2025-12-10 14:55

OTTAWA, Dec 10 (Reuters) - The Bank of Canada released the following statement on Wednesday: "The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. Sign up here. "Major economies around the world continue to show resilience to US trade protectionism, but uncertainty is still high. In the United States, economic growth is being supported by strong consumption and a surge in AI investment. The US government shutdown caused volatility in quarterly growth and delayed the release of some key economic data. Tariffs are causing some upward pressure on US inflation. In the euro area, economic growth has been stronger than expected, with the services sector showing particular resilience. In China, soft domestic demand, including more weakness in the housing market, is weighing on growth. Global financial conditions, oil prices, and the Canadian dollar are all roughly unchanged since the Bank's October Monetary Policy Report (MPR). "Canada's economy grew by a surprisingly strong 2.6% in the third quarter, even as final domestic demand was flat. The increase in GDP largely reflected volatility in trade. The Bank expects final domestic demand will grow in the fourth quarter, but with an anticipated decline in net exports, GDP will likely be weak. Growth is forecast to pick up in 2026, although uncertainty remains high and large swings in trade may continue to cause quarterly volatility. "Canada's labour market is showing some signs of improvement. Employment has shown solid gains in the past three months and the unemployment rate declined to 6.5% in November. Nevertheless, job markets in trade-sensitive sectors remain weak and economy-wide hiring intentions continue to be subdued. "CPI inflation slowed to 2.2% in October, as gasoline prices fell and food prices rose more slowly. CPI inflation has been close to the 2% target for more than a year, while measures of core inflation remain in the range of 2½% to 3%. The Bank assesses that underlying inflation is still around 2½%. In the near term, CPI inflation is likely to be higher due to the effects of last year's GST/HST holiday on the prices of some goods and services. Looking through this choppiness, the Bank expects ongoing economic slack to roughly offset cost pressures associated with the reconfiguration of trade, keeping CPI inflation close to the 2% target. "If inflation and economic activity evolve broadly in line with the October projection, Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment. Uncertainty remains elevated. If the outlook changes, we are prepared to respond. The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval." ((Reuters Ottawa bureau, +1 647 480 7921; [email protected] , opens new tab)) Keywords: CANADA CENBANK/RATES https://www.reuters.com/world/americas/full-text-bank-canada-keeps-key-policy-rate-unchanged-2025-12-10/

2025-12-10 14:51

OTTAWA, Dec 10 (Reuters) - The Bank of Canada released the following statement by Governor Tiff Macklem on Wednesday: "Good morning. I'm pleased to be here with Senior Deputy Governor Carolyn Rogers to discuss today’s monetary policy decision. Sign up here. "Today, Governing Council maintained the policy interest rate at 2.25%. "We have three main messages. "First, steep US tariffs on steel, aluminum, autos and lumber have hit these sectors hard, and uncertainty about US trade policy is weighing on business investment more broadly. But so far, the economy is proving resilient overall. "Second, inflationary pressures continue to be contained despite added costs related to the reconfiguration of trade. Total CPI inflation has been close to the 2% target for more than a year now, and we expect it to remain near the target. "Third, in the current situation, Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment. Nevertheless, uncertainty remains high and the range of possible outcomes is wider than usual. If the outlook changes, we are prepared to respond. "Let me expand on how we're interpreting the new information we received since we published our October Monetary Policy Report. "In November, Statistics Canada published broad revisions to Canada’s economic growth numbers for 2022, 2023 and 2024. The revisions suggest the Canadian economy was healthier than we previously thought before we were hit by the US trade conflict. In particular, they suggest both demand and economic capacity were higher coming into this year. This may explain some of the resilience we're seeing in more recent data. "After falling 1.8% in the second quarter due to sharply lower exports, Canadian GDP grew 2.6% in the third quarter. This was much stronger than we expected, but largely reflected volatility in trade. Final domestic demand was flat in the quarter. We expect growth in final domestic demand to resume, but with an anticipated decline in net exports, GDP growth is likely to be weak in the fourth quarter before picking up in 2026. "The labour market is showing some signs of improvement. After declining through the summer, employment has posted solid gains for the past three months and the unemployment rate has declined to 6.5% in November. Since the start of the year, there have been significant job losses in trade-sensitive sectors. But in recent months, employment in these sectors has been more stable, so gains in other sectors—particularly services—have boosted overall employment. Looking ahead, however, we're seeing muted hiring intentions across the economy. "Inflation has evolved largely as expected. CPI inflation was 2.2% in October, and measures of core inflation remained in the range of 2½% to 3%. In the months ahead, we will see some choppiness in headline inflation, reflecting the temporary GST/HST holiday on some goods and services a year ago. This is likely to push inflation temporarily higher in the near term. Seeing through this choppiness, we expect ongoing economic slack to roughly offset cost pressures associated with the reconfiguration of trade, keeping CPI inflation close to the 2% target. "The recent federal budget includes increases in government spending, particularly in defence, and measures to increase public and private sector investment. It will take some time for the impact of these measures to be fully realized, and we expect they will contribute to growth in both demand and supply in the economy. As usual, we will incorporate updated fiscal measures from federal and provincial budgets in our next economic projection in January. "Taking all these developments into consideration, Governing Council assessed the stance of monetary policy. After cutting the policy interest rate in September and October, Governing Council had indicated that if inflation and economic activity were to evolve broadly in line with the October projection, the policy rate would be about right. While information since the last decision has affected the near-term dynamics of GDP growth, it has not changed our view that GDP will expand at a moderate pace in 2026 and inflation will remain close to target. Governing Council therefore decided to hold the policy rate unchanged. We agreed that a policy rate at the lower end of the neutral range was appropriate to provide some support for the economy as it works through this structural transition while keeping inflationary pressures contained. "Finally, Governing Council acknowledged that uncertainty remains elevated. This includes the unpredictability of US trade policy. In particular, the upcoming review of the Canada-United States-Mexico Agreement is creating uncertainty for many businesses. There is also uncertainty about how the Canadian economy will adjust to higher tariffs. The volatility we’re seeing in trade and quarterly GDP make it more difficult to assess the underlying momentum of the economy. "We will be assessing incoming data relative to our outlook. If a new shock or an accumulation of evidence materially change the outlook, we are prepared to respond. "Increased trade friction with the United States means our economy works less efficiently, with higher costs and less income. This is more than a cyclical downturn—it’s a structural transition. Monetary policy cannot restore lost supply. But it can help the economy adjust as long as inflation is well controlled. The Bank of Canada is focused on ensuring Canadians continue to have confidence in price stability through this period of global upheaval. "With that, the Senior Deputy Governor and I would be pleased to take your questions." ((Reuters Ottawa bureau, +1 647 480 7921; [email protected] , opens new tab)) Keywords: CANADA CENBANK/MACKLEM https://www.reuters.com/world/americas/full-text-bank-canada-governor-says-economy-proving-resilient-2025-12-10/

2025-12-10 14:18

OSLO, Dec 10 (Reuters) - Norway's central bank does not currently recommend the introduction of a central bank digital currency (CBDC), but may do so at a later time, it said on Wednesday. Norges Bank assessed whether a CBDC was needed to help ensure that paying with the Norwegian crown remains secure, efficient and attractive, but concluded that such a measure was not warranted at this time. Sign up here. "We will be ready to introduce a central bank digital currency if it becomes necessary to maintain an efficient and secure payment system," Norges Bank Governor Ida Wolden Bache said in a statement. https://www.reuters.com/business/finance/norway-central-bank-does-not-recommend-introduction-digital-currency-2025-12-10/

2025-12-10 14:09

Stocks up 0.33%, currencies up 0.1% Ukraine clinches deal to swap GDP-linked warrants China real estate shares jump Dec 10 (Reuters) - Emerging market assets inched higher ahead of a widely expected interest rate cut by the Federal Reserve on Wednesday, while investors also monitored developments in Ukraine that could influence global risk sentiment. MSCI's gauge of emerging market stocks (.MSCIEF) , opens new tab rose 0.33% and the currencies index (.MIEM00000CUS) , opens new tab edged 0.1% higher, stabilizing after a drop in the previous session. Sign up here. The moves reflect a tone of cautious optimism as jittery investors await Fed Chair Jerome Powell's comments on the outlook for rate cuts in 2026. With much of the enthusiasm around Wednesday's likely cut already priced in, markets are now waiting for the next catalyst, and any hawkish commentary from Powell could prompt a reassessment of risk. "It could be hard to find anything dovish in today's Fed communication," wrote Chris Turner, global head of markets at ING, adding that expectations of two more cuts next year could be on thin ice. Attention is also focused on Ukraine, where President Volodymyr Zelenskiy is preparing to present the U.S. with a new proposal to end the war with Russia. A breakthrough could lift a major overhang on global stocks. The country secured support from creditors for its plan to swap $2.6 billion of growth-linked warrants for a new class of bonds, ending a longstanding stalemate. The price of the warrants jumped 0.7 cents, scaling a fresh four-year high, according to Tradeweb data. POLITICS, DATA DRIVE TONE In Europe, investors continued to monitor a mix of economic and political factors. The Hungarian forint was 0.4% weaker against the euro. Prime Minister Viktor Orban and U.S. President Donald Trump did not agree on a proposed $20 billion financial lifeline but committed to start talks on a new form of financial cooperation, Hungary's foreign minister said on Tuesday. Czech equities (.PX) , opens new tab were little changed after climbing to a record high on Tuesday, when President Petr Pavel appointed the billionaire leader of the populist ANO party, Andrej Babis, as prime minister. Data released on Wednesday showed Czech consumer prices rose 2.1% year-over-year in November, a slower pace than the previous month. Central bankers have flagged lingering inflation risks and urged caution over cutting rates. In China, real estate shares (.CSI000952) , opens new tab jumped 5.9%. Figures on Wednesday showed annual consumer inflation accelerated to a 21-month high in November, but domestic demand in the world's second-biggest economy remains weak, prompting calls for further policy support. The ailing property sector is seen as a potential beneficiary of any additional measures from Beijing. Elsewhere, a board member of South Korea's central bank said foreign exchange authorities need to take action to curb the South Korean won's decline against the dollar. The currency was little changed. Indonesian stocks (.JKSE) , opens new tab rose 0.2%, while the rupiah eased 0.1%. A representative of the country's coordinating ministry for economic affairs told Reuters that tariff negotiations with the U.S. were still ongoing, after a U.S. official said the trade agreement reached in July was at risk of collapsing. https://www.reuters.com/business/em-assets-firm-up-before-potential-fed-cut-ukraine-focus-2025-12-10/

2025-12-10 12:51

VOLOS, Greece, Dec 10 (Reuters) - Dozens of Greek farmers disrupted operations at the regional port of Volos on Wednesday as part of a nationwide demonstration to protest delays in farm aid payments and high production costs. Farmers have deployed thousands of tractors and trucks in dozens of blockades for days, disrupting traffic at several junctures along major motorways and intermittently blocking border crossings as they face a shortfall of more than 600 million euros ($698.58 million) in European Union aid and other payments. Sign up here. The delays were prompted by investigations into a corruption scandal in which some farmers, aided by state employees, faked land ownership to qualify for payouts. Ongoing audits have slowed subsequent disbursements. The delays also coincide with an outbreak of sheep pox undefined that has led to farmers having to cull hundreds of thousands of sheep and goats. Farmers from the central agricultural region of Thessaly, where floods devastated crops and livestock in 2023, drove their tractors to the nearby city of Volos and parked them for a few hours outside the port. Police blocked the entrance to keep them away from passenger and cargo terminals. In an attempt to limit the impact of the protests on transport, a Greek Supreme Court prosecutor ordered authorities on Tuesday to immediately detain farmers who threaten traffic safety intentionally. "We're not backing down. If they want to arrest the thousands of protesting people, let them come and arrest us," Costas Sefis, a farmer from the northern city of Malgara, told public broadcaster ERT. He said compensation for the 2023 disaster had been limited and had come too late. The centre-right government of Kyriakos Mitsotakis, under fire over the scandal, has said it is open to discussions and has urged farmers to halt the blockades. It has acknowledged delays in payments and said farmers will soon receive more aid. But the protests continue. In the north, transport trucks formed long queues at Greece’s border with Bulgaria late on Tuesday where farmers intermittently restricted traffic through the Promachonas border crossing. https://www.reuters.com/business/environment/protesting-greek-farmers-disrupt-port-operations-nationwide-blockades-persist-2025-12-10/

2025-12-10 12:22

Trade initiative dates from 2000 but elapsed in September Hundreds of thousands of African jobs rely on the deal USTR said earlier this week South Africa could be excluded South Africa fighting to avoid that JOHANNESBURG, Dec 11 (Reuters) - A U.S. House committee on Wednesday approved a bill that would renew for another three years Washington's preferential trade programme for Africa, and there was no immediate mention of excluding South Africa as the U.S. trade envoy had said was possible. The African Growth and Opportunity Act (AGOA), a law first enacted in 2000 to provide duty-free access to the U.S. market for eligible Sub-Saharan countries and products, expired in September and hundreds of thousands of African jobs are estimated to depend on it. Sign up here. U.S. Trade Representative Jamieson Greer said on Tuesday the Trump administration was open to a one-year extension but might exclude South Africa, which he described as a "unique problem". The U.S. House Committee on Ways and Means approved the AGOA Extension Act by a vote of 37-3, a committee statement said, describing the trade initiative as "the cornerstone of economic relations between the U.S. and Sub-Saharan African nations". "An extended lapse in AGOA would create a void that malign actors like China and Russia will seek to fill," the statement added. The bill will pass to the full House of Representatives, though it is not yet clear when it will take it up. SOUTH AFRICA FIGHTING TO STAY IN AGOA South Africa's trade ministry says it is doing everything it can to ensure the country is included in any AGOA extension, even though relations with the U.S. have soured badly during Trump's second term in office. Trump has railed against Africa's biggest economy for its policies addressing racial inequality, and trade official Greer says it needs to lower tariffs and non-tariff barriers on U.S. products for the U.S. to reduce the 30% duties it imposed on South African goods in August. South Africa says the Trump administration based its tariffs on an inaccurate view of the two countries' trade. A trade ministry spokesperson said South Africa was tracking the progress of the AGOA Extension Act closely. https://www.reuters.com/world/africa/us-house-committee-take-up-africa-trade-bill-south-africa-risks-exclusion-2025-12-10/