Ugandan shilling stable; to ease due to importer FX demand
At 0858 GMT, commercial banks quoted the shilling at 3,603/3,613, compared with Friday's closing rate of 3,600/3,610.
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Daily Mail
19 minutes ago
- Daily Mail
A dignified exit for Reeves: Chancellor should use tax reform to boost growth - or fall on her sword, says MAGGIE PAGANO
The cut in interest rates was meant to take the heat off the economy, bolster confidence for business and provide respite to homeowners. Instead, we are seeing a highly volatile gilts market with traders selling big chunks of 30-year bonds, which in turn is pushing up the price of government borrowing to levels not seen for 27 years – and to levels way higher than during the so-called Liz Truss crisis when her administration was blamed for crashing the economy. Over the last few days, yields on 30-year bonds have risen above 5.62 per cent while the yield on the benchmark ten-year bonds has climbed to more than 4.76 per cent, the highest since May. Normally, a rate cut would depress gilt yields. So even though we are in the tail-end days of August, when markets are always thinner, there's no doubt what's going on. Traders and investors are sending the Government a pretty stark message: We don't believe that your economic strategy is working out. You can't blame them. Inflation is climbing, as today's figures are expected to show, and growth is flatlining while figures for the public finances out tomorrow are also expected to show further rises in government debt. Not only does the UK have the highest level of inflation in the G7 but borrowing costs are the highest too. And interest rates are also still the highest despite recent cuts and are unlikely to be trimmed any further. Not a great outlook. Businesses are still reporting heavy job losses while insolvencies are creeping up month on month, reaching 2,081 in July. Over the last year the construction industry has seen the highest number of insolvencies at 3,984, making up 17 per cent of all industry cases, which is disappointing as housebuilding and infrastructure projects were to be a government priority. The bond markets don't like what they see, and are sending the strongest of signals to the Chancellor that something has to give if she is to plug her £50billion black hole – slash public spending or raise taxes. Either way Rachel Reeves will have to break her word on not raising taxes or breaking her own fiscal rules, neither of which is politically palatable. One of the City's most thoughtful economists, Panmure Liberum's Simon French, has an intriguing take on what Reeves should do next. In a recent tweet, French argues that if the Prime Minister won't back his Chancellor and her instincts on the 'optimal split of fiscal repair undertaken by department spending control/welfare/tax increases', then Reeves should resign in 'dignified protest'. French, who is usually non-partisan, also says it will be interesting to see 'how many Labour backbenchers – currently showing economically naive attitudes to debt, inflation & growth – respond to the frequent signals coming from the bond market'. In short, what French suggests is that Reeves can only get a grip on public spending if Starmer stands up to Labour rebels who recently forced through U-turns on winter fuel payments and other welfare reforms. He's right, of course. And maybe those tears she shed during PMQs in the Commons were out of sheer frustration? Rather than give in to the rebels, she should find her inner Iron Lady. And rather than desperately try to find new ways to pluck the taxpayer, which will depress consumer and business confidence, how about pushing through tax reforms which will invigorate growth? Now that would be worth a fight. If she can't, the Chancellor should fall on her sword. Resigning on principle would be a far better legacy than breaking every promise made in the run-up to the election about not raising taxes on working people, or indeed, boasting about being the first female Chancellor. Rooney scores Life just gets more and more complicated. Should we be taking creatine, berberine or is it collagen? No one really knows, but it is the great debate of our time. Fitness fanatics and gym addicts obviously believe so and are buying products like these from Applied Nutrition as though they are sweeties. The Coleen Rooney-backed firm celebrates its first year as a listed company with sales up 24 per cent and forecasts beating earlier estimates. Shares are rising too. How nice that Coleen is scoring her own goals.
Reuters
2 hours ago
- Reuters
Dollar mixed as traders wait on Jackson Hole
NEW YORK, Aug 19 (Reuters) - The dollar was mixed on Tuesday as traders awaited the Federal Reserve's Jackson Hole Economic Policy Symposium later this week for further clues on U.S. interest rate policy. A speech on Friday by Fed Chair Jerome Powell is this week's main focus, with little major economic data to drive market direction. Traders are tuned into whether Powell will push back against market pricing of a rate cut in September. Traders ramped up bets on a rate cut at the Fed's September 16-17 meeting after a weak July jobs report, and as last month's consumer price inflation report showed limited upward pressure from tariffs. But a hotter-than-expected July producer price reading has tempered some rate-cut expectations. Powell has said he is reluctant to cut rates due to an expected increase in inflation this summer from tariffs. "Last week, when we had about 25 basis points priced in for September, and more than two cuts for the rest of the year, there was probably some risk that the Powell speech would disappoint those expectations if he wasn't clear enough in committing to a September cut," said Vassili Serebriakov, an FX and macro strategist at UBS in New York. "Now that we're pricing in about 20 basis points for September and just slightly over 50 basis points for the rest of the year, I think the risks are much more balanced," Serebriakov added. Traders are pricing in 54 basis points of cuts by year-end. The Fed will also release minutes from its July 29-30 meeting on Wednesday, though they may offer limited insight as the meeting came before July's weak jobs report. Data on Tuesday showed groundbreaking for new U.S. single-family homes and permits for future construction rose in July even as high mortgage rates and economic uncertainty continued to hamper home purchases. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, was last up 0.15% on the day at 98.27, with the euro down 0.12% at $1.1646. Against the Japanese yen , the dollar weakened 0.22% to 147.54. Currency moves have been relatively muted for the past few weeks following a steep drop in the dollar in the first half of the year. "There's been a bit of de-risking in FX over the summer and now investors are just waiting for the more clear catalyst for the next move," said Serebriakov. In other currencies, sterling slipped 0.16% to $1.348. The Aussie dropped 0.62% to $0.6451, the weakest since August 5. Traders are also focused on any developments in peace talks to end the Russia-Ukraine war. U.S. President Donald Trump said on Tuesday he hoped Russian President Vladimir Putin would move forward on ending the war in Ukraine but conceded that the Kremlin leader may not want to make a deal at all, adding this would create a "rough situation" for Putin. In cryptocurrencies, bitcoin fell 2.88% to $113,112.
Reuters
3 hours ago
- Reuters
Brazil's 'soy moratorium' site offline after antitrust ruling setback
SAO PAULO, Aug 19 (Reuters) - A website containing information about Brazil's "soy moratorium," a private agreement enforced by global grain traders to protect the Amazon rainforest from soy-driven deforestation, was taken offline on Tuesday after Brazil's antitrust authority ordered suspension of the pact. The soy moratorium has long been hailed as one of the most successful initiatives to protect the Amazon rainforest because it bars soybean traders from buying from farmers who cleared land there after July 2008. But the General Superintendent of antitrust regulator CADE on Monday ruled that it represents a potential breach of Brazilian competition law. Superintendent Alexandre Barreto de Souza ordered firms to suspend the pact or pay fines after he concluded a preliminary investigation, prompted by a request in August 2024 from the agriculture committee of Brazil's lower house of Congress. A majority of lawmakers in the committee is backed by farmers opposed to the moratorium. On Monday, Barreto de Souza also initiated a full investigation involving some 30 grain exporters and two industry groups on whether the moratorium, which has been in place for 19 years, "constitutes an anti-competitive agreement" involving rival companies. Brazilian soy farmers celebrated the moratorium's suspension as a historic victory. Farmers, however, are not expected to clear big areas of forest to grow soy as that crop has been advancing over pastureland, according to Mauricio Buffon, president of farm lobby Aprosoja. 'We do not believe there will be a drop in soy trade,' he said. Even so, soy traders are now in a bind. People familiar with the thinking of trade groups Anec and Abiove told Reuters they will appeal the suspension of the pact at CADE's tribunal, which is composed of six commissioners, including its president. While CADE may take years to conclude the investigation and issue a final opinion on the moratorium's legality, companies may settle with the agency during the course of the probe. If traders are found guilty of breaching competition law, their trade groups face fines of up to 2 billion reais ($365.60 million). For traders themselves, fines can reach up to 20% of the company's gross revenue in the last fiscal year before the investigation started. ($1 = 5.4704 reais)
