<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="517" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-820x517.jpeg" alt="" class="wp-image-416545" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-820x517.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-300x189.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-143x90.jpeg 143w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-768x484.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-1536x969.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/04/106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report-scaled.jpeg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A participant stands near a logo of World Bank at the International Monetary Fund &#8211; World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018.
Johannes Christo | Reuters</figcaption></figure>



LONDON, April 2 (Reuters)&nbsp;&#8211;&nbsp;The World Bank is looking to issue up to $1 billion in a debut hybrid note on capital markets this year, a senior executive told Reuters, as development banks face increasing pressure to find new ways to boost their lending.



The G20 group of major economies has urged multilateral lenders to explore hybrid financing structures in a push to try and maximise balance sheets and increase funding to help developing economies cope with crises, including climate change.



The World Bank would be only the second multilateral lender to issue such an instrument after the African Development Bank (AfDB) sold its hybrid capital note in January &#8211; the first such financing of its kind from a multilateral lender.



When the AfDB sold this deeply subordinated, debt-like equity instrument, it said it hoped to establish this as a new asset class.



&#8220;We are working towards a potential pilot transaction some time this calendar year,&#8221; said George Richardson, director of the capital markets and investment department at the World Bank Treasury.



&#8220;It would be interesting to see if we can find a new way of raising money. The proof is in the pudding,&#8221; said Richardson, adding the lender was talking to investors about the issue and was also closely monitoring market conditions.



Looking at the ratings that would be assigned to the new instrument, Richardson said the World Bank was convinced that hybrid capital issued by multilateral development banks would be a better credit, relative to senior, unsecured bonds, than currently reflected in the rating agencies&#8217; methodologies.



&#8220;These state that hybrid capital will be rated 3 to 5 notches below senior ratings,&#8221; he said, adding that Fitch was undergoing a methodology change and it remained to be seen what changes the ratings agency would make on hybrid capital.



&#8220;We are not commercial banks nor a corporate. Our governance and ownership structure makes us better credits than commercial banks and corporates,&#8221; he added.



Moody&#8217;s assigned an AA3 rating to the AfDB issue, three notches below the bank&#8217;s AAA rated bonds. The AfDB hybrid issue traded at 97.6 cents in the dollar on Tuesday, according to LSEG data, below its debut of just over 100 cents in the dollar in early February. 008281BF3=



(Reporting by Karin Strohecker, Editing by Bernadette Baum)

106944604-16321717072021-09-20t205319z_656748898_rc2wtp9oerrm_rtrmadp_0_worldbank-ethics-report

World Bank set to issue up to $1 bln in debut hybrid note this year

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107392986-17114704652024-03-18t151531z_1895541940_rc2co0a0r3k6_rtrmadp_0_cocoa-ivorycoast-prices-820x462.jpeg" alt="" class="wp-image-470467" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107392986-17114704652024-03-18t151531z_1895541940_rc2co0a0r3k6_rtrmadp_0_cocoa-ivorycoast-prices-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107392986-17114704652024-03-18t151531z_1895541940_rc2co0a0r3k6_rtrmadp_0_cocoa-ivorycoast-prices-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107392986-17114704652024-03-18t151531z_1895541940_rc2co0a0r3k6_rtrmadp_0_cocoa-ivorycoast-prices-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107392986-17114704652024-03-18t151531z_1895541940_rc2co0a0r3k6_rtrmadp_0_cocoa-ivorycoast-prices-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107392986-17114704652024-03-18t151531z_1895541940_rc2co0a0r3k6_rtrmadp_0_cocoa-ivorycoast-prices.jpeg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A farmers holds cocoa beans while he is drying them at a village in Sinfra, Ivory Coast, on April 29, 2023. Luc Gnago | Reuters</figcaption></figure>



Consumers could start to see the effect of surging cocoa prices as the world faces the worst supply deficit in decades, with farmers in West Africa struggling against bad weather, disease and failing trees.



Cocoa futures for May delivery surged to an all-time intraday high of $10,080 per metric ton Tuesday before ending the day down 0.3% to settle at $9,622. Cocoa has more than tripled in cost over the past year and is up 129% in 2024.



Hershey CEO Michele Buck told CNBC last month that the company has a hedging strategy to manage the price volatility. The National Confectioners Association told CNBC in an email that the industry is working with retailers to “manage down costs” and keep chocolate affordable for consumers.



Though the large chocolate companies were well-hedged last year and did not have to immediately pass on high prices to consumers, there is only so much the industry can do to absorb costs, said Paul Joules, a commodities analyst at Rabobank.



The world is facing the largest cocoa supply deficit in more than 60 years and consumers could start to see the effect at the end of this year or early 2025, Joules said. The International Cocoa Organization has forecast a supply deficit of 374,000 tons for the 2023-24 season, a 405% increase from a deficit of 74,000 tons in the previous season.



“The worst is still yet to come,” Joules said. Cocoa prices will likely remain elevated for some time because there are no easy fixes to the systemic issues facing the market, he said.



Consumers could face higher prices or “shrinkflation” in the form of smaller chocolate bars, Joules said. Companies might also adjust ingredients to use less cocoa in some products, he said. The worst sticker shock would come from dark chocolate, which has a very high cocoa content, the analyst said.



David Branch, sector manager at Wells Fargo’s Agri-Food Institute, said consumers could see higher prices as soon as Easter, which is on Sunday.



“Given that cocoa prices and other manufacturing costs have been rising steadily over the past year, it is likely consumers will see a price spike on chocolate candy this Easter,” Branch told clients in a research note this month.



Cocoa prices have been on a tear due to supply disruptions in the key producing nations of Ivory Coast and Ghana, Joules said. The two countries represent about 60% of global cocoa production.



Crops have been hit by black pod disease and swollen shoot virus and many trees are past their maximum yield potential because there has not been a major round of planting since the early 2000s, Joules said.



Heavy rains exacerbated the disease issues, Branch said, and the El Niño weather phenomenon has also led to drier conditions resulting in lower cocoa yields in previous years. Seasonal harmattan winds were more extreme this year, also affecting crop yields, Branch said.



Farmers in Ivory Coast are increasingly exiting cocoa production for more lucrative crops such as rubber, Joules said. The governments of Ghana and Ivory Coast set fixed prices for the farmers at the start of the season so they are not benefiting from the currently rally, the analyst said.



The recent runup is likely due to panic among some commercial buyers rather than market speculation, Joules said. Buyers see the magnitude of the supply deficit and are trying to secure the cocoa that is available, according to the analyst.



Speculators contributed to the early leg of the rally last year as they bet on higher prices by increasing their long positions, Joules said, but they have been exiting those positions this year to book profits.



The spike in prices has hit chocolate giant Hershey, which sees flat earnings for the year. Hershey stock is down about 22% over the past 12 months, while Nestle’s Switzerland-listed shares have shed about 13% during the same period.

107392986-17114704652024-03-18t151531z_1895541940_rc2co0a0r3k6_rtrmadp_0_cocoa-ivorycoast-prices

Cocoa prices are soaring to record levels. What it means for consumers and why ‘the worst is still yet to come’

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/ZO2TST2SFBIXRI7CA7KFKOUIUI-1-1-1-820x547.jpg" alt="" class="wp-image-468014" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/ZO2TST2SFBIXRI7CA7KFKOUIUI-1-1-1-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/ZO2TST2SFBIXRI7CA7KFKOUIUI-1-1-1-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/ZO2TST2SFBIXRI7CA7KFKOUIUI-1-1-1-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/ZO2TST2SFBIXRI7CA7KFKOUIUI-1-1-1-768x513.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/ZO2TST2SFBIXRI7CA7KFKOUIUI-1-1-1-1536x1025.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/ZO2TST2SFBIXRI7CA7KFKOUIUI-1-1-1-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Pump jacks operate at sunset in an oil field in Midland, Texas U.S. August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford/File Photo</figcaption></figure>



LONDON, March 19 (Reuters)&nbsp;&#8211;&nbsp;Oil prices hit four-month highs on Tuesday after breaking above range-bound trading last week, but gains were capped by the prospect of rising exports from Russia as Ukrainian attacks on oil infrastructure curb domestic refining activity.



The Brent crude oil futures&nbsp;LCOc1&nbsp;contract for May delivery was up 33 cents at $87.22 a barrel by 1320 GMT while U.S. West Texas Intermediate (WTI) prices were up 31 cents at $82.47.



The WTI April contract, which expires on Wednesday, was up 31 cents at $83.03.



Both benchmarks hit highs not reached since early November, buoyed by lower crude exports from Saudi Arabia and Iraq as well as signs of stronger demand and economic growth in China and the United States.



&#8220;Oil demand data surprising on the positive side and the extension of the voluntary OPEC+ cuts until the end of June have supported prices,&#8221; said UBS analyst Giovanni Staunovo.



&#8220;Brent will likely trade in an $80-90 per barrel range this year, with an end-June forecast of $86 per barrel.&#8221;



In Russia, exports are rising after Ukrainian drone attacks on the country&#8217;s oil infrastructure, pressuring prices.



&#8220;Attacks will likely reduce Russian crude runs by up to 300,000 barrels per day, in addition to scheduled maintenance closures,&#8221; JP Morgan analysts wrote.



&#8220;Lower primary runs, however, would lead to higher crude oil exports.&#8221;



Russia will increase oil exports through its western ports in March by almost 200,000 barrels per day (bpd), against a monthly plan for 2.15 million bpd.



Prices were also weighed down by uncertainty over U.S. interest rates ahead of this week&#8217;s Federal Reserve policy meeting.



(Reporting by Noah Browning in London and Trixie Yap in Singapore; Additional reporting by Paul Carsten in London; Editing by Mark Potter and David Goodman)

ZO2TST2SFBIXRI7CA7KFKOUIUI-1-1-1

Oil at highest since early November on brighter demand signals

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/37OLJ2JEDJPEZHPKH67DSVTNQU-820x547.jpg" alt="" class="wp-image-466609" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/37OLJ2JEDJPEZHPKH67DSVTNQU-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/37OLJ2JEDJPEZHPKH67DSVTNQU-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/37OLJ2JEDJPEZHPKH67DSVTNQU-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/37OLJ2JEDJPEZHPKH67DSVTNQU-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/37OLJ2JEDJPEZHPKH67DSVTNQU-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/37OLJ2JEDJPEZHPKH67DSVTNQU-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Angola&#8217;s President Joao Lourenco, left, shakes hands with Chinese President Xi Jinping during the Forum on China-Africa Cooperation held at the Great Hall of the People in Beijing September 3, 2018. Andy Wong/POOL Via REUTERS/File Photo</figcaption></figure>



BEIJING, March 15 (Reuters)&nbsp;&#8211;&nbsp;Chinese President Xi Jinping said he would support Chinese firms that invest in Angola&#8217;s agriculture and manufacturing sectors, state media reported on Friday, as the African oil producing nation seeks help in diversifying its economy.



&#8220;The Chinese side is willing to work with Angola to implement key infrastructure projects and support strong Chinese companies to go to Angola to carry out various forms of cooperation,&#8221; Xi told visiting Angolan President Joao Lourenco at the Great Hall of the People in Beijing.



Lourenco&#8217;s visit follows Angola&#8217;s announcement in December it would leave producer group the Organization of the Petroleum Exporting Countries and agreements with China on cooperation.



Xi told Lourenco on Friday Chinese firms could &#8220;help Angola achieve agricultural modernisation, industrialisation and economic diversification,&#8221; the state media report said, part of Beijing&#8217;s long-term drive to deepen economic and political ties with Africa.



China has a vested interest in Angola&#8217;s quest to overhaul its economy because Luanda owes Chinese creditors just under $21 billion, World Bank data shows.



Lourenco, who is accompanied on this visit by his agriculture minister, needs funds to implement structural reforms to cut its reliance on oil, as Luanda does not have enough non-oil revenue sources to finance its transition.



In December, China and Angola signed an investment protection agreement, while Angolan firms from Dec. 25 have had tariff-free access to China&#8217;s massive consumer market across 98% of goods under a separate agreement.



On Friday, the two leaders also agreed to upgrade bilateral ties to the level of comprehensive strategic cooperative partnership, allowing for greater trade and investment.



Chinese firms have invested close to $12 billion in Angola since it joined China&#8217;s Belt and Road Initiative in 2014, data from the American Enterprise Institute think tank shows, just under half of which went into the country&#8217;s energy sector.



The littoral state has plentiful reserves of base metals and ample agricultural resources, such as sugarcane, coffee, cotton and livestock, but they have been neglected compared to oil.



The International Monetary Fund on March 8 released its Executive Board&#8217;s assessment of Angola&#8217;s economy said &#8220;heavy dependence on the oil sector&#8221; put Luanda at a high risk of missing the 0.5% growth target the Fund forecast for 2023, as the IMF expects its oil sector to have shrunk by an annual 6.1% over last year.



(Reporting by Joe Cash; Editing by Sharon Singleton and Barbara Lewis)

FILE PHOTO: Angola’s President Joao Lourenco, left, shakes hands with Chinese President Xi Jinping during the Forum on China-Africa Cooperation held at the Great Hall of the People in Beijing

China’s Xi willing to work with Angola as it moves on from oil

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Q552JFWEBJNPVFQSJPW5CKIHNY-820x547.jpg" alt="" class="wp-image-466091" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Q552JFWEBJNPVFQSJPW5CKIHNY-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Q552JFWEBJNPVFQSJPW5CKIHNY-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Q552JFWEBJNPVFQSJPW5CKIHNY-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Q552JFWEBJNPVFQSJPW5CKIHNY-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Q552JFWEBJNPVFQSJPW5CKIHNY-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/Q552JFWEBJNPVFQSJPW5CKIHNY-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Farmers separate infected cocoa beans from a pile at a farm in San Pedro, western Ivory Coast August 12, 2010. REUTERS/Luc Gnago/File Photo</figcaption></figure>



LONDON/ACCRA, March 13 (Reuters)&nbsp;&#8211;&nbsp;Major African cocoa plants in Ivory Coast and Ghana have stopped or cut processing because they cannot afford to buy beans, four trading sources said, meaning chocolate prices around the world are likely to soar.



Chocolate-makers have already increased prices to consumers, after three years of poor cocoa harvests, with a fourth expected, in the two countries that produce nearly 60% of the world&#8217;s cocoa.



Cocoa prices&nbsp;LCCc2&nbsp;have more than doubled over the last year, scaling numerous all-time highs.



&#8220;We need massive demand destruction to catch up with the supply destruction,&#8221; Tropical Research Services&#8217; Steve Wateridge, a world expert on cocoa, said.



Chocolate-makers cannot produce chocolate using raw cocoa and rely on processors to turn beans into butter and liquor that can be made into chocolate.



But the processors say they cannot afford to buy the beans.



State-controlled Ivorian bean processor Transcao, one of the country&#8217;s nine major plants, said it had stopped buying beans because of their price.



It said it was still processing from stock, but did not say what capacity it was running at. Two industry sources said the plant was almost idle.



They asked not to be named because they were not authorised to speak publicly on the issue.



One of the two sources said more major state run plants could shut soon in top grower Ivory Coast, which produces nearly half the world&#8217;s cocoa.



The same two sources said even global trader Cargill struggled to source beans for its major processing plant in Ivory Coast, halting operations for about a week last month. Cargill did not respond to a request for comment.



In No. 2 cocoa grower Ghana, most of its eight plants, including state-owned Cocoa Processing Company (CPC), have repeatedly suspended work for weeks since the season started in October, two separate industry sources said.



CPC said it is operating at about 20% of capacity because of the shortage of beans.



<h2 class="wp-block-heading" id="h-disruption-at-the-farm-gate">DISRUPTION AT THE FARM GATE</h2>



The price rally has derailed a long-established mechanism for global cocoa trade, through which farmers sell beans to local dealers who sell them on to processing plants or global traders.



Those traders then sell beans or cocoa products &#8211; butter, powder and cocoa liquor &#8211; to global chocolate giants such as Nestle&nbsp;NESN.S, Hershey&nbsp;HSY.N&nbsp;and Mondelez&nbsp;MDLZ.O.



In normal times, the market is heavily regulated &#8211; traders and processors purchase beans from local dealers up to a year in advance at pre-agreed prices. Local regulators then set lower farmgate prices that farmers can charge for beans.



However, in times of shortage like this year, the system breaks down &#8211; local dealers often pay farmers a premium to the farmgate price to secure beans.



The dealers then sell the beans on the spot market at higher prices instead of delivering them at pre-agreed prices.



As global traders rush to purchase those beans at any price to meet their obligations with the chocolate firms, local processors are often left short of beans.



Ivorian and Ghanian authorities normally try to protect local plants by issuing them with cheap loans or by limiting volumes of beans that global traders can purchase.



This year, however, plants are not getting the cocoa they pre-ordered and cannot afford to buy at higher spot prices.



Already, chocolate-makers have raised prices. U.S. retail stores charged 11.6% more for chocolate products last year compared with 2022, data from market research firm Circana shows.



The International Cocoa Organisation (ICCO) expects global cocoa production will fall by 10.9% to 4.45 million metric tons this season.



Grindings &#8211; a measure of demand &#8211; will fall by 4.8% to 4.78 million as processors struggle to buy beans, and supply less butter at a higher price to chocolate-makers, which in turn raise prices.



The supply-demand mismatch will leave the market with a deficit of 374,000 tons this season, up from 74,000 tons last season, according to the ICCO.



This means processors and chocolate firms will have to draw on cocoa stocks to fully cover their needs. The ICCO expects global cocoa stocks to fall to their lowest in 45 years by the season end.



Wateridge of Tropical Research said the cocoa market could post another deficit next season based on the severity of bean disease in West Africa.



The market has not seen four successive years of deficit since the late 1960s, ICCO data shows.



(Reporting by Maytaal Angel; editing by Barbara Lewis)

FILE PHOTO: Farmers separate infected cocoa beans from a pile at a farm in San Pedro

African cocoa plants run out of beans as global chocolate crisis deepens

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107385510-1710163312883-gettyimages-1246952831-20090101230209-99-537362-820x462.jpeg" alt="" class="wp-image-465729" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107385510-1710163312883-gettyimages-1246952831-20090101230209-99-537362-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107385510-1710163312883-gettyimages-1246952831-20090101230209-99-537362-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107385510-1710163312883-gettyimages-1246952831-20090101230209-99-537362-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107385510-1710163312883-gettyimages-1246952831-20090101230209-99-537362-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107385510-1710163312883-gettyimages-1246952831-20090101230209-99-537362.jpeg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Euros, U.S. dollars, Canadian dollars, Russian rubles and Czech korunas lie on a table as banknotes.  Picture Alliance | Picture Alliance | Getty Images</figcaption></figure>



As inflation loosens its grip in most economies, investors are closely monitoring interest rate decisions, with markets expecting a slew of rate cuts this year.



While rates in most economies are set to remain elevated in 2024, economists expect a mild rollback late this year, the Economist Intelligence Unit said in a recent report. Most central banks sharply hiked policy rates from early 2022 in a bid to stifle inflation.



China and Japan remain exceptions in the global tightening cycle, though Beijing’s rates have started to ease slightly, said the global intelligence firm. EIU also expects the Bank of Japan will exit its negative interest rate policy in the second quarter.



<h2 class="wp-block-heading" id="h-united-states"><a></a>United States</h2>



U.S. Federal Reserve Chair Jerome Powell reiterated last week that he expects interest rates to start coming down this year should inflation signals cooperate, but stopped short of giving a specific timeline.



Inflation as assessed by the Fed’s preferred gauge currently stands at an annual rate of 2.4%, remaining ahead of the Fed’s 2% goal. 



The Fed held rates steady in a range of 5.25% to 5.5% in its January meeting. Markets currently expect the Fed to start with a 25-basis-point rate cut in June.



<h2 class="wp-block-heading"><a></a>Euro zone</h2>



The European Central Bank last week also held its policy rate at a record high of 4%, signaling that it won’t cut rates before June.



The central bank acknowledged that inflation was easing faster than it anticipated and lowered its annual inflation forecast from an average of 2.7% to 2.3%. The ECB has a 2% inflation target.



<h2 class="wp-block-heading"><a></a>Switzerland</h2>



Swiss inflation in February rose 1.2% from a year ago, the lowest reading in almost two and a half years, fueling hopes that the Swiss National Bank could trim interest rates in its March 21 meeting.



The SNB’s current policy rate stands at 1.75%, and the central bank has an inflation target range of between 0% and 2%. According to LSEG, there’s a more than 40% chance of a 25-basis-point cut in March, which would take the SNB’s key rate down to 1.5%.



UBS expects the SNB to wait until the second quarter for its first key interest rate cut, while not ruling out the possibility of a cut this month.



<h2 class="wp-block-heading"><a></a>Bank of Canada</h2>



In March, the Bank of Canada left rates unchanged for a fifth consecutive meeting. Its governor said that it was too early to consider a cut.



Canada’s inflation slowed to 2.9% in January, compared with a year ago. That’s a drop from December’s 3.4% and within the BOC’s target range of 1% to 3%.



<h2 class="wp-block-heading">Turkey</h2>



Turkey’s central bank kept its interest rate steady at 45% in February, ending its tightening cycle after eight straight hikes, with many expecting it to hold for most of 2024. The country’s inflation currently stands at around 65%.



JPMorgan said in a research note that the Turkish central bank may cut its policy rate in November and December, keeping its year-end policy rate forecast of 45%.&nbsp;



<h2 class="wp-block-heading"><a></a>Australia</h2>



The Reserve Bank of Australia kept rates unchanged in February at a 12-year high of 4.35%.



Nomura predicts the RBA will start cutting rates in August as inflation eases and unemployment rises. The firm said it expects the country to “narrowly avoid a recession.”



In a recent note, ANZ noted that Australia’s economy experienced a “continued slowdown” in the second half of 2023 as fourth-quarter GDP grew just 0.2% from the prior quarter. That comes after third-quarter GDP edged 0.3% higher from the previous three-month period.



<h2 class="wp-block-heading"><a></a>New Zealand</h2>



The Reserve Bank of New Zealand kept the official cash rate steady at 5.5% in its February meeting, forecasting that inflation will re-enter the 1% to 3% per year target band by September.



Auckland Savings Bank does not expect the RBNZ to start cutting the cash rate until November.



<h2 class="wp-block-heading"><a></a>Indonesia</h2>



Indonesia’s central bank kept its benchmark policy rate at 6% in its recent meeting. 



While the Southeast Asian nation’s consumer price inflation is now within the Bank Indonesia’s targeted range of 1.5% to 3.5% for the year, Indonesia’s central bank governor is considering a 75 basis point cut only in the second semester of the year.



“We are still watching closely is about the global spillover&#8230; mainly of the impact of U.S. monetary policy direction,” Bank Indonesia governor Perry Warjiyo recently told CNBC’s JP Ong.



BMI, a Fitch Solutions research unit, expects the bank to lower the benchmark&nbsp;rate to 5% by the end of 2024, starting in the second half of the year in tandem with the U.S. and other developed market central banks “in order to not raise undue depreciatory pressures on the Indonesian rupiah.”



<h2 class="wp-block-heading"><a></a>Bank of Japan</h2>



Unlike its peers, economists expect the Bank of Japan to raise interest rates this year instead of cutting.



The BOJ is expected to move toward ending its negative interest rate policy by April, contingent on annual wage negotiations, said economists at Oxford Economics and Macquarie.&nbsp;



Spring wage negotiations are an important factor in whether Japan’s inflation has sustainably met the BOJ’s 2% target, a prerequisite for the BOJ to end its negative rate policy.



<h2 class="wp-block-heading"><a></a>South Korea&nbsp;</h2>



South Korea’s central bank in late February kept rates steady at 3.5%.



The BOK governor reportedly said that most board members still deem it “premature” to discuss any interest rate cuts while inflation is above target level.



The BOK could still be one of the first in Asia to cut rates, said Goldman Sachs senior Asia economist Goohoon Kwon, citing ongoing disinflation and subdued private consumption.



A strong rebound in exports driven by semiconductors due to the advent of AI will allow the BOK to be less constrained by U.S. monetary policy and inflation, Kwon said.



<h2 class="wp-block-heading"><a></a>So who’s first?</h2>



“The Bank of Canada is my candidate to be the first to cut,” Carl Weinberg, chief economist at High Frequency Economics told CNBC. He explained that Canada’s CPI, excluding shelter prices, is rising by just 1.7%. That’s below the central bank’s inflation target and Weinberg noted that all the prices the BOC can control in the economy are rising less than the inflation target mandates.



“2024 will be the year of the rate cut pivot,” Weinberg added.



But Asian central banks are unlikely to cut ahead of the Fed as a strong U.S. dollar means that most Asian currencies remain relatively weaker, said Morgan Stanley.



The potential for further depreciation could still lend some higher inflation risks to these countries, the investment bank’s economists said in a report.



“While inflation is coming off, in most of the region’s economies it has either just reached the target range or is still closing the gap to target range,” Morgan Stanley said.

107385510-1710163312883-gettyimages-1246952831-20090101230209-99-537362

2024 is the year of the rate cut pivot — here’s when the world’s central banks will budge

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="612" height="357" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1030878162-612x612-1.jpg" alt="" class="wp-image-400669" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1030878162-612x612-1.jpg 612w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1030878162-612x612-1-300x175.jpg 300w" sizes="(max-width: 612px) 100vw, 612px" /><figcaption class="wp-element-caption">World map with charts and graphs as symbols of global finance</figcaption></figure>



March 12 (Reuters)&nbsp;&#8211;&nbsp;Emerging market stocks climbed to a seven-month high on Tuesday, while currencies languished, with investors awaiting a crucial U.S. inflation report for insights into the timing for the Federal Reserve&#8217;s rate cuts this year.



The MSCI emerging market stocks index&nbsp;.MSCIEF&nbsp;advanced 0.9% as of 5:30 a.m. ET (0930) GMT, hitting its highest level since August 2023 and on track for its fifth straight daily gain.



The currencies index&nbsp;.MIEM00000CUS&nbsp;was largely flat, after touching an over two-month high during the day.



U.S. consumer prices data, due later in the day, and producer prices on Thursday will help investors gauge the timing of the first Federal Reserve interest-rate cut, seen in June as per a Reuters poll. The Fed&#8217;s March policy decision is due next week.



&#8220;We could be moving towards the point where both the Fed and ECB are ready to cut rates&#8230; an inline or weaker (CPI) print would reinforce our view of the June cut and be welcomed by the markets,&#8221; Mohit Kumar, European economist at Jefferies, said in a note.



The Russian rouble&nbsp;RUBUTSTN=MCX&nbsp;weakened slightly against the dollar and was seen trading in a narrow range, while South Africa&#8217;s rand&nbsp;ZAR=&nbsp;climbed slightly ahead of the U.S. data.



Among major developments, Vanke&#8217;s Hong Kong-listed shares 2202.HK jumped 10.3%, along with its bonds, after China&#8217;s No.2 property developer said the impact of a Moody&#8217;s ratings downgrade on financing activities was &#8220;controllable&#8221;, though some analysts remain concerned over its longer-term liquidity.



The Hang Seng Mainland Properties index&nbsp;.HSMPI&nbsp;logged its strongest one-day gain of 8.0% in six months, while the real estate sector&nbsp;.CSI000952&nbsp;climbed 5%. The Hang Seng index&nbsp;.HSI&nbsp;advanced to a three-month high, gaining 3.1%.



Egypt&#8217;s benchmark stock index&nbsp;.EGX30&nbsp;shed over 1% after touching a record high on Monday on upbeat sentiment driven by financing from United Arab Emirates and the International Monetary Fund.



Meanwhile in Central and East Europe, data showed Czech adjusted retail sales excluding cars and motorcycles increased by 2.4% year-on-year in January, while a media report stated central bank Vice-Governor Eva Zamrazilova said Czech interest rate cuts of 25 or 50 basis points are acceptable and bigger cuts should not be considered.



The Czech crown&nbsp;EURCZK=&nbsp;was up 0.2% against the euro.



The Polish zloty has outperformed its CEE peers in 2024, gaining more than 1% this year, owing to accelerated rate cuts in the Czech Republic and Hungary.



Argentina&#8217;s central bank cut its benchmark interest rate to 80% from 100% previously on Monday.



(Reporting by Ankika Biswas in Bengaluru; Editing by Ros Russell)

World map with charts and graphs as symbols of global finance

Stocks scale seven-month high, FX stalls with US inflation data in focus

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/102851129-oilandgold-820x462.jpg" alt="" class="wp-image-458020" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/102851129-oilandgold-820x462.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/102851129-oilandgold-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/102851129-oilandgold-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/102851129-oilandgold-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/102851129-oilandgold.jpg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">(L) Oil pumpjacks and (R) gold bars
Getty Images</figcaption></figure>



Gold prices could soar to $3,000 per ounce, and oil to $100 per barrel within the next 12 to 18 months subject to any one of three possible catalysts, according to Citi.



Gold, which is currently trading at $2,016, could surge by about 50%, if central banks sharply ramp up purchases of the yellow metal, a possible stagflation, or in case of a deep global recession, Aakash Doshi, Citi’s North America head of commodities research, told CNBC.



<h2 class="wp-block-heading" id="h-central-bank-s-gold-rush"><a></a>Central bank’s gold rush</h2>



“The most likely wildcard path to $3,000/oz gold is a rapid acceleration of an existing but slow-moving trend:&nbsp;de-dollarization across Emerging Markets central banks&nbsp;that in turn leads to a crisis of confidence in the U.S. dollar,” Citi analysts including Doshi wrote in a recent note.



That could double central bank’s gold purchases, challenging jewelry consumption as the largest driver of gold demand, Doshi elaborated.&nbsp;



Central banks’ gold purchases have “accelerated to record levels” in recent years, as they seek to diversify reserves and reduce credit risk, Citi said. China and Russian central banks are leading gold purchases, with India, Turkey, and Brazil, also increasing&nbsp;bullion buying.



The world’s central banks have sustained two successive years of more than 1,000 tons of net gold purchases, the&nbsp;World Gold Council reported in January.



“If that goes again [to] double very quickly to 2,000 tons, we think that would be actually very bullish for gold,” Doshi told CNBC via phone.



<h2 class="wp-block-heading">A global recession?</h2>



Another trigger that could drive gold to $3,000 would be a “deep global recession” that could spur the U.S. Federal Reserves to cut rates rapidly.



“That means the brakes have been cut, not to 3%, but to 1% or lower – that will take us to $3,000,” Doshi said, noting that this is a low probability scenario.



Gold prices tend to share an inverse relationship with interest rates. As interest rates dip, gold becomes more appealing compared to fixed-income assets such as bonds, which would yield weaker returns in a low interest rate environment.&nbsp;



The Fed benchmark interest rate has been between&nbsp;5.25% and 5.5%&nbsp;since July 2023, the highest since January 2001 when it shot to 6% following the dot-com bubble burst. Markets expect&nbsp;the Fed to cut&nbsp;rates in May or June.



Stagflation — an increasing inflation rate, a slowing economic growth and rising unemployment — could be another trigger, though Doshi said there’s a “very low probability” of such a scenario.



Gold is perceived as a safe haven and tends to perform well in periods of economic uncertainty when investors move away from the riskier assets such as equities.



These three potential triggers aside, Citi maintains that their base case for bullion is $2,150 in the second half of 2024, and the price of gold to average a little over $2,000 in the first half. A new record could be reached towards the end of 2024, Doshi added.



<h2 class="wp-block-heading"><a></a>Oil at $100?</h2>



Another wildcard scenario highlighted in Citi’s report was for oil prices to hit triple digits again.



The catalysts for oil to hit $100 per barrel include higher geopolitical risks, deeper OPEC+ cuts and supply disruptions from key oil producing regions, Doshi said.&nbsp;



The ongoing Israel-Hamas war has not hit oil production or exports, with the only significant impact being the Houthi attacks from Yemen on oil tankers and other ships traversing the Red Sea.



Major oil producer Iraq has been impacted by the conflict and any further escalation could hurt other major OPEC+ suppliers in the region, Citi said.



Recent developments show that tensions have been rising on the border between Israel and Lebanon, raising fears that the war in Gaza could spread elsewhere in the Middle East.



Doshi said Iraq, Iran, Libya, Nigeria and Venezuela are vulnerable to supply disruptions, with steeper U.S. sanctions policy on Iran and Venezuela potentially on the cards.&nbsp;



Other geopolitical risks such as Russian oil supplies, should Ukraine attack Russian refineries with drones, cannot be ruled out, Citi’s analysts wrote. Doshi maintained that their base case for oil stands at around $75 per barrel for the year.



Global benchmark Brent’s&nbsp;April futures were trading at $83.56 a barrel, while the U.S.&nbsp;West Texas Intermediate&nbsp;March futures stood at $79.13 per barrel.

102851129-oilandgold

Gold at $3,000 and oil at $100 by 2025? Citi analysts don’t rule it out

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-820x547.jpg" alt="" class="wp-image-404443" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling.jpg 1254w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Macro view of a screen of trading terminal with abstract financial graph and digits. Trading and forex concept. 3D Rendering</figcaption></figure>



March 7 (Reuters)&nbsp;&#8211;&nbsp;Most currencies in Europe&#8217;s emerging markets traded in a tight range on Thursday as investors held back from making bets ahead of the European Central Bank&#8217;s latest monetary policy verdict, while a broader gauge of stocks nudged higher.



By 0908 GMT, MSCI&#8217;s index for emerging market stocks&nbsp;.MSCIEF&nbsp;gained 0.2%, touching fresh seven-month highs, while a gauge for currencies&nbsp;.MIEM00000CUS&nbsp;advanced 0.1%.



Equities in Taiwan&nbsp;.TWII&nbsp;closed 1.0% higher, and shares in South Korea&nbsp;.KS11&nbsp;gained 0.2%.



Thursday&#8217;s big-ticket event for global markets is the ECB&#8217;s interest rate decision at 1315 GMT. The bank is expected to keep rates at a record high of 4%. Its president, Christine Lagarde, will hold a press conference 30 minutes after the announcement.



&#8220;It may be too soon to change policy tack, but markets may get carried away with lower rates if Lagarde sounds reassuring on wages and the inflection point last quarter,&#8221; Societe Generale strategists wrote.



Poland&#8217;s zloty EURPLN= weakened 0.1% against the euro a day after its central bank lowered its inflation forecasts for 2024 and 2025 and kept interest rates unchanged at 5.75%.



The Hungarian forint&nbsp;EURHUF=&nbsp;lagged local peers, down 0.5%, while the Czech crown&nbsp;EURCZK=&nbsp;was flat at 25.352 per euro.



Stocks were off to a mixed start with Poland&#8217;s WIG 20&nbsp;.WIG20&nbsp;down 1.5%, while Turkish shares&nbsp;.XU100&nbsp;gained 1.7%.



Poland&#8217;s biggest lender PKO BPPKO.WA fell 2.6% after posting a 60% drop in fourth-quarter net profit.



South Africa&#8217;s rand&nbsp;ZAR=&nbsp;was flat against the dollar after rising for five straight sessions, supported by higher gold prices and a softer U.S. dollar.&nbsp;GOL/



The dollar index&nbsp;=USD&nbsp;remained on the back foot as traders backed the idea that the Federal Reserve could be looking to reduce lending costs this year despite some upside surprises on the inflation front.&nbsp;FRX/



Elsewhere, Malaysia&#8217;s ringgit MYR= strengthened 0.6% against the dollar after the Asian country&#8217;s central bank kept its benchmark interest rate unchanged for the fifth straight meeting.



Meanwhile, bets on lower interest rates in the United States, even with a cloudy outlook, were behind a fourth consecutive month of overall foreign net flows to emerging markets in February, the Institute of International Finance said.



(Reporting by Shashwat Chauhan in Bengaluru; Editing by Ros Russell)

Macro view of a screen of trading terminal with abstract financial graph and digits. Trading and forex concept. 3D Rendering

Most currencies hold steady ahead of ECB rate decision, stocks edge higher

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107308670-1695930955313-gettyimages-1478432952-118-820x462.jpeg" alt="" class="wp-image-452310" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107308670-1695930955313-gettyimages-1478432952-118-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107308670-1695930955313-gettyimages-1478432952-118-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107308670-1695930955313-gettyimages-1478432952-118-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107308670-1695930955313-gettyimages-1478432952-118-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107308670-1695930955313-gettyimages-1478432952-118.jpeg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Gold purchases from central banks led to last year’s surge, with purchases exceeding 1,000 tons for two consecutive years.
Traffic_analyzer | Istock | Getty Images</figcaption></figure>



March 6 (Reuters)&nbsp;&#8211;&nbsp;Gold prices held above the $2,100 level on Wednesday, near a record peak hit in the previous session as hopes for U.S. rates easing by mid-year mount, while traders awaited remarks on the economy&#8217;s health from Federal Reserve Chair Jerome Powell.



Spot gold&nbsp;XAU=&nbsp;edged down 0.1% at $2,126.13 per ounce, as of 0458 GMT. U.S. gold futures&nbsp;GCcv1&nbsp;fell 0.4% to $2,134.30.



Spot prices hit a record peak of $2141.59 per ounce overnight on Tuesday, rallying for a fifth straight session.



Gold&#8217;s rally is sentiment driven, which was triggered by last week&#8217;s poor U.S. economic data that gave little more clarity for a June rate cut, said Ajay Kedia, director at Kedia Commodities, Mumbai, adding, without other factors at play, such as dollar&#8217;s movement, or any surge in geopolitical tensions, gold could see profit taking.



Traders are weighing in risks to the U.S. economic health in a high-interest rate environment and would be tuning into Powell&#8217;s first day of semi-annual congressional testimony for more clarity on the same.



U.S. services industry growth slowed a bit in February amid a decline in employment and new orders for U.S.-manufactured goods dropped more than expected in January.



Data on the U.S. labour market due this week will also be closely watched for. Any downside surprise could help support gold.



Traders see a 71% chance for a June Fed rate cut. Lower rates boost the appeal of non-yielding bullion.



&#8220;The central banks are buying more than 1,000 tons of gold consecutively from last two years versus the historic average of 300 (tons). This has made-up for all the loss in the retail and ETF demand,&#8221; said Kunal Shah, head of research, Nirmal Bang Commodities, Mumbai.&nbsp;GOL/ETF



Spot platinum&nbsp;XPT=&nbsp;rose 0.4% to $884.16 per ounce, and palladium&nbsp;XPD=&nbsp;rose over 1% to $958.20, while silver&nbsp;XAG=&nbsp;dropped 0.3% to $23.63.



(Reporting by Harshit Verma in Bengaluru; Editing by Sherry Jacob-Phillips and Rashmi Aich)

107308670-1695930955313-gettyimages-1478432952-118

Gold holds above $2,100 near record high, focus on Powell testimony

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107028015-16468620192022-03-09t213112z_1256402390_rc27zs99uxg4_rtrmadp_0_ukraine-crisis-usa-gasoline-1-820x462.jpeg" alt="" class="wp-image-462518" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107028015-16468620192022-03-09t213112z_1256402390_rc27zs99uxg4_rtrmadp_0_ukraine-crisis-usa-gasoline-1-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107028015-16468620192022-03-09t213112z_1256402390_rc27zs99uxg4_rtrmadp_0_ukraine-crisis-usa-gasoline-1-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107028015-16468620192022-03-09t213112z_1256402390_rc27zs99uxg4_rtrmadp_0_ukraine-crisis-usa-gasoline-1-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107028015-16468620192022-03-09t213112z_1256402390_rc27zs99uxg4_rtrmadp_0_ukraine-crisis-usa-gasoline-1-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107028015-16468620192022-03-09t213112z_1256402390_rc27zs99uxg4_rtrmadp_0_ukraine-crisis-usa-gasoline-1.jpeg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Marathon Petroleum’s oil refinery in Anacortes, Washington. David Ryder | Reuters</figcaption></figure>



Oil prices edged lower Monday after oil cartel OPEC+ agreed to extend voluntary output reductions until the second quarter, in an effort to support the short-term stability of crude markets.



Global benchmark Brent slipped 0.05% to $83.52 a barrel Monday, while U.S. West Texas Intermediate futures traded down 0.19% at $79.82 per barrel.



OPEC+ announced on Sunday that the 2.2 million barrels per day of voluntary output cuts that were planned for the first quarter of this year will continue into the next quarter.



OPEC+ kingpin and de facto leader Saudi Arabia said it will prolong its voluntary cut of 1 million barrels per day until the end of the second quarter, state-owned Saudi Press Agency said Sunday. Riyadh’s crude production will stand at approximately 9 million barrels per day until the end of June.



Russia, another OPEC+ heavyweight, will slash its&nbsp;production and export supplies by a combined 471,000 barrels per day until the end of June. Moscow had volunteered to reduce its supplies by 500,000 barrels per day in the first quarter. Other key producers Iraq and UAE will also extend their voluntary production cuts of 220,000 barrels per day and 163,000 barrels per day respectively, until the end of the second quarter.



“This new move by OPEC+ clearly shows strong unity within the group, something that was put into question after the November ministerial meeting, which saw Angola leaving OPEC,” Rystad Energy’s Senior Vice President Jorge Leon wrote in a note following the oil cartel’s decision.



The extension signals “robust determination” to defend a price floor above $80 per barrel in the second quarter, he said, adding that if OPEC+ rapidly unwound the cuts, oil prices will drop to $77 per barrel in May.



“Such a move by OPEC+ might also be seen as a sign that demand prospects in the second quarter are less optimistic than the group thought in November last year,” he said.



Oil prices have been languishing in a narrow $75 to $85 per barrel range since the start of the year, in spite of OPEC+ supply cuts, persistent Houthi maritime attacks in the Red Sea artery and ongoing geopolitical risks from Israel’s war against Hamas.



—CNBC’s Ruxandra Iordache contributed to this report.

107028015-16468620192022-03-09t213112z_1256402390_rc27zs99uxg4_rtrmadp_0_ukraine-crisis-usa-gasoline-1

Oil prices slip after OPEC+ extends voluntary oil output cuts until mid-year

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-820x547.jpg" alt="" class="wp-image-404443" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/Stock-value-rising-and-falling.jpg 1254w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Macro view of a screen of trading terminal with abstract financial graph and digits. Trading and forex concept. 3D Rendering</figcaption></figure>



Feb 29 (Reuters)&nbsp;&#8211;&nbsp;Emerging market stocks eyed strong monthly gains on Thursday, with a Chinese recovery fuelling the bulk of the gains, while most currencies were range-bound ahead of key U.S. inflation data, which is likely to set the tone for rate cut expectations.



At 0901 GMT, MSCI&#8217;s index for emerging market (EM) stocks&nbsp;.MSCIEF&nbsp;was up 0.1%, on track for a monthly advance of 4.5%, its best February performance since 2012.



Mainland Chinese shares&nbsp;.CSI300&nbsp;closed 1.9% higher following a more than 1% fall in the previous session, with a monthly gain of 9.4% snapping a six-month losing streak.



&#8220;Investor sentiment has stabilised since China&#8217;s markets reopened, in part supported by positive retail spending and travel data from the holiday period,&#8221; Wee Khoon Chong, APAC market strategist at BNY Mellon, wrote.



State-led buying and tighter regulations have been primarily responsible for pulling China&#8217;s blue-chip index off five-year lows, but more aggressive stimulus is needed for the momentum to continue amid a moribund economy.&nbsp;.SS



Stocks in emerging Europe also had a bright start, with Turkey&#8217;s main index&nbsp;.XU100&nbsp;gaining 0.7%, while shares in Warsaw&nbsp;.WIG20&nbsp;jumped 1.2%.



Turkey&#8217;s economy grew 4.5% last year and 4.0% in the fourth quarter, beating expectations as strong domestic demand offset fallout from devastating earthquakes and a slowdown in main trading partners.



A broader gauge of EM currencies&nbsp;.MEIM00000CUS&nbsp;was flat at 1,726.73 points as caution prevailed ahead of the release of the Federal Reserve&#8217;s preferred inflation gauge later in the day &#8211; the personal consumer expenditures (PCE) price index, which is expected to set the tone for rate cut expectations in the world&#8217;s biggest economy.



Hungary&#8217;s forint&nbsp;EURHUF=&nbsp;edged 0.2% higher against the euro, though was on track to be the worst performing currency amongst local peers this month.



Earlier in the week, the National Bank of Hungary (NBH) slashed its base rate by 100 basis points to 9%.



The Polish zloty&nbsp;EURPLN=&nbsp;eased 0.1%, while the Czech crown&nbsp;EURCZK=&nbsp;also lost 0.1%.



Weakness in the dollar&nbsp;=USD&nbsp;helped South Africa&#8217;s rand&nbsp;ZAR=&nbsp;rise 0.4%, with Israel&#8217;s shekel&nbsp;ILS=&nbsp;also gaining 0.6%.



Meanwhile, Western powers butted heads over how to handle frozen Russian assets on Wednesday as G20 finance ministers kicked off a discussion of challenges for the global economy, trying to set aside deep geopolitical divisions.



The discussions will continue later in the day.



(Reporting by Shashwat Chauhan in Bengaluru;Editing by Mark Potter)

Stocks eye monthly gains on China rebound, currencies steady ahead of US inflation test

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/HPBGECXM2RM4DJT5RIFPZCG5KU-820x547.jpg" alt="" class="wp-image-424855" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/HPBGECXM2RM4DJT5RIFPZCG5KU-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/HPBGECXM2RM4DJT5RIFPZCG5KU-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/HPBGECXM2RM4DJT5RIFPZCG5KU-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/HPBGECXM2RM4DJT5RIFPZCG5KU-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/HPBGECXM2RM4DJT5RIFPZCG5KU-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/HPBGECXM2RM4DJT5RIFPZCG5KU-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: The United Nations headquarters building is pictured with a UN logo in the Manhattan borough of New York City, New York, U.S., March 1, 2022. REUTERS/Carlo Allegri/File Photo</figcaption></figure>



HARARE, Feb 28 (Reuters)&nbsp;&#8211;&nbsp;Africa&#8217;s public debt will stay above pre-pandemic levels in 2024 and 2025, with many countries still at risk of falling into debt distress as they continue to struggle to service international loans, a U.N. official said on Wednesday.



Addressing a United Nations Commission for Africa (UNECA) conference in Victoria Falls, the agency&#8217;s macroeconomics and governance director Adam Elhiraika said eight countries were in debt distress, while 13 were &#8220;expected to be at risk of debt distress&#8221;.



Africa has been hit by repeated economic shocks since 2020, from the COVID-19 pandemic to Russia&#8217;s invasion of Ukraine and rising U.S. interest rates, putting cash-strapped, debt-laden governments in a political and fiscal bind.



&#8220;Debt will (stay) above the pre-pandemic level. This is huge,&#8221; Elhiraika said, adding that the continent&#8217;s debt-to-GDP ratio was 62.5% at the end of 2022.



This ratio doubled to 57% in the decade to 2020 and could rise 10 percentage points in the next five years if Africa&#8217;s fiscal trajectory does not change, according to a recent International Monetary Fund (IMF) report.



&#8220;There is need for African countries to work with international partners to address debt distress,&#8221; Elhiraika said.



Africa&#8217;s fiscal deficit deteriorated to 4.6% of GDP last year, Elhiraika said, without citing previous years&#8217; figures, and is set to widen further to 5% in 2024.



Many African governments are having to slash spending, while interest payments are growing faster.



Zimbabwe Finance Minister Mthuli Ncube called for a rethink of the global financial system.



&#8220;Access to finance for Africa must be made cheaper and easier. Hence, there is a need to re-look at the international financial architecture to ensure that it is fit for purpose,&#8221; Ncube said, addressing the conference.



Zambia became the first African nation to default on its debt in late 2020, during the COVID-19 pandemic. Ghana followed in 2022, while Ethiopia became the latest last December.



(Reporting by Nyasha Chingono; Editing by Rachel Savage and Kevin Liffey)

FILE PHOTO: United Nations in New York City

Africa’s debt to stay above pre-pandemic levels through 2025, UN official says

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="612" height="408" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1076949610-612x612-1.jpg" alt="" class="wp-image-400697" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1076949610-612x612-1.jpg 612w, https://cms.cnbcafrica.com/wp-content/uploads/2021/04/istockphoto-1076949610-612x612-1-300x200.jpg 300w" sizes="(max-width: 612px) 100vw, 612px" /><figcaption class="wp-element-caption">Double exposure of coin stack with city background and world map, financial graph, world map and global network business concept idea, element by NASA.</figcaption></figure>



SINGAPORE, Feb 28 (Reuters)&nbsp;&#8211;&nbsp;Asian stocks eased on Wednesday in cautious trading ahead of a U.S. inflation reading this week that could influence the timing of the Federal Reserve&#8217;s easing cycle, while the New Zealand dollar fell after the central bank softened its hawkish stance.



MSCI&#8217;s broadest index of Asia-Pacific shares outside Japan&nbsp;.MIAPJ0000PUS&nbsp;was 0.44% lower at 525.40 points but hovering around a near seven-month peak of 531.56 after a strong rally. The index is up 4.4% for the month, its strongest February performance in more than a decade.



Asia&#8217;s tentative trading on Wednesday is likely to be mimicked in Europe, with Eurostoxx 50 futures&nbsp;STXEc1&nbsp;down 0.12%, while German DAX futures&nbsp;FDXc1&nbsp;were up 0.06%.



Investor focus is squarely on the personal consumption expenditures price index (PCE) for January, the Fed&#8217;s preferred inflation measure, due on Thursday. The PCE is expected to have risen 0.3% on a monthly basis in January, up slightly from the 0.2% increase seen in December, a Reuters poll showed.



A slew of strong economic data along with inflation that has proven to be sticky has resulted in traders drastically dialling back their initial expectations of deep and early interest rate cuts from the Fed.



Markets now anticipate June to be the starting point of the easing cycle compared with March at the start of the year. Traders now expect 77 basis points of cuts this year versus pricing in 150 bps of easing at the start of the year.



Yuting Shao, macro strategist at State Street Global Markets, said individual data releases carry weight for a data-dependent Fed and will impact risk sentiment given the near-neutral positioning from investors.



&#8220;Although one data point does not make a trend, latest inflation and employment readings have raised the prospect that perhaps no landing scenario is driving many asset markets.&#8221;



Other data due this week that could help shape expectations from the Fed include the second estimate of gross domestic product, jobless claims and manufacturing activity.



Fed policymakers have also in recent days pushed back against cutting rates too early, with Governor Michelle Bowman on Tuesday saying she was in no rush to cut U.S. interest rates, particularly given upside risks to inflation that could stall progress or even cause a resurgence of price pressures.



<h2 class="wp-block-heading" id="h-trapped-kiwi">TRAPPED KIWI</h2>



The Reserve Bank of New Zealand (RBNZ) held the cash rate steady at 5.5% on Wednesday, reiterating that previous rate hikes had helped dampen prices, but adding that the risk of further rate hikes had been reduced.



That sent the New Zealand dollar&nbsp;NZD=D3&nbsp;down more than 1% to a nearly two-week low of $0.6101. The kiwi was last at $0.6111.



&#8220;The RBNZ has closed the door to further rate hikes, which was a surprise to somewhat hawkish expectations,&#8221; said Charu Chanana, head of currency strategy at Saxo.



&#8220;This may give room for NZD longs to unwind in the short term, but NZD still provides a strong carry in this low volatility environment.&#8221;



Meanwhile, the Australian dollar wobbled a bit in early trading after data showed consumer price inflation held at a two-year low in January, reinforcing market expectations interest rates would not need to increase any further. The Aussie&nbsp;AUD=D3&nbsp;was 0.43% lower at $0.6515.



The dollar index&nbsp;=USD, which measures the U.S. currency against six rivals, rose 0.116%.



The yen&nbsp;JPY=EBS&nbsp;remained bolted to the psychologically key 150 per dollar level and was last at 150.625 per dollar. The Nikkei&nbsp;.N225&nbsp;ended marginally lower on the day, having touched fresh record peaks this week.



China stocks slid as investors booked profits after a recent rally, while worries over the property sector lingered after a liquidation petition was filed against developer Country Garden.



Hong Kong&#8217; Hang Seng index&nbsp;.HSI&nbsp;fell 1.1% and China&#8217;s blue-chip CSI300 index&nbsp;.CSI300&nbsp;was down 0.27%.



U.S. crude&nbsp;CLc1&nbsp;fell 0.41% to $78.55 per barrel and Brent&nbsp;LCOc1&nbsp;was at $83.30, down 0.42% on the day, as the prospect of a delayed U.S. rate cutting cycle offset the boost provided by talk of extensions to production cuts from OPEC+.&nbsp;O/R



Spot gold XAU= rose 0.1% to $2,030.83 an ounce.



(Reporting by Ankur Banerjee; Editing by Muralikumar Anantharaman and Jamie Freed)

istockphoto-1076949610-612×612-1

Asian shares lose ground as US inflation data awaits; kiwi slides

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="604" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/SWKPWMQPNBJONAOSYUWQUMN254-820x604.jpg" alt="" class="wp-image-460010" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/SWKPWMQPNBJONAOSYUWQUMN254-820x604.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/SWKPWMQPNBJONAOSYUWQUMN254-300x221.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/SWKPWMQPNBJONAOSYUWQUMN254-122x90.jpg 122w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/SWKPWMQPNBJONAOSYUWQUMN254-768x565.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/SWKPWMQPNBJONAOSYUWQUMN254-1536x1131.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/SWKPWMQPNBJONAOSYUWQUMN254-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Director-General of the World Trade Organization Ngozi Okonjo-Iweala arrives to attend the opening of the WTO ministerial meeting in Abu Dhabi, United Arab Emirates, February 26, 2024. REUTERS/Emma Farge</figcaption></figure>



ABU DHABI, Feb 26 (Reuters)&nbsp;&#8211;&nbsp;Trade ministers from around the world gathered in Abu Dhabi on Monday for a World Trade Organization meeting that aims to set new global commerce rules, but its ambitious chief Ngozi Okonjo-Iweala and delegates sought to curb expectations.



The almost 30-year-old global watchdog, whose rules underpin 75% of global commerce, tries to strike deals by consensus, but such efforts are becoming more difficult amid signs that the global economy is fragmenting into separate blocs.



&#8220;Let&#8217;s not pretend that any of this will be easy,&#8221; Okonjo-Iweala said in her opening speech, describing the atmosphere as &#8220;tougher&#8221; than the WTO&#8217;s last 2022 meeting, citing wars, tensions and elections and signs that trade growth will undershoot the organisation&#8217;s own estimate.



She called on ministers to &#8220;roll up their sleeves&#8221; and complete negotiations, but seemed to rule out any deal in Abu Dhabi on reforming the body&#8217;s mothballed appeals court.



&#8220;We are not there yet,&#8221; she said.



Thani Al Zeyoudi, conference chair and UAE&#8217;s foreign trade minister said in an opening address: &#8220;The multilateral trading system with the WTO at its core is at a critical juncture; it is confronting many challenges.



&#8220;The WTO remains a powerful force in countering the current unilateralism, protectionism, and discrimination.&#8221;



Some delegates privately voiced concerns that India&#8217;s trade minister, seen as the main holdout on some key issues including agriculture, was absent on Monday although New Delhi said he would be in Abu Dhabi on Tuesday.



<h2 class="wp-block-heading" id="h-new-members">NEW MEMBERS</h2>



Negotiators say they remain hopeful for an agreement that could buoy global fish stocks and protect fishermen by banning government subsidies.



Other outcomes from the four-day meeting that are either definite or achievable are the accession of two new members &#8211; Comoros and East Timor &#8211; and a deal among around 120 countries to remove development-hampering investment barriers.



Tougher areas are extending a 25-year moratorium on applying tariffs on digital trade, which South Africa and India oppose, and an agreement on agriculture trade rules that has eluded negotiators for decades.



Indian Commerce Minister Piyush Goyal repeated on Monday New Delhi&#8217;s drive for a controversial stand-alone permanent waiver to WTO rules that currently restrict domestic agriculture subsidies on food items like rice.



&#8220;I think this week is really about trying to consolidate progress from two years ago and build on where possible, but I don&#8217;t think there&#8217;s going to be major new breakthroughs in new areas,&#8221; said Simon Conveney, Ireland&#8217;s Minister for Enterprise, Trade and Employment, referring to the WTO&#8217;s 2022 meeting in Geneva.



U.S. Trade Representative Katherine Tai said the meeting was a chance to &#8220;chart a future path together&#8221; and that success should not be measured by the number of deals.



One factor that could help is the determination of Okonjo-Iweala, a former Nigerian finance minister, whose insistence on all-night meetings helped deliver a package of deals in Geneva in 2022. She has already asked ministers to plan for the four-day talks to run overtime.



The European Trade Commissioner Valdis Dombrovskis said that uncertainty and multiple crises were impacting the rules-based global order. &#8220;This tense geopolitical environment makes multilateral organizations like the WTO much more, not less, important,&#8221; he said.



(Additional reporting by Alexander Cornwell; Editing by Alex Richardson, Bernadette Baum and Emelia Sithole-Matarise)

Director-General of the World Trade Organization Ngozi Okonjo-Iweala arrives to attend the opening of the WTO ministerial meeting in Abu Dhabi

WTO meeting seeks modest outcomes, with global trade at ‘critical juncture’

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/76KI5H4MAFL5ZK7OGV4LXR2UG4-820x547.jpg" alt="" class="wp-image-459116" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/76KI5H4MAFL5ZK7OGV4LXR2UG4-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/76KI5H4MAFL5ZK7OGV4LXR2UG4-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/76KI5H4MAFL5ZK7OGV4LXR2UG4-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/76KI5H4MAFL5ZK7OGV4LXR2UG4-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/76KI5H4MAFL5ZK7OGV4LXR2UG4-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/76KI5H4MAFL5ZK7OGV4LXR2UG4-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. REUTERS/Angus Mordant/File Photo</figcaption></figure>



LONDON, Feb 23 (Reuters)&nbsp;&#8211;&nbsp;Red Sea shipping delays and OPEC+ supply cuts are tightening physical oil markets in Europe and Africa as well as the Brent crude market structure, lending further support to oil futures prices, according to traders, LSEG data and analysts.



A sustained rise in crude prices would lift energy, transportation and manufacturing costs and threaten to unwind some of the recent falls in global inflation, just as major central banks are expected to begin cutting interest rates.



On Thursday, the benchmark Brent crude futures market structure hit its most bullish since October. The premium of the first-month contract to the six-month contract&nbsp;LCOc1-LCOc7&nbsp;reached $4.34 a barrel. This structure, called backwardation, indicates a perception of tight prompt supply.



&#8220;It looks like there has been a pick-up in (tanker) diversions, which is making the crude balance tighter,&#8221; said FGE analyst James Davis. Crude demand is high because of strong refining margins, despite refinery maintenance, he added.



More tankers are avoiding the Red Sea since Yemen&#8217;s Houthis began drone and missile attacks against shipping in mid-November, saying they are acting in solidarity with Palestinians as Israel wages war on Hamas.



January average refining margins for diesel and gasoline in Europe rose to multi-month highs of $34.3 and $11.6 a barrel, respectively, Reuters calculations show.



U.S. crude CLc1-CLc7 is also in backwardation, with the strength of Brent and WTI taking the trading community by surprise after predictions that supply would outpace demand at the start of the year.



The stronger market is a bonus for the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+. The group has been cutting supply for the past two years but has often struggled to achieve prices above $80 per barrel – the minimum most producers need to balance their budgets.



Brent&nbsp;LCOc1&nbsp;traded at almost $84 a barrel on Thursday and has risen 9% this year.



OPEC+ leaders have said backwardation is a positive market trend because it discourages traders from holding inventory to resell at a premium later, with low stocks also creating bullish market sentiment.



The world&#8217;s onshore crude inventories sit at 4.4 billion barrels, their lowest level since the start of 2017 when intelligence firm Kpler began tracking the data, JPMorgan said in a report.



&#8220;The physical sweet crude market is very tight,&#8221; said Black Gold Investors CEO Gary Ross, using a term for low-sulphur crude. Libyan outages, a U.S. cold snap that cut output and payment issues for some Russian supplies are among the reasons, he said.



<h2 class="wp-block-heading" id="h-firmer-footing">&#8216;FIRMER FOOTING&#8217;</h2>



OPEC+ sources have said the group will decide in early March whether to extend oil-output cuts into the second quarter of the year or begin returning supply to the market.



&#8220;The market has found a firmer footing with Brent trading above $80 for a while now, supported by what looks like a better-than-expected demand outlook together with the&#8230;tanker diversions keeping millions of barrels at sea for longer,&#8221; said Ole Hansen, Saxo Bank&#8217;s head of commodity strategy.



&#8220;OPEC+ I&#8217;m sure will be very pleased.&#8221;



In the North Sea crude market, the differential of Forties crude to benchmark dated Brent&nbsp;BFO-FOT&nbsp;has reached the highest since late November and the prices of some other grades considered local alternatives to Middle East crude have soared.



In October, about 1.07 million bpd of Middle Eastern crude came to Europe, Kpler data showed, with volumes falling in the following months amid the Red Sea attacks and expected to average about 606,000 bpd in February.



&#8220;Delays to shipments from East of Suez&#8230;are making crude closer to home more attractive,&#8221; a European crude trader said. &#8220;The offers for West Africa and North Sea crude reflect that.&#8221;



&#8220;Refining margins in Europe for Angolan crude are very favourable and Nigeria is selling cargoes faster than it has for months.&#8221;



Nigerian Forcados&nbsp;BFO-FOC&nbsp;crude was offered this week at dated Brent plus $6.00 a barrel, the highest since October LSEG data showed. Nigerian grades Qua Iboe and Bonny Light have firmed to dated plus $3.80 and $3.00, respectively.



In Asia, Middle East cash crude differentials have stayed pretty stable month on month, suggesting Europe and African crude is seeing the bulk of the strength.



U.S. crude has been mixed. On the light side, there has been some tightness due to a cold snap last month hitting Permian production, while March loadings to Asia are set to pick up after a weak January and February.



An unplanned outage at BP&#8217;s Whiting refinery has pushed some heavy Canadian crude into the Cushing storage hub and so there is currently little tightness.



(Reporting by Alex Lawler, Natalie Grover, Noah Browning and Ahmad Ghaddar, additional reporting by Florence Tan and Arathy Somasekhar; editing by Dmitry Zhdannikov, Kirsten Donovan)

FILE PHOTO: The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County

Europe, Africa oil markets tighten, lending support to futures

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/102851129-oilandgold-820x462.jpg" alt="" class="wp-image-458020" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/102851129-oilandgold-820x462.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/102851129-oilandgold-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/102851129-oilandgold-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/102851129-oilandgold-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/102851129-oilandgold.jpg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">(L) Oil pumpjacks and (R) gold bars Getty Images</figcaption></figure>



Gold prices could soar to $3,000 per ounce, and oil to $100 per barrel within the next 12 to 18 months subject to any one of three possible catalysts, according to Citi.



Gold, which is currently trading at $2,016, could surge by about 50%, if central banks sharply ramp up purchases of the yellow metal, a possible stagflation, or in case of a deep global recession, Aakash Doshi, Citi’s North America head of commodities research, told CNBC.



<h2 class="wp-block-heading" id="h-central-bank-s-gold-rush"><a></a>Central bank’s gold rush</h2>



“The most likely wildcard path to $3,000/oz gold is a rapid acceleration of an existing but slow-moving trend: de-dollarization across Emerging Markets central banks that in turn leads to a crisis of confidence in the U.S. dollar,” Citi analysts including Doshi wrote in a recent note.



That could double central bank’s gold purchases, challenging jewelry consumption as the largest driver of gold demand, Doshi elaborated. 



Central banks’ gold purchases have “accelerated to record levels” in recent years, as they seek to diversify reserves and reduce credit risk, Citi said. China and Russian central banks are leading gold purchases, with India, Turkey, and Brazil, also increasing&nbsp;bullion buying.



The world’s central banks have sustained two successive years of more than 1,000 tons of net gold purchases, the World Gold Council reported in January.



“If that goes again [to] double very quickly to 2,000 tons, we think that would be actually very bullish for gold,” Doshi told CNBC via phone.



<h2 class="wp-block-heading"><a></a>A global recession?</h2>



Another trigger that could drive gold to $3,000 would be a “deep global recession” that could spur the U.S. Federal Reserves to cut rates rapidly.



“That means the brakes have been cut, not to 3%, but to 1% or lower &#8211; that will take us to $3,000,” Doshi said, noting that this is a low probability scenario.



Gold prices tend to share an inverse relationship with interest rates. As interest rates dip, gold becomes more appealing compared to fixed-income assets such as bonds, which would yield weaker returns in a low interest rate environment. 



The Fed benchmark interest rate has been between 5.25% and 5.5% since July 2023, the highest since January 2001 when it shot to 6% following the dot-com bubble burst. Markets expect the Fed to cut rates in May or June.



Stagflation — an increasing inflation rate, a slowing economic growth and rising unemployment — could be another trigger, though Doshi said there’s a “very low probability” of such a scenario.



Gold is perceived as a safe haven and tends to perform well in periods of economic uncertainty when investors move away from the riskier assets such as equities.



These three potential triggers aside, Citi maintains that their base case for bullion is $2,150 in the second half of 2024, and the price of gold to average a little over $2,000 in the first half. A new record could be reached towards the end of 2024, Doshi added.



<h2 class="wp-block-heading"><a></a>Oil at $100?</h2>



Another wildcard scenario highlighted in Citi’s report was for oil prices to hit triple digits again.



The catalysts for oil to hit $100 per barrel include higher geopolitical risks, deeper OPEC+ cuts and supply disruptions from key oil producing regions, Doshi said.&nbsp;



The ongoing Israel-Hamas war has not hit oil production or exports, with the only significant impact being the Houthi attacks from Yemen on oil tankers and other ships traversing the Red Sea.



Major oil producer Iraq has been impacted by the conflict and any further escalation could hurt other major OPEC+ suppliers in the region, Citi said.



Recent developments show that tensions have been rising on the border between Israel and Lebanon, raising fears that the war in Gaza could spread elsewhere in the Middle East.



Doshi said Iraq, Iran, Libya, Nigeria and Venezuela are vulnerable to supply disruptions, with steeper U.S. sanctions policy on Iran and Venezuela potentially on the cards.&nbsp;



Other geopolitical risks such as Russian oil supplies, should Ukraine attack Russian refineries with drones, cannot be ruled out, Citi’s analysts wrote. Doshi maintained that their base case for oil stands at around $75 per barrel for the year.



Global benchmark Brent’s April futures were trading at $83.56 a barrel, while the U.S. West Texas Intermediate March futures stood at $79.13 per barrel.<a href="https://www.tetrapak.com/insights/trendipedia" target="_blank" rel="noreferrer noopener"></a>

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Economy

World Bank set to issue up to $1 bln in debut hybrid note this year

Cocoa prices are soaring to record levels. What it means for consumers and why ‘the worst is still yet to come’

Oil at highest since early November on brighter demand signals

China’s Xi willing to work with Angola as it moves on from oil

African cocoa plants run out of beans as global chocolate crisis deepens

2024 is the year of the rate cut pivot — here’s when the world’s central banks will budge

Stocks scale seven-month high, FX stalls with US inflation data in focus

Gold at $3,000 and oil at $100 by 2025? Citi analysts don’t rule it out

Most currencies hold steady ahead of ECB rate decision, stocks edge higher

Gold holds above $2,100 near record high, focus on Powell testimony

Oil prices slip after OPEC+ extends voluntary oil output cuts until mid-year

Stocks eye monthly gains on China rebound, currencies steady ahead of US inflation test

Africa’s debt to stay above pre-pandemic levels through 2025, UN official says

Asian shares lose ground as US inflation data awaits; kiwi slides

WTO meeting seeks modest outcomes, with global trade at ‘critical juncture’

Europe, Africa oil markets tighten, lending support to futures

Gold at $3,000 and oil at $100 by 2025? Citi analysts don’t rule it out

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