Economy

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In Latin America’s largest-economy, 12-month inflation closed last year at 4.83%, statistics agency IBGE said on Friday, below both the 4.88% expected by economists polled by Reuters and the previous month figure of 4.87%.Despite the modest easing in the headline data, economists believe the figure will not prevent the local central bank from pressing ahead with interest rate hikes.The bank had previously said inflation was all but certain to end 2024 above its 1.5% to 4.5% target range, a level it expects to remain in place until the third quarter before a decline starts.Policymakers at the bank have faced a challenging scenario marked by robust activity, a tight labor market and unanchored inflation expectations despite projections of a more aggressive rate path through this year.They unanimously voted to accelerate their tightening pace with a 100 basis-point hike last month, bringing interest rates to 12.25%, and signaled matching moves for the next two meetings as they seek to reach the official 3% inflation target.”There is little in this IPCA release that will prevent (interest rate-setting committee) Copom following through with its guidance at its meeting in December,” Capital Economics’ deputy chief emerging markets economist Jason Tuvey said.In December alone, IBGE data showed, consumer prices as measured by the benchmark IPCA index rose 0.52%, slightly below the 0.57% increase expected in the Reuters poll but accelerating from the previous month’s 0.39% rise.The monthly figure was driven by higher food and beverage costs, which rose 1.18% in the period. Transportation and clothing prices were also up, the statistics agency said, while housing costs dropped.”This is a relatively positive end to the year, but it offers little comfort as the inflation outlook has deteriorated significantly,” Pantheon Macroeconomics’ chief Latin America economist Andres Abadia said.”Leading indicators and unfavorable inertia suggest inflation will remain uncomfortably high in the coming months, compelling the Copom to continue tightening rates.” More

(Reuters) -U.S. stock index futures slipped on Friday ahead of a crucial labor market report, at a time when concerns around inflation and the incoming Trump administration’s policies have clouded the Federal Reserve’s monetary policy outlook.At 7:06 a.m. ET, Dow E-minis were down 66 points, or 0.15%, S&P 500 E-minis were lower 18.25 points, or 0.31% and Nasdaq 100 E-minis were off 78.75 points, or 0.37%.Elevated Treasury yields also added to investor nervousness, with those on the 10-year benchmark near an eight-month high at 4.69%. All eyes are on the Labor Department’s non-farm payrolls report, due at 8:30 a.m. ET, after a set of jobs data earlier in the week painted conflicting views about the state of employment.Friday’s data is expected to show the economy added 160,000 jobs in December, with unemployment staying steady at 4.2% from the month before.Later in the day, investors will also assess the University of Michigan’s preliminary report on consumer sentiment for January.Wall Street’s main indexes are poised to close their second consecutive week in the red, with the benchmark S&P 500 down nearly 3% from its record high hit a month ago.Fresh inflation worries have taken the spotlight, compelling the Fed to issue a cautious forecast on monetary easing last month, as it anticipates policy changes on trade and immigration under President-elect Donald Trump, who is expected to take office in 10 days time.Multiple reports on his plans, including one on imposing a national economic emergency to fast track tariff implementation, have left investors on edge about their potential impact on the economy and global trade.The Russell 2000 index, tracking domestically focused small-cap companies, has lost over 8% from its record high hit in late November. Futures tracking the index dipped 0.2% on Friday.Voting members on the Federal Open Market Committee have voiced the need for a measured approach to lowering borrowing costs this year, the latest being St. Louis Fed President Alberto Musalem according to a report.Traders see the central bank leaving interest rates steady for much of the first half of 2025, according to the CME Group’s (NASDAQ:CME) FedWatch Tool.”With considerable uncertainty about the impact of potential tax and trade policy, inflation stuck firmly above target and the labor market remaining resilient, the argument for further rate cuts is getting harder to make,” said Max McKechnie, global market strategist at J.P. Morgan Asset Management.Among premarket movers, chip stocks such as Nvidia (NASDAQ:NVDA) dropped 1.4% after a report said the U.S. could announce new export regulations as early as Friday.Delta Air Lines (NYSE:DAL) rose 5.3% after forecasting a higher-than-expected annual adjusted profit and U.S.-listed shares of TSMC added 1% as the chipmaker beat fourth-quarter revenue estimates.Insurance companies such as Mercury General (NYSE:MCY) slumped 40.7%, AIG (NYSE:AIG) dropped 3.1% and Travelers (NYSE:TRV) fell 4% on expectations of high industry losses from wildfires in Los Angeles. Nike (NYSE:NKE) gained 1.1% after Piper Sandler upgraded the stock to “overweight” from “neutral”.Earnings reports will pick up next week and investors wait to hear the possible impact the incoming government’s policy proposals could have on companies, along with insights into the resilience of the consumer and the U.S. economy. More

ABUJA (Reuters) -Nigeria and the United States have signed an agreement to repatriate about $52.88 million in assets forfeited by a former Nigerian oil minister and associates, Nigerian Justice Minister Lateef Fagbemi said on Friday.The agreement “concretizes the repatriation of approximately $52.88 million arising from the forfeiture of the Galactica assets, linked to the former Petroleum Resources Minister Diezani Alison-Madueke and her associates,” Fagbemi said in a statement.The funds will be used to support rural electrification projects through the World Bank, with $50 million allocated to increasing access to renewable energy, Fagbemi said. The remaining $2.88 million will be disbursed as a grant by Nigeria to the International Institute for Justice to support counter-terrorism capacity across Africa, he said. More

The Wall Street brokerage forecast the MSCI All Country World Index Local, a benchmark performance gauge of world stocks, to hit 1,140 points by the end of this year, implying a 10% upside to its last close of 1,035.46.Citi estimated a 10% earnings-per-share(EPS) growth for global equities, slightly below analyst consensus of 13%, adding that U.S. and emerging market regions could see the strongest EPS growth of about 15%.Maintaining its “overweight” stance on U.S. equities, Citi said President-elect Donald Trump’s policies are “a key source of uncertainty, as tariffs, tax cuts and deregulation will bring a complicated mix of favorable and adverse economic effects.”The U.S. benchmark S&P 500 index rallied 24% in 2024, fueled by growth expectations surrounding artificial intelligence, expected rate cuts from the U.S. Federal Reserve, and more recently the likelihood of deregulation policies from the incoming Trump administration.”While AI is no longer expected to provide as much EPS growth advantage vs. the rest of the index, any continuation of USD strength and policy uncertainty on tariffs could extend its outperformance,” Citi analysts added.Among other regional equity markets, Citi maintained its “neutral” view on emerging markets, “underweight” on Australia and Japan, and “overweight” on Continental Europe.On the global sector front, the brokerage raised its rating on health care to “overweight,” consumer staples and materials to “neutral,” and downgraded consumer discretionary, utilities and industrials to “underweight.” More

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