2024-09-13 05:22

FRANKFURT, Sept 13 (Reuters) - Inflation in the euro zone, including a core measure that strips out volatile prices, is going in the right direction, European Central Bank policymaker Joachim Nagel said on Friday as he backed the ECB's latest rate cut. "We assume that core inflation will improve, especially with the declining wage trend in the euro zone," he told German radio Deutschlandfunk. "Here, too, things are moving in the right direction." Sign up here. https://www.reuters.com/markets/europe/euro-zone-inflation-going-right-direction-says-ecbs-nagel-2024-09-13/

2024-09-13 04:58

MUMBAI, Sept 13 (Reuters) - The Indian rupee rose on Friday and dollar-rupee forward premiums climbed on renewed hopes of a 50-basis-point rate cut by the Federal Reserve next week, which also helped lift most Asian currencies. The rupee was up 0.05% at 83.9250 as of 10:20 a.m. IST, compared with its close at 83.9650 in the previous session. The currency saw some relief after hovering close to the 84 mark for much of the week. Reports from the Financial Times and the Wall Street Journal signalled that the Fed's decision next week to cut rates by 25 or 50 bps was likely to be a close call. U.S. bond yields and the dollar index fell as investors raised the odds of a 50 bp cut to 43%, up from 18% a day earlier, according to CME's FedWatch tool. Asian currencies rose, with the Korean won, up 0.8%, leading the gains. The shift also aided dollar-rupee forward premiums, with the 1-year implied yield rising 4 basis points to 2.27%, the highest since May 2023. Interest in building paid positions on far forwards is likely to continue but would prefer to "pay on dips" at current levels given the rise in recent sessions, a trader at a foreign bank said. DBS Bank expects the Fed to deliver a 25-bp cut next week but said the U.S. central bank is likely to "be more explicit than its counterparts regarding its multiple rate cut trajectory over 2025-2026", keeping pressure on the dollar. Despite the positive cues, the rupee will continue to be rangebound as importers' dollar appetite remains buoyant, traders said. Forex advisory firm IFA global expects the rupee to hover between 83.85 and 84 on Friday. Sign up here. https://www.reuters.com/markets/currencies/rupee-forward-premiums-lifted-by-improved-odds-deeper-fed-rate-cut-2024-09-13/

2024-09-13 04:33

A look at the day ahead in European and global markets from Kevin Buckland European traders who went to bed thinking a quarter-point Fed rate cut was a lock for next week may well have had a rude awakening on this Friday the 13th, with the odds for a super-sized half-point reduction back at nearly a coin toss. It started with separate reports in the Financial Times and the Wall Street Journal that both said the Sept. 18 decision remained "a close call". Then former New York Fed President Bill Dudley, who remains highly influential, said at an event in Singapore that there's "a strong case" for a 50 bps reduction. That put the dollar on the defensive, as it slipped back towards its lowest level this year against the yen and lost additional ground on the euro. Two-year Treasury yields were back below 3.6% in Asian hours. Gold pushed to a new all-time peak at $2,570. Reactions in the equities markets were mixed. Hong Kong's Hang Seng was up more than 1% and Australian stocks were also higher. But for the Nikkei, a decline was pretty much a given with the yen that much stronger. South Korea also slumped and mainland Chinese stocks struggled. It's worth noting that all three of those markets are heading into a long holiday weekend, with South Korean traders not back at work until next Thursday. A very early look at pan-European STOXX 50 futures was positive, pointing up 0.3%. There's little on the data docket in Europe on Friday to distract from Fed-focused speculation, which has boosted the chance of a 50 bps cut to 43% versus 28% early in the Asian morning. Some CPI prints are continuing to roll in, including from France and Greece. Data is also due on the euro region's industrial production. No central bank speeches are on the calendar, with the Fed and the Bank of England - which will announce policy next Thursday, with no change expected - in blackout periods. Meanwhile, the ECB has moved mostly into the rear-view mirror after Thursday's well-telegraphed rate cut, and no clear guidance from President Christine Lagarde on when to expect the next one. Key developments that could influence markets on Friday: -France, Greece, Poland, Slovakia CPI (August) -Euro zone industrial production (July) Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-09-13/

2024-09-13 03:01

MUMBAI, Sept 13 (Reuters) - The Indian rupee is expected to rise on Friday after media reports prompted investors to pile into wagers that the U.S. Federal Reserve may cut interest rates by 50 basis points next week. The 1-month non-deliverable forward indicated that the rupee will likely open at 83.92-83.94 to the U.S. dollar, compared with 83.9650 on Thursday. The dollar was under pressure following media reports from the Financial Times and the Wall Street Journal, which indicated that the Fed's decision next week on whether to cut rates by 25 basis points or 50 bps might be a line ball call. This was a surprise to traders who had nearly priced out the probability of a big rate cut, following the U.S. August jobs and inflation report. Probability of 50 bps rate cut has jumped to 40% from 14%, per CME FedWatch Tool. The increase in possibility of a 50 bps rate cut despite a slightly higher than expected reading on the August U.S. producer price index and in-line with expectations print on initial jobless claims. The dollar index has dropped to near 101 and is less than half-a-percentage away from the year-to-date low. With the markets having "swung a touch back" in the direction of a 50 bps Fed cut next week, the dollar is under pressure, ANZ Bank said in a note. The bank reckons the Fed will not opt for a 50 bps cut and will deliver a 25 bps reduction, noting that "underlying financial and economic conditions do not suggest a more forceful commencement" to the rate cut cycle. RUPEE REMAINS WELL SUPPORTED AT 84 The rupee on Thursday yet again avoided a dip past the 84 level, thanks largely to intervention by the central bank, said traders. It has now been more than a month that the central bank has managed to prevent the rupee from weakening past 84. KEY INDICATORS: ** One-month non-deliverable rupee forward at 84.03; onshore one-month forward premium at 8.50 paisa ** Dollar index down at 101.02 ** Brent crude futures up 0.4% at $72.3 per barrel ** Ten-year U.S. note yield at 3.65%, India 10-yr bond yield at 6.81% ** As per NSDL data, foreign investors bought a net $341.8 mln worth of Indian shares on Sept. 11 ** NSDL data shows foreign investors sold a net $22.3 mln worth of Indian bonds on Sept. 11 Sign up here. https://www.reuters.com/markets/currencies/rising-odds-big-fed-rate-cut-following-reports-likely-boost-rupee-2024-09-13/

2024-09-13 02:54

SINGAPORE, Sept 13 (Reuters) - Former New York Federal Reserve President Bill Dudley said there was a strong case for a 50 basis point interest rate cut in the United States. "I think there's a strong case for 50, whether they're going to do it or not," he said at the Bretton Woods Committee's annual Future of Finance Forum in Singapore. He said rates were currently 150-200 basis points above the so-called neutral rate for the U.S. economy, where policy is neither restrictive nor accomodative. "So the question is: 'Why don't you just get started?'" Dudley had previously called for the Fed to begin cutting in July. U.S. yields fell in Asia trade on Friday while rates futures rallied in reaction to media reports that next week's decision on whether to cut by 25 bps or 50 bps was a close call. Sign up here. https://www.reuters.com/markets/rates-bonds/strong-case-50-bp-fed-cut-says-former-ny-fed-chief-dudley-2024-09-13/

2024-09-13 01:43

All but three of 33 economists expect rates on hold at 6.25% on Sept. 18 BENGALURU, Sept 13 (Reuters) - Bank Indonesia (BI) will leave interest rates unchanged next week to support the rupiah but was expected to cut next quarter, after widely anticipated policy loosening by the U.S. Federal Reserve on Sept. 18, a Reuters poll found. With inflation staying well within BI's target range of 1.5%-3.5% since mid-2023, Governor Perry Warjiyo said in August the focus for this quarter will be on supporting the rupiah's exchange rate against the U.S. dollar as a strong currency helps in controlling inflation via cheaper imports. Expectations the Fed will cut rates by at least 75 basis points this year have helped the rupiah gain nearly 5% against the dollar in August, providing BI with enough room to make fewer rate cuts than the U.S. central bank. Thirty of 33 economists surveyed in a Sept. 9-12 Reuters poll forecast the central bank would keep its benchmark seven-day reverse repurchase rate (IDCBRR=ECI) , opens new tab unchanged at 6.25% at the conclusion of its two-day meeting on Sept. 18. BI was also forecast to keep the overnight deposit facility and lending facility rates unchanged at 5.50% and 7.00%, respectively. "BI will remain vigilant on the rupiah, even as it recognises the need for more accommodative monetary policy to support growth," said Brian Lee Shun Rong, an economist at Maybank. Median forecasts showed the first 25 bps cut was expected to come next quarter. That outlook was broadly unchanged from a July survey. Those who provided forecasts until end-2025 predicted BI would cut rates by 100 bps to 5.25% from the current level. The Fed was expected to lower rates by 175 bps for the same period. "I...see BI taking a bit more of a gradual (and) more measured approach to rate cuts over the next 12 to 18 months compared to other regional central banks who might cut more aggressively as the Fed will cut quite aggressively," said Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics. Sign up here. https://www.reuters.com/markets/rates-bonds/bank-indonesia-keep-rates-steady-sept-18-cut-q4-2024-09-13/