2024-12-23 18:33

By David Ljunggren OTTAWA, Dec 23 (Reuters) - The Bank of Canada's decision to cut rates by 50 basis points on Dec 11 was a close call, with some members of the governing council suggesting a smaller reduction, according to minutes released on Friday. The central bank slashed its key policy rate to 3.25% to help address slower growth. Governor Tiff Macklem indicated further cuts would be more gradual, a shift from previous messaging that continuous easing was needed to support growth. The minutes said the discussions had focused on whether a 50 basis point or a 25 basis point cut was more appropriate. "Each member of Governing Council acknowledged that the decision was a close call based on their own assessments of the data and the outlook for growth and inflation," they said. Those preferring a bold move were concerned about a weaker growth outlook and downside risks to the inflation forecast, even while acknowledging that not all the recent data pointed to the need for a 50 basis point cut. "However, it seemed unlikely that a cut of 50 basis points would take rates lower than they needed to go over the next couple of meetings," the minutes said. Those preferring a 25 basis point cut noted signs of strength in consumption and housing activity, suggesting the bank could be patient while the full effects of past cuts became clearer. The decision to opt for a larger cut reflected a weaker outlook for growth than forecast in October and the fact monetary policy no longer needed to be clearly restrictive. "Governing Council members also discussed the future path for interest rates. There was a range of views on how much further the policy rate would need to be reduced, and over what period that should happen," the minutes said. "Members agreed that they would likely be considering further reductions in the policy rate at future meetings, and they would take each decision one meeting at a time." ((Reuters Ottawa bureau, +1 647 480 7921; [email protected] , opens new tab)) Keywords: CANADA CENBANK/ Sign up here. https://www.reuters.com/markets/rates-bonds/bank-canadas-dec-11-jumbo-rate-cut-was-close-call-minutes-show-2024-12-23/

2024-12-23 18:09

WARSAW, Dec 23 (Reuters) - Poland sold about a third of 45 terawatt hours (TWh) of green electricity it offered at auctions in December, prompting the head of the country's energy regulator to suggest a review of regulations to better support some renewable power technologies. The sale of 16 TWh was worth 5.1 billion zloty ($1.24 billion), the Energy Regulatory Office said on Monday, adding that interest in the auctions remained at a similar level as in 2022 and 2023. "The lack of interest in technologies such as biogas plants, hydroelectric power plants or biomass installations indicates the need for reflection on their role in the auction and energy system," the regulator's head was quoted as saying in a statement. "In this situation, it seems reasonable to consider revising the regulations, which would enable more effective support for these technologies," Rafal Gawin added. The auctioned electricity will be produced at new renewable plants - 198 out of 200 winning bids - for photovoltaic installations, and the rest for new wind power generation. ($1 = 4.0976 zlotys) Sign up here. https://www.reuters.com/business/energy/poland-sells-only-third-offered-green-power-december-auctions-2024-12-23/

2024-12-23 13:58

OTTAWA, Dec 23 (Reuters) - Canada's economy exceeded market expectations with 0.3% growth in October, led by increases in oil and gas extraction and manufacturing, but gross domestic product likely contracted in November, data showed on Monday. Analysts polled by Reuters had forecast a 0.2% month-over-month rise in October. September's growth rate was upwardly revised to 0.2% from an initial report of 0.1%, Statistics Canada (Statscan) data showed. The stronger than expected start to the fourth quarter and the upward revision to September's growth rate could assuage some concerns about Canada's economy. Growth in the third quarter missed the Bank of Canada's (BoC) forecast and the central bank said earlier this month that data suggested the economy may underperform its expectation in the last three months of 2024. In a preliminary estimate for November, Statscan said GDP likely decreased by 0.1% as declines in sectors including mining, quarrying, and oil and gas extraction and transportation and warehousing were partially offset by increases in accommodation and food services and real estate and rental and leasing. If November's forecast is confirmed and GDP remains unchanged in December, the economy would fall short of the BoC's 2% growth projection for the fourth quarter. Growth in October was driven a rebound in the goods-producing industry, which rose 0.9% in October after shrinking for four consecutive months, Statistics Canada (Statscan) data showed. The services-producing industries edged up 0.1%. Within the goods-producing industry, the mining, quarrying, and oil and gas extraction sector expanded 2.4% after three straight months of declines, Statscan data showed. Manufacturing rose 0.3% in October driven by an increase in non-durable goods manufacturing. The central bank, in part to help address slower growth, lowered its key policy rate by 50 basis points to 3.25% earlier in December and indicated further reductions would be more gradual. The bank will release fresh forecasts along with its next rate decision on Jan. 29, before Statscan's next GDP report. The BoC has cumulatively slashed interest rates by 175 bps since June as inflation returned to target, and money markets see a roughly 50% chance of 25 bps cut in January. Sign up here. https://www.reuters.com/world/americas/canadas-economy-tops-october-growth-forecast-contraction-seen-november-2024-12-23/

2024-12-23 12:32

MADRID, Dec 23 (Reuters) - The Spanish government has issued a decree extending a temporary tax on energy companies into 2025, Prime Minister Pedro Sanchez said on Monday, after lawmakers voted last week to eliminate the levy. The decree enters into force on Jan. 1, but it will need to be confirmed by parliament within 30 days in order to remain valid throughout next year as the minority government intends - which may prove difficult to achieve as its partners to the left and right are at odds on the issue. Sanchez said that with the extension, Madrid was upholding the commitments made to its partners, as it required an "extra effort" from energy companies while at the same time introducing a tax incentive which "takes into consideration strategic investments that are essential for decarbonisation". The tax credits had been demanded by the centre-right Catalan separatist party Junts and Basque nationalists PNV, who argue that the levy impacted investments in their respective regions. Utilities have warned that extending the levy, of 1.2% for companies with a turnover of at least 1 billion euros ($1.04 billion), would jeopardise 30 billion euros in renewable energy investments. The temporary tax was created in 2022 and aimed at easing cost-of-living pressures for ordinary Spaniards as firms gained from a surge in energy prices following the war in Ukraine. In its last meeting of the year, the cabinet also extended by six months the temporary subsidies that allow public transport prices to be offered at a discount, Sanchez said. In addition, the ministers approved a 2.8% increase in pensions that would benefit some 12 million retirees, he added. ($1 = 0.9607 euros) Sign up here. https://www.reuters.com/business/energy/spanish-government-extends-energy-windfall-tax-by-decree-2024-12-23/

2024-12-23 12:21

Dec 23 (Reuters) - Canada's Vermilion Energy (VET.TO) , opens new tab said on Monday it will acquire privately held oil and gas firm Westbrick Energy for C$1.075 billion ($746.53 million), strengthening its position in the Deep Basin of Alberta. U.S.-listed shares were up 1.4% at $8.99 in premarket trade. The acquisition, which is expected to close in the first quarter of 2025, is likely to add 50,000 barrels of oil equivalent per day to its existing production. The integrated oil and gas firm said the acquisition will make it the fifth largest producer in the basin. ($1 = 1.4400 Canadian dollars) Sign up here. https://www.reuters.com/markets/deals/vermilion-energy-acquire-westbrick-energy-c108-bln-2024-12-23/

2024-12-23 12:12

BRASILIA, Dec 23 (Reuters) - Brazil recorded a current account deficit of $3.1 billion in November, the central bank said on Monday, widening the 12-month shortfall mainly due to a weaker trade surplus. The monthly deficit was narrower than the $3.3 billion forecast in a Reuters poll of economists, but marked a significant deterioration from the $3 million deficit registered a year earlier. Over the 12-month period, the current account deficit rose to 2.37% of gross domestic product (GDP), doubling the level seen a year ago. The widening deficit reflects Brazil's stronger-than-expected economic performance, which has boosted imports and reduced the trade surplus. Finance Minister Fernando Haddad has estimated this year's economic growth at 3.5%, sharp contrasting with the 1.6% expansion projected by private economists at the beginning of the year. The robust economic activity has also driven up net spending on services and widened the deficit in factor payments, contributing to the larger current account gap. In November, the trade surplus reached $6.3 billion, a 20.9% drop from a year earlier. The deficit in services rose 24.6% to $4.7 billion, while the factor payments deficit increased 13.8% to $5 billion. Foreign direct investment (FDI) for the month totaled $7 billion, exceeding the $6.5 billion forecast in the Reuters poll. Over the 12-month period, FDI stands at 3.0% of GDP. Sign up here. https://www.reuters.com/world/americas/brazil-posts-31-billion-current-account-deficit-november-2024-12-23/