2024-08-24 06:27

Aug 24 (Reuters) - Credit rating agency S&P Global Ratings has revised Austria's outlook to positive from stable, citing the country's improving energy supply position and solid budgetary situation. "The positive outlook reflects the potential that Austria's energy supply position improves further while its economy remains robust over the next 24 months," S&P said in a statement late on Friday, affirming the country's AA+/A-1+ long- and short-term foreign and local currency sovereign credit ratings. The positive outlook also reflected the possibility of clear and discernible budgetary consolidation, with declining budget deficits, the agency added, delivering its view as Austria's government gears up for a general election on Sept. 29. S&P said it considered Austria's economy to be "broadly resilient", even if a longstanding take-or-pay contract between Austria's biggest energy supplier OMV and Russian gas firm Gazprom ends at the close of this year, when the gas transit contract between Russia and Ukraine is due to expire. It noted that while Austria's exposure to Russian gas remains relatively high, at 83% of total gas imports as of June, it found that the country had made significant progress in diversifying its energy supplies. Thus, Austria looked well equipped to handle potential short-term disruptions arising from the end of the transit contract between Ukraine's Naftogaz and Gazprom, S&P said. The rating agency expects Austria to post a general government deficit of 3.0% of gross domestic product (GDP) this year, which it forecast would shrink to 2.5% by 2027. S&P noted that budgetary plans pursued by a new government after the election could differ from its current forecast, and might need to follow a stricter consolidation path to be compliant with the European Union's fiscal framework. Sign up here. https://www.reuters.com/markets/europe/sp-revises-austrias-credit-rating-outlook-positive-sees-energy-supply-2024-08-24/

2024-08-24 05:39

BANGKOK, Aug 24 (Reuters) - Thailand's central bank is ready to work with the finance ministry despite having different views on certain issues, its governor said on Saturday. Prime Minister Paetongtarn Shinawatra, sworn in last week, has called central bank independence an "obstacle" to economic growth. Paetongtarn's predecessor, Srettha Thavisin, was dismissed as prime minister by court order. Srettha, from the same political party as Paetongtarn, had repeatedly called for the central bank to cut interest rates to support growth. "Our independence comes with accountability," Bank of Thailand Governor Sethaput Suthiwartnarueput told a press conference, adding that the BOT was ready to work with anyone. On Wednesday, the central bank left its key interest rate unchanged for a fifth straight meeting saying the current level was neutral as it waits to see whether Paetongtarn would change Thailand's economic policies. "We are ready to make adjustments that are appropriate to the situation," Sethaput said. "If the outlook changes, then we are ready to adjust policy rates." Paetongtarn has said she would continue but review the government's flagship digital wallet cash-handout programme worth 500 billion baht ($15 billion). Thailand's economy grew 2.3% in the April-June quarter from a year earlier, accelerating from the 1.6% growth in the previous three months, but analysts said fiscal policy uncertainty clouded the outlook. Sethaput said the outlook for the economy and inflation remained in line with forecasts. In June the central bank projected economic growth of 2.6% this year after last year's 1.9% expansion, which lagged regional peers. Sign up here. https://www.reuters.com/markets/asia/thai-central-bank-will-use-policy-mix-address-uneven-economic-recovery-governor-2024-08-24/

2024-08-24 03:35

HOUSTON, Aug 23 (Reuters) - A U.S. federal court officer overseeing an auction of shares in the parent of Venezuela-owned refiner Citgo Petroleum on Friday requested a new extension to evaluate bids and select a winner of the bidding round, according to a court filing. A complex bidding system in an unprecedented court case to pay up to $21.3 billion in debts from expropriations and debt defaults in Venezuela has repeatedly created delays. The auction is expected to see an ownership change of the seventh-largest U.S. refiner. The proposed extension, the third requested so far this year, would give Delaware court officer Robert Pincus until Sept. 16 to choose and recommend a winner. Parties would have 21 days after that to file any objections, with the final sales hearing to be held on Nov. 7, the court document said. The two leading bidders in the auction are refiner CVR Energy (CVI.N) , opens new tab, backed by billionaire investor Carl Icahn, and an investment group led by miner Gold Reserve (GRZ.V) , opens new tab, sources told Reuters last month. The long-running case, first introduced in 2017, has broken new ground in its treatment of international arbitration awards and foreign sovereign immunity issues. The court found Citgo's parent PDV Holding liable for Venezuela's debts. Sign up here. https://www.reuters.com/markets/commodities/us-court-officer-requests-new-extension-select-winner-citgo-auction-2024-08-24/

2024-08-24 00:54

SAO PAULO, Aug 23 (Reuters) - Brazil's Sao Paulo state said that wildfire outbreaks were affecting or closing in on 30 of its cities on Friday evening, adding two people had died in an industrial plant trying to hold back the flames. The cities have been affected by dry, hot weather in recent days, the government said in a statement. The state government also warned that forest fires could spread rapidly from gusts of wind, potentially razing large areas of natural vegetation. For now, the government has not reported flames directly reaching the city of Sao Paulo, Latin America's largest by population with more than 11 million residents. Still, local media reported smoke blocking out some parts of state capital's sky. The government said two employees at an industrial plant in the city of Urupes had died on Friday while fighting a fire, without providing more details. Earlier in the day Raizen (RAIZ4.SA) , opens new tab, the world's largest sugarcane processor, said that industrial operations at a plant in Sertaozinho had been halted since Thursday due to fires in sugarcane fields around the plant. The Sao Paulo state government has created an emergency committee to handle the fires, which had also blocked some 15 highways either fully or partially. Brazil's wildfire season typically peaks in August and September. This year wildfires started unusually early in Pantanal, the world's largest wetlands, in late May, while the number of fires in the Amazon rainforest surged to a two-decade high for the month of July, government data showed early this month. Sign up here. https://www.reuters.com/world/americas/wildfires-affecting-30-cities-brazils-sao-paulo-state-leave-2-dead-2024-08-24/

2024-08-23 22:35

Fed's Powell says 'time has come' to cut interest rates Small caps, regional banks surge Workday jumps after Q2 revenue beat, $1 bln share buyback plan Indexes up: Dow 1.14%, S&P 500 1.15%, Nasdaq 1.47% NEW YORK, Aug 23 (Reuters) - U.S. stocks rallied on Friday as dovish remarks from U.S. Federal Reserve Chair Jerome Powell solidified expectations that the central bank will cut its key policy rate in September. In highly anticipated comments before the Jackson Hole Economic Symposium, Powell said "the time has come" to lower the Fed funds target rate, and "the upside risks of inflation have diminished." "We do not see or welcome further weakening in labor market conditions," Powell added in a speech that appeared to all but guarantee a rate cut at next month's policy meeting, which would be the first such cut in over four years. "The long wait is over," said Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska. "This was the dovish shift that market participants have been waiting for." "The Fed is clearly turning to the dovish camp and Powell has made it crystal clear that September will be the start of multiple rate cuts coming the remainder of this year," Detrick added. All three major U.S. stock indexes jumped after the release of Powell's prepared remarks, with megacaps Nvidia (NVDA.O) , opens new tab, Apple (AAPL.O) , opens new tab and Tesla (TSLA.O) , opens new tab providing the most muscle. Small caps (.RUT) , opens new tab and regional banks were outperformers, (.KRX) , opens new tab rising 3.2% and 4.9%, respectively. "Financials are at an all-time high, with a huge surge from regional banks," Detrick said. "One would think if a major calamity or a recession were on the horizon, regional banks and financials wouldn't be as strong as they’ve been." All three indexes logged weekly advances, standing on the shoulders of last week's largest Friday-to-Friday percentage gains of the year. Next week, the data-dependent Fed will have a raft of economic indicators to consider ahead of its September rate decision, including the Commerce Department's revised second-quarter GDP and its broad-ranging Personal Consumption Expenditures (PCE) report, which includes the Fed's preferred inflation yardstick, the PCE price index. The Dow Jones Industrial Average (.DJI) , opens new tab rose 462.3 points, or 1.14%, to 41,175.08, the S&P 500 (.SPX) , opens new tab gained 63.97 points, or 1.15%, to 5,634.61 and the Nasdaq Composite (.IXIC) , opens new tab added 258.44 points, or 1.47%, to 17,877.79. All 11 major sectors in the S&P 500 ended the session in positive territory, with real estate shares (.SPLRCR) , opens new tab boasting the largest percentage gain, rising 2.0%. Workday (WDAY.O) , opens new tab beat quarterly revenue expectations and announced a $1 billion stock buyback plan, sending shares of the human resources software firm up 12.5%, the biggest percentage gainer on the Nasdaq. Ross Stores (ROST.O) , opens new tab gained 1.8% after the discount retailer raised its fiscal 2024 profit forecast. Turbo Tax's parent Intuit (INTU.O) , opens new tab sagged 6.8% in response to disappointing quarterly revenue. Advancing issues outnumbered declining ones on the NYSE by a 8.08-to-1 ratio; on the Nasdaq, a 3.68-to-1 ratio favored advancers. The S&P 500 posted 81 new 52-week highs and no new lows; the Nasdaq Composite recorded 149 new highs and 51 new lows. Volume on U.S. exchanges was 10.57 billion shares, compared with the 11.88 billion average for the full session over the last 20 trading days. Sign up here. https://www.reuters.com/markets/us/futures-firm-powell-set-take-center-stage-jackson-hole-2024-08-23/

2024-08-23 22:19

JACKSON HOLE, Wyoming, Aug 23 (Reuters) - The Bank of Japan can raise interest rates gradually as heightening inflation expectations leave further scope to normalise its ultra-loose monetary policy, the International Monetary Fund said on Friday. The speed of further rate increases will be "very data-dependent," as the BOJ will look at the pace at which inflation, wage growth and inflation expectations heighten in normalising policy, said IMF chief economist Pierre-Olivier Gourinchas. Gourinchas said Japan's inflation is higher than 2% and inflation expectations have started to move towards, or "maybe even a little bit above" the BOJ's 2% target. As a result, the BOJ is normalising the extremely loose monetary policy it has had for decades, which is "certainly something that we think is a good development for Japan," he told Reuters in an interview on the sidelines of the annual economic symposium in Jackson Hole, Wyoming. "Certainly in our assessment, there is scope for further normalisation of monetary policy going forward, and policy rates to increase gradually for some time," he said. The BOJ ended negative interest rates in March and raised its short-term policy rate to 0.25% in July in landmark steps away from a decade-long radical stimulus program. BOJ Governor Kazuo Ueda has signaled the bank's readiness to keep raising interest rates if inflation makes progress toward durably meeting its 2% target, as it projects. While Japan's economic growth will slow in 2024 from the fiscal stimulus-driven expansion last year, what is important for the BOJ is not just economic activity but inflation, Gourinchas said. Unlike other central banks that focused on taming inflation expectations, the BOJ had to pull them up from multiple decades of too-low levels, he said. "What the BOJ is trying to engineer is a realignment of inflation expectations," Gourinchas said. "We're expecting that as inflation expectations remain stable at their new level close to 2%, the BOJ will start normalising policy rates," he said. The BOJ's surprise July rate increase and Ueda's hawkish signal jolted financial markets in August, forcing his deputy to offer dovish reassurances that no hikes would come until markets stabilise. Speaking in parliament on Friday, Governor Ueda reaffirmed the BOJ's readiness to keep raising rates but with a close eye on the economic fallout from still-unstable markets. Gourinchas said the recent market turbulence was due to a mix of factors including prospects of higher Japanese interest rates, and weak U.S. jobs data that fueled expectations of faster-than-expected rate cuts by the Federal Reserve. Thin market trading during the August holiday season, coupled with a massive unwinding of the yen carry trade, also heightened market volatility, he said. "I think the market overreacted," he said. "I think a lot of this has been resolved, but we could see other episodes of market volatility as markets are ... in a little bit of an uncharted territory" with many central banks starting to ease policy, while the BOJ begins to raise rates, he said. Sign up here. https://www.reuters.com/markets/asia/imf-sees-scope-bank-japan-keep-raising-rates-2024-08-23/