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FACTBOX-Currency that faced the FX manipulator tag under the Yellen regime | Instant News


April 15 (Reuters) – Treasury Secretary Janet Yellen’s first foreign exchange report due for release this week could see some US trading partners being labeled as currency manipulators.

This determination is based on three broad criteria here A $ 20 billion-plus trade surplus with the United States, current account surpluses exceed 2% of GDP and currency interventions exceed 2% of gross domestic product.

Those criteria led the Trump administration to label Switzerland and Vietnam as currency manipulators in December.

Whether Yellen is taking his predecessor’s aggressive approach to scolding trading partners is unclear.

This time, analysts said the following was risky.

SWISS

* Switzerland was named by the US Treasury a currency manipulator in its December report after meeting all three criteria.

* For 2020, Switzerland has a goods trade surplus of 28 billion Swiss francs with the US, according to data from the Swiss customs office. The United States is Switzerland’s second largest trading partner after Germany.

* SNB currency intervention in 2020 is equivalent to 15.6% of Swiss GDP, well above the US threshold of 2%.

* The SNB appears to have reduced its intervention so far in 2021 as the franc has weakened, but Chairman Thomas Jordan said in March “absolutely no change in our monetary policy, so our willingness to intervene in the foreign exchange market if necessary is appropriate. same.”

TAIWAN

* Taiwan’s trade surplus with the United States reached $ 29.9 billion in 2020, according to official data, nearly $ 7 billion more than in 2019, while last year’s current account surplus was around 11% of GDP, exceeding Washington’s criteria.

* The Taiwan dollar’s 5.6% rise against the dollar last year was one of the strongest in Asia and remains a strong performer this year.

* The central bank said it intervened up to $ 39.1 billion last year as it stepped up efforts in November and December to “avoid serious disruption”.

* The island was last officially labeled a currency manipulator by the United States in December 1992. It was re-entered on the watch list in 2020.

VIETNAMESE:

* The US trade deficit with Vietnam widened to $ 63.36 billion in 2020 from $ 46.90 billion in 2019, according to Vietnamese government customs data. The deficit widened even further in the March quarter.

* The central bank bought a net $ 21 billion last year to increase currency reserves to about $ 100 billion. US Trade Representative Katherine Tai, in a telephone conversation earlier this month with Vietnam’s industry and trade minister, highlighted US concerns about Vietnam’s currency practices.

THAILAND:

* The baht has come under pressure in recent months as the novel coronavirus pandemic has devastated the prospects for a tourism-dependent economy. It is likely to fall even further in 2021 thanks to a much smaller current account surplus.

* Thai officials say they will take steps to ensure the currency will not hinder the economic recovery. As of April 2, foreign reserves totaled $ 245.7 billion while the net front was $ 33 billion.

OTHER POSSIBILITIES:

* The US Treasury may change the threshold for the criteria used to determine whether a country is manipulating its currency. The threshold was last changed in May 2019 under the Trump administration to make it easier for Washington to label countries as currency manipulators.

* A number of countries are expected to remain or appear on the “watch list,” according to Win Thin BBH, including China, Germany, Japan, Italy, India and Singapore. The yuan remains one of the strongest performers versus the greenback this year. ($ 1 = 0.8830 Swiss francs)

Reporting by Ben Blanchard in Taipei, Khanh Vu in Hanoi, John Revill in Zurich; Orathai Sriring in Bangkok; David Lawder in Washington Compiled by Angel Chatterjee in London; Edited by Megan Davies and Alistair Bell

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US COVID cases are marching higher, hospitalizations rising for the second week in a row | Instant News


(Reuters) – The United States reported an 8% rise in new COVID-19 cases to 490,000 last week, the fourth consecutive week that infections have risen, according to a Reuters analysis of state and county data.

FILE PHOTO: Critical care workers insert an endotracheal tube into a coronavirus (COVID-19) positive patient in the intensive care unit (ICU) at Sarasota Memorial Hospital in Sarasota, Florida, February 11, 2021. REUTERS / Shannon Stapleton / File Photo

In the week ending April 11, Michigan reported the highest number of new cases per capita of all 50 states and also led the country in hospitalizations per capita. (Open here in an external browser to view details about other states.)

About 39% of new cases in Michigan are the more infectious variant of the B.1.1.7 virus that was first identified in Great Britain, the highest percentage in the United States, according to CDC data collected over the four-week period ended. on March 13. At the same time that cases started to increase in early March, Michigan relaxed its COVID-19 restrictions.

US Center for Disease Control and Prevention director Rochelle Walensky said Michigan must be “shut down” to combat surges in cases, hospitalizations and deaths.

“The answer is to shut everything down, get back to our basics, go back to where we were last spring, last summer, and shut everything down,” Walensky told a news conference on Monday.

Deaths from COVID-19, which tends to lag infections by weeks, fell 7% to 5,325 last week, excluding the heap of deaths reported by Oklahoma, according to a Reuters analysis.

Last week, Oklahoma reported 1,716 new deaths that occurred between August and February that were not reported due to laboratory errors. Including that backlog, deaths were up 21%.

The average number of COVID-19 patients in hospitals rose 6% to more than 39,000, increasing for the second week in a row.

For the seventh week, vaccinations set a record, with an average of 3.1 million injections given per day last week. As of Sunday, 36% of the US population had received at least one dose and 22% had been fully vaccinated, according to the CDC. New Hampshire became the first state to give at least one dose to more than half of its population.

(Open here in an external browser to view a graph about vaccinations.)

Graphics by Chris Canipe, written by Lisa Shumaker, edited by Tiffany Wu

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UPDATE 3-Brazil initiates rate hikes more aggressively than expected | Instant News


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BRASILIA, March 17 (Reuters) – Brazil’s central bank announced its first rate hike in nearly six years on Wednesday, a larger-than-expected 75 basis point increase to 2.75%, and marking a similar move in May to fight inflation despite ride. economic uncertainty.

The decision to raise borrowing costs comes at a delicate time, as the second wave of the COVID-19 pandemic swept through Latin America’s largest economy. Brazil’s death toll and number of cases trailed only in the United States, and its economy will contract in the first quarter.

However, the bank’s rate-setting committee, known as Copom, said its decision to raise its benchmark interest rate from a record low of 2.00% was unanimous, and hinted at an increase of the same size at its next meeting unless prospects change significantly.

All but one of 30 economists surveyed by Reuters expected a smaller increase of 2.50%.

Economists said the decision indicated that policymakers were more concerned about the risk of rising inflation than the risk of lowering growth. Weaning financial markets of extremely low interest rates with bold moves will help anchor the inflation outlook and support the Brazilian currency.

“Advancing the policy normalization process is a stronger and faster way to stabilize financial markets, real support and minimize the risk of inflation ending the year above target,” said Luciano Rostagno, head of strategy at Mizuho Bank in Sao Paulo.

The last time Brazil raised interest rates was July 2015, when Selic’s benchmark interest rate rose 50 basis points to 14.25%, and the last time it raised interest rates by 75 basis points was in June 2010.

With 12-month inflation running at 5.2%, well above the central bank’s year-end target of 3.75%, Copom said in an accompanying statement that this hike marked the start of a “partial normalization” process for monetary policy.

Using market-based interest rate and exchange rate forecasts, Copom said inflation will end this year at 5.0%, uncomfortably close to the 5.25% upper limit of the band’s target.

“For the next meeting, unless there is a significant change in inflation projections or in the risk balance, the Committee expects a continuation of the partial normalization process with other adjustments, of the same magnitude, in the level of monetary stimulus,” they said.

Copom highlighted that the relevant policy horizon is “especially” 2022, when inflation will fall back to its official year-end goal of 3.50%.

Alberto Ramos, head of Latin America research at Goldman Sachs, said the central bank was “partially burdening the normalization of monetary policy but not at this point aiming to move up quickly towards a neutral monetary stance.”

A survey of central bank economists this week expects Selic to end this year at 4.50% and next year at 5.50%. Most economists consider the “neutral” rate, when the economy is running at full employment and growth potential while keeping inflation constant, to be around 6.0% -6.5%.

A sharp rate hike could help put the floor below the real, following last year’s 30% decline against the dollar with a further 8% drop so far this year. That has added to inflationary pressures and prompted the central bank to step up currency market intervention in recent weeks.

Reporting by Jamie McGeever Editing by Brad Haynes, David Gregorio & Shri Navaratnam

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THE EMERGING MARKET-Brazil stocks hit by fears of government interference, FX falls | Instant News


    * Petrobras, Bovespa set for worst day since March
    * Coronavirus aid extension in Brazil to be discussed this
week
    * Mexican peso down for sixth straight session 
    * Chile's peso sole gainer 

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    By Susan Mathew and Ambar Warrick
    Feb 22 (Reuters) - Brazil's benchmark Bovespa index tanked
on Monday as oil major Petrobras plummeted 21% following the
ouster of its investor-backed chief executive, while Latin
American stocks and currencies fell as higher inflation
expectations hurt sentiment. 
    After weeks of sparring between CEO Roberto Castello Branco
and Brazilian President Jair Bolsonaro on fuel prices, former
Defense Minister and retired army general Joaquim Silva e Luna,
who has no oil and gas experience, was appointed to take over.

    Branco's ouster could force a broader shakeup at Petrobras,
which has steered toward more market-friendly and less
politically driven policies in recent years.
    Petrobras shares were on course to
post their sharpest one-day decline since March last year, as
was the Bovespa, which sank nearly 4%.  
    "The reversal of these types of practices by Bolsonaro early
in his administration was a key credit positive for Brazil's
quasi-sovereigns," said Citigroup strategists. 
    "A reversal of this policy is a clear credit negative."
    Banco do Brasil, caught up in a spat with
Bolsonaro over branch closings, slumped 11%, while power company
Eletrobras skidded nearly 3% amid signs of the
president's interference in the power sector.

    Brazil's real fell as much as 2.8%, hitting
lows not seen since November last year, while the cost to insure
exposure to Brazil's sovereign debt jumped 22 basis points from
Friday's close.
    "Local assets will underperform across the board in the very
short-term," Citigroup warned, adding that a break in the key
5.50 level of dollar-real pair could see further continuation of
weakness in the real.  
   Investors also have their eyes on a discussion regarding an
extension of Brazil's emergency aid bill this week, with eyes on
cost cuts elsewhere to keep spending within the limit.

    Worries about stretched fiscal spending have caused the real
to lag its emerging market peers widely in 2020. This year, the
currency is down about 6% so far.  
    Other currencies in Latin America also
dropped, pressured by rising U.S. Treasury yields and inflation
expectations.
    Higher U.S. yields pressure risk-driven assets by offering
relatively stronger and safer returns. 
    In its sixth straight day in the red, Mexico's peso
hit its lowest since early November as a deep freeze in Texas
continued to raise concerns about a hit to factory activity in
the country.
    A corresponding surge in oil prices failed to support the
peso, while Colombia's peso also dropped.
    Surging copper prices saw Chile's peso as the only
gainer for the day. 
        
    Key Latin American stock indexes and currencies:
    
                              Latest      Daily % change
 MSCI Emerging Markets         1402.48               -1.93
                                        
 MSCI LatAm                    2311.50                -3.8
                                        
 Brazil Bovespa              114019.83               -3.72
                                        
 Mexico IPC                   45035.62                 0.3
                                        
 Chile IPSA                    4569.36               -1.18
                                        
 Argentina MerVal             49446.07              -3.033
                                        
 Colombia COLCAP               1348.63               -0.29 Currencies             Latest      Daily % change
 Brazil real                    5.4412               -1.08
                                        
 Mexico peso                   20.6505               -1.09
                                        
 Chile peso                      706.1                0.27
                                        
 Colombia peso                    3591               -0.60
 Peru sol                       3.6518                0.00
                                        
 Argentina peso                89.4300               -0.30
 (interbank)                            
                                        
 
    
 (Reporting by Susan Mathew in Bengaluru; Editing by Steve
Orlofsky and Dan Grebler)
  

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2-Eni Italia UPDATE beat expectations in last quarter after ‘year like no other’ | Instant News


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MILAN, Feb 19 (Reuters) – Italian energy group Eni’s fortunes picked up in the last quarter of this year as firmer oil prices after “a year like no other” saw full-year profits fall.

Adjusted net income for the fourth quarter was 0.66 billion euros ($ 798 million), down 88% on the year but beating analyst expectations for a 0.04 billion euro loss.

But for the full year, it reported a loss of 742 million euros compared to a gain of 2.876 billion euros in 2019 after what Eni Chief Executive Claudio Descalzi said was “a year unlike any other in the history of the energy industry”.

The unprecedented drop in demand triggered by the COVID-19 pandemic saw big European rivals Shell and BP as well as big US companies Exxon Mobil and Chevron report heavy losses for the year.

Eni’s shares fell sharply last year, hitting their lowest level in a quarter century as the health pandemic rocked oil markets.

In the fourth quarter production fell 11% to 1,713 million barrels of oil equivalent per day but the company said full-year production was on target.

Like its competitors, Eni has cut its investments to offset the impact of the pandemic and spent 35% less last year at 5 billion euros.

Adjusted cash flow for the year fell to 6.7 billion euros compared with guidelines for 11.5 billion euros on Brent oil prices of $ 60 per barrel.

“By taking advantage of the actions we took, our adjusted cash flow for 2020 … was able to finance our capex, with a surplus of 1.7 billion,” said Descalzi.

The companies, which said they were well-equipped to deal with this year’s uncertain trading environment with liquidity of around 20.4 billion euros, confirmed a 2020 dividend of 0.36 euros per share.

In a note, Royal Bank of Canada said Eni remains one of the more leveraged names among integrated oil companies.

“We see Eni’s aggressive strategy around the energy transition as posing a risk to shareholders from time to time,” he said.

Eni, like other European peers, is cleaning up his business as investors increase pressure on the oil and gas sector to fight climate change.

It will release its new business plan on Friday.

By 1019 GMT Eni’s shares were down 1.1%, while the European oil and gas index was down 0.5%.

($ 1 = 0.8271 euro)

Additional reporting by Stefano Bernabei; Edited by Edmund Blair and David Evans

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