2024-10-10 16:24

MEXICO CITY, Oct 10 (Reuters) - The Bank of Mexico's five-member governing board expects easing inflation could allow further reductions to its benchmark interest rate, minutes from the bank's September monetary policy decision showed on Thursday. Banxico, as the Mexican central bank is known, lowered its key lending rate by 25 basis points to settle at 10.50% following a four to five vote by its governing board announced on Sept. 26. Minutes showed most board members agreed that Mexico's inflation outlook has been improving, with all members noting core inflation in Latin America's No. 2 economy continued to trend downwards. Most of the board, however, warned that inflationary pressures still pose a challenge. Twelve-month headline inflation in Mexico hit 4.58% in September, down from the August figure of 4.99%, fueling expectations Banxico may continue cutting the interest rate. Still, all board members underscored that services inflation continues to show persistence. One board member noted "services inflation, which better reflects domestic pressures, keeps showing a resistance to decline and remains at high levels." The unnamed member added the persistence could continue given the resilience of private consumption. Banxico forecasts headline inflation to converge to its 3% target, plus or minus a percentage point, in the fourth quarter of next year. Deputy Governor Jonathan Heath, the lone dissenting voice at the last monetary policy meeting, had voted to hold the rate at 10.75%. Heath argued, according to the minutes, that patience was needed "for the current monetary policy stance to have the desired effect on the persistence in services inflation." "Initiating a cycle of monetary easing prematurely could send a signal of complacency and that we are content with the high levels of headline inflation," Heath said. Sign up here. https://www.reuters.com/world/americas/banxico-expects-cooling-inflation-allow-more-rate-cuts-2024-10-10/

2024-10-10 16:11

JOHANNESBURG, Oct 10 (Reuters) - The South African rand firmed against the dollar on Thursday after data showed a slight decline in U.S. inflation in September, keeping the Federal Reserve on track to cut interest rates again next month. At 1554 GMT, the rand traded at 17.53 against the dollar , about 0.7% stronger than its previous close. "This initial strength (in the rand) likely reflects investor optimism that the slightly softer (U.S.) inflation numbers could lead to a rate cut, making emerging markets like South Africa more attractive," said Wichard Cilliers, head of market risk at TreasuryONE. Data on Thursday showed that in the 12 months through September U.S. consumer inflation rose 2.4%, the smallest gain in more than 3-1/2 years though economists had expected a 2.3% increase. "Despite inflation being above expectations, there are signs that the economy is slowing, particularly with higher unemployment claims, and the Fed is widely expected to cut rates to stimulate growth," Cilliers said. Domestic economic data on Thursday was mixed, with August mining production rising 0.3% year on year but August manufacturing output falling 1.2% year on year. On the Johannesburg stock market, the Top-40 index (.JTOPI) , opens new tab closed little changed. The benchmark 2030 government bond was marginally stronger, with the yield down 3 basis points to 9.14%. Sign up here. https://www.reuters.com/markets/currencies/south-african-rand-firms-after-us-inflation-data-2024-10-10/

2024-10-10 14:37

Oct 10 (Reuters) - Chicago Federal Reserve Bank Austan Goolsbee on Thursday said he sees a series of interest-rate cuts over the next year to year and a half, noting that inflation is now near the Fed's 2% goal and the economy is about at full employment, and the Fed's goal is to freeze those conditions in place. "Over a 12-18 month period, I think we are going to gradually, whatever word you want to use, move to a steady state" on the policy rate, Goolsbee said in a CNBC interview. He noted that there was broad agreement among policymakers that rates need to drop a "fair amount" over that time period. Near-term, he said, there are likely to be more meetings where policy decisions will be close calls, as last month's was, as central bankers sift through sometimes conflicting data. Sign up here. https://www.reuters.com/markets/rates-bonds/feds-goolsbee-sees-gradual-policy-rate-cuts-over-next-12-18-months-2024-10-10/

2024-10-10 13:10

Oct 10 (Reuters) - Venture capital investors in the United States remained cautious about dealmaking amid economic uncertainty, according to a PitchBook-NVCA report released on Thursday, underscoring challenges in the industry despite a rally in public markets. About $37.5 billion of deals were clinched in the third quarter ended Sept. 30, nearly 32% lower than the preceding quarter, the report said. Limited liquidity has driven investors to negotiate tougher terms for startups, leading many to postpone funding until conditions improve. The report highlights the challenges in the VC space, at a time when the spotlight has been on the massive rounds for artificial intelligence companies. "AI companies are commanding the most attention in venture," the report said. Despite the slowdown in dealmaking, interest rate cuts by the Federal Reserve may stimulate activity. "Though 50 basis points won't be enough to jumpstart venture, it is a step in the right direction," said Emily Zheng, VC analyst at PitchBook. A revival of the IPO market could further accelerate VC deals by providing investors with more opportunities to exit their investments. PRIVATE FOR LONGER Leading startups like Stripe, OpenAI and SpaceX are choosing to stay private for longer, offering employees liquidity by doing secondary share sales instead of tapping the public markets. "Secondaries are the best of both worlds. Companies can stay private for longer and investors that want liquidity can get it," Zheng said. The rising appeal of private assets may also be encouraging some to delay their IPOs, especially if they secure ample funds from private market investors. "The democratization is going to come. The private market will continue to open and this new asset class is here to stay," said Howe Ng, head of analytics and investment solutions at private marketplace Forge Global (FRGE.N) , opens new tab. Sign up here. https://www.reuters.com/markets/us/venture-capital-investors-wary-dealmaking-despite-stock-market-momentum-report-2024-10-10/

2024-10-10 12:45

SAO PAULO, Oct 10 (Reuters) - Retail sales volumes in Brazil fell less than expected in August from July, government statistics agency IBGE said on Thursday. Sales in Latin America's largest economy were down 0.3% in the period, while economists polled by Reuters expected a decrease of 0.50%. In July, they had risen 0.6%. Brazil's retail sector has provided a big boost to economic activity in 2024, and the August figure marks only the second negative monthly reading so far this year, after June also saw a drop. Seven out of the eight sub-sectors surveyed by IBGE posted month-on-month declines in August, the statistics agency said, with personal and domestic use products the biggest drag with a 3.9% fall. On the other hand, IBGE added, retail sales grew 5.1% in August from the year-earlier period, compared to expectations for a 3.60% increase in the Reuters poll. Amid stronger-than-expected economic data, Brazil's central bank kicked off an interest rate-hiking cycle last month with a 25 basis-point increase to 10.75% and signaled more tightening ahead. Sign up here. https://www.reuters.com/markets/brazil-retail-sales-fall-less-than-expected-august-2024-10-10/

2024-10-10 12:18

MOSCOW, Oct 10 (Reuters) - The TurkStream pipeline that ships Russian gas to Turkey via the Black Sea could help Europe to cope with the expected loss of gas transited via Ukraine, Hungarian Foreign Minister Peter Szijjarto said on Thursday. A five-year deal between Kyiv and Moscow on Russian gas transit via Ukraine to Europe will expire on Dec. 31 2024, and the contract's extension is regarded as unlikely given the military conflict between the two ex-Soviet countries. Szijjarto, speaking at the St Petersburg International Gas Forum, also said that the loss of the Russian gas transit via Ukraine will not hurt Hungary as the country receives Russian gas via the TurkStream pipeline. "This alternative route may help not only Hungary, but other countries of Central Europe if they face a serious situation in case there is no transit via Ukraine," he said. Hungary, in contrast to most European Union countries, seeks to maintain close political and business ties with Russia. Ukraine has said it will not renew its deal with Russia, and Moscow has said the decision lies with Ukraine and Europe. Russia shipped about 15 billion cubic metres (bcm) of gas via Ukraine in 2023 - 8% of peak Russian gas flows to Europe via various routes in 2018-2019. Szijjarto said Hungary is satisfied with cooperation with Russian energy giant Gazprom (GAZP.MM) , opens new tab and that it has no attractive alternatives. He also said Hungary will sign an addendum to the gas contract with Gazprom later on Thursday. "This year we are receiving 6.7 billion cubic metres of gas altogether from Gazprom in Hungary... This will make TurkStream totally utilised in its full capacity," Szijjarto said. Sign up here. https://www.reuters.com/business/energy/hungary-says-turkstream-could-help-europe-if-ukrainian-gas-transit-stops-2024-10-10/