2024-10-17 10:06

Oct 17 (Reuters) - The pound drifted near two-month lows against the U.S. dollar on Thursday, after sliding a day earlier when a tame inflation report boosted Bank of England rate cut bets. Sterling was last down 0.1% at $1.29815 after breaching the key $1.30 mark on Wednesday when data showed British inflation dropped to the lowest since April 2021, and by more than economists had expected. "The sterling bears are now testing ... a few pips below the 1.30 mark, to reverse the April to September positive trend and send the pair into a medium-term bearish consolidation zone," said Swissquote Bank analyst Ipek Ozkardeskaya. Traders now see an 85% chance that the Bank of England will lower rates by 25 basis points at its next policy meeting in November, up from about 80% before the data. BOEWATCH The expectation that stubborn inflation would see the BoE lower rates more gradually then its U.S. and European counterparts had helped send the pound to a two-and-a-half year high against the greenback in late September. However, strong U.S. data reigning in hefty Fed rate cut bets and tensions in the Middle East have caused a relative repricing among currency pairs, boosting the dollar and weighing on the pound. Investors are looking to British finance minister Rachel Reeves' first budget on Oct. 30 where she is eyeing tax rises and spending cuts to a value of around 40 billion pounds ($52 billion), two government sources told Reuters. Against the euro, sterling was little changed at 83.595 pence. A quarter point interest rate cut from the European Central Bank is nearly fully priced in at its meeting on Thursday, while President Christine Lagarde's remarks will later be parsed for any clues on the ECB's thinking on future moves. Sign up here. https://www.reuters.com/markets/currencies/sterling-drifts-near-two-month-lows-versus-dollar-2024-10-17/

2024-10-17 10:03

A look at the day ahead in U.S. and global markets from Mike Dolan Tech-heavy stock markets are set to breathe a sigh of relief on Thursday as the world's largest chipmaker beat the street and eased gnawing doubts about semiconductor demand worldwide and jitters about the wider artificial intelligence theme. After a cloudy outlook from Europe's ASML (ASML.AS) , opens new tab earlier this week sideswiped chip stocks everywhere, Taiwan Semiconductor Manufacturing (2330.TW) , opens new tab said on Thursday it expects sustained growth as it reported a forecast-beating 54% jump in profits and soaring demand for chips used in AI. TSMC, the dominant producer of advanced chips used in AI applications and whose customers include Apple (AAPL.O) , opens new tab and Nvidia (NVDA.O) , opens new tab, has become a bellwether for the AI story and its shares jumped 6% in Frankfurt after the earnings report. Nvidia shares were also up another 2% in out of hours trade. TSMC is spending billions of dollars building new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, although it has said most manufacturing will remain in Taiwan. With Wall Street index futures , higher again ahead of Thursday's bell, the news from Taiwan may well lift both the S&P500 (.SPX) , opens new tab and Nasdaq (.IXIC) , opens new tab back to record highs. Helped by a strong earnings season so far for the big U.S. investment banks, the wider market raced ahead on Wednesday. The small cap Russell 2000 (.RUT) , opens new tab clocked it best close in almost three years and Dow Jones blue chips (.DJI) , opens new tab set another record close after the index secured a foothold above the 43,000 mark. Streaming giant Netflix(NFLX.O) , opens new tab tops the diary later, with investors looking for signs its nascent ad revenue business is accelerating. That's important as it's set to report about 4 million new subscribers - its lowest addition in six quarters following a boom on its password-sharing crackdown. Netflix shares are up 44% for the year so far. With the European Central Bank set to deliver its third interest rate cut of the year later on Thursday - its first back-to-back cut in 13 years - the broader interest rate picture was supportive too. The euro fell to its lowest level since early August against a generally stronger dollar (.DXY) , opens new tab ahead of the ECB decision. European stocks (.STOXXE) , opens new tab pushed higher after a shaky week of disappointments from ASML and luxury goods maker LVMH (LVMH.PA) , opens new tab, both hit by wobbling Chinese demand and a brewing trade war between Brussels and Beijing. China's markets (.CSI300) , opens new tab underperformed once again and the offshore yuan touched its weakest level in almost two months as a lack of fresh stimulus from a closely-watched housing policy briefing left some investors disappointed. China will expand a "white list" of housing projects eligible for financing and increase bank lending for such developments to 4 trillion yuan ($562 billion), Minister of Housing and Urban-Rural Development Ni Hong said. But analysts said the details just fleshed out previously announced support and some of the numbers underwhelmed. Property stocks traded in China (.CSI000952) , opens new tab and Hong Kong (.HSMPI) , opens new tab tumbled 7.9% and 6.7% respectively - reversing gains of the previous day. China reports third-quarter GDP numbers on Friday - and the annual growth rate over the three months is expected to have slowed to 4.5% from 4.7% the prior quarter. Back on Wall Street, Treasuries were steady, with the 10-year yield retaining a 4% handle ahead of a stream of retail, industrial and weekly jobless data for last month. With the labor market under the microscope at the Federal Reserve as it mulls its next interest rate move, distortions in jobless claims due to recent storms and strikes have made the number difficult to read. Still, another quarter-point Fed rate cut next month is almost fully priced in futures markets and there was encouraging news on the inflation front at home and abroad. U.S. import prices fell by the most in nine months in September amid decreases in the costs of energy products and food. And despite Middle East tensions, China-related global demand worries for next year have kept a lid on oil, leaving U.S. crude clinging on to $70 per barrel and down almost 20% on this time last year. In deals news, shares of travel booking website Expedia Group (EXPE.O) , opens new tab jumped 8% in after-hours trading after the Financial Times reported that ride-hailing giant Uber (UBER.N) , opens new tab explored a possible bid for the company. Uber shares were down about 2%. Key developments that should provide more direction to U.S. markets later on Thursday: * European Central Bank policy decision and press conference with ECB President Christine Lagarde * US corporate earnings: Netflix, Snap-on, Intuitive Surgical, Blackstone, Travelers, Truist, M&T, Elevance Health, Marsh & McLennan, Huntington Bancshares, KeyCorp * US September retail sales, industrial output, weekly jobless claims, October Philadelphia Fed business survey, Oct NAHB housing index, August business/retail inventories, August TIC data on Treasury holdings * Federal Reserve Bank of Chicago President Austan Goolsbee * European Commission President Ursula von der Leyen and European Council President Charles Michel holds a press conference after European Union summit * U.S. President Joe Biden visits Germany Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-pix-2024-10-17/

2024-10-17 09:57

Oct 17 (Reuters) - The economic policies being proposed by Republican presidential candidate Donald Trump would fuel inflation and harm businesses, U.S. Treasury Secretary Janet Yellen plans to warn in a speech, according to a report in the New York Times on Thursday. Yellen's critique is set to be delivered in remarks to the Council on Foreign Relations and although she is not expected to mention Trump by name she will argue that the broad tariffs the former U.S. President and some Republicans in Congress support would damage the U.S. economy, the New York Times said, citing Yellen's speech obtained by the newspaper. "Sweeping, untargeted tariffs would raise prices for American families and make our businesses less competitive," Yellen plans to say. Trump has made tariffs and tax cuts the key elements of his economic pitch to voters, the majority of whom view the economy as the biggest campaign issue of the 2024 presidential election. Trump defended his trade policies and other fiscal proposals in an interview on Tuesday with Bloomberg News editor-in-chief John Micklethwait. He maintained that his trade policies - which call for pricey tariffs on goods not only from rivals such as China but allies such as the European Union - would revitalize American manufacturing and yield enough revenue to ease concerns about ballooning the deficit. Sign up here. https://www.reuters.com/world/us/yellen-warn-sweeping-tariffs-would-ignite-inflation-nyt-reports-2024-10-17/

2024-10-17 09:29

PRAGUE, Oct 17 (Reuters) - Czech interest rates in the coming years will be higher than in the past and cuts will be done with caution, central bank Governor Ales Michl said on Thursday. "We will cut (rates) but very carefully. But in any case, on average, interest rates should be higher than we were used to," he said at an economic conference, reiterating past messages. Michl had said the board would be cautious on rate cuts after policymakers' last meeting in September, when the bank delivered a 25-basis-point rate reduction, the seventh decrease since it started easing last December. In total, it has cut its main rate (CZCBIR=ECI) , opens new tab by 275 basis points to 4.25% since its monetary easing cycle began in December. Sign up here. https://www.reuters.com/markets/rates-bonds/czech-rates-be-cut-with-caution-central-bank-chief-says-2024-10-17/

2024-10-17 09:06

SBV is open to the possibility of further rate cuts Bank lending rose 9% as of September 30 from end-2023 Vietcombank, MBBank takeover Construction Bank, Oceanbank respectively HANOI, Oct 17 (Reuters) - Vietnam can still meet its economic growth target this year despite the extensive damage caused by Typhoon Yagi and is open to the possibility of interest rate cuts, central bank deputy governor Dao Minh Tu said on Thursday. Tu also told a media briefing that business and manufacturing activities were recovering from the typhoon. "The central bank will continue to pursue supportive monetary policies during the rest of the year," Tu said. "We will keep policy rates at least at the current levels, and are open to the possibility of further rate cuts." The central bank, formally known as the State Bank of Vietnam (SBV), reported that bank lending had risen 9% as of Sept. 30 from end-2023. Vietnam's economic growth largely relies on bank lending, and the central bank is targeting credit growth of 15% this year. Vietnam's gross domestic product (GDP) rose 7.4% in the third quarter from a year earlier, the strongest pace in two years, as growth in exports, industrial production and foreign investment offset the initial effects of typhoon-related flooding and damage in September. Average consumer prices in the first nine months of this year rose 3.88% from a year earlier, below the government's targeted inflation cap of 4.5% for the year. At Thursday's meeting, the central bank also announced that the country's biggest bank, Vietcombank (VCB.HM) , opens new tab, will take over smaller lender Construction Bank and one of the leading commercial banks, Military Commercial Joint Stock Bank (MBBank) (MBB.HM) , opens new tab, will take over Oceanbank. The moves are part of the central bank's restructuring programme to stabilise the financial sector and tackle non-performing loans, one of the largest banking consolidation operations in the country recently. A central bank official at the briefing also highlighted a rising trend of non performing loans. "The goal of the compulsory takeovers is for the banks to return to normal operations, handle their accumulated losses, ... and ensure depositors' rights," said Nguyen Duc Long, deputy head of the central bank's inspection department. Under the restructuring plan, two other poorly performing commercial banks, DongA Bank and Global Petro Bank are still pending a restructuring plan. Sign up here. https://www.reuters.com/markets/asia/vietnam-central-bank-says-keep-policy-supportive-open-rate-cuts-2024-10-17/

2024-10-17 08:12

BUDAPEST, Oct 17 (Reuters) - Hungarian gross domestic product growth will be "very close to zero" in the third quarter, significantly below market expectations, Economy Minister Marton Nagy said on Thursday. In power since 2010, Prime Minister Viktor Orban has struggled to revive Hungary's economy after last year's downturn following a surge in inflation to more than 25% in the first quarter of 2023, the highest level in the European Union. Economists polled by Reuters expect third-quarter growth at an annual 1.3%. "Our internal growth is secure," Nagy told a business conference. "But external growth does not depend on us." "In an economy where the share of exports is worth 80% of GDP and exposure to the German economy is so strong, this is a difficult issue," he said. Nagy reiterated his view that Hungary has overcome the inflation crisis, with the latest data coming in below expectations. September inflation fell to the Hungarian central bank's 3% target for the first time since 2021. "Inflation is not an issue. Actual data have been coming in below expectations continuously. This is the result of lingering concerns over inflation. The central bank also appears to be stuck in inflation concerns," he said. Nagy's remarks, however, appeared to be at odds with the central bank's assessment, which has struck a cautious tone regarding further cuts from the EU's highest, 6.5% benchmark rate level due to financial market risks. Deputy Governor Barnabas Virag has flagged a likely pause in the bank's interest rate cuts next Tuesday after an escalation of the conflict in the Middle East and a shift in the U.S. rate outlook pushed the forint to 18-month-lows. Sign up here. https://www.reuters.com/markets/europe/hungarian-gdp-growth-will-be-close-zero-q3-economy-minister-says-2024-10-17/