2024-06-19 08:59

June 19 (Reuters) - Sterling rose after UK data showed that underlying price pressures remained strong, meaning the Bank of England is likely to wait longer before cutting interest rates. British inflation returned to its 2% target in May for the first time in nearly three years, while the closely-watched services prices rose by 5.7%. Markets priced in a 30% chance of a BoE first cut by August from around 50% before the data, while expecting 44 bps of monetary easing in 2024 from almost 50 bps before the data. The euro fell 0.20% to 84.32 pence against the pound, which was up 0.16% at $1.2730 . It was flat right before the release of inflation data. "For now, we are sticking with our forecast that the bank will first cut interest rates from 5.25% in August, although that relies on better news on services CPI inflation and wage growth in the coming months," said Ruth Gregory, deputy chief economist at Capital Economics. Data last week showed British wages picked up more quickly than forecast. "The big question is whether the bank sticks to previous guidance and primes the market for an August kick-off to a rate-cutting cycle," said Jamie Dutta, market analyst at Vantage, after forecasting no decision on rates by the BoE on Thursday. "Keeping policy restrictive for 'an extended period' is the key phrase to watch." "Of course, before we get to that point, there is the general election on July 4, which may preclude any significant changes to forward guidance at this meeting," he added. Analysts expected the BoE to start easing its monetary policy in August, according to all but two of 65 economists polled by Reuters last week. Most of them forecast at least one more reduction this year despite persistently high pay and services inflation. Sign up here. https://www.reuters.com/markets/currencies/sterling-firms-versus-euro-dollar-after-uk-inflation-data-2024-06-19/

2024-06-19 08:51

MUMBAI, June 19 (Reuters) - Foreign inflows into Indian bonds will hit a decade-high of $2 billion around June 28, when they will be included in a widely-tracked JPMorgan index, although the central bank will lap up most of the dollars to avoid a knee-jerk rise in the rupee, bankers said. The $2 billion, single-day inflow estimate by four bankers trails only the record-high $2.7 billion poured into Indian bonds on Aug. 20, 2014, as prospects of a credit rating upgrade gained traction. More than $200 billion in assets track the JPMorgan Emerging Market Index in which India will eventually have a weight of 10% by March 2025, suggesting total passive inflows of at least $20 billion over the 10-month period. The Reserve Bank of India, which has been keeping a hawk eye on the rupee to prevent it from plumbing lifetime lows, will be vigilant of the inflows and speculative positioning on the currency, but has not adopted additional surveillance measures, a source aware of the RBI's plans said. "It's just a case of inflows, this time in debt instead of equities," the source said. "It might be positive for the rupee and might be positive for FX reserves as well." The source and the bankers requested anonymity as they are not authorised to speak to the media. The RBI did not immediately respond to an email seeking comment. Since the rupee's real effective exchange rate -- a gauge of its relative value against a basket of currencies -- is signaling it is moderately over-valued, the RBI is wary of any significant appreciation, the source said. So, while front-running in anticipation of the inflows may boost the rupee, a large rally is unlikely given the central bank's grip on the currency, the bankers said. The RBI has said it will continue to boost its forex reserves opportunistically, which, in turn, helps avoid a sudden surge in the rupee. Since there is no precedent for these debt index-related inflows, bankers' estimates of the timing of flows are based on similar index adjustments in the equity markets. "Obviously, all this is a first and you can't be sure how things will be," the head of trading at a large foreign bank cautioned. "However, based on how portfolio flows related to (equity) rebalancing happen, the money will come in on (June) 27 or 28." In anticipation, large foreign banks could look at building short dollar/rupee positions to help manage inflows when they happen, an FX trader at a foreign bank said. Still, despite the best-laid plans, concerns persist. As a senior banker at a large foreign bank said: "all the pipes that have been put in place might not work." Sign up here. https://www.reuters.com/markets/asia/india-set-decade-high-2-bln-bond-inflows-around-jpmorgan-index-inclusion-day-2024-06-19/

2024-06-19 07:48

GUWAHATI, India, June 19 (Reuters) - India was battling on Wednesday extreme weather that caused severe heatwaves, landslides and floods, killing at least 11 people this week, among them a woman and her three daughters buried alive in a northeastern state, officials and media said. The capital, New Delhi, sweltered through its hottest night in six years on Tuesday, with hospitals in the city of 20 million reporting at least five deaths from heatstroke this week, the Times of India newspaper said. Floods and landslides triggered by incessant rain in the northeastern state of Assam killed at least six people on Tuesday night, officials said. "A landslide buried a woman and her three daughters alive," a state disaster management official, Siju Das, said by telephone. "Their house was on a slope, and they died on the spot around midnight," he said, adding that the bodies were retrieved after a three-hour search operation by rescuers. "A three-year-old was killed too." Billions across Asia are grappling with extreme heat this summer, in a trend scientists say has been worsened by human-driven climate change. Since March, temperatures have soared to 50 degrees C (122 degrees F) in Delhi and the nearby desert state of Rajasthan, while more than twice the usual number of heatwave days were recorded this season in the country's northwest and east. These conditions stemmed from fewer thundershowers, as well as warm winds blowing in from neighbouring arid regions. In Assam, more than 160,000 people were affected, with waters surpassing the danger level in the Kopili, one of the largest tributaries of the Brahmaputra, which ranks among India's biggest rivers. More than 30 people in the state have died since the end of May in floods and landslides brought by heavy rain, officials said. Sign up here. https://www.reuters.com/world/india/unrelenting-heatwave-kills-five-indian-capital-2024-06-19/

2024-06-19 07:45

BEIJING, June 19 (Reuters) - China's securities regulator said on Monday it has approved autonomous driving startup Momenta Global Limited's initial public offering (IPO) in the United States. Momenta plans to issue up to 63,352,856 ordinary shares and list on the Nasdaq Stock Market or the New York Stock Exchange, the regulator said in a statement. China in June granted approval to a first group of nine automakers to carry out tests on vehicles with advanced autonomous driving technologies on public roads, as part of a plan to accelerate adoption of self-driving cars. The auto industry has defined five levels of autonomous driving, spanning driver assistance features such as cruise control at level one to fully self-driving cars at level five. China issued the guideline of the nationwide scheme last November to start accepting applications from companies that seek to roll out more fully autonomous driving vehicles for mass adoption. In the plan, drivers in the test vehicles are allowed to take their hands off the steering wheels, with automakers and fleet operators taking responsibility for safety. Sign up here. https://www.reuters.com/markets/deals/china-approves-autonomous-driving-startup-momentas-us-ipo-2024-06-19/

2024-06-19 07:37

HONG KONG, June 19 (Reuters) - China's commerce ministry said on Wednesday that it had urged Britain to stop sanctioning Chinese firms after the country sanctioned five Chinese companies over their links to Russia. In a statement, the ministry said China "firmly opposes Britain's actions on the grounds that the Chinese companies are "related to Russia." Britain last week imposed its first sanctions targeting vessels in Russian President Vladimir Putin's "shadow fleet" that it said was used to circumvent Western sanctions on the trade in Russian oil. The action, part of 50 new sanctions and coordinated with G7 partners, also targeted suppliers of munitions, machine tools, microelectronics, and logistics to Russia's military, including entities based in China, Israel, Kyrgyzstan and Turkey, the British government said. Britain's approach has ignored China's representations and the momentum and had a negative impact on economic and trade relations between China and the UK, China's commerce ministry said. "Britain's approach is a unilateral sanction that has no basis in international law," it added. "We urge Britain to immediately correct its erroneous practices." Sign up here. https://www.reuters.com/world/beijing-urges-britain-stop-sanctioning-chinese-firms-over-russian-links-2024-06-19/

2024-06-19 07:32

HONG KONG/BEIJING, June 19 (Reuters) - China's Ministry of Industry and Information Technology on Wednesday issued new guidelines for its lithium-ion battery industry, aiming to transform, upgrade and promote high-quality development amid rapid expansion in the sector. The guidelines, following a proposal in May, will help firms scale back manufacturing projects that only expand production capacity, while enhancing technology innovation and product quality and trimming output costs, the ministry said. Projects built on farmland and ecological zones would be required to be shut down, or strictly reined in and gradually removed. Rapid expansion of production capacity along the lithium battery supply chain has led to a plunge in prices for products, including battery and raw materials, eroding companies' profits in the world's biggest market. Industry planning and launch of new projects should be in line with national development of resources, ecological protection and energy saving management, the ministry said. The new guidelines will be effective from Thursday. Sign up here. https://www.reuters.com/markets/commodities/china-regulate-lithium-ion-battery-industry-amid-fast-expansion-2024-06-19/