2025-04-03 15:19
JOHANNESBURG, April 3 (Reuters) - South African assets remained under pressure on Thursday after being hit by a double-whammy of U.S. President Donald Trump's announcement of new and higher tariffs and a contentious budget vote that has threatened the ruling coalition's future. The risk-sensitive rand traded at 18.76 against the dollar by 1511 GMT. It hit 19.0150 per dollar earlier in the day, its weakest level since mid-January. Sign up here. On Wednesday, Trump announced a 10% baseline tariff on all imports to the United States, and higher duties on dozens of countries, including South Africa, which was hit with a 31% rate. Trump said the tariffs were a response to duties and other non-tariff barriers put on U.S. goods. On the Johannesburg stock market, the Top-40 (.JTOPI) , opens new tab index closed 3.3% lower. The cost of insuring South Africa's debt against default rose to its highest since late April last year, up 16 basis points from Wednesday's close to reach 254 basis points, according to data from S&P Global Market Intelligence. South Africa's presidency said it urgently wanted a new trade deal with the United States. Major South African exports to the U.S. include vehicles and auto parts, precious stones and metals, iron and steel, machinery and aluminium products and citrus. "While SA will look to enhance other trading partners, Pretoria’s response also requires long overdue domestic economic policy changes to kickstart growth," Daniel Silke, director of the Political Futures Consultancy, said in a post on X. South Africa's parliament passed the budget's fiscal framework on Wednesday after weeks of political wrangling, but the second-biggest party in the coalition, the pro-business Democratic Alliance, voted against the measure and on Thursday challenged the outcome in court. The rand gradually weakened over the course of the day on Wednesday as market fears grew that the alliance may potentially exit the coalition, and went into freefall after the tariff announcement. It slipped as much as 2.6% against the dollar. "The market celebrated the formation of the GNU (government of national unity), but if it were to collapse, we could see even greater turbulence in asset classes," said Maarten Ackerman, chief economist at Citadel Investment Services. https://www.reuters.com/markets/currencies/south-african-markets-hit-by-double-whammy-tariffs-shaky-coalition-2025-04-03/
2025-04-03 12:58
Investors pull out their recession playbooks Rush into bonds may be scuppered by inflation US stocks to continue with falls, China may bounce LONDON, April 3 (Reuters) - Big investors reeling from the shock of U.S. President Donald Trump's hefty new tariffs are pulling out their global recession playbooks and rushing to diversify away from battered Wall Street stocks and the dollar. Trump imposed heftier tariffs than investors expected on Wednesday, announcing a 10% baseline tariff on all imports, including 34% on China and 20% on the European Union, bringing the overall U.S. tariff level to its highest since 1910. Sign up here. The question is to what extent the measures are a negotiating tactic, how much U.S. partners will retaliate and how fast tariff fallout feeds into economic pain. Here's a look at some markets in focus right now: 1/ RECESSION RISK With tariffs set to hit economic growth and raising the odds for a global recession, it's no surprise that traders are ramping up their central bank rate-cut bets. They now see over 80 basis points (bps) of rate cuts from the Federal Reserve this year, versus closer to 70 bps before Trump's announcement. Even before Wednesday's announcement, JPMorgan saw a 40% chance of a U.S. recession this year. "We don't know where those tariffs are going to end up, but it's negative for global growth," Columbia Threadneedle Investments CIO William Davies said. 2/ DOLLAR RATTLED The U.S. dollar slid almost 2% percent against a basket of peers on Thursday, bringing its loss to over 6% so far this year with investors shunning it as a safe-haven for now. "There's a nervousness that everybody loses in terms of growth and the U.S. is one of the bigger losers," said Societe Generale's chief currency strategist Kit Juckes. With Asian countries being hit with some of the highest tariffs, the dong in Vietnam , which will see a 46% levy, hit a record low. But the euro surged above $1.10 and was set for its biggest one-day jump since 2015 , despite hefty measures against the European Union. Juckes said while the tariffs would hurt Europe's economy in the near term, he was looking through that expecting stronger growth later, on the back of massive German stimulus and defence spending. 3/ NIGHTMARE ON WALL STREET Wall Street shares have dropped 3.5% this year with futures trading on Thursday morning in New York signalling another 3% drop could occur in the next few hours. "The US has been showing signs of weakness recently and there is nothing in what is going on now that will help it in the short and medium term," Premier Miton CIO Neil Birrell said. Overseas investors and retirement savers have ploughed $62 trillion into U.S. assets during a dizzying stock rally fuelled by artificial intelligence fever, which is now reversing. Saxo global head of investment strategy Jacob Falkencrone added that the surge in the U.S. tariff rate was a tax on consumption and corporate costs, especially for industries relying on imports. "The result? Higher prices, tighter margins, weaker growth—and a heightened risk of recession." 4/ SPREAD THE PAIN It's not just U.S. stocks in the doldrums. In Asia, Vietnamese stocks (.VNI) , opens new tab tumbled almost 7%, Japan's Nikkei slid 3% to its lowest levels since an August rout (.N225) , opens new tab, and European shares (.STOXX) , opens new tab slid 2%. Investors were now scouring the globe for assets that could be less exposed to trade and tariff shocks in the medium term. State Street head of European investment strategy Altaf Kassam said "rolling uncertainty" was negative for global equities but that a euro zone recovery if U.S. tariffs were reduced via negotiations was a "wild card" trade. Aberdeen portfolio manager Gabriel Sacks said Chinese stocks could bounce back because Beijing may now rapidly escalate its so-far piecemeal economic stimulus pledges in response to 54% tariffs, a level he said investors had previously feared. "I'm relatively positive on China but you have to believe in policy starting to take effect and the property market stabilising," Sacks said. James Henderson at Janus Henderson Investors meanwhile saw opportunities in domestically focused UK stocks in sectors like food retail, which may have been hit by selling and after Britain will only see a 10% levy on exports. 5/ BACK TO SAFETY While they have shunned the dollar, investors are still rushing to safe U.S. Treasuries. U.S. 10-year yields dropped more than 10 basis points to their lowest since October at 4.04% . That's a remarkable turnaround from January, when they surged to a more than one-year above 4.8%, as markets focused on heavy debt and deficit levels. Marlborough chief investment officer Sheldon MacDonald said recession risks would "light a fire" under bond trades, adding he had moved out of U.S. stock markets to take a strong position in U.S., UK and German bonds. But UBS head of European rates strategy Reinout De Bock added it was hard for the market to drive a "super-aggressive rally" in U.S. bonds when inflation was still high and could rise further, given uncertainty around the impact of tariffs on price growth. https://www.reuters.com/markets/wealth/investors-stunned-by-trump-tariffs-prepare-global-growth-shock-2025-04-03/
2025-04-03 12:39
VIENNA, April 3 (Reuters) - Austria will close two smaller crossings at its border with Slovakia and 21 at its border with Hungary from Saturday, in a bid to prevent foot-and-mouth disease from entering the country, the Interior Ministry said on Thursday. The first outbreak of the highly infectious disease in 50 years in Hungary led the country on Wednesday to deploy soldiers and launch disinfection measures to contain it in an area bordering Slovakia and Austria. Sign up here. The disease, which poses no danger to humans, mostly affects cattle and other cloven-hoofed animals like swine, sheep and goats, causing fever and mouth blisters. Outbreaks often lead to trade restrictions and culls of some livestock. Slovakia declared an emergency situation on Tuesday after the disease was found on three farms. To strengthen efforts aimed at preventing the disease from reaching Austria, the country will focus its police resources at those borders on its main crossings, the ministry said in a statement. "So as not to undermine these police checks, we ask you to understand that we cannot provide further details, particularly the times, staffing levels, form of checks etc at the various locations," the ministry said. https://www.reuters.com/business/healthcare-pharmaceuticals/austria-shut-border-crossings-hungary-slovakia-over-foot-mouth-2025-04-03/
2025-04-03 12:34
OTTAWA, April 3 (Reuters) - Canada posted a trade deficit of C$1.52 billion ($1.08 billion) in February, as exports fell and imports grew slightly, Statistics Canada said on Thursday. Due to the implementation of new software at the Canadian Border Services Agency, Statscan said that this month's data includes a greater degree of estimation. Sign up here. Exports were down 5.5%, on energy products, as well as motor vehicles and parts. Imports grew by 0.8%, on motor vehicles and parts, as well as industrial machinery, equipment and parts. Following are the seasonally adjusted figures in billions of Canadian dollars: Merchandise trade Feb Jan (rev) change pct Jan (prev) Balance -1.519 +3.130 n/a +3.973 Exports 70.114 74.214 -5.5 74.464 Imports 71.633 71.083 +0.8 70.492 NOTE: Analysts surveyed by Reuters forecast a trade surplus of C$3.55 billion in February. ($1=$1.4124 Canadian) Keywords: CANADA ECONOMY/TRADE https://www.reuters.com/markets/canada-posts-trade-deficit-152-billion-february-2025-04-03/
2025-04-03 12:23
LAGOS, April 3 (Reuters) - Nigeria's President Bola Tinubu has appointed ex-Shell executive Bayo Ojulari and a new board to run the Nigerian National Petroleum Company, raising hopes of a much-needed overhaul at the troubled state-owned firm and a boost in oil production. Long serving as Nigeria's golden goose, NNPC's opaque dealings, corruption and high-level political meddling have crippled its finances in recent years, creating challenges the new leadership must tackle if they are to get the company - and the nation's economy - back on track. Sign up here. Here is what to know about NNPC's operations. WHY DOES NNPC MATTER? Nigeria's economy is dependent on oil, which accounts for 90% of exports and typically half of the revenues that fund its national budget, making NNPC's performance critical to the economic well-being of Africa's most populous nation. "No Nigerian president can succeed in moving the needle of the economy without addressing the long hydra-headed issues that have made the state oil company a cesspit of malfeasance for decades," said Abuja-based energy analyst Kelvin Emmanuel. Nigeria produces around 1.75 million barrels of oil per day mostly through NNPC's joint ventures with international partners Shell, ExxonMobil, TotalEnergies, Chevron and Eni. NNPC, which is also Nigeria's largest importer of refined fuels, said last year that it had $161 billion in assets. RESTRUCTURING NNPC One of the biggest tasks for Ojulari, a 24-year industry veteran, will be to restructure NNPC to become more efficient, analysts said. That could involve cutting its workforce of over 5,700 employees and selling off some of NNPC's sprawling assets, which include petrol stations and troubled refineries, in order to concentrate on oil production. Any large-scale changes, however, could face pushback from powerful politicians, who influence appointments at NNPC and benefit from the company's contracts, the analysts said. Jeremiah Enoch, an associate at consultancy firm J.S. Held, said Ojulari would also have to carefully navigate "the persistent issue of ethnic politics within the organisation," referring to how ethnic identity can make or break careers in Nigeria. TRANSPARENCY NNPC has long been accused of lacking transparency. It only started publishing financial results in 2021 after four decades of operations. Last September, after months of denials, it finally admitted it was facing financial strain and owed $6 billion to gasoline suppliers. NNPC has also not disclosed how much of its future crude revenues are earmarked for loan repayments, though local media report the figure could run into the billions of dollars. Clementine Wallop, director for Sub-Saharan Africa at political risk consultancy Horizon Engage, said Ojulari faces a tough challenge to sustain recent production gains that many hope will underpin Nigeria's economic recovery. "He will need all his skills to tackle some serious challenges at NNPC, which has had a rocky time financially in the last year," she said. Restructuring and transparency would also help ready NNPC for a planned initial public offering, which could come in the next 12 to 15 months and provide a useful injection of fresh capital, a senior company official said. ($1 = 1,532.3800 naira) https://www.reuters.com/business/energy/what-know-new-ceo-takes-over-nigerias-state-oil-firm-nnpc-2025-04-03/
2025-04-03 12:23
April 3 (Reuters) - India has tightened steel procurement rules to favour domestic manufacturing, at a time when mills are struggling with lower prices of iron and steel due to a sharp influx of cheaper imports, a government notification showed. India's finished steel imports from China, South Korea and Japan hit a record high in the first 10 months of the previous financial year which ended on March 31, government data showed. Sign up here. The new rules under the "Domestically Manufactured Iron And Steel Products Policy 2025" mandates all ministries, departments and agencies under the Indian government to prioritise locally manufactured iron and steel products. The policy is valid for five years and may be extended at the discretion of the Ministry of Steel, a gazette notification issued on April 1 showed. "Specifying foreign certifications or unreasonable technical specifications in bid document is a restrictive and discriminatory practise against local suppliers," the notification said. As per the policy, foreign governments and entities which do not allow Indian mills to participate in their tenders, will not be allowed to participate in Indian government tenders, except for some items specified by the steel ministry. The policy, however, excludes steel grades not manufactured in the country, or if domestic mills cannot meet the quantity required for a project. The move comes a few weeks after the Directorate General of Trade Remedies, which functions under the trade ministry, recommended a temporary 12% tax for 200 days on certain steel imports to curb "serious injury" to the domestic industry. https://www.reuters.com/world/india/india-tightens-steel-procurement-favour-domestic-mills-2025-04-03/
