2024-12-19 15:56

Czech central bank votes 5-2 for unchanged rates Two board members voted for 25-bp reduction Bank has cut 300 bps from main rate since December 2023 PRAGUE, Dec 19 (Reuters) - The Czech National Bank paused its year-long rate-cutting campaign as expected on Thursday, leaving its main rate (CZCBIR=ECI) , opens new tab at 4.00% as inflation pressures in the service sector kept it cautious. The Czech central bank board voted 5-2 to keep rates unchanged - with two members wanting a 25 basis point reduction - and joined peers in central Europe in pausing easing cycles, although analysts expect the bank could resume gradual cuts early in 2025. Thursday's Czech decision marks the first time since Hungary started cutting rates in May 2023 that all four of the region's banks have kept rates on hold in the same month. After the inflation surge of recent years pushed borrowing costs to the highest in over two decades, the Czech central bank began cutting in December 2023 and has reduced its main rate by 300 basis points in that time. But it had been signalling a pause may be near. "The disinflation process in the core components of the consumer basket, especially in the services sector, is not yet completed," Governor Ales Michl said. "For these reasons, the bank board decided to pause the interest rate reduction process for the time being." Michl said the board was most likely to debate keeping rates stable or cutting at its next meeting in February. Nine of 12 analysts in a Reuters poll last week forecast a return to cuts in the first quarter, when the bank meets twice. The Czech central bank, like others, is balancing still fast growth in service sector prices and a strong labour market against a weak economic recovery stemming from poor sentiment and sagging foreign demand, especially from Germany. Headline inflation has edged up from early-2024 lows to 2.8% year-on-year in November, staying within the upper boundary of the 1-percentage-point tolerance band around the 2% target. The bank expects a temporary pick-up in inflation in the short term due to food prices and base effects, before returning to the upper half of the tolerance band early next year. The bank will already have a flash inflation estimate for January when it meets next. CNB Vice-Governor Eva Zamrazilova, who had backed a pause at the last meeting in November, told Reuters this month that further easing may be up for future discussion if consumer prices data for January gave positive signals. Analysts have said the bank could continue cuts next year to take the main rate to as low as 3.00%. "According to our forecast, the recovery in the domestic economy should be more moderate than the CNB is counting on, and we also expect the crown to be stronger," Komercni Bank analyst Jaromir Gec said. The crown was a touch weaker on Thursday, at 25.14 to the euro, and is hovering below three-month highs hit last week. Sign up here. https://www.reuters.com/markets/europe/czech-central-bank-pauses-easing-cycle-inflation-lingers-2024-12-19/

2024-12-19 15:21

Dec 19 (Reuters) - Accenture (ACN.N) , opens new tab beat Wall Street estimates for first-quarter revenue and profit on Thursday, on the back of growing demand for its services to help clients adopt AI-powered tools, sending its shares up 6.5% in early trading. Businesses are placing an emphasis on scaling their AI projects and digitizing their core operations as well as data security to increase growth and cut costs, and companies such as Accenture are reaping the benefits. Accenture is leveraging GenerativeAI across industries to help clients optimize operations, from predictive maintenance in manufacturing to automating workflow in advertising operations, the company said in a post-earnings call. Its GenAI business recorded new bookings of $1.2 billion, and about $500 million in revenue, due to an increase in projects utilizing the service. The company's new bookings, a key indicator of future revenue, rose to $18.7 billion for the first quarter from $18.4 billion a year earlier. The IT provider said it has increased its data and AI workforce to 69,000 and plans to reach 80,000 by 2026, indicating growing demand for its services. The company raised its annual revenue growth forecast to between 4% and 7% from its earlier estimate of 3%-6%. However, the mid-point is below analysts' expectations of 5.63%, according to data compiled by LSEG. Accenture forecast second-quarter revenue of $16.2 billion to $16.8 billion, the mid-point of which is below analysts' average estimate of $16.63 billion. Its first-quarter revenue stood at $17.7 billion, beating analysts' estimates of $17.12 billion, driven by growth in the Americas and EMEA regions and across public service and health industries. Sign up here. https://www.reuters.com/technology/accenture-forecasts-annual-revenue-below-estimates-2024-12-19/

2024-12-19 12:53

By David Milliken and Suban Abdulla LONDON, Dec 19 (Reuters) - The Bank of England kept its main interest rate unchanged at 4.75% on Thursday but policymakers became more divided about whether rate cuts were needed to tackle a slowing economy. Three of the BoE's nine-person Monetary Policy Committee - Deputy Governor Dave Ramsden and external members Swati Dhingra and Alan Taylor - voted for a quarter-point rate cut to 4.5%. Economists polled by Reuters had expected only one MPC member to vote for a cut. But BoE Governor Andrew Bailey said the central bank needed to stick to its existing "gradual approach" to cutting rates. "With the heightened uncertainty in the economy we can't commit to when or by how much we will cut rates in the coming year," he said. Economists polled by Reuters last week forecast the BoE would cut rates four times next year, but financial markets have scaled back their expectations sharply in response to faster than expected wage growth and only see up to two cuts. The BoE has been less willing to cut rates than either the U.S. Federal Reserve or the European Central Bank, reducing rates by just half a percentage point this year. Official figures on Wednesday showed British consumer price inflation rose to 2.6% in November - the highest in the Group of Seven rich economies by a small margin, and slightly higher than the BoE itself had forecast last month. "Headline inflation is expected to continue to rise slightly in the near term," the BoE said. However, the central bank also cut its growth forecast for the final quarter of this year to zero from a 0.3% forecast just six weeks ago. Britain's economy contracted in September and October - the first back-to-back monthly falls in output since 2020 - according to official data last week and business sentiment has tumbled since finance minister Rachel Reeves announced a 25 billion pound tax hike for employers in her Oct. 30 budget. MPC members who backed keeping rates on hold said it remained "particularly uncertain" whether these higher costs would be passed on to consumers through higher prices or lead to job losses and slower pay growth. "Recent developments added to the argument for a gradual approach to the withdrawal of policy restrictiveness, while eschewing any commitment to changing policy at a specific meeting," they said. The three MPC members who voted to cut rates said a "very restrictive" policy stance risked pushing inflation too far below its 2% target in the medium term and creating an unduly large amount of spare capacity in the economy. (([email protected] , opens new tab)) Keywords: BRITAIN BOE/ Sign up here. https://www.reuters.com/markets/rates-bonds/bank-england-keeps-rates-steady-policy-split-widens-2024-12-19/

2024-12-19 12:51

Dec 19 (Reuters) - Tesla (TSLA.O) , opens new tab is in early talks with the authorities in the city of Austin, Texas, about its autonomous vehicle technology, Bloomberg News reported on Thursday. A Tesla employee has been in touch with the city's autonomous vehicle task force since at least May to establish safety expectations for the vehicles, the report said, citing emails acquired by public records requests. Tesla had revealed a prototype of the eagerly anticipated Cybercab, a driverless and pedal-less vehicle, at its Hollywood robotaxi event in October, with CEO Elon Musk later announcing plans to introduce an "unsupervised version" of its driver-assistance technology in California and Texas next year. For several years, the electric vehicle maker has offered a package known as Full Self-Driving, or FSD, which, despite its name, is not entirely autonomous and necessitates continuous driver supervision. Tesla did not immediately respond to a Reuters request for comment. Shares of the company were up about 3% in premarket trading on Thursday. The EV maker's shares have rallied since Donald Trump was re-elected as U.S. president as investors expect Musk's influence over the administration to help the company break through regulatory roadblocks for the technology. Industry experts have said Tesla would face fewer challenges in less-regulated states such as Texas, where there are almost no restrictions and the regulation of driverless vehicles by cities is explicitly prohibited. During an earnings call in October, Musk revealed that Tesla is currently pilot-testing a ride-hailing technology in the Bay Area with its employees, utilizing an in-house app and vehicles equipped with safety drivers. Sign up here. https://www.reuters.com/business/autos-transportation/tesla-talks-with-city-austin-over-autonomous-vehicle-technology-bloomberg-news-2024-12-19/

2024-12-19 12:48

LONDON, Dec 19 (Reuters) - The Bank of England wrapped up a big year of central bank rate cuts by keeping rates steady on Thursday, a day after the Federal Reserve eased policy but suggested it would be more cautious in 2025. Seven of the world's 10 major, developed-market central banks cut rates this year, with only Australia and Norway still on hold. Japan, the outlier, is in hiking mode. 1/ SWITZERLAND The Swiss National Bank, which has been at the forefront of monetary easing, cut rates by an unexpectedly large 50 basis points (bps) to 0.5% last week, the lowest since November 2022 and the bank's biggest reduction in almost a decade. Swiss annual inflation was most recently reported at just 0.7% and the SNB, which is alert to the safe-haven Swiss franc strengthening beyond levels domestic exporters can bear, said it could reduce borrowing costs again next year. 2/ CANADA The Bank of Canada also cut rates by 50 bps to 3.25% last week, marking the first time since the COVID-19 outbreak that it has implemented consecutive half-point cuts. It indicated further easing would be gradual after annual inflation accelerated to 2%, but with Canada's weak economy threatened by U.S. President-elect Donald Trump's proposed tariffs, markets placed 50% odds on a 25-bps cut next month. 3/ SWEDEN Sweden's Riksbank cut rates by a quarter-point to 2.5% on Thursday, in line with expectations, but signalled it can slow its easing pace in early 2025 after 150 bps of cuts so far this year. The central bank said it favours a more tentative approach - noting that monetary policy affects the economy with a lag. 4/ NEW ZEALAND New Zealand's economy sank into recession in the third quarter, Thursday data showed, a dire result that cements the case for more aggressive rate cuts. The Reserve Bank of New Zealand next meets in February and its governor says there is scope for a 50-bps cut. It has lowered its cash rate by 125 bps to 4.25% so far this cycle and markets are pricing around another 100 bps of cuts by the middle of next year. 5/ EURO ZONE The ECB is firmly in easing mode, cutting its deposit rate by 25 bps to 3% last week in its fourth such move this year and keeping the door open to further reductions. It also signalled that further cuts are possible by removing a reference to keeping rates "sufficiently restrictive", economic jargon for a level of borrowing costs that curbs economic growth. Markets price in roughly 110 bps worth of further tightening by end-2025. 6/ UNITED STATES The Federal Reserve cut rates on Wednesday, as expected, but Chair Jerome Powell said more reductions in borrowing costs now hinge on further progress in lowering stubbornly high inflation. That jolted markets, sending stocks down sharply and bond yields higher as investors dialled back expectations of rate cuts for 2025. 7/ BRITAIN The Bank of England kept its main interest rate unchanged at 4.75% on Thursday but policymakers became more divided about whether rate cuts were needed to tackle a slowing economy. The more dovish tone sparked a rally in UK government bond prices, pushing yields down. Still, markets price in less than a 50% chance of a 25-bps rate cut when the BoE next meets in February. 8/ NORWAY Norway's central bank held its policy rate steady at a 16-year high of 4.5% on Thursday. Looking forward, the Norges Bank believes that while restrictive policy is still needed, the time to begin easing is approaching and it expects to start lowering borrowing costs in March next year. 9/ AUSTRALIA The Reserve Bank of Australia held rates steady at a 12-year high of 4.35% last week but softened its tone on inflation, raising the market-implied probability of a quarter-point cut in February to more than 50%. The RBA, which has not changed borrowing costs for more than a year, has taken note of a surprise economic growth slowdown as high rates deterred households from spending despite a recent round of tax cuts. 10/ JAPAN The Bank of Japan, the only G10 central bank in a hiking cycle, kept interest rates unchanged on Thursday, as expected, but markets seized on remarks from governor Kazuo Ueda suggesting the BOJ preferred to wait for Spring wage data before moving again. Investors had seen a January rate increase as likely, and their reassessment of this sent the yen and bond yields tumbling. Sign up here. https://www.reuters.com/markets/global-markets-central-banks-2024-12-19/

2024-12-19 12:41

German, Czech, Italian leaders discuss auto sector with EU March EU summit to discuss upcoming industry dialogue Industry lobby says carmakers could face fines of 15 bln euros Automakers struggle with Chinese competition, falling demand BRUSSELS, Dec 19 (Reuters) - The leaders of auto manufacturing hubs Germany, Italy and the Czech Republic pressured Brussels on Thursday to waive financial penalties on carmakers that miss EU emissions targets from next year. German Chancellor Olaf Scholz said after a summit of EU leaders that it did not make sense to add to the industry's difficulties and that fines should not limit companies' ability to invest in electric vehicles (EVs). Scholz, who is under pressure from a snap election in February next year, said automakers were bringing out new EVs, but consumers could not be forced to buy them. "I think it's right not to impose fines and to look into how to do this. It's not straightforward, but I've had such in-depth discussions and I think a way will be found," he said. Scholz also welcomed a plan by European Commission President Ursula von der Leyen to launch a "structured dialogue" with the auto sector. EU leaders had agreed with his suggestion, he said, to discuss the outcome at the next EU summit in March. The prime ministers of Italy and the Czech Republic were also planning on Thursday to urge von der Leyen to drop fines on automakers that miss CO2 targets, EU diplomats said, speaking on condition of anonymity. European carmakers could face some 15 billion euros ($15.62 billion) in penalties for missing the targets, according to industry estimates, with the region's biggest automaker Volkswagen (VOWG_p.DE) , opens new tab the most affected. Automakers have warned of plant closures and thousands of job losses, as they struggle with weak demand, Chinese competition and lower than expected electric vehicle sales. France also joined the opposition to fines this week. A government paper, seen by Reuters, said Paris did not want to weaken the CO2 targets, but supported a solution to avoid penalties on carmakers next year. "The reality we are facing now is not the one we prepared for to begin with," Agnes Pannier-Runacher, French climate minister, said at a meeting of EU ministers on Tuesday. The EU's 2025 targets set a CO2 limit that manufacturers must meet on average across the fleet of cars they sell during the year. A drop in EV sales could drive up a manufacturer's average fleet emissions, causing it to miss the CO2 goal. Austria, Bulgaria, Romania and Slovakia have also urged the EU to rethink its CO2-cutting policies for cars. Only a few countries - including Sweden, home to Volvo (VOLCARb.ST) , opens new tab - have spoken out in favour of keeping the fines. ($1 = 0.9605 euros) Sign up here. https://www.reuters.com/business/autos-transportation/germany-urges-eu-spare-automakers-harsher-co2-fines-2024-12-19/