2024-01-02 11:04

A look at the day ahead in U.S. and global markets by Samuel Indyk A rollercoaster 2023 that ended with an equity rally on hopes for rate cuts amid slowing inflation has extended into the first trading day of 2024, pushing European stocks to an almost two-year high and bringing U.S. stock market peaks into view. Today's economic calendar looks light, so the theme that has driven markets since the beginning of November looks set to dominate until important U.S. data is released on Wednesday - JOLTs and manufacturing ISM - and the minutes from the Federal Reserve's December meeting. At that meeting, the central bank appeared to make the long-awaited pivot, signaling that tightening of interest rates is likely over and the discussion of rate cuts coming into view. Traders moved quickly to price in easing of policy and, as things stand, are looking for 150 basis points of easing this year, with the first 25 basis-point rate cut almost fully priced for March. Wednesday's minutes will be parsed for clues on whether that pricing is justified, especially as commentary over the holiday period from Fed policymakers has been sparse. It looks set to remain that way this week, apart from speeches from Richmond Fed President Tom Barkin on Wednesday and Friday. Barkin will get to vote on policy this year as the annual reshuffle of voters on the Federal Open Market Committee sees Barkin, Raphael Bostic, Mary Daly and Loretta Mester get a vote, while Austan Goolsbee, Patrick Harker, Neel Kashkari and Lorie Logan rotate out in 2024. How the new composition of voters on the FOMC affects policy this year remains to be seen. For now, European equities are pushing higher with the STOXX 600 trading at a 23-month high and Germany's DAX rising over 1%. The euro zone's banking stocks are leading the rally, jumping as much as 2% and on track for their biggest daily rise since October. Wall Street futures are also pointing to a higher open. With the S&P 500 just 1% from its all-time high, it seems only a matter of time before new peaks are reached for the U.S. benchmark. The picture in Asia was less rosy with MSCI's broadest index of Asia-Pac shares outside Japan falling 0.6%, led lower by weakness in China and Hong Kong as latest activity data signaled uneven economic recovery. A private sector survey showed China's factory activity expanded at a quicker pace last month, but that contrasted with official data, released on Sunday, that showed manufacturing activity shrank for a third straight month in December. Elsewhere, the dollar is hovering above a five-month low reached at the end of last year, while bond yields in the U.S. and Europe are on the up but remain within striking distance of multi-month lows reached at the end of 2023. Bitcoin has also begun the new year in a similar fashion to how it ended the last, storming above $45,000 for the first time since April 2022. Key developments that should provide more direction to U.S. markets later on Tuesday: * U.S. final S&P global manufacturing PMI * U.S. 3-, 6-month bill auctions https://www.reuters.com/markets/us/global-markets-view-usa-2024-01-02/

2024-01-02 10:10

MUMBAI, Jan 2 (Reuters) - The Indian rupee ended weaker on Tuesday, in line with broad weakness in Asian currencies, and pressured by U.S. dollar demand from oil companies and foreign banks. The rupee ended at 83.3175, lower by 0.1% compared with its close at 83.2375 in the previous session. The dollar index rose to 101.6 while Asian currencies retreated, with the Korean won leading losses down by nearly 1%. While the rupee's initial fall was prompted by weakness in its Asian peers, dollar demand from oil companies and foreign banks kept up the pressure on the local unit, a foreign exchange trader at a state-run bank said. Benchmark Indian equity indices, the BSE Sensex (.BSESN) and Nifty 50 (.NSEI), ended in the red as selling pressure emerged after the indices touched record high levels on Monday. Overseas investors bought a total of $10.1 billion worth of Indian equities and bonds in December but the rupee was unable to gain much as the Reserve Bank of India likely stepped in to absorb large inflows, traders said. However, hopes of continued robust inflows have prompted some bullish calls on the rupee, with Goldman Sachs forecasting it may appreciate to 81 against the dollar over the next 12 months, according to a note on Tuesday. In the near-term, investors await key U.S. economic data that will be released later this week. The ISM manufacturing purchasing managers' index (PMI) will be released on Wednesday and the closely-watched non-farm payrolls data on Friday. The data may "bring a bit of choppiness" to the market but the rupee is unlikely to stray significantly from its prevailing range between 83 and 83.40, Gaurang Somaiya, a FX analyst at Motilal Oswal Financial Services, said. https://www.reuters.com/markets/currencies/rupee-closes-lower-amid-us-dollar-demand-oil-companies-foreign-banks-2024-01-02/

2024-01-02 09:15

MOSCOW, Jan 2 (Reuters) - Natural gas supplies to Europe by Russian energy giant Gazprom (GAZP.MM) were down 55.6% to 28.3 billion cubic metres (bcm) in 2023, Reuters calculations showed on Tuesday. The calculations, based on data from the European gas transmission group Entsog and Gazprom's daily reports on gas transit via Ukraine, showed that average daily pipeline exports of Russian gas to Europe declined to 77.6 million cubic metres (mcm) in 2023 from 174.8 mcm in 2022. Russia supplied a total of around 63.8 bcm of gas to Europe by various routes in 2022, аccording to Gazprom data and Reuters calculations. Gazprom has not published its own statistics since the start of 2023. It did not immediately reply to a request for comment. Russia's gas exports to Europe, once its primary export market, have fallen sharply because of the political fallout from the conflict in Ukraine. At their peak in in 2018-2019, annual flows reached 175-180 bcm. https://www.reuters.com/business/energy/russian-pipeline-gas-exports-europe-down-56-2023-reuters-calculations-2024-01-02/

2024-01-02 08:42

MUMBAI, Jan 2 (Reuters) - The Indian rupee is likely to appreciate to 81 against the U.S. dollar over the next 12 months amid expectations of heavy foreign capital inflows, Goldman Sachs said in a note on Tuesday. Still, the currency will underperform its Asian peers as the Reserve Bank of India (RBI) could continue to accumulate inflows and build forex reserves "at every opportunity," economist Santanu Sengupta said. Equity portfolio flows into India will be "robust" as the Federal Reserve starts its interest rate easing cycle in 2024, while debt inflows will be strong following India's inclusion in the JPMorgan's global bond indexes, Goldman Sachs added. Moreover, Asia's third-largest economy will continue to benefit from regional supply chain diversification, which will boost foreign direct investments, it said. The brokerage has a fairly bullish view on the rupee compared with other analysts. The rupee will gain to 82.80 by end-November, according to a Reuters poll last month. The Indian currency was trading at 83.3375 on Tuesday after shedding 0.5% of its value in 2023, which was its smallest annual percentage change in at least 20 years. Goldman Sachs expects the rupee to hover around 82-83 per dollar over the next three-to-six months. India's external balances remain favourable, with a combination of low current account deficit, strong public market capital flows, adequate forex reserves and low external debt, it added. The country's foreign exchange reserves rose to a 21-month high of $620.44 billion as of Dec. 22. The RBI intervenes in the currency markets to prevent excessive volatility in the rupee's exchange rate. Goldman Sachs on Tuesday lowered its estimates for India's current account deficit in 2023 and 2024 to 1% of gross domestic product and 1.3% of GDP, from 1.3% and 1.9%, earlier. https://www.reuters.com/markets/currencies/indian-rupee-may-rise-81usd-by-2024-end-amid-robust-inflow-hopes-goldman-sachs-2024-01-02/

2024-01-02 08:38

STOCKHOLM, Jan 2 (Reuters) - New registrations of Tesla (TSLA.O) cars in Sweden increased in December from a year earlier and the car maker's market share grew, industry data showed on Tuesday, despite union action against the company hampering imports. Data from Swedish auto industry association Mobility Sweden showed 1,789 new Tesla (TSLA.O) cars were registered in December, up from 1,645 in the same month of 2022. The U.S. company's market share grew to 6.1% from 4.6%. Tesla is facing a wave of union action in the Nordic region, backing Swedish union IF Metall's mechanics who went on strike in October, demanding a collective agreement covering wages and other conditions. Dock workers in Sweden and Denmark have in sympathy action stopped unloading and transporting Tesla cars destined for Sweden. Tesla's Model Y was Sweden's top-selling car in 2023 with 16,412 new vehicles registered, ahead of Volvo's XC40 with 13,606 cars. But in December, the Model Y slipped to fourth place with 1,098 new cars registered, lagging the XC40's 1,967 cars. https://www.reuters.com/business/autos-transportation/tesla-new-car-registrations-sweden-rose-9-dec-2024-01-02/

2024-01-02 07:03

Headline inflation at 2.61% y/y, vs 2.72% in poll Core inflation at 1.80% y/y, vs 1.85% in poll BI lowers target range to 1.5% to 3.5% in 2024 JAKARTA, Jan 2 (Reuters) - Indonesia's annual inflation rate cooled more than expected in December to 2.61%, within the central bank's target range, official data showed on Tuesday. The rate was below November's 2.86% and expectations in a Reuters poll for a December reading of 2.72%. The central bank's inflation target for 2023 was 2% to 4%, while its 2024 target is 1.5% to 3.5%. The core inflation rate, which strips out government-controlled prices and volatile food prices, also eased more than expected in December to 1.80%, the lowest level since December 2021, and compared with 1.85% predicted in the poll. November's core inflation was 1.87%. The central bank, Bank Indonesia, raised interest rates by a total of 250 basis points between August 2022 and October 2023 to fight inflation and maintain currency stability . DBS Bank economist Radhika Rao said December's lower-than-expected inflation rate would provide comfort for monetary policymakers. "We expect the policymakers to exhibit a lower urgency to shift towards an easing cycle in 1H24 to preserve finance stability," she said. Rao said headline inflation could rise above 3% in the first half of 2024 as price pressures build around religious holidays, such as Ramadan, which is expected to start in March. BI officials have predicted headline inflation may reach 3.2% this year due to higher global food and energy prices. https://www.reuters.com/markets/asia/indonesias-dec-inflation-eases-more-than-expected-2024-01-02/