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☆ European markets set to open mixed ahead of key U.S. inflation data
▼ + stars: | 2023-04-12 | by ( Hannah Ward-Glenton | ) www.cnbc.com time to read: +1 min

European markets are keeping an eye on key U.S. inflation data. European markets are set to open mixed Wednesday as investors await key inflation data from the U.S. set for release later in the day. That data will likely determine the U.S. Federal Reserve's path in its tightening cycle. Investors will also be digesting the International Monetary Fund's latest global growth report, released Tuesday, which included its weakest medium-term growth forecast for more than 30 years. U.S. stock futures were flat in overnight trading Tuesday, while markets in the Asia-Pacific were mostly higher on Wednesday as investors turned their focus to March's highly anticipated inflation report.

The consumer price index is expected to show core inflation rose 0.4% on a monthly basis (USCPF=ECI) and 5.6% year-over-year (USCPFY=ECI) in March. The two-year Treasury yield, which typically moves in step with interest rate expectations, rose 3.5 basis points to 4.043%. "We're just beginning to feel the pain of these much higher interest rates. The dollar fell after a strong U.S. jobs report for March showed a resilient labor market, adding to expectations of another Fed rate hike. The 10-year JGB yield fell to as low as 0.445%, its lowest since April 4, after hovering at 0.465% in the previous session.

☆ World stocks cling to upbeat mood, dollar stalls
▼ + stars: | 2023-04-11 | by ( Dhara Ranasinghe | ) www.reuters.com time to read: +5 min

European stocks added 0.5% (.STOXX), U.S. equity futures pointed to a positive Wall Street open , and Japan's blue-chip Nikkei rallied over 1% (.N225). Markets price in a roughly 70% chance of a May hike, having last week priced such a move as a coin toss. Traders still price in rate cuts by year-end as the economic growth outlook weakens, exacerbated by banking turmoil. U.S. March inflation data on Wednesday could provide the next steer for markets on the rate outlook. U.S. Treasury yields edged down on Tuesday, however, , with rate sensitive two-year yields 4 bps lower at 3.96%.

☆ World stocks hold on to upbeat mood, dollar stalls
▼ + stars: | 2023-04-11 | by ( Dhara Ranasinghe | ) www.reuters.com time to read: +4 min

European stock markets opened broadly firmer (.STOXX), U.S. stock futures pointed to a positive open for Wall Street shares , and Japan's blue-chip Nikkei rallied over 1% (.N225). Friday's non-farm payrolls suggested labour markets remain resilient, boosting expectations for a 25 basis point (bps) U.S. rate increase in May. NEW BOJ CHIEFIn Asia, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.57%, while MSCI's world stock index was up 0.3% (.MIWD00000PUS). U.S. Treasury yields edged down in European trade , with rate sensitive two-year yields last down 3 bps at 3.96%. Brent crude futures rose 61 cents, or 0.74%, to $84.81 a barrel, while U.S. WTI futures gained 68 cents, or 0.83%, to $80.41 a barrel.

☆ Fortune teller sees bleak future as Sri Lankans celebrate new year
▼ + stars: | 2023-04-11 | by ( Uditha Jayasinghe | ) www.reuters.com time to read: +3 min

About 85% of Sri Lanka's 22 million population celebrate the New Year on April 14, observing auspicious times and visiting family. Sri Lanka's economic meltdown, triggered by a severe foreign exchange shortage, low tax revenues and high debt, has seen the cost of living soar. Sri Lanka secured an IMF bailout last month but is still ironing out how to restructure debt owed to bilateral creditors and bondholders. His power bill has jumped 29,000 rupees per month to 105,578 now after big increases in tariffs. Fortune teller Chandani hopes things will improve in the new year.

☆ Banks in 'more precarious situation' creating risks for global growth, IMF chief economist warns
▼ + stars: | 2023-04-11 | by ( Jenni Reid | ) www.cnbc.com time to read: +1 min

Interest rate rises have increased banks' vulnerabilities — and their response presents a significant risk to global growth, the International Monetary Fund's chief economist warned Tuesday. "Banks are in a more precarious situation. They have healthy cushions, but it's certainly going to lead them to be a little bit more prudent and maybe cut down lending somewhat," Gourinchas said. In one scenario, the IMF sees funding conditions for banks tightening further and squeezing lending, bringing its forecast of 2.8% global growth in 2023 down to 2.5%. Gourinchas said its models had also forecast a more adverse scenario where financial stability is not contained.

☆ Morning Bid: Glass half full on disinflation
▼ + stars: | 2023-04-11 | by ( ) www.reuters.com time to read: +4 min

Headline March consumer price inflation is expected to drop as low as 5.2% from 6% - showing the disinflation journey from more than 40-year highs of 9.2% last June to the Fed's 2% target more than half way there. The rider is that headline inflation rates are expected be below stickier annual 'core' rates, which are forecast to have ticked higher to 5.6% last month. The International Monetary Fund's updated World Economic Outlook is also due on Tuesday ahead of the Fund's Spring meeting in Washington. The disinflation picture was encouraged around the world on Tuesday as Chinese consumer price inflation hit an 18-month low last month and the annual decline in factory prices sped up. Hopes that central bank rates are cresting worldwide lifted risk appetite across the spectrum with major cryptocurrency bitcoin broke back above $30,000 level for the first time in 10 months on Tuesday.

WASHINGTON, April 10 (Reuters) - World Bank Group President David Malpass said on Monday that the lender has revised its 2023 global growth outlook slightly upward to 2% from a January forecast of 1.7% but the slowdown from stronger 2022 growth will increase debt distress for developing countries. Advanced economies, including the U.S. and in Europe, are also doing a bit better than the World Bank anticipated in January, Malpass said as the World Bank's and International Monetary Fund's Spring Meetings week kicked off. But the departing World Bank chief warned that turmoil in the banking sector and higher oil prices could again put downward pressure on growth prospects in the second half of 2023. A bank asset maturity mismatch will take some time to work through and banks are likely to pull back credit for businesses, slowing growth, he said. The World Bank's forecasts tend to be a bit lower because they are based on market exchange rates, while the IMF's forecasts are based on purchasing power parity exchange rates.

☆ Japan unveils fresh childcare plan but funding unclear
▼ + stars: | 2023-03-31 | by ( Tetsushi Kajimoto | ) www.reuters.com time to read: +3 min

Under the plan, the government will take steps such as expansion of child allowances to be given without income limits. While the government has earmarked 6.1 trillion yen ($45.90 billion) for steps to arrest the declining number of children, a senior ruling party lawmaker was quoted by media as demanding an additional 8 trillion yen to fund the new measures. "A boost to child allowances alone could cost 2-3 trillion yen. "Everyone acknowledges childcare support is important given Japan's need to boost the growth rate. "Opposition parties also have no objection to boost childcare spending," said political analyst Atsuo Ito.

The financially strapped South Asian country will also start formal negotiations for the debt it owes to bilateral creditors and overseas bondholders after the domestic debt operation, aiming to complete those parallel debt talks by September. Central bank and treasury officials said they expected that "exploring options for a domestic debt operation" will help achieve much-needed liquidity relief, including both local currency T-Bills and T-Bonds. Government officials told investors that only T-Bills held by the central bank would be considered for a debt rework, while a voluntary domestic debt operation was expected for the holders of $24 billion of T-Bonds. Sri Lanka is struggling with its worst economic crisis in more than seven decades. To that end, Sri Lanka has already frozen public recruitment and has hiked taxes and power tariffs by 66% this year.

☆ Ukraine creditors group: provides assurances to support IMF steps to help Ukraine
▼ + stars: | 2023-03-24 | by ( ) www.reuters.com time to read: +1 min

BRUSSELS, March 24 (Reuters) - The Group of Creditors of Ukraine (GCU) body said on Friday that it had provided financing assurances to support the International Monetary Fund's (IMF) approval for an upper credit tranche programme to help restore Ukraine's economy. The Group of Creditors of Ukraine includes Canada, France, Germany, Japan, Britain and the United States. That is why Germany is committed to providing financial support bilaterally and in various multilateral forums," a German finance ministry spokesperson said in a written statement. The group agreed to conduct a debt restructuring in a later phase to restore the country's debt sustainability, it added. Reporting by Sudip Kar-Gupta, additional reporting by Victoria Waldersee; editing by Jonathan OatisOur Standards: The Thomson Reuters Trust Principles.

☆ Sri Lanka receives first tranche of IMF bailout
▼ + stars: | 2023-03-22 | by ( Uditha Jayasinghe | ) www.reuters.com time to read: +1 min

REUTERS/Dinuka LiyanawatteCOLOMBO, March 22 (Reuters) - Sri Lanka has received the first tranche of an IMF bailout programme, President Ranil Wickremesinghe told parliament on Wednesday. "This sets the stage for Sri Lanka to have better fiscal discipline and improved governance," Wickremesinghe said. It clears the way for Sri Lanka to rework a substantial part of its $84 billion worth of public debt. State finance minister Shehan Semasinghe said in an interview that Sri Lanka is ready to engage in restructuring talks with bilateral and private creditors to recover debt sustainability as "soon as possible." This was the 17th IMF bailout for Sri Lanka and the third since the country's decades-long civil war ended in 2009.

[1/5] A general view of a main market is seen, after The International Monetary Fund's executive board approved a $3 billion, in Colombo, Sri Lanka March 21, 2023. REUTERS/Dinuka LiyanawatteCOLOMBO, March 21 (Reuters) - Sri Lanka will receive the first tranche of about $330 million from the International Monetary Fund in the next two days, and, going forward, disbursements would be tied to reviews that take place every six months, an IMF official said on Tuesday. Peter Breuer, Senior Mission Chief for Sri Lanka, Asia and Pacific Department at IMF, said debt sustainability was one of the key criteria for the IMF to approve a bailout for any economy. International dollar bonds issued by the country soared following the IMF package approval. The biggest bilateral creditors, including China, India and Japan, have guaranteed support to Sri Lanka in its efforts to put the economy back on track.

Analysts have gradually raised their forecasts for where the key rate will end this year, to 7.5% from 7.13% in the previous poll. "High budget spending is the key issue," said Anton Tabakh, Chief Economist at RA Expert, who expected the upsurge in inflation at the beginning of the year due to higher budget spending to be contained. "But at the same time, there will be a preventative rate increase and, accordingly, we see the key rate at 7.5% in December, from 8%-8.25% in the middle of the year." Tabakh also said that all risks were higher and the level of uncertainty elevated. Inflation expectations, an indicator to which the central bank pays close attention ahead of meetings, rose to 12.2% in February.

The key to it all, of course, is money, and as organized and funded now, the World Bank would be stretched to meet those goals. He also serves on the advisory board of Beyond Net Zero, a climate finance fund. This will be especially difficult for the World Bank's top shareholder, the United States, due to political brawling between the Biden administration and the Republican-majority House of Representatives. The House has major sway over the country's purse strings and its leaders are not disposed to widen the World Bank's role in fighting climate change. In fiscal 2022, the World Bank committed more than $104 billion to projects around the globe, according to the bank's annual report.

☆ Ukraine war live updates: NATO leaders to meet in Brussels; Wagner Group makes gains around Bakhmut
▼ + stars: | 2023-02-14 | by ( Karen Gilchrist | ) www.cnbc.com time to read: 1 min

The International Monetary Fund's managing director Kristalina Georgieva said Tuesday that Ukraine is fighting not just in defense of its national sovereignty but to protect the international rule of law. "In Ukraine, people strongly believe they're fighting not just for themselves, they're fighting for the right of every nation to exist and run its own affairs," the director of the United Nations financial institution said at the World Government Summit in Dubai. Georgieva said that a problem which is Ukraine's problem today can tomorrow "be a problem for many other countries," adding that it is in "everybody's interest" to defend a rules-based global system. "If we blow up rule of law internationally, how are we going to keep it domestically?" "It is for everyone, everybody's interest to defend it."

☆ Ghana bilateral lenders in talks to form official creditor committee
▼ + stars: | 2023-02-13 | by ( Jorgelina Do Rosario | ) www.reuters.com time to read: +2 min

LONDON, Feb 13 (Reuters) - Ghana's bilateral lenders are discussing the formation of an official creditor committee, a first step needed to engage in debt relief talks for the crisis-hit country, according to two sources with direct knowledge of the matter. The Paris Club of creditor nations has contacted other bilateral creditors, such as China, to engage on forming the committee and deciding who would chair it, one of the sources said. China is Ghana's single biggest bilateral creditor with $1.7 billion of debt, while Ghana owes $1.9 billion to Paris Club members, according to data from the International Institute of Finance. COMMON FRAMEWORK TALKSAn official creditor committee is a key step for Ghana to formally seek financing assurances from bilateral creditors stating they are willing to enter a debt rework process. Ghana has said it hopes for a rapid debt overhaul, though other countries undergoing common framework treatment have faced slow progress.

[1/4] A Japanese flag flutters atop the Bank of Japan building under construction in Tokyo, Japan, September 21, 2017. "This is a problem that is not going to change easily," said Momoko Nojo, a prominent campaigner for gender equality in Japan. The BOJ ranked 142nd of 185 central banks on gender equality, according to a report last year by the Official Monetary and Financial Institutions Forum. About 11% of central banks surveyed had a female governor, a record high, while 37% had female deputy governors. That target is far below the European Central Bank, where women hold 30% of management roles.

☆ The odds of the US slipping into recession are now just 25% thanks to a surge in jobs, Goldman Sachs says
▼ + stars: | 2023-02-07 | by ( George Glover | ) www.businessinsider.com time to read: +3 min

There's now just a 25% chance the US suffers a recession within 12 months, Goldman Sachs said Monday. "We have cut our subjective probability that the US economy will enter a recession in the next 12 months from 35% to 25%," said strategists led by Jan Hatzius, Goldman Sachs chief economist. Inflation has fallen for six months in a row to 6.5% as of December, which has boosted the chances that the US economy staves off a recession, the Goldman Sachs team said. "Progress on price inflation has been particularly rapid in recent months," the strategists said. Goldman Sachs' latest prediction chimes with recent comments from the International Monetary Fund's managing director.

☆ Paris Club creditors give assurances to back IMF bailout for Sri Lanka
▼ + stars: | 2023-02-07 | by ( Jorgelina Do Rosario | ) www.reuters.com time to read: +3 min

[1/3] A woman buys vegetables from a vendor at a market in the rampant food inflation, amid Sri Lanka's economic crisis, in Colombo, Sri Lanka, July 30 , 2022. REUTERS/Kim Kyung-HoonFeb 7 (Reuters) - The Paris Club of creditors has given financing assurances to support the International Monetary Fund's approval of an extended fund facility for Sri Lanka, the Sri Lankan president's office said on Tuesday. The financing assurances from the Paris Club, which includes Japan - Sri Lanka's second biggest bilateral lender - was previously reported by Reuters. "Members further expressed appreciation for the specific and credible financing assurances issued by India on Jan. 16, 2023 and its coordination with the Paris Club," the group's statement added. Sri Lanka has to restructure debt payments of about $13 billion on 11 international bonds.

☆ China keeps insisting its real-estate market is not in a crisis — even as just about every sign points to the opposite
▼ + stars: | 2023-02-06 | by ( Huileng Tan | ) www.businessinsider.com time to read: +5 min

The IMF said in a report on China's economy that the country's property crisis remains "unresolved." But China's hit back at that, saying its property market "has been operating smoothly in general, and is not in a 'crisis' situation." China's real estate market has been mired in debt woes for the past few years. The IMF says China's property crisis "intensified" in 2022The IMF said in its Friday report China's property crisis "intensified" in 2022. The debt crisis also had a deep social impact.

☆ Recession in Europe and U.S. still very possible, portfolio manager says
▼ + stars: | 2023-01-31 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailRecession in Europe and U.S. still very possible, portfolio manager saysJoost van Leenders, senior portfolio manager at Kempen Capital Management, discusses the International Monetary Fund's upgraded forecast for growth and the outlook for monetary policy.

It followed a 3.9% rise in December and stayed above the central bank's 2% target for an eighth straight month, data showed on Friday. "These readings point squarely at a further, large increase in inflation at the national level this month," said Darren Tay, Japan economist at Capital Economics. Government measures to lower energy bills will kick in next month and bring inflation down by about 1% point," he said. The BOJ kept monetary policy ultra-loose this month but raised its inflation forecasts in fresh quarterly projections, as companies continued to pass on higher raw material costs to households. Kuroda, whose term will end in April, has stressed the need to keep monetary policy ultra-loose until wages rise more, changing the recent cost-push inflation into inflation driven by robust domestic demand.

In November, the State Bank of Pakistan's Monetary Policy Committee unexpectedly pushed up its key rate by 100 bps, meaning it has now raised it by a total of 725 bps since January 2022. The country - struggling after last year's devastating nationwide floods - posted a 24.5% annual inflation rate in January. Although some moderation was seen in inflation in November and December, it remains high and core inflation has been on a rising trend for the last 10 months, the central bank added. The lack of fresh financial inflows and ongoing debt repayments have led to a steady drawdown in official reserves, the central bank said. "The current account deficit narrowed by around 60 percent to $3.7 billion in H1-FY23," the central bank said.

Zambia has become a test case for the G20-led 'Common Framework' restructuring vehicle launched during the COVID-19 pandemic, but differences with some of its main creditors about the debt relief required means progress has been slow. Its vast swathes of national parks are home or migration routes for some of Africa's most impressive wildlife including lions and elephants. "We will be considering all debt restructuring options that are in the framework (G20 Common Framework)which falls within the DSA (debt sustainability analysis) parameters... and that are acceptable to all parties," the ministry's response added. KAZA conservation areaCOMMON FRAMEWORKWWF's Zambia country head, Nachilala Nkombo, told Reuters that the most recent talks with the government took place last month. Sri Lanka, another Common Framework restructuring country, has said that it would like to do a debt-for-nature swap and with Zambia still hoping to wrap up its deal this year it would likely set a precedent.

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