2024-10-14 19:33

BRUSSELS, Oct 14 (Reuters) - A group of EU countries including France and the Baltic states have asked the European Commission to tighten reporting rules across the bloc on Russian LNG imports, a letter sent to the commission on Monday showed. The EU adopted a 14th package of sanctions in June that included a ban on trans-shipments of Russian liquefied natural gas (LNG) in its port areas. Moscow has been using European ports to trans-ship onto other vessels for farther destinations in Asia. The restrictions stopped short of an import ban on Russian LNG. Some EU countries still receive Russian pipeline gas through Ukraine and Turkey. Since then, imports of Russian LNG to Europe have increased to Belgium and the Netherlands where most of the trans-shipments used to take place. Belgium has called for stronger measures. "We consider (it) important to ensure full transparency on imports of Russian natural gas and to shed light on the identity of natural gas suppliers who import Russian LNG," the document said. Further, the countries want the commission to strengthen the "reporting obligation for unloading operations of Russian LNG," as public data do not give "a complete picture." The package includes a wind-down period until March, and the EU members want the commission to propose stronger reporting rules before then. These would include asking LNG storage operators to provide information on the portion of Russian LNG in reloaded cargoes and storage operators to monitor LNG origin. The paper was co-signed by Lithuania, Austria, Czech Republic, Finland, Estonia, Latvia, Luxembourg and Sweden. Sign up here. https://www.reuters.com/business/energy/more-transparency-russian-gas-imports-sought-by-eu-countries-document-shows-2024-10-14/

2024-10-14 15:13

ISTANBUL, Oct 14 (Reuters) - Turkey's economy will grow 3% this year and next, lower than the government's recently updated forecasts, a Reuters poll of economists showed on Monday, pointing to a much deeper slowdown as authorities seek to douse rampant inflation. Poll respondents also unanimously agreed the central bank would hold its key interest rate at 50% on Thursday, but eventually ease policy by 250 basis points by year-end. Ankara launched its tightening drive in mid-2023 to reverse a years-long low-rates strategy championed by President Tayyip Erdogan to boost economic growth. The central bank has since raised rates by 4,150 basis points, while the government adopted tax and savings measures meant to rebalance the economy and leave behind a series of currency crisis and price rises. The drive to cool prices is expected to lower gross domestic product growth to average 3% this year and next, according to the median of 42 economists in the Oct. 8-14 Reuters poll. That compares to the government's prediction of 3.5% GDP growth this year and 4% next year, in its three-year policy roadmap. The economy grew 4.5% in 2023. GDP will rise 3.6% in 2026, the poll's median showed. Natixis said the government had kept its promise of orthodox economic policies and announced fiscal consolidation and budget measures that had further squeezed growth and helped the central bank tackle inflation. "The impact from a much tighter policy mix on economic activity is, indeed, seen via a number of indicators ... Recession is not yet on the table though as we anticipate a slowdown in the real GDP growth," the investment management firm said. The central bank will announce its interest rate decision at 1100 GMT on Oct. 17. In the poll, economists predicted it would not significantly ease policy until next year. The bank was forecast to have reduced rates by 20 percentage points to 30% by end-2025. Economists expect the policy rate to fall to 42.5% in the first quarter of next year and to 35.0% in the second quarter, based on the median response. They expect the cutting cycle to be completed in the third quarter of next year, leaving the policy rate at 30.0%. Tight policy, fiscal measures and base effects brought inflation down to 49.38% in September from a recent peak of 75.45% in May. The poll median showed economists expect inflation to fall to 43.5% this year and to 25.2% by the end of 2025. The government forecasts annual inflation will fall to 41.5% in 2024 and 17.5% next year. Turkey's current account deficit in 2024 is expected to be 1.8% of GDP this year and next, the median forecast showed, compared to a government forecast of 1.7% and 2.0% respectively. (Other stories from the October Reuters global economic poll) Sign up here. https://www.reuters.com/world/middle-east/turkish-economy-cool-more-than-government-expects-2024-10-14/

2024-10-14 14:46

Oct 14 (Reuters) - Brazil's central bank sees strong economic activity as a key input for its monetary policy decision, incoming governor Gabriel Galipolo said on Monday, as the government provided signs it might revise its 2024 growth projection upwards again. Central bank data earlier in the day showed that activity in Latin America's largest economy again exceeded expectations in August, reinforcing the view of heated momentum that prompted the central bank to kick off a monetary tightening cycle. Galipolo, the current monetary policy director who will take over the central bank in January, said at an event hosted by lender Itau in Sao Paulo that the strength of economic activity was a "central theme" for policymakers. He labeled it the main factor driving inflation expectations further away from the bank's 3% target while also impacting consumer prices, which remain above the official goal. Speaking at the same event, Finance Minister Fernando Haddad said the government might need to revise its economic growth forecast for this year again, after bumping it up last month. The ministry in September raised its gross domestic product (GDP) growth projection to 3.2% from 2.5% as activity continues to surprise on the upside, driven by buoyant household consumption amid a tight labor market. "Unlike other countries, Brazil continues to show greater resilience in economic activity," Galipolo said. The central bank had highlighted the economy's strength as a factor skewing the inflation risk balance to the upside when it began a rate-hiking cycle last month, raising the benchmark rate by 25 basis points to 10.75%. Market expectations now suggest the pace of rate hikes will accelerate to 50 basis points at the next policy meeting in November. Galipolo said that inflation expectations remain unanchored at an "uncomfortable" level, reiterating that the bank must keep interest rates at a sufficiently restrictive level for as long as necessary to bring inflation back to target. Haddad, on the other hand, noted that there had been "communication issues" from both the central bank and the executive branch of government leading to the unanchored inflation expectations. 'IRRATIONAL' The minister stressed that real rates of 6.5-7% for the remuneration of public debt, currently reflected in the yield curve, "are irrational", but expressed confidence that expectations would improve. That would happen once market participants recognize the "intertemporal consistency" of President Luiz Inacio Lula da Silva's fiscal framework, he said, adding that there was room to contain primary spending and reduce tax expenditures. He emphasized the importance of calibrating spending dynamics and ensuring a revenue flow compatible with contracted expenditures. Galipolo added that policymakers anticipate a reduction in fiscal stimulus but must be conservative in their forecasts. The central bank director also pointed out that Brazil's real is "persistently" undervalued against the U.S. dollar, emphasizing that interventions in the currency market would only occur when liquidity shortages or excessive volatility arise. Sign up here. https://www.reuters.com/world/americas/brazils-haddad-says-government-may-have-revise-2024-gdp-forecast-again-2024-10-14/

2024-10-14 14:15

Oct 14 (Reuters) - J.P.Morgan and BofA Global Research have joined a growing rank of major brokerages that expect the U.S. Federal Reserve to reduce interest rates by 25 basis points in November after blowout nonfarm payrolls data earlier this month pointed to a resilient economy. Citigroup also expects a 25 bps cut in the November meeting of the Federal Open Market Committee, but forecasts weakening labor market data leading to a 50 bps cut in December. Goldman Sachs, Barclays, Macquarie and Deutsche Bank reiterated their forecasts of a 25 bps cut each in November and December. Here are the forecasts from major brokerages after the jobs report: * UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group Here are the forecasts from major brokerages ahead of the jobs data: * UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group Sign up here. https://www.reuters.com/markets/us/most-brokerages-expect-25-bps-rate-cut-fed-wednesday-2024-09-17/

2024-10-14 14:02

Oct 14 (Reuters) - U.S. Federal Reserve Bank of Minneapolis President Neel Kashkari said on Monday more rate cuts likely lie ahead for the central bank as the 2% inflation target looms into sight. "As of right now, it appears likely that further modest reductions in our policy rate will be appropriate in the coming quarters to achieve both sides of our mandate," Kashkari said in a speech delivered before a conference held by the Central Bank of the Argentine Republic. He added, "ultimately, the path ahead for policy will be driven by the actual economic, inflation and labor market data." Kashkari said that the current stance of monetary policy, with the federal funds rate range between 4.75% and 5%, remains restrictive of growth, although by how much is unclear. He said the Fed is "in the final stages of bringing inflation down to our 2% target," while noting recent strong job market data shows the labor sector remains strong and is not on the verge of a rapid slowdown. Kashkari spoke as the Fed is weighing how much further it can lower its interest rate target amid moderating price pressures and a still-strong economy. Sign up here. https://www.reuters.com/markets/rates-bonds/feds-kashkari-sees-more-modest-rate-cuts-ahead-us-economy-2024-10-14/

2024-10-14 12:04

RIO DE JANEIRO, Oct 14 (Reuters) - Brazil's Petrobras (PETR4.SA) , opens new tab is set to reduce planned investments for next year, despite requests by the government for the state-run oil firm to increase CAPEX, three sources close to the matter told Reuters. The firm foresaw $21 billion of investments for next year, but spending could be down to around $17 billion, according to initial estimates by the firm, said one source. Petrobras did not immediately respond to a request for comment. In its current 2024-2028 strategic plan, Petrobras is set to invest $102 billion, a 31% increase over the last plan, amid pressure from Brazil's President Luiz Inacio Lula da Silva for the firm to invest more and prop-up the country's economy while generating local jobs. Petrobras wants to release a plan that is more "realistic," said one source. Sources did not say whether the 2025-2029 plan, set to be unveiled in November, would have lower CAPEX than the current one. The 2025-2029 plan will prioritize projects that need lower investment and deliver higher and faster returns, said the sources. It would also include plans to open more oil and gas wells, they said. The main concern is to increase oil and gas production, said a source, boosting the firm's earnings and "helping the country." A rise in equipment prices and financing limitations were among the reasons cited by the sources for the lowering of investments next year. The firm has also faced difficulties expanding activities in Brazil due to a lack of environmental licenses for exploration projects, the sources noted. Sign up here. https://www.reuters.com/markets/commodities/brazils-petrobras-reduce-investments-planned-2025-sources-say-2024-10-14/