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The strong report comes less than a week after the company’s FMX exchange, which is looking to take on derivatives trading giant CME Group (NASDAQ:CME), secured a minority investment from 10 financial market giants including Bank of America, Goldman Sachs and JPMorgan Chase (NYSE:JPM).Investors are hotly debating the trajectory of rate cuts after discouraging signs in the latest inflation and gross domestic product data, which have raised fears that the Federal Reserve may have to keep monetary policy tighter for longer.The uncertainty has prompted traders to actively rejig portfolios across asset classes to maximize returns and hedge against risk. Revenue in BGC’s rates unit jumped 6.3%, while the energy, commodities and shipping business rose 32.1% from a year ago.Net income jumped to $46.4 million, or 10 cents a share, for the three months ended March 31, from $24.2 million, or 5 cents per share, last year. More

ISLAMABAD (Reuters) -The disbursement of $1.1 billion by the International Monetary Fund (IMF) will help Pakistan achieve greater economic stability, Prime Minister Shehbaz Sharif said on Tuesday, amid discussions for a new loan programme.The funding was the second and final tranche of Pakistan’s $3 billion standby arrangement with the IMF which it secured last summer to help avert a sovereign default.”The disbursement will bring more economic stability in Pakistan,” Sharif said in a statement from his office, adding that the standby arrangement was important in saving the South Asian nation from defaulting on its external liabilities.Pakistan central bank said in a statement that it has received SDR 828 million (around US$ 1.1 billion) from the IMF in its account. The IMF’s executive board approved the final tranche on Monday. The approval came a day after Sharif discussed a new loan programme with IMF Managing Director Kristalina Georgieva on the sidelines of the World Economic Forum in Riyadh.The IMF appreciated Pakistan’s policy and fiscal measures to achieve the targets under the standby arrangement. “Macroeconomic conditions have improved over the course of the program,” it said in a statement, adding that 2% growth was expected in the current fiscal year ending on June 30, given continued recovery in the second half. It said the fiscal position continued to strengthen with a primary surplus of 1.8 percent of GDP achieved in the first half of the fiscal year, on track to achieve primary surplus of 0.4% of GDP. Islamabad is seeking a new, larger long-term Extended Fund Facility (EFF) agreement with the IMF.Pakistan’s Finance Minister Muhammad Aurangzeb has said Islamabad could secure a staff-level agreement on the new programme by early July.Islamabad says it is seeking a loan over at least three years to help achieve macroeconomic stability and execute long-overdue and painful structural reforms.Aurangzeb has declined to give details on the amount the country is seeking. Islamabad is yet to make a formal request, but the Fund and the government are already in discussions. If secured, it would be Pakistan’s 24th IMF bailout. The $350 billion economy faces a chronic balance of payments crisis, with nearly $24 billion to repay in debt and interest over the next fiscal year – three-time more than its central bank’s foreign currency reserves.Pakistan’s finance ministry expects the economy to grow by 2.6% in the fiscal year ending in June, while average inflation for the year is projected to stand at 24%, down from 29.2% in the previous fiscal year.The IMF said inflation, while still elevated, continued to decline, and with appropriately tight, data-driven monetary policy maintained, was expected to reach around 20% by end-June.To move Pakistan from stabilization to a strong and sustainable recovery, authorities need to continue their policy and reform efforts, it added. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Turkish exports to Russia tumbled at the start of 2024, suggesting that a US crackdown on trade with goods Moscow uses in its war in Ukraine is starting to pay off.Exports from Turkey to Russia fell a third in the first three months of this year compared with the same period in 2023 to $2.1bn, according to Financial Times calculations based on data from the Turkish Statistical Institute. The decline comes after the Biden administration issued an executive order in late December that gives the Treasury department the power to hit banks with secondary sanctions if they deal with companies that are subject to US bans because of their links to Russia’s military-industrial complex. The White House deployed the measure in a bid to stymie trade in goods such as microchips that Russian President Vladimir Putin needs for his war against Ukraine. Turkey is among a clutch of countries that recorded a large increase in trade in these so-called high-priority battlefield goods since Russia launched its full-scale invasion in early 2022. The US along with its partners, such as the EU, have lobbied governments including Ankara to curb this trade. The executive order was seen as a way for Washington to exert pressure on the private sector directly since international banks rely heavily on their access to the American financial system. The Kremlin has complained of “unprecedented, open, aggressive pressure” from the US against banks in Turkey. Similar problems have arisen in countries that have become conduits for rerouting trade to Russia such as China and the United Arab Emirates, as well as former Soviet nations including Armenia and Kazakhstan.Kremlin spokesperson Dmitry Peskov said earlier this month that Russia and Turkey were “constantly holding working level contacts on all financial issues looking for a way out of this situation”. “It’s obvious what the reason for these problems is. It seriously damages the interests of Russian and Turkish economic operators,” Peskov said.The steep decline in exports from Turkey to Russia was recorded from December 2023 to February 2024 before a slight recovery in March. The flows remain below the level of March 2023, a potential indication that Turkish banks are calibrating their sanctions compliance strategy.Seasonal agricultural flows contributed to the overall drop, but the bulk of the decline has come from a reduction in exports of mechanical goods, vehicles and other categories of export that rapidly expanded following Russia’s full-scale invasion of Ukraine.Ukraine’s allies have identified specific “high-priority” items that they are particularly concerned about reaching the Russian defence sector — a list that includes ball bearings, lasers and computer equipment. Turkey’s exports of most such goods stood at $8.8mn in December, before tumbling to $2.2mn by February and recovering slightly to $5.2mn in March.There was also a sharp decline in China’s exports to Russia at the start of the year, where goods exports fell from $10.7bn in December to $7.6bn in March, according to Trade Data Monitor, a trade statistics platform. While interpreting this data is more complex because of the holiday period around the lunar new year falling in February, the biggest contributor to the decline was in electronics and electrical machinery. There was also a pronounced decline in mechanical goods exports.Chinese banks are larger than Turkish ones and less exposed to secondary sanctions, allowing them to withstand the initial US pressure better, according to Alexandra Prokopenko, a fellow at the Carnegie Russia Eurasia Center in Berlin.Given Turkish banks’ familiarity with rerouting transactions through middlemen, Russia was able to rebuild payment channels with Turkish banks much more quickly — allowing for the uptick in March, she added.“These are all temporary solutions. Russia hasn’t found a systemic way out of the problem,” Prokopenko said.The signs of slowing Turkish-Russian trade also come amid an improvement in Ankara’s relationship with Washington this year. President Recep Tayyip Erdoğan dropped his veto on Sweden’s accession to Nato while the US agreed to sell Turkey billions of dollars worth of F-16 fighter jets.A visit by Putin to Turkey, originally scheduled for before Russia’s presidential election in March, has been postponed. Peskov said last week that a date for the trip had not yet been set.Turkey’s energy minister told the FT last week that Ankara was keen to “diversify” its energy supply at a time when it is dependent on Russian gas and oil to fuel its $1tn economy. Russia is also building and will operate Turkey’s first nuclear power plant. More

(Reuters) – Government borrowing costs across developed economies saw their biggest jumps in months in April, evidence that bond markets are not yet out of the woods when it comes to inflation and the threat of higher-for-longer than expected interest rates.U.S. inflation jumping the most in six months sent two-year Treasury yields above 5% in April as traders slashed Federal Reserve rate cut bets.Benchmark 10-year U.S. yields, up over 40 basis points (bps) at 4.6% in their biggest move since September when fiscal worries mounted, could also hit 5% soon, some investors reckon. Bond yields move inversely to prices.In Europe, German 10-year bond yields have crossed the closely-watched 2.5% technical level. Britain’s rose nearly 40 bps in their biggest monthly jump since May. Ed Hutchings, head of rates at Aviva (LON:AV) Investors, said that without U.S. economic data cooling, it was hard to bet with conviction that bond yields would fall. “Until the data turns, investors are going to want a little bit of extra compensation to own government bonds,” he said.Hutchings has favoured shorter-dated euro zone and UK debt over Treasuries, but noted U.S. yields had pulled European peers higher. Global government bonds have lost investors 2.5% so far this year. That risks leaving 2023’s modest return looking like a blip after 15% losses over 2021-22, when surging inflation surprised markets and policymakers.The latest moves highlight market sensitivity to inflation even as it slows from double-digit levels in 2022. EUROPE TOO Traders have also curbed European rate cut expectations, adding to the bond selloff.They expect just 40 bps of Bank of England cuts this year, down from around 70 bps in late March, and around 70 bps from the European Central Bank, down from 90 bps in early April .While the repricing of Fed rate cut expectations prompted much of those moves, investors have also reacted to data this month showing British inflation and wage growth slowed less than expected. Dovish, followed by hawkish BoE policymaker commentary also moved expectations.British and euro zone business activity meanwhile rose more than expected, at the fastest paces in nearly a year, pointing to strengthening economies, also confirmed by the euro zone growing more than expected in the first quarter.”You need to have a high degree of conviction in your models that in a slowing inflation environment with strong economic activity, inflation isn’t flaring up again,” said Danske Bank chief analyst Piet Christiansen.Many investors favour euro zone bonds, which have outperformed as inflation nearing the ECB’s 2% target paves the way for rate cuts expected to start in June. Data on Tuesday showed inflation at 2.4% in April, as expected. The closely-watched services measure slowed for the first time in months, though core inflation dropped less than expected. Yet ECB policymakers have sounded cautious about cuts beyond June.”The (business activity) data coming in is questioning how many rate cuts are needed after the June cut,” Christiansen said.In another sign of caution, a market gauge of euro zone inflation expectations watched by the ECB touched its highest since December around 2.4% as oil prices rose.The UK debt outlook is more uncertain. A Reuters poll of economists expects 75 bps of BoE rate cuts by year-end, nearly double what markets price.If traders’ BoE expectations recover, that would favour Britain’s debt. Goldman Sachs recommends buying 30-year gilts over Treasuries.But high funding needs would limit how much longer-dated gilt yields could fall, Imogen Bachra, head of non-dollar rates strategy at NatWest Markets, said in a note on Monday, even as she expects 100 bps of cuts this year.Gilts have underperformed global government bonds even as inflation slows, losing investors over 4% year-to-date. BONDS STILL BACK?To be sure, investors say bonds remain appealing given the attractive yields they pay longer-term holders after spending a decade at or below 0%.Case in point: Britain saw the third-highest ever level of demand on record for a 30-year bond sold at a record yield. Some investors said their dampening impact on the economy would limit how much further U.S. bond yields, which determine other borrowing costs, could rise. “I suspect that just as investors were too complacent a few months ago on inflation and rates, the reverse is true currently and we will see bond yields moderate somewhat,” said Zurich Insurance Group (OTC:ZFSVF)’s chief market strategist Guy Miller. U.S. economic uncertainty is expected to keep global markets volatile. “The market is doing some probability weighted outcome of no cuts, some cuts, and maybe a very small tail of more cuts down the road,” said Idanna Appio, fund manager at First Eagle Asset Management and a former Fed economist. More