2025-02-26 11:17

BUDAPEST, Feb 26 (Reuters) - Hungary's economic growth this year is likely to come in between 2% and 3%, below the official government forecast of 3.4%, Prime Minister Viktor Orban's chief of staff said in a podcast on news site 24.hu on Wednesday. Gergely Gulyas said gross domestic product growth could be below the official forecast due to various risks, including problems in the German economy. "The budget still includes 3.4% (GDP growth forecast)... but if we suppose that there will be a recession in Germany, then there are more risks, and then we can suppose that (growth) can be somewhat lower than that," Gulyas said. Replying to the reporter's question, he said that economic growth between 2% and 3% this year seemed realistic. Nationalist Orban is trying to revive the economy ahead of an election in 2026. But his hopes that strong growth will propel his Fidesz party to another election victory are being challenged by a rebound in inflation, sagging household morale and even a plunge in the birth rate that he is keen to boost. None of the 12 economists surveyed in a February Reuters poll expect the economy to reach the 3.4% growth Orban had assumed in this year's budget. Erste Bank, last year's most accurate forecaster of Hungarian economic indicators, sees growth at 2% this year. Sign up here. https://www.reuters.com/markets/europe/hungary-economy-may-grow-2-3-this-year-below-forecast-budget-official-says-2025-02-26/

2025-02-26 11:16

CALGARY, Feb 26 (Reuters) - The Canadian energy sector has proposed several major oil pipeline projects in the last decade, but only the Trans Mountain expansion project was completed. Here, a look at three other pipelines that never came to be: Energy East - A proposed C$15.7-billion project (US$11.0 billion), Energy East would have carried oil cross-country from Alberta to the Atlantic province of New Brunswick. It was cancelled in 2017 by TC Energy in the face of regulatory hurdles and opposition from environmental groups, particularly in Quebec. Northern Gateway - This pipeline was proposed by Enbridge in 2006 to carry oil from Alberta to British Columbia's northwest coast. The C$7.9-billion project (US$5.5 billion) faced opposition from local and Indigenous communities who feared the risk of a marine spill. The project died in 2016 after Prime Minister Justin Trudeau's government cancelled its permits. Keystone XL - This proposed TC Energy project would have carried oil from the oilsands of northern Alberta to the major U.S. crude storage hub at Cushing, Oklahoma and then on to U.S. Gulf Coast refineries. The project was rejected on environmental grounds by former U.S. President Barack Obama's administration, then revived during President Donald Trump's first administration. Former President Joe Biden revoked the pipeline's permit on his first day in office in 2021. TC Energy spun off its oil pipeline business in October last year into a new company named South Bow Energy (SOBO.TO) , opens new tab Trump said on Monday he wanted the pipeline built, but South Bow said it had moved on. TC Energy has sought to recover more than US$15 billion from the U.S. government for cancellation of the project. Sign up here. https://www.reuters.com/business/energy/canadas-cancelled-oil-pipeline-projects-2025-02-26/

2025-02-26 11:15

A look at the day ahead in U.S. and global markets from Mike Dolan Hit by draining consumer and business confidence amid uncertainty about Washington's economic policies, Wall Street stock indexes are all tripping into the red for 2025 - with the slide stalling for now, awaiting megacap Nvidia's earnings today. The latest sideswipe from main street has unnerved stock, bond and credit markets across the piece. U.S. consumer confidence deteriorated at its sharpest pace in 3-1/2 years in February, with 12-month inflation expectations surging amid worries that tariffs on imports would raise prices for households. At 8-month lows, it was the third straight monthly decrease in that measure of household sentiment and pushed the index to the bottom of the range that has prevailed since 2022. But it's just the latest in a series of similar outcomes from consumer, business and housing surveys showing rising levels of anxiety about the blizzard of sometimes conflicting new policy signals from Donald Trump's latest administration. The gnawing fear is that high levels of uncertainty are making it impossible for firms to plan and invest, dragging on economic activity and hiring, sapping stock prices and further hitting confidence in a risky spiral. Gauges of U.S. economic uncertainty are now at their highest since the pandemic lockdowns five years ago and global equivalents are at their highest on record, according to the Economic Policy Uncertainty index series. And U.S. financial markets, which had mostly assumed the Trump presidency would do the opposite for economic confidence, now appear wrongfooted and are rotating portfolios frantically. On Tuesday, the S&P 500 (.SPX) , opens new tab fell again to its lowest close of the year. The pullback in the big tech (.NDX) , opens new tab was even bigger, led by a pre-earnings 3% slide in Nvidia (NVDA.O) , opens new tab and a whopping 8% retreat in Elon Musk's auto giant Tesla (TSLA.O) , opens new tab. Tesla's market value tumbled below $1 trillion for the first time since November after news of a sales slump in Europe last month amid a series of boycott campaigns due to Musk's political roles. The European Automobile Manufacturers Association reported that Tesla sales dropped 45% in Europe, compared with a 37% jump in overall sales of EVs in Europe. That's seen the once "Magnificent Seven" of Big Tech mega caps slide deep into the red for 2025, marking an official 'correction' of more than 10% from the record peaks of December. The wider Nasdaq (.IXIC) , opens new tab and small cap Russell 2000 (.RUT) , opens new tab are now down more than 2% for the year so far - a stark contrast to 14-15% gains in Germany's DAX (.GDAXI) , opens new tab or Hong Kong's Hang Seng (.HSI) , opens new tab. Borrowing premiums for U.S. high-yield 'junk' credits rose to their widest in six weeks. Commodity prices fell, with U.S. crude oil hitting its lowest for the year, and risky tokens like Bitcoin plunged. S&P 500 futures clawed back some of the losses early on Wednesday - awaiting Nvidia's update but also partly due to stepped-up rate cut hopes and overnight tax cut moves in Congress. Market angst ripped through the bond market on Tuesday as the household survey - which saw jobs readings fall too - stepped up Federal Reserve easing speculation. Futures now price 55 basis points of interest rate cuts for the year, more than Fed policymakers indicated themselves in December, and with an 80% chance the next one comes as soon as June. Ten-year U.S. Treasury yields plunged below 4.3% for the first time this year and two-year yields fell to their lowest since before November's election - showing another 'Trump trade' gone awry. U.S. Treasury Secretary Scott Bessent claimed the U.S. economy was "brittle underneath" and vowed to "re-privatize" growth by cutting government spending and regulation. And the Republican-controlled U.S. House of Representatives late on Tuesday advanced Trump's tax-cut and border security agenda by a slim two-vote margin, delivering a major boost to his 2025 priorities. But in another jarring take on trade policy, Trump opened yet another front on Tuesday by ordering a probe into potential new tariffs on copper imports to rebuild U.S. production of a metal critical to electric vehicles and military hardware. Overseas, Europe's stock (.STOXX) , opens new tab rally this year - sown mainly by fears that Trump's moves to work with Russia to seek an end to the Ukraine war only increased the region's security risks and defense spending needs - powered on to new record highs. Germany's new government is forming after weekend elections and is seeking to increase fiscal spending, mainly on defence. Overnight, the U.S. and Ukraine have agreed on the terms of a draft minerals deal central to Kyiv's push to win Washington's support. The contents of the draft agreement said that it does not specify any U.S. security guarantees or continued flow of weapons but says that the United States wants Ukraine to be “free, sovereign and secure.” In Asia, China's stock rally also continued and Hong Kong (.HSI) , opens new tab jumped another 3% - helped in part by its own artificial intelligence buzz surrounding the DeepSeek development. Japan bucked the trend, ending in the red on Wednesday as yen strength and a possible interest rate rise there next month rattled it. Key developments that should provide more direction to U.S. markets later on Wednesday: * U.S. January new home sales * G20 finance ministers and central bankers meet in Cape Town * Richmond Federal Reserve President Thomas Barkin and Atlanta Fed President Raphael Bostic all speak; Bank of England policymaker Swati Dhingra speaks * US corporate earnings: Nvidia, Salesforce, Paramount Global, eBay, Agilent, Universal Health, Lowe's, Synopsys, First Energy, NRG, TJX, Verisk, APA, Invitation Homes etc * US Treasury sells $44 billion of 7-year notes, $28 billion of 2-year floating rate notes Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2025-02-26/

2025-02-26 10:58

Feb 26 (Reuters) - Sterling edged lower against a strengthening dollar and held steady versus the euro a day after the British government's pledge to increase military spending. The U.S. dollar edged up from its 11-week low on Wednesday as U.S. Treasury yields bounced back after recent declines. British Prime Minister Keir Starmer said on Tuesday he would increase annual defence spending to 2.5% of gross domestic product (GDP) by 2027 and target a 3% level last seen just after the Cold War, a signal to U.S. President Donald Trump that Britain can boost Europe's security. Sterling was down 0.1% to $1.2653. It hit $1.2626 on Monday, its highest level since December 18. "We think sterling can start to underperform in March," said Chris Turner, head of forex strategy at ING. Some analysts argued that the Bank of England could unlock more cuts in line with the recent dovish shift. BoE policymakers do not have a consensus about how fast the central bank should cut interest rates, even though they all agreed to use the word "gradual", Monetary Policy Committee member Swati Dhingra said on Monday. Dhingra was one of two Monetary Policy Committee members to vote for a half-point interest rate cut on February 6, while the majority voted for a quarter-point cut to 4.5%. Investors are closely watching developments in U.S. trade policy but expect U.S. tariffs to hurt the economy more in Europe than in the UK. However, they expect the U.S. protectionist measures to weigh on all European currencies. The euro was down 0.05% at 82.92 pence . It hit 82.63 pence on Friday, its lowest level since January 2. Markets expect the BoE to cut rates by 57 basis points (bps) in 2025 and the European Central Bank to ease by 80 bps. However, recent remarks from ECB officials have cast doubt on the monetary path traders are currently pricing in. ECB board member Isabel Schnabel said it's no longer clear the current 2.75% rate is still holding back the euro zone economy after arguing last week the ECB had to start a discussion about when to halt rate cuts. Sign up here. https://www.reuters.com/markets/currencies/sterling-edges-lower-versus-dollar-eyes-military-spending-2025-02-26/

2025-02-26 09:31

Dollar up in three of past four sessions Investors gauge policy uncertainty, US economy Markets price more than two 25 bps Fed rate cuts in 2025 Trump says Canada, Mexico tariffs to start in April NEW YORK, Feb 26 (Reuters) - The U.S. dollar rose on Wednesday to move further from recent 11-week lows, as investors assess the strength of the economy and tariffs outlook after the most recent comments from U.S. President Donald Trump. The greenback stumbled on Tuesday as economic data showed a sharp drop in consumer confidence, the latest in a string of data points that have prompted concerns about the strength of the U.S. economy and persistent inflation, and caused U.S. Treasury yields to tumble. The benchmark 10-year U.S. Treasury yield plunged nearly 10 basis points (bps) on Tuesday and was last down 4.2 basis points to 4.256% after falling to 4.249%, its lowest since December 11 as an earlier attempt to stabilize dissipated. "We've had a pretty good sell-off since January, a lot of that's been fueled by the adjustment lower in U.S. real rates, which was largely fueled by the underperforming data we've been seeing, including yesterday," said Brad Bechtel, global head of FX at Jefferies in New York. "We're at a stage now where we're probably just going to chop around for a bit until we hear more about what's actually happening with tariffs." The dollar index , which measures the greenback against a basket of currencies, rose 0.21% to 106.46, with the euro down 0.26% at $1.0486. The greenback had fallen nearly 4% from a more than two-year high hit in January as worries have emerged about U.S. economic growth as well as inflation, as investors deal with shifting tariff deadlines by Trump on Canada and Mexico. Investors are also bracing for the labor market impact from actions taken by Elon Musk's Department of Government Efficiency. The Canadian dollar weakened 0.9% versus the greenback to C$1.43 while the Mexican peso strengthened 0.3% versus the dollar at 20.406. Trading in both currencies was choppy after Trump said at a cabinet meeting that they would take effect on April 2, but a White House official, however, said the March 4 deadline for the tariffs on Mexican and Canadian goods remained in effect "as of this moment." Even with the recent declines, the dollar has risen in three of the past four sessions and "the market is still respecting the fact that there's an underlying bid tone to the dollar overall, and that's kind of why we're holding in around 106 for now," said Bechtel. Markets are currently pricing in 57 bps of rate cuts from the U.S. Federal Reserve by the end of the year, with expectations for a cut of at least 25 bps not topping 50% until the June meeting. Richmond Federal Reserve President Tom Barkin said on Tuesday he will follow a wait-and-see approach regarding central bank interest rate policy until it is clear inflation is returning to the Fed's 2% target given the current uncertainty surrounding the economy. The U.S. Commerce Department said on Wednesday that new home sales plunged 10.5% to a seasonally adjusted annual rate of 657,000 units last month, short of the 680,000 estimate of economists polled by Reuters, hurt by persistently high mortgage rates and unusually cold weather in some parts of the country. Investors were also eyeing any peace talks over Ukraine, which could affect the euro area economy and the single currency. Ukraine said on Wednesday it had reached a "preliminary" deal to hand revenue from some of its mineral resources to the United States, before an expected trip to Washington by President Volodymyr Zelenskiy on Friday. Against the Japanese yen , the dollar weakened 0.04% to 148.96 after falling to 148.56 on Tuesday, its lowest since October 11. Sterling strengthened 0.09% to $1.2677. Bank of England policymaker Swati Dhingra said the BoE's response to higher tariffs and other trade restrictions will depend on the extent supply chains are disrupted and not just increasing costs, as higher tariffs would likely be offset by softer global growth in the short-term. Sign up here. https://www.reuters.com/markets/currencies/bund-yields-rise-slightly-after-german-elections-2025-02-26/

2025-02-26 07:59

US crude stocks fall, gasoline and distillate inventories rise, EIA reports Potential peace deal between Russia and Ukraine weighs on prices Oil sanctions in focus after talks between US and Russia Trump orders termination of oil deal with Venezuela NEW YORK, Feb 26 (Reuters) - Oil prices fell to two-month lows on Wednesday as a surprise build in U.S. fuel stockpiles signalled demand weakness and a potential peace deal between Russia and Ukraine continued to weigh on prices. Brent crude settled down 49 cents, or 0.67%, at $72.53 a barrel. U.S. West Texas Intermediate crude oil futures fell by 31 cents, or 0.45%, to $68.62. Both benchmarks settled at their lowest since December 10. U.S. gasoline and distillate inventories posted surprise builds last week even though crude oil stockpiles fell unexpectedly as refining activity ticked higher, the Energy Information Administration said. "We had a knee jerk reaction down to the low. It was a bit of a surprise because of the crude oil number was a pretty big draw," said Bob Yawger, director of energy futures at Mizuho. Prospects for a peace deal between Russia and Ukraine are improving, ING commodities strategists said in a note, adding the market was also watching for implications of a minerals deal between the U.S. and Ukraine. "This would take us a step closer to Russian sanctions being lifted, removing much of the supply uncertainty hanging over the market," the note said. Downside risks on oil prices increased because of U.S. President Donald Trump's policies, such as initiatives to support higher oil exports by Iraq, said Saxo Bank analyst Ole Hansen. Trump's tariff policies could also trigger a trade war and curb economic growth, Hansen added. The U.S. and Ukraine agreed on terms of a draft minerals deal central to Trump's efforts to bring a swift end to the war in Ukraine, sources familiar with the matter told Reuters on Tuesday. Fears that a trade war could slow demand have eased worries about tighter near-term oil supply despite fresh U.S. sanctions against Iran, ANZ Bank analysts said in a note. Trump announced a reversal of concessions given to Venezuela by former President Joe Biden in 2022. The Biden administration allowed Chevron to expand its production in Venezuela and bring the country's crude oil to the U.S. Sign up here. https://www.reuters.com/business/energy/oil-edges-up-after-us-stockpiles-report-helps-offset-worries-rising-supply-2025-02-26/