2024-12-27 13:03
Russian central bank seen keeping rates on hold for most of 2025 Inflation forecast to fall to 6.6% by end of 2025 Central bank may cut key interest rate to 18% in Q4 2025 MOSCOW, Dec 27 (Reuters) - The Russian rouble is expected to keep changing hands for around 100 per U.S. dollar at the start of 2025 and gradually weaken to 108 towards the end of the year, a Reuters poll of 10 economists showed on Friday. The rouble fell to its lowest level in about 2-1/2 years in November as the U.S. imposed new financial sanctions on Russia, but it has regained some ground since then after the central bank intervened to support it. Most analysts believe that the 100 mark against the dollar is the new equilibrium level as the situation with foreign trade transactions, disrupted by sanctions, stabilises, while other factors will support the rouble. Analysts noted that the first quarter of the year is traditionally favourable for the rouble as imports, overseas travel and external debt payments decrease. The rouble slumped to 103.7 against the U.S. dollar on Friday after the central bank announced it would withdraw some support for the currency in the first working week of 2025 following the New Year break. Analysts predicted that the central bank would hold its benchmark interest rate at 21% throughout the first half of 2025 after it surprised markets on Dec. 20 by keeping rates unchanged. "We expect the central bank to keep the key rate at 21% at the meeting on Feb. 14. We believe that lending will continue to slow down, aligning with the regulator's forecast for 2025," said Mikhail Vasilyev from Sovcombank. Russia's central bank has hiked its key rate to the highest level in more than 20 years as it seeks to curb inflation, which analysts expect to be at 9.8% this year, and to counter economic overheating as a consequence of excessive government spending. Analysts are estimating GDP growth of 3.9% in 2024, slightly above their previous call of 3.8%. In 2025, economic growth is forecast to slow sharply to 1.6% due to the central bank's monetary tightening. Analysts foresee inflation rates falling to 6.6%, closer to the regulator's target of 4%, towards the end of next year, creating room for the central bank to reduce its benchmark rate to 18% in the fourth quarter of 2025. Sign up here. https://www.reuters.com/markets/currencies/russian-rouble-seen-around-100-per-us-dollar-early-2025-2024-12-27/
2024-12-27 12:42
Estonia navy moves to protect remaining power cable NATO to enhance Baltic Sea presence Finland seizes ship suspected of damaging power cable Baltic Sea nations on alert for sabotage HELSINKI, Dec 27 (Reuters) - NATO said on Friday it would boost its presence in the Baltic Sea after the suspected sabotage this week of an undersea power cable and four internet cables, while alliance member Estonia launched a naval operation to guard a parallel electricity link. Finland on Thursday seized a ship carrying Russian oil on suspicion of causing an outage of the Estlink 2 undersea power cable linking it with Estonia, and of disrupting fibre optic lines. On Friday it said it had asked the transatlantic military alliance for support. Baltic nations are on alert after a string of outages of power cables, telecom links and gas pipelines since Russia invaded Ukraine in 2022. "We have agreed with Estonia, and we have also communicated to NATO Secretary General Mark Rutte, that our wish is to have a stronger NATO presence," Finnish President Alexander Stubb told a news conference. Rutte posted on the social media platform X that "NATO will enhance its military presence in the Baltic Sea", without elaborating. A NATO official declined to provide further detail. Sweden's coastguard said it had increased surveillance of ship traffic, deploying aircraft and vessels and coordinating with other nations. The Kremlin said Finland's seizure of the ship carrying Russian oil was of little concern to it. In the past, Russia has denied involvement in any of the Baltic infrastructure incidents. Estonia said its navy was guarding the still operational Estlink 1 power cable. "If there is a threat to the critical undersea infrastructure in our region, there will also be a response," Foreign Minister Margus Tsahkna said on X. He said on Thursday that such incidents had become so frequent it was hard to believe they were all caused by accidents or poor seamanship. Estonia's justice minister said they highlighted the need to update centuries-old maritime law to explicitly outlaw such damage. The 658 megawatt (MW) Estlink 2 outage began at midday on Wednesday, leaving only the 358 MW Estlink 1 linking Finland and Estonia, grid operators said. They said Estlink 2, which was feeding power to Estonia at the time, might not be back in service before August. SEIZED SHIP COULD BE PART OF RUSSIAN "SHADOW FLEET" Finnish investigators believe the seized ship, registered in the Cook Islands and named as the Eagle S, may have caused the damage by dragging its anchor along the seabed. Video and photos published on Friday by the Finnish daily Ilta-Sanomat showed the Eagle S with a single anchor chain stretching into the sea from its starboard side, while the hole where the port side anchor chain would normally be was empty. Finland's customs service believes the ship is part of a "shadow fleet" of ageing tankers being used to evade sanctions on the sale of Russian oil. Finnish police said they were investigating the Eagle S on suspicion of "aggravated criminal mischief", and that crew members had been questioned. United Arab Emirates-based Caravella LLC FZ, which according to MarineTraffic data owns the Eagle S, did not respond to requests for comment. India's Peninsular Maritime, which according to MarineTraffic acts as technical manager for the ship, was not immediately available for comment. The power cable outage will not prevent the planned decoupling of Estonia, Latvia and Lithuania from a Soviet-era power grid shared with Russia and Belarus, Estonia's grid operator Elering said. But the breach means power prices in the Baltic countries are likely to be higher than expected in 2025, while those in Finland and the average of the Nordic region will probably be lower, LSEG power market analyst Ole Tom Djupskaas said. Swedish police are still investigating last month's breach of two telecom cables, and have named a Chinese ship travelling from Russia as a possible culprit. Separately, Finnish and Estonian police are continuing a probe into last year's damage to the Balticconnector gas pipeline and several telecom cables, in which another Chinese vessel arriving from Russia was named. Sign up here. https://www.reuters.com/world/europe/estonias-navy-protect-baltic-sea-power-cable-2024-12-27/
2024-12-27 12:34
Dec 27 (Reuters) - India on Friday extended its mandate for imported coal-based power plants to operate at full capacity until Feb. 28, a government circular showed. In October, the government had invoked an emergency clause to direct companies including Tata Power (TTPW.NS) , opens new tab, Adani Power (ADAN.NS) , opens new tab and Vedanta (VDAN.NS) , opens new tab, to operate their imported coal fired plants till Oct. 15 and had further extended the mandate till Dec. 31. Imported coal-based power plants in India have a combined annual capacity of nearly 16 gigawatts. India's coal-fired power output had fallen for a second straight month in September due to slower growth in electricity use and a surge in solar generation. The country's imports of thermal coal plunged 31.8%, its fastest rate of contraction in fifteen months, in October, Reuters had reported earlier. India's overall coal-based power generation over April-September rose by 5% from a year earlier, government data shows. Sign up here. https://www.reuters.com/world/india/india-extends-mandate-imported-coal-based-power-plants-run-full-capacity-2024-12-27/
2024-12-27 12:01
Dec 27 (Reuters) - Canada's main stock index fell on Friday, weighed by losses in technology and mining shares as traders returned after Christmas break, even as the index was on track to record its best year since 2021. The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) , opens new tab was down 50.42 points, or 0.20%, at 24,796.40. The index has gained 18.1% so far this year, with two more trading sessions left in the coming week. The Canadian markets have benefited from policy easing cycles at home and in the United States, as well as a rally fueled by Donald Trump's victory in the November U.S. presidential election. However, Canadian equities have faced a rough few weeks in December, partly due to the U.S. Federal Reserve's forecast of fewer rate cuts next year due to stubbornly high inflation. Looking to 2025, the focus will shift to Donald Trump's arrival in the White House after having pledged to impose a 25% tariff on all imports from Canada, a blow to a country that sends a majority of its crude exports to the United States. "It's very quiet (on Friday) because everyone is just getting ready to position for year end," said Greg Taylor, chief investment officer at Purpose Investments in Toronto. "We're starting to see a lot more nervousness creep up into markets with bond yields staying higher than everyone thought. We're trying to get into the new year and get more clarity about what the new U.S. administration is going to do," Taylor said. Among sectors, Canada's information technology (.SPTTTK) , opens new tab lost 1.2%, dragged by a 4.5% fall in bitcoin miner Bitfarms (BITF.TO) , opens new tab. The industrials index (.GSPTTIN) , opens new tab fell 0.5%. Gold prices fell. The materials sector (.GSPTTMT) , opens new tab, which includes precious and base metals miners and fertilizer companies, lost 0.2%. In the U.S., Wall Street's holiday cheer also ended, with all three main benchmarks closing lower in a broad-based sell-off. Additionally, in a bid to address the looming threat of U.S. tariffs, Canada's new Finance Minister Dominic LeBlanc and Foreign Affairs Minister Melanie Joly will meet aides to U.S. President-elect Donald Trump in Florida on Friday. Trump has threatened a 25% tariff on imports from Canada until the country stops drugs and migrants from crossing its border with the United States. Sign up here. https://www.reuters.com/markets/tsx-futures-inch-lower-after-christmas-break-2024-12-27/
2024-12-27 11:55
Dec 27 (Reuters) - Shell (SHEL.L) , opens new tab has shut down an oil processing unit at its Pulau Bukom facility to investigate a suspected leak, Singapore's Maritime and Port Authority (MPA) and National Environment Agency (NEA) said on Friday. The oil company estimates that a few tonnes of refined oil products, along with cooling water discharge used in the refining process, have leaked. Pulau Bukom, site of Singapore's first refinery, now houses Shell's only energy and chemicals park in Asia, according to the company's website. Shell confirmed in an emailed statement to Reuters that oil sheens were spotted alongside a wharf on Dec. 26, 2024 at Shell Energy and Chemicals Park Singapore. The company stated it has taken steps to contain the leak and prevent it from spreading into the sea and has deployed boats alongside the MPA to clean up light oil sheens observed near the leak site. The MPA said investigations are ongoing, and navigation traffic in the area remains unaffected. Sign up here. https://www.reuters.com/business/energy/shell-shuts-down-oil-processing-unit-investigate-leak-singapores-port-authority-2024-12-27/
2024-12-27 11:42
Dec 27 (Reuters) - U.S. tech investor Cathie Wood is calling on Donald Trump's incoming administration to boost economic growth and policy certainty by backdating promised corporate and personal tax cuts to Jan. 1, 2025, she told Reuters. A laggard in recent years, Wood's flagship ARK Innovation exchange-traded fund (ARKK.P) , opens new tab has surged 17% since Trump's victory, which is expected to bring policy changes that will benefit the fund's holdings. Two of its stocks, electric carmaker Tesla (TSLA.O) , opens new tab and crypto exchange Coinbase (COIN.O) , opens new tab, are already up 54% and 7% respectively since Nov. 6, while the S&P500 has risen about 1.7% in that time. ARKK's other top holdings include Robinhood (HOOD.O) , opens new tab and Block (SQ.N) , opens new tab, both of which could also benefit from friendlier crypto and AI policies. Wood has publicly backed Trump's economic platform, arguing that his plan to unleash deals, promote innovation in crypto and artificial intelligence, and cut red tape and government costs will make life easier for corporate America. Tax policy was also central to the election race, with Trump pledging to cut the rate paid by companies that make goods in the United States and to extend individual tax cuts Congress passed in 2017 that are set to expire next year. That's a key area where Wood said she's pushing for more clarity. "I see them saying, okay, we're going to cut taxes but we will make them retroactive to Jan. 1, 2025. That would be very helpful, I think, in terms of providing certainty for the markets," Wood said in an interview. "If they don't, you're going to get companies and individuals perhaps holding back. ... I'm trying to communicate that pretty regularly to anyone who will listen." While Wood said she does not generally support tariffs, which act as a tax increase on goods, Trump's threat to hike them on major trading partners appears to be a negotiating strategy. TAX REFORM Analysts expect the new Republican-controlled Congress to pursue tax reform next year, but Trump will kick start other key policies with executive orders upon his Jan. 20 inauguration. He has also announced new regulators who can start to implement his pro-innovation agenda. Campaign finance records indicate that Wood did not financially back Trump in the 2024 election cycle. She told Reuters that she has only met Trump once, earlier this year at his Florida home, but is in contact with Tesla boss and billionaire Trump backer Elon Musk and crypto enthusiast Wyoming Republican Senator Cynthia Lummis, both of whom are helping to shape Trump's policies. Wood has been one of Musk's top cheerleaders, investing 16% of ARKK's $6.4 billion in assets in Tesla. That oversized bet reflects her confidence in Musk and her conviction that AI, including autonomous vehicles, will be a major driver of investment returns going forward, she said. "He understands that technologies are converging, that artificial intelligence is the biggest catalyst," said Wood. However, she is selling some Tesla shares to reinvest in other companies likely to benefit from the same trend, like Archer Aviation (ACHR.N) , opens new tab, a developer of autonomous aircraft. Florida-based ARK has also been a leading proponent of crypto, launching a spot bitcoin ETF in January. Wood said a crypto crackdown under President Joe Biden put the United States in a vulnerable position, but the new administration "will not want to lose innovation to the rest of the world." Lummis said in a statement that engaging with stakeholders was a priority and that "Wood is a leader in digital assets and someone who has shared feedback with me on a number of issues related to innovation." Although some of the market exuberance over Trump's victory has fizzled, Wood said she believes the Trump bump, which has benefited crypto, small-cap and financial stocks, will eventually spill over into more of the market. "I do think ... that the market is going to continue broadening out. It'll definitely favor innovation and anything that has been held back by policies in the last several years,” she said. Neither Musk nor Trump's transition team responded to requests for comment. 'CONTRARIAN PATTERN' Wood's outsize bets on stocks like Zoom (ZM.O) , opens new tab generated a 152% return at the height of the pandemic and won her a huge retail investor following but she has struggled to sustain that outperformance. Investors have pulled roughly $3.5 billion from ARKK over the past two years, with $300 million flowing out in the past month, according to data from Morningstar and VettaFi. "That's an atypical pattern for most ETFs and mutual funds, but typical of the contrarian pattern we've seen for Cathie Wood's funds," said Robby Greengold, a Morningstar analyst. Wood said that even the most favorable new policies won't end that volatility. "We're telling people that, hey, we offer a highly differentiated exposure to innovation." As a result, she added: "yes, we're going to be volatile." Sign up here. https://www.reuters.com/markets/us/arks-cathie-wood-calls-tax-clarity-she-rides-trump-bump-2024-12-27/
