Japan's economy expands annualised 1.0% in April-June
The rise in gross domestic product (GDP) translated into a quarterly increase of 0.3%, compared with a median estimate of a 0.1% increase.
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Reuters
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- Reuters
Banco do Brasil facing record agribusiness default levels, CEO says
SAO PAULO, Aug 15 (Reuters) - Banco do Brasil ( opens new tab is facing the highest default level ever recorded in its agribusiness loan portfolio, opens new tab, CEO Tarciana Medeiros said on Friday, adding that the deterioration had not been anticipated even in the most pessimistic forecasts. The state-run lender on Thursday reported weaker-than-expected second-quarter results, opens new tab and announced a sharp cut to its full-year outlook, following an already challenging, opens new tab first quarter marked by high delinquency in the agribusiness segment. Most of the defaults stem from soybean, corn, and cattle producers in Brazil's center-west and southern regions, Medeiros said during a call with analysts. "We have a portfolio of over 600,000 clients, of which 20,000 are in default. And 74% of them had never been in default until December 2023," she said. Many farmers in Brazil - a top global supplier of grains, coffee, meat, cotton and sugar - have struggled in recent years with bad weather, high interest rates, opens new tab and elevated input costs, leading to an increase in the number of bankruptcy filings. Banco do Brasil reported a 90-day default ratio of 3.49% in the sector in the April-to-June period, up from 3.04% in the previous quarter and 1.32% a year earlier. The bank, long seen as a pillar of farm credit in the South American agricultural powerhouse, expects the sector to continue to hurt its results in the very short term, Medeiros said. She pointed to a "still stressed" third quarter and said the lender did not want market participants to have unrealistic expectations, as it has debt from the 2024/25 season maturing through September. The bank hopes that favorable weather conditions, forecasts for a bumper 2025/26 grain crop and improving commodity prices will help lower delinquency in agribusiness in the new season. Banco do Brasil expects some improvement in its overall results from the fourth quarter onwards, driven by net interest income growth. Its shares fell as much as 4% in early Sao Paulo trading, before reversing course to trade up 1%. They had plunged more than 30% since the weaker-than-expected first quarter results and are still down 13% year-to-date. "Certainly a weak quarter, but somewhat expected," analysts at Itau BBA said in a note to clients. "We remain cautious, looking for more visibility on the still-worsening credit quality trends, but do not expect a major negative reaction," they added. ($1 = 5.3934 reais)
Reuters
a minute ago
- Reuters
World equities flat, crude oil prices fall as markets await Trump-Putin talks
NEW YORK/LONDON, Aug 15 (Reuters) - Global stocks were flat but still traded near record highs on Friday as investors awaited talks in Alaska between U.S. President Donald Trump and his Russian counterpart Vladimir Putin over Ukraine. Short-term U.S. Treasury bond yields fell with markets anticipating a Federal Reserve interest rate cut. The Dow hit a record high earlier in the session, becoming the last of Wall Street's main indexes to soar to a new peak. Benchmark S&P 500 and the Nasdaq were losing ground, dragged down by technology, utilities and financials stocks. The Dow Jones Industrial Average (.DJI), opens new tab rose 0.09%, the S&P 500 (.SPX), opens new tab fell 0.25% and the Nasdaq Composite (.IXIC), opens new tab fell 0.36%. "This market continues to move higher and the story is just earnings and margins," said Talley Leger, chief market strategist at The Wealth Consulting Group in New Jersey. "The inflation numbers that we saw this week were mostly services and in a services-based economy like ours, this is good for profit margins." Data showed that U.S. retail sales increased solidly in July, rising 0.5% from the prior month, after an unexpected spike in producer price data on Thursday renewed inflation concerns and pared market expectations for Federal Reserve rate cuts this year. European shares touched a near five-month high before pulling back, as investors drew support from a largely positive earnings season. The pan-European STOXX 600 (.STOXX), opens new tab index was flat at 0.08%. The MSCI All Country World Index (.MIWD00000PUS), opens new tab consolidated recent gains. It was last up 0.05% at 952.34, just shy of the record level of 954.21 set on Wednesday. The White House has said the Trump-Putin meeting will take place at 11 a.m. Alaska time (1900 GMT), with the U.S. president's hopes of a ceasefire agreement on Ukraine uncertain. Trump has said a second summit involving Ukrainian President Volodymyr Zelenskiy could follow if the talks go well. Details and the longevity of any agreement will be key, and for now investors are on standby. Ukraine's government bonds - key indicators of the mood - in recent days have largely stalled at a still-distressed 55 cents on the dollar. "There's still a small degree of risk premium in European markets because of the war. Any type of resolution will ultimately pare that back," said Shaniel Ramjee, co-head of multi-asset at Pictet Asset Management, adding that oil and other commodity prices could also react. "But I think that the market has learnt not to expect too much from these negotiations. Ultimately, Zelenskiy and the Europeans are not invited. They will need to be involved in any final negotiation," Ramjee added. The two-year note yield, which typically moves in step with interest rate expectations for the Fed, fell 0.9 basis points to 3.73%. The yield on benchmark U.S. 10-year notes rose 0.3 basis points to 4.297%. In currency markets, the dollar weakened 0.64% to 146.82 against the Japanese yen and was down 0.35% to 0.805 against the Swiss franc . The euro was up 0.57% at $1.1712. The dollar index , which tracks the greenback against a basket of six major currencies, was last trading down 0.45% at 97.74. Japanese GDP data released on Friday showed the economy expanding by an annualised 1.0% in the April-to-June quarter, beating analyst estimates. The dollar weakened 0.6% against the yen to 146.875 . Brent crude was down 0.79% at $66.32 per barrel. U.S. crude fell 0.89% to $63.45. Spot gold rose 0.17% to $3,341.26 an ounce. U.S. gold futures rose 0.22% to $3,342.70 an ounce. Cryptocurrency markets stabilised after bitcoin touched a record $124,480.82 on Thursday. It was down 0.35% to $117,531.48.
Reuters
a minute ago
- Reuters
Chinese state media calls U.S. a 'surveillance empire' over trackers in chip shipments
BEIJING, Aug 15 (Reuters) - The United States' practice of installing location trackers in chip shipments at risk of diversion to China reflects the "instincts of a surveillance empire," China's state-run media outlet Xinhua said in a commentary published on Friday. Reuters reported earlier this week that U.S. authorities had secretly placed location tracking devices in targeted shipments of advanced chips to detect diversions to China, which is under U.S. curbs for advanced chip exports. The Xinhua commentary, titled "America turns chip trade into a surveillance game," cited "reports" that Washington had embedded such trackers, accusing the United States of running "the world's most sprawling intelligence apparatus". The U.S. government has in the past few years tightened restrictions on the exports of advanced chips as well as related technology and equipments to China, as the two superpowers vie for technological dominance. The Chinese commentary follows longstanding accusations from Washington and its Western allies that China could use some exported products, from telecommunications equipment to vehicles, for surveillance, posing potential security risks. In 2022, the Biden administration banned the sale and import of new telecommunications equipment from several Chinese firms, including Huawei, citing national security concerns. In January, it intensified scrutiny by targeting China-made cars and trucks. In its commentary, Xinhua accused the U.S. government of seeing its trading partners as "rivals to be tripped up or taken down," adding that "if U.S. chips are seen as Trojan horses for surveillance, customers will look elsewhere." China's cyberspace watchdog last month said it had asked U.S. chipmaker Nvidia to explain whether its H20 chips had any backdoor security risks - a hidden method of bypassing normal authentication or security controls. Chinese authorities have also cautioned domestic tech firms over their use of H20 chips, Reuters recently reported.
