2024-12-20 07:56

Buyers are adopting wait-and-see approach, Indian Jeweller says India's gold imports are poised for sharp slowdown in December International spot gold prices on track for a weekly decline Dec 20 (Reuters) - Gold demand in India remained subdued this week as volatile prices prompted potential buyers to delay purchases, while higher rates across China are expected to potentially offset upcoming seasonal demand. After gold prices became highly volatile over the past two weeks, buyers are now adopting a wait-and-see approach, hoping for prices to decline further, said a Chennai-based jeweller. In India, domestic prices fell to 75,459 rupees ($887.28) per 10 grams earlier this week after rising to 79,120 rupees last week. Indian dealers this week offered a discount of up to $8 an ounce over official domestic prices, inclusive of 6% import and 3% sales levies, down from last week's discount of up to $9. "Jewellers stayed on the sidelines this week, waiting for the Federal Reserve's interest rate cut. They were later surprised by the rupee dropping to a record low," said a Mumbai-based dealer with a private bullion importing bank. India's gold imports are poised for a sharp slowdown in December, while soaring gold prices have led many Indian families to opt for lightweight and lower-carat jewellery. 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. High bullion prices also kept demand soft in other Asian regions, including top consumer China, where discounts of around $5 per ounce to the international price were offered, as per independent analyst Ross Norman. . In China, high gold prices are one thing but in January demand could increase ahead of the Chinese New Year, even though they will not buy the much heavy stuff, said Dick Poon, general manager at Heraeus Metals Hong Kong Ltd. In Japan, traders quoted a premium of $1.5 per ounce to discounts up to $4.5, while in Hong Kong, gold was sold at a $2.00 premium, a trader said. . ($1 = 85.0450 Indian rupees) Sign up here. https://www.reuters.com/markets/commodities/asia-gold-price-fluctuation-dampens-demand-india-2024-12-20/

2024-12-20 07:48

Turkey, Hungary are major buyers of Russian gas The two countries receive gas via Black Sea TurkStream pipeline Russia-Ukraine gas transit deal expires on Dec. 31 Clear there will be no new transit deal, Putin says ISTANBUL, Dec 20 (Reuters) - Turkey and Hungary said they have received exemptions for gas payments to Russia after the United States imposed sanctions on Gazprombank, removing a major hurdle to the gas trade with Moscow. The U.S. in November imposed new sanctions over the Ukraine conflict on Russia's Gazprombank, one of the country's largest banks which receives payments for natural gas from Gazprom's customers in Europe. Turkey, Hungary and Slovakia had been using the bank to make payments and have since been seeking clarification and exploring other ways to pay. Turkey and Hungary had asked the United States for an exemption. Turkish Energy Minister Alparslan Bayraktar, in response to a question from Reuters on Friday, said an exemption had been granted. Turkey imports almost all its gas requirement, with Russia the top supplier, providing more than 50% of the country's pipeline imports, or 21.1 bcm last year. Hungarian Foreign Minister Peter Szijjarto said on Thursday that the U.S. had granted the country, which also mainly relies on Russian oil and gas, a gas-payment exemption. The U.S. Treasury did not immediately respond to a request for comment on the exemptions. Slovakia's main gas buyer, state-owned SPP, said it had not received such a notification. Russian President Vladimir Putin published a decree on Thursday allowing foreign buyers of Russian gas to pay in roubles at other Russian banks until April 1. Both Turkey and Hungary receive Russian gas via the TurkStream pipeline under the Black Sea. Supplies to Slovakia currently go via Ukraine but a transit deal between Moscow and Kyiv expires on Dec. 31. Ukraine has previously ruled out extending the contract and Putin said on Thursday that it was clear it would not be renewed. Sign up here. https://www.reuters.com/business/energy/turkey-receives-waiver-gas-payments-russia-gazprombank-sanctions-2024-12-20/

2024-12-20 07:44

Macron extends his visit after pleas for more help Comments defending govt role making waves Death toll still uncertain Rescue teams still to reach some shantytowns Aid begins to arrive MAMOUDZOU, Dec 20 (Reuters) - Angry residents of a Mayotte neighbourhood damaged by Cyclone Chido heckled French President Emmanuel Macron, who replied they would be in "deeper shit" without France as he toured the Indian Ocean archipelago. Nearly a week after the storm hit, the lack of potable water was testing nerves in France's poorest overseas territory. "Seven days and you're not able to give water to the population!" one man shouted at Macron. "Don't set people against each other. If you set people against each other, we're screwed," Macron told the crowd in the Pamandzi neighbourhood on Thursday night. "You are happy to be in France. If it wasn't for France, you would be in way deeper shit, 10,000 times more, there is no place in the Indian Ocean where people receive more help." In the past, Macron has often got in trouble with off-the-cuff remarks in public that he says are meant to "tell it like it is" but have often come across as insensitive or condescending to many French people and contributed to his sharp drop in popularity over his seven years as president. Back home, opposition lawmakers pounced on the comments on Friday. "I don't think the president is exactly finding the right words of comfort for our Mayotte compatriots, who, with this kind of expression, always have the feeling of being treated differently," Sebastien Chenu, a lawmaker from the far-right National Rally (RN), said. Hard-left lawmaker Eric Coquerel said Macron's comment was "completely undignified". Asked about the comments in an interview on Friday, Macron said some of the people in the crowds were RN political militants, and that he wanted to counter the opposition's narrative that France had been neglecting Mayotte. "I hear that narrative, which is fuelling the National Rally and some of the people who were insulting us yesterday, whereby 'France is doing nothing'," Macron told MayotteLa1ere. "The cyclone wasn't decided by the government. France is doing a lot. We must be more efficient, but divisive, rabble-rousing speeches won't help." Officials in Mayotte have only been able to confirm 35 fatalities from Chido, but some have said they fear thousands could have been killed. Some of the islands' worst-affected neighbourhoods, hillside shantytowns comprised of flimsy huts that are home to undocumented migrants, have not yet been reached by rescue workers. WORST STORM IN 90 YEARS Macron, who had extended his visit to Mayotte to spend more time surveying the damage from the worst storm to hit the territory in 90 years, responded that authorities were scaling up distributions. "I understand your impatience. You can count on me," he said. The French state spends about 1.6 billion euros per year on Mayotte, or about 8% of the budget for overseas territories and 4,900 euros per inhabitant, compared with 7,200 euros people in Reunion Island or 8,500 euros for people in Guadeloupe, according to official 2023 budget documents. Some in the Tsingoni neighborood greeted Macron more positively on Friday, thanking him for coming to see them. A 70-year-old woman offered a blessing while patting him on the head. The previous evening, Macron replied testily to a jeering crowd that chanted for his resignation and accused his government of neglecting Mayotte, which is located some 8,000 km (5,000 miles) from metropolitan France. He told reporters on Friday that France had invested heavily in Mayotte but that its institutions could not keep up with arrivals of undocumented migrants. Concerns about immigration have helped make the territory a stronghold for the RN, with 60% voting for Marine Le Pen in the 2022 presidential election runoff. Macron later led a crisis meeting of officials before departing in the afternoon for Djibouti, where he will share a Christmas meal with French troops stationed there. 'WE NEED WATER' Ali Djimoi, who lives in the Kaweni shantytown on the outskirts of the capital Mamoudzou, said Mayotte had been "completely abandoned" by the French state. "The water running out the pipes - even if it's working you can’t drink it, it comes out dirty," he told Reuters. Djimoi said eight people in his immediate neighbourhood were killed in the storm, two of whom were quickly buried close to a mosque. Authorities have warned it will be difficult to establish a precise death toll, in part because some victims were buried immediately in accordance with Muslim tradition. The many undocumented migrants from Comoros, Madagascar and other countries also complicate matters. Official statistics put Mayotte's population at 321,000, but many say it is much higher. Interior Minister Bruno Retailleau said 80 tons of food and 50 tons of water were distributed on Thursday in nine of Mayotte's 17 communes and that the remaining eight would receive provisions on Friday. "Everything has been put in place to allow the distribution of 600,000 litres of water per day, or two litres per Mayotte resident," he said on X. The islands, close to the Comoros archipelago, first came under France's control in 1841. In 1974, Mayotte voted to stay French at the same time the three main Comoro islands opted to form an independent state. Chido also killed at least 73 people in Mozambique and 13 in Malawi after reaching continental Africa, according to officials in those countries. Sign up here. https://www.reuters.com/business/environment/frances-macron-visit-mayotte-shantytowns-wrecked-by-cyclone-chido-2024-12-20/

2024-12-20 07:15

Retail sales +0.2% in Nov vs Reuters poll +0.5% Sales volumes over 3 months weakest since April-June Food sales rise, clothing stores hit again Data adds to sign of weak growth in broader economy LONDON, Dec 20 (Reuters) - British retail sales rose by a weaker-than-expected 0.2% in November, according to official data which suggested consumers had overcome their worries about the new government's first budget but added to signs of only slow momentum in the economy. A Reuters poll of economists had forecast a monthly increase of 0.5% in sales volumes after a drop of 0.7% in October in the run-up to finance minister Rachel Reeves' tax and spending plan. The monthly rise in sales was the first since August. But over the three months to November, volumes were up by only 0.3%, the weakest performance since the three months to June, the Office for National Statistics said on Friday. Previously released official data has shown that Britain's economy contracted in September and October, the first back-to-back shrinkage since the COVID-19 pandemic. Much of the blame for the slowdown has been pinned on worries about Reeves' budget on Oct. 30 which ended up piling tax increases on employers rather than consumers. Surveys have shown a hit to companies' hiring plans since she announced 25 billion pounds ($31.3 billion) of higher social security contributions for firms. The Bank of England on Thursday said the economy would show zero growth in the last three months of 2024 but it did not cut interest rates due to concerns about stubborn inflation pressure. "Overall, against a backdrop of recent weak activity data, today’s release could have been worse," Alex Kerr, an economist with consultancy Capital Economics. "As real incomes continue to grow and consumer confidence improves next year, we think the retail sector will contribute to an acceleration in consumer spending growth." Sterling was little changed against the U.S. dollar immediately after the data. For the first time in three months, food store sales rose, the ONS said. Britain's biggest supermarket chains Tesco (TSCO.L) , opens new tab and Sainsbury's (SBRY.L) , opens new tab have forecast strong Christmas sales. But clothing stores suffered again with volumes dropping by 2.6% from October. Sportswear and fashion groups JD Sports (JD.L) , opens new tab and Frasers (FRAS.L) , opens new tab and discounter Poundland (PCOP.WA) , opens new tab have all cautioned on the outlook. On Wednesday footwear retailer Shoe Zone (SHOE.L) , opens new tab issued a profit warning, highlighting "very challenging trading conditions" in the first half of December. The ONS said its November figures had been adjusted to account for the Black Friday discounting season mostly falling outside its reporting period but some retailers reported that sales began earlier. School half-term holidays in England and Wales unusually fell in November this year, not October, but the impact was not adjusted for in the data. ($1 = 0.7999 pounds) Sign up here. https://www.reuters.com/world/uk/uk-retail-sales-edge-up-by-02-november-2024-12-20/

2024-12-20 07:02

LONDON, Dec 20 (Reuters) - The U.S. dollar's latest surge has forced central banks around the world to lean against it, selling greenback reserves to stabilise local currencies but potentially exaggerating dollar strength into the bargain and sowing problems down the line. If hard cash reserves, typically banked in U.S. debt, are run down sharply, it may just aggravate Treasury yields higher at the margins and bolster one of the main reasons for dollar strength in the process. Until tightening Treasury yields eventually force foreign capital out of "exceptional" U.S. markets at large, the process could spiral from here. The Federal Reserve's "hawkish cut" on Wednesday provided the latest spur to the greenback by forcing markets to rethink the rate horizon next year and suspect the Fed's new 4.38% policy rate may now not get back below 4% in the current cycle. As U.S. Treasury yields climbed on both that hawkish message and higher Fed inflation forecasts, the dollar went with them - jarring many major emerging markets still dependent on significant dollar funding and fearful of promised tariff hikes from a Donald Trump White House. The Fed's own broad trade-weighted dollar index - up almost 40% over the past decade - is again stalking the record highs set in 2022, with the inflation-adjusted "real" index less than 2% from all-time highs too. The latest twist has proven painful for many emerging economies in particular, with many coping with both looming trade threats and domestic crises. Brazil is a standout, where the real has lost more than 20% of its value this year and 12% of that in the past three months - hit by rising budget concerns even in the face of a 100 basis point central bank rate rise this month. The currency shock has forced the central bank to intervene in the open market and it sold $5 billion in a surprise second auction on Thursday - the largest of its kind since the Brazilian currency floated in 1999. The central bank has now held six spot interventions since last week, selling a total of $13.75 billion, in addition to three dollar auctions with repurchase agreements of $7 billion. But Brazil's far from alone. Exaggerated by a recent government crisis, South Korea's won has dropped to its lowest in 15 years, while India's rupee hit a record low and Indonesia's rupiah struck a four-month trough. All three central banks actively sold dollars on Thursday along with strong verbal warnings of further action. China, which holds the world's biggest hard cash stash and is the second biggest holder of Treasuries, is also suspected to have sold dollars on Thursday to shore up the yuan's slide to 2024 lows. According to JPMorgan, capital outflows from emerging economies excluding China were some $33 billion in October alone. Including China, it was $105 billion - the biggest monthly exit of money since June 2022 just before the U.S. election. While flows stabilised just before this week's Fed meeting, pressure is clearly back now into year-end. "We could be moving into a new equilibrium – one where emerging market portfolio flows might struggle," JPM analyst Katherine Marney told clients. BALLOONING US LIABILITIES But does it still matter for Treasuries if emerging market central banks pull back, with less demand for U.S. debt or even outright sales of notes and bonds? Together, entities from China, Brazil, South Korea and India account for about $1.5 trillion of overseas holdings of Treasury Securities. That might seem small against a total of $28 trillion outstanding marketable Treasury securities. What's more, those tallies may flatter what are official holdings and dollars sold in intervention may not necessarily involve the rundown of debt securities per se. But these countries are also likely not the only ones selling dollars into the new rally and the extent of any overall hit may yet affect demand for Treasuries at the margin at a sensitive time. With U.S. debt and fiscal concerns already high surrounding an incoming Trump administration and the Fed, any additional spur to Treasury yields would only add to the pressure. The more Treasury yields climb, the higher the dollar will probe and the overall heat from U.S. markets may start to scare the rest of the world that's so now heavily invested there. Perhaps the big question next year is the extent to which spiraling Treasury yields eventually puncture the expensive and crowded U.S. stock market. That could undermine the massive overseas inflow to an "exceptional" United States over the past decade and inflate the overvalued dollar. That overwhelming foreign demand for U.S. securities and the vast outperformance of U.S. stock prices and the dollar over recent years has ballooned the U.S. net international investment position (NIIP) to a deficit of $22.5 trillion by mid 2024, according to the latest figures. That's now some 77% of GDP - twice what it was 10 years ago. U.S. liabilities increased by $1.4 trillion to a total of $58.52 trillion, due mainly to rising U.S. stock prices that lifted the value of portfolio investment and direct investment liabilities. But some $391.1 billion of additional foreign purchases of U.S. stocks and long-term debt securities contributed to the liability increase. Overall, portfolio investment liabilities increased $666 billion to $30.89 trillion and direct investment liabilities increased $568.2 billion to $16.64 trillion, mostly attributable to Wall Street gains. All that has likely expanded further since June. The lofty U.S. dollar and Wall Street prices - and seemingly ubiquitous bullishness about the outlook for 2025 - mean any disturbance to capital flows and exchange rates at this stage could seed a dangerous and largely unforecast market reversal on a grand scale. The opinions expressed here are those of the author, a columnist for Reuters. Sign up here. https://www.reuters.com/markets/currencies/intervention-halt-dollar-merely-gives-it-legs-mike-dolan-2024-12-20/

2024-12-20 06:57

Gold down 0.9% so far this week U.S. PCE data shows monthly inflation slowed in November Dec 20 (Reuters) - Gold prices extended gains on Friday, supported by a softer dollar and Treasury yields after U.S. economic data indicated a slowdown in inflation, although the Federal Reserve's hawkish interest rate outlook kept bullion on track for a weekly loss. Spot gold was up 1.2% at $2,624.15 per ounce, as of 01:41 p.m. ET (1841 GMT) and U.S. gold futures settled 1.4% up at $2,645.10. The dollar (.DXY) , opens new tab fell 0.6% from its two-year high, making gold less expensive for overseas buyers, while Treasury yields edged down from an over six-month high. The report showed that monthly inflation slowed in November after showing little improvement in recent months. The personal consumption expenditures (PCE) price index rose 0.1% last month after an unrevised 0.2% gain in October. "Not only the PCE data, the personal income data, and the personal spending data all came out weaker than expected. We're seeing people come back into the gold market here and re-establish positions," Phillip Streible, chief market strategist at Blue Line Futures, said. "Now all of a sudden going from two interest rate cuts which were priced in, that caused the dramatic selloff in gold, now comes back the possibility of three interest rate cuts in a more accommodative policy, but it's still way too soon to tell." Bullion is down 0.9% this week so far after the Fed's "dot plot" on Wednesday showed only two 25-bps rate cuts by 2025, signalling less easing than projected in September. Higher interest rates increase the opportunity cost of holding gold, which does not yield any interest. "With physical demand holding a floor for now, this means we are now heading into a 2025 that has relatively low Fed cut expectations, something that could fuel gold gains if inflationary fears end up being overblown, allowing the Fed more maneuverability," J.P. Morgan said in a note. Spot silver rose 1.8% to $29.54 per ounce, platinum gained 0.5% to $928.34 and palladium climbed 1.5% to $919.56. Sign up here. https://www.reuters.com/markets/commodities/gold-set-weekly-drop-traders-await-us-data-cues-2024-12-20/