2024-12-18 10:22

MUMBAI, Dec 18 (Reuters) - The Indian rupee hit its all-time low on Wednesday, pressured by strong dollar demand from importers and likely outflows from local equities, while intervention by the Reserve Bank of India curbed losses, traders said. The rupee fell to 84.9550 against the U.S. dollar before closing at 84.9525, down 0.07%. Weakness in regional currencies ahead of the Federal Reserve's policy decision due in U.S. trading hours also hurt the rupee alongside speculative dollar bids amid a lingering bearish bias on the local unit. Benchmark Indian equity indexes BSE Sensex (.BSESN) , opens new tab and Nifty 50 (.NSEI) , opens new tab ended lower by about 0.6% each. Worries over India's growth outlook have kept the rupee under pressure, alongside a well-supported dollar following Donald Trump's election victory. The dollar index was last at 106.7, and has risen over 3% since the Nov. 5 election. Despite the pressures, the rupee has fared better than most of its regional peers since then, on the back of routine interventions by the Reserve Bank of India. The local unit is down 0.9%, while its peers have weakened between 1.8% and 4.4%. The RBI likely sold dollars and conducted dollar-rupee buy/sell swaps on Wednesday as well, as part of its measures to support the currency. The central bank has complemented spot market intervention with dollar-rupee buy/sell swaps in recent sessions, likely intended to prevent the impact of spot dollar sales on headline foreign exchange reserves and INR liquidity, traders said. Globally, investors were watching out for any changes to Fed policymakers' projection of rate cuts in 2025 from the September forecast, with a 25 basis points reduction fully priced in for this meeting. "Expectations for the final Fed meeting are well embedded: a hawkish 25bp cut to 4.25%-4.50%, meaning a possible pause in January and fewer cuts in 2025/26," Societe Generale said in a note. Sign up here. https://www.reuters.com/markets/currencies/rupee-weakens-lifetime-low-hurt-by-merchant-dollar-bids-weak-equities-2024-12-18/

2024-12-18 10:17

Macro strategy top choice for investors in 2025 Currencies will be in focus Biggest investors wait for crypto regulations LONDON, Dec 18 (Reuters) - Next year's top pick for hedge fund strategies is so-called macro, with U.S. President-elect Donald Trump centre-stage as investors bet on how global policy decisions will impact economic conditions and play out in financial markets. Hedge fund returns benefited this year from wild market swings sparked by politics such as November's U.S. election, and twists in monetary policy such as Bank of Japan rate hikes. And investors are readying for more volatility in the year ahead, seven hedge fund investors and portfolio managers told Reuters and a recent survey showed. "Macro seems interesting now given a more turbulent political backdrop and what it means for both fiscal and monetary policy," said hedge fund investor Craig Bergstrom, chief investment officer at Corbin Capital Partners. U.S. tariff hikes under a new Trump administration could deal the global economy a fresh blow, further weakening China's yuan and the euro, while adding to inflationary pressures that slow the Federal Reserve's ability to cut rates. Although hedge funds specialising in cryptocurrency trounced other strategies in 2024, with data provider Preqin estimating a 24.5% annualised return, investors are less convinced for 2025. Macro ranked first and crypto last in a list of hedge fund strategies for 239 investment firms surveyed by Societe Generale (SOGN.PA) , opens new tab in November. Around two fifths of those surveyed aimed to invest in macro, the client note seen by Reuters said, adding that interest in government bond trading had fallen. Meanwhile, funds trading commodities and equities ranked second and third. Jordan Brooks, co-head of the Macro Strategies Group at investment management firm AQR agreed that sovereign bonds were becoming less of a key investment theme. "Inflation is now more balanced. From here, we think things are less certain across the board," said Brooks, adding that the $7.5 trillion a day currencies market would be in focus. CRYPTO? NOT YET Although Trump has embraced digital assets, promising friendly regulation and to accumulate a stockpile of bitcoin , some hedge fund investors are not convinced. "We haven't seen a lot of institutional investor demand on the solutions side for crypto trading strategies," said Carol Ward, head of solutions at the $175 billion Man Group. Benjamin Low, a senior investment director at Cambridge Associates, said some Asia-based funds had explored small-scaled crypto investing, but nothing had come of it yet. Crypto might serve as a good diversifier that trades differently to broader markets, said Low, whose advisory firm links hedge funds with investors and undertakes fund manager selection and allocation for clients. "But the volatility is so high, when you talk crypto, what are you trading, is it just the cryptocurrencies, are you buying into companies or equities?" said Low. "The definition is so broad and wide that it might invite more questions from existing investors," he added. Nevertheless, attitudes are changing and many funds have updated their investor documents in the last couple of years to allow them to include crypto exposure, said Edo Rulli, CIO of hedge fund solutions at UBS Asset Management. "Larger exposures in non-specialist hedge funds are not there yet. Digital asset exchanges are not regulated and some carry reputational and fraud risk," said Rulli, adding that some hedge funds have found ways to trade crypto indirectly. NextGen Digital Venture, a Hong Kong-based hedge fund specializing in crypto stocks, jumped 116% this year through November, thanks to its exposure to stocks like Coinbase, MicroStrategy, and Marathon Digital Holdings. Founder Jason Huang is preparing his second crypto-focused fund and while optimistic, cautioned that bitcoin could reach a cyclical peak next year. Meanwhile, hedge funds including Millennium Management, Capula Management and Tudor Investment raised their exposure to U.S. spot bitcoin ETFs in the third quarter, filings showed. And multi-strategy funds have bought the convertible bonds of software company MicroStrategy, the largest corporate holder of bitcoin, whose shares have soared nearly 500% this year. SkyBridge founder Anthony Scaramucci said it should take a while for crypto to lure more big allocators, as potential regulatory discussions have just started. "We're creating now a regulatory runway. Big institutions, endowments, big enterprises, they don't want to get fired. They're sitting on top of piles of money, and it's their job to take measured risk," he said. (This story has been refiled to capitalise the letter 'B' in 'SkyBridge,' in paragraph 24) Sign up here. https://www.reuters.com/markets/macro-must-have-hedge-fund-investors-betting-2025-market-swings-2024-12-18/

2024-12-18 08:00

Confirmed death toll is 31 but feared to be much higher Hunger and disease pose new threats President Macron set to visit on Thursday Overnight curfew imposed after reported looting MAMOUDZOU, Mayotte, Dec 18 (Reuters) - Authorities in the French overseas territory of Mayotte could still confirm only 31 deaths on Wednesday from Cyclone Chido, more than four days after it swept through the Indian Ocean archipelago, causing mayhem and killing possibly thousands. Mayotte, France's poorest overseas territory, is home to large numbers of undocumented migrants whose shanty towns were flattened by the storm, and many areas remain inaccessible, further complicating the already difficult task of calculating the scale of death and destruction. Authorities in Mayotte were ramping up relief operations, with 120 tonnes of food due to be distributed on Wednesday. Supplies have been arriving via an air bridge from France's other Indian Ocean territory, Reunion Island. Local officials and health workers have said hundreds or even thousands could be dead from the worst storm to hit the archipelago in 90 years. In addition to the 31 confirmed deaths, the local prefecture said it had recorded 1,373 people with light injuries. It said a complete tally of deaths and injuries would take some time. "I cannot give a death toll because I don't know. I fear the toll will be too heavy," acting Interior Minister Bruno Retailleau told BFMTV earlier on Wednesday. Some victims were buried immediately in accordance with Muslim tradition, before their deaths could be counted. The situation is made more difficult by uncertainty around Mayotte's exact population. While official statistics put it at 321,000, many believe it is much higher due to undocumented immigration, mainly from Comoros and Madagascar. Few people could be seen on Wednesday in the usually overcrowded shanty towns where many immigrants live, the prefecture office said, while the island's maternity ward, which usually sees one birth per hour, was operating at below normal levels. CLEANING UP In the capital Mamoudzou, residents picked through piles of corrugated iron, bedding and other scattered possessions where makeshift homes once stood. Others hammered metal sheets to cover the damaged roofs of houses that had survived the storm. Tree branches that had withstood the 200 kph (124 mph) winds were festooned with clothing tossed up by the cyclone. The death toll in continental Africa, where the storm hit after passing through Mayotte, rose on Wednesday to 45 in Mozambique - from 34 a day earlier - and in Malawi to 13 from an earlier seven, officials in those countries said. European Commission chief Ursula von der Leyen told the European Parliament that France had activated the EU Civil Protection Mechanism, which can mobilise assistance from other countries and contribute to operational costs. Retailleau said two gendarmes were injured overnight by projectiles during a curfew decreed on Tuesday after reported looting. Mayotte has experienced repeated bouts of unrest in recent years. Nizar Assani, who manages a real estate business in Mamoudzou, said someone in his native village had died because there was no electricity to power their ventilator. He pleaded for French President Emmanuel Macron, who will visit Mayotte on Thursday, to take bold action. "We do not need a declaration of love. We need gestures of love," he told Reuters. "We need to see that France will not cast Mayotte aside." Health workers say they are bracing for a surge of disease as dead bodies lie unrecovered and people struggle to access clean drinking water. WATER With many homes lacking running water, people queued where they could find it to fill up jerrycans and buckets. The Mayotte prefect's office said in a bulletin that half the population should have access to running water by Wednesday evening. Three out of four people in Mayotte live below the national poverty line. While it exports vanilla, coffee and cinnamon, it remains heavily dependent on support from metropolitan France and attracts relatively few tourists. The ferry linking its two main islands resumed services on Wednesday for civilians, allowing some people caught out by the storm to return to their families. During his weekly audience at the Vatican, Pope Francis asked that God "grant rest to those who lost their lives, necessary assistance to those who are in need, and comfort to the families who have been affected". Opposition politicians in France have criticised what they say is the government's neglect of Mayotte and failure to prepare for natural disasters linked to climate change. Some right-wing politicians, including Retailleau of the conservative Les Republicains party, have pointed the finger at illegal immigration, which they say has impoverished Mayotte and left it with vast shanty towns vulnerable to extreme weather. Concerns about immigration and inflation have helped make the territory a stronghold for France's far-right National Rally, with 60% voting for Marine Le Pen in the 2022 presidential election runoff. Sign up here. https://www.reuters.com/world/europe/france-rushes-supplies-mayotte-still-reeling-deadly-cyclone-2024-12-18/

2024-12-18 07:44

Dec 18 (Reuters) - Britain's National Grid (NG.L) , opens new tab said on Wednesday it would invest up to 35 billion pounds ($44.45 billion) over the five years to March 2031 as per its business plan for its transmission business. The company, which runs Britain's energy systems and operates electricity and gas businesses in New York and Massachusetts, said investments include more than 11 billion pounds towards maintaining and upgrading existing transmission networks, and construction works for three Accelerated Strategic Transmission Investment (ASTI) projects in the UK. The ASTI projects form a key part of National Grid's plan to build new electricity network infrastructure required to reduce the UK's reliance on fossil fuels by connecting 50 Gigawatt of offshore wind by 2030. Britain has a target to largely decarbonise its power sector by 2030, which will mean reducing its reliance on gas-fired power plants and rapidly increasing its renewable power capacity. National Grid said around 24 billion pounds would be allotted to pipeline investments. ($1 = 0.7873 pounds) Sign up here. https://www.reuters.com/business/energy/uks-national-grid-invest-up-44-bln-transmission-business-2024-12-18/

2024-12-18 07:41

LONDON, Dec 18 (Reuters) - British inflation rose to its highest in eight months in November but an underlying measure of price growth watched closely by the Bank of England held steady, offering the central bank a little bit of relief. Consumer prices rose by an annual 2.6% in November, up from an increase of 2.3% in October and moving further away from September's 1.7% rise - the first time in almost three and a half years that inflation fell below the BoE's 2% target. The inflation rate was the highest since March and in line with economists' expectations in a Reuters poll. The increase in the rate was broad-based but most prominent for transport - particularly petrol and car purchase costs - and was only partly offset by smaller rises in air fares and the cost of eating out. "Another consecutive monthly rise in inflation, reaching its highest level since March, underscores the persistent price pressures within the UK economy," Martin Sartorius, principal economist at the Confederation of British Industry, said. The BoE is worried about persistently strong wage growth while the new government's tax increase for employers is expected to filter through into higher prices after it is introduced in April. Some economists have predicted headline consumer price inflation is likely to hit 3% in 2025. The BoE - which is expected to keep interest rates on hold on Thursday after its December meeting - predicted consumer price inflation in November would be 2.4% when it published a set of projections six weeks ago. Services inflation - which the BoE views as a key measure of domestically generated price pressure - held at 5.0% in November unchanged from October, the Office for National Statistics said. The economists polled by Reuters had mostly expected a slight increase in service price inflation to 5.1%. The BoE had expected it to dip to 4.9% in November. The BoE has said it will move only gradually with cuts to interest rates despite signs that Britain's economy is losing momentum. Sterling briefly edged down against the dollar after the data was published. The ONS said its measure of core inflation, which excludes energy, food, alcohol and tobacco, picked up to 3.5% in November from 3.3% in October. Sign up here. https://www.reuters.com/world/uk/uk-inflation-rises-26-november-2024-12-18/

2024-12-18 07:39

US crude stocks fall, EIA says Federal Reserve rate outlook in focus Brent futures turn negative in post-settlement trade HOUSTON, Dec 18 (Reuters) - Oil prices settled higher on Wednesday after U.S. crude inventories fell and the U.S. Federal Reserve cut interest rates as expected, but gains were capped as the Fed signalled it would slow the pace of cuts. Brent futures settled up 20 cents, or 0.27%, to $73.39 a barrel. U.S. West Texas Intermediate crude settled up 50 cents, or 0.71%, to $70.58. Both benchmarks retreated from gains of more than $1 a barrel at session highs. U.S. crude stocks and distillate inventories fell while gasoline inventories rose in the week ending Dec. 13, the Energy Information Administration said on Wednesday. Total product supplied, a proxy for demand, was 20.8 million barrels per day, up 662,000 bpd from the prior week. "The market seems to have turned a corner from all the negativity we saw a couple weeks ago as there is more optimism about demand," said Phil Flynn, a senior analyst for Price Futures Group. The U.S. Federal Reserve cut interest rates and signalled it will slow the pace at which borrowing costs fall further, given a relatively stable unemployment rate and little recent improvement in inflation. Both Brent and U.S. crude futures pared gains and turned negative in post-settlement trade after the Fed's announcement, which was followed by the dollar index reaching a year-to-date high of 108.156. A stronger greenback makes oil more expensive in other countries, which can reduce demand. U.S. central bankers project they will make just two quarter-percentage-point rate reductions by the end of 2025. Oil investors had already baked in a 25-basis-point cut to be announced on Wednesday, StoneX analyst Alex Hodes said in a note, and had been more eagerly awaiting the Fed's outlook for future cuts. Lower rates decrease borrowing costs, which can boost economic growth and demand for oil. Sign up here. https://www.reuters.com/markets/commodities/oil-prices-little-changed-ahead-fed-rate-decision-2024-12-18/