2025-01-21 15:40

BRASILIA, Jan 21 (Reuters) - Economists have launched a fresh wave of upward revisions to projections for Brazil's interest rate this year, citing deteriorating inflation expectations, a weaker currency and lingering concerns over the fiscal outlook of Latin America's largest economy. Citi on Tuesday forecast rates to peak at 15.50% in June, following similar moves by Itau, XP and Santander. "Although we believe the bulk of the currency depreciation is linked to fiscal (policy), we still expect the Brazilian central bank to react to the worsening of the inflation outlook," Citi's team said in a report, with easing only expected next year. On Monday, Itau raised its Selic forecast to 15.75% by mid-year, up from 15%, projecting it to remain at that level through 2025. "If there is another round of currency depreciation and/or further deterioration in expectations, it's possible the tightening cycle could be extended, eventually delaying rate cuts in 2026," the bank warned. Earlier this month, XP revised its Selic rate projection to 15.50% this year, emphasizing growing challenges as inflation expectations drift further from the 3% target. In December, Santander had done the same, also forecasting the Selic to end 2025 at 15.50%. These adjustments have been gaining momentum since late last year, after leftist President Luiz Inacio Lula da Silva's administration unveiled a fiscal control package that disappointed markets, weakening the currency and pushing interest rate futures higher. The deterioration persisted despite the central bank's December decision to accelerate tightening with a 100 basis-point rate hike, signaling matching increases for the next two meetings, which would push rates from the current 12.25% to 14.25%, the highest in over eight years. Inflation closed 2024 at 4.83%, above the upper limit of its 4.5% tolerance band. Economists surveyed weekly by the central bank have been steadily raising their forecasts, now expecting consumer prices to rise by 5.08% this year and 4.10% the next. Sign up here. https://www.reuters.com/world/americas/economists-ramp-up-projections-brazils-interest-rates-above-15-2025-01-21/

2025-01-21 14:12

Monthly inflation rate contracts by 0.4% in December Inflation drop led by alcohol, food at restaurants Bank of Canada's core inflation measures also ease Market bets 80% chance of 25 bps rate cut on Jan. 29 OTTAWA, Jan 21 (Reuters) - Canada's annual inflation rate slowed in December, data showed on Tuesday, helped by a sales tax break which kicked off in the middle of the month and brought down prices of alcohol, restaurant foods and children's clothing. The annual inflation rate dropped to 1.8%, Statistics Canada said, slightly lower than expected and a tick below the prior month's 1.9%. On a month-on-month basis the consumer price index contracted by 0.4%. On an annual basis, prices for alcoholic beverages purchased from stores declined 1.3% in December, compared with a 1.9% increase in November, and food purchased at restaurants dropped by 1.6% in December from a rise of 3.4% the previous month. The prices included in the Consumer Price Index are inclusive of all excise and other taxes paid by consumers, and as a result any tax break brings down the prices recorded by the statistics agency. The sales tax break, which impacted a tenth of the components of the CPI basket, will continue until mid-February and the month of January will see a full month of exemption versus 18 days in December, Statscan said. Analysts polled by Reuters had forecast the annual inflation rate at 1.9% and a contraction of 0.4% on a monthly basis. The consistent easing of prices, which has stayed at or below the Bank of Canada's target of 2% since August, has helped the bank to slash its key policy rate by a total of 175 basis points from June to 3.25%. A further drop in inflation in December could prompt the central bank to cut rates again next week, although the BoC Governor Tiff Macklem had said last month that further rate cuts would be gradual. Currency markets are betting an 81% chance of a 25 basis point rate cut on Jan. 29. The Canadian dollar was trading weaker by 0.90% to 1.4435 against the dollar, or 69.27 U.S. cents. "Overall, there are a lot of moving pieces and temporary factors playing out in the inflation data at the moment," said Andrew Grantham, senior economist with CIBC Capital Markets said. "But... underlying price pressures appear to be close to 2% and we continue to expect a 25 bp (basis point) reduction in interest rates from the Bank of Canada next week," he added. The BoC's preferred measures of core inflation, CPI-median and CPI-trim, also edged down, nearing the 2% mid-point of the bank's 1-3% target range. CPI-median - or the centermost component of the CPI basket when arranged in an order of increasing prices - eased to 2.4% from 2.6% in September, while CPI-trim - which excludes the most extreme price changes - dropped to 2.5% from downwardly revised 2.6% in the prior month. Shelter prices - rent and mortgage costs - rose by 4.5% in December on an annual basis, slightly down from the prior month but still elevated. Year over year, prices for gasoline rose 3.5% in December compared with a 0.5% decline in November, mainly due to a base-year effect as prices declined heavily in December 2023, Statscan said, adding that on a monthly basis prices fell 0.6% in December 2024. Sign up here. https://www.reuters.com/world/americas/canadas-annual-inflation-rate-drops-18-december-sales-tax-relief-2025-01-21/

2025-01-21 12:43

Jan 21 (Reuters) - Oil producer Infinity Natural Resources is targeting a valuation of up to $1.24 billion in its initial public offering, joining a cluster of industry players that have rushed to list their shares in recent months. The company said on Tuesday it was aiming to raise up to $278.25 million through a sale of 13.25 million shares priced between $18 and $21 each. Energy sector IPOs have gained momentum from a flurry of recent activity, including by LNG producer Venture Global, which is expected to list later this week after a blockbuster IPO. A resilient economy, potential interest rate cuts and the prospect of deregulation under the Trump administration have bolstered boardroom confidence in launching IPOs. Infinity Natural is backed by investment firms Pearl Energy Investments and NGP Capital, which hold a nearly 65.7% stake. The company's shares will list on the NYSE under the symbol "INR". Founded in 2017, the company has oil and natural gas assets in the Appalachian Basin in the United States. Its total revenue nearly tripled in the first nine months of 2024, compared with a year earlier. Citigroup, Raymond James and RBC Capital Markets are the joint book-running managers for Infinity's IPO. Sign up here. https://www.reuters.com/business/energy/infinity-natural-eyes-up-12-bln-valuation-us-ipo-2025-01-21/

2025-01-21 12:42

BUENOS AIRES, Jan 21 (Reuters) - Argentina's state-run oil company YPF (YPFDm.BA) , opens new tab signed a memorandum of understanding with three Indian firms to potentially export up to 10 million metric tons of liquefied natural gas (LNG) per year, the company said on Tuesday. YPF Chief Executive Horacio Marin inked the deal in New Delhi with executives from Oil and Natural Gas Corporation (OIL), Gas Authority of India Limited (GAIL) and Oil and Natural Gas Corporation Videsh Limited. The agreement also covers cooperation in lithium, critical minerals, and hydrocarbon exploration and production, YPF said in a statement. "We are convinced that the country has an opportunity to become an energy exporter and achieve the objective sought by the entire industry to generate revenues of $30 billion over the next 10 years," Marin said. The executive has also visited Israel, South Korea and Japan to seek buyers for LNG from Vaca Muerta, the world's second-largest shale gas reserve. Reuters reported in December, citing a company source, that Marin was set to travel to India this month to sign the preliminary LNG export deal. Sign up here. https://www.reuters.com/business/energy/argentinas-ypf-signs-deal-with-indian-firms-export-lng-2025-01-21/

2025-01-21 12:32

CAIRO, Jan 21 (Reuters) - The new stretch of the Suez Canal near Egypt's Little Bitter Lake will be operational in the first quarter of this year, the chairman of the canal authority Osama Rabie said on Tuesday. In a statement, Rabie said the navy would reissue navigational maps after adding the 10-km (6.2 mile) extension to the canal. Egypt said on Saturday it had successfully tested the new 10-km stretch near the canal's southern end, developed despite a drop in revenue due to Houthi attacks on vessels in the Red Sea. The Suez Canal Authority confirmed two ships had passed through the new section during a trial run without incident. Following the 2021 grounding of the container ship Ever Given that blocked the vital waterway for six days, Egypt accelerated plans to extend the second channel in the southern reaches of the canal and widen the existing channel. According to the Suez Canal Authority, the latest expansion extends the total length of the canal's two-way section to 82 km from a previous 72 km. The canal is 193 km long in total. Egypt's Suez Canal connects the Red Sea to the Mediterranean, and is the fastest way to ship fuel, food and consumer goods from Asia and the Middle East to Europe. Shippers use the route to ferry as much as one-third of all global container cargo, including toys, tennis shoes, furniture and frozen food. Sign up here. https://www.reuters.com/world/suez-expansion-be-operational-first-quarter-canal-chairman-says-2025-01-21/

2025-01-21 12:32

LONDON, Jan 21 (Reuters) - Donald Trump's second term as U.S. president will draw a lot of investment into crypto, the CEO of Coinbase told a panel discussion at the World Economic Forum in Davos. "The Trump effect cannot be denied. To have the leader of the largest GDP country in the world come out undeniably and say that he wants to be the first crypto president," said Brian Armstrong, CEO of Coinbase. (COIN.O) , opens new tab Legislation in Congress will bring a lot of new investment to cryptocurrencies, Armstrong said, adding that bitcoin's recent all-time high was largely due to Trump's inauguration. Sign up here. https://www.reuters.com/technology/trump-effect-crypto-undeniable-will-lure-investment-coinbase-ceo-says-davos-2025-01-21/