmid spoke before Friday's data showing that inflation as measured by the Personal Consumption Expenditures price index did slow in January, ticking down to 2.5% last month from 2.6% in December. The core PCE measure, excluding volatile food and energy prices, fell to 2.6% from 2.9%, the Commerce Department's Bureau of Economic Analysis showed. Though an improvement, progress towards the Fed's 2% target has been slow in recent months, while concerns have mounted that price pressures could build again in the wake of import taxes the Trump administration intends to impose. Of particular note to the Fed, as well, is a recent rise in consumers' expectations of inflation, something that if sustained would make central bankers reluctant to ease monetary policy for fear of stoking inflationary psychology. The same report on Friday also showed consumer spending unexpectedly dropped in January, following a sharp increase in December as households stocked up on goods ahead of the Trump administration's telegraphed tariffs. A recent drop in consumer confidence may also point to slowing growth ahead given the U.S. economy's reliance on household consumption. Fed policymakers themselves say they are focused on the data to be released over the next couple of months and on assessing the actual economic fallout of Trump's policies, including a 25% levy on imports from Mexico and Canada set to start next week, along with an increase to tariffs on China. It's unclear, they say, how much of those higher rates will be passed on to consumers in the form of higher prices, and on how they will impact economic growth more broadly. None have signaled any inclination to cut the policy rate, currently in the 4.25%-4.50% range, when they meet next month, and at least a few -- including Fed Governor Adriana Kugler and Cleveland Fed chief Beth Hammack -- say rates could stay where they are for some time unless there is an unexpected increase in the unemployment rate, which last month dropped to 4%. Fed Chair Jerome Powell is expected to give his own updated view on the economic and policy outlook next Friday, when the government will also release its monthly employment report for February. Sign up here. https://www.reuters.com/markets/rates-bonds/traders-keep-bets-fed-rate-cut-june-after-inflation-data-2025-02-28/

2025-02-28 16:20

Feb 28 (Reuters) - CME Group (CME.O) , opens new tab said on Friday that it plans to roll out futures contracts on cryptocurrency Solana on March 17, pending regulatory review. The exchange said it expects to debut two contracts, one for 500 Solana coins and a "micro-sized" contract for 25 Solana. "We are responding to increasing client demand for a broader set of regulated products to manage cryptocurrency price risk," said Giovanni Vicioso, global head of cryptocurrency products at CME. If the products get the regulatory stamp of approval, the launch would clear the way for approvals of exchange-traded funds tied to Solana. The first filings seeking approval by the U.S. Securities & Exchange Commission to launch ETFs tied to the spot price of Solana were made in June 2024 by VanEck and digital assets manager 21Shares. Most recently, Franklin Templeton made a similar filing last Friday. The SEC may want to see several months' worth of trading in a new Solana futures contract before approving those ETFs, said Sui Chung, CEO of CF Benchmarks, a crypto indexing firm. The decision "significantly increases" the likelihood of an approval, Chung said. "A regulated futures market has been the SEC’s primary pre-requisite to approve a spot crypto ETF." That is because it brings at least part of the trading in a cryptocurrency under the purview of U.S. regulators, giving them confidence that they will be able to identify anyone who attempts to manipulate the market, Chung added. Asset management companies have filed a slew of applications to launch ETFs tied not only to Solana but several other crypto tokens, including XRP and Litecoin. That wave of new filings has grown in number since the U.S. presidential election last November, analysts have noted. The crypto industry widely views Trump as a crypto-friendly president and last month hailed his moves to overhaul digital asset regulations. Sign up here. https://www.reuters.com/business/finance/cme-group-plans-launch-solana-futures-march-17-2025-02-28/

2025-02-28 16:06

OTTAWA, Feb 28 (Reuters) - Canada recorded a slight drop in its budget deficit to C$21.72 billion ($15.05 billion) for the first nine months of the 2024/25 fiscal year as government revenues increased faster than expenditure, the finance ministry said on Friday. By comparison, the deficit in the same period a year earlier had been C$23.61 billion, it said in a statement. Program expenses rose 10.7% on increases across all major categories of spending for the nine months. Public debt charges increased by 17.3% largely because of higher interest rates, the ministry said. Year-to-date revenues grew by 11.8%, largely reflecting higher tax revenues and from other taxes and duties. On a monthly basis, Canada's budgetary balance in December swung to a surplus of $1 billion, from a deficit of C$4.47 billion in same month the prior year. ($1 = 1.4432 Canadian dollars) ((Reuters Ottawa bureau; [email protected] , opens new tab)) Keywords: CANADA BUDGET/ Sign up here. https://www.reuters.com/markets/canada-budget-deficit-over-first-nine-months-202425-c2172-bln-2025-02-28/

2025-02-28 14:31

Consumer spending, business investments led Q4 growth Statscan revised third-quarter growth to 2.2% from 1% On a monthly basis, GDP expanded by 0.2% in December January's growth likely to be 0.3%, flash estimate shows OTTAWA, Feb 28 (Reuters) - Canada's gross domestic product in the fourth quarter expanded by 2.6% on an annualized basis, surpassing widespread expectations, as a jump in consumer spending, business investments and exports lifted growth, data showed on Friday. Analysts polled by Reuters had expected the GDP to grow by 1.8% in annualized terms in the quarter ending December, similar to Bank of Canada's predictions from last month. The third quarter growth rate was revised to 2.2% from 1% earlier, Statistics Canada said. It added that, on a month-on-month basis, the economy in December expanded by 0.2%, reversing the contraction seen in November. This was mainly due to healthy growth in retail sales and a sales tax break that started from mid-December, it said. The monthly GDP figures are calculated by industrial output while quarterly figures are calculated by spending and expenditure. An advance estimate shows that monthly growth would likely be 0.3% in January. The Canadian dollar extended gains after the data and firmed 0.15% to 1.4417 against the U.S. dollar, or 69.36 U.S. cents. Yields on the two-year government bond rose 1.6 basis points to 2.639% after the data was released. Household spending, which accounts for more than half of total GDP, rose 1.4% in the fourth quarter, registering its biggest jump since the second quarter of 2022, Statscan said. Residential construction rose by 3.9%, its largest quarterly rise since the first quarter of 2021, while business investments, which have mostly been a laggard for the last 11 quarters, posted a growth of 0.7% in Q4, led by a 4.2% increase in investment in machinery and equipment. On a per capita basis, real GDP rose 0.2% in the fourth quarter, the second increase in the last seven quarters. Canada's economy, which had been sluggish for the better part of last year, has shown signs of improvement lately as interest rates fell from over two-decade high levels from the middle of last year. The BoC has cut rates by 200 basis points from June to 3% in January in its bid to prop up economic growth, especially as reducing immigration numbers and an impact of widespread tariffs from the U.S. pose major risk to growth. The bank has said that it might have to cut rates to support the economy in the event of sweeping tariffs. However, a healthy fourth quarter GDP is likely to help the bank pause the rate cutting cycle. "All points to the fact that absent the tariff threat, there would be substantial grounds for optimism over 2025 prospects, and perhaps a good reason for the Bank of Canada to take a pause on rate cuts," said Avery Shenfeld, managing director and chief economist at CIBC. Sweeping tariffs of 25% could hit almost all Canadian exports by as early as March 4. In the event of tariffs, the BoC's rates decision due on March 12 could be a cut, Shenfeld said. Currency markets reduced their bets marginally for a 25 basis point rate cut next month to below 50% after the data was released. Sign up here. https://www.reuters.com/markets/canadas-economy-posts-surprise-annualized-fourth-quarter-growth-26-2025-02-28/