2024-10-04 14:28

TORONTO, Oct 4 (Reuters) - Canadian economic activity rebounded in September after contracting in the prior month as the pace of price increases cooled to its slowest in six months, Ivey Purchasing Managers Index (PMI) data showed on Friday. The seasonally adjusted index rose to 53.1 from 48.2 in August. A reading above 50 indicates an increase in activity. August's reading was the first move below the 50 no-change threshold in 13 months. The Ivey PMI measures the month to month variation in economic activity as indicated by a panel of purchasing managers from across Canada. The gauge of employment fell to an adjusted 51.6 from 54.7 in August, while the prices index was at 58.2, its lowest level since March, down from 63.4. The unadjusted PMI rose to 54.5 from 50.3. Sign up here. https://www.reuters.com/world/americas/canadas-ivey-pmi-shows-activity-expanding-september-2024-10-04/

2024-10-04 13:57

Oct 4 (Reuters) - Coinbase (COIN.O) , opens new tab will delist certain stablecoins in the European Economic Area by year's end, the cryptocurrency exchange said on Friday, as the industry braces for tougher regulation in the region. The European Union's landmark crypto regulatory framework, known as the Markets in Crypto-Assets (MiCA) regulation, introduced in early 2023, is set to be fully applied by December. It requires issuers of stablecoins - crypto tokens whose monetary value is pegged to a stable asset to protect from wild volatility - to meet strict transparency, liquidity, and consumer protection standards. "Given our commitment to compliance, we intend to restrict the provision of services to EEA users in connection with stablecoins that do not meet the MiCA requirements by December 30, 2024," the top U.S. crypto exchange said in an emailed statement. Coinbase plans to offer in November impacted EEA customers options to switch to authorized issuers like fintech firm Circle's USDC and EURC, whose value is pegged to the U.S. dollar and euro, respectively. Stablecoins have gained significant popularity in recent years, as financial heavyweights such as PayPal (PYPL.O) , opens new tab adopt them and the rapid integration into mainstream finance of the once-nascent digital assets sector. Sign up here. https://www.reuters.com/technology/coinbase-delist-some-stablecoins-europe-ahead-new-regulations-2024-10-04/

2024-10-04 13:49

Oct 4 (Reuters) - U.S. job growth accelerated in September and the unemployment rate slipped to 4.1% from August's 4.2%, further reducing the need for the Federal Reserve to maintain large interest rate cuts at its remaining two meetings this year. Nonfarm payrolls increased read more by 254,000 jobs last month after rising by an upwardly revised 159,000 in August, the Labor Department said on Friday. Economists polled by Reuters had forecast payrolls rising by 140,000 positions after advancing by a previously reported 142,000 in August. The initial payrolls count for August has typically been revised higher over the past decade. MARKET REACTION: STOCKS: S&P 500 E-minis extended 0.73% higher BONDS: The yield on benchmark U.S. 10-year notes rose to 3.934%, the two-year note yield rose to 3.8469% FOREX: The dollar index turned 0.6% higher FED FUNDS FUTURES: Odds of a 25-bp cut at the Fed's November meeting rose to 93% from around 71% before the data, according to LSEG calculations. COMMENTS: WASIF LATIF, PRESIDENT AND CHIEF INVESTMENT OFFICER, SARMAYA PARTNERS, PRINCETON, NEW JERSEY “This is definitely much stronger than what was expected. I think it’s catching quite a few people by surprise. It means that the 50-basis point rate cut that we already got – which was good for sort of psychology and in the overall sentiment; and the next rate cut might not need to be as big. The initial reactions are that yields are jumping, and the market is taking off some of the degree or the number of rate cuts off the table or pushing them further out. I think on the equity side, equity markets are still buoyant. It looks like they like this. So, it could be a case of good news is good news.” PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK "They were much stronger than expected and obviously it negates the fear of perhaps the economy moving to negative growth anytime soon... it basically tells us economic activity in the fourth quarter is likely to remain at a solid pace. The fact that you only had 13 cents rise in hourly wages is good news for the Fed. It's a blowout report, so it's a good surprise, but I also think it may now slow the pace of rate cuts." GENE GOLDMAN, CHIEF INVESTMENT OFFICER, CETERA INVESTMENT MANAGEMENT, EL SEGUNDO, CA "The number was phenomenal. It came in well above expectations. The unemployment rate came down and it shows the economy is strong." "The market is seeing good news as good news. This news today confirms that the economy is on solid footing. I'd view today's initial move in stocks with a little bit of caution because the dollar is strengthening and bond yields are higher," "All the data this week suggested the economy is strong. This puts a final nail in the coffin for the Fed to cut only 25 basis points." “Another point that the market should be concerned about is that average hourly earnings increased by 0.4% m/m, which was enough to push y/y number to 4%, a five-month high.” KARL SCHAMOTTA, CHIEF MARKET STRATEGIST, CORPAY, TORONTO “Blockbuster payrolls report by any measure. I think a no-landing scenario for the U.S. economy has suddenly become far more plausible. This is a report that is beautiful on the headline level as well as the internals. You're looking at a sustained rise in job creation over the last three months, the unemployment rate ratcheting down, the participation rate holding steady, all of which indicate that this is not a statistical aberration that might be washed out in coming months. So ultimately what this means is that Treasury yields are spiking across the front of the curve, rate cut expectations are being pulled back, and the expectation now would be for a Federal Reserve that treads far more cautiously in easing policy.” BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN "A pleasant surprise to the upside, but mentally the Fed is shaving about 68,000 from the headline payrolls number. This is because the Bureau of Labor Statistics has not yet revised their numbers from their latest benchmarking study. August payrolls are also the ones most often revised because there are all sorts of issues with people going back to school. "Despite the large upside surprise to the payrolls number, the aggregate weekly hours worked fell 0.1%. This could be because of Hurricane Helene, which wreaked havoc during the survey week. "Unless we see a big downside surprise with the November 1st report for October, the Fed will take this as a reason to cut only 25 bps." GLEN SMITH, CHIEF INVESTMENT OFFICER, GDS WEALTH MANAGEMENT, FLOWER MOUND, TEXAS "Friday's jobs report was stronger-than-expected and that gives the Federal Reserve flexibility to either cut interest rates by 25 basis points at their next meeting on November 7, or take a pause and revisit a potential rate cut in December. It was still the right decision for the Fed to cut rates by a deeper 50 basis points in September, which was essentially an insurance policy for the Fed to guard against any risk of a deterioration of the labor market, which had been slowing prior to Friday's report." "The labor market data may become clouded over the next few reports by a perfect storm of factors, such as the port strike and the disruptions from Hurricane Helene. While these data impacts aren't likely to change the Fed's interest rate course, it may make it tougher for both central bankers and investors to gauge accurately how the labor market is faring.” "The stock market has been living up to October's reputation of increased volatility, and we expect this choppiness to continue for the next few weeks as the market starts to navigate the uncertainty surrounding the election, the Federal Reserve's next move and corporate earnings reports." LINDSAY ROSNER, HEAD OF MULTI-SECTOR INVESTING, GOLDMAN SACHS ASSET MANAGEMENT (in emailed note) "Today’s data hit a grand slam with payrolls coming in strong, positive revisions, and unemployment falling. The economy is heading into the post-season solidly. This is a beat on every aspect and the Fed must be smiling as they got their bats out! This is a credit positive as the fundamentals of this economy are on strong footing." Sign up here. https://www.reuters.com/markets/us/view-us-sept-payrolls-jump-takes-nov-50-bp-cut-off-table-2024-10-04/

2024-10-04 12:28

PRAGUE, Oct 4 (Reuters) - The Czech Republic will seek European Union partners to help it contend with tougher EU CO2 emission rules next year, Transport Minister Martin Kupka and the country's main sector lobby said on Friday. The EU will lower a cap on average emissions from new vehicles sales to 94 grams/km from 116g/km. Exceeding that cap could lead to fines of 95 euros ($104.80) per excess CO2 g/km multiplied by the number of vehicles sold. The car industry is the Czech Republic's biggest sector, contributing around 9% of the country's GDP, and has warned of shrinking competitiveness as emissions limits get stricter from 2025, risking hefty fines. The country's Automotive Industry Association (AutoSAP) said addressing this was necessary. "Under current market conditions, it is virtually impossible to meet these targets, which would lead to massive penalties in the hundreds of billions of crowns for car manufacturers," said AutoSAP president Martin Jahn, who is also a board member at Volkswagen-owned Czech carmaker Skoda Auto (VOWG_p.DE) , opens new tab. "An early revision of the CO2 targets is essential." AutoSAP and Kupka said the country also wanted to assess the bloc's aim to ban combustion engine vehicles in 2035, part of EU climate goals. Kupka said he would seek other member states for support. "Together we will do everything to ensure we do not have to think about factory closures and job losses at home, or the loss of individual mobility," Kupka said. The EU passed a policy last year that will ban sales of new CO2-emitting cars in 2035, effectively ending sales of new combustion engine vehicles running on petrol and diesel. ($1 = 0.9065 euros) Sign up here. https://www.reuters.com/business/autos-transportation/czechs-seek-partners-challenge-eus-co2-goals-car-sector-2024-10-04/

2024-10-04 11:52

MUMBAI, Oct 4 (Reuters) - India's foreign exchange reserves crossed $700 billion for the first time on record, after climbing for seven straight weeks, on valuation gains and the central bank's dollar purchases. The forex reserves (INFXR=ECI) , opens new tab were at $704.89 billion, having risen by $12.6 billion in the week through Sept. 27 in their biggest weekly increase since mid-July 2023, Reserve Bank of India (RBI) data showed on Friday. India is only the fourth economy in the world to cross $700 billion in reserves after China, Japan, and Switzerland. The country has been boosting its forex reserves since 2013, when foreign investors pulled out due to weak macroeconomic fundamentals. Since then, stricter control on inflation, higher economic growth as well as narrower fiscal and current account deficits have helped draw in foreign funds, boosting reserves. Foreign inflows hit $30 billion so far this year, led mainly by investments in local debt after they were included in a key J.P. Morgan index. "Adequate FX reserves reduces currency volatility since RBI has adequate firepower to intervene if needed," Gaura Sen Gupta, economist at IDFC First Bank, said. "Moreover it adds to investor confidence which reduces the risk of sudden capital outflows." India's forex reserves have ballooned by $87.6 billion so far in 2024, already more than the near-$62 billion increase over the whole of last year. The increase last week was spurred by $7.8 billion in dollar purchases by the RBI, and $4.8 billion in valuation gains, according to Sen Gupta. The valuation gains were due to the decline in U.S. Treasury yields, a weaker dollar and the rise in gold prices, she said. In the week corresponding to the latest reserves data, the rupee strengthened past 83.50 to the dollar, likely spurring the RBI to step in to shore up its reserves. For several months, the RBI has intervened on both sides of the market to keep the rupee in a narrow trading range, which has made it the least volatile among emerging market currencies. RBI Governor Shaktikanta Das, on being questioned on the rupee's lack of volatility last month, said that higher volatility did not benefit the economy. Sign up here. https://www.reuters.com/world/india/indias-forex-reserves-top-700-bln-first-time-after-seven-week-surge-2024-10-04/

2024-10-04 11:46

Oct 4 (Reuters) - International Monetary Fund staff and officials in Ghana have reached an agreement on their third review of the West African country's $3 billion IMF loan programme, the fund said on Friday. The West African gold and cocoa producer is nearing completion of a debt-restructuring process under the G20's Common Framework initiative, after it defaulted on most of its $30 billion international debt in 2022. "Ghana has made remarkable progress on its public debt restructuring," the fund said in a statement, adding that the performance of the programme was "generally satisfactory." More than 90% of Ghana's bondholders have approved an overhaul of $13 billion worth of Eurobonds, the government said on Thursday, following a deal with bilateral creditors in June. "The authorities are committed to pursuing good-faith efforts to reach an agreement with other commercial external creditors," the IMF said. Once the staff-level agreement is approved by the IMF's executive board, Ghana will have access to $360 million in financing, the fund said. The IMF board approved Ghana's current lending programme, which expires in 2026, in May of last year. Ghana's debt restructuring is expected to reduce its debt stock by $4.7 billion and provide cash flow relief worth a total of $4.4 billion during the period of the IMF programme, the government said in June. "Economic growth in the first half of 2024 was much higher than initially envisaged," said the IMF. Ghana's economy grew at the fastest pace in five years in the second quarter, government data showed, and policymakers have started to lower interest rates on signs that inflation is easing. Sign up here. https://www.reuters.com/world/africa/imf-ghana-reach-staff-level-deal-3-bln-loan-programme-review-2024-10-04/