Aurelia Butler

“A negative equity does not affect the Riksbank’s ability to conduct monetary policy in the short term,” Governor Erik Thedeen said in a statement. “But to maintain confidence in an independent monetary policy in the long term, it is necessary that the Riksbank is financially independent,” he added.In 2022, the Riksbank made a loss of around 80 billion crowns, resulting in negative equity of 18 billion crowns, because of a sharp increase in interest rates which led to a fall in the value of bonds bought by the bank between 2015 and 2021.New legislation introduced in 2023 says the Riksbank’s equity should have a target equity level of 60 billion crowns, and a basic level of around 40 billion.The Riksbank said its equity at the end of 2023 was around minus 2 billion crowns.($1 = 10.7796 Swedish crowns) More

U.S. stock futures traded largely lower Tuesday, continuing the previous session’s weakness on concerns Federal Reserve rate cuts will be delayed until the second half of the year.By 04:25 ET (09:25 GMT), the Dow futures contract was 105 points, or 0.3%, lower, S&P 500 futures dropped 2 points, or 0.1%, while Nasdaq 100 futures rose by 5 points, or 0.1%.The major indices closed largely lower Monday, with the Dow Jones Industrial Average dropping 240 points, or 0.6%, and the broad-based S&P 500 index dropping 0.2%. The tech-heavy Nasdaq Composite bucked the trend, climbing 0.1%.The weakness followed data showing strength in the U.S. manufacturing sector, which cast doubts on the likelihood of a rate cut from the Federal Reserve in June.There is more economic data to digest Tuesday, including job openings and durable orders, both for February, ahead of Friday’s widely-watched payrolls report for March.The release of strong U.S. manufacturing activity data on Monday has seen traders push back expectations of the Federal Reserve’s first interest rate cut this year.The CME’s FedWatch tool now factors in 61.3% odds of a Fed rate cut in June, down from about 70.1% probability a week ago.This has benefited the U.S. currency, with the dollar index, which measures the currency against its main rivals, trading just below the over 4-month high of 105.07 seen on Monday.This strength is best illustrated against the Japanese yen, with the USD/JPY pair trading just below the 152 level that last prompted intervention from the Japanese authorities in 2022.This yen weakness has come despite the Bank of Japan’s first interest rate hike since 2007 last month, prompting Finance Minister Shunichi Suzuki to  reiterate, earlier Tuesday, that he wouldn’t rule out any options to respond to disorderly currency moves.The IPO market is picking up, after Rubrik announced plans on Monday to list its shares, adding to a growing wave of companies turning to capital markets after a two-year lull.The cybersecurity platform is set to follow the recent debuts of Reddit (NYSE:RDDT) and Astera Labs (NASDAQ:ALAB). After a record IPO year in 2021, soaring inflation and rising interest rates resulted in a drying up in tech investing in the public and private markets.The company’s revenue in the fiscal year ended January rose about 5% to $627.9 million, but its net loss widened to $354.2 million from $277.7 million a year earlier. Rubrik plans to trade on the New York Stock Exchange under the ticker symbol “RBRK.” UBS (SIX:UBSG) is emerging from the turmoil surrounding its merger with troubled rival Credit Suisse in a relatively strong position, even with doubts remaining over the accuracy of the latter’s financial reports.UBS reported last week in its annual report that there is a risk that “a material error” may not be detected by UBS and could result in a material misstatement to Credit Suisse’s reported financial results.However, the Swiss banking giant showed confidence in the future by announcing Tuesday a new share buyback program of up to $2 billion, with the scheme starting on Wednesday.The scheme follows the 2022 buyback, where UBS bought back 298.5 million of its shares – equivalent to 8.6% of its stock – for $5.2 billion.Before the deal was announced, UBS had already repurchased nearly 1.2 billion Swiss francs ($1.32 billion) worth of its stock.Oil prices rose Tuesday, boosted by signs of improving demand in China and the U.S., the world’s biggest oil consuming nations.By 04:25 ET, the U.S. crude futures traded 1.3% higher at $84.81 a barrel, while the Brent contract climbed 1.2% to $88.48 per barrel.Data released earlier this week showed March manufacturing activity in China expanded for the first time in six months and in the U.S. for the first time in well over a year, which should translate to rising oil demand from these two economic giants.At the same time, fears of more supply disruptions from the oil-rich Middle East grew following a fatal Israeli strike on Iran’s embassy in Syria, marking an escalation in the war in Gaza between Israel and Hamas, which is supported by Iran. The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, will hold an online meeting of its Joint Ministerial Monitoring Committee on Wednesday to review the market. More

BRASILIA (Reuters) – In just three years, Brazil’s hugely popular Pix payment system has become the country’s favorite way to pay, replacing cash and wire transfers in many cases and now threatening the dominance of credit cards in the booming e-commerce sector.The instant payments designed by Brazil’s central bank are a boon to online retailers, helping with cash flow in a sector with tight margins, while undercutting the legacy business of banks and fintechs built on existing credit card infrastructure.”I think credit cards will cease to exist at some point soon,” central bank chief Roberto Campos said nearly two years ago, discussing the potential for open finance and the Pix platform. “This system eliminates the need to have a credit card.” Market trends have since added weight to his forecast.Use of Pix surged 74% last year to nearly 42 billion payments across the Brazilian economy — surpassing credit and debit card charges combined by about 23%, according to central bank data and industry group Abecs.For buyers, the switch to Pix has been nearly seamless, as they simply scan a QR code with any banking app instead of reaching for their wallet. But for sellers, it has turned the tables on the traditionally lucrative card payments industry.In online retail, orders paid with Pix surged 22 percentage points in two years to about a third of all purchases in December, according to e-commerce research firm Neotrust. Credit card orders slipped 5 percentage points to 51% in the period.That trend is likely to pick up as the central bank teases new Pix innovations starting this year such as recurring payments and purchases in installments, which one official said is likely to boost the system’s role in retail.Although Brazilian consumers rarely notice, paying with a debit or credit card requires sellers to pay discount fees divided between card networks such as Visa (NYSE:V), Mastercard (NYSE:MA) and American Express (NYSE:AXP); payment processors such as Cielo, Rede, Stone, Getnet and PagBank, as well as card issuers, which are typically banks.By removing intermediaries, Pix is putting pressure on the card networks, which receive no cut of such transactions, and payment processors, which pocket a much smaller slice than they get for credit or debit card purchases.Pix costs an average 0.22% of each transaction for retailers, whereas debit card fees run over 1% and credit card fees can reach 2.2% of each sale in Brazil, according to a Bank of International Settlements (BIS) paper.The growth of Pix “can limit the use of credit cards and pre-payment volumes,” Goldman Sachs told clients in a note. Analysts noted that the extra fees for early payment of credit card sales contribute meaningful revenue to payment processors Stone (49%), PagBank (34%) and Cielo (9%).Those companies declined to comment.Major players in Brazil’s credit card industry are shifting their approach as storm clouds gather.Cielo’s controlling shareholders Banco do Brasil and Bradesco announced in February their plans to take it private, a path already taken in 2022 by rival Getnet, owned by Spanish bank Santander (BME:SAN). Two sources familiar with the operation told Reuters, on condition of anonymity, that going private gives leeway to offer a bundle of integrated products, becoming less reliant on the traditional business of connecting retailers to credit cards.”BB and Bradesco opted to carry out Cielo’s public offering as a way to make the company’s governance more aligned with the new configuration of the sector,” Banco do Brasil said in response to questions, adding that the industry had become more competitive amid recent “transformations.”Bradesco declined to comment.”Pix has been and will continue to be the most disruptive technology in the financial segment in the country for the next few years,” said Eduardo Lopes, public policy director at Nubank, Latin America’s largest digital bank.Nubank launched in Brazil a decade ago, offering one product: an iconic purple credit card without fees — but it has now diversified into a range of other segments, including an embrace of Pix seen at several leading banks and fintechs. The lender ended the fourth quarter with 13.6 million customers using Pix on credit, which lets customers borrow for Pix transfers up to their Nubank credit card limit. Customers using it grew 166% from a year before. Berkshire Hathaway (NYSE:BRKa), the investment firm of U.S. billionaire Warren Buffett, which has a 2% stake in Nubank, said in February it had totally divested its position in Stone. NEW FEATURES PENDINGBrazil’s central bank launched the Pix protocol in November 2020, mandating banks to integrate their accounts with instant digital transfers that are free for individuals. Users embraced the alternative to cash and slow, costly wire transfers. A range of payment apps from PayPal (NASDAQ:PYPL) to Venmo have sprung up globally, but none carry the weight of a central bank owning, operating and regulating the system to guarantee speed, efficiency and universal integration with banks from day one.That allowed the central bank to develop the protocol for less than 14 million reais and impose the adoption costs on banks, while assuring them the benefits of a more agile and inclusive financial system.The success of Pix in Brazil, which moved more than 17 trillion reais ($3.4 trillion) in 2023, has quickly expanded into payments between people and business (P2B).The central bank estimates P2B payments have grown from 5% of Pix transactions at launch to 38% in March — a conservative figure given how many small and informal businesses accept payments to an owner’s personal account. Although Pix does not offer the standard fraud protections on credit card purchases, its broad reach and lower transaction costs for sellers have helped to make it the preferred payment system for many retailers. “Pix is definitely a game-changer,” said Carlos Mauad, CEO of Fintech Magalu, the financial arm of retail group Magalu, which processes its own Pix transfers to cut costs and offer discounts to customers choosing the payment method.Now the central bank is preparing to roll out new features boosting the appeal of Pix for P2B use, according to Mayara Yano, senior advisor to the Pix management and operations department at the central bank.The first, Pix Automatico, allows for the automatic payment of recurring bills and has been scheduled for launch in October. It could take the place of the ubiquitous bank invoices used for tuition, utilities and phone bills — and may also supplant credit cards used for media subscriptions and online services.An even bigger impact could come from a new feature, called Pix Garantido, allowing for payments in monthly installments — a major perk of credit cards for Brazilian consumers.Those changes are likely to accelerate the rise of Pix, which is now dictating the payment landscape in Brazil, said Carlos Netto, CEO of Matera, a tech firm helping companies integrate with the new payment platform.”It is setting the standards for a digital finance revolution, representing the most concrete threat to credit cards,” he said.($1 = 5.0675 reais) More

BEIJING (Reuters) – China will lift anti-dumping and anti-subsidy tariffs on Australian wine from March 29, the Chinese commerce ministry said on Thursday, ending three years of punitive levies and offering long-awaited relief to Australian wine producers.The tariffs, of up to 218.4%, were first imposed in March 2021 for a period of five years along with a host of other trade barriers on Australian commodities when ties soured after Canberra called for a probe into the origins of COVID-19.Ties have improved significantly since last year, leading China to steadily lift trade hurdles on Australian goods ranging from barley to coal, and raising hopes the punishing tariffs on shipments to Australia’s top wine export market would soon be removed.”Given the situation in China’s wine market has changed, the anti-dumping and anti-subsidy tariff imposed on wine imported from Australia is no longer necessary,” the commerce ministry said in a statement.Previously, Australian wines imported into China were subject to zero tariffs after the signing of a free trade agreement in 2015, giving them a 14% tariff advantage over many other wine-producing nations.In the first half of 2023, Australian wine accounted for only 0.14% of Chinese wine imports compared with 27.46% in 2020 before the duties were imposed, according to the commerce ministry statement.”We welcome this outcome, which comes at a critical time for the Australian wine industry,” the Australian government said in a statement. “Since 2020, China’s duties on Australian wine effectively made it unviable for Australian producers to export bottled wine to that market. Australia’s wine exports to China were worth $1.1 billion in 2019.””This is great news,” said Campbell Thompson, the Beijing-based Australian CEO of wine importer and distributor The Wine Republic. “We are delighted and we look forward to re-introducing some great wines to China very soon.” Australian wine makers had been preparing for the dropping of Chinese tariffs for months. Trade data show almost 2.5 million litres worth of wine from Australia entering Hong Kong in December, up from around 685,000 litres a month in recent years and the most since September 2019.Beijing started imposing tariffs on Australian products in 2020, prompting Canberra to complain to the World Trade Organisation (WTO). When the tariffs on Australian wine were levied in 2021, Canberra urged the WTO to arbitrate in the dispute.Under the joint efforts of both sides, China and Australia reached a consensus on the proper settlement of disputes under the WTO framework, He Yadong, a spokesman at the Chinese commerce ministry, told reporters on Thursday. The removal of the Chinese duties means Australia will discontinue its legal proceedings at the WTO, according to the Australian statement.Australia’s top publicly listed winemaker, Treasury Wine Estates (OTC:TSRYF), said it welcomed the announcement and will start partnering with customers in China to expand sales and marketing, as well as brand management.”Today’s announcement is a significant positive not only for Treasury Wine Estates, but also for the Australian wine industry and wine consumers in China,” CEO Tim Ford (NYSE:F) said in a statement.According to Simon Woods, CEO of Australia’s Chamber of Commerce in Shanghai (AustCham Shanghai) the announcement will “raise confidence within the Australia-China business community.””This is fantastic news and is the product of hard work on the part of Australian and Chinese governments and businesses,” he said.The lifting of the tariffs will also be a welcome move for vine growers in Australia as millions of vines are being destroyed to rein in over-production amid falling consumption of wine worldwide. More

COLOMBO (Reuters) -The World Bank raised its forecast for Sri Lanka’s economy on Tuesday, projecting growth of 2.2% for 2024 as the crisis-hit nation makes a faster-than-expected recovery from its worst financial crisis in decades. Sri Lanka secured a $2.9 billion bailout from the International Monetary Fund (IMF) in March last year, helping it temper inflation, increase state revenues, and rebuild foreign exchange reserves after its economy crumpled in 2022.The IMF programme helped Sri Lanka’s economy stabilise, and it is expected to return to growth this year after contracting 2.3% in 2023. The World Bank, in its latest report on South Asia, raised its growth forecast for Sri Lanka by 50 basis points. Real GDP growth was also expected to strengthen further to 2.5% in 2025, with modest recoveries in reserves, remittances and tourism, the development bank’s report said.”Growth is projected to be positive in 2024, and moderate over the medium term – not a quick bounce back,” Richard Walker, senior economist at World Bank, told reporters.Sri Lanka defaulted on its overseas debt in May 2022 after a severe shortage of foreign exchange reserves triggered the worst financial crisis since independence from Britain in 1948, sending inflation rocketing to 70% in the following months.While prices have eased off recently, the World Bank estimates the poverty rate in Sri Lanka will remain above 22% until 2026. It was about 26% in 2023, compared to pre-COVID levels of 11.3% in 2019, the World Bank said.”Households have been impoverished by a fall in their purchasing power due to high inflation, losses in wages, income and employment, and a drop in remittances,” the report said. The Indian Ocean island nation secured an agreement in principle with China, India and the Paris Club nations last November to restructure its debt and now needs agreements with each bilateral creditor – a key condition in its IMF bailout.Sri Lanka, which is due to hold presidential elections in the second half of 2024, would need to complete the debt restructuring before the next IMF review.”Downside risks remain high, due to limited primary account and reserve buffers… especially with elections and policy fatigue. The other is an insufficiently deep debt restructuring,” Walker said.South Asia, excluding Afghanistan, was expected to grow 6.1% in 2025, remaining the fastest-growing region in the world for the next two years, with India’s expected growth of 6.6% for fiscal year 2025 leading the way.The World Bank expects Pakistan’s fiscal year 2024 growth at 1.8%, below the State Bank of Pakistan’s projection of 2%-3%. Real GDP is seen expanding 2.3% in fiscal year 2025, the report said. More

COLOMBO (Reuters) – Job creation in South Asian economies is not keeping pace with the rise in the working age population, putting the region on a path that risks “squandering its demographic dividend”, the World Bank said on Tuesday.”The danger is the demographic dividend is missed. Its squandered,” Franziska Ohnsorge, World Bank Chief Economist for South Asia told Reuters.”If only they can be employed. It’s a fantastic opportunity to grow but until recently employment ratios have been falling.”During the period between 2000-23, employment grew 1.7% a year while the working-age population expanded 1.9% a year, data included in the report showed.In absolute terms, the region created an average of 10 million jobs a year when the working-age population was growing by an average of 19 million a year.The World Bank expects output growth in South Asia at 6-6.1% in the financial year ending March 31, 2025, largely due to strong growth in India where the economy is seen expanding at 6.6%.India’s central bank forecasts stronger growth of 7% during this period.In India, growth has rebounded strongly after the pandemic, driven by government spending and more recently the construction industry but private investment in the Asia’s third-largest economy has remained weak, hurting job creation.Over 2000-22, the employment ratio in India declined more than any other South Asian country except Nepal, but preliminary data suggests a rebound in 2023 that partially reversed the earlier decline, said the World Bank.”Overall, during 2000–23, employment growth was well below the average working-age population growth and the employment ratio declined.”The World Bank, in its report, said South Asian nations need to address several policy weaknesses to accelerate job creation.These include policies that encourage productive firms to hire workers, streamline labour and land market regulations and greater openness to international trade. More