2024-12-30 16:20

PRAGUE, Dec 30 (Reuters) - The Czech Republic is ready to provide Slovakia with gas transit and storage capacities to help it secure stable supplies if Ukraine ends a transit deal for Russian gas at the end of the year as expected, the Czech Industry Ministry said on Monday. Industry Minister Lukas Vlcek has written to his Slovak counterpart to say the Czech Republic could provide additional capacity, both in this heating season and on a long-term basis, the ministry said. Slovakia, which has a long-term contract with Russia's Gazprom, has sought to retain gas flows through Ukraine although Kyiv has refused to extend a transit deal with Moscow because of the ongoing Ukraine war. Vlcek said alternative supplies to the region would become more affordable after Germany agreed to exempt countries transiting gas from a domestic gas levy from Jan. 1. The Czech Republic is among the European countries that no longer buys gas directly from Russia, but the cost of the German levy had made it rely increasingy on cheaper gas via Slovakia, potentially of Russian origin, in recent months. Sign up here. https://www.reuters.com/business/energy/czechs-ready-help-slovakia-when-ukraine-gas-transit-deal-ends-2024-12-30/

2024-12-30 15:20

Galipolo replaces Bolsonaro appointee, vows continuity Lula's picks hold majority of policy seats from January Market meltdown adds urgency to questions about handoff BRASILIA, Dec 30 (Reuters) - After months of rancor, ties between President Luiz Inacio Lula da Silva and Brazil's central bank look poised for an era of sweetness and light - which is precisely what worries some investors. Gabriel Galipolo, 42, is set to take the reins at the bank on Wednesday. The former deputy finance minister has earned a reputation for economic views that sometimes stray from his predecessor's embrace of free markets but warm the hearts of left-leaning politicians. While that should help quiet months of sniping from a president exasperated with high interest rates, it may test the new formal independence of that institution, six of its former directors told Reuters. Galipolo takes over from central bank governor Roberto Campos Neto, an appointee of former President Jair Bolsonaro, in the first transition since a 2021 law that required heads of state to wait two years before naming their own central bank chief, in a move designed to boost the bank's autonomy. The handoff will be scrutinized after frustration with government spending plans triggered a market meltdown, sending Brazil's risk premium surging and its currency to all-time lows. The central bank declined a request for comment from Galipolo, who now serves as one of its policy directors. Galipolo and Campos Neto have played down their differences and vowed continuity at a shared news conference on Dec. 19. Now leading the country in his third nonconsecutive term, Lula praised Galipolo in a social media video on Dec. 20, vowing fiscal discipline and a hands-off stance toward the central bank. Concerns remain, however, about a shift in monetary policy, dating back to a split policy decision in May when Galipolo and three other Lula appointees voted for a larger rate cut than the Bolsonaro-appointed majority. Starting in January, Lula's picks will hold seven of the nine seats on the central bank's rate-setting committee, or Copom. All five of the central bank's rate decisions since May have been unanimous, including December's bigger-than-expected 100 basis-point hike that came with surprising policy guidance of planned increases of the same size in January and March of 2025. Despite the united front and hawkish rhetoric from Galipolo, who has pledged independence from Lula, some economists say the market remains unconvinced. "The forward guidance was issued precisely because there are concerns," said former central bank director Alexandre Schwartsman, appointed during Lula's first term in 2003. "It's a symptom, a recognition there are serious doubts about how (Galipolo) will behave, whether he will truly be independent or not." "We'll see the true outcome after March," he added. "Until then, the ghosts of Copom past will hold sway." LONG SHADOW One such phantom is that of Alexandre Tombini, the last central bank governor appointed by Lula's leftist Workers Party. On his watch in late 2012, Copom cut rates and kept them at a record low despite inflation shooting away from the official target. Many economists criticized Tombini for ceding to pressure from then-President Dilma Rousseff to keep borrowing costs low, adding to imbalances in Brazil's economy that eventually tipped the country into its worst recession in decades. Lula's allies instead cite his relationship with Henrique Meirelles, whom he tapped to run the central bank during his first two terms from 2003 to 2010 when aggressive monetary policies eventually paved the way for a robust economic boom. Meirelles told Reuters he was confident Lula would respect the central bank's independence as he had in his prior terms. "If it's good for the country, it's good for the government. As long as Lula trusts in this, the relations are likely to become less tense," Meirelles said in a telephone interview, adding that investors' biggest concern is Brazil's surging public debt. Brazil's Treasury forecasts the country's gross debt will have climbed by 10 percentage points over Lula's term to 81.7% of GDP by 2026, considered exceptionally high among emerging-market peers. With less than two years before the next election, aides say Lula has been especially impatient about obstacles to economic growth, including high interest rates. Relations with Campos Neto were also soured from the start after the central bank chief voted in the 2022 election wearing a soccer jersey favored by Bolsonaro's supporters. Adding insult to injury, he attended a dinner in his honor in June held by Sao Paulo Governor Tarcisio de Freitas, seen as one of Lula's strongest challengers in 2026. Campos Neto has said central bank officials can be close to political actors while maintaining their independence. Setting aside Lula's baggage with Campos Neto, some say his personal relationship with Galipolo, whom he has called a "gift" and "a golden boy," may have swung too far in the other direction. Galipolo joined Lula for bilateral meetings with foreign heads of state in Rio de Janeiro during a summit of the Group of 20 major economies in November and tagged along with Finance Minister Fernando Haddad for meetings in Washington the month before, the kind of events from which Campos Neto was notably absent. Still, opposition lawmakers have praised Galipolo's qualifications and a Senate committee unanimously approved his nomination. With economic growth around 3.5% in 2024 and record-low unemployment, tight monetary policy has faced limited public backlash. However, former central bank officials believe the real challenge for Galipolo will come when the central bank needs to maintain its position as the economy cools and unemployment rises - a more sensitive issue for a left-leaning government. Sign up here. https://www.reuters.com/world/americas/lulas-embrace-new-brazil-central-banker-has-markets-wary-2024-12-30/

2024-12-30 12:44

Dec 30 (Reuters) - China's net gold imports via Hong Kong in November more than doubled from October, marking the highest level in seven months, Hong Kong Census and Statistics Department data showed on Monday. The world's top gold consumer imported a net 33.074 metric tons in November, up 115% from 15.414 tons in October, its highest level since April 2024. Total gold imports via Hong Kong were up 60% at 45.22 metric tons from October, posting its highest level in eight months. WHY IT'S IMPORTANT China is the world's leading consumer of gold, and its purchasing activities can significantly influence global gold prices. China's central bank resumed buying gold for its reserves in November after a six-month pause, according to official data. KEY QUOTE "The People’s Bank has started reporting fresh purchases and it could be that there has been some import for official sector purchases," said StoneX analyst Rhona O'Connell. "More likely it is continued interest in bars and coins, and some improvement in jewellery demand" Last week, gold dealers in China also started charging premiums for the first time in more than a month as consumers began stocking up for the upcoming Lunar New Year celebrations. CONTEXT Gold exports from Switzerland rose in November due to a jump in supplies to India and some revival of deliveries to China and Hong Kong compared with October, Swiss customs data showed. Spot gold has gained around 27% so far this year, hitting a record high of $2,790.15 on Oct. 31 on the back of U.S. Federal Reserve's interest rate easing and escalated tensions around the globe. However, prices fell 3% in November after a post-election sell-off driven by Donald Trump’s win. The Hong Kong data may not provide a complete picture of Chinese purchases, as gold is also imported via Shanghai and Beijing. Sign up here. https://www.reuters.com/markets/commodities/chinas-november-net-gold-imports-via-hong-kong-hit-seven-month-high-2024-12-30/

2024-12-30 11:58

Dec 30 (Reuters) - The pound stood its ground in thinned-out holiday trading session on Monday and looked set to end the year as the best performing major currency against the relentlessly firming dollar. Sterling was up 0.1% against the greenback at $1.2595. The pound has fallen 1% versus the greenback since the Federal Reserve's Dec. 18 policy meeting, but has clawed back close to 0.5% since last Monday. Trading has been thin over the past holiday-limited week, and is expected to remain subdued as the end of the year quickly approaches. But sterling is still the G10 currency that has held up the best against the dollar this year, with expectations of a slow rate-cut path from the Bank of England underpinning much of the currency's strength in 2024. The BoE is in part an outlier because of sticky British inflation, and Goldman Sachs entitled its regular inflation monitor published late Sunday: "Progress (towards controlling inflation) resumes outside of the UK". British inflation hit an eight-month high in November, though the rise in services prices - watched closely by the Bank of England as an underlying measure of inflationary pressures - held steady, offering the central bank a little bit of relief. But traders are wondering how long the BoE can remain an outlier amid a slowing British economy. British Prime Minister Keir Starmer has asked regulators, including the financial and competition watchdogs, to remove barriers to growth in an effort to revive a sluggish economy, Sky News reported on Saturday. "While sterling has been the best performing currency against the dollar in 2024, a repeat of this major outperformance seems unlikely in the coming year," said J.P.Morgan in its outlook for 2025 published earlier in December. The euro was flat against the pound on the day at 82.89 pence. The pound has gained more than 4% over the single currency this year. Sign up here. https://www.reuters.com/markets/currencies/sterling-holds-out-against-strong-dollar-2024-12-30/

2024-12-30 10:45

ISTANBUL, Dec 30 (Reuters) - Turkey's Karpowership, owner of a floating power plant fleet, said on Monday that the company is one of many alternatives being evaluated for providing electricity to Syria. Since rebels backed by Turkey toppled Bashar al-Assad in neighbouring Syria this month after a 13-year civil war, talks have been held between the country's new rulers and Ankara on the supply of electricity. "Many energy production alternatives are being evaluated. We are one of the alternatives," Karpowership said in a statement to Reuters when asked if it was involved in power supply talks. "There are talks between countries, alternatives are being evaluated. It is too early for us to say anything at this stage." Energy Minister Alparslan Bayraktar has said Turkey was ready to export electricity to Syria. In addition to providing electricity from the network between the two countries, Turkey also has the option of using ships with floating power plants, known as powerships. Karadeniz Holding's Karpowership produces electricity for at least 12 countries in Africa and South America with its ships anchored in their ports. The company's largest ships have a capacity of 470 MW, which is more than 10% of Syria's estimated installed power. However, the ports must have the necessary electricity transmission capacity for the ships to be connected. Sign up here. https://www.reuters.com/business/energy/turkeys-karpowership-says-running-supply-power-syria-2024-12-30/

2024-12-30 10:44

Ukraine's foreign minister visits Damascus Promises more Ukrainian food aid for Syria Syrian foreign minister calls for close cooperation Ousting of Assad has hurt Russian influence in Syria DAMASCUS, Dec 30 (Reuters) - Syria hopes for strategic partnerships with Ukraine, its new foreign minister told his Ukrainian counterpart on Monday, as Kyiv moves to build ties with the new Islamist rulers in Damascus amid waning Russian influence. Russia was a staunch ally of ousted President Bashar al-Assad and has given him political asylum. Moscow has said it is in contact with the new administration in Damascus, including over the fate of Russian military facilities in Syria. "There will be strategic partnerships between us and Ukraine on the political, economic and social levels, and scientific partnerships," Syria's newly appointed foreign minister, Asaad Hassan al-Shibani, told Ukrainian counterpart Andrii Sybiha. "Certainly the Syrian people and the Ukrainian people have the same experience and the same suffering that we endured over 14 years," he added, apparently drawing a parallel between Syria's brutal 2011-24 civil war and Russia's seizure of Ukrainian territory culminating in its full-scale 2022 invasion. Sybiha, who also met Syria's new de facto ruler Ahmed al-Sharaa in Damascus on Monday, said Ukraine would send more food aid shipments to Syria after the expected arrival of 20 shipments of flour on Tuesday. Ukrainian President Volodymyr Zelenskiy said he hoped providing help to Syria would be beneficial to restoring stability in Ukraine, locked in a 34-month-old war with Russia. "We can help restore stability in Syria after years of Russian interference and this will undoubtedly help us restore peace for ourselves," Zelenskiy said in his nightly video address. "It will be the right step to renew our diplomatic relations with Syria and our economic cooperation. I am very hopeful that post-Assad Syria will respect international law in a way that Assad could not and did not want to." Zelenskiy announced last Friday the dispatch of Ukraine's first batch of food aid to Syria comprising 500 metric tons of wheat flour as part of Kyiv's humanitarian "Grain from Ukraine" initiative in cooperation with the United Nations World Food Programme. RUSSIAN INFLUENCE SQUEEZED Ukraine, a global producer and exporter of grain and oilseeds, traditionally exports wheat and corn to countries in the Middle East, but not to Syria, which in the Assad era imported food from Russia. Russian wheat supplies to Syria have been suspended because of uncertainty about the new government in Damascus and payment delays, Russian and Syrian sources told Reuters in early December. The ousting of Assad by al-Sharaa's Islamist group, Hayat Tahrir al-Sham, has thrown the future of Russia's military bases in Syria - the Hmeimim airbase in Latakia and the Tartous naval facility - into question. Russian Foreign Minister Sergei Lavrov said the status of Russia's military bases would be the subject of negotiations with the new leadership in Damascus. Al-Sharaa said this month that Syria's relations with Russia should serve common interests. In an interview published on Sunday, he said Syria shared strategic interests with Russia, striking a conciliatory tone, though he did not elaborate. Sign up here. https://www.reuters.com/world/syrias-de-facto-leader-hosts-ukraines-foreign-minister-sana-says-2024-12-30/