2023-12-19 21:51

SANTIAGO, Dec 19 (Reuters) - Chile's central bank cut its benchmark interest rate on Tuesday by 75 basis points to settle at 8.25% in a unanimous decision, as the nation's monetary authority sees inflation pressures easing. In a statement, the central bank said its board believes that bringing inflation in the world's largest copper producing nation to its 3% target will require further cuts in the monetary policy rate. "The size and timing of the cuts will take into account the evolution of the macroeconomic scenario and its implications for inflation," the bank said in a statement, noting that while inflation has declined last month still exceeded forecasts. Chile's November inflation hit 0.7% while economists polled by Reuters had forecast just 0.2%. 12-month inflation continued to slide, reaching 4.8% - its lowest level since August 2021. In the statement, the central bank maintained its expectation that the rate of rising consumer prices should converge to the target in the second half of 2024, though core inflation will likely get there in the first half of next year. Since its last monetary policy meeting, it said, the peso has appreciated and long-term interest rates have fallen "significantly". The interest rate reduction was larger than the 50-basis-point cut estimated in a central bank poll last week by traders, who also forecast the benchmark rate would reach 5.0% within 12 months. https://www.reuters.com/markets/rates-bonds/chiles-central-bank-cuts-benchmark-interest-rate-825-2023-12-19/

2023-12-19 21:49

Dec 20 (Reuters) - A look at the day ahead in Asian markets. A 'Santa rally' is in full swing across global stocks, with the Bank of Japan's dovish tilt on Tuesday adding fuel to a fire already burning nicely after the Federal Reserve indicated last week that U.S. interest rates could be cut early next year. Even Chinese stocks got in on the act, snapping a four-day losing streak, and Beijing is where investor attention in Asia turns on Wednesday as the People's Bank of China prepares to deliver its latest policy decision. If anything, however, the PBOC will spoil the party. It is widely expected to leave its one- and five-year loan prime rates unchanged at 3.45% and 4.20%, respectively, according to all 28 economists surveyed in a Reuters poll. Beijing is under increasing pressure to significantly ease monetary or fiscal policy - or both - to heal the sickly property sector, kick-start growth and pull the economy out of deflation. But that probably won't come until some time next year, and although investors are fully anticipating no action on Wednesday, it will be another reminder of China's policy predicament, economic travails and market vulnerabilities. Japanese markets, on the other hand, got a shot in the arm after the BOJ doused speculation that its landmark move away from negative interest rates is imminent. The benchmark Nikkei 225 index jumped 1.4% and is now within 2% of November's 33-year high; the yield on 10-year Japanese Government Bonds fell more than six basis points, one of its steepest daily declines this year; and the yen fell for a third day against the dollar, this time by 0.75%. The yen's losses against the euro were particularly steep, while the risk-sensitive Australian and New Zealand dollars were among the biggest gainers against the U.S. dollar on Tuesday, both sitting around their highest in nearly five months. The BOJ's relatively dovish tilt boosted the positive risk appetite already coursing through global markets. Despite some push back from Fed officials, investors are still betting on as much as 150 basis points of rate cuts next year. After the Dow Jones Industrials index ventured into uncharted territory last week, the tech-heavy Nasdaq followed suit on Tuesday, rising to a new peak just shy of 15,000 points, while the S&P 500 got within 1% of a new record high also. The U.S. 'FAANG' index of mega tech stocks rose for a ninth straight day on Tuesday and, remarkably, has almost doubled in value this year. Perhaps this will give the Hang Seng tech index a much-needed boost on Wednesday. But while the MSCI World index on Tuesday hit its highest since April last year too, the MSCI Asia index continued to underperform. Here are key developments that could provide more direction to markets on Wednesday: - China central bank policy decision - Japan trade (November) - Australia leading indicators (November) https://www.reuters.com/markets/asia/global-markets-view-asia-pix-2023-12-19/

2023-12-19 21:41

Dec 19 (Reuters) - Georgia utility regulators on Tuesday approved a request by Georgia Power to pass an additional $7.56 billion onto customers to cover cost overruns at its Vogtle nuclear reactors project. The Vogtle two-unit expansion project has been hailed as a major milestone for the U.S. nuclear power industry, which some see as a key way to transition to cleaner energy sources. But the project's reactors arrived seven years late, and its total costs have ballooned to $30 billion, more than double initial projections. In July, Unit 3, the first from the project to come online, became the newest reactor in the U.S. to enter commercial service. Unit 4 is slated for completion in the first quarter of 2024. Average charge to costumers will be approximately 5% higher in the month after Unit 4 goes into commercial operation, a company filing shows. "We believe this decision by the Georgia PSC (Public Service Commission) acknowledges the perspectives of all parties involved and takes a balanced approach that recognizes the value of this long-term energy asset for the state of Georgia and affordability needs for customers," a company spokesperson said. Georgia Power, a unit of Southern Co (SO.N), has a 45.7% stake in the Vogtle reactors. It provides electricity to 2.7 million customers in the state. https://www.reuters.com/business/energy/regulator-lets-georgia-power-lift-rates-cover-cost-overruns-2023-12-19/

2023-12-19 21:24

Single-family housing starts rise 18.0% in November Single-family building permits up 0.7% Overall housing starts advance 14.8%; permits fall 2.5% WASHINGTON, Dec 19 (Reuters) - U.S. single-family homebuilding surged to more than a 1-1/2-year high in November and could gain further momentum, with declining mortgage rates and incentives from builders likely to draw potential buyers back into the housing market. The report from the Commerce Department on Tuesday also showed permits for future construction of single-family housing last month increased to the highest level since May 2022. A jump in mortgage rates had dampened new construction activity in recent months. The new housing market remains underpinned by an acute shortage of previously owned homes available for sale. Economists raised their fourth-quarter gross domestic product growth estimates, and predicted that the housing market would help the economy avoid a recession next year. "American housing demand is permanently higher than before the pandemic since people are spending more time at home," said Bill Adams, chief economist at Comerica Bank in Dallas. "As long-term interest rates fall, builders will add more supply to the housing market to meet that demand, fueling economic growth." Single-family housing starts, which account for the bulk of homebuilding, jumped 18.0% to a seasonally adjusted annual rate of 1.143 million units last month, the Commerce Department's Census Bureau said. That was the highest level since April 2022. Activity was also likely supported by mild temperatures and dry conditions. Data for October was revised slightly lower to show single-family starts rising to a rate of 969,000 units instead of the previously reported 970,000 units. Starts vaulted 42.2% on a year-on-year basis in November. Single-family homebuilding soared in the Northeast, Midwest and the densely populated South. It declined in the West. The rate on the popular 30-year fixed mortgage averaged 6.95% last week, the lowest level since August, from 7.03% in the prior week, according to data from mortgage finance agency Freddie Mac. It has tumbled from a 23-year high of 7.79% in late October, tracking the decline in U.S. Treasury yields. The Federal Reserve held interest rates steady last week and policymakers signaled in new economic projections that the historic tightening of monetary policy engineered over the last two years is at an end and lower borrowing costs are coming in 2024. A survey on Monday showed confidence among single-family builders rebounded from an 11-month low in December. The National Association of Home Builders noted that "many builders continue to reduce home prices to boost sales." Stocks on Wall Street were trading higher. The dollar fell against a basket of currencies. U.S. Treasury prices rose. BUILDING PERMITS RISE Permits for future construction of single-family homes increased 0.7% to a pace of 976,000 units last month, the highest in 1-1/2 years. The strength in housing starts and permits bodes well for residential investment, which rebounded in the third quarter after nine straight quarterly decreases. Economists at Goldman Sachs raised their fourth-quarter GDP growth estimate to a 1.7% annualized rate from a 1.5% pace. The economy grew at a 5.2% rate in the third quarter. The anticipated slowdown in growth this quarter is likely to reflect moderate consumer spending as well as drags from inventories and a wider trade deficit. Starts for housing projects with five units or more rose 8.9% to a rate of 404,000 units in November. Activity is, however, moderating as builders work through a large stock of apartment buildings under construction. Demand for rental accommodation is also cooling, with the rental vacancy rate rising to more than a two-year high in the third quarter. Increased supply of rental housing is one of the main factors expected to drive inflation lower next year. Multi-family building permits dropped 9.6% to a rate of 435,000 units last month. Overall housing starts soared 14.8% to a rate of 1.560 million units in November. Economists polled by Reuters had forecast starts would fall to a rate of 1.360 million units from the previously reported 1.372 million units. Building permits as a whole fell 2.5% to a rate of 1.460 million units last month. The number of houses approved for construction that are yet to be started fell 2.5% to 276,000 units. The single-family homebuilding backlog dropped 4.2% to 136,000 units, the lowest level since May. The completions rate for that housing segment declined 3.2% to 960,000 units. Overall housing completions rose 5.0% to a rate of 1.447 million units. According to the National Association of Realtors, the inventory of previously owned homes on the market is just above 1 million units, well below nearly 2 million units before the COVID-19 pandemic. Realtors estimate that housing starts and completion rates need to be in a range of 1.5 million to 1.6 million units per month to bridge the inventory gap. The number of housing units under construction rose 0.7% to a rate of 1.685 million. The inventory of single-family housing under construction increased 1.9% to a rate of 680,000 units. The stock of multi-family housing under construction dipped 0.1% to 988,000 units, not far from recent record highs. "The drag on GDP from weak residential investment is starting to diminish," said Jay Hawkins, a senior economist at BMO Capital Markets in Toronto. "However, it will take some time to balance supply and demand and improve affordability." https://www.reuters.com/markets/us/us-single-family-housing-starts-surge-november-2023-12-19/

2023-12-19 21:04

Dec 19 (Reuters) - The international coalition formed by the U.S. to protect maritime navigation in the Red Sea is part of the aggression against the Palestinian people, the political bureau of Yemen's Houthi group said in a statement on Tuesday, adding that the coalition contradicts international law. The United States on Tuesday launched a multinational operation to safeguard commerce in the Red Sea as attacks by Iran-backed Yemeni militants forced major shipping companies to reroute, fuelling concern over sustained disruptions to global trade. The Houthi group, which controls vast amounts of territory in Yemen after years of war, has since last month fired drones and missiles at international vessels sailing through the Red Sea - attacks it says respond to Israel's devastating assault on the Hamas-ruled Gaza Strip. "The international coalition that America announced under the pretext of protecting maritime navigation in the Red Sea is an alliance to protect the Israeli entity and to protect Israeli ships. It is an integral part of the aggression against the Palestinian people, Gaza, and the Arab and Islamic nations," its politburo said. "It aims to encourage the Zionist entity to continue its brutal crimes against the Palestinian people in Gaza, this coalition contradicts international law and does not protect maritime navigation, but rather threatens it and seeks to militarize the Red Sea for the benefit of the Israeli entity," the statement said. "Yemen's armed forces don't represent any threat to any country, we only target Israeli ships or ships heading toward Israeli ports", it added. "We affirm our steadfast position in supporting the Palestinian people until Israel’s aggression ends, and siege on the Gaza strip is lifted." Earlier on Tuesday, Mohammed Ali al-Houthi, a member of the Supreme Yemeni Political Council, told Iranian Al-alam TV that any country that moves against Yemen will have its ships targeted in the Red Sea. https://www.reuters.com/world/us-formed-coalition-red-sea-part-aggression-against-palestinians-yemens-houthis-2023-12-19/

2023-12-19 20:50

COPENHAGEN, Dec 19 (Reuters) - Denmark will shut down the so-called "open door scheme" for new applications to install renewable energy projects over conflict with EU regulations, the Danish Climate, Energy and Utilities Ministry said on Tuesday. The review of applications for wind projects and other renewable energy projects under the scheme, which allowed companies to submit unsolicited applications to install renewable energy projects, was suspended in February due to a possible conflict with EU law. "It has not proven possible to adjust the open-door scheme within the framework of EU regulation in a way that would facilitate a faster expansion of offshore wind," the ministry said in a statement. The Danish Energy Agency will reject the remaining applications for the Vikinge Banke, Kadet Banke og Paludan Flak offshore wind farms. Projects that are well advanced and have the necessary approvals will continue. Denmark aims for a fivefold increase in offshore wind power capacity by 2030. https://www.reuters.com/sustainability/climate-energy/denmark-end-green-energy-scheme-due-eu-law-conflict-2023-12-19/