2024-11-19 02:46
MUMBAI, Nov 19 (Reuters) - The Indian rupee is likely to open steady on Tuesday and may look to make mild gains through the session as the dollar's post-U.S. election surge shows signs of cooling after touching a one-year high last week. The 1-month non-deliverable forward indicated that the rupee will open at 84.38-84.39 to the U.S. dollar, little changed from its close of 84.3850 in the previous session. The local currency had declined to its record low of 84.4125 last week. The dollar index was at 106.2 after declining 0.4% on Monday, its second consecutive daily decline, likely on the back of profit-booking after it rose to a one-year peak of 107.07 last week. "Expect (USD/INR) to move lower, tracking broad dollar weakness but not by much," a foreign exchange trader at a private bank said. The trader expects the dollar-rupee pair to find immediate support at 84.35-84.36 on the back of hedging demand from importers. Asian currencies were mostly stronger on the day, led by the Indonesian rupiah, which was up 0.3%. Meanwhile, the Indian government is likely to extend the term of Reserve Bank of India (RBI) governor Shaktikanta Das for a second time, Reuters reported earlier. An extension for Das should mean that the "RBI's aggressive FX intervention should still continue for the time being, implying USD/INR (volatility) should still be capped," MUFG Bank said in a note. Routine interventions by the Indian central bank have supported the rupee for over a month as the currency came under pressure due to sustained portfolio outflows and a post-U.S. election rise in the dollar index and US bond yields. Overseas investors have pulled out $3.3 billion from Indian stocks and bonds on a net basis over November so far, adding to the $11.4 billion outflow in the previous month. KEY INDICATORS: ** One-month non-deliverable rupee forward at 84.50; onshore one-month forward premium at 11.50 paisa ** Dollar index at 106.2 ** Brent crude futures up 0.1% at $73.4 per barrel ** Ten-year U.S. note yield at 4.41% ** As per NSDL data, foreign investors sold a net $176.9 mln worth of Indian shares on Nov. 14 ** NSDL data shows foreign investors bought a net $20.6 mln worth of Indian bonds on Nov. 14 Sign up here. https://www.reuters.com/markets/currencies/rupee-eyes-breathing-room-dollar-rally-stalls-importers-may-cap-gains-2024-11-19/
2024-11-19 00:09
LONDON, Nov 19 (Reuters) - Thousands of British farmers will march to Parliament Square on Tuesday to protest against the end of an inheritance tax exemption that has helped family farms pass down the generations, saying the move will threaten food production. Seeking to raise funds to fix public services, finance minister Rachel Reeves announced in October that farmers with land worth more than 1 million pounds ($1.26 million) will no longer be able to leave their farms to their children tax free from 2026. Opposition to the so-called "tractor tax" is one part of a wider backlash against Reeves's financial plans. Some of Britain's biggest companies have warned that her increases to employers' social security contributions will fuel inflation. Farmers say the change will threaten the viability of family farms, which often have tight profit margins, and that their children will have to sell land to cover the tax bill, raising the risk that food production will suffer. Organisers have said around 20,000 farmers could join the London rally on Tuesday. Television presenter turned farmer Jeremy Clarkson is expected to attend. Reeves said she recognised the strength of feeling but added that the reforms would only target wealthier estates and the most valuable farms, helping fund schools and health services that farmers and families in rural communities rely on. Protest organisers say that while this event will be peaceful and include children driving toy tractors, rallies could escalate in the future if the government refuses to budge. Clive Bailye, an arable farmer from central England who helped arrange the demonstration, has said he knows of colleagues who would like to "get a bit more French", a reference to the militancy of farmers across the Channel. Some British farmers have already threatened to strike or disrupt food supplies. They say they suffer unfair competition as cheaper imported produce does not have to meet the same environmental and welfare standards, while their incomes have also been squeezed by supermarkets and hit by climate change. The government said the tax change would only impact about 500 farms a year, with the tax rate for those paying set at 20%, rather than the usual 40% rate, and payable in instalments over 10 years. "I do understand that it's causing concern, but .... I am confident that the vast majority of farms and farmers will not be affected at all by that aspect of the budget," Prime Minister Keir Starmer, who is attending the G20 summit in Brazil, told reporters when asked about the tax change. He said the farming sector was set to benefit from the 5 billion pounds in government support over the next two years. ($1 = 0.7923 pounds) Sign up here. https://www.reuters.com/world/uk/british-farmers-protest-against-tractor-tax-london-2024-11-19/
2024-11-19 00:00
LONDON, Nov 18 (Reuters) - China's announcement that it will end tax rebates on exports of aluminium semi-manufactured products caused market mayhem on Friday and may have major long-term ramifications for the global aluminium supply chain. The Shanghai price sank and the London price surged as traders factored in the potential annual loss of over 5 million metric tons of Chinese products in the international market. That's a worst-case scenario and the reality may turn out to be less dramatic, depending on how China's aluminium processors cope with what for many is a loss of vital income. FINANCIAL LIFELINE The Ministry of Finance's elimination of the 13% VAT refund effective Dec. 1 also applies to exports of copper products. China's shipments of copper products are not insignificant at around 700,000 tons a year but aluminium volumes are on a different scale. The country's exports of semi-manufactured products such as bars, sheet and tubes totalled a massive 5.2 million tons in 2023. They will be higher still this year. Outbound shipments grew by 17% in the first nine months of 2024. Just about all of that tonnage qualifies for the VAT refund, which acts as a financial life-line for many smaller product manufacturers in a ferociously competitive market. There will be a predictable rush to export before the Dec. 1 deadline and those processors that can will no doubt look to pass on some of the cost hit to international buyers. The market reaction has been to open a financial arbitrage window to facilitate continued flows of aluminium product from east to west. The most likely outcome is a sharp drop in export volumes next year followed by some stabilisation as exporters adjust to the new financial reality. This is what happened to galvanized steel exports after the authorities eliminated the tax rebate for plate and sheet in 2020. Much, though, will depend on Chinese processors' ability to operate without the VAT lifeline. China's mid-stream aluminium processing sector is plagued by over-capacity with utilisation rates typically below 65% and as low as 40% in some sectors, according to research house AZ Global. Not everyone is going to survive. INTERNATIONAL TENSIONS Why has China pulled the tax trigger? And why now? The decision appears to be motivated by both international and domestic considerations. China's exports of aluminium products have long been a point of tension with Western trading partners, who have accused the country of unfair subsidies and damaging trade practices. Removing the tax export booster may be a pre-emptive concession at a time when the diplomatic heat is rising. China has been locked in talks with the European Union over the bloc's imposition of tariffs of up to 45% on Chinese exports of electric vehicles with both sides keen to avoid a broader trade war. Meanwhile, the prospect of a new U.S. administration promises more tariff trouble for China given Donald Trump's threat to impose import duties of up to 60% on all Chinese products entering the United States. It's worth noting that Friday's announcement also included a cut in the VAT refund for both photovoltaic cells and batteries, two other major sources of international trade tension. DOMESTIC REALIGNMENT Reducing exports of aluminium products may also address a fundamental tension in China's domestic supply chain. The government has imposed a capacity cap of 45 million tons on its smelting sector. National output of primary metal is currently running at an annualised rate of 43.5 million tons, suggesting little further growth potential. Yet China is going to need more aluminium, a metal that is closely tied to the clean energy revolution in the form of packaging for solar panels and electric vehicle bodies. Rising demand and static output imply an ever tighter domestic market balance as long as 5 million tons of product are shipped overseas. Incentivising the sector for that material to stay at home is one way of ensuring self-sufficiency over the coming years, a key goal for Chinese policymakers across the commodities board. GLOBAL NO MORE The short-term impact of the tax rebate removal may not be as bad as the market fears, but it marks another big step in the fracturing of what was until recently a globalised marketplace. The United States has been erecting ever higher trade barriers on Chinese aluminium, most recently in the form of a 25% import tariff. Canada has done the same while Mexican shipments to the United States must now come with evidence they haven't been fabricated from Chinese metal. The EU has imposed import tariffs on some Chinese aluminium products and a bigger barrier is coming in the form of the bloc's carbon border adjustment mechanism. China's move to limit exports merely adds to the sense that the global aluminium market is breaking down into distinctive regional markets defined by trade barriers. Western smelters, many of them shuttered due to low prices, and product manufacturers may be the eventual winners from a reduction in Chinese exports. To what extent, however, depends on how hard the Ministry of Finance's tweaks to its tax code hit China's domestic operators. The opinions expressed here are those of the author, a columnist for Reuters. Sign up here. https://www.reuters.com/world/china/chinas-export-tax-bombshell-rocks-aluminium-market-andy-home-2024-11-18/
2024-11-18 23:40
Nov 18 (Reuters) - Nuclear fuel supplier Centrus Energy (LEU.A) , opens new tab said on Monday it has received a notice from Russia's TENEX that its government passed an order, which canceled its license to export low-enriched uranium to the U.S., effective through Dec. 31, 2025. Shares of Centrus were down 4.3% at $73.14 in trading after the bell. Russia, the world's largest supplier of enriched uranium, said last week it had imposed temporary restrictions on the fuel's export to the United States, a symbolic tit-for-tat move after the U.S. banned Russian uranium imports. TENEX is required to obtain a specific export license from the Russian authorities to make each of the remaining 2024 shipments of low-enriched uranium to Centrus and for shipments in 2025. Centrus said TENEX is seeking the necessary export licenses, in a timely manner. But there is no certainty whether they will be issued by the Russian authorities and if issued, whether they will be in a timely manner, it said. If TENEX is unable to secure export licenses, it would affect Centrus' ability to meet delivery obligations to customers, it said. Sign up here. https://www.reuters.com/markets/commodities/centrus-says-russia-canceled-tenexs-license-export-low-enriched-uranium-us-2024-11-18/
2024-11-18 23:22
Nov 19 (Reuters) - Chinese President Xi Jinping said China and Mexico should continue to enhance exchanges, renew friendship, and make good use of the highly complementary nature of the two economies, Chinese state media reported on Tuesday. Xi made the remarks as he met his Mexican counterpart Claudia Sheinbaum on the sidelines of the G20 Leaders' Summit in Rio de Janeiro, state television CCTV reported. Xi said both countries should advance practical cooperation and push for development of bilateral relations, Xinhua news reported. Sign up here. https://www.reuters.com/world/chinas-xi-wants-continue-exchanges-advance-cooperation-with-mexico-2024-11-18/
2024-11-18 23:21
WASHINGTON, Nov 18 (Reuters) - U.S. President-elect Donald Trump said on Monday that he is nominating former Wisconsin Representative Sean Duffy, now a Fox News host, to be transportation secretary. If confirmed, Duffy will oversee aviation, automotive, rail, transit and other transportation policies at the department with about a $110 billion budget as well as significant funding that remains under the Biden administration's 2021 $1 trillion infrastructure law and EV charging stations. Trump has vowed to reverse the Biden administration's vehicle emissions rules. He has said he plans to begin the process of undoing the Biden administration's stringent emissions regulations finalized earlier this year as soon as he takes office. The rules cut tailpipe emissions limits by 50% from 2026 levels by 2032 and prod automakers to build more EVs. Duffy will face a number of major transportation issues. U.S. traffic deaths have fallen this year but still remain sharply above pre-COVID levels. The fatality rate remains higher this year than in any pre-pandemic year since 2008. He will face pressure to ease rules for self-driving cars sought by Tesla and other automakers. Trump said Duffy will prioritize "Excellence, Competence, Competitiveness and Beauty when rebuilding America’s highways, tunnels, bridges and airports. He will ensure our ports and dams serve our Economy without compromising our National Security." Duffy will oversee the continuing enhanced oversight of Boeing (BA.N) , opens new tab. The Federal Aviation Administration, which is part of USDOT, capped production at 38 737 MAX planes per month in January after a door panel missing four key bolts flew off an Alaska Airlines (ALK.N) , opens new tab 737 MAX 9 in midair that month, exposing serious safety issues at Boeing. He will also decide whether to continue the Biden administration's aviation passenger rights push and whether to approve more airline joint ventures. Duffy will also be in charge of oversight of companies run by Elon Musk, who has been closely involved in Trump's transition. USDOT is investigating Tesla TSLA.O Autopilot, while the FAA has proposed to fine SpaceX for violating space license rules. Musk has called for the resignation of FAA Administrator Mike Whitaker. A persistent shortage of controllers has delayed flights and, at many facilities, while a series of near miss incidents involving passenger jets have raised safety concerns. Congress also has been considering significant rail safety reforms in the aftermath of the February 2023 derailment of a Norfolk Southern (NSC.N) , opens new tab train in East Palestine, Ohio. Sign up here. https://www.reuters.com/world/us/trump-picks-sean-duffy-be-transportation-secretary-2024-11-18/
