2023-12-21 21:48
Dec 22 (Reuters) - A look at the day ahead in Asian markets. Investors seem more confident than ever that the U.S. economy is gliding towards the hallowed 'soft landing', which bodes well for risk assets in Asia as the final full trading week of the year draws to a close on Friday. Consumer price inflation figures from Japan top the regional economic calendar, and investors also have inflation data from Malaysia, bank lending from Australia and the latest unemployment report from Taiwan to get their teeth into. Although the MSCI World index is poised for its eighth consecutive weekly rise, which would be the longest winning streak in six years, emerging market and Asian stocks have not performed as strongly. The MSCI Asia ex-Japan index is on track for a third weekly loss in four. But it looks like a very slender decline which will flip to a second straight weekly gain if the index rises 0.2% or more on Friday. This is likely, after the rebound on Wall Street and in global stocks on Thursday. The move was partly a natural bounce back from the surprise slump in the last hour of trading the previous day, and partly thanks to figures that showed U.S. inflation is back down to the Fed's target. The final reading of third quarter U.S. growth and inflation showed that growth was revised down to a 4.9% annualized rate from 5.2%, but annual rate of core PCE inflation was revised down to 2.0% from 2.3%. Traders quickly moved to price in a more dovish Fed outlook - 155 basis points of easing next year is now expected, the first cut will be in March, with a 15% probability that the easing cycle could even start in January. Music to the ears of the 'soft landing' crew, a band of believers that appears to be gaining in numbers by the day. On Friday the inflation focus switches to Japan from the US. Japan's core annual consumer inflation rate is expected to slow in November to 2.5% from 2.9%. That would be the lowest since July last year and mark one of the steepest declines in years. Headline inflation is stickier - in October it was running at an annual rate of 3.3% - and has not been below 3% since July last year. After decades of fighting deflation, the Bank of Japan wants to see sustained inflation, as it gears up to exit ultra-loose policy and turn interest rates positive again. "The chance of trend inflation accelerating towards our price target is gradually heightening," Ueda said in a press conference on Wednesday after leaving policy unchanged. "But we still need to scrutinize whether a positive wage-inflation cycle will fall in place." Here are key developments that could provide more direction to markets on Friday: - Japan CPI inflation (November) - Australia credit and lending (November) - Malaysia CPI inflation (November) https://www.reuters.com/markets/asia/global-markets-view-asia-pix-2023-12-21/
2023-12-21 21:25
TSX ends up 0.8% at 20,765.73 Materials group rallies 1.1% Financials add 0.8% BlackBerry tanks on Q4 revenue forecast Dec 21 (Reuters) - Canada's main stock index rose on Thursday despite a sharp drop in the shares of BlackBerry, in a rally across sectors that clawed back much of the previous day's decline. The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended up 164.92 points, or 0.8%, at 20,765.73, after falling more than 1% on Wednesday. Wall Street also rebounded as economic data fueled optimism that the Federal Reserve would ease monetary policy and revived investor risk appetite. The number of Americans filing new claims for unemployment benefits rose marginally last week, suggesting underlying strength in the economy as the year winds down. "The claims data – along with other recent labor market statistics – are consistent with a job market that is cooling but not freezing," said Nancy Vanden Houten, lead US economist at Oxford Economics. "We expect a further slowdown in employment to put downward pressure on wage growth and inflation, allowing the Fed to start cutting rates next year." Last week, the Fed hinted it could look at interest rate cuts next year. The materials sector, which houses Canada's major mining firms, rallied 1.1%, as gold and copper prices rose. Heavily-weighted financials added 0.8% and industrials were up 0.9%. All ten major sectors ended higher. BlackBerry Ltd (BB.TO) shares dropped 13.5% after the technology company forecast fourth-quarter revenue below analysts' expectations. https://www.reuters.com/markets/tsx-futures-rebound-after-heavy-losses-previous-session-2023-12-21/
2023-12-21 21:17
PANAMA CITY, Dec 21 (Reuters) - The Panama Canal Authority said on Thursday it has not seen a notable traffic increase due to the situation in the Red Sea, where attacks by Yemen's Houthi group are forcing vessels to divert or switch their transponders off. The hostilities have put a chokehold on ship passages through the Suez Canal, which handles about 12% of worldwide trade, and according to analysts could end up forcing some vessel owners to try to pass the Panama Canal even amid transit restrictions due to severe drought. "To date, we have not observed a notable increase in the number of vessels directly associated with the ongoing situation in the Red Sea," the Panama Canal Authority told Reuters in a written statement. Earlier this month, the canal relaxed a planned reduction to just 20 authorized daily transits next month. Instead, the authority increased the number of authorized ships to pass to 24. The waterway's administrator will continue monitoring the country's water conditions, it said. The authority relies on rain water to fill the locks that make passage possible. "The modification of restrictions will be contingent upon the variability of rainfall in the upcoming months." The Iran-aligned Houthis, who control much of Yemen, have been attacking ships passing through the Bab al-Mandab Strait at the southern end of the Red Sea for weeks in what they say is a response to Israel's war in Gaza. Germany's Hapag-Lloyd said this week it will reroute 25 ships by the end of the year from the Suez Canal as freight rates and shipping stocks have increased because of the disruption. https://www.reuters.com/markets/commodities/panama-canal-has-seen-no-traffic-increase-amid-attacks-red-sea-2023-12-21/
2023-12-21 21:15
Canadian dollar strengthens 0.6% against the greenback Touches its strongest since Aug. 2 at 1.3287 Canadian retail sales rise 0.7% in October Canada-U.S. 2-year spread narrows 6.3 basis points TORONTO, Dec 21 (Reuters) - The Canadian dollar extended recent gains against the U.S. dollar on Thursday as Wall Street rallied, with the move raising pressure on speculators that have built large short positions in the currency. The loonie was trading 0.6% higher at 1.3287 to the greenback, or 75.26 U.S. cents, its strongest level since Aug. 2. "A recovery in U.S. stocks has caused the USD to give back all of yesterday's gains and more, with the risk-on backdrop taking USD-CAD lower in the process," said George Davis, chief technical strategist at RBC Capital Markets. The U.S. dollar (.DXY) lost ground against a basket of major currencies and Wall Street recouped much of the previous day's decline as economic data fueled optimism that the Federal Reserve would ease monetary policy. Speculators have trimmed their bearish bets on the Canadian dollar after raising them in November to the highest in six years. "There's clearly pain. Funds are getting out of short positions that are just not working," said Erik Bregar, director, FX & precious metals risk management, at Silver Gold Bull. Canadian retail sales rose by 0.7% in October from September, and were up even more in volume terms, but a preliminary estimate for November was less upbeat, showing no growth. The price of oil, one of Canada's major exports, fell after Angola said it would exit the Organization of the Petroleum Exporting Countries, raising questions about the producer group's efforts to limit global supplies. U.S. crude futures settled 0.4% lower at $73.89 a barrel Canadian bond yields rose across the curve, with the 2-year up 4.4 basis points at 3.952%. The gap between it and its U.S. equivalent narrowed by 6.3 basis points to roughly 40 basis points in favor of the U.S. note, the narrowest since Nov. 16. https://www.reuters.com/markets/currencies/canadian-dollar-climbs-near-5-month-high-stocks-rebound-2023-12-21/
2023-12-21 20:51
OSLO, Dec 21 (Reuters) - The European Energy Exchange (EEX) on Thursday published its 2024 calendars for the auctioning of emission allowances as part of the EU's emissions trading scheme (EU ETS). The European Union's Emissions Trading System (ETS) forces manufacturers, power companies and airlines to pay for each tonne of carbon dioxide they emit as part of Europe's efforts to meet its climate targets. Under the schedule, the EEX will auction a total of 677.3 million EU allowances (EUA) in 2024, covering sales via the EU's common EU Auction Platform (CAP3) as well as separate auctions for Germany, Poland and Northern Ireland, it said. It will also auction 6.7 million EU Aviation Allowances (EUAA). However, the volumes for auctions of EUAs from September to December 2024 are still preliminary and can be subject to adjustments, the EEX said. In November, the European Commission said it would publish the number of permits member states will sell from September to December 2024 on July 31. The EEX volumes for the September to December period could be around 76 million lower to reflect adjustments under the EU ETS' market stability reserve (MSR), analysts at Vertis Environmental Finance said. "Hence, we would expect the actual 2024 auction volume to be around 608 million next year," Stefan Feuchtinger, head of market R&A at Vertis, said in a comment on the EEX calendar announcement. This is 84 million more than the 523 million EUA total for 2023, and within the range expected by the market, he added. https://www.reuters.com/sustainability/climate-energy/energy-bourse-eex-publishes-2024-emission-auction-volumes-2023-12-21/
2023-12-21 20:23
SAN SALVADOR, Dec 21 (Reuters) - El Salvador's Congress has approved a migration law granting expedited citizenship to foreigners who make bitcoin "donations" to government social and economic development programs. In a surprise vote late Wednesday evening, the unicameral legislature passed the reform with support from President Nayib Bukele's New Ideas party, which controls Congress. The law is expected to come into force in the coming days. Bukele is running for re-election in the Central American nation's election, scheduled for Feb. 4. The reform cites the "vital interest" of the president's development projects, highlighting "altruistic foreigners interested in supporting the economic, social and cultural development of El Salvador ... by donating bitcoin." The law does not cite any minimum "donation" requirement. Bitcoin on Thursday was trading at $43,741. The reform provides that those who qualify would skip the normal requirement for the naturalization process of five years of permanent residence for anyone from a non-Spanish-speaking country, or two if the person has a Salvadoran spouse. El Salvador made bitcoin a national currency in 2021, although its implementation has been slow and its use limited. Some foreign promoters of the digital currency have moved to the country, mainly to beach communities. Bukele's cash-strapped government is currently working to reach an agreement with the International Monetary Fund for a new financing program amid concerns over the country's slow economic growth. The IMF has been vocal about what it sees as risks stemming from El Salvador's adoption of bitcoin as legal tender. Bukele is running for re-election despite the constitution's appearing to clearly prohibit consecutive terms. In 2021, El Salvador's top court – whose members are appointed by Congress – ruled that Bukele could stand for re-election, a decision that drew international condemnation, including from the United States. https://www.reuters.com/world/americas/el-salvador-offers-citizenship-foreign-bitcoin-investors-2023-12-21/
