2024-08-19 08:57

Riksbank seen cutting policy rate to 3.50% from 3.75% Policy rate expected at 3.00% at year end Rate announcement 0730 GMT, Aug 20 Link to data: STOCKHOLM, Aug 19 (Reuters) - Sweden's central bank is expected to cut its policy rate by a quarter percentage point to 3.50% on Aug. 20 and then twice more before the end of the year as inflation pressures continue to ease, a poll of analysts by Reuters showed on Monday. All 16 analysts in the poll saw a quarter point cut on Tuesday with the policy rate expected to end the year at 3.00% before falling further in early 2025. "Swedish inflation and activity data have been weaker than policymakers expected," Adrian Prettejohn, Europe Economist at Capital Economics said. "We think this will encourage them to cut the key policy rate from 3.75% to 3.50% ... and to indicate at least a further 50 basis points of cuts over the remainder of the year." After cutting the policy rate for the first time in eight years in May, the central bank left it unchanged at 3.75% in June. It said then that it could make up to three more cuts before the end of the year amid lower price pressures. The pace of headline inflation has continued to ease from its peak of above 10% in 2022, and has undershot the central bank's target of 2% for two months in a row. The economy has slowed with manufacturers, households and the construction sector all weakening in the second quarter. With markets expecting the U.S. Federal Reserve to start cutting interest rates in September, worries that rapid local rate cuts could hurt the crown and push inflation back up have also moderated, with a minority of analysts seeing scope for faster Swedish cuts this year. "We stand firm with our forecast that the policy rate will be cut at all the four upcoming monetary policy meetings and a policy rate at 2.75% year-end," Nordea economist Torbjorn Isaksson said. "We see an additional rate cut early next year." However, with stubborn inflation in the euro zone and the European Central Bank only expected to cut rates twice more this year, Swedish rate setters may opt for a degree of caution. The central bank of neighbouring Norway held its key rate on Aug. 15 and said a tight stance will likely be needed for some time to combat inflation. The Swedish central bank has three more rate-setting meetings this year after Tuesday, in September, November and December. The Riksbank publishes its policy decision at 0730 GMT. Sign up here. https://www.reuters.com/markets/europe/swedish-cbank-seen-cutting-rates-this-week-more-come-by-year-end-2024-08-19/

2024-08-19 07:38

TOKYO, Aug 19 (Reuters) - Japan's national and Tokyo governments are seeking a 700 billion yen ($4.7 billion) valuation for Tokyo Metro as they prepare to list the subway operator as early as October-end, three sources said, in what would be the nation's biggest IPO in roughly six years. The two governments, which own 100% of Tokyo Metro, plan to arrange a meeting of brokerages within a week for a briefing on the IPO and expect to receive approval for the listing from the Tokyo Stock Exchange as soon as mid-September, the sources said. With half the company to be sold, the initial public offering (IPO) could raise 350 billion yen at that valuation, which would exceed the size of Kokusai Electric's (6525.T) , opens new tab IPO last year and become the largest since SoftBank Group (9984.T) , opens new tab listed its wireless unit in 2018. The Tokyo government said the timing of the sale is being discussed with the national government and is not decided. The finance ministry did not respond to requests for comment. Tokyo Metro said it would not comment on progress on the listing. Japan Exchange Group (8697.T) , opens new tab, which operates the Tokyo Stock Exchange, said it cannot comment on specific companies. The IPO follows the listing of other railway operators, including Kyushu Railway (JR Kyushu) (9142.T) , opens new tab in 2016. Tokyo Metro runs 195 kilometres (120 miles) of lines carrying 6.5 million passengers daily. Tokyo Metro's history dates back to 1920 with the establishment of the Tokyo Underground Railway Company. Seven years later, it opened Japan's first subway line, between the Asakusa and Ueno districts of Tokyo. The company, whose business includes real estate and retail, reported net profit jumped by two-thirds to 46 billion yen in the financial year ended March 2024 as economic activity rebounded from the COVID-19 pandemic. The central government, which owns 53.4% of Tokyo Metro, plans to use the funds raised to repay reconstruction bonds issued following the 2011 earthquake and tsunami. The Tokyo government holds the remaining 46.6% of the subway operator. Nomura, Mizuho and Goldman Sachs are the joint global coordinators for the listing. ($1 = 148.9800 yen) Sign up here. https://www.reuters.com/markets/deals/japan-tokyo-governments-target-47-bln-valuation-tokyo-metro-ipo-sources-say-2024-08-19/

2024-08-19 07:33

FTSE 100 down 0.2%, FTSE 250 flat Aerospace and defence stocks lead losses Plus500 sees annual results above market view, shares jump Aug 19 (Reuters) - London stocks kick-started the week on a lacklustre tone, weighed down by aerospace and defence shares, although investor optimism over a potential September rate cut in the United States limited losses. The blue-chip FTSE 100 index (.FTSE) , opens new tab was down 0.2% on Monday, after logging its best week since May in the previous session. The mid-cap FTSE 250 (.FTMC) , opens new tab was flat, as of 0710 GMT. Aerospace and defence stocks (.FTNMX502010) , opens new tab inched 1.3% lower, tracking losses in European defence stocks following reports the German federal government would reject new military aid requests for Ukraine due to spending cuts. Shares of Bae Systems (BAES.L) , opens new tab fell 2% while Rolls-Royce (RR.L) , opens new tab and Chemring (CHG.L) , opens new tab were down more than 1% each. Heavyweight energy shares (.FTNMX601010) , opens new tab inched down 0.2% on lower crude prices, while banks (.FTNMX301010) , opens new tab dipped 0.1%. On the flip side, precious (.FTNMX551030) , opens new tab and industrial metal miners (.FTNMX551020) , opens new tab inched 0.7% higher each, as gold prices traded near historic levels while copper gained on waning fears of U.S. recession and Chinese demand concerns. Real estate (.FTUB3510) , opens new tab and real estate investment trusts (.FTNMX351020) , opens new tab were marginally higher after property website Rightmove said British estate agents reported higher buyer interest since the Bank of England's interest rate cut. Investors remained optimistic over a potential U.S. rate cut as data last week reflected slowing inflation and allayed slowdown fears, uplifting sentiment after a global stocks sell-off earlier this month. All eyes will be on commentary from U.S. Federal Reserve Chair Jerome Powell scheduled to speak at the Jackson Hole event later this week. A monthly reading of the purchasing managers index is due in the UK and the United States later this week, alongside minutes of the Fed's last policy meeting in an otherwise data-light week. Among individual stocks, Plus500 (PLUSP.L) , opens new tab gained 4.1% to top the FTSE 250 index after the online trading platform forecast its annual results to be above market view and also recorded a 13% jump in new customers in the first half of the year. Sign up here. https://www.reuters.com/world/uk/londons-ftse-100-slips-us-rate-cut-optimism-limits-losses-2024-08-19/

2024-08-19 07:12

LONDON, Aug 19 (Reuters) - Oil prices eased on Monday, with Brent holding below $80 as concern over demand in top oil importer China weighed on market sentiment. Brent crude futures dropped 63 cents, or 0.8%, to $79.05 a barrel by 1129 GMT. U.S. West Texas Intermediate crude (WTI) futures slid 71 cents, or 0.9%, to $75.94. Both benchmarks fell nearly 2% last Friday as investors tempered their Chinese demand growth expectations but ended the week largely unchanged after U.S. data showed that inflation was moderating despite robust retail spending. "Persistent concerns about slow demand in China led to a sell-off," said Hiroyuki Kikukawa, president of NS Trading, adding that the approaching end of peak driving season in the United States was another factor weighing on prices. However, supply risks from tensions in the Middle East and escalation of the Russian-Ukraine war are underpinning the market, he said. Customs data over the weekend showed that China's diesel and gasoline exports fell sharply in July, reflecting lower crude processing levels because of weak profit margins. On Thursday data also showed China's economy lost momentum in July, with new home prices falling at the fastest pace in nine years, industrial output slowing and unemployment rising. That has stoked worries among traders about a slump in demand from China, where refineries implemented sharp cuts to crude processing rates last month in the face of tepid fuel demand. Meanwhile, U.S. Secretary of State Antony Blinken arrived in Tel Aviv on Sunday on another Middle East tour to push for a ceasefire in Gaza, but Hamas raised doubts about the mission by accusing Israel of undermining his efforts. The mediating countries - Qatar, the United States and Egypt - have so far failed to narrow enough differences to reach an agreement in months of on-off negotiations. Sign up here. https://www.reuters.com/markets/commodities/oil-prices-ease-china-demand-fears-focus-mideast-talks-2024-08-19/

2024-08-19 06:42

KYIV, Aug 19 (Reuters) - Ukraine will cut power for some consumers again on Monday due to a power generation shortage after Russian attacks on its energy system and increased consumption due to hot weather, the Ukrainian power grid operator and the energy ministry said. Russian missile and drone attacks on Ukraine's energy sector have intensified since the spring, resulting in blackouts in many regions and forcing Kyiv to start large-scale electricity imports from the European Union. The restrictions will be in effect from 5:00 p.m. to 9:00 p.m. Kyiv time, Ukrenergo said. Ukraine significantly limited energy supplies in July due to the repair of several key nuclear power units and record high temperatures. The restrictions almost disappeared in August after reactors were brought back on line and temperatures dropped. Ukrainian officials have said that the country lost almost half of its power production capacity because of the attacks. Sign up here. https://www.reuters.com/business/energy/ukraine-return-power-cuts-amid-hot-weather-lack-generation-2024-08-19/

2024-08-19 06:18

Russia started pork exports to China in February Aims to take 10% of China's $3.5 bln import market Brazil, others also take aim at Chinese market MOSCOW, Aug 19 (Reuters) - Russian pork producers are aiming to capture 10% of China's pork import market in the coming years from a standing start, seeking to take advantage of trade tensions between the European Union and China, the world's biggest pork consumer. Russia did not export any pork to China until February, when Beijing authorised three Russian producers to sell pork into the $3.5 billion Chinese import market, which is dominated by EU producers with a 51% share. The trade adds to the growing economic ties between Russia and China in the face of increasing sanctions against both countries by the West. The EU recently set provisional duties of up to 37.6% on electric cars imported from China to counter what it says are unfair subsidies. In response, China named Danish, Dutch, and Spanish pork firms as targets in an anti-dumping probe. "For us, these trade tensions represent a chance to showcase our competitiveness in the Chinese market," Yuri Kovalyov, the head of Russia's National Union of Pig Breeders, told Reuters, adding that producers were not seeking to exploit the tensions on purpose. Kovalyov said Russia's goal was to supply 10% of China's pork imports within three to four years. It will face stiff competition from other major pork exporters, such as Brazil, plus rising Chinese output. Demand for pork is also falling in China, though it still consumes about half of the world's pork, or 53-54 million tons a year. PREMIUM PRICES Russian pork production is expected to reach 5.2 million metric tons in 2024 from 4.9 million in 2023 and a post-Soviet low of 1.5 million in 1999, Kovalyov said. The Soviet Union’s record was 3.5 million tons in 1989. Current production makes Russia the fourth largest producer, behind China, the EU, and the United States, and puts it on par with Brazil. China's imports of pork and offal fell 27.3% year-on-year to 1.11 million tons in the first half of 2024, its customs data show. Kovalyov sees about 50,000-60,000 tons of Russian pork heading to China this year, around 3% of China's total imports, as forecast by the U.S. Department of Agriculture. Much of China's imports from the EU are offal, such as ears and feet, rather than muscle meat. Russian domestic demand for offal is low, as it is in the EU. Kovalyov said Russian pork exports were currently 60% meat and 40% offal – similar to the mix in China's imports. The Russian private producers authorised to sell pork to China – Miratorg, Velikoluksky Pig Breeding Complex, and Rusagro – are among Russia's top five pork producers. "We cautiously estimate that we will export 10,000 tons to China this year," Rusagro deputy CEO Alexander Tarasov said. "The prices are at a premium of 30-40% to domestic prices." HELP FROM SANCTIONS The Russian pork industry collapsed after the fall of the Soviet Union in 1991. The industry started growing again in 2005, helped by state support and protectionist measures. Kovalyov estimates that up to $25 billion has been invested in the sector since 2005. Meatpackers suffered a major setback in 2008 due to an outbreak of African swine fever, which inflicted heavy losses on producers and effectively closed the Chinese market for Russia for 15 years. However, pork production recovered quickly and received a major boost from a ban on EU pork imports to Russia in 2014. Agriculture minister Oksana Lut forecasts Russian pork exports to all countries will rise to 310,000 tons in 2024, including live pigs. Russian producers have already taken a 50% share of pork imports in Vietnam and are exporting to about 20 other markets. "As newcomers, we have one of the most modern pork production sectors in the world," said Kovalyov. Miratorg said it had made the first deliveries from its logistics hub in Russia's Belgorod region to the port of Nansha in southern China by both rail and sea. The company said its overall pork exports jumped 70% last year and it plans to increase pork production by 5% to match demand growth. "Russia definitely has the natural resources, feed base, and freshwater reserves to increase meat production multiple times over," said Marina Demidova, Miratorg's head of exports. Expansion plans could be hindered by delays in payments between Russia and China as Chinese banks, under pressure from Western regulators to enforce sanctions against Russia, have become more cautious in processing payments. Banking sources told Reuters that food exports could be one area where the two countries may experiment with barter trade schemes. Kovalyov said he was not aware of any barter deals. Sign up here. https://www.reuters.com/markets/commodities/russian-pork-producers-target-eus-share-chinas-pork-market-2024-08-19/