2024-12-09 18:20

Canadian dollar gains 0.2% against the greenback Trades in a range of 1.4094 to 1.4175 Price of U.S. oil increases 2% Bond yields rise across the curve TORONTO, Dec 9 (Reuters) - The commodity-linked Canadian dollar strengthened against its U.S. counterpart on Monday as China vowed to stimulate its economy, but the move was limited ahead of an expected supersized interest rate cut by the Bank of Canada this week. The loonie was trading 0.1% higher at 1.4135 to the U.S. dollar, or 70.75 U.S. cents. It moved in a range of 1.4094 to 1.4175, holding just short of the 4-1/2-year low it posted on Nov. 26 at 1.4177. The Australian and New Zealand dollars also notched gains. Like Canada, Australia and New Zealand are major commodity producers, so their currencies tend to be sensitive to global economic prospects. "Risk-sensitive currencies are advancing against their safe-haven counterparts after Chinese authorities explicitly signaled more stimulus to come in the year ahead," Karl Schamotta, chief market strategist at Corpay, said in a note. China will implement more proactive fiscal policy and moderately loose monetary policy next year, state media reported. The price of oil, one of Canada's major exports, rose 2% to $68.54 a barrel. Copper futures were up 2.2% and gold added 1.3%. The BoC will slash interest rates by half a percentage point for a second consecutive meeting on Wednesday, according to a majority of economists polled by Reuters. "Glimmerings of a potential (Canadian) consumer rebound are evident in housing markets and retail sales numbers, but data in recent weeks has shown growth weakening and unemployment pushing higher - reducing the likelihood of an inflationary overheat," Schamotta said. Data on Friday showed that Canada's unemployment rate climbed to 6.8% in November, a near-eight-year high outside of the pandemic era. Canadian bond yields moved higher across the curve, tracking moves in U.S. Treasuries ahead of key U.S. inflation data on Wednesday. The 10-year was up 5.2 basis points at 3.033%. Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-edges-higher-china-stimulus-pledge-2024-12-09/

2024-12-09 18:06

Inflation expectations rise among college-educated consumers Gasoline, rent, and food costs expected to weaken Optimism about economy despite softer job market outlook Dec 9 (Reuters) - U.S. consumers were bracing last month for higher levels of inflation in coming years even as they marked up expectations that their personal financial situations would improve markedly, the New York Federal Reserve reported on Monday. Respondents to the regional Fed bank's survey of consumer expectations in November see inflation a year from now at 3%, versus the 2.9% expected in October, while inflation in three years is seen at 2.6%, compared to 2.5% in the previous month. Inflation five years from now is expected to be 2.9%, compared to 2.8% in October. The New York Fed noted educational levels affected the view on future inflation, saying "the overall increase in one- and three-year-ahead inflation expectations masks a decline among those without a college degree and an increase among those with a college degree." The projected rise in inflation contrasted with expectations that gasoline prices, rent and food costs will all rise at a weaker rate a year from now, even as the costs of medical care and college are seen mounting bigger gains. Meanwhile, the expected rise in home prices held steady at 3% in November. The survey was released at a time of considerable expected change in the path of the economy tied to President-elect Donald Trump's imminent return to the White House. Trump is widely expected to pursue policies that increase price pressures through his promise of large tariffs on U.S. trading partners and deportations of immigrants. His tax and spending plans are also expected to push up deficits by a sizable amount. The Fed is widely expected to cut its benchmark overnight interest by a quarter of a percentage point at its Dec. 17-18 policy meeting, with much less certainty about what comes after that, given the unpredictability of Trump's policy agenda and stickier-than-expected inflation pressures. The New York Fed survey, which was conducted throughout November, found optimism over the future of the economy. Respondents projected better income and earnings growth, although their outlook on the job market softened a bit. While households' view of their current financial situation was stable and their sense of access to credit little changed, year-ahead expectations of those respondents who see a better financial situation jumped to the highest level since February 2020. Meanwhile, the share of those who expect to be worse off ebbed to the lowest level since March 2021. Households also put lower prospects on missing debt payments. Although economists expect Trump will drive deficits higher, respondents in the New York Fed survey cut their forecasts of the growth in government debt to the lowest reading since February 2020. Households also predicted a rising probability that interest rates on savings accounts will be higher in a year, which contrasts with an expected path of Fed policy that points to lower interest rates. Sign up here. https://www.reuters.com/markets/us/us-consumers-expect-higher-inflation-better-economy-new-york-fed-says-2024-12-09/

2024-12-09 16:15

LONDON, Dec 9 (Reuters) - The Bank of England will be vigilant over the possibility that investors will take greater risks after a year of relative stability in markets, Deputy Governor Dave Ramsden said on Monday. Ramsden, who is head of markets at the BoE and in charge of its balance sheet, said there had been no major bank failures or bouts of market dysfunction in 2024, even though political events had stoked volatility. "I am ... mindful that whilst this has been a year of relative stability, that is never a sign that we should get complacent," Ramsden said in a speech at the Official Monetary and Financial Institutions Forum, a think tank. "As famed economist Hyman Minsky once said, 'stability breeds instability' and the comparatively calmer market conditions of this year could lead to greater risk-taking in future," Ramsden added. Britain's government bond market - the subject of a meltdown in 2022 triggered by then-Prime Minister Liz Truss's unfunded tax cuts and exacerbated by the structure of pension funds - was functioning in an orderly manner, Ramsden said. But he added vulnerabilities remained around the leverage of hedge funds and the concentration of the market - something the BoE would watch carefully. Last month the BoE said financial firms outside the banking system, such as hedge funds, remained vulnerable to a sudden financial shock and would not all be able to access the funding they would need in such a crisis. Ramsden's speech also touched on the Contingent Non-Bank Financial Institution Repo Facility (CNRF), a new financial stability tool that insurers and pension funds will be able to use during severe turbulence in the gilt market. He said he understood why these companies were interested to know the circumstances under which BoE would activate the CNRF, but he said the central bank could not give a definitive list, given how market dysfunction can arise in different ways. "What I can say is that the Bank will draw on a mix of quantitative and qualitative information to assess whether the conditions for activating the CNRF are met," Ramsden said. Sign up here. https://www.reuters.com/business/finance/bank-englands-ramsden-says-will-be-vigilant-towards-greater-risk-taking-2024-12-09/

2024-12-09 14:30

JOHANNESBURG, Dec 9 (Reuters) - South Africa's rand firmed early on Monday, at the start of a week packed with economic data releases that will shed light on the health of Africa's most industrialised economy heading into the new year. At 0732 GMT, the rand traded at 17.94 against the dollar , about 0.5% stronger than its previous close. "The (rand) was able to take back some ground last week, which could extend through the start of this week, although with so much domestic data due, there is bound to be some apprehension to take on any significant directional trade," said ETM Analytics in a research note. South Africa-focussed investors will this week look to October mining production (ZAMNG=ECI) , opens new tab and manufacturing (ZAMAN=ECI) , opens new tab data on Tuesday and retail sales figures (ZARET=ECI) , opens new tab on Wednesday. Also on Wednesday Statistics South Africa will publish November consumer inflation data (ZACPIY=ECI) , opens new tab, and on Thursday it will release producer inflation numbers (ZAPPIY=ECI) , opens new tab for the same month. "All of these data sets are relevant as investors try to gauge prospects for the SA economy through the year ahead," the ETM note added. On the Johannesburg Stock Exchange, the Top-40 index (.JTOPI) , opens new tab was down slightly in early trade. South Africa's benchmark 2030 government bond was little changed, the yield at 8.925%. Sign up here. https://www.reuters.com/markets/south-african-rand-firms-start-data-filled-week-2024-12-09/

2024-12-09 12:39

BERLIN, Dec 9 (Reuters) - Chancellor Olaf Scholz announced several measures to prop up Germany's ailing steel sector on Monday after he met with industry representatives to discuss high energy prices, cheap Asian competition and an economic downturn. In a statement issued by his spokesperson, Scholz said he would initiate the extension of state aid allowing employers to switch employees to shorter working hours during an economic downturn. He also said his government would seek to cap the costs of electricity transmission at 3 cents per kilowatt hour, partly finance the costs of the transmission grids and ensure that transmission grid fees do not increase in 2025. Prospects for the proposed aid in the current legislative period are uncertain after the collapse of Germany's governing coalition last month. A snap election is to be held in February. Germany is the world's seventh-largest crude steel producer, and the EU's largest steel producer. Its steel industry generated 55.2 billion euros in sales and employed around 90,000 people in 2022. Monday's meeting included representatives of the steel unit of Thyssenkrupp (TKAG.DE) , opens new tab, Salzgitter (SZGG.DE) , opens new tab, Stahl Holding Saar and Arcelor Mittal. Scholz said in a weekend newspaper interview that he would not rule out Berlin potentially taking a stake in Thyssenkrupp Steel, which is planning to axe thousands of jobs. Sign up here. https://www.reuters.com/markets/commodities/germanys-scholz-announces-measures-prop-up-ailing-steel-industry-2024-12-09/

2024-12-09 12:36

Dec 9 (Reuters) - Devon Energy (DVN.N) , opens new tab said on Monday that Rick Muncrief would retire as CEO and will be succeeded by Chief Operating Officer Clay Gaspar. Muncrief, 66, was named the CEO in January 2021 following the U.S. shale producer's merger with rival WPX Energy. Gaspar, who also joined from WPX, will receive $1 million as annual base salary and cash bonus target of 130% of his base salary, Devon revealed in a regulatory filing. The leadership transition is effective March 1, the company said. Sign up here. https://www.reuters.com/business/energy/devon-energys-rick-muncrief-retire-ceo-2024-12-09/