Aurelia Butler

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BENGALURU (Reuters) – Thailand’s central bank will leave its key policy rate unchanged at 2.25% on Wednesday and likely through 2024, marking an end to a year-long tightening cycle, according to a Reuters poll, though a few economists still expect one final hike.Despite inflation in Thailand edging up slightly to 0.88% in August, it remained below the central bank’s 1-3% target range for a fourth consecutive month, suggesting little need for the Bank of Thailand (BOT) to continue hiking.Governor Sethaput Suthiwartnarueput recently said both economic growth and inflation were expected to be lower than previously forecast due to softer tourism spending and a weak economic outlook for China, the country’s major trading partner.A strong majority of economists in a Sept. 18-22 poll, 21 of 27, expected the BOT to keep its benchmark one-day repurchase rate at 2.25% on Wednesday. Only six forecast another quarter-point hike to 2.50%.”The BOT will switch to a wait-and-see mode. It is actually in a relatively comfortable position to take its time in terms of making its policy decisions because growth is strong, inflation is low,” said Lavanya Venkateswaran, senior ASEAN economist at OCBC.”We don’t see inflation coming back to within BOT’s target for the rest of this year at least, and possibly even in Q1 next year … so I don’t think in the near term there’s a need to rush into further hikes.”None expected the central bank to raise interest rates at the following meeting in November. Median forecasts showed interest rates remaining at 2.25% through next year.However, there was a split among those with a longer-term view on rates, with 47% of economists, nine of 19, expecting the BOT to keep rates at 2.25% until end-2024, while six predicted another hike to 2.50%, and four anticipated a cut — three to 2.00% and one to 1.75%.”Despite growth slumping … it’s clear the BOT is determined to raise rates at least one more time to reach its estimated neutral rate,” noted Aris Dacanay, ASEAN economist at HSBC. More

SYDNEY (Reuters) – Asian shares were hesistant on Monday after central banks last week reinforced the message that interest rates will stay higher for longer, while investors braced for inflation data from the U.S. and Europe.Markets will also be looking for further clues on whether China’s economy is regaining traction. The yen nursed losses at more than nine-month lows at 148.38 per dollar, after the Bank of Japan made no change to its dovish monetary policy. Ten-year Japanese bond yields settled at a decade high of 0.745%. MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.1% on Monday, after a 2.3% fall the previous week to fresh ten-month lows. A surge in Chinese shares on Friday helped the index trim earlier losses. Japan’s Nikkei was up 0.2%. Both S&P 500 futures and Nasdaq futures rose 0.1%. Chinese shares surged 1.8% on Friday amid hopes of improving growth in the world’s second largest economy. The big test in the week ahead would be the industrial profit figures on Wednesday, as well as manufacturing and services PMIs on Saturday. [.SS]A week-long holiday starting on Friday in China will also be a key test of whether consumer confidence and spending is starting to revive.Bond investors were still smarting from the U.S. Federal Reserve’s more hawkish rate projections last week, which had caught markets by surprise. Coupled with the recent economic resilience in the U.S. economy, markets ramped up bets that interest rates would stay higher for longer and drastically scaled back rate cut expectations.Much will depend on the U.S. data. In a sign of slowing growth, U.S. business activity was basically at a stand still in September, with the vast services sector essentially idling at the slowest pace since February.Bruce Kasman, chief economist at JPMorgan, expects good news from U.S. and European inflation results this week. “First, US real PCE spending is expected to flatten in August, suggesting that a mid-year surge is ending, and overall growth is set to moderate into year-end. Second, both the US and Euro area should deliver low core inflation readings,” he said in a client note.The Fed’s favoured inflation gauge, the core Personal Consumption Expenditures Price Index, is expected to show on Thursday a 0.2% monthly increase for August, unchanged from July. Other U.S. data in the week includes final Q2 GDP, and weekly jobless claims. In the currency markets, the U.S. dollar was still standing strong near its six month top at 105.58 against a basket of major currencies.Ten-year Treasury yields were little changed at 4.4519%, after easing from a 16-year high of 4.508% on Friday. Two year yields settled at 5.1140%, having fallen from a 17-year top of 5.2020% hit last week.Oil prices were higher on Monday, not far from their 10-month highs. Brent crude futures rose 0.5% to $93.73 per barrel and U.S. West Texas Intermediate crude futures were also up 0.5% at $90.47.The gold price was flat at $1,923.88 per ounce. More

SINGAPORE (Reuters) – The yen approached the closely watched 150 per dollar level on Monday and kept traders on intervention watch after the Bank of Japan and Governor Kazuo Ueda quashed hopes of any imminent move away from its stark ultra-loose monetary policy.In the broader currency market, the dollar was on the front foot, extending its gains from last week after a still-hawkish Federal Reserve surprised markets by signalling U.S. rates would need to stay higher for longer than initially expected.The yen fell to a more than 10-month low of 148.49 per dollar and remained within striking distance of 150, a level which some market watchers saw as a line in the sand that would spur forex intervention from Japanese authorities similar to that of last year’s.The Japanese currency had fallen more than 0.5% on Friday after the BOJ maintained ultra-low interest rates and stuck to its dovish stance, while Governor Ueda similarly stressed the need to spend more time assessing data before raising interest rates.”I don’t think the level matters that much and will be the trigger (for intervention). I think the pace of change matters more… But I do think the risk of an FX intervention is higher now given all the warnings from Japanese officials,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia (OTC:CMWAY).”Also, there is a higher chance of a coordinated intervention just because U.S. Treasury Secretary (Janet) Yellen made some remarks the other day and she basically gave the green light to a BOJ intervention.”Yellen said last week whether Washington would show understanding over another yen-buying intervention by Japan “depends on the details” of the situation.Elsewhere, the euro gained 0.04% to $1.0649, after having fallen to a six-month low of $1.0615 on Friday against a stronger dollar.The single currency was on track to lose roughly 1.8% for the month, its steepest monthly fall since May.Sterling steadied at $1.2244, after sliding more than 1% last week on the back of the Bank of England’s pause on its rate-hike cycle, a decision which came a day after data showed Britain’s high inflation rate unexpectedly slowed.The pound was headed for a more than 3% fall in September, its worst monthly performance in a year.”Central banks in the UK, the Euro area, and Japan have ‘turned tail’. They’re now testing the thesis that their slowing economies portend a defeat of the inflation impulse, or that the slowdowns are serious enough to no longer wish to tempt the fates with more tightening,” said Thierry Wizman, Macquarie’s global FX and interest rates strategist.”And because the U.S. has yet to display the growth infirmities of the rest of the world, the U.S. stands apart, and the Fed has signalled that it can tempt fate.”Fed officials had on Friday warned of further rate hikes ahead even after the central bank chose to keep rates on hold at last week’s policy meeting, with markets now seeing a roughly 21% chance of a 25-basis-point increase at November’s meeting..The dollar index, which on Friday touched an over six-month high, firmed at 105.57 in early Asia trade.The Aussie gained 0.06% to $0.6445 while the New Zealand dollar fell 0.05% to $0.5958, after touching a roughly three-week high of $0.6001 earlier in the session. More

The association’s plea comes in response to concerns that the impending tariffs, set to be enforced between the UK and the EU from January, could lead to a substantial decline in regional production. The EAMA warns that these measures could potentially result in a production drop of up to 480,000 vehicles over the next three years.The call by the auto lobby group underscores the potential impact of these tariffs on the sector. It emphasizes the need for careful consideration by the European Commission before implementing such measures, highlighting their potential to significantly disrupt the EV industry in Europe. The EAMA’s plea is seen as a crucial step towards safeguarding Europe’s EV industry, which has been growing steadily in recent years. As negotiations continue, all eyes will be on the upcoming trade officials meeting this week, where these concerns are expected to be discussed in depth.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

(Reuters) – The European Union and Britain need to take urgent action to postpone rules for electric vehicles traded between the bloc and the UK that will trigger 10% tariffs, Europe’s car industry group said on Monday.”Driving up consumer prices of European electric vehicles, at the very time when we need to fight for market share in the face of fierce international competition, is not the right move,” European Automobile Manufacturers’ Association (ACEA) president and Renault (EPA:RENA) CEO Luca de Meo said in a statement ahead of a planned trade meeting between EU and UK officials this week.Under the EU-UK post-Brexit trade deal, EVs need to have 45% EU or UK content from 2024, with a 50%-60% requirement for their battery cells and packs, or face British or EU import tariffs of 10%.The problem is that neither carmakers in Britain nor the EU have built up their EV supply chains sufficiently to meet those requirements and have called for the rules to be postponed until 2027.Stellantis (NYSE:STLA) has said British car plants will close with the loss of thousands of jobs unless the Brexit deal is swiftly renegotiated, while Ford (NYSE:F) has said it will slow the transition to electric. The ACEA has said the rules could cost carmakers up to 4.3 billion euros ($4.57 billion) in tariffs and hit output.So far, the EU executive has been reluctant to renegotiate the deal. In June, Stefan Fuehring, a European Commission official overseeing the post-Brexit EU-UK trade agreement, said the EU rules of origin were “fit for purpose” and that the bloc was not considering changing them.($1 = 0.9400 euros) More

WASHINGTON (Reuters) – With just a week before Washington runs out of money to keep the federal government fully operating, warring factions within the Republican Party in the U.S. Congress on Sunday showed no signs of coming together to pass a stopgap funding bill. Congress so far has failed to finish any of the 12 regular spending bills to fund federal agency programs in the fiscal year starting on Oct. 1.House of Representatives Speaker Kevin McCarthy will push an ambitious plan this week to win approval of four large bills, including military and homeland security funding, that he hopes would demonstrate enough progress to far-right Republicans to win their support for a stop-gap spending bill, known as a continuing resolution, or CR, as well.Republican Representative Michael McCaul, a 19-year veteran of Congress who chairs the House Intelligence Committee, urged the group of party “holdouts” to stop blocking Republican-backed spending bills while at the same time “saying don’t bring bipartisan bills to the floor.””Republicans need to vote for Republican bills” to avert a shutdown, McCaul said on ABC’s “This Week” broadcast.But some of those “holdouts,” who want deep spending cuts that go beyond a deal passed earlier this year, showed no sign of relenting.”Continuing resolutions don’t solve the problem. They just kick the can down the road,” Republican Representative Tony Gonzalez told CBS News’ “Face the Nation.”In June, President Joe Biden signed into law an increase in U.S. borrowing authority that he brokered with McCarthy, which also came with around $1.5 trillion in spending cuts over 10 years.Ultra-right House Republicans want to go further with around $120 billion in additional cuts just for the new fiscal year, which could hit programs ranging from education and environmental protection to Internal Revenue Service enforcement and medical research.Similarly, Republican Representative Tim Burchett told CNN’s “State of the Union” that he has never voted for a temporary funding bill and won’t this time around. He warned that if McCarthy allows legislation to pass the House with Democratic support, “I would look strongly at” a move to strip McCarthy of his speakership.”This dysfunctional Washington cannot continue,” Burchett said, referring to the way Congress handles the federal budget, which is on a path to a $1.5 trillion deficit for the fiscal year that ends on Saturday.Transportation Secretary Pete Buttigieg warned in an ABC interview that a government shutdown will require his agency to immediately suspend air traffic controller training courses at a time when air travel is “getting back to normal” following a high volume of flight delays and disruptions last year.Aides to McCarthy were not immediately available for comment on whether negotiations over a CR were continuing on Sunday.But he has been pushing for a 30-day bill to keep federal offices open, coupled with a strict border security plan that would basically suspend most immigration into the United States at a time of record numbers of people seeking asylum on the border with Mexico.Even some of the Senate’s most conservative Republicans on Sunday appealed to House counterparts to stop blocking a stop-gap bill.”We would like for the House to begin that process of sending us a CR to keep the government open and functioning,” Senator Marsha Blackburn told Fox Business News.Appealing to those conservatives’ eagerness for conducting investigations into Biden and some other top administration officials, Blackburn added: “If you shut down the government you can’t continue that.” More

Lego found that bricks made from recycled polyethylene terephthalate (RPET), would lead to higher carbon emissions. “We tested hundreds and hundreds of materials. It’s just not been possible to find a material like that,” Lego Chief Executive Niels Christiansen told the Financial times. Reuters was not able to independently verify the details of the FT report. Lego did not immediately respond to Reuters’ request for comment.Lego had earlier pledged to replace oil-based plastic bricks with ones made from sustainable materials by the end of the decade. The company had kicked off efforts in 2020 to replace its plastic bricks by sustainable materials. The difficulty was to find a material that would be environment friendly but give the same color, shine and sound of an oil-based plastic bricks. More