2024-02-23 00:58

BUENOS AIRES, Feb 22 (Reuters) - Argentine President Javier Milei said on Thursday he will propose a bill to penalize the central bank from financing the nation's treasury. Milei, speaking in an interview with local news broadcaster TN, said he would look to stop the monetary authority from printing more bills in a bid to rein in inflation, which currently tops 200% annually. The libertarian president, who took office in December with a promise of controlling the economy in a country facing spiraling poverty, said the International Monetary Fund (IMF) supports his policies. "The fund is very satisfied with what we're doing," Milei said following a meeting earlier in the day with Gita Gopinath, the fund's first deputy managing director. Gopinath said in a statement that the Milei administration's "initial actions are starting to bear fruit, although the path ahead remains challenging." The IMF recognized Argentina's efforts to establish a strong fiscal anchor. In December, Argentina devalued the local peso currency by more than 50% against the U.S. dollar. "Consistent and well-communicated monetary and (foreign-exchange) policy will be necessary to continue to bring down inflation durably, rebuild reserves, and strengthen credibility," Gopinath said. https://www.reuters.com/world/americas/argentina-president-push-bill-penalizing-cenbank-financing-treasury-2024-02-23/

2024-02-23 00:56

Britain targets arms supply chain and revenue sources Package comes day after EU approves its own sanctions UK also planning to tighten shipping restrictions LONDON, Feb 22 (Reuters) - Britain announced a new package of sanctions against Russia on Thursday, saying it was seeking to diminish President Vladimir Putin's weapons arsenal and war chest two years after the invasion of Ukraine. The package, covering more than 50 individuals and entities, was announced two days before Saturday's second anniversary of the full-scale invasion and is part of a coordinated Western effort to restrict the Russian economy. "Our international economic pressure means Russia cannot afford this illegal invasion. Our sanctions are starving Putin of the resources he desperately needs to fund his struggling war," Foreign Secretary David Cameron said in a statement. The European Union on Wednesday approved its own package of sweeping sanctions, banning nearly 200 entities and individuals accused of helping Moscow procure weapons or of involvement in kidnapping Ukrainian children. Britain sanctioned companies linked to the Russian ammunition industry, including what it said was the largest, the Sverdlov State Owned Enterprise, and targeted sources of revenue in the metals, diamonds and energy industries. That included a Turkish company Britain said was supplying electronics to Russia, three electronics companies in China and executives at Russian diamond producer Alrosa. It also added managers of copper producer UMMC to the list. Alrosa did not immediately respond to a request for comment. The foreign office also imposed sanctions on what it said were key Russian importers and manufacturers of machine tools used to manufacture defence systems and components ranging from missiles and engines to tanks and fighter jets. The government also said it was preparing to strengthen its powers to target "malign Russian shipping activity and individual 'shadow fleet' vessels used by Russia to soften the blow of oil-related sanctions". China called the sanctions "unilateral acts that have no basis in international law", and argued that it has "always adhered to an objective and fair position" on the Ukraine issue while actively committed to promoting peace talks. "We would like to inform the British side that any action that undermines China's interests will be resolutely countered by the Chinese side," a spokesperson at the Chinese embassy in the United Kingdom said in a statement. Britain this week imposed sanctions on six individuals in charge of the Arctic penal colony where Russian opposition leader Alexei Navalny died. There are more than 2,000 Russian individuals, companies and groups on Britain's sanctions list. https://www.reuters.com/world/uk/uk-launches-new-russian-sanctions-package-mark-invasion-anniversary-2024-02-22/

2024-02-23 00:37

Feb 22 (Reuters) - U.S. Federal Reserve policymakers should delay interest rate cuts by at least another couple more months to see if a recent uptick in inflation signals stalling progress toward price stability or is just a bump in the road, Fed Governor Christopher Waller said on Thursday. Core consumer prices rose 0.4% in January from a month earlier, well above the pace consistent with the Fed's 2% annual inflation goal. That, along with a 3.3% annualized increase in fourth-quarter GDP and the more than 350,000 jobs added to the U.S. economy in January, "has reinforced my view that we need to verify that the progress on inflation we saw in the last half of 2023 will continue and this means there is no rush to begin cutting interest rates to normalize monetary policy," Waller said in remarks prepared for delivery in Minneapolis. Progress on inflation, he said, has been both "real" and "considerable." Accounting for the latest data, he said, January inflation by the core personal consumption expenditures index - to be released next week - will likely come in at 2.8%. It stood at 4.9% a year ago. While inflation is still "likely" on track to reach the Fed's 2% goal, he said, "I am going to need to see at least another couple more months of inflation data before I can judge whether January was a speed bump or a pothole." And with most other economic data suggesting the economy is still fundamentally solid, he said, "the risk of waiting a little longer to ease policy is lower than the risk of acting too soon and possibly halting or reversing the progress we’ve made on inflation." The U.S. central bank has held its policy rate steady in the 5.25%-5.5% range since last July, and minutes of its policysetting meeting last month show most central bankers were, like Waller, worried about moving too quickly to ease policy. Waller's take on the economy and monetary policy have often been a bellwether for the Fed as a whole, and his remarks Thursday marked a change in tone from his last speech, in which he said the Fed is within "striking distance" of its inflation goal. Now, he said, he will be closely watching wage growth, economic activity and employment not only for any signs of weakness that could force the Fed to act more quickly, but also for whether they are "consistent with continued progress toward 2% inflation." Waller also pushed back on the idea that the Fed risks sending the economy into recession if it waits too long to cut rates, saying the Fed can afford to "wait a little longer" to ease policy. "In the absence of a major economic shock, delaying rate cuts by a few months should not have a substantial impact on the real economy in the near term," Waller said. "And, I think I have shown that acting too soon could squander our progress in inflation and risk considerable harm to the economy." Traders of futures contracts tied to the Fed's policy rate are betting the Fed will not start cutting interest rates until its June 11-12 meeting. https://www.reuters.com/markets/us/feds-waller-sees-no-rush-cut-interest-rates-2024-02-23/

2024-02-23 00:00

LONDON, Feb 22 (Reuters) - Fund managers have been scaling up short positions on zinc, betting that this year's weakest base metals price performer has further downside. Investment fund positioning is now the most bearish it's been since the London Metal Exchange (LME) first launched its Commitments of Traders Report in 2018. LME three-month zinc , currently trading around $2,400 per metric ton, is already down by 8% on the start of the year. Zinc's use in galvanised steel means it is heavily exposed to the fortunes of the ailing global construction sector, particularly that in China. The global zinc market is generating a lot of surplus metal, some of which has just turned up in LME warehouses, lifting stocks to the highest level since June 2021. More may be on the way judging by LME time-spreads but with the price now eating into the cost curve, just how much further can zinc fall? BEAR ATTACK Fund managers lifted short positions on the LME zinc contract to 60,492 contracts, or just over 1.5 million tons, as of the close of business last Friday. The previous record short positioning of 54,935 contracts occurred in August last year. There are still plenty of investment funds keeping the faith with zinc after the LME price bounced off a six-month low of $2,278 on Feb. 12. But even on a net basis the collective short of 18,012 contracts is still the largest since 2018, exceeding the previous point of maximum bearish positioning seen in February 2020, when China was leading the world into COVID-19 lockdown. It's worth noting that "other financial institutions", covering index providers and insurance players, are still net long of zinc but at much reduced levels relative to the 2018-2021 period. ZINC FLOOD The accumulation of speculative bear bets on the London zinc contract has played out in tandem with fast-rising LME warehouse stocks. A total 72,750 tons of zinc were delivered onto LME warrant in Singapore between Feb. 6 and 16, lifting headline inventory to 228,500 tons. The last time LME stocks were so high was in the first half of 2021, when they peaked at 294,025 tons. Global commodities trader Trafigura is reported to be delivering metal from off-exchange shadow storage into an on-exchange rent-sharing warehouse deal. When LME stock movements become defined by warehousing dynamics, it's a sure sign there's a lot of surplus metal floating around, even if it's not always visible. The International Lead and Zinc Study Group estimates the global refined zinc market notched up a 204,000-ton supply-usage surplus last year and its most recent forecast in October was for an even bigger 367,000-ton glut this year. More large-volume deliveries into the LME system are quite possible, if LME time-spreads are anything to go by. The benchmark cash-to-three-month spread has moved into super-contango this week. It was valued at $42.50 per ton at Wednesday's close, the widest it's been in at least two decades. Higher interest rates are of course a factor in the cost of carry but this week's sudden widening in the spread structure looks ominous. INTO THE COST CURVE With market optics deteriorating, it's not hard to see why investment funds are piling on the bear pressure. But just how much more price downside is there? The zinc price is already trading deep into the production cost curve. Analysts at Citi calculate that 90th percentile mine costs averaged $2,600 per ton last year. Several mines have already gone into care and maintenance, most notably Boliden's (BOL.ST) , opens new tab Tara mine in Ireland and Nyrstar's (NYR.BR) , opens new tab Middle Tennessee complex. Price-induced cutbacks and unexpected outages such as the fire at the new Ozerny mine in Russia have pushed the mined concentrates segment of the market into deficit. Treatment charges, the fees levied by a smelter for converting concentrate into metal and a good indicator of raw materials availability, are currently assessed by price reporting agency Fastmarkets at $70-100 per ton over LME cash. That's a long way off last year's benchmark of $274 per ton, which tells you how much concentrates availability has tightened over the last year. Lower treatment charges squeeze smelter margins and there have already been casualties. Nyrstar, which is owned by Trafigura, has placed its Budel plant in the Netherlands on care and maintenance. Low treatment charges have combined with low physical metal premiums and high power costs to undermine the smelter's profitability. This is all part and parcel of the building supply response to market oversupply and low prices. It does, however, create a tension with all the new short positions being established by the fund community. How this tension is resolved will in part depend on just how much more zinc makes its way from the storage shadows to the LME warehouse system. The opinions expressed here are those of the author, a columnist for Reuters https://www.reuters.com/markets/europe/funds-amass-record-bear-bets-zinc-lme-stocks-jump-2024-02-22/

2024-02-23 00:00

Feb 22 (Reuters) - JPMorgan Chase (JPM.N) , opens new tab CEO Jamie Dimon has sold about $150 million of his shares in the bank, a SEC filing showed on Thursday, marking the first time the head of the largest U.S. lender has sold shares since taking charge in 2005. Dimon and his family intend to sell 1 million of their 8.6 million shares, the bank had said in a filing last October. Dimon, one of the longest serving chief executives on Wall Street, has sold off 821,778 shares of the bank so far. The bank has a market capitalization of more than $527 billion, according to LSEG data. The sale is not related to leadership succession and the bank chief had no current plans to sell more stock, but could consider doing so in the future, a company spokesperson said in October. Dimon's compensation climbed about 4.3% to $36 million for 2023. JPMorgan reported its biggest-ever annual profit last year. It also acquired failed regional lender First Republic Bank in May, which has helped to bolster profit. https://www.reuters.com/markets/us/jpmorgan-ceo-dimon-sells-about-150-mln-his-shares-sec-filing-says-2024-02-22/

2024-02-22 23:54

SAO PAULO, Feb 22 (Reuters) - Brazilian miner Vale (VALE3.SA) , opens new tab reported on Thursday a 35% decrease in its net profit for the fourth quarter from a year earlier, hit by higher provisions related to its joint venture Samarco. Vale, one of the largest iron ore producers in the world, posted a $2.42 billion net profit for the quarter ended in December, while analysts polled by LSEG were expecting a $4.15 billion profit. A $1.2 billion provision related to charges from the 2015 collapse of a tailings dam that caused a giant mudslide that killed 19 people and severely polluted the Rio Doce river hit Vale's bottom line. BHP (BHP.AX) , opens new tab, which was Vale's partner in the Samarco joint venture that owned the dam, said last week it would record another $3.2 billion impairment related to the case. Recurring adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) grew 37% in the quarter from a year earlier to $6.33 billion, while analysts had estimated $6.32 billion. Sales revenue rose 9.3% to $13.05 billion, versus $13.15 billion forecast by analysts. Vale's earnings come as succession at the helm of the company is uncertain, with its board divided between re-electing current chief executive Eduardo Bartolomeo and choosing a new name. (This story has been corrected to change the currency of LSEG estimates to US dollars from reais, in paragraphs 5 and 6) https://www.reuters.com/markets/commodities/brazils-vale-fourth-quarter-profit-falls-24-bln-2024-02-22/