2024-09-16 14:54
BUENOS AIRES, Sept 16 (Reuters) - Argentina's sovereign bonds and stock index climbed in early trading on Monday, as investors cheered an ambitious 2025 budget plan from libertarian President Javier Milei, that predicts robust growth and sticks to a "zero" fiscal deficit. Argentina's S&P Merval sock index (.MERV) , opens new tab hit an intraday record high against its previous peak registered at the beginning of the month. Bonds, which have rallied strongly since Milei took office in December, were up around 1%. On Sunday Milei had told Congress his 2025 budget would stick by his key pledge to establish a fiscal surplus and that he would veto any bills that threatened his zero deficit plan. Milei, a right-wing former economist, has taken tough austerity measures to overturn years of fiscal deficits, tackle rampant inflation and stabilize the economy. He has called a balanced budget non-negotiable. The draft budget foresees the economy expanding 5% in 2025, inflation dropping from over 250% now to some 18% by the end of next year, and the exchange rate weakening to 1,207 pesos per dollar by end-2025 from 960 per dollar now. There would be a primary fiscal surplus of 1.3% of gross domestic product (GDP). "The new budget bill is very ambitious... but now we will have to see if it is approved and what it really looks like in practice," said analyst Marcelo Rojas. "The fact though that the government is committed to not spending more than it collects is already an achievement." Sign up here. https://www.reuters.com/world/americas/argentina-markets-cheer-mileis-zero-deficit-budget-2024-09-16/
2024-09-16 12:38
PARIS, Sept 16 (Reuters) - Austria has reported an outbreak of bluetongue disease on a cattle farm in the western part of the country, the World Organisation for Animal Health (WOAH) said on Monday. Bluetongue can be deadly for domestic ruminants such as sheep, cattle and goats. A new variant of the disease has been circulating in northern Europe since late last year, leading to vaccination campaigns in affected countries including France. Sign up here. https://www.reuters.com/world/europe/austria-reports-outbreak-bluetongue-virus-cattle-farm-woah-says-2024-09-16/
2024-09-16 12:14
FRANKFURT, Sept 16 (Reuters) - The European Central Bank should keep cutting interest rates gradually, its chief economist said on Monday, but its policymakers expressed differing views on how to signal their intent given economic uncertainty. The ECB cut rates for the second time this year on Thursday but provided little to no guidance on further moves, even as some policymakers privately argued that coming back for another cut in just five weeks was too soon. Markets now see only a 25% chance of a move on Oct. 17, but pricing could shift after the U.S. Federal Reserve's own policy decision later this week. "A gradual approach to dialling back restrictiveness will be appropriate if the incoming data are in line with the baseline projection," ECB chief economist Philip Lane said in a speech. "We should retain optionality about the speed of adjustment." He said the ECB may need to speed up cuts if the economy faltered or disinflation accelerated but the bank would have to slow down in case of surprises going in the other direction. Peter Kazimir, Slovakia's central bank chief, was however keen on shutting the door on October, arguing that quick cuts were risky and the ECB needed more hard data proving that inflation is indeed coming back to target by the end of 2025. "We will almost surely need to wait until December for a clearer picture before making our next move," Kazimir, an outspoken conservative, or policy hawk said in a blog post. "I would require a significant shift, a powerful signal, concerning the outlook to consider backing another cut in October," Kazimir said. "But the fact is that very little new information is in the pipeline." The key issue is that wage growth remains quick and that is putting pressure on prices in services, a sector where worker pay is the biggest variable in overall costs. Labour costs rose by an annual 4.7% in the second quarter, a slowdown from 5.0% three months earlier, but that is still well above the 3% rate the ECB considers consistent with its target, Eurostat data showed earlier in the day. But wages are just catching up after workers lost a big chunk of their purchasing power to rapid inflation, and there will be a big slowdown in labour cost growth next year, ECB Vice President Luis de Guindos said in Madrid. Like Lane, de Guindos made the case for keeping all options open on interest rates. The policymakers also pointed to inflation volatility, which may present a communications hurdle. Price growth will slow sharply in September, possibly to target or even below, but will accelerate again towards the end of the year. That could make it seem like the inflation target will already have been met by the next policy meeting, but this is part of the "bumpy" nature of inflation and price growth is not likely to be back at 2% on a sustainable basis until late 2025. Sign up here. https://www.reuters.com/markets/rates-bonds/ecb-should-keep-cutting-rates-gradually-lane-says-2024-09-16/
2024-09-16 12:12
Sept 16 (Reuters) - Foreign investors ploughed a net $30.9 billion into emerging market stocks and debt portfolios in August as markets continue to position for an imminent rate cut from the U.S. Federal Reserve, data from a banking trade group showed on Monday. Fixed income funds ex-China accounted for $27.8 billion of inflows, with $1.4 billion funneled to Chinese debt, the data show. The net inflow to stocks stood at $1.7 billion despite a $1.5 billion outflow from Chinese equities. "The expectation of Fed cuts in the near future seems to be priced in and investors are positioning themselves into EM debt in large quantities," said in a statement IIF economist Jonathan Fortun. The monthly net total of $30.9 billion compares with $37.4 billion in July and a $21 billion outflow in August 2023. A Fed rate cut is fully priced in by the end of this week's policy-setting meeting, with bets for a quarter-point cut or a half point increasingly tilting towards the bigger reduction, according to the CME's FedWatch Tool. A week ago, the chance for a 50 basis points cut was at just 30%. The Fed meeting ends Wednesday. "Moving forward we see Fed cuts aiding to the level of capital flows across the EM complex," Fortun added. "The potential for a wider rate differential between EMs and developed markets could draw more capital to EM assets, especially in countries with stable economic fundamentals and positive growth prospects," he said. Regionally, last month Asia saw a net $17 billion inflow, followed by $9.4 billion to Latin America, $2.6 billion to Africa and the Middle East, and $1.9 billion to Emerging Europe. Year-to-date, foreigners have poured some $186.5 billion net into their emerging market portfolios, with net $162.5 billion going to debt. Sign up here. https://www.reuters.com/markets/foreigners-pour-31-bln-into-em-portfolios-august-with-fed-sight-iif-2024-09-16/
2024-09-16 12:05
NEW DELHI, Sept 16 (Reuters) - Indian state retailers' diesel sales fell in the first half of September from the previous month, preliminary sales data showed on Monday, as monsoon rains hit industrial activity and mobility. Fuel demand in India, the world's third-biggest oil importer and consumer, typically falls during the four-month monsoon season beginning in June as parts of the country are affected by heavy floods. State retailers sold 2.4 million metric tons of diesel in the first half of September, down 4% from the same period in August and by 12.3% from a year earlier, the data showed. Diesel in mostly used by trucks and commercial vehicles. Sales of gasoline, primarily used in passenger vehicles, remained flat at 1.23 million tons. However gasoline sales was down 5.1% from the first of September last year, the data showed. Apart from restricting mobility, monsoon rains also hit demand from the agriculture sector as farmers use gasoil-fired generators for irrigation. Gasoil consumption is directly linked to industrial activity in Asia's third-largest economy. State retailers Indian Oil Corp (IOC.NS) , opens new tab, Hindustan Petroleum Corp Ltd (HPCL.NS) , opens new tab and Bharat Petroleum Corp Ltd (BPCL.NS) , opens new tab own about 90% of the country's retail fuel outlets. The four state fuel retailers sold 1.32 million tons of liquefied petroleum gas in the first half of September, up 3.3% from the previous month and down 2.9% from last year. Aviation fuel sales at 303,600 tons were down 1.1% from the last month, the data showed. Sign up here. https://www.reuters.com/business/energy/india-monsoon-rains-dent-state-retailers-diesel-sales-data-shows-2024-09-16/
2024-09-16 11:53
Over 30 killed, 1 million affected, mostly in camps without food and clean water Floods caused by dam burst following heavy rainfall in Sahel region Aid agencies warn of waterborne disease outbreak, overwhelmed by crisis MAIDUGURI, Nigeria, Sept 16 (Reuters) - (This Sept. 16 story has been corrected to remove Goemaere as the source of the statement that the insurgency had driven people from their farms, in paragraph 12) People in Nigeria's flood-hit northeastern Borno state are struggling to get medical care as overwhelmed aid agencies warn of an outbreak of waterborne disease following the worst floods to hit the region in three decades. More than 30 people have been killed by the floods, which authorities say affected about one million people, most of whom are housed in camps without food and clean water. The deluge threatens not only the health and safety of the displaced but puts a strain on aid agencies and government resources, exacerbating an already critical humanitarian crisis. The floods in Borno, the birthplace of Boko Haram militants in the Lake Chad basin, started when a dam burst its walls following heavy rainfall that has also caused floods in Cameroon, Chad, Mali and Niger, all part of Africa's Sahel region that usually receives little rain. In the last two weeks of August, more than 1.5 million people were displaced across 12 countries in West and Central Africa due to floods, and about 465 have been killed, according to the United Nations humanitarian affairs office. Over the weekend, an additional 50,000 people were displaced in northeastern Nigeria as the floods intensified, the Norwegian Refugee Council (NRC) said on Monday. "The situation in the Sahel and Lake Chad region is increasingly dire, as the compounding effects of conflict, displacement and climate change take a severe toll on vulnerable populations," said Hassane Hamadou, NRC's Central and West Africa regional director. The floods in West Africa come at a time of flooding in Europe after days of torrential rain that caused rivers to burst their banks in several parts of the region. In a camp in Maiduguri, Borno's state capital, Bintu Amadu was among hundreds of frustrated people waiting for hours to see a doctor because her son had diarrhoea. "We have not received any aid, and our attempts to see a doctor have been unsuccessful. We have been waiting for medical attention since yesterday, but to no avail," she said. Ramatu Yajubu was happy she had obtained an appointment card after waiting for days, but quickly added: "I am uncertain about receiving attention due to the overwhelming number of people seeking care." Years of an Islamist insurgency have driven many people from their farms. Mathias Goemaere, a field coordinator for Medecins Sans Frontieres, said that even before the floods, residents in Borno were struggling with malnutrition. "They are exposed to their environment, so what do we see? A lot of waterborne diseases, diarrhoea, diarrhoeal diseases ... Malaria is around with a lot of mosquitoes," Goemaere told Reuters. "So a lot of people, because of malnutrition, are immuno-suppressed, which makes them more susceptible to diseases." Nigeria's government has separately warned of rising water levels in the country's largest rivers, the Benue and Niger, which could cause floods in the oil-producing Niger Delta region in the south. Sign up here. https://www.reuters.com/world/africa/nigerian-flood-victims-face-long-wait-medical-help-2024-09-16/
