2025-01-17 11:50

BERLIN, Jan 17 (Reuters) - German authorities are to lift an emergency ordinance to stop the spread of the livestock illness foot-and-mouth disease at the end of the day, the agriculture ministry in the eastern state of Brandenburg said on Friday. Sign up here. https://www.reuters.com/business/healthcare-pharmaceuticals/german-authorities-lift-emergency-ordinance-curb-foot-and-mouth-disease-2025-01-17/

2025-01-17 11:36

JAKARTA, Jan 17 (Reuters) - Indonesia plans to start offering carbon credit certificates to international buyers next week, the country's carbon exchange said, to raise funds to help efforts to achieve its carbon neutrality target. Indonesia is an archipelago with the world's third-largest rainforest area, but is also one of the world's top 10 green house gas emitters. The first offer of carbon credit certificates for international buyers will be launched on Monday, Jan. 20, the exchange said. The certificates will come from emission reductions from several power projects on Java island worth 2.48 million metric tons of carbon dioxide equivalent (CO2e), the Ministry of Environment said earlier this week, according to state news agency Antara. Indonesia launched carbon emission credit trading for domestic players in September 2023, but the market has been mostly illiquid due to a lack of supply and demand. Trading value as of December 2024 was 50.64 billion rupiah ($3.10 million), while trading volume reached 908,018 tons of CO2e, according to Indonesia's Financial Services Authority. New President Prabowo Subianto has plans to raise funds through sales of carbon offsets. Last year, he said he was optimistic Indonesia could reach net zero emissions in 2050, a decade earlier than previously targeted, including by retiring coal-fired power plants. ($1 = 16,360.0000 rupiah) Sign up here. https://www.reuters.com/sustainability/indonesia-plans-offer-carbon-credit-certificates-foreign-buyers-next-week-2025-01-17/

2025-01-17 11:23

Small-cap Russell 2000 has pulled back sharply from Nov highs Trump's pro-growth policies seen helping small cap stocks Slower Fed rate cuts, tariffs could weigh on small caps NEW YORK, Jan 17 (Reuters) - As investors seek assets that will shine under a Donald Trump presidency, one corner of the U.S. stock market expected to benefit from the Republican's policies has been stumbling. Shares of smaller U.S. companies have been under pressure, with the small-cap Russell 2000 (.RUT) , opens new tab last week marking a 10% correction from its November highs. The S&P 500 (.SPX) , opens new tab, the benchmark for large-cap companies, declined less than 3% in that time. Trump, who will be inaugurated for his second term on Monday, is expected to back an agenda promoting domestic economic growth, increasing the appeal of small-cap stocks. But the group encountered a severe headwind in recent weeks: the prospect of higher interest rates than previously expected, which stand to raise borrowing costs that hit smaller companies particularly hard. "With more pro-growth policies, small caps tend to do better in theory when the economy is stronger," said Keith Lerner, co-chief investment officer at Truist Advisory Services. "You almost have this tug of war," Lerner said. "On one side, stronger growth should be good for small caps. On the other side, high interest rates are negative." Small caps and equities broadly won some relief this week from an encouraging inflation report that calmed surging Treasury yields. The focus on small caps comes as investors look for "Trump trades" that have room to run. The overall stock market has given up some gains since Trump's Nov 5 victory, when investors were enthused about his pro-growth agenda benefiting equities broadly. The S&P 500 is up 3% since the election. Some Trump trades continue to thrive. Shares of Tesla (TSLA.O) , opens new tab, led by Trump backer Elon Musk, have gained over 60% since Nov 5. Bitcoin , which is expected to benefit from a friendlier crypto regulatory environment, is up over 40%. Small caps, however, have pulled back. The Russell 2000 index surged nearly 6% on the day after Trump's win. Later in November, it hit its highest closing level in three years. Now the index is little changed since the election. An expectation of fewer interest rate cuts this year has dampened sentiment for small caps, with the Federal Reserve in December projecting less easing as it raised its estimate for inflation in 2025. Treasury yields have surged. This week, the benchmark 10-year yield hit a 14-month high. Smaller companies "tend to have greater debt loads...so not getting the follow-through with lower interest rates is something that sort of poured a bit of cold water" on hopes for small-cap strength, said Yung-Yu Ma, chief investment officer at BMO Wealth Management. The Russell 2000 surged following Trump's 2016 election and the index kept outperforming the S&P 500 in the year following his first victory, rising 24% against a 21% for the large-cap index. Under Trump, the prospect of reduced regulations and promotion of domestic business should benefit smaller companies, whose businesses tend to be more U.S.-focused than larger, multi-national corporations, said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. But while the group's outlook improves under Trump compared to his predecessor Joe Biden, the incoming president's favoring of tariffs could cause problems for smaller companies if they disrupt supply chains, Samana said. "There will be some things that are helpful under the Trump administration... but there will also be some negatives," Samana said. Small-cap bulls are counting on some catch-up. The S&P 500's nearly 50% gain over the past two years is more than double the rise for the Russell 2000. Still, small caps could face headwinds if interest rates keep rising. Small-cap indexes tend to be more highly weighted toward financials and industrials, sectors that are relatively more sensitive to higher rates and inflation, according to Truist's Lerner. The Russell 2000 held a 37% weight with those two sectors as of the end of 2024, compared to a roughly 22% for those groups in the large-cap S&P 500. Trump's arrival presents an opportunity for small caps, BMO's Ma said, "but that thesis for outperforming probably hinges more on a favorable interest rate environment." Sign up here. https://www.reuters.com/markets/us/wall-st-week-ahead-small-caps-lose-trump-bump-rising-rates-sap-strength-2025-01-17/

2025-01-17 11:18

FRANKFURT, Jan 17 (Reuters) - The European Central Bank should not rush to lower interest rates because inflation remains high and uncertainty great, ECB policymaker Joachim Nagel said in an interview published on Friday. The Bundesbank president also told German financial newsletter Platow Brief that he still expected the Basel III global banking rules to be implemented both in the United States and in Europe, while he dismissed a proposal from a German politician to include bitcoin in official reserves. The ECB has cut interest rates four times since June and is expected to continue doing so in the next six months, having seen inflation fall from double digits in late 2022 to just above its 2% target. But Nagel called for a cautious approach given still high services inflation and a "high level of uncertainty" - a possible reference to questions hanging over global trade once Donald Trump returns to the White House next week. "We should therefore not rush into anything on the path to monetary policy normalisation," he said. Still, Nagel said there had been nothing wrong with the ECB discussing a bigger, 50-basis-point rate cut at its last meeting in December, adding: "That's part of it." Nagel gave short shrift to an election proposal by Christian Lindner, former German finance minister and leader of the pro-business Free Democratic Party (FDP), to add bitcoin to Bundesbank and ECB reserves. "This worries me because it gives the impression that an asset is being given some kind of government seal of approval," he said. "A currency reserve must be safe, liquid and transparent. None of this applies to bitcoin." Nagel also said global rules designed to make banks safer would be applied "on both sides of the Atlantic" even after they were watered down by the U.S. Federal Reserve and might even be scrapped under Trump's incoming administration. "I assume that Basel III will be finalised on both sides of the Atlantic," he said. "It is important that we in Europe speak with one voice." Earlier on Friday, the Bank of England said it would delay its implementation of the rules, which include tougher bank capital requirements, by one year until January 2027. Sign up here. https://www.reuters.com/markets/europe/ecb-should-not-rush-rate-cuts-nagel-says-2025-01-17/

2025-01-17 11:15

A look at the day ahead in U.S. and global markets from Mike Dolan Salvos from a Federal Reserve governor and the incoming Treasury Secretary helped nail down this week's inflation-inspired retreat in worrisome U.S. Treasury yields before Donald Trump's inauguration as president on Monday. The reversal of the year's rise in U.S. yields and the dollar coupled with news of an upbeat end to last year for China's economy nudged world stocks (.MIWD0000PUS) , opens new tab up on Friday. Two-year Treasury yields hit their lowest level since Jan. 2 - a punchy 20 basis points off Monday's peaks - after Fed board governor Christopher Waller on Thursday held out the chance of three or four interest rate cuts this year. Not unlike a similar forecast from Bank of England policymaker Alan Taylor the previous day, the unusually dovish take from Waller suggested twice as much easing this year than currently priced into futures markets. With the Fed governor welcoming the week's surprisingly soft inflation report and saying March could not be ruled out for a resumption of rate cuts, Fed funds futures have moved back closer to pricing two rate cuts in 2025 - having doubted any cuts were coming as recently as last week. The rally in Treasuries saw two-year yields slip below 4.45% and the 10-year probed back under 4.60%. The dollar index (.DXY) , opens new tab held up, partly because the yen weakened despite fresh reports the Bank of Japan would raise its key policy rates next week. Even though a tech-sector drag saw Wall Street stock indexes (.SPX) , opens new tab step back on Thursday - after the prior session's best day of the year so far, amid an earnings-related bank stocks boom - futures were up again ahead of Friday's bell and a three-day weekend due to Monday's Martin Luther King holiday. BESSENT HEARING Next week's inauguration and Trump's initial policy moves are now firmly in focus and the Treasury market remains key. To that effect, the confirmation hearing for Trump's Treasury Secretary pick Scott Bessent on Thursday was an important marker for the debt market and the dollar. Bessent underscored plans for a rollover of Trump's 2017 tax cuts - positing an economic "calamity" if they were not, despite disquiet among some Congressional Republicans. But he also stood squarely behind the dollar's dominant global role, supported Fed independence and insisted no debt default would ever be considered. Earlier in the day, the latest U.S. economic health checks showed retail spending remained firm, weekly jobless claims ticked up and business confidence captured by the Philadelphia Fed survey jumped higher this month. December industry and housing starts numbers are out later on Friday. Overseas, news of a 5% Chinese gross domestic product growth for 2024 met both market forecasts and the government's target -- despite some doubts about that only a few months ago. Fourth quarter annual readings were higher than expected at 5.4% and both industrial and retail sales growth in December also surprised to the upside. Perhaps of greatest relief in Beijing was news that monthly house prices stopped falling for the first time since 2023 -- even though they remained 5.3% lower year-on-year. Chinese stocks (.CSI300) , opens new tab, (.HSI) , opens new tab were marginally higher. Longer-term problems for the Chinese economy continued to lurk, however, with data showing the population there fell last year for the third year running. In Europe, euro zone inflation came in as expected but there was another negative surprise for Britain's struggling economy with a surprise drop in UK retail sales in December. The pound and recently edgy British gilt yields slipped. Key developments that should provide more direction to U.S. markets later on Friday: * U.S. December housing starts and permits, Dec industrial production, Nov TIC data on foreign holdings of Treasuries * U.S. corporate earnings: State Street, Citizens Financial, Regions Financial, Truist, Huntington Bancshares, Schlumberger, Fastenal Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-pix-2025-01-17/

2025-01-17 11:10

About half of US farmworkers are undocumented Rural and legal groups seeing surging demand for immigration workshops Some workers assigning guardians to US-born children in case of detainment Jan 17 (Reuters) - Immigrant farmworkers are preparing for incoming U.S. president Donald Trump's promise of mass deportations, including by assigning guardians for their children if they are detained, according to groups providing them legal support. Rising demand for such legal services reflects anxiety that Trump will follow through on a campaign vow to deport millions of undocumented immigrants once he is sworn in to office Jan. 20, something that could have an outsized impact on the country's agricultural sector, which heavily relies on their labor. About half of hired farmworkers nationwide lack legal immigration status, according to the U.S. Department of Agriculture, and farm trade groups have warned deporting them could bring the country's food production to a halt. "The administration is not yet sworn in, but people are already afraid," said Sarait Martinez, executive director of the Centro Binacional para el Desarrollo Indígena Oaxaqueño (CBDIO), an organization that supports indigenous Mexican farmworkers in the Central Valley of California. Representatives of four U.S. rural and legal advocacy organizations, including CBDIO, told Reuters they have seen as much as a ten-fold increase in interest from immigrant farmworkers in workshops and resources they provide on what to do if confronted by immigration officials and how to ensure their family’s security if they are detained. The workshops can include role-play confrontations with immigration officials and instructions on how to prepare for potential enforcement: like filling out forms assigning temporary guardians to their children, assigning an alternate to pick up pay, or giving permission for their children to travel internationally in the event they are deported. Alfredo, a farmworker in Washington State who asked to be identified only by his first name due to concerns he could be targeted, said he is taking part in some of the trainings so he can pass along what he learns to fellow workers. "We are definitely very concerned," he told Reuters. "We really take pride in doing farm work, but it’s becoming very hard to look forward to going out to work." AGAINST THE CLOCK In his first administration from 2017-21, Trump's government conducted worksite raids at poultry processing plants and produce processing facilities in Nebraska. The incoming Trump administration has said it will prioritize the deportation of people in the country illegally who pose a public safety or national security threat, but has not ruled out extending deportations more broadly to undocumented farmworkers. "President Trump will enlist every federal power and coordinate with state authorities to institute the largest deportation operation of illegal criminals, drug dealers, and human traffickers in American history while simultaneously lowering costs for families and strengthening our workforce," said Karoline Leavitt, spokeswoman for the Trump administration transition team. Farm industry trade groups are worried about the potential impact on food production, and especially in California. A third of U.S. vegetables and three-quarters of fruits and nuts are produced in the state, along with huge quantities of dairy and livestock, according to the California Department of Food and Agriculture. All that food is harvested and processed by about 400,000 farmworkers, according to state employment data. And about 75% of those are undocumented workers, according to the University of California-Merced Community and Labor Center. Despite the high proportion of undocumented immigrants, there is little access to appropriate legal services for farmworkers in some of the state's largest agricultural counties, said Ivette Chaidez Villarreal, civic engagement program director at Valley Voices, a workers' rights and voter education group in the Central Valley. Since November's election, the organization has grown its work on immigration services due to a high volume of legal questions and requests from farmworkers. It is also working with other California groups to create a rapid response network to support workers who may be subject to raids, Villarreal said. Farmworkers often struggle to access legal services because of their rural location, said Patricia Ortiz, immigration legal director at California Rural Legal Assistance, which is developing resources for farmworkers. "It puts them in a more precarious situation than other workers," she said. Undocumented workers who have U.S.-born children are particularly worried about being separated from their families, said Martinez of CBDIO. About 4.4 million U.S.-born children live in a household with at least one unauthorized immigrant parent, according to the Pew Research Center. Martinez said many of the workers her group is helping speak languages like Mixteco and Zapoteco, and not Spanish or English, and are seeking help with immigration paperwork and securing passports for their U.S.-born children. Across the country in upstate New York, the Cornell Farmworker Program has increased its immigration workshops ten-fold since before the election, and expects to soon hold one every day, said director Mary Jo Dudley. Using role-play, trainers show workers ways to respond to immigration officials if stopped on the street or approached at their homes, Dudley said. "We're working against the clock," she said. Sign up here. https://www.reuters.com/world/us/immigrant-us-farmworkers-prepare-trump-mass-deportation-plan-2025-01-17/