Aurelia Butler

GS expects two rate cuts in 2025- in June and December, and one additional cut in 2026, bringing the Fed’s terminal rate to 3.5% to 3.75%, from current levels of 4.25% to 4.5%. The investment bank’s shift in expectations came just after stronger-than-expected nonfarm payrolls data for December, which spurred increased bets that the Fed will have little immediate impetus to keep cutting interest rates. The reading also triggered steep losses on Wall Street.The Fed cut rates by 1% through 2024, but warned of a much slower pace of cuts this year. The central bank had effectively slashed its outlook on rate cuts to a projected two from four for 2025, citing concerns over sticky inflation and a strong labor market. GS analysts said that while their baseline forecast for rates remained somewhat more dovish than market pricing, it was hard to have “great conviction in the timing of cuts” due to expectations of robust U.S. economic data, which made cuts reasonable but not critical. The investment bank also said that it was uncertain over how the Fed will navigate increases in trade tariffs under incoming President Donald Trump, who will take office next week. Trump has vowed to impose steep import tariffs on several major U.S. trading partners, especially China. But American importers are expected to pay the tariffs, heralding an increase in domestic goods and services that are reliant on imports. Still, GS analysts said they did not expect Trump’s fiscal and immigration policies to have a perceptible impact on inflation, and that tariffs would likely not raise inflation enough to warrant interest rate hikes or to unsettle Wall Street.  More

LONDON (Reuters) -Zambia’s Securities and Exchange Commission (SEC) has sanctioned Standard Chartered (OTC:SCBFF) for mis-selling a Chinese property company’s bonds to one of the bank’s local wealth clients at the height of the Asian country’s real-estate crisis, according to a source. The source familiar with the matter told Reuters that the UK-headquartered bank, which is currently looking to sell its wealth and retail banking businesses in Zambia, was facing “enforcement action” for two breaches of SEC rules following a months-long investigation.The first was that it had failed to disclose “material information” about the bonds it sold in March 2022. Those bonds, issued by state-backed Chinese developer Sino-Ocean, defaulted just over a year later and are now, like many in the sector, almost worthless. In addition, the SEC found Standard Chartered had also used “exclusionary” contract clauses, which meant the client held all responsibility for the risks, which goes against Zambia’s securities rules.In a statement to Reuters, Standard Chartered said: “We respect the outcome of the Securities Exchange Commission in Zambia, however, in accordance with appropriate local procedures we will respectfully be exercising our right to appeal.” “We are fully aware of this matter, and we are reviewing the necessary details to clarify the situation. It is our priority at the Bank to ensure compliance with regulatory standards across all of our markets.” The SEC, which started its investigation of the case in April, said it was not able to comment on the matter when asked by Reuters. Under Zambia’s Securities Act, Standard Chartered now has 30 days to lodge its appeal.Zambia’s SEC has the power to fine, or publicly or privately “censure or reprimand” lenders, although it can’t formally order them to compensate customers for mis-selling. Reuters wasn’t able to establish what penalty the regulator is planning to impose on Standard Chartered.The lender announced in November it was looking to sell its Zambian wealth and retail banking businesses alongside those in nearby Botswana and Uganda. It has operated in Zambia for nearly 120 years making it the country’s oldest bank. It is currently reducing its overall footprint in Africa, however, having also sold its Tanzania business and subsidiaries in Angola, Cameroon, The Gambia, and Sierra Leone in the last couple of years. More

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(Reuters) – A look at the day ahead in Asian markets. If the reaction in U.S. stocks, bonds and the dollar to Friday’s sizzling U.S. employment report is any guide, Asian markets are in for a bumpy ride on Monday, rocked by another whoosh higher in bond yields and inflation fears.The U.S. economy created over a quarter of a million net new jobs and the unemployment rate fell last month, reflecting a robust labor market. That’s good news. But the bad news for asset markets, especially in emerging and Asian economies, is the impact on borrowing costs and the dollar.Treasury yields surged to the highest in over a year, the dollar hit a two-year peak, and traders are now only predicting one quarter-point rate cut from the Fed this year, in September.The S&P 500 fell to its lowest since November 5, the day of the U.S. presidential election, and it looks like soaring bond yields could crush investors’ appetite for risky assets like stocks.Japanese futures are pointing to a fall of more than 1% at the open in Tokyo on Monday, and it will be a similar story around the continent. Sentiment is already fragile, as the explosive rise in long-term bond yields has tightened financial conditions everywhere. According to Goldman Sachs, aggregate emerging market financial conditions are the tightest since late 2023.Uncertainty over the potential hit to growth in Asia – especially China – from the incoming Trump administration’s ‘America First’ trade policies is another reason to be cautious if not outright bearish.Trade figures from China on Monday are unlikely to lift the gloom. Economists polled by Reuters expect export growth accelerated in December while imports contracted for a third straight month.December’s import figures are likely to garner more attention as they reflect the strength of domestic demand, and can therefore perhaps be seen as an early sign of how successful Beijing’s stimulus efforts have been. The trade figures are the first clutch of top-tier indicators from China this week which include house prices, retail sales, industrial production, investment, unemployment and culminate on Friday with fourth-quarter and full-year GDP.Investors will also assess the People’s Bank of China’s announcement on Friday that it has suspended treasury bond purchases, spurring speculation it is stepping up defense of the yuan. Will this be enough to put a floor under yields and the yuan? The annual Asian Economic Forum opens in Hong Kong, and among the speakers on Monday are Hong Kong Monetary Authority Chief Executive Eddie Yue, China Investment Corp’s CIO Liu Haoling, and European Central Bank board member Philip Lane.Meanwhile, Indian inflation on Monday is expected to show that the annual rate cooled slightly in December to 5.3% from 5.5% in November. Here are key developments that could provide more direction to markets on Monday:- China trade (December)- India CPI inflation (December)- Asia Economic Forum More

(Reuters) -U.S. bank JPMorgan Chase (NYSE:JPM) on Friday asked its employees who are on hybrid work schedules to return to the office five days a week starting in March, an internal memo seen by Reuters showed, prompting hundreds of staff comments, including complaints.Financial companies have been aggressive in enforcing return-to-office demands in the wake of the pandemic which began to impact the U.S. in 2020. Many companies began to call staff back to the office as early as 2021.JPMorgan CEO Jamie Dimon and counterparts at Goldman Sachs and Morgan Stanley (NYSE:MS) have been strong advocates of working from the office, saying it fosters better learning, innovation and culture.More than half of JPMorgan’s employees already come into the office full-time, according to the memo from the bank’s operating committee. It has more than 316,000 staff worldwide.”Now is the right time to solidify our full-time in-office approach,” the executives wrote. “We think it is the best way to run the company.”  A JPMorgan spokesperson confirmed the contents of the memo but declined to comment further.”We know that some of you prefer a hybrid schedule and respectfully understand that not everyone will agree with this decision,” Dimon and other leaders wrote in the memo. “Being together greatly enhances mentoring, learning, brainstorming and getting things done.” Some JPMorgan staffers pushed back against the return-to-office directive by posting comments on the company’s intranet site, according to two sources who saw the posts and declined to be identified discussing personnel matters.The complaints cited increased commuting and childcare costs, as well as concerns about mental health and stress, according to one of the sources.After more than 300 comments were posted within the first hour, the page was locked, the second source said.Essential workers at lenders, including bank branch employees, reported for in-person work throughout the pandemic. JPMorgan called corporate staff back to offices on a rotational basis in mid-2021 after months of pandemic shutdowns, and brought managing directors back to the office full-time in 2023.The largest U.S. lender said that employees will be given at least 30 days’ notice before they are expected to return to offices full-time. The employees were also directed to seek manager approval if they needed more time to prepare.”What is not changing is our support for flexibility in the workplace, which we are committed to providing at every level in a fair way,” the bank said.The memo also included a link to a list of frequently asked questions, giving details about special exceptions for remote work, flexibility for personal reasons and attendance logs. More

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JERUSALEM (Reuters) -Israel plans to use tax revenue it collects on behalf of the Palestinian Authority to pay the PA’s nearly 2 billion shekel ($544 million) debt to state-run Israel Electric Co (IEC), Finance Minister Bezalel Smotrich said on Sunday.Israel collects tax on goods that pass through Israel into the occupied West Bank on behalf of the PA and transfers the revenue to Ramallah under a longstanding arrangement between the two sides.Since the Hamas-led attack on Israel on Oct. 7, 2023, triggered the war in Gaza, Smotrich has withheld sums totalling 800 million shekels earmarked for administration expenses in Gaza. Those frozen funds are held in Norway and, he said at Sunday’s cabinet meeting, would instead be used to pay debt owed to the IEC of 1.9 billion shekels.”The procedure was implemented after several anti-Israeli actions and included Norway’s unilateral recognition of a Palestinian state,” Smotrich told cabinet ministers.”The PA’s debt to IEC resulted in high loans and interest rates, as well as damage to IEC’s credit, which were ultimately rolled over to the citizens of Israel.”The Palestinian Finance Ministry said it had agreed for Norway to release a portion of funds from an account held since last January with 1.5 billion shekels, calling money in the account “a punitive measure linked to the government’s financial support for Gaza”.The ministry said as part of the deal, 767 million shekels of the Norwegian-held funds will pay Israeli fuel companies for weekly fuel purchases over the coming months. A similar amount will be used to settle electricity-related debts owed by Palestinian distribution companies to IEC.Smotrich has been opposed to sending funds to the PA, which uses the money to pay public sector wages. He accuses the PA of supporting the Oct. 7 attack in Israel led by the Islamist movement Hamas, which controlled Gaza. The PA is currently paying 50-60% of salaries.Israel also deducts funds equal to the total amount of so-called martyr payments, which the PA pays to families of militants and civilians killed or imprisoned by Israeli authorities. The Palestinian finance ministry said 2.1 billion shekels remain withheld by Israel, bringing the total withheld funds to over 3.6 billion shekels as of 2024. Israel, it said, began deducting an average of 275 million shekels monthly from its tax revenues in October 2023, equivalent to the government’s monthly allocations for Gaza.”This has exacerbated the financial crisis, as the government continues to transfer these allocations directly to the accounts of public servants in Gaza,” the ministry said.It added it was working with international partners to secure the release of these funds as soon as possible.($1 = 3.6763 shekels) More