2023-11-13 06:56

SAN FRANCISCO, Nov 12 (Reuters) - Economic growth among Asia Pacific Economic Cooperation countries is expected to decline next year and remain below the global average as higher interest rates slow U.S. growth, as China continues to struggle with its recovery and tensions between the two hamper trade, the body said on Sunday. The APEC Secretariat's Policy Support Unit issued new forecasts on the eve of the APEC leaders' summit in San Francisco, showing that the 21-country region's growth rate would dip to 2.8% in 2024 from 3.3% in 2023. The APEC GDP growth rate will average 2.9% in 2025 and 2026, below the global average of 3.2% and 3.5-3.6% in the rest of the world. Among key downside risks for the Pacific Rim region are persistent inflation associated with export restrictions, weather conditions that have raised the price of rice and other agricultural products, and disruptions in the fertilizer supply chain. Taming inflation could require more monetary policy tightening, slowing growth further. Trade volume growth for goods is set to rebound next year among APEC countries after a largely flat 2023 due to China's sluggish growth, rising to 4.3% for goods exports and 3.5% for goods imports. But growth of both exports and imports are forecast to peak at 4.4% in 2025, declining slightly in 2026 due to geo-political fragmentation that is disrupting longstanding supply relationships. Carlos Kuriyama, director of the APEC policy support unit, said the data show that it was important for the U.S. and China to patch up their differences after years of tariff battles and national security export restrictions. U.S. President Joe Biden and Chinese President Xi Jinping are expected to meet in-person for the first time in a year on Wednesday in a high-stakes session aimed at curbing tensions between the world's two largest economies. Kuriyama said that national security-driven export controls and other restrictions between the U.S. and China are driving up costs in supply chains that were previously optimized for efficiency. While a full return to pre-COVID-19 trading patterns is not possible, avoiding further fragmentation is important, he added. The data shows "how important it is to re-engage, de-risk and avoid decoupling" of the U.S. and Chinese economies. "I think a stable relationship within U.S. and China is a win-win situation for everyone," Kuriyama said. https://www.reuters.com/world/asia-pacific/apecs-growth-slow-persistent-inflation-us-china-tensions-weigh-report-2023-11-13/

2023-11-13 06:24

LONDON/NEW YORK, Nov 13 (Reuters) - Global stocks traded in a narrow range on Monday as the market focused on U.S. inflation data for more clues on whether global interest rates really have peaked. After two weeks of gains, MSCI's gauge of global equities (.MIWD00000PUS) whipsawed between modest gains and losses, and finished up 0.19%. Wall Street's benchmark S&P 500 share index (.SPX) was flat, the Dow Jones Industrial Index (.DJI) was up 0.16%, while the Nasdaq Composite lost 0.22%. The index for world equities has gained almost 5% so far this month, after risk aversion in October caused by the Israel-Hamas war was soothed by bets that major central banks have ended their lengthy run of interest rate hikes. Still, the week ahead is packed with market risk events, with consumer inflation and retail sales figures from the United States on Tuesday and Wednesday, respectively, the most likely to shift the economic narrative. "Top of mind this week will be Tuesday's October Consumer Price Index report where we are looking for core inflation to have gained additional speed for a third straight month," analysts at TD Securities said in a note. They forecast core inflation to have accelerated to 0.4% from 0.3% in September. Economists polled by Reuters expect headline U.S. consumer price inflation slowed to 3.3% in October from 3.7% the month before, with the so-called core inflation rate that strips out volatile components unchanged. "While a continuation of the (stocks) rally into year-end is definitely possible, it may be muted by bearish equity sentiment driven by both heightened geopolitical and financial market risk," research house BCA also cautioned in a note to clients on Monday. That combination of rate hike worries and risk aversion helped send the dollar to a fresh one-year high against the yen on Monday. Benchmark 10-year Treasury yields , which rise when prices fall, also touched a one-week high of 4.6960% early Monday, as concerns about inflation reduced the appeal of fixed interest-paying debt instruments. Moody's cut its U.S. AAA credit rating outlook to "negative" from "stable" on Friday, citing large fiscal deficits and a decline in debt affordability. Fitch downgraded the United States to AA+ from AAA in August after months of political brinkmanship around the U.S. debt ceiling. The U.S. faces another partial government shutdown beginning Saturday if Congress does not pass a stopgap spending bill. The dollar hit 151.90 yen on Monday for the first time since mid-October last year, and was still hovering at 151.59 near those highs at 2110 GMT. The dollar index, which tracks the U.S. currency against six others, was flat at 105.61, within distance of its year-to-date high reached Oct. 3. Nomura Securities strategist Naka Matsuzawa said global equities were now likely close to a peak. "Up until now, the market has been taking bad economic news as good news, because that would mean a pause in Fed rate hikes," he said. "But now, the Treasury market has already priced in a pause, so there's not much room for Treasury yields to fall further," removing a support for the stock market. "In short, I don't think the stock market rally is going to continue." Adding to short-term market tensions, U.S. President Joe Biden and Chinese leader Xi Jinping will meet this week on the sidelines of an Asia-Pacific Economic Cooperation (APEC) summit in San Francisco. Crude oil prices also eased as demand worries trumped supply concerns ahead of Chinese retail sales data later in the week that may darken an outlook already dimmed by declining industrial activity in the world's second-largest economy. Brent crude futures for January and U.S. West Texas Intermediate (WTI) crude futures for December edged higher, both up around $1.30 at $82.75 and $78.53 a barrel. Both benchmarks gained nearly 2% on Friday as Iraq voiced support for oil cuts by OPEC+. https://www.reuters.com/markets/global-markets-wrapup-1-2023-11-13/

2023-11-13 06:13

MUMBAI, Nov 13 (Reuters) - The Indian rupee inched up on Monday on expectations that the central bank would ensure that there is no fallout of the previous session's decline to a lifetime low. The rupee was at 83.2950 to the U.S. dollar, up from 83.34 on Friday. The currency traded in a choppy session on Friday, affected by a technical incident and a lifetime low of 83.42. The Reserve Bank of India (RBI) stepped in to help the rupee, according to traders. "Today, we anticipate low volatility and range-bound trading. The truncated holiday week may deter large traders, and the central bank's proactive involvement is likely to limit any substantial advances in the pair," said Anindya Banerjee, head research - FX and interest rates at Kotak Securities. "The central bank may drive USD/INR lower to offset the rise observed last Friday." The rupee managed to shrug off the decline in Asian peers, weak risk appetite and the uptick in U.S. Treasury yields. Moody's late Friday lowered its outlook on the U.S. credit rating to "negative" from "stable", citing large fiscal deficits and a decline in debt affordability, impacting risk. Investor focus now turns to the U.S. inflation print, due on Tuesday. U.S. headline prices likely rose by just 0.1% month-on-month in October, thanks to lower energy prices, while the more important core measure likely increased 0.3% on-month and by 4.1% on-year. The inflation data comes on the back of comments by Fed Chair Jerome Powell last week that indicated that he was not yet ready to call a policy peak. https://www.reuters.com/world/india/rupee-marginally-up-rbis-proactive-involvement-2023-11-13/

2023-11-13 05:50

NEW DELHI, Nov 13 (Reuters) - Two Indian cities joined New Delhi to be among the world's worst 10 for pollution on Monday morning, with smoke heavy in the air a day after revellers let loose with firecrackers for Diwali - the annual Hindu festival of light. The capital New Delhi took, as it often does, the top spot. It had an air quality index (AQI) figure of 420, putting it the 'hazardous' category, according to Swiss group IQAir. But it was also joined in the top 10 by Kolkata in India's east, which came in fourth with an AQI of 196, while the financial capital of Mumbai was eighth with an AQI of 163. An AQI level of 400-500 impacts healthy people and is dangerous to those with existing diseases, while a level of 150-200 brings discomfort to people with asthma, lung and heart problems. Levels of 0-50 are considered good. A thick layer of smog had begun to circulate in New Delhi from Sunday night, sending its AQI to an alarming 680 a little after midnight. Every year authorities impose bans on firecrackers in the capital, but only rarely do those bans appear to be enforced. Air quality in India deteriorates every year ahead of winter, when cold air traps pollutants from vehicles, industry, construction dust and agricultural waste burning. New Delhi's authorities postponed an earlier decision to restrict use of vehicles after a brief spell of rain on Friday brought some respite from a week-long exposure to toxic air. The local government plans to review the decision after Diwali. https://www.reuters.com/world/india/three-indian-cities-among-worlds-10-most-polluted-after-diwali-2023-11-13/

2023-11-13 05:48

NEW DELHI, Nov 13 (Reuters) - Totaram Maurya heaves bricks and sacks of cement on building sites in New Delhi to feed his family of seven. But he's been stuck at home with no pay for more than 10 days because of a ban on building work aimed at easing a toxic smog over the city. "If I'm going to get sick from air pollution and die then I would prefer to die while working as I have mouths to feed," said Maurya, his bamboo hut on the banks of the Yamuna river shrouded in a murky haze. Delhi, a city of 20 million people, is the world's most polluted capital. It has been gripped by poor air quality since early this month, as happens every year despite government pledges to fix the problem. Bans on construction, in the hope of keeping down the dust and reducing vehicle exhaust, are not new. Thousands of labourers like Maurya have been put out of work as authorities struggle to clear fine particles in the air that can rise to levels almost 20 times higher than a World Health Organization (WHO) safe limit. The 45-year-old Maurya said he usually earns about 500 rupees ($6) a day. "It's tough to lift the heavy materials, especially when there's pollution as I cough a lot when smoke gets in my lungs and my eyes burn," said the sole wage earner in his family. The only protection he could afford was a handkerchief over his face, Maurya said. Delhi's air pollution gets worse in winter when the wind drops and the air cools, trapping pollutants spewed out from vehicles, industry and the burning of agricultural waste as farmers in surrounding bread-basket states burn off stubble to prepare for new planting. Grappling for solutions, city authorities ban construction and stop heavy vehicles coming into the city. Schools have also been closed. The city has at times sent out water trucks to spray in the air in the hope of clearing the smoke and dust and this year, for the first time, they will try to make rain. HAZARDOUS AIR Scientists expect some cloud cover next week and hope there will be enough moisture in the air to trigger rain through cloud seeding, said Manindra Agrawal, a scientist at the Indian Institute of Technology at Kanpur, southeast of Delhi, who is leading the trial. Rain brought some short-lived relief late last week but pollution surged again as revellers defied a ban on firecrackers to mark the Hindu festival of Diwali on Sunday. The air quality index (AQI) was up to 420 on Monday, a level categorised as "hazardous" by Swiss group IQAir. The WHO estimates that air pollution kills 4.2 million people around the world every year. While authorities advise people to limit outdoor activity when the air is bad, workers like Maurya say they can't afford to sit at home, or to get ill. "If I fall sick, everything will fall apart," said Pramod Kumar, 23, a limestone worker at construction sites in Delhi, who also complained of not having worked for days. Both Maurya and Kumar said try to get work on farms when construction stops but say it's hard to find. The construction sector is India's second-largest job generator after agriculture, employing an estimated 70 million people including unskilled workers who leave the countryside for the cities in the hope of better lives. The Delhi government has at times given some compensation to construction workers when bans are enforced but it has not done so this year. It is not just labourers who are hit by bans. The property developers are too. "Despite meeting all the compliance requirements for dust control and mitigation measures ... the struggle persists," said a spokesperson for Parsvnath Developers Ltd. https://www.reuters.com/world/india/construction-ban-fight-pollution-compounds-misery-delhi-labourers-2023-11-13/

2023-11-13 05:34

COLOMBO, Nov 13 (Reuters) - Sri Lanka's government projected a lower-than-anticipated budget deficit for 2024 on Monday on the back of a significant jump in revenues which are crucial to keep its bailout programme from the International Monetary Fund afloat. The government set a fiscal deficit target of 2.85 trillion Sri Lankan rupees ($8.73 billion) in 2024, or 9.1% of GDP, higher than the revised 8.5% of GDP in the current year. The original target for this year was 7.9%. Next year's deficit target, however, is smaller than the 12% backed by the IMF, after the fund warned of revenue shortfalls when reviewing the country's finances as part of the $2.9 billion bailout package. The government also projected total tax revenue at 4.1 trillion rupees for 2024, sharply higher than 2.85 trillion rupees in the current year, with the biggest jump coming from the goods and services tax receipts, the budget document showed. "This is a budget to build the foundation of Sri Lanka's recovery. We cannot continue as a people who depends on others," President Ranil Wickremesinghe, who is also the island nation's finance minister, told the parliament. "To ensure that Sri Lanka does not collapse again we have to renew and recreate our economic and political systems." Sri Lanka's economy contracted 7.8% in 2022, forcing it to default on its foreign debt in its worst financial crisis since Independence in 1948. Budget expenditure has been set at a record 6.98 trillion rupees in 2024, an increase of nearly 33% compared to 2023, with capital expenditure more than doubling and 450 billion rupees reserved for bank recapitalisation. "The budget deficit is lower than anticipated but if we add the allocation for bank recapitalisation the deficit increases," said Dimantha Mathew, head of research, First Capital Research. The island will allocate 3 trillion rupees to repay international sovereign bonds in 2024 after ongoing debt restructuring talks with bondholders are finalised, Wickremesinghe said, proposing to raise Sri Lanka's debt ceiling by 3.45 trillion rupees to 7.35 trillion rupees. The central bank expects growth of 3.3% in 2024, when the country will hold presidential elections. The cabinet had already approved raising Value Added Tax (VAT) by 3% from Jan. 1 and broadening collection. The government has projected a primary account deficit of 0.6% of GDP, slightly smaller than 0.7% in 2023, with the IMF requiring the nation to reach a primary surplus of 2.3% by 2025 and reduce its debt to GDP to 95% by 2032. The debt to GDP ratio stood at 113.8% as of end-December. ($1 = 326.5000 Sri Lankan rupees) https://www.reuters.com/markets/asia/sri-lankas-budget-will-strive-return-economy-growth-meet-imf-targets-2023-11-13/