2024-12-19 10:43
Maintains rate at 16-year high of 4.5% Says restrictive policy still needed Expects first cut in March, sees rate at 3.75% at end-2025 Norway economy holding up, but outlook uncertain Sees worries over international trade OSLO, Dec 19 (Reuters) - Norway's central bank held its policy interest rate unchanged at a 16-year high of 4.50% on Thursday, as expected, and said it now planned to cut rates three times in 2025, down from four cuts seen previously. "The committee judges that a restrictive monetary policy is still needed to stabilise inflation around target, but that the time to begin easing monetary policy is soon approaching," Norges Bank Governor Ida Wolden Bache said in a statement. "Based on the committee's current assessment of the outlook, the policy rate will most likely be reduced in March 2025," Norges Bank said. The policy rate is now expected to decline to 3.75% by the end of 2025, Bache said. Norges Bank, and analysts in a Reuters poll, had earlier forecast a decline to 3.50% next year. The Norwegian crown weakened to 11.79 against the euro at 0958 GMT, from 11.76 just before the announcement. The Norwegian monetary policy stance contrasts with other Western central banks, most of which started cutting rates already this year as growth slowed and inflation eased from the highs of recent years. Norway's economy has weathered relatively high interest rates, economists said, helped by rising business investments and wages, increased government spending and currency depreciation. Norges Bank said the economy was holding up better than previously projected, while inflation pressures were more subdued. Still, the outlook was unclear, it added. "There is substantial uncertainty about the outlook for both the global and Norwegian economy," it said. The 28 participants in a Dec. 11-16 Reuters poll had unanimously predicted the central bank would keep rates on hold this week and almost all said it would start cutting in the first quarter of 2025. Brokers Nordea said the central bank appeared to be concerned that by keeping rates on hold for too long, it could constrict the economy. "The committee is still fearing that unemployment could rise too much if they do not cut rates soon," Nordea said. Norges Bank highlighted the risk of a trade war between the United States and China as one of the issues it discussed, saying it "was concerned with the risk of an increase in international trade barriers". "Higher tariffs will likely dampen global growth, but the implications for price prospects in Norway are uncertain," the bank said. The U.S. Federal Reserve on Wednesday cut rates by a quarter percentage point, as expected, but said more reductions hinge on further progress in lowering persistent inflation. The Nordic country's core inflation accelerated in November to 3% year-on-year from 2.7% in October, above the central bank's 2% target. The Swedish central bank earlier on Thursday cut rates by 25 basis points, in line with expectations, and said it may again ease policy in the first half of 2025. In Britain, the Bank of England is due to report the outcome of its latest rate meeting later on Thursday, with economists expecting no rate change. Sign up here. https://www.reuters.com/markets/europe/norway-central-bank-keeps-rate-hold-eyes-march-cut-2024-12-19/
2024-12-19 10:23
MUMBAI, Dec 19 (Reuters) - The Indian rupee weakened past 85 per dollar on Thursday, hitting an all-time low as the Federal Reserve's scaling back of its rate cut projections for 2025 battered Asian currencies. The rupee hit a low of 85.0850 against the U.S. dollar before closing at 85.07, down 0.1% on the day. The Reserve Bank of India's (RBI) likely dollar-selling intervention helped the rupee fare better than most of its Asian peers, which declined by as much as 1.2%. While dollar bids were broad-based, those from foreign banks were especially "strong", suggesting likely outflows from Indian stocks, a trader at a private bank said. India's benchmark equity indexes, the BSE Sensex (.BSESN) , opens new tab and Nifty 50 (.NSEI) , opens new tab, ended lower by about 1% each, posting their fourth consecutive daily fall. The Fed on Wednesday cut its benchmark interest rates by 25 basis points, but policymakers revised the number of rate cuts anticipated through 2025 down to two, from the four projected in September, and also raised their inflation forecasts. The dollar index dipped below the 108 handle in Asia trading after rising to an over two-year high earlier in the day. U.S. bond yields extended gains, with the 10-year Treasury yield touching a peak of 4.54%, the highest since May. Central banks across emerging market countries scrambled to defend their struggling currencies as the Korean won dropped to its weakest level in 15 years, while the Indonesian rupiah hit a four-month low. "U.S. rates are expected to remain at higher levels for longer thereby creating a wider policy divergence with other major central banks," MUFG Bank said in a note. Elevated rates, alongside the risk of higher tariffs being imposed at the start of U.S. President-elect Donald Trump's second term, will keep upward pressure on the dollar heading into 2025, the lender said. Sign up here. https://www.reuters.com/markets/currencies/rupee-falls-below-85usd-feds-hawkish-shift-rattles-asian-currencies-2024-12-19/
2024-12-19 10:17
BUDAPEST, Dec 19 (Reuters) - New tariffs U.S. President-elect Donald Trump has pledged to impose on European Union imports would hit Hungary's economic growth and boost inflation, the National Bank of Hungary (NBH) said in its quarterly inflation report on Thursday. Germany is expected to be more affected by any U.S. tariffs than other euro area members, Nomura forecasts, which will have a knock-on effect on Central Europe given its deep trade ties to Europe's largest economy. These are particularly strong in the automotive sector, with the region sending 20% to 30% of its exports to Germany. The Czech Republic, Hungary and Slovakia are considered the most exposed as suppliers and manufacturing bases for German brands, S&P Global said in a report last week. "There is a risk that customs duties against the EU could be extended, and rates of duty increased," the NBH said after raising its 2025 inflation forecast by 50 bps to a range of 3.3% to 4.1%. "In this respect, the focus was mainly on the exports of European car manufacturers, which may have a significant impact on the sector, which is of particular importance for Hungary." The NBH left its base rate steady at the European Union's joint highest level of 6.5% on Tuesday, as widely expected, after falls in the forint since its latest rate cut and tax hikes have sharply raised next year's inflation path. Even so, rate-setters see upside risks to inflation and downside risks to economic growth under the bank's baseline economic scenario. On Thursday the forint, central Europe's worst-performing currency, which fell more than 8% to the euro this year, skirted two-year-lows, pressured by a shift in the U.S. rate outlook. The NBH said any extension of protectionist measures posed a "substantial risk" to global growth and could exacerbate the vulnerability of small economies like Hungary, whose export share relative to output is among the highest in the EU. "In this alternative scenario, the external inflation environment will thus be higher than expected, causing a ripple effect in domestic prices," it said. "The scenario is consistent with a higher inflation and lower growth path than the baseline." Sign up here. https://www.reuters.com/markets/emerging/us-tariffs-would-hit-hungarys-growth-boost-inflation-central-bank-says-2024-12-19/
2024-12-19 09:17
Apple talks with Tencent, ByteDance are at a very early stage-sources Tech firms and startups have launched dozens of AI models in China Apple needs local partner as ChatGPT not available in China BEIJING, Dec 19 (Reuters) - Apple (AAPL.O) , opens new tab is in talks with Tencent (0700.HK) , opens new tab and TikTok owner ByteDance about integrating their artificial intelligence models into iPhones sold in China, according to three sources familiar with the matter. The U.S. company started the rollout of OpenAI's ChatGPT into its devices this month, part of the Apple Intelligence product that allows its Siri voice assistant to tap the chatbot's expertise including on user queries about photos and documents such as presentations. ChatGPT is not available in China and the country's regulatory requirements mandate that generative AI services obtain government approval before public release, forcing Apple to seek local partners for its AI features at a time when its market share in the country is declining. Apple's discussions with Tencent and ByteDance on using their AI models are at a very early stage, said the sources, who declined to be named as the talks are not public. ByteDance declined to comment, while Apple and Tencent did not respond immediately to requests for comment. A successful partner for Apple's AI services in China could be a major winner in the country's increasingly crowded AI field where dozens of large language models have been launched by large tech firms as well as startups. They include ByteDance's Doubao, Tencent's Hunyuan and search engine giant Baidu's (9888.HK) , opens new tab Ernie. MARKET SHARE IN CHINA Apple and Baidu have reportedly been in talks about using the latter's AI model in China, but The Information this month reported the discussions faced setbacks due to technical issues, including disputes over using iPhone user data to train AI models. Baidu did not respond immediately to a request for comment. Baidu's Hong Kong-listed shares fell after the Reuters report, down 4.2% against a 0.6% decline in the Hang Seng index. (.HSI) , opens new tab. Tencent's shares rose 2.3%. The absence of AI capabilities in the latest iPhones sold in China has become a major setback for Apple, as it faces declining market share in the world's biggest smartphone market due to growing competition from domestic brands including Huawei. Huawei, which returned to the high-end market in August with a phone using a Chinese-made chip, launched its Mate 70 series last month featuring AI capabilities powered by its proprietary large language model. Apple briefly fell out of China's top five smartphone vendors in the second quarter before recovering in the third quarter. The U.S. company's smartphone sales in China still slipped 0.3% during the third quarter from a year earlier, while Huawei's sales surged 42%, according to research firm IDC. Sign up here. https://www.reuters.com/technology/artificial-intelligence/apple-talks-with-tencent-bytedance-roll-out-ai-features-china-sources-say-2024-12-19/
2024-12-19 07:46
LONDON, Dec 19 (Reuters) - Investors reduced further their bets on how quickly the Bank of England will cut interest rates next year after the U.S. Federal Reserve signalled it would move slowly with reducing borrowing costs. Interest rate futures on Thursday pointed to roughly 46 basis points of cuts to the BoE's benchmark Bank Rate by December 2025, down from about 50 basis points of cuts which were priced into the market on Wednesday. The BoE is expected to keep borrowing costs on hold at 1200 GMT on Thursday after its December monetary policy meeting. It has said it will move gradually to lower rates because of inflation pressures in the economy, despite signs of a slowdown. Sign up here. https://www.reuters.com/world/uk/investors-trim-bets-again-bank-england-rate-cuts-2025-2024-12-19/
2024-12-19 07:45
COPENHAGEN, Dec 19 (Reuters) - Finland's Fortum (FORTUM.HE) , opens new tab said on Thursday it had agreed to buy a project development portfolio for renewable power from Finnish energy company Enersense (ESENSE.HE) , opens new tab for around 9 million euros ($9.37 million). The portfolio includes 2.6 gigawatt (GW) of early-stage onshore wind development projects in Finland, Fortum said in a statement. It said it expects to close the deal in the first quarter of next year. ($1 = 0.9609 euros) Sign up here. https://www.reuters.com/business/energy/fortum-buy-renewable-power-portfolio-94-mln-2024-12-19/
