2025-01-09 11:28

NEW DELHI, Jan 9 (Reuters) - India sharply revised lower its April-November 2024 gold import estimate by $11.7 billion in data released on Thursday after figures were miscalculated due to some double counting. The government has revised its gold import estimate to $37.38 billion from $49.06 billion, trade statistics department data showed. The downward revision in gold imports is likely to also shrink the nation's trade gap by at least $11.7 billion but India's trade department is yet to finalise the revisions, said an official with knowledge of the matter. The government is yet to make an official statement on what caused the miscalculation in gold imports and neither has it ruled out errors in other categories of imports. As per current estimates, India's April-November trade deficit stood at $202.42 billion. New Delhi said last month its gold imports hit a record high of $14.8 billion in November, a figure that has now been revised down by $5 billion. The spike widened the country's merchandise trade deficit (INTRD=ECI) , opens new tab to a record level and spooked the South Asian nation's currency. India is the world's second-largest consumer of gold and relies on imports to meet most of its demand, which typically increases during the festival and wedding season in the December quarter. Sign up here. https://www.reuters.com/markets/commodities/india-cuts-april-november-gold-import-estimate-by-117-billion-2025-01-09/

2025-01-09 11:24

BENGALURU, Jan 9 (Reuters) - The Indian rupee will extend its steady decline against a strong U.S. dollar amid heightened market expectations of a Reserve Bank of India interest rate cut next month, a Reuters poll of foreign exchange strategists found. Predictions in the latest poll for the rupee were barely changed from last month. That is despite the unexpected departure of former Reserve Bank of India Governor Shaktikanta Das and arrival of his successor, Sanjay Malhotra, whose views on monetary policy are unknown. The rupee was forecast to remain near Thursday's 85.84 per dollar and to be at 85.50 in three months, before weakening to 86.00 in six months, according to the Jan. 3-9 Reuters poll of 42 foreign exchange analysts. It was expected to lose nearly 1% by year-end, reaching 86.50, a smaller decline compared to last year when the rupee fell 2.8%. It has fallen about 15% over the past three years. "The rupee has been much more stable and stronger than its fundamentals would suggest. I think the RBI can allow a little bit more adjustment in line with regional currencies," said Michael Wan, senior currency analyst at MUFG. The rupee is currently overvalued by 8% compared to its trading peers, according to RBI data on the real effective exchange rate. While remaining the fastest-growing major economy, growth in India has slowed to just above 5% and markets expect a rate cut from the RBI in February, despite inflation sticking well above the RBI's 4% medium-term target. This, along with further strength in the U.S. dollar, could place further pressure on the rupee, suggesting the RBI may need to ramp up its regular interventions in currency markets in the coming months. But in response to an additional question, a strong majority of analysts - 15 of 21 - said the RBI would reduce its pace of market intervention in the near term. "Intervention should be a last resort, as it was in the past. You don't have to eliminate volatility to manage it - some is necessary for hedging," said K. K. Mital, senior economist at Venus India. "Markets expect the new governor to cut rates in February, but I don't think that should happen. It...could backfire by fueling capital outflows." Foreign investors have removed around $2 billion dollars from India's stock market since the start of the year. (Other stories from the January Reuters foreign exchange poll) Sign up here. https://www.reuters.com/markets/currencies/indian-rupees-slide-continue-despite-higher-rate-cut-expectations-2025-01-09/

2025-01-09 11:22

Jump in gilt yields turns focus on Reeves budget plans 30-year government borrowing costs highest since 1998 Sterling falls, bond move off lows Reeves under pressure to cut spending Government promises iron grip on public finances LONDON, Jan 9 (Reuters) - Rachel Reeves is facing her first major test since becoming Britain's finance minister after a jump in the government's borrowing costs this week and a deepening of the pound's losses on Thursday, potentially forcing her to cut future spending. With investors worrying about high borrowing and a stagnating economy, the Treasury said there was no need for intervention to calm markets, having vowed late on Wednesday to maintain "an iron grip" on the public finances. A selloff in debt markets on Tuesday and Wednesday - which has been linked in part to the imminent arrival in the White House of Donald Trump - pushed the yield on 30-year British government bonds - or gilts - to a 26-year high. Gilt prices slumped further at the start of trading on Thursday - driving yields to fresh highs - before recovering to stand little changed on the day. The pound was headed for its biggest three-day drop in nearly two years, prompting comparisons with the 2022 "mini-budget" crisis that forced former prime minister Liz Truss out of Downing Street. However, this week's market moves have been less sharp and there has so far been no evidence of the strain on institutional investors that forced the Bank of England into emergency bond purchases in 2022. Treasury minister Darren Jones, Reeves' deputy, told parliament the UK bond markets "continue to function in an orderly way" and demand for UK debt remained strong. "There is no need for any emergency intervention," Jones said. The Conservative opposition party accused Reeves of being "missing in action" and called on her to scrap a trip to China aimed at reviving trade ties. She was due to depart on Thursday. PIMCO, one of the world's largest bond investors, said it was still positive about UK bonds and said that shifts in the U.S. debt market ahead of Trump's presidency were largely to blame. "Although UK-specific factors, such as the budget, have contributed to the rise, most of the increase has been driven by rises in U.S. Treasury yields during the same period," PIMCO economist Peder Beck-Friis said. Britain's new government launched its plan for more investment in public services and infrastructure to boost economic growth just days before Trump's Nov. 5 election victory which pushed up borrowing costs globally. That shift in markets has made investors more worried about the combination of high borrowing in Britain planned by Reeves and Prime Minister Keir Starmer, and the impact of their higher taxes for business on an economy that is now stagnating. A survey of recruiters showed that vacancies slumped in December, while shares in Britain's Marks & Spencer and other retailers fell due to concerns about weak consumer confidence. Analysts at Citi said British bonds were being hit by worries about the extent of the government's borrowing plans, which could keep pressure on inflation and prevent the BoE from cutting interest rates quickly to help the economy. "The market appears to be questioning the credibility of the fiscal plans, especially with another full fiscal event not due until the autumn," they said in a note to clients. Britain is due to issue nearly 300 billion pounds ($368 billion) of government bonds over the coming financial year. Some analysts said Britain's departure from the European Union had made it more exposed to swings in financial markets. "Brexit UK is vulnerable as a less core asset in global investor portfolios," Krishna Guha and Marco Casiraghi at Evercore ISI, a consultancy, said in a report. Others said the rise in market interest rates would make it easier for the BoE to cut borrowing costs, potentially easing the pressure on gilt yields and the government's coffers. "The recent sharp tightening in financial conditions, which poses downside risks to the UK economic outlook, reinforces the case for BoE easing," Simon Dangoor, head of fixed income macro strategies at Goldman Sachs Asset Management. OUT OF WIGGLE ROOM In her Oct. 30 budget, Reeves gave herself only a small margin of error for meeting her target of balancing spending on public services with tax revenues by the end of the decade. Economists think the rise in borrowing costs and economic stagnation since July's election mean Reeves is off course to hit that target and that she will need to respond. Reeves has previously said she does not plan further big tax increases after her hike in social security contributions for employers from April prompted protests from corporate leaders. Instead, she could announce spending cuts for future years, but that would risk being seen as a return to what she derided as austerity under the previous Conservative governments. Jones told parliament the government would stick to its existing spending plans but declined to directly address questions about whether further tax rises could be ruled out. Reeves will deliver a budget update on March 26 when official fiscal forecasters will say whether she is on course to meet her targets. She has said she favours only one budget announcement a year in the autumn. But Matthew Amis, an investment manager at fund management firm abrdn, predicted that Reeves would probably be forced to announce spending cuts in March. "The UK is borrowing a lot this year, investors need confidence to buy that debt otherwise gilt yields will continue to move higher and the currency will continue to weaken," Amis said. ($1 = 0.8144 pounds) Sign up here. https://www.reuters.com/world/uk/uk-bond-market-sell-off-heaps-pressure-reeves-2025-01-09/

2025-01-09 11:16

PARIS, Jan 9 (Reuters) - The Philippines reported an outbreak of highly pathogenic H5N2 bird flu among backyard ducks, the World Organisation for Animal Health (WOAH) said on Thursday. The virus was detected in 15 out of 428 backyard ducks in the Camarines Norte province, the Paris-based WOAH said in a report citing Philippine authorities. The outbreak occurred in November and was confirmed in December, it said. Highly pathogenic avian influenza, commonly called bird flu, has spread around the globe in the past years, leading to the culling of hundreds of millions of poultry. The H5N2 strain is different from the one that has led to the death of a man in the United States. Sign up here. https://www.reuters.com/business/healthcare-pharmaceuticals/philippines-reports-outbreak-h5n2-bird-flu-among-backyard-ducks-2025-01-09/

2025-01-09 11:10

Reuters poll graphic on Brazil FX reserves: BUENOS AIRES, Jan 9 (Reuters) - Brazil's real currency is forecast to trade slightly stronger, at around 6 per U.S. dollar at the end of 2025 following a punishing year of losses, a Reuters poll of foreign exchange analysts showed. The real , fell around 22% in 2024, mainly due to investor disappointment about a fiscal package introduced by President Luiz Inacio Lula da Silva's economic team to correct worrying debt trends. Losses in Brazilian assets only stopped after Brazil's central bank sold nearly 10% of its reserves throughout the last three weeks of 2024. The real has now stabilized following last month's meltdown to a record low. But like many other emerging market currencies, there is little prospect for making much positive headway this year so long as the U.S. retains its dominance in currency market bets. The currency is expected to trade at 5.94 per dollar in one year, 2.7% stronger than its closing value of 6.10 on Tuesday, according to the median estimate of 25 analysts polled Jan. 3-8. "Pressure on the real was exacerbated by the market's negative perception of progress of the government's spending cut package in Congress," analysts at Sicredi wrote in a report. "Despite the (central bank) intervention, unfavorable dynamics for the Brazilian currency continue to be a significant challenge." In December, Banco Central do Brasil (BCB) sold $22 billion of its reserves in spot foreign exchange markets and another $11 billion through repurchase agreements. It has not intervened again in the first days of 2025. "Higher yields in the U.S. and the perception of greater fiscal risk in Brazil should keep the currency at the new level (6 per dollar)," analysts at Banco Inter wrote in a report. U.S. Treasury yields edged higher on Tuesday after data showed the U.S. economy remained resilient, supporting market expectations the Federal Reserve may have only one quarter-point interest rate cut left to deliver. Latin American currency strategists are also waiting for what U.S. President-elect Donald Trump announces after his inauguration on Jan. 20, wary of any potential plan to apply sweeping tariffs that could hit the Mexican peso even further. The currency fell nearly 19% in 2024 on tariff fears as well as concerns related to controversial judicial reforms. The peso is forecast to trade at 20.90 per dollar in 12 months, or 2.8% weaker than its value of 20.31 on Tuesday. (Other stories from the January Reuters foreign exchange poll) Sign up here. https://www.reuters.com/world/americas/brazils-real-seen-more-stable-trade-close-6-per-us-dollar-end-2025-2025-01-09/

2025-01-09 10:58

STOCKHOLM, Jan 9 (Reuters) - Electricity output from wind hit a record high in Sweden in 2024, with wind exceeding nuclear power for the first three-month period ever in the last quarter, the Swedish Wind Energy Association (SWEA) said in a statement. In December, wind was the largest source of electricity for the first time, ahead of hydro and nuclear power, making up 35% of production, with record monthly output, the SWEA said. "The December outcome gives hope. Wind power can account for a large part of the electricity production needed for electrification not to lose momentum, to enable a climate transition, and to achieve Sweden's climate goals," it said. For all of last year, wind accounted for 25% of generation, up from 22% in 2023, after hydro and nuclear power. Still, the Swedish government in November rejected applications to build 13 offshore wind farms, citing Baltic Sea security concerns. It also removed subsidies for connecting offshore wind projects to Sweden's power grid. The government believes Sweden needs to double electricity output in the next two decades to around 300 TWh to meet higher demand and reach climate targets, and it plans to build out nuclear power. "2024 offered normal winds, but thanks to the expansion of wind power, the annual production was 40.8 TWh, the highest annual production ever," SWEA said, citing official data. An SWEA spokesperson said that, assuming similar wind strengths and electricity prices, output from wind power should be at least as big in 2025 as in 2024. Sign up here. https://www.reuters.com/business/energy/wind-power-tops-nuclear-sweden-first-time-trade-group-says-2025-01-09/