2024-04-30 18:12

Canadian dollar falls 0.7% against the greenback For April, the currency weakens 1.5% Canadian GDP increases 0.2% in February Bond yields climb, tracking U.S. Treasuries TORONTO, April 30 (Reuters) - The Canadian dollar weakened to an 11-day low against its broadly stronger U.S. counterpart on Tuesday as slower-than-expected domestic economic growth supported bets the Bank of Canada would cut rates more deeply than the Federal Reserve. Canada's gross domestic product (GDP) rose 0.2% in February, Statistics Canada said, missing estimates for a gain of 0.3%, while a preliminary estimate for March showed that GDP was "essentially unchanged". The economy is likely to have expanded at a 2.5% annualized rate in the first quarter, Canada's national statistics agency added. That's the fastest growth rate since the first quarter of 2023 but slightly slower than the BoC's latest forecast of 2.8%. "Lower expected growth in Canada and a more rate sensitive economy is likely to force BoC policy to diverge with the Fed in a meaningful way over the next few quarters," said Geoff Phipps, a trading Strategist and portfolio manager at Picton Mahoney. Money markets see a roughly 60% chance that the Canadian central bank begins cutting its benchmark interest rate in June and expect 54 basis points of easing in total by December, compared to 32 basis points from the Fed. The Canadian dollar was trading 0.7% lower at 1.3750 per U.S. dollar, or 72.73 U.S. cents, after earlier touching its weakest level since April 19 at 1.3760. For April, the loonie was down 1.5%, its biggest monthly decline since October. The move lower for the currency came as U.S. labor cost data boosted the U.S. dollar against a basket of major currencies and rising U.S. crude production weighed on oil, one of Canada's major exports. U.S. crude futures were down 1.1% at $81.73 a barrel. Canadian government bond yields moved higher across the curve, tracking moves in U.S. Treasuries. The 10-year was up 4.7 basis points at 3.808%. Sign up here. https://www.reuters.com/markets/currencies/c-posts-biggest-monthly-loss-since-october-rate-outlooks-diverge-2024-04-30/

2024-04-30 16:20

LONDON, April 30 (Reuters) - Austrian authorities have urged Raiffeisen Bank International (RBI) to drop a deal linked to a Russian oligarch fearing a backlash from the United States, people familiar with the matter said, a blow to RBI's plans to unlock funds stranded in Russia. RBI (RBIV.VI) New Tab, opens new tab, the biggest Western bank in Russia, wants to buy a stake in construction group Strabag linked to Oleg Deripaska for 1.5 billion euros ($1.6 billion), a contested deal that has renewed international pressure on the Austrian lender. In recent weeks, Austrian central bank officials have warned RBI about the deal, cautioning it could backfire if the U.S. penalises the bank, said one person with direct knowledge of those discussions. The central bank is responsible for oversight of Western sanctions in Austria and also watches for broader financial stability. Shares in RBI fell nearly 4% after the Reuters report, closing at 17.38 euros, against a 0.3% drop across the European banking sector (.SX7P) New Tab, opens new tab. RBI is buying the stake in Vienna-based Strabag from a company the construction group identified as earlier controlled by Oleg Deripaska New Tab, opens new tab. The move had come under fire from the U.S. Treasury because Deripaska is sanctioned, exacerbating tensions between Washington and RBI, which is already under scrutiny from U.S. sanctions enforcement agency OFAC. Other Austrian public officials have also privately cautioned the bank against the sale, believing it could be declared a breach of sanctions, said two people with direct knowledge of those discussions. One of those people said RBI had been warned by U.S. authorities that they could not give their blessing for the deal and could impose a penalty if it pressed ahead. Although it is unclear what that penalty might be, U.S. authorities have the power to fine or even take the drastic step of shutting a bank out of dollar payments. The sale is embarrassing for Austria, given international criticism of the country for being too friendly towards Russia, one of the people with direct knowledge of officials' thinking told Reuters. A spokesperson for RBI said the "acquisition of Strabag shares remains subject to the compliance review of RBI", adding that it "will not buy the shares from Mr. Deripaska nor any other sanctioned person or entity". A central bank spokesperson declined to comment. A spokesperson for Deripaska said he had "had nothing to do with Strabag for a long time" and would not comment, describing Western sanctions against him as "totally misguided" and "based on false information". RUSSIA BOND Two years after Russia's full-scale invasion of Ukraine, RBI's continued presence in Russia underlines the ties between Moscow and Vienna - whether via Russian gas pipelines or Vienna serving as a hub for cash from Russia and former Soviet states. RBI's Russia business is a money spinner but has tarnished the group's image. Investors welcomed the prospect of the Strabag deal but the bank was forced to drop a planned bond sale when the U.S. objections emerged in a Reuters report. The change of tone in Vienna, where officials and ministers have so far sought to stymie international pressure on RBI, is a rare challenge at home to the bank that is part of an industrial group underpinning Austria with wide political influence. RBI has resisted pressure to cut ties with Moscow, although it says it has long explored doing so. Strabag is one of Europe's biggest construction firms and built the Olympic stadium for the Sochi winter games and luxury apartments in Moscow. Senior U.S. Treasury officials underscored their concerns in meetings with the bank and Austrian authorities earlier this year, sources have told Reuters. They believe Deripaska will benefit from the sale. One person familiar with the bank's thinking previously told Reuters that in light of the U.S. position, the bank itself was preparing to drop the deal. RBI is a financial lifeline for millions of Russian customers who want to send euros or dollars abroad. Western regulators want this to change. So far, key Austrian officials, irked by what they see as U.S. bullying of a small, neutral country, have fought the bank's corner. Recently, Austria pressured Ukraine to remove RBI from a Ukrainian blacklist, holding out on backing fresh EU sanctions on Russia until it did. ($1 = 0.9321 euros) Sign up here. https://www.reuters.com/markets/deals/austrian-officials-warn-off-raiffeisen-russian-oligarch-deal-sources-say-2024-04-30/

2024-04-30 15:51

BOGOTA, April 30 (Reuters) - Colombia's inflation in April is expected to hit 0.59%, extending its deceleration and taking 12-month consumer price growth to its lowest level in 27 months, according to the median of a Reuters poll published on Tuesday. Inflation estimates for April from 20 analysts ranged from 0.45% and 0.71%. If the median is met, 12-month inflation through April 30 would slow to 7.15%, reaching its lowest level since January 2022. "April is very important because it is the first month where we will be able to effectively see how consistent the decline in inflation is, because the statistical base effects compared to last year have stopped," said Sergio Olarte, chief economist for Scotiabank in Colombia. However, inflation would still be more than double the central bank's 3% target. The government's DANE statistics agency will publish April inflation data on May 8. Most analysts expect inflation to behave in a way that would allow the central bank to make further cuts to its benchmark interest rate in the short term. The bank is expected to cut the rate by 50 basis points to 11.75% on Tuesday. That said, analysts now expect inflation to close the year at 5.67%, up from the 5.51% forecast in last month's survey. "The general rise in expectations for the end of the year is explained because public services, especially gas and water, have risen quite a bit, so that is reflected in the models," Olarte explained. According to the survey, inflation will end 2025 at 3.80%, as per last month's poll, while inflation expectations for 2026 slowed to 3.20% from 3.40% last month. Sign up here. https://www.reuters.com/world/americas/colombia-april-inflation-slow-059-or-715-annual-rate-2024-04-30/

2024-04-30 15:15

DUESSELDORF, Germany, April 30 (Reuters) - Germany's IG Metall union on Tuesday said it had preliminary talks with Carlyle (CG.O) New Tab, opens new tab on the investment firm taking a majority stake in Thyssenkrupp Marine Systems (TKAG.DE) New Tab, opens new tab and agreed to push for an agreement as quickly as possible. In a newsletter seen by Reuters, the union however insisted that a stake sale to private equity investors could only happen if the state stepped in as well to secure the conglomerate's naval shipbuilding activities. The economy ministry was not immediately available for comment. "A first round of negotiations in a small group is scheduled for the beginning of May," IG Metall said, adding that Carlyle was carrying out due diligence about taking a majority stake. Thyssenkrupp said last month it was considering selling a stake in its Marine Systems unit. Carlyle had confirmed its involvement in the talks but declined to elaborate. Thyssenkrupp is aiming to sell a stake of around 25% in the unit mainly due to the burden of providing billions of euros of guarantees to clients. "...a sale to private equity investors can only happen if the state assumes its responsibility and steps in to secure naval shipbuilding as a key technology in the long term," the union said. "There is currently broad political support for this." Sign up here. https://www.reuters.com/markets/deals/union-announces-talks-with-carlyle-thyssenkrupp-marine-systems-investment-2024-04-30/

2024-04-30 14:41

WARSAW, April 30 (Reuters) - Poland's government on Tuesday adopted a revision to its plan on spending European Union recovery funds, changing some of the previous cabinet's proposals so it can use up most of the money within the available time frame. Under the National Recovery Plan to help EU countries bounce back from the COVID-19 pandemic and with energy transition, Poland gained access to nearly 60 billion euros, made up of 25.3 billion in grants and 34.5 billion in cheap loans. Rows over the rule of law between the previous nationalist government and Brussels resulted in the funds being frozen. They have been released this year after Donald Tusk's pro-European government took power, but it now has less time to spend the money. Changes to the plan affect a quarter of the 55 reforms laid out and nearly half of the investments, and include replacing a planned tax on combustion engine vehicles with subsidies for buying electric cars, as well as allocating additional funds to food security and agriculture, Poland's development funds ministry said in a press release. The government will send the revised plan to Brussels, which will have two months for a formal assessment, and expects approval of the modified implementation decision by the EU's Economic and Financial Affairs Council (ECOFIN) on July 16. It expects the annexing of financing and loan deals with the European Commision in late July or early August, necessary for Poland to make further payment requests. Poland plans to submit its second and third request for EU funds at the beginning of September and expects to be reimbursed at the end of 2024, the ministry said in the release. Sign up here. https://www.reuters.com/world/europe/poland-adopts-revised-plan-tap-eu-recovery-funds-2024-04-30/

2024-04-30 13:34

U.S. crude output rises to 13.15 million bpd in Feb Hopes of Israel-Hamas ceasefire agreement strengthen Investors watch two-day Fed monetary policy meeting US crude stocks rose by 4.91 mln barrels last week -API HOUSTON, April 30 (Reuters) - Oil prices fell 1% on Tuesday, extending losses from Monday, on the back of rising U.S. crude production, as well as hopes of an Israel-Hamas ceasefire. Brent crude futures for June , which expired on Tuesday, settled down 54 cents, or 0.6%, at $87.86 a barrel. The more active July contract fell 87 cents to $86.33. U.S. West Texas Intermediate crude futures were down 70 cents, or 0.9%, at $81.93. The front-month contract for both benchmarks lost more than 1% on Monday. U.S. crude production rose to 13.15 million barrels per day (bpd) in February from 12.58 million bpd in January in its biggest monthly increase since October 2021, the Energy Information Administration said. Meanwhile, exports climbed to 4.66 million bpd from 4.05 million bpd in the same period. U.S. crude oil inventories rose by 4.91 million barrels in the week ended April 26, according to market sources citing American Petroleum Institute figures on Tuesday. Stocks were expected to have fallen by about 1.1 million barrels last week, an extended Reuters poll showed on Tuesday. Official data from the EIA is due on Wednesday morning. Gasoline inventories fell by 1.483 million barrels, and distillates fell by 2.187 million barrels. Expectations that a ceasefire agreement between Israel and Hamas could be in sight have grown in recent days following a renewed push led by Egypt to revive stalled negotiations between the two. However, Israeli Prime Minister Benjamin Netanyahu vowed on Tuesday to go ahead with a long-promised assault on the southern Gaza city of Rafah. "Traders believe some of the geopolitical risk is being taken out of the market," said Dennis Kissler, senior vice president of trading at BOK Financial. "We're not seeing any global supply being taken off the market." Continued attacks by Yemen's Houthis on maritime traffic south of the Suez Canal - an important trading route - have provided a floor for oil prices and could prompt higher risk premiums if the market expects crude supply disruptions. Investors also eyed a two-day monetary policy meeting by the Federal Reserve Open Market Committee (FOMC), which gathers on Tuesday. According to the CME's FedWatch Tool, it is a virtual certainty that the FOMC leaves rates unchanged at the conclusion of the meeting on Wednesday. "The upcoming Fed meeting also drives some near-term reservations," said Yeap Jun Rong, market strategist at IG, adding that a longer period of elevated interest rates could trigger a further rise in the dollar while also threatening oil demand outlook. Some investors are cautiously pricing in a higher probability that the Fed could raise interest rates by a quarter of a percentage point this year and next as inflation and the labour market remain resilient. U.S. product supplied of crude oil and petroleum products, EIA's measure of consumption, rose 1.9% to 19.95 million bpd in Feb. However, concerns over demand have crept up as diesel prices weakened. Balancing the market, output from the Organization of the Petroleum Exporting Countries has fallen in April, a Reuters survey found, reflecting lower exports from Iran, Iraq and Nigeria against a backdrop of ongoing voluntary supply cuts by some members agreed with the wider OPEC+ alliance. A Reuters poll found that oil prices could hold above $80 a barrel this year, with analysts revising forecasts higher on expectations that supply will lag demand in the face of Middle East conflict and output cuts by the OPEC+ producer group. Sign up here. https://www.reuters.com/business/energy/oil-dips-investors-eye-israel-gaza-truce-talks-us-fed-policy-review-2024-04-30/