2024-01-04 11:30

LONDON, Jan 4 (Reuters) - British clothing retailer Next's (NXT.L) sales growth will likely be moderated if disruption to shipments through the Suez Canal due to attacks by Iran-backed Yemeni Houthi militants in the Red Sea continues through 2024, its boss said on Thursday. Next CEO Simon Wolfson said the issue, if it persists, will result in a delay of stock arriving in the United Kingdom of around two and a half weeks as shipments are diverted around Africa's southern Cape of Good Hope. He said Next, which sources the majority of its products from Asia, could mitigate this through earlier ordering or using some air freight. "It will be a factor if it continues, it will moderate sales growth in that we'll have slightly less stock in the country than we would like," Wolfson told Reuters after the retailer updated on Christmas trading which drove its shares up 5%. Global shipping firms Maersk (MAERSKb.CO) and Hapag-Lloyd (HLAG.DE) said on Tuesday their container ships would continue to avoid the Red Sea route following a weekend attack on one of Maersk's vessels. Next is one of the first major retailers to comment on the disruption after Inter IKEA in December warned of potential product shortages. Wolfson, however, said the issue needed to be put in the context of Next's supply chains. "If I look at the amount of stock we've got today, it's probably about 15 to 17 times the amount of stock that we sell in a week," he said. "So if two weeks of that is late, it means your stock levels are not optimal but it's not like you've got nothing on the shelves." He said consumers would notice in that some of the best selling lines might run out and some sizes they were hoping to find might not be available. Wolfson said Next has made an allowance in its financial guidance for the 2024/25 year for higher sea freight costs. Despite that, Next does not expect to raise selling prices for consumers for the spring/summer season. https://www.reuters.com/business/retail-consumer/red-sea-attacks-could-moderate-growth-uks-next-says-ceo-2024-01-04/

2024-01-04 11:28

STOCKHOLM, Jan 4 (Reuters) - Rescue services on Thursday evacuated motorists from hundreds of cars stuck overnight on Swedish and Danish roads as heavy snowfall, strong winds and icy conditions led to big traffic jams. In Sweden, the military mobilised tracked vehicles to aid the evacuation and bring food and water to those who were stranded on a motorway in southern Sweden. The Swedish transport agency said it expected the affected stretch of the E22 road between Horby and Kristianstad to reopen Friday, after the road clogged up with vehicles on Wednesday as trucks got stuck and ploughs struggled to clear the roadway. Many cars were abandoned as the evacuation continued, while others were able to turn around as rescue workers cut holes in the metal barriers separating southbound and northbound lanes, news agency TT reported, citing rescue services. https://www.reuters.com/world/europe/hundreds-motorists-stuck-snow-overnight-southern-sweden-denmark-2024-01-04/

2024-01-04 11:09

A look at the day ahead in U.S. and global markets from Mike Dolan A relatively soothing bond market reading of the Federal Reserve's latest meeting minutes has helped calm the new year horses, but edgy geopolitics and oil price gains still rankle. Even though Wall St stock indexes (.SPX), (.IXIC) clocked a second straight day of hefty losses on Wednesday - led this time by the biggest one-day drop in small cap stocks (.RUT) since the March regional bank crunch - bonds rallied on the minutes. While the Fed predictably gave no timeline for rate cuts this year, it flagged impressive disinflation and concerns about "overly restrictive" policy into a slowing economy - and risks to its dual mandate of stable prices and maximum employment in the event of an "abrupt downshift" in labor markets. But Treasuries - where 10-year yields have retreated about 5 basis points from Wednesday's 4% peaks - got an additional fillip from a Fed discussion about how it may trail a slowing of its balance sheet rundown - or "quantitative tightening" (QT) process. Although Fed officials said market liquidity was still abundant, some pointed to the steep drop in daily takeup of the Fed's "reverse repo" money draining facility and said it would be "appropriate" to begin discussing the factor that may lead the central bank to slow the balance sheet runoff and halt QT. The effect of the Fed minutes combined with news that U.S. job openings fell to nearly a three-year low in November as the labor market gradually cools and an ISM manufacturing survey showing another month of contracting activity and falling input prices. With the fourth-quarter corporate earnings season looming next week, the cooling of the wider economy has seen the U.S. economic surprise index on the cusp of turning negative for the first time since May. Richmond Fed boss Thomas Barkin struck a dovish note on Wednesday and flagged "real progress" on inflation that made a soft economic landing "increasingly conceivable". The upshot of all the new information was another slight drop in the futures' market chances of first Fed rate cut by March to 75% - but with 146 bps of rate cuts still priced for the whole year. And U.S. stock futures have caught a break and are trading higher at last before Thursday's open. The dollar index (.DXY) retreated from near one-month highs as U.S. yields subsided. SUPPLY CHAIN JITTERS Ahead of Friday's December employment report, Thursday's data diary throws up ADP's private sector jobs reading and Challenger's layoff numbers for the same month - as well as weekly jobless claims. But as many eyes may be on the New York Fed's global supply chain pressure index - with fears of an escalation of the Middle East conflict increasing jitters about shipping supply chains and oil prices. Members of the U.N. Security Council on Wednesday called on Yemen's Iran-aligned Houthis to halt their attacks on shipping in the Red Sea and Gulf of Aden, saying they are illegal and threaten regional stability, freedom of navigation and global food supplies. But tensions in Iran increased as its elite Revolutionary Guards and First Vice President Mohammad Mokhber vowed revenge for explosions this week that killed nearly 100 people at a ceremony to commemorate top commander Qassem Soleimani, who was killed by a U.S. drone in 2020 in Iraq. Oil rose more than 1% on Thursday - with year-on-year U.S. crude flipping to its most positive since October - and added to gains in the previous session on concerns over Middle Eastern supply following disruptions at an oilfield in Libya and heightened tensions regarding the Israel-Hamas war. U.S. crude gains were spurred by news the U.S. government was seeking three million barrels to re-fill its strategic petroleum reserve. In Europe, headline annual inflation rates for last month climbed again - but monthly readings were more subdued and below many forecasts. Key diary items that may provide direction to U.S. markets later on Thursday: * U.S. Dec ADP private sector jobs, Dec Challenger layoffs, weekly jobless claims, NY Fed's Dec global supply chain pressure index, U.S. Dec final S&PGlobal service sector survey * U.S. Treasury sells 4-week bills * U.S. corporate earnings: Conagra brands, Walgreens Boots Alliance, Lamb Weston Holdings (This story has been refiled to remove the repetitive paragraph 7) https://www.reuters.com/markets/us/global-markets-view-usa-2024-01-04/

2024-01-04 10:27

MUMBAI, Jan 4 (Reuters) - The Indian rupee ended slightly stronger on Thursday, aided by dollar inflows, even as most of its Asian peers were on the back foot as investors moderated their expectations of early U.S. rate cuts this year. The rupee ended at 83.23 against the U.S. dollar, higher by 0.05% compared with its close at 83.2750 in the previous session. The dollar index edged lower to 102.14 after touching a more-than-two-week high in the New York session, supported by an uptick in U.S. yields and tepid risk appetite. While the rupee hovered in a tight range in the earlier half of the session, dollar inflows post the mid-day fixing window aided gains in the local unit, a foreign exchange trader at a private bank said. But "constant (dollar) buying by state-run banks," kept the rupee's gains constrained, the trader added. Most Asian currencies weakened, with the Korean won leading losses down by 0.3%. The rupee's prevailing tight range has made the market "lacklustre," and till it breaks on either side, it's tricky to assess the overall trend, said Abhilash Koikkaraa, head of forex and rates at Nuvama Professional Clients Group. Minutes from the U.S. Federal Reserve's December meeting, released on Wednesday, signalled a growing sense that inflation is under control but offered no direct cues on when rate cuts might commence. The Fed is "making real progress" towards controlling inflation and the hoped-for soft landing is "increasingly conceivable," Richmond Federal Reserve President Thomas Barkin said on Wednesday. Investors now await U.S. initial jobless claims data due later in the day followed by the key non-farm payrolls and unemployment data on Friday. The unemployment rate likely ticked up to 3.8% in December, up from 3.7% in November, according to a Reuters poll. https://www.reuters.com/markets/currencies/rupee-closes-slightly-higher-supported-by-dollar-inflows-2024-01-04/

2024-01-04 10:16

MUMBAI, Jan 4 (Reuters) - Indian banks disbursed some employee benefits through the digital rupee in December, helping the Reserve Bank of India meet its target of one million daily transactions by end-2023, three sources directly familiar with the development said. The central bank digital currency (CBDC), called the e-rupee, has been devised as a digital alternative to physical cash and has been built using distributed-ledger technology. The RBI started its e-rupee pilot in December 2022 but transactions averaged only 25,000 a day by the end of October, even though its use case was significantly broadened by linking it to the popular United Payments Interface (UPI), a framework that facilitates peer-to-peer money transfer via mobile apps. However, last month some large private and state-run lenders disbursed amounts related to employee benefit schemes directly to employees' CBDC wallets, instead of their salary accounts, the first source familiar with the pilot said. These lenders included HDFC Bank (HDBK.NS), Kotak Mahindra Bank (KTKM.NS), Axis Bank (AXBK.NS), Canara Bank (CNBK.NS), and IDFC First Bank (IDFB.NS) the second source said. The RBI expects non-financial firms to follow suit as well, helping boost transactions further, the source added. Even the user base has been steadily growing ... "to about 4 million users currently, up from 3 million in December," a third executive familiar with the pilot said. The sources declined to be identified as they are not authorised to speak to the media. The RBI did not immediately respond to an email seeking comment. Globally, countries including China, France and Ghana are in the pilot stages of their CBDC projects. Others like Nigeria have rolled out their digital currency, but with limited success despite offering rewards like discounts on auto-rickshaw rides. Indian banks too are offering incentives for e-rupee transactions, following a nudge from the RBI to boost volumes, Reuters had reported earlier. "Compensating employees using the CBDC is a good step," Sharat Chandra, co-founder of India Blockchain Forum said. Other avenues such as toll tax collections can also be included to further encourage adoption, he added. (This story has been corrected to replace ICICI Bank and IDBI Bank with Axis Bank, IDFC First Bank and Canara Bank in paragraph 5) https://www.reuters.com/business/finance/indias-digital-currency-transactions-top-1-mlnday-dec-sources-2024-01-04/

2024-01-04 06:39

Wall Street see-saws after labor market data European shares snap New Year losing streak Euro zone data lifts euro and bond yields Oil falls in choppy trade, dollar ends flat Graphic: World FX rates NEW YORK, Jan 4 (Reuters) - Bonds sold off and global equity markets failed to fully shake off New Year blues on Thursday after U.S. unemployment data indicated a resilient labor market, tempering expectations of Federal Reserve interest rate cuts in 2024. The yield on 10-year Treasuries jumped above 4% in a sharp reversal from last week, when the benchmark note slid to a five-month low of 3.783% on recent data showing inflation by some measures had declined close to the Fed's 2% target. The focus has turned to the U.S. central bank's efforts to steer the economy to a soft landing. "The real federal funds rate doesn't need to be as high and as restrictive as it currently is. But the Fed will need more evidence of inflation progress to get those cuts," said Roosevelt Bowman, senior investment strategist at Bernstein Private Wealth Management in New York. "So that's where we would say, 'You know what? The market is probably a little bit ahead of itself here in terms of the number of cuts and the need to cut.'" Major equity indexes in Europe closed higher, with the pan-regional STOXX 600 index (.STOXX) up 0.69%, helping MSCI's gauge of stocks across the globe (.MIWD00000PUS) to tread higher for most of the session. Wall Street closed mixed, with the Dow (.DJI) eking out a gain as the Nasdaq (.IXIC) and the S&P 500 (.SPX) dived, to pull MSCI's global index close down 0.03%. The number of Americans filing new claims for unemployment benefits fell more than expected last week, data showed. Separately, the ADP National Employment Report showed U.S. private employers hired more workers than expected in December. "The combination of better-than-expected ADP and lower-than-expected-jobless claims was enough to inspire a little bit of selling pressure on Treasuries," said Ben Jeffery, a U.S. rates strategist at BMO Capital Markets in New York. The reports "definitely moderate the odds of a near-term rate cut from the Fed just given the fact that the job market remains in a relatively good place," he said. The yield on 10-year Treasuries rose 9.2 basis points to 4.00%. Minutes from the U.S. central bank's December policy meeting offered few clues on when the Fed might start cutting rates. Traders see a 66.4% chance for at least a 25-basis point (bps) rate cut in March and about a 92% probability in May, according to the CME Group's FedWatch. Fed policymakers have indicated they expect three rate cuts this year. Futures traders have trimmed the total estimated reduction by December to just over 137 bps from expectations of more than 160 bps late last year. On Wall Street, the Dow Jones Industrial Average (.DJI) rose 0.03%, the S&P 500 (.SPX) lost 0.34% and the Nasdaq Composite (.IXIC) dropped 0.56%. Data in Europe was encouraging. Both German and French inflation surveys showed prices moving up again, bolstering forecasts that euro zone-wide inflation rose back to 3% last month. European bond yields reversed early declines and the euro rose further versus the dollar, putting it up 0.25% to $1.0948. The dollar index edged down 0.01%. Against the Japanese yen, the greenback rose to a two-week peak of 144.87 yen a day after jumping nearly 1%. HCOB's Composite Purchasing Managers' Index (PMI), a survey-based gauge of the euro zone's economic health, was revised up for December to match November's 47.6 after an earlier estimate of 47. It was still below the 50 mark separating growth from contraction. The German 10-year yield , the euro zone benchmark, was last up 2.2 basis points (bps) at 2.127% having hit a one-year low of 1.896% last week. France's yield inched up as well, to 2.677%. Asian shares (.MIAPJ0000PUS) closed slightly lower, as did Japan's Nikkei (.N225) on its first trading day of the year. Oil settled lower in a choppy see-saw session, as massive weekly gasoline and distillate stock builds overshadowed a larger-than-expected crude stock draw. Brent crude settled down 66 cents to $77.59. During the session it both rose and fell over $1. U.S. West Texas Intermediate crude futures fell 51 cents to settle at$72.19. Gold held steady after four sessions of declines as investors braced for the U.S. non-farm payrolls data. U.S. gold futures settled up 0.4% at $2,050.00 an ounce. https://www.reuters.com/markets/global-markets-wrapup-1-2024-01-04/