Gold has broken through the $2,300 level, and one market veteran has a bullish call looking ahead

 Gold has broken through the $2,300 level, and one market veteran has a bullish call looking ahead

KEY POINTS

Gold broke above $2,300 on Thursday, and Juerg Kiener, chief investment officer at Swiss Asia Capital, told CNBC the precious metal could hit $2,600 within a year.

Geopolitics, government money-printing and accelerated demand for precious metals in Asia will also boost gold's price, according to Kiener.

Expectations for interest rate cuts and central bank purchases have helped fuel a gold rally in recent months.

Geopolitical and structural factors have put gold on course to hit $2,600 per ounce within a year, according to one market veteran.

The precious metal has hit successive record highs this year, including another on Thursday when spot gold broke above $2,300 before easing slightly. Early Friday it was trading around $2278 per ounce.

The reasons behind its climb — and how much higher it can go in the near to medium-term — are hot topics among investors, especially as stock market gains remain robust.

Juerg Kiener, chief investment officer at Swiss Asia Capital, told CNBC's "Street Signs Asia" on Wednesday that his forward curve analysis for gold "looks fantastic."

"If you look at your forward curve for a year it's about 26 [$2,600]. I think we might be really fast as we take 23 [$2,300] out, it has a lot of pent-up demand," he said.

He added that an inventory collapse in the gold market is putting "a lot of derivative structures at risk."

"It puts probably a lot of structures which are in the market playing gold at risk too, because [traders] might not be able to cover [their short positions]. And if I say that 26 is for me just a forward curve, in case we get a short squeeze the numbers will go much higher."

A short squeeze is when the price of an asset rises sharply and those with short positions — who were betting on price falls — are forced to buy the asset to prevent more losses, typically driving up the price even further.

Kiener also cited geopolitics, a shift to a "multipolar world," and changing international trade structures as reasons for his bullishness on the gold price. Another was governments "printing money like there's no tomorrow," he added.

Gold is typically viewed as a so-called safe haven asset and also as a potential hedge against inflation.

Geopolitics has been cited by several analysts as the basis of a medium-term bullish case for gold, amid the wars in Gaza and Ukraine, the upcoming U.S. election and the possibility of recession in major economies. Another commonly cited factor is the likelihood of interest rate cuts by the U.S. Federal Reserve, of which three are expected this year. Lower borrowing costs tend to increase the appeal of gold as investors shift away from fixed-income assets like bonds.

"We've got a massive flow of precious metal leaving the West," he said, adding that there was a "real shift" toward precious growing demand in Asia and the BRIC countries more broadly.

U.S. and China to hold talks on 'balanced growth' amid overcapacity concerns, Yellen says PUBLISHED SAT, APR 6 2024 3:

 

U.S. and China to hold talks on 'balanced growth' amid overcapacity concerns, Yellen says

PUBLISHED SAT, APR 6 2024 3:

US Treasury Secretary Janet Yellen (L) shakes hands with China's Vice Premier He Lifeng in the southern Chinese city of Guangzhou, on April 5, 2024.

US

U.S. Treasury Secretary Janet Yellen said on Saturday that she and Chinese Vice Premier He Lifeng agreed to launch exchanges on "balanced" economic growth, an effort to address U.S. concerns about China's excess manufacturing capacity.
After two days of economic talks in China's southern export hub of Guangzhou, Yellen said she and He also agreed to start a forum to cooperate on anti-money laundering efforts in their respective financial systems.

The exchanges "will facilitate a discussion around macroeconomic imbalances, including their connection to overcapacity, and I intend to use the opportunity to advocate for a level playing field for American workers and firms," Yellen said in a statement released at the conclusion of the talks.

She characterised four and a half hours of discussions with He on Saturday as productive and frank.

Coming into her four-day visit to China, her top priority was to persuade Chinese officials to rein in excess production capacity for electric vehicles (EVs), solar panels and other clean energy technology that threaten competing firms in the U.S. and other countries.

The Biden administration is facing growing calls from U.S. lawmakers to increase tariffs on Chinese EVs to protect U.S. producers.

Chinese state media pushed back on her excess capacity arguments, calling them a "pretext" for protectionist U.S. policies and "fear-mongering.

No tariff threat

Yellen did not threaten to raise tariffs or impose other trade barriers if China failed to curb state support that has expanded production of EVs, solar panels and other clean energy products far beyond domestic demand, a senior U.S. Treasury official said.

"I think the Chinese realize how concerned we are about the implications of their industrial strategy, for the United States, for the potential to flood our markets with exports that make it difficult for American firms to compete," Yellen said. "And then other countries have the same concern."

She said the forum would provide a "structured" way to discuss a complicated issue but that it would take some time to resolve.

"It's going to be critical to our bilateral relationship going forward and to China's relationship with other countries that are important," she added.

She added Chinese officials were "more confident" about the world's second-biggest economy after putting in place policies to address issues in the property sector and on local government debt.

China's Xinhua news agency said in a statement that the discussions between He and Yellen were "candid, pragmatic and constructive", confirming both parties had agreed to further discuss balanced growth and financial stability.

Beijing also expressed serious concerns about U.S. economic and trade restrictions on China and made a full response to the production capacity issue during the talks, the statement said.

The U.S. Treasury official, who spoke on condition of anonymity, said the balanced growth forum was first proposed in February during an economic working group meeting.

Wendy Cutler, a former U.S. trade negotiator, said the forum focused on overcapacity was a positive development, but there was a danger that it could "turn into a stalling tactic" by Beijing to avoid needed actions to bring supply and demand back into balance.

Yellen also said she had warned Chinese firms faced "significant consequences" if they provided material support to Russia's invasion of Ukraine. The Chinese side emphasized that their policy was not to provide such support and did not want this to be a bilateral issue.

Protectionist pretext'

Xinhua criticized Yellen's stance late on Friday, saying that talking up "Chinese overcapacity" in the clean energy sector created a pretext for protectionist policies to shield U.S. companies.

In an editorial on Saturday, Xinhua said suppressing China's EV-related industries would not help the U.S. grow its own, adding that it hoped more headway could be made during Yellen's visit to break down barriers hindering mutually beneficial cooperation.

While Treasury does not expect a major shift in Chinese policy after Yellen's visit, U.S. officials believe it was important to explain the economic risks that overinvestment in some sectors and weak consumer demand present to both China and its trading partners.

Yellen said on Friday her trip was partly aimed at cementing U.S.-China ties to "withstand shocks and challenging circumstances."

Yellen will continue her discussions with Chinese officials on Monday in Beijing, where she is to meet officials including Premier Li Qiang, Finance Minister Lan Foan and People's Bank of China Governor Pan Gongsheng.

‘Outrage against international law’: Mexico breaks diplomatic ties with Ecuador over embassy raid

 ‘Outrage against international law’: Mexico breaks diplomatic ties with Ecuador over embassy raid

Mexico is breaking diplomatic ties with Ecuador after police raided its embassy in Quito to arrest former Ecuadorian Vice President Jorge Glas, who had been seeking asylum there.

Confirming the move in a statement to CNNE, a foreign ministry spokesperson said all Mexican diplomatic staff would leave Ecuador immediately.

Mexico decried the raid as “an outrage against international law.”

Video from the scene showed police officers massing around the embassy, some armed. Embassies are generally considered protected spaces under diplomatic norms.

Glas has since been transferred to a maximum-security prison in Guayaquil known as La Roca, the national prisons agency SNAI announced Saturday.

A rift between the two Latin American countries had been growing for several days, culminating Friday in Mexico’s decision to grant political asylum to Glas, who served as vice president under leftist ex-President Rafael Correa between 2013 and 2017.

Convicted twice on corruption charges, Glas says he is the subject of political persecution and had been sheltering inside the embassy.

He had most recently been accused by Ecuadorian authorities of embezzling government funds meant to help rebuild after a devastating 2016 earthquake.

But on Friday, Mexican president Andrés Manuel López Obrador, on his official X account, said he had been informed that “police from Ecuador forcibly entered” the Mexican embassy and took Glas – who “was a refugee and processing asylum because of the persecution and harassment he faces.”

A statement released by Ecuador’s government on X also confirmed the arrest.

Glas was “sentenced to imprisonment by the Ecuadorian justice system,” the statement from Ecuador’s government read, and was “arrested tonight and placed under the orders of the competent authorities.” He had been granted diplomatic asylum “contrary to the conventional legal framework,” the government said.

“What you have just seen is an outrage against international law and the inviolability of the Mexican embassy in Ecuador,” Roberto Canseco, head of chancellery and policy affairs of the Mexican embassy, told a reporter from CNNE, calling Glas’s arrest “totally unacceptable.”

“It is barbarism,” Canseco added. “It is impossible for them to violate the diplomatic premises as they have done.”

At a news conference Saturday, Ecuadorian Foreign Minister Gabriela Sommerfeld said the decision to raid the Mexican embassy to arrest Glas was made “in the face of a real risk of imminent escape.”

Sommerfeld also accused Mexico of violating the principle of non-intervention by letting Glas stay in the embassy and evade an order to appear before authorities in a corruption probe.

“The Mexican embassy, by receiving Mr. Glas Espinel, contributed to the failure to comply with the obligation to appear weekly before the judicial authority, thus affecting the democratic institutions of Ecuador, clearly contravening the fundamental principle of non-intervention in the internal affairs of other states,” she said.

Sommerfeld dismissed Mexico’s claim that Glas was being politically prosecuted, saying, “For Ecuador, no criminal can be considered a politically persecuted person when he has been convicted with an enforceable sentence and with an arrest warrant issued by the judicial authorities.”

Mexico plans to lodge a complaint with the International Court of Justice to denounce the Ecuadorian police’s actions, the spokesperson for Mexico’s foreign secretary added.

Secretary of Foreign Affairs Alicia Bárcena said there had been no prior contact with Ecuador’s foreign ministry about the arrest and Canseco was physically attacked during the arrest. Video shows Canseco scuffling with police outside the embassy and being dragged to the ground.

Adding to current tensions was López Obrador’s apparent criticism of Ecuador’s recent elections, saying the 2023 run-off vote took place in a “very strange” manner and suggesting presidential candidates had used the media, presidential candidate Fernando Villavicencio’s assassination and overall violence in their favor while campaigning.

After that comment, Ecuador declared Mexico’s ambassador to the country “persona non grata,” meaning they would have to leave the country in short order.

The dramatic rupture in relations sent shock waves through the region, with Latin American leaders swiftly condemning Ecuador’s raid on the embassy.

In a statement, Colombian President Gustavo Petro said Glas’s right to asylum had been “barbarically violated” and called for an urgent examination of the “breach of the Vienna convention by a member state” conducted by international bodies, including the Organization of American States.

 

How to photograph April 8's solar eclipse with a camera or a smartphone

What you need to know about taking pictures of solar eclipsePhotographer Stan Honda shared his best tips for taking pictures of the total solar eclipse on April 8, either with a camera or a smartphone.Courtesy of Stan Honda

"Eclipse Across America," will air live Monday, April 8, beginning at 2 p.m. ET on ABC, ABC News Live, National Geographic Channel, Nat Geo WILD, Disney+ and Hulu as well as network social media platforms.

The historic total solar eclipse on April 8 is set to be one of the most photographed events this year.

In the U.S., 31 million people already live inside the path of totality and millions are likely to travel to cities within that path, watching the moon pass over and then completely block the face of the sun for a short period.

It's a phenomenon that almost every viewer will want to capture in a photograph, but it may be difficult to figure out what's the best gear to use or how to set up.

Photographer Stan Honda, who is based in New York City, has photographed three total solar eclipses and at least 10 partial solar eclipses. He gave his tips to ABC News on the best ways to capture this rare celestial event.

Before you start taking pictures, wear eclipse glasses

One of the most important things, before and as you are setting up equipment, is to never look up at phases of the partial eclipse -- when the moon is partly obscuring the sun -- without wearing eclipse glasses.

Looking up with the naked eye or regular sunglasses can burn the retina, leading to long-lasting -- even permanent -- damage. The glasses can only be removed during the totality period, when the sun is completely blocked by the moon.

Make sure the glasses are certified ISO 12312-2, which is the international safety standard for products designed for direct viewing of the sun.

This standard does not apply to solar filters that fit in the front of devices such as camera lenses, so make sure you're purchasing a proper solar filter to fit when photographing the partial phases of the eclipse.

Keep the setup simple

If you'll be taking photographs with a professional or digital camera, Honda recommends keeping the set-up as simple as possible.

MORE: Warby Parker offering free eclipse glasses for total solar eclipse

The type of lens you use will depend on what kind of photographs you would like to capture, but Honda says he tries to use two types of lenses for his photographs.

The first is a long telephoto lens to get a close view of the sun during the eclipse and the second is a wider angle lens to capture both the eclipse and the landscape around you.

"To me, that's almost a more interesting picture because it places the eclipse in a location," he said of the wider-angle photographs. "When you zoom in and when you do close-ups of the sun, it isolates it up in space, and you're not really sure where you are. The wide-angle ones really show the location where you are, and often can show people, things like that."

For amateur photographers, or those experiencing their first total solar eclipse, Honda recommends using just one camera, one lens and a tripod.

"I always tell people, especially if this is your first total eclipse, try not to think too much about the photography because you really want to see it with your own eyes," he said. "If you're spending all the time trying to fiddle around with your cameras, then it's sort of a lost opportunity to experience this just unbelievable event."

What if I'm using a smartphone?

With the majority of Americans owning smartphones, millions will likely capture the event with an iPhone or Android camera.

New calculations have raised concerns popular eclipse maps might be off. Here’s what scientists say

 New calculations have raised concerns popular eclipse maps might be off. Here’s what scientists say

CNN

 — 

If you’re planning to see the epic total solar eclipse that will dance across the skies of North America on Monday, you should aim to travel as close to the center of the celestial spectacle’s path as possible.

New map calculations have raised some concerns that the path of totality — where it’s possible to see the moon completely block out the sun — is slightly narrower than NASA calculated. That means some cities on the edge of the route that were expecting to experience a second or two of total darkness might be left out.

NASA has not changed its predictions, but the space agency advises that there is some uncertainty involved in mapping the eclipse’s path.

Calculations that use a slightly larger radius for the size of the Sun yield an eclipse path that is slightly narrower,” said NASA spokesperson Karen Fox in an emailed statement. “This difference would only affect cities on the very edge of the path of totality, where blanket predictions are difficult regardless — a few city blocks one way or the other could mean 20, 10, or 0 seconds of totality.”

And for viewing purposes, NASA scientists and other experts recommend that spectators head for the middle, rather than the perimeter, of the path anyway.

“I would never, never be near the edge of where that totality is because it’s a difference between night and day,” said Dr. Edward Guinan, a professor of astronomy and astrophysics at Villanova University.

Mapping the moment

Recent questions around a potentially shifting path have focused on a new map calculated by Guildford, England-based software developer John Irwin and published to a webpage called Besselian Elements.

The research hasn’t been thoroughly reviewed by scientists, Guinan said. And even if the NASA map is wrong, Irwin’s calculations indicate it’s only off by a couple thousand feet on the edges.

Frederic J. Brown/AFP/Getty Images

A woman views a map showing the eclipse path during the Solar Eclipse Festival at the California Science Center in Los Angeles, California, on August 19, 2017, two days before the total eclipse on August 21.

Irwin did not immediately respond to an email request for comment Friday.

But few things in science are ever certain. And NASA also acknowledges that exact measurements of the eclipse path are difficult to pin down.

“(P)recise eclipse prediction has brought new attention to a tiny but real uncertainty about the size of the Sun,” NASA’s statement reads. “Uncertainty in the Earth’s rotation can also affect eclipse predictions on this level.”

Guinan explained that it’s extremely difficult to determine an exact measurement of the sun’s size because “it’s a fuzzy surface.”

He noted that the sun could be slightly enlarged right now because the our star is currently going through a period of maximum magnetic activity, which “could cause the sun to swell out a bit.”

But the uncertainty accounts for only a few hundred feet, while the moon is millions of miles across.

Still, even slight adjustments in the sun’s size could gently alter the edges of the moon’s shadow on Monday.

Edge effects

The Besselian Elements website advertises that people should consult Irwin’s alternative eclipse map if they’re hoping to travel to the edge of the path — where the length of total darkness may be extremely brief but onlookers could catch a prolonged glimpse of various other eclipse-related phenomenon.

Guinan notes that eclipses do offer “edge effects.”

“You wouldn’t see the total eclipse, but you would see this diamond ring effect — flashes of the sun going in and out behind mountains and coming through valleys on the moon,” he said. “That would be kind of cool to do if you have seen a lot of eclipses.”

 

Gaza: Israel urged to publish full report on aid worker deaths

Seven aid workers were killed in three drone strikes on a convoy of vehicles

Food charity World Central Kitchen (WCK) has called for an independent investigation into the killing of seven of its staff by Israeli drone strikes in Gaza.

It comes after the Israel Defense Forces (IDF) said "grave mistakes" led to the fatal targeting of the workers.

An Israeli military inquiry led to two senior officers being dismissed.

However, the CEO of the aid group said the Israeli military "cannot credibly investigate its own failure in Gaza".

In a statement, Erin Gore continued: "[The IDF's] apologies for the outrageous killing of our colleagues represent cold comfort. It's cold comfort for the victims' families and WCK's global family."

She said Israel must take "concrete steps" to ensure the safety of aid workers operating on the ground in Gaza, where several organisations have suspended operations in light of the deaths.

Israel is under pressure from key Western partners to publish the full findings of its investigation, which have not been made public.

US Secretary of State Antony Blinken said he had received the Israeli report and was "reviewing it very carefully". He said the US will be "looking to see not just what steps are being taken, but the results that follow from them".

The Biden administration is facing mounting pressure from some Democrats over its military support to Israel. On Friday, more than three dozen members of Congress, including former House Speaker Nancy Pelosi, signed a letter urging the US president and Mr Blinken to "reconsider" the authorisation of an arms package transfer to Israel.

The letter called for the US to withhold further arms transfers pending an investigation into the airstrike that killed the aid workers, or if Israel "fails to sufficiently mitigate harm to innocent civilians in Gaza."

In the space of four minutes on 1 April, the seven aid workers were killed when three missiles destroyed their cars one by one as they engaged in humanitarian work.

The charity's team had been authorised by the Israeli military to help transfer aid supplies from the coast to a warehouse, but a series of mistakes and miscommunications on the part of the IDF resulted in them being mistaken for Hamas operatives and targeted.

The IDF said a "number of armed gunmen" were in the vicinity of the convoy, but drone operators wrongly tracked cars carrying aid workers.

The army apologised after admitting its soldiers did not follow protocols and were not given crucial information about the pre-approved aid mission.

The IDF said information about the aid workers' movements was not passed on to drone operators

As well as the dismissal of a colonel and a major, three IDF commanders have been formally reprimanded and the drone unit responsible has been suspended.

UK Foreign Secretary Lord David Cameron said British officials were "carefully reviewing the initial findings" and called the dismissal of two officers a "first step".

In a post on X, formerly Twitter, he said: "These findings must be published in full and followed up with a wholly independent review to ensure utmost transparency and accountability."

Additional material from the IDF investigation - including video footage purporting to show a Hamas gunman on top of an aid lorry - was shown to journalists in a private briefing ahead of the IDF's public apology, but only a summary of the findings has been made publicly available.

The Israeli investigation was carried out via a pre-existing disciplinary procedure which deals with allegations of military misconduct, and was overseen by a reservist major general.

IDF spokesman Rear Adm Daniel Hagari described the report as being carried out by a "professional, independent body that is outside of the chain of command".

Google AI content under premium now? Search engine says it's 'not considering ad-free experience'

 Google AI content under premium now? Search engine says it's 'not considering ad-free experience'

The potential move suggests the Alphabet Inc unit still hasn’t figured out how to incorporate the new, fast-growing technology without threatening its essential advertising business.

Google logo and AI Artificial Intelligence words are seen in this illustration

Google is considering charging for new “premium" features run by artificial intelligence, the Financial Times reported, marking the first time it would put any of its core product behind a paywall.

The tech giant is mulling options such as adding certain AI search features to its premium subscription services, the FT reported, citing three unnamed people familiar with the plans. Engineers are developing the technology to roll out the service but executives haven’t decided whether or when to launch it, according to the report. Google’s ubiquitous search engine would continue to be free and ads would appear alongside search results even to subscribers, the FT said.

“We’re continuing to rapidly improve the product to serve new user needs," a spokesperson said. “We’re not working on or considering an ad-free search experience. As we’ve done many times before, we’ll continue to build new premium capabilities and services to enhance our subscription offerings across Google."

The potential move suggests the Alphabet Inc. unit still hasn’t figured out how to incorporate the new, fast-growing technology without threatening its essential advertising business. The shares were down less than 1% in premarket trading Thursday.

Ever since OpenAI launched ChatGPT in late 2022, Google has found itself on the defensive in the face of the wildly popular chatbot. ChatGPT’s ability to give answers to queries in a narrative voice has forced Google to rethink its traditional list of blue links to websites and the lucrative ads that appear alongside them. Meanwhile, in recent years, a new crop of search startups has emerged. Some have tried to persuade users to sign up for paid subscriptions to access generative AI search features, or for better privacy protections.

Last year, Google began testing its own AI-powered search service that combines the personalized, detailed narrative in addition to links to websites and advertising. But it has been slow to incorporate features from its experimental “search generative experience" to the main search engine.

In February, Google added a new paid tier to its consumer subscription service that gives people access to its latest AI model, Gemini. Users who pay for that subscription, called Google One AI Premium, are able to use its advanced Gemini chatbot and access the generative AI model in popular services such as Gmail and Google Docs.

Using generative AI technology to power search queries is “eye-wateringly" expensive, said one former Google employee, who worked on the company’s search products. Teams regularly ran benchmark tests on random queries internally to measure how quickly Google’s search engine could deliver results — but they didn’t run the same tests for Google’s AI-powered search product in part because it was so costly, the former staffer said.

In the wake of ChatGPT’s appearance, Google has reoriented its search teams to deploy more people to work on the experimental AI-powered experience, according to another former Google employee. While early feedback was positive, the high cost likely factored into the decision not to roll it out more widely, the person said. A Google spokesperson said the company has been focused on improving issues such as latency and adding new features, and that cost hasn’t influenced the company’s decisions about how fast to incorporate more AI into search.

For Google, charging for certain AI search aspects could help the company shake loose some additional revenue, without cannibalizing its core search ad business, said Mandeep Singh, an analyst at Bloomberg Intelligence.

“Given OpenAI has reached a subscription run-rate of $2 billion with consumer subscriptions, we believe Alphabet could see a similar boost to its $15 billion subscription sales," he wrote in an email.

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Byju’s seeks arbitration over NCLT trial in dispute with investors

 Byju’s seeks arbitration over NCLT trial in dispute with investors

Investors have alleged that the edtech firm has violated the tribunal’s order, which prohibited Byju's from issuing shares to participants in the rights issue without first expanding its authorized share capital.

Byju's relationship with its shareholders worsened last month when a group of four investors moved the NCLT, highlighting their concerns over Byju's $200-million rights issue, which was priced at a 99% discount to the company's peak valuation of $22 billion.

Embattled edtech firm Byju's on Thursday filed a plea with the National Company Law Tribunal (NCLT) seeking arbitration in its dispute with some of its key investors.

Dhyan Chinappa, representing Byju's, argued that an application under section 8 of the Arbitration and Conciliation Act ought to take precedence over ongoing NCLT proceedings.

An NCLT bench, comprising Justices K Biswal and Manoj Kumar Dubey, was hearing a plea challenging Byju's rights issue.

A clutch of investors including General Atlantic, Prosus and Peak XV have alleged that the edtech firm violated the tribunal’s 27 February order, which had directed debt-laden Byju's to not allot shares to investors participating in the rights issue without increasing its authorized share capital.

Byju's went against the NCLT’s directive by distributing shares without augmenting the company's authorized share capital, the investors said in their plea.

Byju’s has denied the allegations.

The NCLT has given Byju's 10 days to file its response in the matter. The case will be next heard on 23 April.

A group of four investors - Prosus NV, General Atlantic, Sofina, and Peak XV Partners, with support from Tiger Global and Owl Ventures - had moved the the NCLT against Byju's $200-million rights issue fearing a near wipe-out of their investments last month.

The NCLT refused to stay the extraordinary general meeting (EGM) to augment the authorized share capital of the beleaguered edtech company, giving effect to its $200-million rights issue.

Investors have also argued that they were not permitted to inspect documents to decide on their voting stance at the EGM and alleged that not all shareholders received the notice as required by law.

Currently, Byju's authorized share capital is ₹6.5 crore, whereas the rights issue’s face value is ₹40 crore, in conflict with provisions of the Companies Act. This led the company to call for an EGM for increasing the authorized share capital of the company.

The bench held that the NCLT orders should be scrupulously followed by the parties.

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Exchanges' poor communication and not RBI's circular causing losses in currency-derivatives, say sources

 Exchanges' poor communication and not RBI's circular causing losses in currency-derivatives, say sources : 

Leading exchange issued circulars in this regard to brokerages only on April 1, which was just few days before the earlier deadline.

Traders and brokers told Moneycontrol that they were told to expect a rollback from the regulators.

Retail traders have been hastily exiting their currency-derivative positions, incurring significant losses, after brokers alerted them to an impending RBI circular just days before its implementation deadline. However, experts said that the requirement outlined in the circular is not new and has been in place since at least 2020.

The recent circular merely underscored this requirement and mandated exchanges to inform traders accordingly, they said.

The Reserve Bank of India (RBI) had sent out a circular on January 5, asking stock exchanges to inform users that they must be able to establish (if required) that they have an underlying exposure to a currency—for example as an importer or exporter—before they can trade in the currency's derivative. The circular's directive was to come into effect from April 5.

In a circular issued on April 4, the central bank said that they have extended the deadline to May 3.

The January circular was followed by an uproar from various quarters claiming that the central bank has effectively killed the currency derivatives market. But legal experts and market insiders told Moneycontrol that the central bank's position on this derivative segment has not changed significantly for years, atleast when it comes to retail traders.

In the April 4 circular, the RBI stated, "it is emphasised that the regulatory framework for ETCDs has remained consistent over the years and that there is no change in the RBI’s policy approach."

The experts and insiders explained that the only additional directive in the January circular, which could impact retail traders, was that exchanges were asked to inform traders of an existing regulatory requirement.

This is where a large lapse seems to have occurred, which led to traders having to exit their positions at whatever price. Leading exchange issued circulars in this regard to brokerages only on April 1, which was just few days before the earlier deadline of April 5.

'No clarity given'

Market insiders, including traders and dealers, told Moneycontrol that there was no clear communication from the exchanges or the brokerages on this matter till few days before the deadline.

A currency dealer, who spoke on condition of anonymity to Moneycontrol, said, "We have been asking for clarity on RBI's circular since January 15 but no one from the exchanges or the brokerages told us anything definitively. They kept telling us that the regulatory requirement could be reversed or the deadline (April 5) might be extended."

The dealer said that they have been squaring off positions of their clients for the past two days.

The option premiums have been shooting up, with some option premiums even going up by 100x in a few minutes, but the dealer said that the traders have no choice but to exit at whatever price they can find.

Another trader said that some of the brokerages hinted that this directive may come into force but then assured that there will be a roll back done by RBI or by the market regulator. A broker, on condition of anonymity, seconded this. The roll back was never made. The central bank only gave an extension of the deadline, which is now May 3.

Not a new regulatory requirement

The regulatory requirement, that users have to establish contracted or anticipated currency-risk exposure, is not new. It was there even from 2020, said legal experts.

The dealer said that they have been squaring off positions of their clients for the past two days.

The option premiums have been shooting up, with some option premiums even going up by 100x in a few minutes, but the dealer said that the traders have no choice but to exit at whatever price they can find.

Another trader said that some of the brokerages hinted that this directive may come into force but then assured that there will be a roll back done by RBI or by the market regulator. A broker, on condition of anonymity, seconded this. The roll back was never made. The central bank only gave an extension of the deadline, which is now May 3.

Not a new regulatory requirement

The regulatory requirement, that users have to establish contracted or anticipated currency-risk exposure, is not new. It was there even from 2020, said legal experts.

Trump leads Biden in six swing states amid stiff presidential battle, poll finds

 Trump leads Biden in six swing states amid stiff presidential battle, poll finds

In the poll, the negative views for Biden outweighed the positive ones by at least 16 percentage points and more than 20 points in four of the states.

According to a recent poll by the Wall Street Journal, Donald Trump has a lead over Joe Biden in six of the seven swing states. The survey, released Wednesday, found that the presumptive GOP nominee had a lead of between 2 and 8 percentage points among voters in Pennsylvania, Michigan, Arizona, Georgia, Nevada and North Carolina.

New poll finds Trump has edge over Biden in 6 of 7 swing states

Donald Trump has an edge over Joe Biden in six of the seven swing states, new poll by WSJ finds(AFP)

The journal added that the results were similar in a “one-on-one matchup” with the US president on the ballot that included third-party and independent candidates. Meanwhile, in the seventh state, Wisconsin, where Biden was already ahead by 3 points on a multiple-candidate ballot, the two rivals were tied in a “head-to-head contest,” per Reuters.

“The Biden re-election campaign is grappling with voter concerns about the US economy despite job growth, healthy spending and better-than-expected GDP increases, an issue that has vexed economists and Democratic political strategists,” according to the outlet.

In the poll, the negative views for Biden outweighed the positive ones by at least 16 percentage points and more than 20 points in four of the states. The outlet further added, “Trump got an unfavourable job rating for his time in the White House in only one of the seven states - Arizona.”

Additionally, the poll results also saw that most of the viewers saw Trump as a better fit for the presidential role in lieu of having better mental and physical health. In contrast to the 28 percent favourable votes for Biden, Trump acquired 48 percent.

The outlet further added that “the survey of 4,200 votes - 600 in each of the seven states - was conducted March 17th-24th and had a margin of error of plus or minus 1.5 percentage points for the full sample and 4 points for results in individual states.”

 

RBI defers implementing FX derivatives rules to May 3

RBI had tightened rules on currency derivatives with the aim of curbing speculative trading. This would offer some short-term relief as market participants feared that the implementation of the new rules could dent trading volumes significantly in the segment.

MUMBAI - The Reserve Bank of India (RBI) has deferred the implementation of currency derivative regulations by a month to May 3. This is in view of the feedback received from the market and the recent developments, the central bank said in a release.

RBI had tightened rules on currency derivatives to curb speculative trading.

This would offer some short-term relief as market participants feared that the implementation of the new rules could dent trading volumes significantly in the segment.

In January, RBI issued a circular stating that forex derivative contracts involving the rupee can be used only for hedging contracted exposure.

The central bank had directed stock exchanges to inform users that trading in currency derivatives up to $100 million equivalent across all currency pairs can be done only if they have exposure to a valid underlying contracted exposure.

While the implementation has been deferred, RBI reiterated that its policy approach on forex derivatives remains unchanged.

“It is emphasised that the regulatory framework for ETCDs (exchange traded currency derivatives) has remained consistent over the years and that there is no change in the RBI’s policy approach,” the central bank said.

The revised rules still align with the RBI’s broader foreign exchange management policy as the central bank is taking measures to ensure no major swings in the rupee in the run-up to the inclusion of India’s bond in global indexes from June.

The rupee has been one of the least volatile currencies among emerging market currencies globally.

Taking Stock: Sensex, Nifty close at new highs, all eyes on RBI policy

 Taking Stock: Sensex, Nifty close at new highs, all eyes on RBI policy

 The Sensex and Nifty also hit fresh all-time highs of 74,501.73 and 22,619 early in the day but pared some of the gains as the session progressed.

The Indian benchmark indices climbed to record highs, squandered some of the gains but still managed to close in the green in a volatile session of trade on April 4, a day ahead of Reserve Bank of India (RBI) policy announcement.

The Sensex ended 350.81 points, or 0.47 percent, higher at 74,227.63 and the Nifty 80 points, or 0.36 percent, at 22,514.70, their best close ever

Market started the session gap-up at record highs with the Sensex hitting 74,501.73 and the Nifty 22,619 but they erased the gains in the initial hours to gyrate between gains and losses throughout the session.

Top Nifty gainers were HDFC Bank, Eicher Motors, Asian Paints, Tech Mahindra and Titan Company, while losers were ONGC, Shriram Finance, Adani Ports, BPCL and Bharti Airtel.

Among sectors, bank, power, information technology were up 0.5-1 percent, while the PSU bank and oil & gas index were down 0.7-1.6 percent.

The BSE midcap index ended flat, while the smallcap index added 0.5 percent.

Among individual stocks, a volume spike of more than 300 percent was seen in Dabur India, Ipca Lab, Exide Industries.

A long build-up was seen in Ipca Lab, Vedanta and Bandhan Bank, while a short build-up was seen in Dabur India, Colgate Palmolive and HPCL.

More than 200 stocks touched thier 52-week high including Aditya Birla Capital, Adani Power, Ajmera Realty, Anup Enginerring, Avenue Supermarts, Canara Bank, GE Power India, Genesys International, Glenmark Pharma, Grasim Industries, Indian Hotels, Ipca Labs, JSW Energy, Jubilant Pharmova, KEC International, L&T Technology, Laurus Labs, M&M, Muthoot Finance, NTPC, Quess Corp, Reliance Power, Shriram Finance, UNO Minda, Vardhman Textile, Vedanta, Voltas, among others.

Markets traded volatile for yet another session and gained nearly half a percent. After the initial uptick, Nifty slipped sharply lower in the early hours however strength in heavyweights, especially from banking and IT majors, helped the index to recoup losses and inch higher. Eventually, Nifty settled at 22,514.65 level; up by 0.4%. Meanwhile, a mixed trend continued on the sectoral front wherein FMCG and energy closed in the red. The buoyancy continued on the broader front wherein smallcap gained nearly half a percent.

We expect the prevailing tone to continue however the pace of advance would largely depend upon the performance of banking and IT majors. Participants should continue with the “buy on dips” approach and focus more on stock selection.

Netanyahu says aid workers’ killing tragic, ‘happens in wartime’: 10 points

 Netanyahu says aid workers’ killing tragic, ‘happens in wartime’: 10 points

The seven workers killed in the strike were citizens from Australia, Britain, Poland, a Palestinians and a dual citizen of the United States and Canada.

People inspect the site where World Central Kitchen workers were killed in Deir al-Balah, Gaza Strip,

In Short

🔸Seven killed in Israeli strike at food charity in Gaza

🔸Israeli PM laments killings, but says it 'happens in war'

🔸Countries, including Poland, Spain, the UK, react strongly

Seven people working for the World Central Kitchen aid group in Gaza were killed in an Israeli airstrike on Tuesday. Three of them were British nationals, one Australian, one from Poland, one Palestinian and one dual citizen of the United States and Canada.

Israeli Prime Minister Benjamin Netanyahu lamented the killing of the NGO workers calling the incident "tragic and unintended". However, he also said this "happens in wartime".