2023-11-21 01:28

BENGALURU, Nov 21 (Reuters) - Bank Indonesia (BI) will leave its key policy rate unchanged at 6.00% on Thursday and likely keep it at that level until at least mid-2024, according to a Reuters poll of economists in which a few respondents still expected another rate hike. Despite inflation inching up to 2.56% in October from 2.28% in September, it was still within the central bank's 2%-4% target range for the year, suggesting price pressures were less of a concern in Southeast Asia's largest economy. Indeed, Bank Indonesia's surprise 25-basis-point rate hike on Oct. 19 was aimed at propping up the rupiah, which had been down around 8% against the dollar since May. The currency has since gained nearly 2% against the greenback and was trading around 15,540/$ on Monday. Expectations the U.S. Federal Reserve was done with hiking rates also boosted the rupiah and other Asian currencies. "Bank Indonesia is likely to keep rates unchanged this month. Rupiah stability was the driving factor behind the unexpected move last month, and since then market pressures have eased with the U.S. dollar and yields pulling back post the U.S. Fed's pause," said Radhika Rao, senior economist at DBS bank. In a Nov. 14-20 Reuters poll, a strong majority of economists, 27 of 31, expected Indonesia's central bank to keep its benchmark key interest rate (IDCBRR=ECI) unchanged at 6.00% on Thursday. The remaining four predicted a quarter-percentage-point hike to 6.25%. Despite median forecasts showing no change to interest rates at least until the end of the second quarter of 2024, there was a plurality of views among economists on the key rate. While 12 of 28 put the key rate at 6.00% at the end of June, five had a 6.25% forecast and three had 6.50%. The remaining eight predicted at least a quarter-percentage-point cut by then. "Our base case is for the first BI rate cut in Q3 2024 ... Nonetheless, the timing and duration will be data-dependent; BI is likely watching incoming data and the Fed closely to decide its next move," said Brian Lee Shun Rong, economist at Maybank. https://www.reuters.com/markets/rates-bonds/bank-indonesia-maintain-key-rate-600-until-least-mid-2024-2023-11-21/

2023-11-21 00:13

Microsoft rises as ousted OpenAI CEO set to join company Bristol Myers down as Bayer's anti-clotting drug trial fails Indexes up: Dow 0.58%, S&P 0.74%, Nasdaq 1.13% Nov 20 (Reuters) - Wall Street's three major stock averages closed higher on Monday with Nasdaq's 1% rally leading the charge as heavyweight Microsoft hit a record high after it hired prominent artificial intelligence executives. The Nasdaq boasted its highest closing level since July 31 while the S&P 500 registered its highest close since Aug. 1. The S&P 500's information technology sub-index (.SPLRCT) ended up 1.5% and was the top gainer among the S&P 500's 11 major sectors. Its biggest boost came from Microsoft (MSFT.O) shares which touched a record high and ended up 2%. Microsoft CEO Satya Nadella said Sam Altman, who headed OpenAI until he was ousted late last week, was set to join Microsoft to lead a new advanced AI research team. Microsoft will also take on Greg Brockman, another OpenAI cofounder, as well as other researchers. The news set a positive tone for the market with other heavyweight technology stocks including Nvidia (NVDA.O) and Apple (AAPL.O) also gaining ground. Investors have been cheering a better-than-expected earnings season and the ongoing trend of falling Treasury yields, said Bruce Zaro, managing director at Granite Wealth Management in Providence, Rhode Island. "The market likes what it sees in the behaving bond market. It likes what it sees in earnings reports and it's in the holiday mood," said Zaro, noting that investors may be preparing for a rally which often comes with the year-end holiday season. The Dow Jones Industrial Average (.DJI) rose 203.76 points, or 0.58%, to 35,151.04, the S&P 500 (.SPX) gained 33.36 points, or 0.74%, at 4,547.38 and the Nasdaq Composite (.IXIC) added 159.05 points, or 1.13%, at 14,284.53. The Dow posted its highest closing level since Aug. 9. The benchmark S&P 500 (.SPX) ended less than 1% below its 2023 closing peak reached in late July. Wall Street's main indexes have staged a rebound so far in November, after about three months of weakness, as evidence of easing U.S. inflation has supported bets that the Federal Reserve was done raising interest rates. The defensive utilities index (.SPLRCU) was the weakest among the S&P 500's 11 major sectors, ending down 0.3% followed by consumer stables (.SPLRCS), which closed down 0.01%. While trading volume is often thin ahead of Thursday's U.S. Thanksgiving holiday, investors will have at least two potential catalysts to monitor. One is the quarterly report, due out on Tuesday from chip designer Nvidia (NVDA.O), whose stock is seen as one of the best ways to bet on the emerging artificial intelligence industry. Nvidia's results will wrap up the earnings season for the so-called "Magnificent Seven" group of megacap companies. Also on Tuesday, the Fed is expected to issue minutes of its November meeting, which may provide clues on the direction of U.S. interest rates. Traders have nearly fully priced in the likelihood that the Fed will keep interest rates unchanged in December, and some have started pricing in rate cuts as soon as March, according to the CME Group's FedWatch tool. Capping off the week, foot traffic at stores on Black Friday could provide a gauge on the state of U.S. consumer spending. Among individual movers, Bristol Myers Squibb (BMY.N) fell 3.8% as Germany's Bayer (BAYGn.DE) on Sunday stopped a late-stage trial testing a new anti-clotting drug, hurting investor confidence in all firms developing similar class of drugs. Boeing (BA.N) rose 4.6% after Deutsche Bank upgraded the aerospace company to "buy" from "hold" and raised its price target to $270 from $204. Advancing issues outnumbered decliners on the NYSE by a 2.17-to-1 ratio; on Nasdaq, a 1.66-to-1 ratio favored advancers. The S&P 500 posted 29 new 52-week highs and one new low; the Nasdaq Composite recorded 78 new highs and 90 new lows. On U.S. exchanges 10.1 billion shares changed hands compared with the 11.0 billion moving average for the last 20 sessions. https://www.reuters.com/markets/us/futures-edge-higher-microsoft-shines-2023-11-20/

2023-11-20 23:50

Nov 20 (Reuters) - Kraken, one of the world's largest cryptocurrency exchanges, was sued on Monday by the U.S. Securities and Exchange Commission, which accused it of illegally operating as a securities exchange without first registering with the regulator. The lawsuit in San Francisco federal court is the latest step in SEC Chair Gary Gensler's push to bring cryptocurrency under his agency's purview, by contending that digital assets are investment contracts subject to federal securities laws. Kraken intends to defend itself, saying Congress should decide how to regulate cryptocurrency exchanges and calling the SEC view of digital assets "incorrect as a matter of law, false as a matter of fact, and disastrous as a matter of policy." The San Francisco-based exchange also said the lawsuit will not affect its more than 10 million clients. In June, the SEC filed similar lawsuits against Binance, the world's largest cryptocurrency exchange, and Coinbase, the largest in the United States. Both are defending against the regulator's claims. The SEC said Payward Inc and Payward Ventures Inc, which operate as Kraken, have since 2018 made hundreds of millions of dollars arranging crypto purchases and sales while turning a "blind eye" to securities laws designed to protect investors. Kraken was also accused of having deficient internal controls and inadequate record keeping, reflected in part in its commingling customer money with its own and paying operating costs directly from customer accounts. Failing to register has "resulted in a business model rife with conflicts of interest that placed investors' funds at risk," SEC enforcement chief Gurbir Grewal said in a statement. "Kraken's choice of unlawful profits over investor protection is one we see far too often in this space." In its statement, Kraken said the SEC complaint conceded that any alleged "commingling" amounted to "no more than Kraken spending fees it has already earned." The SEC also accused Binance of commingling customer funds, following a Reuters report describing such conduct. Binance has denied the commingling accusation. Monday's lawsuit seeks a civil fine, disgorgement of ill-gotten gains, and a halt to acting as an exchange without registering. Kraken was founded in 2011. It is backed by investors including Blockchain Capital, Digital Currency Group, Hummingbird Ventures, SkyBridge and Tribe Capital. The case is SEC v Payward Inc et al, U.S. District Court, Northern District of California, No. 23-06003. https://www.reuters.com/business/finance/us-sec-sues-kraken-operating-crypto-trading-platform-without-registering-2023-11-20/

2023-11-20 23:45

LIMA, Nov 20 (Reuters) - Workers at the Chinese-owned Las Bambas copper mine in Peru will kick off an "indefinite" strike beginning next week after the miner failed to deliver information on profit-sharing protocols, the union's leader said on Monday. Erick Ramos, general secretary of the Las Bambas workers union, told Reuters by telephone the union had agreed to go on a strike with no set end date starting Nov. 28. "A meeting with the company was set for today to explain information regarding profit sharing, but that did not happen," Ramos said. Representatives for Las Bambas did not immediately respond to requests for comment. The mine, owned by China's MMG Ltd (1208.HK), began operations in 2016 and is among the largest copper producers in Peru, the world's No. 2 producer of the metal. The union had already kicked off a strike on Sunday, which is set to end Tuesday, over the profit sharing. The miner, as part of its contract with workers, is to share some profits every year with employees. However, the mine "had already said that there wouldn't be any profit sharing this year," Ramos said. "So they're going to have to see how to pay the workers. By contract they were supposed to have given us part of that payment in November." Las Bambas has pumped out around 221,160 metric tons of copper from January to September this year, a 21.7% boost from the year before, according to sources at the mining ministry. The mine's production has steadily increased after having to freeze operations at the beginning of the year due to roadblocks by anti-government protesters following December's ouster of President Pedro Castillo. A source close to the mine said the company respects labor rights "and works hard to ensure a safe working environment for its workers," noting the labor ministry had declared the current strike "inadmissible". The union, which represents more than 1,000 workers, is currently registering the strike set for Nov. 28 with the labor ministry, Ramos said. https://www.reuters.com/world/americas/union-strike-underway-mmgs-las-bambas-copper-mine-peru-2023-11-20/

2023-11-20 23:22

Ageing population no longer main Japan investment story Global stockpickers positive on Japan banks, retailers Investors cautious on bonds LONDON/TOKYO, Nov 21 (Reuters) - Global inflationary forces are finally seeping into Japan's economy after decades of falling prices, forcing investors to radically rethink their Japan bets as the Bank of Japan considers a major policy shift. International investors, who have long favoured stocks benefiting from Japan's ageing population or a weakening yen, are tearing up their playbooks to focus on expected higher interest rates, more generous dividends and a revival in consumer spending. The policy switch has been slow in coming but could herald an entirely new way of investing in Japan if a predicted long-term inflation rate of 2% in 2024 really happens. Japanese shoppers who no longer expect prices to keep falling may make big purchases. If the BOJ pulls interest rates above zero for the first time in years, banks' lending margins could rise. Japanese stock markets have already rallied to around their highest since 1990, with consumer and financial stocks outperforming domestic indexes. On the downside, inflation creates a bleak outlook for Japanese government bonds. "Interest rate policy is undergoing a historic change," said Shigeka Koda, chief executive of the $500 million Singapore-based hedge fund Four Seasons Asia Investment. "Something new is in the offing." BANKS UPSTAGE CREMATORIA AND CAKE-MAKING ROBOTS Japan's ageing demographic has made a Japanese crematorium company one of the top picks for foreign investors, with its shares up almost 700% in five years. Koda's top positions have included the crematorium operator - Kosaido Holdings (7868.T) - as well as Rheon Automatic Machinery (6272.T), which sells cake-making robots to help food manufacturers deal with a shrinking workforce. But in August, for the first time in the 17-year history of his fund, Koda picked a Japanese bank, Kyushu Financial (7180.T), as his largest position, because he believes Japanese interest rates will rise. Steve Donzé, deputy head of investment at Pictet Asset Management in Tokyo, said he had also been buying Japanese bank stocks. For Junichi Inoue, head of Japanese equities at Janus Henderson, consumer businesses with the pricing power to increase revenues and profits by passing higher energy and food costs on to customers were the focus. "I do like convenience stores," he said. "Margins have really been going up, earnings have been good - positively surprising." NEW DYNAMIC? Japanese wages, adjusted for inflation, fell in the 18 consecutive months to September. But big employers are expected to agree bumper pay hikes in the spring. "You really need to see services inflation come through in order for inflation to be sticky, and that's driven by wages," said, James Halse, portfolio manager at Platinum Asset Management in Sydney. Data out on Friday is expected to show core consumer prices accelerated again in October, staying above target for a 19th straight month. Global fund managers are the most positive on Japanese stocks since March 2018, a Bank of America survey published on Nov. 14 showed. And Warren Buffett is buying. Japan's Topix index (.TOPX), one of the key indexes on the Tokyo Stock Exchange, has jumped 26% this year, helped by corporate governance reforms. David Hogarty, senior portfolio manager at Dublin-based KBI Global Investors, said he had turned positive on Japan partly because higher inflation would pressure companies to boost dividend payouts. "Typically, if you increase your dividend in inflationary times, people like that," he said, noting Japan currently has the highest dividend growth globally at about 20% year-on-year. BOND PAIN Japanese inflation means bond investors could suffer. Rising inflation reduces the appeal of fixed interest-paying bonds. The BOJ has also long supported the bond market by buying government debt to cap yields and suppress domestic borrowing costs. But investors are cautious about this so-called yield curve control policy ending as the BOJ is forced to tighten monetary policy. Inflation "probably isn't transitory" for Japan because it had not been in the United States or Europe, said Jon Day, global bond portfolio manager at Newton Investment Management. "And of course the bond market isn't fully priced for it." The five-year JGB yield is around 0.35% . Even a long-term inflation rate of 1% in Japan would make that a "terrible return," Day said. U.S. Treasuries are facing a third year of hefty price falls after aggressive Federal Reserve tightening took rates to 5.25%-5.5%. At minus 0.1%, the BOJ is the only major central bank with negative rates. Grégoire Pesques, CIO for fixed income at Europe's largest fund manager Amundi, said he holds a short position on the 10-year JGB as he expects yields to rise from around 0.8% currently , as bond prices fall. Rising yields could finally lift a battered yen. The yen, which surged to 133 per dollar in December 2022 when the BOJ hinted it would review yield-curve control, dropped as low as 151.92 last week . "The direction of travel is clear and away from unsustainably easy (monetary) policy," Pictet's Donzé said, forecasting "a stronger currency as we move into 2024." https://www.reuters.com/markets/asia/japans-inflation-comeback-prompts-investors-tear-up-old-playbooks-2023-11-21/

2023-11-20 23:20

WASHINGTON, Nov 20 (Reuters) - U.S. President Joe Biden pardoned two enormous white-plumed turkeys from Minnesota on Monday, granting Liberty and Bell freedom from Thanksgiving dinner tables as Americans prepared for their annual feasts. With schoolchildren squealing in delight from the audience on the South Lawn of the White House, Biden took part in an annual tradition that goes back decades. "These birds have a new appreciation for the words 'let freedom ring,'" said Biden. Liberty weighed in at 42.5 pounds (19.3 kg) while Bell weighed 42.1 pounds. "That's a big bird, man," Biden said of Liberty as the turkeys gobbled. The two turkeys had spent the night in tranquility at the Willard Hotel not far from the White House. They were raised in Willmar, Minnesota, under the direction of the National Turkey Federation. The turkeys will "retire" to the University of Minnesota’s College of Food, Agricultural and Natural Resource Sciences in St. Paul. Millions of turkeys will be roasted in Thanksgiving ovens across the country on Thursday and drenched in gravy, accompanied by a variety of side dishes including holiday staples like stuffing, potatoes, cranberry sauce and green bean casserole. Biden noted that while it was his birthday as well on Monday, he was not around for the first such turkey pardoning event 76 years ago. "I want you to know I wasn't there at the first one. I was too young to make it up," he said. Biden turned 81 years old on Monday. https://www.reuters.com/world/us/biden-pardons-two-turkeys-sparing-them-thanksgiving-diners-2023-11-20/