2025-12-03 11:29
SAO PAULO, Dec 3 (Reuters) - Brazilian President Luiz Inacio Lula da Silva said on Wednesday he expects U.S. counterpart Donald Trump to further cut tariffs on Brazilian products soon, following a phone call between the two leaders on Tuesday. Trump last month removed additional tariffs on several Brazilian food products, including coffee and beef, that he had announced in July to punish Brazil over the prosecution of former right-wing President Jair Bolsonaro. Sign up here. "We are close to hearing good news from the U.S.," Lula told TV channel Verdes Mares. He described his conversation with Trump as "extraordinary" and reiterated they agreed to cooperate in fighting organized crime. https://www.reuters.com/world/americas/brazils-lula-expects-more-us-tariff-cuts-after-call-with-trump-2025-12-03/
2025-12-03 11:28
Partial grid failure had left western provinces dark Fuel shortages, aging infrastructure blamed for grid collapses Imports from allies like Venezuela and Mexico fell sharply HAVANA, Dec 3 (Reuters) - Cuba said it had reconnected its electrical grid and was gradually restoring power after a partial collapse on Wednesday left capital Havana and much of western Cuba in the dark, the latest incident in an energy crisis that has left millions suffering from prolonged blackouts for months. Top energy officials said a main transmission line connecting Havana with the country's largest power plant in Matanzas failed around 5 a.m. (1000 GMT), but that workers had restored power to approximately 40% of the capital city by midday. Sign up here. At least four western provinces, from Pinar del Rio to Mayabeque, lost power early on Wednesday, officials said, though all had been reconnected to the grid within hours of the outage. Even before Wednesday's incident, much of Cuba was already experiencing daily blackouts extending as much as 20 hours or more. Havana, once protected from the brunt of outages, now regularly faces 10 hours or more without electricity each day. Officials warned a generation shortfall - today approximately two-thirds of demand even after repairing transmission lines - means regular blackouts will continue. Havana's ocean-front skyline was dark before sunrise, with only scattered hotels and hospitals lit with generators. Cell phone service was intermittent, and street and stop lights shut off. CUBA STRUGGLES TO KEEP LIGHTS ON The island's oil-fired power plants, already obsolete and struggling to keep the lights on, experienced a full crisis last year as oil imports from Venezuela, Russia and Mexico dwindled. Cuba's grid has collapsed several times since, with the government blaming fuel shortages, decrepit infrastructure and damage from Hurricane Melissa for worsening power outages. U.S. sanctions and a deep economic crisis have for years made it impossible for the government to buy enough fuel, forcing a dependence on allies. Crude and fuel imports in the first 10 months fell more than a third from a year ago as allies Mexico and Venezuela slashed supplies, according to shipping data and documents seen by Reuters. https://www.reuters.com/world/americas/cubas-electrical-grid-suffers-partial-collapse-havana-without-power-2025-12-03/
2025-12-03 11:25
Dec 3 (Reuters) - Sterling rose against the euro after two straight declines on Wednesday as investors weighed diverging rate outlooks with the single currency bloc against expectations of a stronger UK economy. The pound also hit a 5-week high versus a weakening dollar as markets remained focused on the Federal Reserve easing path. Sign up here. With Britain's growth outpacing earlier forecasts, as the OECD said on Tuesday, the Bank of England could slow its monetary easing path, a move that would support the pound. The single currency had firmed earlier this week as markets strengthened their view that the European Central Bank will stay on hold through 2027, while the Bank of England is expected to cut rates next year. Traders priced in only about a 30% chance of an ECB rate cut in 2026 and see the deposit rate at 1.95% by December 2026, down from the current 2%, while the Bank of England is expected to deliver around 60 basis points of cuts by the end of 2026. The euro dropped 0.20% against the pound to 87.80 pence on Wednesday. It hit 87.46 last Thursday, its lowest level since October 28. "Chancellor Rachel Reeves was able to pull together a smorgasbord of tax increases that collectively are projected to reduce the budget deficit by a wider margin than expected," said Kristina Hooper, chief market strategist at Man Group. "In other words, she was able to achieve the fiscal credibility that was needed." Sterling hit a 5-week high against the dollar at $1.3289, and was last up 0.54% at $1.3286. Analysts argued that the lack of immediate fiscal tightening after the budget does not provide additional impetus for the BoE to cut rates more in the coming years. Traders also flagged the pound was unaffected by political opponents' accusations that Finance Minister Reeves misled the public ahead of the budget, which she denied. However, an official from Britain's fiscal watchdog said on Tuesday that her pre-budget speech was not misleading. https://www.reuters.com/world/uk/sterling-rises-against-euro-hits-5-week-high-vs-dollar-2025-12-03/
2025-12-03 11:15
Italy has world's third-largest national bullion reserves Meloni's party wants to assert gold belongs to people Central banks hold gold as safety net against adverse scenarios ROME, Dec 3 (Reuters) - The European Central Bank has urged Italy to reconsider a parliamentary amendment asserting that the national central bank's gold reserves belong to the Italian people, a document published on Wednesday showed. The Bank of Italy, a public institution independent of the government, owns the world's third-largest national gold stockpile, behind the U.S. and Germany. Its 2,452 metric tons of gold are worth $300 billion, roughly 13% of Italy's national output. Sign up here. "The Italian authorities are invited to reconsider the draft provision, also with a view to preserving the independent performance of the Bank of Italy," the ECB said, adding it was not clear what the concrete purpose of the draft provision was. The remarks may prompt the ruling coalition to drop its claim on people's ownership of gold reserves, which was tabled as an amendment to next year's budget. The ECB said it had issued its opinion after receiving two requests for comment from Italy's Treasury, on November 28 and December 1. CENTRAL BANK INDEPENDENCE Politicians of all parties have sought for years to clarify ownership of the gold, with some eyeing a possible sale to cut public debt or fund tax cuts and spending. All such proposals have met resistance from European Union authorities. "When carrying out the task of holding and managing gold reserves, neither the ECB, nor a national central bank including Bank of Italy, nor any member of their decision-making bodies, shall seek or take instructions from any government of a member state," the ECB said on Wednesday. It warned that a transfer of gold or foreign reserves off the Bank of Italy's balance sheet would circumvent the prohibition on central banks financing the public sector. The Bank of Italy says on its website that gold could be used as collateral for loans or, as a last resort, sold to buy the national currency to support its value. Meloni's party had already softened its proposal by removing a reference to the state to avoid ECB criticism. The initial amendment said: "The gold reserves, managed and held by the Bank of Italy, belong to the state, on behalf of the Italian people." The ECB also said Italian authorities should consult with the Bank of Italy if they wanted to press ahead with plans to clarify the legal ownership of gold reserves. The opinion comes amid growing concern in European capitals over policies pursued by U.S. President Donald Trump, which have raised questions about Federal Reserve independence. Sources have told Reuters that some central bank officials have even considered pooling dollar and gold reserves outside the U.S. if the Fed, perhaps under Trump's influence, were to shut its emergency liquidity line to the ECB — a backstop banks have relied on since the financial crisis. https://www.reuters.com/business/finance/ecb-calls-italy-reconsider-proposal-central-bank-gold-2025-12-03/
2025-12-03 11:11
BUENOS AIRES, Dec 3 (Reuters) - Mexico's peso will keep trading in 2026 close to the center of a range between 16.00-22.00 per U.S. dollar that recently turned 10 years old, a Reuters poll found. The currency first entered the interval in July 2015. It has averaged a mid-value of 19.20 since then, only crossing the upper bound of 22.00 during the height of the COVID pandemic of 2020. Sign up here. Now, the peso is forecast to weaken 3.4% to 18.92 in 12 months, from 18.27 on Tuesday, still near the center of the range, according to the median estimate of 22 analysts polled November 28-December 3. "Risks surrounding our MXN forecast remain balanced, although with a slight bias towards depreciation," said Christian Admin de la Huerta Avila, an economist at Finamex. This view is based on recent signs of weaker economic activity, less dynamic remittances and "the possibility of greater divergence between Banxico and the Federal Reserve," he added. While the Mexican central bank - known as Banxico - is expected to continue its gradual policy easing, a divided U.S. Federal Reserve could halt rate cuts after an expected move this month. This may eventually prompt bets against the peso at some point on the possibility of diminishing interest rate differentials currently favoring Mexico's unit. Of 11 foreign exchange strategists who responded to an extra question on risks to their forecasts for the peso, five saw a weaker bias, three a stronger one, and three had a neutral view. Elsewhere, Brazil's real is set to weaken 3.1% to 5.50 per dollar in one year, from 5.33 on Tuesday. Year-to-date, the Brazilian currency is up 15.9%. The consensus forecast estimated the real at 5.38 by the end of 2025, implying a 14.9% gain this year that would be its biggest since a 21.8% appreciation in 2016. The Mexican peso is up 13.9% so far in 2025, aiming at a 12.5% annual appreciation that would be the strongest since a 14.9% rise in 2023. (Other stories from the December Reuters foreign exchange poll) https://www.reuters.com/world/americas/mexicos-peso-trade-within-decade-old-range-2026-2025-12-03/
2025-12-03 11:06
ZURICH, Dec 3 (Reuters) - The Swiss National Bank will stick to its 0% interest policy next week and well into 2026 rather than opting for negative rates, economists said on Wednesday, despite inflation slipping below expectations to the bottom end of the SNB's target range. Switzerland's annual inflation rate unexpectedly slowed by a 10th of a percentage point in November to zero, slightly undershooting expectations, official data showed. Sign up here. The consensus forecast of a Reuters poll of analysts was that inflation would remain unchanged at 0.1% last month. The 0% reading was at the bottom end of the SNB's price stability target for inflation between 0% and 2%, and the lowest figure since May. DATA IS LAST INFLATION READING BEFORE RATES DECISION The central bank declined to comment on the figures, which were the last inflation data before it announces its next interest rate decision on December 11. Still, despite the downturn economists reckon the SNB will keep its benchmark interest rate unchanged at 0% and well into 2026. "There is no need for policy changes," said Karsten Junius, an economist at J.Safra Sarasin, who also expects no change in 2026. Rudolf Minsch, chief economist at economiesuisse, also expects the central bank to keep interest rates at zero next week and throughout 2026, while Swiss inflation would increase to around 0.4% next year. "Negative interest rates also have undesirable effects, and are only used when there is an urgent necessity, which we don’t see," he said. SNB HAS HIGH THRESHOLD TO CUT RATES Likewise, UBS economist Alessandro Bee said he expected the SNB to keep rates at 0% into 2026, when he expected a slight acceleration in Swiss inflation due to higher wages next year. Market expectations are presently that the bank will leave the benchmark rate unchanged next week. SNB officials have also previously said they expect inflation to rise in future, while they also said they would tolerate inflation falling below 0% temporarily. https://www.reuters.com/business/snb-expected-avoid-negative-rates-despite-inflation-downturn-2025-12-03/
