2025-02-19 04:41
Hong Kong working to become Asian digital asset hub Financial regulator to launch new licensing regimes Analysts see city's push as clue to China's plans HONG KONG, Feb 19 (Reuters) - Hong Kong is expanding the ways investors can trade virtual assets, its financial regulator said on Wednesday, as the city races to become Asia's digital assets hub and attract capital. The Securities and Futures Commission will establish new licensing regimes for over-the-counter trading in virtual assets and for custody services, aiming to boost market efficiency and investor protections, it said in an statement on Wednesday. Derivative trading and margin financing options for virtual assets are also under review, the regulator said, after its CEO Julia Leung announced the measures at CoinDesk's Consensus Hong Kong 2025 conference earlier. Hong Kong first drew up a plan to become a virtual asset trading centre in 2022 - an effort that followed Beijing's sweeping ban on all cryptocurrency transactions in mainland China the previous year. It has since launched the first spot crypto exchange-traded funds in Asia, and issued nine virtual asset trading platform (VATP) licences, Paul Chan, the city's financial secretary said at the conference. Regulators are also advancing on the regulation of stablecoins and have introduced the relevant legislation to facilitate further innovation, he added. These initiatives "reflect our commitment to building a thriving digital asset ecosystem", Chan said. Bullish Group, which owns crypto news website CoinDesk, said it had became the 10th licensed crypto exchange in the city on Tuesday. Consensus Hong Kong is the first major crypto industry gathering since U.S. President Donald Trump took office last month, and speakers expressed a bullish view on the regulatory environment. "There's a big shift in sentiment in the U.S.," said Richard Teng, chief executive of Binance Holdings. He said some sovereign wealth funds and institutional investors have gone from debating whether they should invest in crypto to considering how much they should invest. The price of bitcoin more than doubled last year. It hit an all-time high of $109,071 on January 20 this year, the day of Trump's inauguration, but has since pulled back to stand at about $96,000. Hong Kong's push into crypto is seen by some as offering a clue to Beijing's exploration of virtual asset regulations, at a time when the new crypto-friendly U.S. administration is drafting new regulations and exploring a national reserve to promote the industry. "I think Hong Kong's particular role for China, not just in crypto but overall, is that it's one country, two systems," said Lawrence Chu, co-founder and CEO of digital asset firm IDA. "We're here to play that role, to be a sandbox, maybe in some cases for China, but also to be a conduit for various activities." Sign up here. https://www.reuters.com/technology/hong-kong-issues-nine-digital-asset-platform-licenses-plans-more-approvals-2025-02-19/
2025-02-19 04:25
RBNZ's cut reinforces dovish stance, contrasting with cautious RBA, Fed Governor flags 25-bps cuts in April, May amid moderating inflation Economy struggles with recession, inflation volatility anticipated RBNZ says global tariff uncertainty poses economic risks WELLINGTON, Feb 19 (Reuters) - New Zealand's central bank cut its benchmark rate by 50 basis points to 3.75% on Wednesday and flagged further reductions in borrowing costs amid moderating inflation as policymakers sought to revive a struggling economy. The Reserve Bank of New Zealand Governor Adrian Orr said the board is forecasting a lower terminal rate than in its November projections, and expects two more 25-basis point rate cuts in April and May subject to economic conditions evolving as expected. The rate track pushed it broadly in line with market pricing and reinforced the RBNZ's dovish stance in contrast with a more cautious approach in Australia and the U.S., denting the New Zealand dollar and sparking a rally in 90-day bank bill futures. "If economic conditions continue to evolve as projected, the Committee has scope to lower the OCR further through 2025," the RBNZ said in its accompanying policy statement after the cut met market expectations in a Reuters poll. Orr, speaking at a press conference, said: "We are looking at lowering the official cash rate a little bit quicker than what we projected back in November...We have our projection of the OCR being around 3% by year end." The RBNZ's new projection has rates at 3.45% by June, and at 3.10% in the fourth-quarter, down from the November estimate of 3.2%, helped by inflation moving to the middle of the bank's 1%-3% target. The central bank has now cut rates by 175 basis points since August in a much needed boost for an economy emerging from a deep recession. “The main message from today's Monetary Policy Statement is the lowering (again) of the Official Cash Rate track. The RBNZ are signalling more cuts, sooner,” said Kiwibank chief economist Jarrod Kerr The RBNZ said it is well placed to respond to future inflationary shocks but added that global uncertainty, particularly led by U.S. President Donald Trump's tariff policies, pose risks to the economy. “The RBNZ’s aggressive 50-basis point cut to 3.75% shows its determination to revive the economy, despite inflation risks and global uncertainties like Donald Trump's re-election as U.S. President," said Junvum Kim, senior sales trader at Saxo Asia Pacific. Several of the large banks in New Zealand including Westpac, ASB Bank, Kiwibank and Bank of New Zealand cut mortgage rates following the cash rate announcement. Bill futures rallied as markets priced in a 93% chance of an easing in April and have rates near 3.0% by year-end, which is seen as the bottom of the cycle. The kiwi dollar slipped 0.3% to $0.5683 but rebounded to last fetch $0.5707. GLOBAL TARIFF, ECONOMIC UNCERTAINTY A global front-runner in withdrawing pandemic-era stimulus, the RBNZ lifted rates 525 basis points since October 2021 to curb inflation in the most aggressive tightening since the official cash rate was introduced in 1999. The punishing borrowing costs, however, took a heavy toll on demand and tipped the economy into recession in the third quarter of last year - the worst downturn outside of the pandemic since 1991. The weakened state of the economy has added urgency to policymakers efforts to stimulate demand. The government has already abandoned hopes for a return to budget surpluses, seeing deficits for the next five years. New Zealand's annual inflation has come off in recent months and is currently at 2.2%, but the central bank said a volatile period ahead will probably see it increase to 2.7% in the third quarter before moderating again. New Zealand is one of several countries to ease policy as inflation has moved lower, but its sharp rate reductions contrast with a more cautious approach by the U.S. Federal Reserve and its counterpart in Australia, which on Tuesday delivered the first cut in rates in more than four years. Trade and other broader economic policies under Trump's second term in power have also raised policy uncertainty around the world due to the renewed risk of inflation. "Lower interest rates will encourage spending, although elevated global economic uncertainty is expected to weigh on business investment decisions," the RBNZ said. "Geopolitics, including uncertainty about trade barriers, is likely to weaken global growth." Sign up here. https://www.reuters.com/markets/new-zealand-central-bank-cuts-rates-by-50-basis-points-2025-02-19/
2025-02-19 02:18
SINGAPORE, Feb 19 (Reuters) - JP Morgan analysts upgraded Singapore equities to overweight on Wednesday, citing inexpensive valuations, high dividend yields as well as government initiatives to revive the domestic stock market. In a note after Singapore's budget on Tuesday, analysts at JP Morgan set a bull case target for the Singapore benchmark index (.STI) , opens new tab of 4,200, implying about a 6% rise from current levels. The index touched a record high of 3,949.65 on Wednesday and is up 4% so far in 2025 after rising 17% last year mainly driven by bank stocks and optimism around the measures aimed at reviving the stock market. "We believe the household and business supports should keep economic activities strong, whilst investment into innovation and boosting the equities market would open up new opportunities for growth," JP Morgan analysts said in a note. Sign up here. https://www.reuters.com/markets/asia/jp-morgan-upgrades-singapore-equities-overweight-2025-02-19/
2025-02-19 00:53
Trump to impose around 25% tariffs on cars, chips US housing starts fall, dollar extends losses vs yen UK inflation rises, pound gets brief boost Russia talks on Ukraine still in focus Trump policy proposals raise inflation concern -Fed minutes NEW YORK, Feb 19 (Reuters) - Safe-haven currencies led by the U.S. dollar and yen gained on Wednesday, as market jitters escalated amid the latest round of tariff threats from U.S. President Donald Trump and contentious talks to end the Russia-Ukraine war. The U.S. currency slipped further against the yen after minutes of the latest Federal Reserve policy meeting showed that Trump's initial policy proposals raised concern about higher inflation. It also affirmed a continued pause from rate cuts. The greenback overall rose against currencies that investors buy when risk appetite is high such as the euro, sterling, the Australian and Canadian dollars and those in emerging markets like the Mexican peso. The yen, on the other hand, advanced against most major currencies like the dollar, euro, Swiss franc, and sterling. Those gains were fueled by comments from Trump late Tuesday that he intends to impose auto tariffs "in the neighborhood of 25%" and similar duties on semiconductors and pharmaceutical imports. On Friday, Trump said levies on automobiles would come as soon as April 2, the day after members of his cabinet are due to deliver reports to him outlining options for a range of import duties. "So far, the dollar has tracked the path it had during the previous Trump administration...and we can pretty much agree that Trump is doing exactly what he said," said Chester Ntonifor, chief FX and global fixed income strategist, at BCA Research in Montreal, referring to tariffs that represent one of Trump's major policy mantras since he got into office. "Overall, short term, the dollar is tracking what Trump is saying." In afternoon trade, the dollar was down 0.4% against the yen at 151.495 , with the euro also dropping 0.6% to 157.925 yen . The dollar earlier extended losses against the Japanese currency after data showed U.S. single-family homebuilding fell 8.4% in January to a seasonally adjusted annual rate of 993,000 units last month, amid disruptions from snowstorms and freezing temperatures. The euro, meanwhile, slipped 0.2% versus the dollar to $1.0424 . The dollar index , essentially a reverse proxy for the euro because the latter is the largest component of the index, last stood at 107.18, up 0.2%, after dropping 1.2% last week. The pound, meanwhile, got a short-lived boost from stronger-than-expected UK inflation, which rose more than expected, hitting a 10-month high of 3% in January and is likely to rise further. Sterling hit a two-month peak overnight but last traded at $1.2585, down 0.2%. The Trump administration, meanwhile, said on Tuesday it had agreed to hold more talks with Russia on ending the war in Ukraine after an initial meeting that excluded Kyiv, a departure from Washington's previous approach that rallied U.S. allies to isolate Russian President Vladimir Putin. On Wednesday, Ukrainian President Volodymyr Zelenskiy and Trump traded barbs. Zelenskiy hit back at Trump's suggestion that Ukraine was responsible for Russia's 2022 full-scale invasion, saying the U.S. president was trapped in a Russian disinformation bubble. Trump, for his part, denounced Zelenskiy as "a dictator without elections" and said he had better move fast to secure a peace or he would have no country left. The euro has reacted most to the headlines on Russia and Ukraine, rallying last week on a potential resolution to the conflict, and slipping on signs of tension. "Should Russia and Ukraine ultimately reach a peace agreement, the dollar could well come under renewed pressure," wrote Fawad Razaqzada, market analyst, at City Index and FOREX.com in research note. Elsewhere, the Reserve Bank of New Zealand reduced its benchmark rate by 50 basis points to 3.75% as widely expected and signaled future moves would likely be smaller. The latter was enough to boost the New Zealand dollar, which was last up 0.3% at US$0.5721 . Sign up here. https://www.reuters.com/markets/currencies/dollar-firms-ukraine-tensions-kiwi-awaits-rbnz-decision-2025-02-19/
2025-02-19 00:42
Feb 18 (Reuters) - The United States Department of Agriculture said on Tuesday that it accidentally fired several agency employees working on the federal government's response to the H5N1 avian flu outbreak, over the weekend, NBC news reported. "Although several positions supporting [avian flu] were notified of their terminations over the weekend, we are working to swiftly rectify the situation and rescind those letters," a USDA spokesperson told NBC. The USDA did not immediately respond to Reuters request for comment. On Sunday, Reuters reported that the Trump administration terminated 1,165 workers at the National Institutes of Health and media reported some cuts at the Food and Drug Administration as well. The layoffs began on Friday with almost half of the probationary workers at the U.S. Centers for Disease Control and Prevention and others at the National Institutes of Health being forced out as President Donald Trump overhauls government agencies. Sign up here. https://www.reuters.com/world/us/usda-works-rehire-bird-flu-officials-it-fired-nbc-news-reports-2025-02-19/
2025-02-19 00:39
CHICAGO, Feb 18 (Reuters) - A discussion about global soybean exports cannot proceed without mention of Brazil or the United States, because together they fuel 85% of total shipments each year. Likewise, "China" and "imports" are often synonymous in global soybean trade because the country accounts for more than 60% of annual imports. But what about the other customers? Who takes in the other 40% of soy cargoes, and how have these trends changed in recent years, especially with respect to each supplier? This conversation has been pulled to the forefront of the market as the United States has threatened tariffs on many of its trade partners, who are contemplating measures of their own. This includes both Mexico and European Union countries, top destinations for U.S. farm goods. At the same time, Brazil’s ballooning soybean crop has been increasingly able to supply global needs, slowly chipping away at U.S. soy exporters’ relevance. QUICK CHINA RECAP China significantly reduced its reliance on U.S. soybeans during the first trade war in 2018, though that was largely possible at the time because of widespread disease throughout its hog herd, which significantly dented feed demand. But for U.S. exporters, the pre-trade war levels were never restored, and U.S. soy shipments to China over the last three calendar years have fallen 12% from the 2015-2017 average. China increased its imports by 13% during that time. Also during this time, Brazil expanded its soy exports to China by 51%, less than the 61% rise in the country’s total shipments. By comparison, U.S. soy exports to all destinations declined 2% in the same period as the focus on domestic demand increased. On average over the last three years, about 72% of Brazil’s soy exports headed to China, compared with 76% between 2015-2017. This huge dependence on a single customer is perhaps the biggest vulnerability of Brazil’s export program. About 53% of U.S. soy exports were destined for China over the last three calendar years compared with a three-year, pre-trade-war average of 59%. EUROPE AND CREW European Union countries are collectively the second-largest soybean importing entity, accounting for about 8% of the global total. The EU is also the No. 2 destination for both Brazilian and U.S. soybeans. Around 2000, Europe was Brazil’s present-day China, consuming almost two-thirds of the country’s soy exports. That share has averaged just 7% in the latest three years, though the volumes have risen over the last decade. U.S. soy exports to the EU have also risen in recent years, though the average volumes remain slightly lower than those from Brazil. EU countries accounted for about 11% of U.S. shipments over the last three years. However, U.S. soybean trade with the EU, which grossed $2.4 billion last year, could be in jeopardy. Brussels is expected on Wednesday to publish a policy potentially restricting agricultural imports treated with chemicals banned in Europe. That could force U.S. exporters to explore new markets, assuming trade relations allow. Mexico is the United States’ second largest single-country soybean destination, accounting for about 10% of the annual total, though tariff threats also loom there. Total Brazilian soy exports are nearly 80% larger by volume than their U.S. counterparts, but both countries over the last three years exported similar volumes to destinations other than China and the EU. This relatively greater diversity among the United States’ customers might be its only present advantage over Brazil’s booming business. The future of U.S. soy exports could become less worrisome if domestic demand were to escalate in a manner implied by the aggressive biofuel mandates floated a few years ago. But those plans, much like the tariff discussions, are in a holding pattern for now. This means that if the upcoming U.S. soy crop is not sufficiently large, next season’s shipments could be squeezed further. Karen Braun is a market analyst for Reuters. Views expressed above are her own. Sign up here. https://www.reuters.com/markets/commodities/by-numbers-breaking-down-global-soybean-trade-braun-2025-02-19/
