2023-11-01 06:04

LONDON, Nov 1 (Reuters) - Central banks across major developed economies in September delivered no rate hikes for the first time since January 2022 while emerging markets extended their split between easing in Latin America and much of central Europe and tightening in Asia. October saw five of the central banks overseeing the 10 most heavily traded currencies hold rate setting meetings, with policy makers at the Bank of Japan, the European Central Bank, the Reserve Bank of Australia, the Reserve Bank of New Zealand and the Bank of Canada opting to keep their benchmarks unchanged, Reuters data showed. Central banks in Sweden, Switzerland, Norway, Great Britain and the United States held no rate setting meetings. That compares to September, where three major developed central banks delivered a last-gasp set of rate hikes, which took 2023 the year-to-date tally for G10 central banks to a total of 1,150 bps across 36 hikes. While inflation was still high compared to central banks’ targets, a rapid recent rise in global bond rout had changed the backdrop significantly thanks to the rise in yields at the long end of the yield curve across both developed and emerging markets, analysts said. "The higher yields may be doing some of the tightening work for the Fed, the Bank of England and the European Central Bank, and a pause from central bankers to monitor the impact of previous hikes on the economy is increasingly likely," said Fabiana Fedeli, chief investment officer at M&G Investments. The U.S. Federal Reserve - which will announce its interest rate decision later on Wednesday - was most likely the closest to the end of its rate hike cycle, Fedeli added. Meanwhile, diverging rate trajectories continued to be on display in emerging economies where 12 out of the 18 central banks in the Reuters sample held meetings in October. Latin America and central and eastern Europe are at the forefront of the easing cycle, with Chile, Hungary and Poland extending their rate cutting cycles to lower benchmarks by a cumulative 150 basis points (bps). "Cuts are returning swiftly because the hiking cycle was arguably too fast and too furious for some," said credit strategist Barnaby Martin at BofA Securities, adding emerging markets had last seen rate cuts akin to the current ones during the summer of 2020 when policy makers battled the fallout from the COVID-19 rout. Meanwhile, Asian central banks were still in their tightening cycle with both Indonesia and the Philippines raising rates by 25 bps each. And Russia and Turkey - both battling pressures on their currencies due to idiosyncratic stories rather than the global backdrop - lifted benchmarks by 200 bps and 500 bps respectively. Central banks in Brazil, Mexico, South Africa, Thailand, Malaysia and Czech Republic did not meet in October. The total tally for the year on rate hikes stood at 4,225 bps through 34 hikes, while policy makers also delivered 570 bps of rate cuts across 11 moves. https://www.reuters.com/markets/g10-central-banks-hit-rate-plateau-october-emerging-markets-diverge-2023-11-01/

2023-11-01 05:51

ANKARA, Nov 1 (Reuters) - Turkey is preparing new legislation covering crypto-assets to persuade an international crime watchdog to remove it from a "grey list" of countries that have taken insufficient action to prevent money laundering and terrorist financing. The Financial Action Task Force (FATF) downgraded Turkey to a so-called grey list in 2021. Addressing a parliamentary commission late on Tuesday, Finance Minister Mehmet Simsek said a FATF report found Turkey fully compliant with all but one of the watchdog's 40 standards. "The only remaining issue within the scope of technical compliance is the work related to crypto assets," Simsek said. "We will submit a law proposal on crypto-assets to the parliament as soon as possible. After that, there will be no reason for Turkey to stay in that grey list, if there are no other political considerations." Simsek gave no further details of the planned legal changes. The FATF, set up by the G7 group of advanced economies to protect the global financial system, had warned Turkey about "serious shortcomings" including the need to improve measures to freeze assets linked to terrorism and weapons of mass destruction proliferation in 2019. https://www.reuters.com/world/middle-east/turkey-toughen-law-crypto-assets-minister-2023-11-01/

2023-11-01 05:46

TEMECULA, California, Oct 31 (Reuters) - A Southern California wildfire fueled by desert winds burned 2,487 acres (1,010 hectares) and prompted evacuation orders for more than 4,000 people in Riverside County, officials said on Tuesday. The Highland Fire nearly doubled in size from Monday night to Tuesday, blowing toward the west by Santa Ana winds. The seasonal phenomenon occurs when dry desert air blows toward the ocean, creating a fire hazard in Southern California. The fire was 10% contained as of Tuesday night, the California Department of Forestry and Fire Protection (Cal Fire) said, after crews attacked the blaze on the ground and aircraft dropped fuchsia-colored retardant. Some 1,220 homes and 4,270 residents were under mandatory evacuation orders, with another 1,136 homes and 3,976 residents under evacuation warnings, Cal Fire spokesperson Thomas Shoots said. Officials opened one evacuee center for people and another for animals, while those staying at a resort for recreational vehicles drove their campers to a Walmart parking lot in Temecula about 15 miles (25 km) away. Some people said they left the RV resort at the prodding of first responders, escaping flames that later entered the site. "I had to grab dog food and basically just get in my van and leave," said Barb Bommarito. Robert Duke, 85, said people were uncertain about whether the evacuation was necessary. "It was made mandatory with law-enforcement cars coming around with red and blue flashing lights and broadcasting ... that we should all leave," Duke said. The cause of the fire was being investigated, Cal Fire said, adding that the fire was a continuing threat with several roads closed and evacuation orders in effect. Southern California has had a mild fire year in 2023, after unusually heavy rainfall that included the first tropical storm to reach heavily populated areas in the state in 84 years. https://www.reuters.com/world/us/california-wildfire-fueled-by-desert-winds-forces-evacuations-2023-10-31/

2023-11-01 05:43

MUMBAI, Nov 1 (Reuters) - The Indian rupee is likely to break out of rangebound trade, as the Reserve Bank of India's defence of the currency will be unsustainable at some point of time, traders said. The rupee was at 83.27 against the U.S. dollar at 11:08 a.m. IST, slightly weaker than 83.25 in the previous session. The rupee's monthly range narrowed last month despite persistent local dollar demand and equity outflows, as the central bank's forex market interventions prevented a breach of the 83.29 record low. The spike in U.S. Treasury yields and global risk aversion due to the military conflict in the Middle East also could not hurt the rupee much. A repeat of what happened in October is not likely, bankers said. The prevailing narrow range for the rupee is unlikely to hold, said Apurva Swarup, vice president at Shinhan Bank India. "Eventually the RBI will have to stop," as the current approach is unsustainable in the long term, he said Volatility expectations for the rupee have dropped. One-month implied volatility eased to a multi-year low of 2.45% on Wednesday. "It's advisable to fasten your seatbelt and prepare for a potential ride into higher volatility," said Amit Parbari, managing director at forex advisory firm CR Forex. On Wednesday, most Asian units fell before the U.S. Federal Reserve policy outcome due later in the day. The dollar index was higher at 106.75 and the 10-year U.S. Treasury yield rose. The Fed is widely expected to make no change to the policy rate. Investors will focus on Fed Chair Jerome Powell's press conference for cues on whether another rate rise may be in the offing. FEDWATCH https://www.reuters.com/markets/currencies/india-rupees-tranquil-october-run-may-not-sustain-2023-11-01/

2023-11-01 05:39

A look at the day ahead in European and global markets from Ankur Banerjee The Japanese currency needed a fresh and sterner intervention warning from Tokyo on Wednesday to lift it off the one-year low touched after the central bank's policy tweak failed to excite yen hawks. Masato Kanda, Japan's top currency diplomat, said authorities were on "standby" to respond to yen's recent "one-sided, sharp" falls, ramping up the rhetoric around yen-buying intervention - something the market has been on alert for in recent months. As Europe wakes up, the yen is not far off the one-year low of 151.74 hit this week and the three-decade low of 151.94 touched last year, which triggered an intervention by Tokyo at the time. The broad yen sell-off on Tuesday came a day after the BOJ watered down its 1% yield cap on the 10-year bond. While economists saw that as an unambiguous sign the cap's day were numbered, markets saw it as insufficient to close the wide interest rate gaps that have kept the currency under pressure. So how has the Japanese bond market reacted? The 10-year yield rose to 0.970%, a level last seen in May 2013, prompting the BOJ to announce an emergency bond-purchase operation to stall its march. It was last at 0.965%. How hard the BOJ defends the so-called 1% reference will be the key question traders ask in coming days. Meanwhile, the central bank focus shifts to the United States, with the Fed widely expected to stand pat on rates although comments from Jerome Powell will again take the spotlight as investors parse every word to gauge where interest rates are headed. Markets have priced in a 29% chance of a 25 basis point hike in December and a 35% chance of a 25 bps hike in January, the CME FedWatch tool showed, with traders bracing for the Fed and Powell to keep another hike on the table. With little on Europe's economic calendar, investors are likely to keep the focus on the Fed and yen. Futures suggest European stock markets are set for a higher open. Key developments that could influence markets on Wednesday: Economic events: UK S&P Oct PMI and UK Nationwide house price for Oct Earnings: GSK https://www.reuters.com/markets/europe/global-markets-view-europe-2023-11-01/

2023-11-01 05:37

BEIJING, Nov 1 (Reuters) - Two Chinese icebreaker research vessels and a cargo ship set sail on Wednesday for the Antarctic with more than 460 personnel on board to help complete construction of China's fifth station on the world's southernmost continent. China's biggest flotilla of research vessels deployed to the Antarctic will focus on building the station on the rocky, windswept Inexpressible Island near the Ross Sea, a deep Southern Ocean bay named after a 19th century British explorer. Work on the first Chinese station in the Pacific sector began in 2018. It will be used to conduct research on the region's environment, state television reported. China has four research stations in the Antarctic built from 1985 to 2014. A U.S.-based think tank estimated the fifth could be finished next year. The facility is expected to include an observatory with a satellite ground station, and should help China "fill in a major gap" in its ability to access the continent, the Center for Strategic and International Studies (CSIS) said in a report this year. The station is also well situated to collect signals intelligence over Australia and New Zealand and telemetry data on rockets launched from Australia's new Arnhem Space Centre, it said. China rejects suggestions that its stations would be used for espionage. The two icebreakers, Xuelong 1 and Xuelong 2, the name means "Snow Dragon" in Chinese, set sail from Shanghai with mostly personnel and logistics supplies on board. The cargo ship "Tianhui", or "Divine Blessings", taking construction material for the station, set off from the eastern port of Zhangjiagang. The five-month mission will include a survey on the impact of climate change. The two icebreakers will also conduct environmental surveys in the Prydez Bay, the Astronaut Sea in southeast Antarctic, and in the Ross Sea and Amundsen Sea in the west. The mission, China's 40th to the Antarctic, will also cooperate with countries including the United States, Britain, and Russia on logistics supply, state media said. https://www.reuters.com/business/environment/biggest-chinese-antarctic-fleet-sets-off-build-research-station-2023-11-01/