GLOBAL NEWS-

RBI to discuss monetary policy transmission with banks

The Reserve of India (RBI) will talk to lenders later this month about a pass-through on lower policy interest rates, said Governor Shaktikanta Das on Monday.Concerns over a full pass-through of lower interest rates to the real economy surfaced after Indian lenders lowered lending rates by only 5 basis points after a 25 basis point rate cut by the RBI in early February, raising questions on the efficiency of monetary policy transmission.“Transmission of rates is very important especially after the central bank announces a rate cut,” Das told reporters after its board meeting in the capital.“We will discuss that issue with the banks and see what needs to be done,” said Das, adding that he is set to meet with the heads of private and public sector banks on Feb. 21.Earlier in the day, Rajnish Kumar, Chairman of State Bank of India, the country’s largest public sector lender said that the bank currently does not have any headroom to cut interest rates.

Russia's Gazprombank decided to freeze PDVSA accounts

Russian lender Gazprombank has decided to freeze the accounts of Venezuelan state oil company PDVSA and halted transactions with the firm to reduce the risk of the bank falling under U.S. sanctions, a Gazprombank source told Reuters on Sunday.“PDVSA’s accounts are currently frozen. As you’ll understand, operations cannot be carried out.Reuters reported this month that PDVSA was telling customers of its joint ventures to deposit oil sales proceeds in its Gazprombank accounts, according to sources and an internal document, in a move to sideline fresh U.S. sanctions on PDVSA.

Washington says the sanctions, imposed on Jan. 28, are aimed at blocking Venezuelan President Nicolas Maduro’s access to the country’s oil revenue after opposition leader Juan Guaido proclaimed himself interim president and received widespread Western support.Gazprombank is Russia’s third biggest lender by assets and includes among its shareholders Russian state gas company Gazprom.

Asia bulls dare to hope on trade talks, stimulus

Asian share markets bounced broadly on Monday as investors dared to hope for both progress at Sino-U.S. trade talks in Washington this week and more policy stimulus from major central banks.MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1 percent, recovering from a sharp fall last Friday. Japan’s Nikkei climbed 1.8 percent to its highest level of the year so far, while Australia’s main index rose 0.7 percent.Shanghai blue chips bounced 1.6 percent. But E-Mini futures for the S&P 500 were flat as trade was thinned by a holiday in U.S. markets.The Dow and the Nasdaq had boasted their eighth consecutive weekly gains on wagers the United States and China would hammer out an agreement resolving their protracted trade war.

Singapore Jan non-oil exports suffer biggest decline in more than two years

Singapore’s exports stumbled more than expected in January, getting 2019 off to a bumpy start amid signs trade frictions are having an impact on Asia’s trade-reliant economies.Weak export data released on Monday comes two days after Singapore reported the fourth quarter had slowest growth in more than two years and warned of significant moderation for manufacturing this year.“Singapore joins other countries in the region, like Korea, which have been seeing slower export numbers as well,” Maybank Kim Eng economist, Lee Ju Ye said, adding that she expects slower exports this year, particularly in the first quater.

UK businesses plan to raise pay by most since 2012

British businesses plan to raise basic wages by the most in at least seven years, due to recruitment difficulties and a need to keep pay in line with competitors, a survey showed on Monday, highlighting ongoing strength in Britain’s jobs market.Britain’s labor market has proved resilient in the run-up to Brexit, with unemployment falling to its lowest since the mid-1970s, despite a broader slowdown that caused investment to slide and cut overall growth in 2018 to its weakest since 2012.Bank of England policymaker Gertjan Vlieghe said last week firms may be choosing to expand by hiring staff rather than buying new equipment, as after a potential no-deal Brexit it would be easier to sack workers than sell unwanted machinery.

May to speak to every EU head in bid for Brexit deal changes

Theresa May plans to speak to every European Union leader and the European Commission chief to seek changes to her EU withdrawal agreement, days after another defeat from her own lawmakers and as businesses brace for a no-deal Brexit on March 29.In her talks with EU leaders and European Commission President Jean-Claude Juncker she will be seeking to change the Irish backstop, one of the most contentious parts of the withdrawal agreement she agreed in November, her office said.May has told EU leaders she could pass her deal with concessions primarily around the backstop - a guarantee that there can be no return to border controls between the British province of Northern Ireland and EU-member Ireland.

Saudi crown prince begins Asia tour with $20 billion Pakistan investment pledge

 Crown Prince Mohammed bin Salman on Sunday said Saudi Arabia has signed investment agreements worth $20 billion during his high-profile visit to Pakistan, where tensions were flaring up with nuclear-armed rival India.Kicking off his tour of South Asia and China with a far higher Pakistan investment than expected, the crown prince said the $20 billion figure represents only the start of an economic tie-up that would bring the historic Muslim allies even closer.“It’s big for phase 1, and definitely it will grow every month and every year, and it will be beneficial to both countries,” said the crown prince.

ECB rate move hinges on downturn's duration

The timing of the European Central Bank's first post-crisis rate hike hinges on whether the euro zone's current slowdown is a blip or a more protracted downturn, ECB policymaker Francois Villeroy de Galhau said in an interview published on Sunday.The ECB has said it aims to keep interest rates at current record lows at least through the summer, but its longstanding rate guidance is increasingly out of sync with market expectations as growth has slowed.Asked in an interview with Spanish newspaper El Pais whether recent data reduced chances for a hike after summer, Villeroy said the ECB would scrutinize the flow of economic data."The key question will be if the slowdown is temporary -- with a bounce-back during this year -- or more durable," said Villeroy, who is head of the French central bank and seen as a frontrunner to succeed Mario Draghi as ECB President this year.

European efforts for trade with Iran fall short

Iran's foreign minister said on Sunday that a European mechanism to trade with Tehran fell short and that France, Britain and Germany needed to do more to show their commitment to the 2015 nuclear deal with Iran.

"Instex (the mechanism) falls short of commitments by the E3 (France, Germany, Britain) to save the nuclear deal," Mohammad Javad Zarif said at the Munich Security Conference. "Europe needs to be willing to get wet if it wants to swim against the dangerous tide of U.S. unilateralism.

President Trump receives update on China trade talks

President Donald Trump received an update on trade talks with China on Saturday at his Florida retreat after discussions in Beijing saw progress ahead of a March 1 deadline for reaching a deal.The White House offered no additional detail.Both the United States and China reported progress in five days of negotiations in Beijing this week but the White House said much work remains to be done to force changes in Chinese trade behavior.Shortly after the meeting with his trade team, Trump said on Twitter the talks in Beijing were "very productive."At a White House press conference on Friday, he said the talks with China were "very complicated" and that he might extend the March 1 deadline and keep tariffs on Chinese goods from rising.

U.S. duties on $200 billion worth of Chinese imports are set to rise from 10 percent to 25 percent if no deal is reached by March 1 to address U.S. demands that China curb forced technology transfers and better enforce intellectual property rights.China’s vice premier and chief trade negotiator, Liu He, and Lighthizer are to lead the next round of talks this coming week in Washington.

U.S.-China trade talks to resume next week, Trump hints at extension

The United States and China will resume trade talks next week in Washington with time running short to ease their bruising trade war, but U.S. President Donald Trump repeated on Friday that he may extend a March 1 deadline for a deal and keep tariffs on Chinese goods from rising.Both the United States and China reported progress in five days of negotiations in Beijing this week.

Trump, speaking at a White House news conference, said the United States was closer than ever before to "having a real trade deal" with China and said he would be "honored" to remove tariffs if an agreement can be reached.

Dollar weakens as trade deal hopes buoy riskier assets; Aussie, kiwi firm

The dollar fell versus a basket of its peers on Monday as rising expectations of a U.S.-Sino trade deal led investors to shift away from the safety of the greenback into riskier assets.Both the United States and China reported progress in five days of negotiations in Beijing last week, although the White House said much work remains to be done to force changes in Chinese trade behaviour.Negotiations will continue next week in Washington as investors hope for an end to the trade war between the world’s two largest economies.“Trade is the big focus for the markets...with talks shifting from Beijing to Washington, we could get more news flow,” said Michael McCarthy, chief markets strategist at CMC Markets.

“I expect the euro to remain under pressure this week while dollar/yen could also fall if we see risk-aversion based on negative trade news flow.”The Aussie gained 0.2 percent to $0.7154, after firming 0.48 percent on Friday on hopes of a U.S.-China trade breakthrough. The kiwi dollar gained around 0.3 percent on the dollar to $0.6886.In Asia, the yen was steady versus the greenback at 110.53.

Gold at two-week high on trade deal hopes; palladium peaks

Gold prices rose to their strongest level in more than two weeks on Monday as the dollar weakened on hopes the United States and China are nearing a trade deal, while palladium hit a record high.Spot gold had gained 0.3 percent to $1,324.80 per ounce, just below a 9-month peak of $1,326.30 an ounce marked on Jan. 31.U.S. gold futures rose 0.4 percent to $1,327.8 an ounce.“Alleviation of risks around the trade talks has certainly benefited the markets.

Brent crude oil slips away from 2019 high after China reports car sales drop

Oil prices fell on Monday after climbing to their highest this year earlier in the session as China reported automobile sales in January fell for a seven month, raising concerns about fuel demand in the world’s second-largest oil user.International Brent crude futures were at $66.20 per barrel at, down 5 cents from their last close. Brent earlier climbed to $66.78 a barrel, the highest since November 2018. U.S. West Texas Intermediate (WTI) crude oil futures were at $55.82 per barrel, up 23 cents from their last close.

WTI prices also rose their highest since November, at $56.13 per barrel, earlier on Monday.Traders said Brent prices slipped after China reported the weak car sales data.China’s vehicle sales last month fell by 15.8 percent versus the same month in 2018, an industry association said on Monday. This continued the 2018 trend, in which China recorded the first annual drop in vehicle sales on record.