2025 sees improved global economic outlook

Standard Chartered now expects global GDP growth of 3.1% this year, unchanged from 2023, and 3.2% in 2025, an improvement from earlier forecasts of 2.9% and 3.1%. According to the bank’s Global Focus Economic Outlook Q2-2024, which covers the outlook for 58 economies, key geopolitical issues and financial market implications this year and beyond, Asia is set to remain the primary engine of global growth, with Africa and MENAP expected to grow faster in 2024 than in 2023. That said, key elections in multiple countries this year may temporarily weigh on investment activity and decisions over the timing and pace of rate cuts remain challenging given lingering inflation concerns.

Major central banks are likely to start their rate-cutting cycles in the coming months, opening the door for Q3 policy easing by central banks in Asia. While inflation has moderated over the past year, domestic price pressures are still a concern given strong labour markets and sticky wages in many economies.

China continues to export disinflation, but global goods prices remain vulnerable to periodic supply-chain disruptions. A ramp-up of trade protectionism could add to costs. The disinflationary impact of falling food and energy prices may be waning before lower inflation expectations become anchored. In particular, rising global oil demand and disappointing non-OPEC supply may drive prices higher even if OPEC output cuts are not extended into H2.

While inflation has yet to return to target in many economies, central banks are also wary that keeping rates too high for too long risks damaging economic activity. Elevated real rates have weakened credit availability and raised debt delinquency rates, and the impact of earlier monetary tightening is likely still working its way through.

Standard Chartered expects below-trend growth across major economies for much of 2024. The bank’s US growth forecast upgrade for 2024 reflects current labour-market strength and ongoing growth momentum from H2-2023. But deteriorating labour market surveys and falling real incomes point to softer US growth in H2-2024. The euro area economy likely stalled in Q1 and the credit impulse remains negative. The bank expects another year of sub-1% GDP growth, albeit with momentum improving on higher real wage growth.

“Global activity is likely gradually to regain momentum as monetary policy becomes less restrictive; lower policy rates should underpin stronger global growth in 2025,” said Sarah Hewin, Head of Research, Europe and Americas at Standard Chartered Bank. “Among major central banks, we expect the European Central Bank and the Bank of Canada to start cutting rates in June, the Fed in July, and the Bank of England in August. These are close calls, particularly in the US; each inflation-related data point in the coming months will be key.”

 

Canada’s faster payments programme resumes

Payments Canada has announced a path forward for the Real-Time Rail (RTR), Canada's fastest payment system. The new system will allow payments to be sent and received as well as cleared and settled in real-time 24/7, 365 days a year. 

The real-time movement of money enabled by the RTR aims to give Canadians more control over their finances by allowing payments to be made in seconds not days and providing greater confidence that payments have been finalised. It should also provide the foundation for new payment products and services to be introduced by members and innovators leading to greater payment choice and convenience for all Canadians. Payments Canada said in a statement that the RTR will reflect its commitment to provide a safe and secure foundation for participants to innovate upon, including a centralised fraud utility service.

The RTR is a complex, large-scale, multi-year infrastructure program that includes two key technical components: the build of the RTR exchange component provided by Interac, which was completed in June 2023 and will allow for the exchange of payment messages in real time. The second piece is the build of the real-time clearing and settlement component. 

“Over the past year, we have reviewed our path forward through engagement and collaboration from our members, regulators and key stakeholders,” said Jude Pinto, Co-CEO (Interim) and Chief Delivery Officer, Payments Canada. “Our collective focus is on building a sustainable real-time payment system that will support long-term payment innovation and the continued advancement of our economy, Canada’s international economic competitiveness and provide value and benefit to Canadian consumers and businesses.”

The last component of the RTR, the clearing and settlement build, will continue through 2024 prior to initiating testing of the new system through 2025 and into industry testing in 2026. The path forward for the RTR includes new partners IBM Canada and CGI, along with Interac, to support its delivery and operation. As part of Payments Canada’s larger modernisation initiative, IBM Canada was the lead technology partner for the successful implementation and operation of Lynx, Canada’s high-value payment system. 

 

Recovery in sight for the Swedish economy

The Swedish economy will gradually enter a recovery phase this summer, according to Swedbank’s latest Economic Outlook. Inflation will continue to fall and household real income will rise, although the labour market will weaken this year. The Riksbank will start cutting the policy rate in May, and fiscal policy will be more expansionary in 2025.

“The outlook for households is starting to improve,” commented Mattias Persson, Group Chief Economist, Swedbank. “After two years of falling income, real disposable income will increase this year and will go up even more next year. Consumption will remain subdued for a while as the labour market weakens during the year, but it will begin to rise after the summer, and then take a leap in 2025 with an increase of 3.4%.”

In Sweden, the inflation trend remained favourable in early 2024. CPIF inflation is expected to fall below the Riksbank’s target of 2% by the summer and to remain low in 2025.

“We expect the policy rate to be cut by 25 basis points in May, to 3.75%, followed by three further cuts this year,” added Persson. “The Riksbank will continue to cut the policy rate in 2025, down to 2%. Monetary policy will become less stringent, providing a much-needed injection for the Swedish economy.” 

Housing prices have largely remained flat in the past 12 months and are about 10% below the peak noted in spring 2022. They have now stabilised, with price increases around the corner.

“The Riksbank’s change of direction will give the housing market a boost,” noted Persson. “In combination with better household purchasing power, this indicates an increase in demand for housing and a moderate price increase of 2-3% this year and around 5% next year.” 

The Swedish government’s recently presented spring amendment budget was the first step towards a more expansionary fiscal policy. Next year, the policy will be even more expansionary, with SEK50bn in unfunded fiscal measures. The Swedish economy is gradually gearing up, and next year, the country’s growth will outpace that of most other European countries. 

“A recovery is in sight for the Swedish economy,” concluded Persson. “When the economic policy shifts, with monetary policy becoming less stringent and fiscal policy becoming expansionary, growth in Sweden will truly pick up speed – making Sweden one of Europe’s fastest-growing economies. This also indicates that the Swedish krona will gain strength.”

 

UniCredit expands Swift GPI to retail clients

UniCredit has claimed it is now the first and only bank across its core markets to offer Swift GPI on international payments across each of its client segments - from retail clients up to SMEs and multinational corporates - following its recent roll-out of the free service in Austria, Italy and Germany.

Swift GPI enables banks to offer a faster, transparent, and traceable cross-border payments service, with end-to-end visibility on transactions and accurate and real-time payment information.

At UniCredit, retail clients now receive updates on the status of their international payments via a simple push notification - the latest example of the bank improving digital channels and building its business around clients.

“We are keeping our clients at the centre of everything we do,” said Raphael Barisaac, Global Head of Payments & Cash Management, UniCredit. “This means being able to adapt and evolve rapidly alongside their needs - as evidenced here via the expansion of Swift GPI for our retail customers.”

 

MUFG and Credit Agricole complete first ISO 20022 payment on CHIPS Network

MUFG Bank and Credit Agricole Corporate & Investment Bank have successfully completed the first payment in the ISO 20022 message format on The Clearing House’s CHIPS network. 

The network’s implementation of ISO 20022 messages, which went live starting on the April 8 banking day, is designed to enhance the efficiency of cross-border payment processing and allows participants and end-user customers to glean value from enriched data content, among other benefits.

On April 8, the CHIPS network concluded its first day of operations using the ISO 20022 message format, releasing 555,345 payments for a total value of US$1.81 trillion. Some 95% of CHIPS payments represent the USD leg of a funds transfer that begins or ends in another country. The successful migration to messages following the ISO 20022 standard means that CHIPS messages now align with message formats used by other global high-value payment systems, which should substantially enhance the efficiency and information content of cross-border payments.

 

StoneX partners with NatWest to enhance global FX payment systems

StoneX Financial, a subsidiary of StoneX Group, and NatWest Group have announced a strategic partnership to enhance the UK bank’s international payments capabilities and provide its clients with seamless cross-border FX services.

StoneX Payments will supply NatWest with third-party delivery and international FX payment services, allowing the bank’s corporate clients to transfer money to more countries. This partnership will support cross-border payments and expand local payment reach in an additional set of 10 currencies, providing access to customers in markets the bank had not previously serviced. This will be underpinned by StoneX’s API-driven financial institution platform and network of over 350 correspondent banks.

StoneX Payments’ proprietary network and infrastructure will play a central role in the collaboration, ensuring NatWest customers have access to competitive foreign exchange rates and a seamless payment experience. The offering to NatWest includes clarity at the inception of the payment transaction regarding the precise amount of funds to be delivered to their desired destination.

 

J.P. Morgan using data API product to drive virtual card adoption for B2B payments

Codat, a business data API provider, has announced the launch of its Supplier Enablement data product. This product is designed to enable businesses to share their spend and supplier data more easily from ERP systems and accounting software. Card issuers can access the right data in their preferred format to recruit suppliers to accept virtual card payments instead of checks on an ongoing basis.

Now in production with J.P. Morgan, commercial clients are able to establish and scale programmes for paying their suppliers with virtual cards by connecting to comprehensive and up-to-date supplier and spend data. Replacing static supplier payment files with API connections, the solution should provide more robust data sets and complete analysis to the bank, which should ultimately drive increased spend per connected client through its virtual card offering. 

With the growth of virtual cards as a payment method for business-to-business (B2B) transactions projected to reach US$13.8 trillion by 2028, according to a Juniper Research study, many issuers are seeking solutions to seize this opportunity and drive greater benefits for their clients.

“With the rapidly-growing adoption of virtual cards for B2B payments, we felt the time was right to release a new data product specifically designed to transform supplier enablement and accelerate how the value of payments innovation is realised in the market,” said Peter Lord, CEO at Codat. “Codat’s ongoing collaboration with J.P. Morgan has been hugely valuable in helping us develop products that maximise the value of data sharing for financial institutions and their business clients.”

 

Wells Fargo taps TradeSun for trade finance and compliance solution

TradeSun and Wells Fargo have entered into an agreement that will enable the bank to leverage the trade finance and compliance digitisation solution from the vendor, using AI and other advanced technologies to streamline the complex and manual processes employed globally within the banking industry.

TradeSun’s trade-focused AI will help Wells Fargo deliver its goals by automating manual processes that will increase capacity and drive new business. The bank will use the AI platform to digitise, extract, validate, and classify unstructured data for use with compliance and document checking.

“Wells Fargo continues to make significant progress transforming our trade finance and receivables processes,” commented Cesar Gonzalez, head of Wells Fargo’s Commercial Banking Operations group. “Our agreement with TradeSun gives us the digitisation and automation tools to strengthen our risk framework, deliver flawless execution, and provide a world-class client experience.”

 

C8 Technologies launches FX hedging tool

C8 Technologies, a London-based fintech founded by former BlueCrest Capital Management partners Mattias Eriksson and Ebrahim Kasenally, is launching an FX hedging platform which employs advanced systematic trading models to help businesses easily and effectively manage their currency exposures.

The platform employs machine learning and statistical models to help predict future FX movements. It is designed to help users quickly craft customised hedging solutions that align precisely with their needs.

Through its active approach, the platform allows users to potentially benefit from currency movements, boosting returns beyond those offered by passive FX hedging. It can also adapt to changing market conditions to quickly seize opportunities and mitigate risk, offering a dynamic hedging solution to shield portfolios against adverse currency movements.

In addition, C8 Hedge users can calculate optimal FX hedge ratios for all their currency exposures, both assets and liabilities, add risk weights for each currency exposure, and calculate optimal FX ratios for each currency within a portfolio risk limit. The fintech says that corporates can use their existing FX execution implementation, with no need for any integration work, and keep full control of all FX hedging.

“Applying our systematic trading models to FX hedging through an intuitive platform that anyone can use allows corporates and funds avoid the complexities they would otherwise face when they buy an asset or sell products overseas,” said Mattias Eriksson, CEO at C8. “FX presents intricate risks that require a tailored approach, which is why we have designed the platform to allow users to easily craft customised FX hedging solutions that meet their exact requirements every time they need to handle foreign currency exposure.”

 

CCE Holding secures €50m loan from RGreen Invest

CCE, an Austrian-German photovoltaic specialist, has secured €50m in corporate financing from RGreen Invest, an independent investment management company specialising in the financing of energy transition infrastructure projects. 

This investment was made by INFRABRIDGE III (Art.9 SFDR), the short-term senior debt fund managed by RGreen Invest, which aims to accelerate the energy transition by supporting entrepreneurs of the sector through tailor-made financing solutions.

RGreen Invest was advised by Austrian law firm PHH, while CCE was advised by global law firm Dentons and Dumfarth/Klausberger.

“With this investment, we close our INFRABRIDGE III fund and launch the fourth vintage of our short-term debt strategy,” commented Mathilde Ketoff, Deputy CIO - Head of Debt Investment at RGreen Invest.” We are looking forward to continuing supporting impactful companies and projects with our flexible debt capital solutions.”

 

Bloomberg expands front office pricing solution to Europe 

Bloomberg has announced that its pricing solution, Intraday BVAL (IBVAL) Front Office, now covers all EUR and GBP investment grade and high-yield credit bonds included in Bloomberg’s flagship Europe and UK credit indices and more. New contextual features have also been released giving traders insight into IBVAL’s pricing. This marks the latest expansion of IBVAL, which launched in 2023 by pricing USD credit securities.

IBVAL uses a machine learning model that consumes billions of market data points from a variety of data sources to deliver real-time pricing across the liquidity spectrum. Customers receiving IBVAL through B-PIPE will also be able to view the associated scores from Bloomberg’s evaluated pricing service, BVAL. This BVAL score is from 1 to 10 and reveals the relative amount and consistency of market data used to calculate the IBVAL price for a given security as of the most recent BVAL snapshot. A lower score indicates there was less comparable market data available to derive the IBVAL price. This can be an especially powerful data point to help inform trading decisions when there’s limited information available about a given security.

Additional new features include I-spread and G-spread metrics that publish alongside IBVAL pricing enabling traders to understand the relative value analytics of the underlying bond prices. The scores and relative value metrics are available for all of IBVAL’s global pricing providing traders with deeper insights into what drives IBVAL pricing. IBVAL continues to be enhanced with new features and expanded coverage to meet traders evolving requirements.

“As credit markets transition to more electronic trading, there’s increasing demand for rapid pricing insights, especially for less liquid securities, to actively manage client portfolios, develop credit algos, execute portfolio trades, and to inform trading decisions more broadly,” said Eric Isenberg, Global Head of Enterprise Data Pricing at Bloomberg. “The introduction of IBVAL pricing in Europe backed by contextual metadata provides a new defensible price discovery channel for the world’s largest credit markets.”

 

TNS launches end-to-end payments solutions stack

Transaction Network Services (TNS) has launched Complete Commerce, a full-stack, modern and secure payment and network capability. In a rapidly changing payments landscape, from evolving consumer behaviour to regulatory demands and technology modernisation, enterprises are pressured to deal with these ongoing complexities while delivering a user-friendly, reliable, and secure customer experience to meet the needs of the modern consumer. The firm says the new solution helps solve this payment complexity by leveraging a single supplier relationship and reducing total cost of ownership (TCO) across the enterprise’s technology environment.

TNS’ network intersects with acquirers, processors, loyalty, and alternative payment providers worldwide to facilitate mission-critical payment message transmission. The TNS cloud-native payment orchestration stack, with rich functionality, allows payments to be processed in real-time to multiple endpoints worldwide.

Complete Commerce is also supported by the latest security standards across payments and network connectivity, including PCI DSS certification, PCI P2PE validation, and PCI PTS v6.x devices. The solution leverages TNS’ Accept, Connect, and Orchestrate payment portfolios, global footprint, and decades of payment industry expertise to deliver a single partner enterprise capability for running mission-critical payments infrastructure.