2024-08-28 18:58
Canadian dollar falls 0.3% against the greenback Pulls back from a 5-month high at 1.3438 Price of U.S. oil settles 1.3% lower Canada-U.S. 2-year spread hits narrowest in 3 months TORONTO, Aug 28 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Wednesday, as oil prices fell and investors took stock of recent gains for the currency which lifted it to a five-month high. The loonie was trading 0.3% lower at 1.3480 per U.S. dollar, or 74.18 U.S. cents, after earlier touching its strongest since March 8 at 1.3438. The currency was on track to advance 2.4% in August, which would be its biggest monthly advance since June 2023. "The CAD is pausing for a respite," said Tony Valente, a senior FX dealer at AscendantFX. "Month-end flows into the USD usually dominate the last couple of days of the month, especially after the losses it (the dollar) has sustained across the board this month." The U.S. dollar clawed back some recent losses against a basket of major currencies, while the price of oil, one of Canada's major exports, was trading 1% lower at $74.80 a barrel after a smaller-than-expected draw in U.S. crude stockpiles and as concerns over Chinese demand persisted. Canadian second-quarter GDP data, due on Friday, is expected to show the economy growing at an annualized rate of 1.6%, which would be below the roughly 2.4% rate the Bank of Canada estimates for potential growth. Such an outcome could cement another interest rate cut when the BoC makes a policy decision next Wednesday. The central bank has cut twice since June to leave its benchmark rate at 4.50%. Canadian government bond yields moved higher across the curve, with the 2-year up 2.2 basis points at 3.271%. The gap between it and the U.S. equivalent narrowed by 1.6 basis points to 60 basis points in favor of the U.S. note, the narrowest gap since May 17. Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-gives-back-some-recent-gains-ahead-month-end-2024-08-28/
2024-08-28 17:57
JERUSALEM, Aug 28 (Reuters) - The Bank of Israel kept interest rates unchanged on Wednesday for the fifth-straight meeting, citing geopolitical uncertainty that has raised economic risks, along with rising inflation, and said rates would likely not fall further until 2025. The central bank, worried about Israel's risk premium, which has risen since Israel's war against Hamas militants began on Oct. 7, left its benchmark rate (ILINR=ECI) , opens new tab at 4.50%. All 15 analysts polled by Reuters had expected no rate move. "In view of the continuing war, the monetary committee’s policy is focusing on stabilizing the markets and reducing uncertainty, alongside price stability and supporting economic activity," the Bank of Israel said in a statement. Policymakers expressed concerns over loosening fiscal policy as the war and geopolitical risks are being reflected in high yield spreads between Israeli government and U.S. bonds, and in credit default swap spreads that are near record levels. The central bank had reduced the rate by 25 basis points in January after inflation eased and economic growth slowed amid the Gaza war, but kept policy steady in February, April, May and July. Some analysts had believed that rates could go down further this year, with two more decisions on Oct. 9 and Nov. 25 but deputy governor Andrew Abir said that was unlikely. "It's unlikely for us to be cutting rates until well into 2025," Abir told Reuters, noting that the decision remains data-dependent. "As long as the uncertainty around the war (and) the dislocation in various key industries carries on, it's difficult for us to be able to reduce interest rates." He said there were too many factors against a rate cut, such as rising inflation and the Gaza war, which has created supply disruptions and labour shortages. Those conditions have led to a higher budget deficit and the government has yet to present a credible 2025 state budget. "Because of the fiscal situation, that leads us to being more cautious and conservative about monetary policy," Abir said. "And we think a higher level of interest is needed in order to keep the economy and markets stable." Israel's annual inflation rate rose to 3.2% in July from 2.9% in the previous month, moving back above the government's 1%-3% target range after falling as low as 2.5% in February. The economy grew an annualised 1.2% in the second quarter, slowing markedly from a 17.3% pace in the first quarter. "The level of economic activity is lower than the trendline and even lower than its level in the corresponding quarter of 2023, and is greatly impacted by supply limitations," the bank said. Sign up here. https://www.reuters.com/markets/rates-bonds/israel-central-bank-unlikely-cut-rates-again-2024-deputy-governor-says-2024-08-28/
2024-08-28 14:35
BRASILIA, Aug 28 (Reuters) - Brazil's central bank has provided no guidance for its upcoming policy meeting because of its need for flexibility at this time as it tries to bring inflation back toward its 3% target, Governor Roberto Campos Neto said on Wednesday. Speaking at an event hosted by Santander, Campos Neto said central bank policymakers understand that the lack of clear signaling increases market volatility, but he emphasized that "we chose not to provide guidance precisely because we believe it is important to have flexibility at this moment." "The best way to maintain credibility is to conduct monetary policy based on a technical and well-communicated framework," Campos Neto said. Brazil's central bank kept its Selic benchmark rate steady at 10.5% at its meeting in July for the second consecutive time. Its next policy meeting will take place on Sept. 17-18. Campos Neto said the central bank will do whatever is necessary to bring inflation back down to the target, a message he highlighted as "very important." Official data on Tuesday showed annual inflation in South America's largest economy hit 4.35% in mid-August. In a written presentation to the Santander event, the central bank chief said Brazil's disinflation process had slowed while inflation expectations had further deviated from the official target recently. He also emphasized that "services inflation, which has greater inertia, is playing a predominant role in the current stage of the disinflationary process" in the country. Campos Neto added that there are early but clearer signs that a strong labor market may be pushing up prices in the service sector. Sign up here. https://www.reuters.com/world/americas/brazils-central-bank-chief-says-disinflation-has-slowed-2024-08-28/
2024-08-28 12:50
MADRID, Aug 28 (Reuters) - Spain has proposed its Energy and Environment Minister Teresa Ribera as a European Union Commissioner, a government spokesperson said on Wednesday. Ribera has shepherded Spain's green agenda since 2018, championing a harder, faster transition to a zero-carbon economy, prioritising renewable energy such as solar and wind over gas and nuclear plants, which she advocates phasing out. Prime Minister Pedro Sanchez's office has sent a formal letter proposing that Ribera, 55, be appointed to the new Commission headed by Ursula von der Leyen, the government spokesman said, confirming an earlier report by state news agency EFE. The Spanish government and the S&D group of social democrats in the European Parliament will push to give Ribera a broader portfolio beyond climate matters, a source with direct knowledge of the talks told Reuters. Consolidating a single market for energy and implementing clean tech industry policies could be among the new subjects added to Ribera's remit, the source added. Ribera is also expected to vie for one of the Commission's vice presidencies. The dearth of strong female candidates would pave the way for such an appointment, a source within Ribera's Socialist Party said. Since Spain held the EU's rotating presidency, Ribera was a key figure at the COP28 climate change conference in Dubai, reinforcing her image as one of the fiercest proponents of Europe's agenda to combat climate change. Issues such as the nuclear phase-out and the biogas industry generated tension between Ribera and big energy players and business lobbies, while environmental groups criticised the energy plan for not doing enough to tackle climate change. Sign up here. https://www.reuters.com/world/europe/spain-proposes-energy-minister-ribera-eu-commissioner-post-2024-08-28/
2024-08-28 12:32
MEIWA, Japan, Aug 28 (Reuters) - The record high temperatures and sweltering weather that suffocated Japan this summer did not stop 77-year-old farmer Yasuyuki Kurosawa from tending his crops. Kurosawa, who grows rice, cabbage, wheat and corn in Meiwa, a town in the eastern Gunma prefecture, is one of nearly a million predominantly elderly Japanese who still farm for a living, and who are at a greater risk that most people of falling ill, or even dying, from the heat. "This is something that we cannot avoid, so we must do what we must do even if it's hot," he said. Agriculture accounts for about 1% of Japan's economy and almost 70% of its 1.4 million farmers are aged 65 and above. This July, the number of people working in farming and fishing who were taken to hospital due to heat stroke was 877, nearly five times the number in June, according to the fire and disaster management agency. In 2022, 29 farmers died from heat stroke. The authorities this year have issued warnings about heat-related illnesses as the temperatures soared to 40 Celsius (104 degrees Fahrenheit) in several cities. Some parts of Tokyo and other areas in the country have also witnessed record high temperatures for this time of year. The heat is particularly challenging for farmers like Kurosawa, who works from 5:30 a.m. until noon, and then takes a break until around 3:30 p.m. to avoid being outside during the hottest hours of the day. Yukihiro, his 39-year-old son and also a farmer, said he drinks about 10 bottles of liquid a day to keep hydrated. He also wears a jacket that has fans attached, and said he was concerned that this extreme heat was becoming more commonplace. "The heat record is broken every year, and I'm anxious about the situation," he said, sweat beading on his forehead. "Even if it's hot outside and we feel anxious, we have to do it while taking precautions against the heat." Sign up here. https://www.reuters.com/world/japan/heat-stroke-risk-wont-stop-japans-ageing-farmers-temperatures-soar-2024-08-28/
2024-08-28 11:17
MILAN, Aug 28 (Reuters) - An independent foundation on Wednesday filed a class action lawsuit in the Netherlands against Stellantis (STLAM.MI) , opens new tab over alleged emissions test cheating by one of its predecessor companies, Fiat Chrysler, a document seen by Reuters showed. According to the lawsuit, filed by the Dutch non-profit foundation Fiat Chrysler Investors Recovery Stichting, from at least 2014 until 2017 Fiat Chrysler failed to disclose it had installed illegal software in its vehicles aimed at covering up emissions, the foundation's legal adviser said in a statement. "As a result, (it) significantly harmed investors buying and/or holding Fiat Chrysler shares," the statement from law firm Scott+Scott said. Stellantis said in a statement it "believes that this lawsuit is without merit and intends to defend itself vigorously". Stellantis was formed in early 2021 from the merger of Fiat Chrysler Automobiles (FCA) and France's PSA. FCA US LLC, a unit of Netherlands-based Stellantis, pleaded guilty in 2022 to criminal conspiracy as part of a multi-year U.S. Justice Department diesel-emissions fraud probe. Scott+Scott said investors potentially eligible to join the claim were those who bought or held Fiat Chrysler shares on the Milan stock exchange from October 2014 to May 2017. The claim is funded by an external financier associated with U.S. asset manager Fortress Investment Group, according to the foundation website. "This emission scandal was hidden by Fiat Chrysler for years and has impacted thousands of investors. It is overdue that the car manufacturer is being held accountable through this class action," foundation chair Flip Schreurs said in the statement. Fiat Chrysler, Peugeot maker PSA and Opel - also a brand of Stellantis - have been under investigation in Europe, along with several other carmakers, in the wake of Volkswagen's (VOWG_p.DE) , opens new tab dieselgate emissions scandal. Scott+Scott partner Jan-Willem De Jong said the case was submitted on Wednesday to the District Court North-Holland in the Netherlands, while it notified Stellantis on Tuesday. The court is expected to decide the next steps on Dec. 4, he added. Sign up here. https://www.reuters.com/business/autos-transportation/dutch-group-sues-stellantis-over-alleged-emissions-cheating-2024-08-28/
