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China’s central bank achieves largest short-term weekly money injection since 2019 (Reuters)

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© Reuters. Reuters/Jason Lee

SHANGHAI (Reuters) – China’s central bank ramped up liquidity support this week by conducting its largest weekly cash injection through a short-term bond instrument since 2019 to help financial institutions move smoothly through the end of the year.

The People’s Bank of China (PBOC) injected 183 billion yuan ($26.28 billion) through seven-day reverse repo agreements into open market operations on Friday, according to an online statement.

The People’s Bank of China attributed the liquidity offerings to “maintaining a stable liquidity level at the end of the year.”

With 2 billion yuan of these reverse repos due on Friday, the People’s Bank of China injected a net 181 billion yuan on the day. And the weekly cash offerings via the liquidity tool brought it a net 975 billion yuan, the largest number since January 2019.

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($1 = 6.9625)

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Economic

European Stocks Start 2023 On An Upbeat Note On Encouraging Factory Data By Reuters

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© Reuters. A chart of the German stock price index DAX is pictured at the Frankfurt Stock Exchange, Germany, December 30, 2022. REUTERS/Staff

By Bansari Mayur Kamdar

(Reuters) – European stocks rose in the first trading session of 2023 on Monday as manufacturing data in the euro zone indicated the worst had passed after a year marred by fears of a recession as central banks raised interest rates globally.

The regional index rose 0.8%, supported by consumer discretionary stocks. The auto and spare parts sector increased by 2.5%, and luxury names such as LVMH and keyring (EPA 🙂 added about 1.5% each.

“With 10-year yields above 2.50%, slowing year-end trading and a potential drop in HICP inflation raise hopes for an optimistic start to the year,” Commerzbank Research (ETR:) analysts said in a note. Eurozone consumer price inflation data is due later this week.

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An early indicator was data showing that the slowdown in manufacturing activity in the eurozone has likely bottomed out as supply chains begin to recover and inflationary pressures ease, leading to a revival of optimism among factory managers.

The STOXX 600 ended 2022 with sharp losses, driven by strict central bank policy to curb soaring prices, an economic slowdown, the Russia-Ukraine conflict adding to inflationary pressures and growing concerns about COVID cases in China.

Price-sensitive tech stocks, among the worst performers last year, rose 1.5% on the day, despite hawkish signals from the European Central Bank.

European Central Bank President Christine Lagarde said that wages in the eurozone are growing faster than previously thought, and the central bank must prevent this from adding to already high inflation.

Bond yields for Germany, Europe’s largest economy, have fallen from their highest levels in more than a decade as investors brace for inflation data this week.

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Germany’s finance minister expects inflation in Europe’s largest economy to fall to 7% this year and continue to fall in 2024 and beyond, but he expects higher energy prices to be the new normal.

Germany gained 1.0%, while other European stock exchanges started the year on a positive note. The London and Dublin stock exchanges are closed for the New Year’s holiday.

The energy sector rose 1.3 percent, following constant crude prices.

Croatia kicked off the new year with two historic changes, as the European Union’s youngest member joined the EU’s border-free Schengen area and the single currency of the euro.

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IIFL Finance to raise funds via public issue by Reuters

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MUMBAI (Reuters) – India’s IIFL Finance plans to raise at least 1 billion rupees ($12.10 million) through the public issuance of a non-convertible bond, according to a product note.

The issuance, which also contains Greenhoe’s option to retain the oversubscription of Rs 9 billion, will open for subscription on Friday and close on January 18.

The company offers bonds maturing in two, three and five years at an annual coupon in the range of 8.50% to 9% for investors.

Equirus Capital, Edelweiss, Trust Investment Advisors and IIFL Securities are the lead managers for the bond issue, which is rated AA by CRISIL and ICRA.

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Fundraising through public issuances is expected to pick up slightly in 2023 as retail investors bet on attractive interest rates and companies look to diversify their funding portfolio amid tightening liquidity conditions.

($1 = 82.6600 Indian Rupees)

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Economic weakness expected to weigh on oil prices in 2023 by Reuters

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© Reuters. FILE PHOTO: The sun is behind a crane pumping crude oil in the Permian Basin in Loving County, Texas, US, November 22, 2019. (Reuters) / Angus Mordant // File Photo

By Brijesh Patel

(Reuters) – Oil prices are set to make slight gains in 2023, a Reuters poll showed on Friday, as a darkening global economic backdrop and the outbreak of COVID-19 in China threaten demand growth and offset the impact of supply shortages caused by sanctions on Russia. .

A survey of 30 economists and analysts forecast the price per barrel to average $89.37 in 2023, about 4.6% below the consensus of $93.65 in the November poll. The global benchmark will average $99 per barrel in 2022.

The price is expected to average $84.84 per barrel in 2023, compared to $87.80 in the previous month.

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“We expect the world to slide into recession in early 2023 as the effects of high inflation and higher interest rates are felt,” said Bradley Saunders, associate economist at Capital Economics.

Brent crude has fallen more than 15 percent since early November and was trading around $84 a barrel on Friday, as rising COVID-19 cases in China dampened expectations of oil demand growth in the world’s largest importer of crude oil. [O/R]

“The oil market remains tight despite a weak global demand outlook as recession fears mount,” said Edward Moya, senior analyst at OANDA, adding that China will be the primary focus in the first quarter of next year.

Most analysts said that oil demand will grow significantly in the second half of 2023, driven by the easing of COVID-19 restrictions in China and central banks adopting a less aggressive approach to interest rates.

The poll showed that the impact of Western sanctions on Russian oil is expected to be minimal.

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“We don’t expect an impact from the price cap, which is designed to give bargaining power to buyers from other countries,” analysts at Goldman Sachs (NYSE:NYSE) said in a note.

This week, Moscow signed a decree banning the supply of oil and its products to the countries participating in the Group of Seven (G7) from February 1 for a period of five months.

“In the event of a sharp decline in Russian exports (which we do not expect to happen), OPEC + will most likely be willing to increase production to prevent prices from skyrocketing,” said data and analytics firm Kepler.

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