2025-02-27 10:50
LONDON, Feb 27 (Reuters) - Weak external demand and the impact of conflicts slowed economic growth again in countries covered by the European Bank for Reconstruction and Development (EBRD), the lender said in a semi-annual report released on Thursday. The 0.3 percentage point revision, to 3.2% growth for 2025, is the bank's third straight downward change to the economic outlook for its region, which covers emerging Europe, central Asia, the Middle East and Africa. It warned that uncertainty around tariffs, trade wars, flagging European competitiveness and a fading "peace dividend" loomed over future prospects. "What we see is subdued global growth momentum," said EBRD Chief Economist Beata Javorcik. Two of the largest 2025 growth forecast revisions - down more than 1 percentage point - were Hungary, where exports to Germany were "drastically reduced" last year, and Ukraine, where Russian attacks on electricity infrastructure weighed on the economy. While uncertainty over trade rules can by itself have a "significant detrimental effect" on trade, investment and production, Javorcik said, slowing growth in Germany would have an even more significant direct impact on EBRD economies than tariffs. Already, she said, there was anecdotal evidence of lower demand, for example from German automakers for Romanian IT services. "What matters for our countries is this persistent differential between Europe, advanced Europe, and the U.S. that has emerged," she said. Javorcik pointed to data showing European companies falling behind those in China and the United States in research and development spending. The fading "peace dividend" could further sap that sort of investment as countries plow more money into defence at the expense of other investments. "We are seeing this erosion of the peace dividend that's going, particularly in the environment of higher interest rates, to crowd out social spending, crowd out spending that leads to investment in long-term growth." Defence spending as a portion of GDP in EBRD regions nearly doubled over the last decade, from around 1.8% of GDP in 2014 to around 3.5% in 2023, with big increases in Ukraine, Poland and Estonia but also Lebanon, Armenia and Kyrgyzstan. Whether such spending could boost economic growth, Javorcik said, hinged on whether it benefited domestic industry or focused on imports. But, she added, a European version of the U.S. Defense Advanced Research Projects Agency, which develops new technologies for the military, could help. "If the EU were to embark on this mission-led approach to defence, with big investments in research and development..., spillovers of that R&D effort to civilian usage could boost competitiveness and innovation in Europe," she said. "That could alleviate some of the challenges related to Europe falling behind our innovation relative to the U.S." Sign up here. https://www.reuters.com/markets/growth-outlook-slows-again-peace-dividend-fades-ebrd-says-2025-02-27/
2025-02-27 10:25
MUMBAI, Feb 27 (Reuters) - The Indian rupee ended little changed on Thursday, caught between weakness in Asian currencies due to U.S. tariff-related uncertainties, and prompt, aggressive intervention by the central bank. The rupee ended at 87.20 against 87.21 in the previous session. The unit hit a more than two-week low of 87.4050 earlier in the session, but strengthened to 87.1350 on aggressive intervention by the Reserve Bank of India (RBI). Traders said the intervention was not just to stabilise the currency, but to also curb large one-way moves, thus reducing any speculative trades against the rupee. "Prevailing global challenges outweigh the existing advantages for the rupee and the downside bias remains for the rupee," said Amit Pabari, managing director of forex advisory CR Forex. "We think a floor of 87.60 looks intact for the domestic unit, but the pace of depreciation will solely be determined by the RBI," he said. Asian currencies struggled on the day with the offshore Chinese yuan slipping to 7.2787 to the U.S. dollar. Other Asian currencies also declined amid uncertainty on what U.S. President Donald Trump will do on tariffs. Trump on Wednesday rekindled hopes for yet another one-month pause on new tariffs on imports from Mexico and Canada, saying they could take effect on April 2. Trump's tariff threat "remains real" but the forex markets will only believe tariffs when they see them, ING Bank said in a note. Apart from news related to Trump's tariffs, investors will be looking at crucial data sets that will be released this week. The U.S. will report initial jobless claims, pending home sales, and provisional third-quarter growth data on Thursday and core PCE price index on Friday. The data sets will provide clues on the Federal Reserve's rate cut cycle. India will release the October-December growth figures on Friday. Sign up here. https://www.reuters.com/markets/currencies/rupee-ends-little-changed-wedged-between-us-tariff-fears-rbi-intervention-2025-02-27/
2025-02-27 10:04
Meme coin Libra jumped to $5 after Milei post, then plunged Critics cry 'rug pull' scam, government says president was duped One poll shows surge in negative perceptions of president BUENOS AIRES, Feb 27 (Reuters) - A meme coin scandal and investigation have dented the popularity of Argentina's libertarian President Javier Milei and hindered his efforts to strengthen political alliances ahead of congressional midterm elections this year. The brash former economist won a shock election in 2023 with pledges to take a "chainsaw" to public spending - and recently gifted a real one to billionaire Elon Musk. Milei stirred controversy when he posted this month on X in support of a new token, Libra. After Milei's post, Libra spiked in price as high as $5. Hours later it collapsed to about $1. The president quickly deleted the post and critics accused him of a so-called "rug-pull" scam, in which an influential person touts a financial asset for dubious reasons to inflate the price and then sell it. Milei's government said the president himself was fooled, and he has denied having business links to the cryptocurrency. A federal judge is investigating the token's launch and whether Milei was involved. Milei's early economic fixes came with harsh austerity measures, yet voters appreciated his plain-speaking style and pledges to take down the corrupt "caste" politicians. But the crypto episode has begun to erode that robust support. "There is something that has been broken in terms of credibility and reliability," said Shila Vilker, director of Buenos Aires-based pollster Trespuntozero, whose data showed 53.1% of Argentines did not trust Milei over the scandal. Both Trespuntozero's poll and another by Giacobbe & Asociados showed Milei's positive image only edged down slightly after the scandal. Yet the Giacobbe & Asociados poll indicated 46.6% of respondents held a negative view of the president, up sharply from 36.2%. That raises concern in an election year as Milei seeks to bolster his relatively weak position in Congress by building bridges with more mainstream conservative allies and bringing more lawmakers into his libertarian party. "The Libra case has started to hurt his voter base," said Vilker, handing an issue to the left-leaning opposition. "It's the bullet or the ammo that the opposition needed." MILEI THE ANTI-POLITICIAN Meme coins are novel crypto tokens that rely on popular internet trends or people. They often take off and post staggering rises in price before suddenly collapsing, leaving a few early buyers with spectacular gains, but many more losers. Famous meme coins include the dog-themed Dogecoin, which soared when billionaire Elon Musk began tweeting about it in 2020. U.S. President Donald Trump and his wife released cryptocurrencies named after themselves days before his January inauguration. Milei's post to his 3.8 million followers on X helped boost Libra before the meme coin collapsed. His government claims he was duped and did not personally benefit. "If there is someone who has been scammed, it is Milei," a government source close to the president told Reuters. Marina Acosta, director of communications at local consultancy Analogías, said the issue for Milei was with middle-ground voters who generally supported the government but only felt a "weak" connection with Milei's party and ideology. "Many people no longer believe that Milei is different, but rather that he's part of the political 'caste' himself," teacher Silvia Sarabia, 54, told Reuters, referring to the label the president often pins on traditional politicians. The government source said Milei's La Libertad Avanza had become the main right-wing bloc, taking over the mantle from the center-right PRO, which remains an important yet uneasy ally for Milei in Congress. "We are the right-wing party, and those who want to (join us) are welcome," the government source said. The main Peronist opposition looking to dent Milei's momentum is divided. The Peronist governor of Buenos Aires province Axel Kicillof this month launched his own political bloc, signaling a further split. "We have no other option than to go united; if not, they (the government) will bulldoze us," a Peronist source said. "However, if La Libertad Avanza and PRO are split in Buenos Aires province and city, we have a chance of winning." Sign up here. https://www.reuters.com/world/americas/argentina-meme-coin-scandal-dents-mileis-hunt-election-allies-2025-02-27/
2025-02-27 07:57
ABU DHABI, Feb 27 (Reuters) - Cyprus's Energy Minister, George Papanastasiou, said on Thursday that Abu Dhabi's TAQA (TAQA.AD) , opens new tab is interested in investing in and supporting the delivery of an electricity connection project the country is developing. The project is the Great Sea Interconnector (GSI)cable which will link transmission networks of Europe to Cyprus in a project costing 1.9 billion euros ($2.12 billion), and later stretch to Israel. Sign up here. https://www.reuters.com/business/energy/taqa-interested-investing-electricity-connection-project-by-2029-cyprus-energy-2025-02-27/
2025-02-27 07:45
OSLO, Feb 27 (Reuters) - Vaar Energi has made an oil discovery in its Zagato prospect some 8 km (5 miles) north of the Arctic Goliat oilfield, the company and the Norwegian Offshore Directorate said on Thursday. The preliminary estimated gross recoverable resources found in the well are between 15 million and 43 million barrels of oil equivalent and come on top of two other discoveries made in the area, Vaar said. "Close proximity to existing infrastructure provides opportunity for a fast track, low emission, cost-efficient development utilising available capacity... adding high value barrels," Vaar Chief Operating Officer Torger Roed said. Vaar Energi, majority owned by Italy's Eni (ENI.MI) , opens new tab, is the operator with a 65% stake, while Equinor (EQNR.OL) , opens new tab owns the remaining 35%. Sign up here. https://www.reuters.com/business/energy/vaar-energi-makes-oil-discovery-near-arctic-goliat-field-2025-02-27/
2025-02-27 07:40
Brent and WTI gain 2% Both benchmarks hit two-month lows in previous session Chevron exports about 240,000 bpd of crude from Venezuela Sanctions, tariffs make OPEC+ hesitant on April oil hike NEW YORK, Feb 27 (Reuters) - Oil prices rose more than 2% on Thursday as supply concerns resurfaced after U.S. President Donald Trumprevoked a licence granted to U.S. oil major Chevron (CVX.N) , opens new tab to operate in Venezuela. Investors were still keeping an eye on signs of a potential peace deal in Ukraine, which could result in higher Russian oil flows. Brent crude oil futures settled up $1.51, or 2.1%, at $74.04 a barrel. U.S. West Texas Intermediate crude oil futures rose $1.73, or 2.5%, to $70.35. The contracts had settled in the previous session at their lowest levels since December 10. "Markets like clarity as opposed to uncertainty. Unless a clear path is presented on tariffs and Eastern European peace, oil prices will remain on the defensive with sporadic and spontaneous headline-based rallies," said Tamas Varga, an analyst at PVM. The Chevron licence revocation means the company will no longer be able to export Venezuelan crude. And if Venezuelan state oil company PDVSA exports oil previously exported by Chevron, U.S. refineries would be unable to buy it because of American sanctions. The move also could lead to the negotiation of a fresh agreement between the U.S. producer and state company PDVSA to export crude to destinations other than the U.S., sources close to the talks told Reuters. Chevron exports about 240,000 barrels per day (bpd) of crude from its Venezuela operations, more than a quarter of the country's entire oil output. "Chevron's exit could reduce Venezuela (oil) production, giving OPEC+ capacity to increase output. If this occurs, coastal U.S. refiners could incur higher procurement costs," TD Cowen analysts said in a note. If OPEC+ does not increase supply, it could increase heavy sour prices, which would hit U.S. refiners, the analysts said. Oil prices rose during intraday trading after Reuters reported that OPEC+ is debating whether to raise oil output in April as planned or freeze it as its members struggle to read the global supply picture because of fresh U.S. sanctions on Venezuela, Iran and Russia, eight OPEC+ sources said. "It is my opinion that with Brent crude oil still hovering around $75 per barrel, OPEC+ will delay the restoration of the voluntary production cuts at least through the end of April and possibly through the end of the second quarter," said Andrew Lipow, president of Lipow Oil Associates. Also in focus is Trump's involvement in efforts to facilitate a Russia-Ukraine peace deal. Trump said Ukrainian President Volodymyr Zelenskiy would visit Washington on Friday to sign an agreement on rare earth minerals, though the Ukrainian leader said the success of talks would hinge on continued U.S. aid. U.S. economic growth slowed in the fourth quarter, the government confirmed on Thursday, and the loss of momentum appears to have persisted early this quarter amid cold weather and concerns that tariffs will hurt spending through higher prices. Meanwhile, the number of Americans filing new applications for unemployment benefits increased more than expected last week. A separate unemployment program, reported with a one-week lag, showed no impact yet of the recent mass layoffs of probationary federal government workers. Sign up here. https://www.reuters.com/business/energy/oil-prices-climb-2-month-lows-trump-axes-chevrons-venezuela-license-2025-02-27/
