money markets

Stocks, bonds in euphoric mood, but dollar takes a beating – The Zimbabwe Mail

LONDON,- World stocks held near two-month peaks on Friday, while oil prices were set for a fourth week of declines in a boost for the inflation outlook and government bond markets that are increasingly confident interest rate cuts are coming next year.

The dollar slid 1% against the yen and was set for one of its steepest weekly falls against other major currencies this year as market rate expectations shift.

MSCI’s World Stock Index edged back up towards highs hit earlier this week, while European shares rallied 1% and U.S. stock futures pointed to a positive open for Wall Street later , .

Oil prices attempted to bounce back after sliding almost 5% on Thursday to four-month lows in a move that was blamed on economic and supply concerns, though technical selling likely played a part when the $80 bulwark broke.

Brent was last up 1% at $78.23 a barrel, but still down almost 20% from the $97.69 top hit in late September. U.S. crude also rallied 1% to $73.7.

Whatever the cause, the recent rout should put added downward pressure on global inflation and reinforce expectations of policy easing next year.

A softer tone to U.S. economic data this week has fuelled rate-cuts bets, pushing Treasury yields down and lifting equity markets.

November so far has seen one of the strongest performances for stock markets this year, with MSCI’s world stock index and the S&P 500 index both more than 7% higher.

“We’re still in this environment where we are late cycle and flirting with the idea of whether we go into a recession or not,” said Justin Onuekwusi, chief investment officer at investment firm St James’s Place.

“This is the key reason why central bank expectations have become a key driver to risk and right now it’s hard to look beyond near-term.”

BOND BULLS OUT

Global bond markets were in a bullish mood.

A fall in U.S. Treasury yields gathered momentum, with the 10-year yield falling to its lowest level since September at around 4.38% – a sharp drop from the 5.02% high hit just last month.

Two-year Treasuries yields are down 25 basis points for the week at 4.81%. That means they are set for their best weekly performance since March, when a banking crisis gripped world markets.

Rate-sensitive two-year bond yields in Germany and Britain fell to their lowest levels since June , with money markets now pricing in roughly 100 basis points worth of rate cuts in the United States and the euro area.

Corporate bond spreads have also tightened sharply this week in another sign that risk appetite has picked up.

“The most striking number this week was the (U.S.) CPI, which was a bit lower than consensus and led to some euphoria in bond markets,” said Christian Hantel, a portfolio manager at Vontobel Fixed Income Boutique.

“That tells you two things. One that in terms of inflation, we continue to move in the right direction and second, that there had been some doubts in markets on the topic of a soft landing so as more data confirmed that view, there was a strong move.”

Data on Tuesday showed U.S. consumer prices were unchanged in October, and the annual rise in underlying inflation was the smallest in two years.

Adding to the disinflationary theme was commentary from Walmart executives that costs were “more in check” and they were planning on cutting prices for the holiday season.

DOLLAR BEATING

In FX markets, the sea change in market pricing for the Fed weighed on the dollar, with the U.S. currency down 1% below 150 yen .

The euro was a fifth of a percent firmer at $1.0872 and sterling reversed earlier falls to stand a touch firmer at $1.2433 .

In Asia, shares outside Japan eased 0.45%, while Japan’s Nikkei closed up 0.48%, to be around 3% firmer for the week, helped by reassurance from the Bank of Japan that it was sticking with its super loose policy.

Chinese blue chips were 0.12% lower, having missed on the general rally so far this week. Alibaba Group’s Hong Kong shares slumped 10% after it scrapped plans to spin off its cloud business.

Sentiment in Asia had been supported by the apparent easing of tensions between the United States and China, with the Chinese press lauding the meeting between President Xi Jinping and President Joe Biden.

Gold nudged up to $1,989 an ounce , about 0.45% firmer.

money markets

Zimbabwe’s economy seen growing 5.5% in 2023 – finance minister – Reuters

HARARE, Nov 30 (Reuters) – Zimbabwe’s economic growth is expected to end the year at 5.5% in 2023, slightly higher than previously forecast, before falling to 3.5% in 2024 due to drought, Finance Minister Mthuli Ncube said in a speech on Thursday.

The budget deficit is expected to end the year at 1.2% of GDP, he said.

Annual inflation is projected to end the year at 20% and then fall to between 10% and 20% in 2024 due to tight monetary policy, Ncube said.

Reporting by Nyasha Chingono; Writing by Nellie Peyton; Editing by Alexander Winning

Our Standards: The Thomson Reuters Trust Principles.

Acquire Licensing Rights, opens new tab

money markets

2024 budget ED’s project: Mthuli -Newsday Zimbabwe – NewsDay

Although Ncube said the Finance ministry was under Mnangagwa’s supervision, under Government Gazette General Notice 1925A of 2023, as prescribed by sections 99 and 104 of the Constitution, the President assigned Vice-President Constantino Chiwenga to oversee all economic sector ministries.

FINANCE minister Mthuli Ncube yesterday revealed that President Emmerson Mnangagwa played a part in the formulation of the 2024 national budget to be presented in Parliament this afternoon.

Ncube made the revelations in an interview with a State-owned local television channel saying the budget was, in essence, Mnangagwa’s.

The budget presentation follows complaints that Treasury had failed to conduct physical public consultations for the budget.

Ncube said he met Mnangagwa outside Cabinet on several occasions where he would dictate what he wanted to be included in the budget.

“I meet the President every week, not in Cabinet. We meet because the Finance, Economic Development and Investment Promotion ministry reports directly to his Excellency,” Ncube said.

“It’s his ministry, so we meet every week to discuss policy issues.

“When it comes to the budget again, I take him through our thinking in terms of the excess budget and how the economy is doing.

“I take him through the revenue measures, and he always comes back, pushes back, and give us ideas. He always asks very good questions.”

He said Mnangagwa was aware of the content of the budget to be presented today.

“Actually, I do not want to be questioned by him. They are tough questions, and you have to be clear, so I would say, maybe I should do this differently. So, we have that interaction. He had tremendous input into the budget,” Ncube told ZTN.

“As I speak, he knows everything that I will be presenting in terms of revenue measures, areas of relief, additional revenue, and areas of how to improve the tax administration. He is fully aware, and he has given input.

“In a way, it’s his budget.”

Meanwhile, public finance watchdogs yesterday raised fears that the budget would not reflect the citizens’ aspirations because of limited consultations.

The consultations were conducted online, mainly on public radio stations, unlike in previous years, where meetings would be done physically.

Coalition for Market and Liberal Solution executive director Rejoice Ngwenya said the Treasury chief’s remarks explain why the national budget was “militarised.”

“I do not for once think ED (Mnangagwa) has the ‘depth’ and interest to contribute anything to the budget, other than saying ‘add more money to the soldiers and police’. If indeed, as he says, it’s his budget, it’s going to be shallow and uneventfully dreary,” he said.

Zimbabwe Coalition for Debt and Development programmes manager John Maketo said: “The budget must address the immediate needs of ordinary people, particularly bread and butter issues. It must make sense to all.”

He said the budget must be inclusive, pro-poor, and create opportunities for the majority of the poor.

“It must seek to close existing inequality gaps. This is an indication that public policy is top-driven rather than people-driven,” Maketo said.

National Consumer Rights Association spokesperson, Effie Ncube, told NewsDay that government must take stakeholder input seriously.

“Consultation for the sake of consultation is not the way to go. It must be a good faith engagement,” he said.

The Zimbabwe Congress of Trade Union (ZCTU) challenged Ncube to present a pro-poor budget.

“Reviewing taxes downwards for anyone earning less than a living wage is a must,” ZCTU secretary-general Japhet Moyo said in an interview.

“The government should not tax someone earning below a minimum wage.”

Ncube presents the budget when the majority of the country’s citizens are wallowing in poverty with the Zimdollar on a free-fall while companies are struggling to stay afloat.

There have been calls to re-dollarise, but Mnangagwa has dug in saying his dedollariation strategy remains on course.

Mnangagwa reintroduced the local currency in 2019 after a decade of relative economic stability.

money markets

2024 budget ED’s project: Mthuli – NewsDay