2025-08-27 06:23

LONDON, Aug 27 (Reuters) - Millions of British households will see higher energy bills from October after regulator Ofgem increased its price cap by 2%, in a blow to the government seeking to drive down energy costs. The price hike comes amid strained household budgets after inflation hit its highest level in 18 months in July and as the government faces pressure over the affordability of its net zero plan. Sign up here. Ofgem said the rise was due to an increase in network and policy costs. https://www.reuters.com/sustainability/boards-policy-regulation/millions-britons-face-higher-energy-bills-price-cap-rises-2-2025-08-27/

2025-08-27 05:41

Investors await pivotal Nvidia earnings after Fed drama Fed independence under threat, leads Treasury yields to steepen Dollar under pressure on rate-cut wagers French political crisis back in focus SINGAPORE, Aug 27 (Reuters) - Asian stocks meandered on Wednesday ahead of an earnings report from AI leader Nvidia (NVDA.O) , opens new tab that will shape near-term risk sentiment, while the U.S. dollar wobbled as investors remained nervous about attacks on Federal Reserve autonomy. European futures indicated a higher open but investors are likely to take a dim view of the political drama in France after Prime Minister Francois Bayrou's gamble to win backing for his deeply unpopular debt-reduction plan backfired. Sign up here. The latest political turmoil comes after France lost its last prime minister, Michel Barnier, to a no-confidence vote over the budget in late 2024, after just three months in office. Meanwhile, the U.S. Treasury yield curve has been steepening since President Donald Trump on Monday ordered the firing of Federal Reserve Governor Lisa Cook, an unprecedented move that could lead to a legal tussle after a lawyer for Cook said she will file a lawsuit to prevent it. "The Fed has said it will abide by any decision the court makes on Lisa Cook but the reality is the Fed is in a bind," said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities. "If the court ends up ruling in favour of Trump, this potentially puts Chair (Jerome) Powell in line to be fired for permitting a non-Fed employee to make decisions on behalf of the Fed Board" should Cook continue to serve between Trump's firing and the court's decision. The yield on the two-year note , which typically moves in step with interest rate expectations, hit its lowest since May at 3.654% but was last up 1.8 basis points at 3.661%. The yield on the 30-year note was 1.4 bps higher at 4.922%. Trump has repeatedly criticised Powell and policymakers for not cutting interest rates. Market watchers interpreted Powell comments last week as indicating cuts could be on the way. That has led to investors wagering a cut next month, with traders pricing in an 84% chance of the Fed moving in September and expecting more than 100 bps of easing by June. The dollar staged a small recovery in Asian hours after dropping in the previous session. The euro eased 0.2% at $1.161825, while the yen weakened to 147.87 a dollar. "I think investors are focused more on the upcoming payroll print and what that means for a September rate move," said Ben Bennett, APAC investment strategist at Legal and General Investment Management. "The hope is that a rate cut is still on the cards without a sharp deterioration in the labour market. Tonight's Nvidia results will also be important for the near-term direction of markets." Data showed options traders are pricing in about a $260 billion swing in Nvidia's market value after the firm reports earnings, where its business in China will be in focus following an unusual profit-sharing deal with the Trump administration. Caught in the crossfire of a Sino-U.S. trade war, the fate of Nvidia's China business hangs on where the world's two largest economies land on tariff talks and chip trade curbs. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab was little changed. Chinese stocks though remain on the charge with the blue-chip stock index(.CSI300) , opens new tab hitting a three-year high, buoyed by tech sector. In commodities, spot gold was 0.47% lower after hitting a two-week high in the previous session. Oil prices steadied after falling in the previous session, as the market watched for fresh developments in the Ukraine war and investors weighed hefty new U.S. tariffs on India, the world’s third-biggest crude consumer. Brent crude futures rose 5 cents to $67.27 per barrel, while West Texas Intermediate crude futures were up 3 cents at $63.28. https://www.reuters.com/world/china/global-markets-wrapup-2-2025-08-27/

2025-08-27 05:15

Dollar weighed down by concerns over Fed independence Fed Governor Cook to file lawsuit to prevent Trump from firing her Two-year U.S. Treasury yield falls to nearly four-month low SINGAPORE, Aug 27 (Reuters) - The dollar staged a shaky recovery on Wednesday, with gains capped by renewed investor worries about the Federal Reserve's independence following U.S. President Donald Trump's latest attempt to extend his power over the central bank. Trump had on Monday said he would fire Fed Governor Lisa Cook over alleged improprieties in obtaining mortgage loans, though Cook's lawyer later said she would file a lawsuit to prevent her ouster, kicking off what could be a protracted legal fight. Sign up here. The dollar initially weakened on the developments though later regained some ground on Wednesday, rising 0.33% against the yen to 147.93 and leaving the euro trading 0.24% lower at $1.1614. Sterling fell 0.23% to $1.3448, while the dollar index rose 0.2% to 98.47. Still, gains in the greenback were limited as Trump's push to gain more influence over U.S. institutions and the path of monetary policy further eroded investors' trust in the dollar's dominance. "It's the latest salvo in the Fed wars and shows how increasingly politicised the central bank is becoming," said Neil Wilson, UK investor strategist at Saxo, referring to Trump's attempt to fire Cook. "It's going to be virtually impossible for the next chair to do anything other than Trump's bidding. This should be negative for the dollar. The question for markets right now is about the September meeting but be in no doubt that we are witnessing a regime shift like we have not seen in decades." Also weighing on the dollar were expectations of faster and deeper U.S. rate cuts, particularly if Cook - should she be removed from her position - gets replaced by someone dovish. Trump has repeatedly called for the Fed to lower interest rates and has threatened to fire Fed Chair Jerome Powell, although he recently backed down from that. Cook's departure would allow Trump to pick a majority of the Fed's seven-member board, including two incumbents and the pending nomination of White House economist Stephen Miran. "Trump has essentially usurped the Fed's forward guidance function for the time being and telling markets lower rates are coming, which is being manifest in a steeper yield curve," said Jamie Cox, managing partner for Harris Financial Group. The two-year U.S. Treasury yield , which typically reflects near-term rate expectations, bottomed at 3.6540% on Wednesday, its lowest since May 1, as traders ramped up bets of imminent Fed cuts. Yields on the longer end of the curve have meanwhile risen on concerns that forced easing of monetary conditions in the near term will lead to a resurgence in inflation. The 30-year yield was last a touch higher at 4.9223%. In other currencies, the Australian dollar was last down 0.16% at $0.6484, while the New Zealand dollar eased 0.27% to $0.5845. The Aussie got a brief lift earlier in the session after domestic data showed consumer prices jumped far more than forecast in July, while core inflation also rose in a blow to hopes of a rate cut from the Reserve Bank of Australia as soon as next month. https://www.reuters.com/world/middle-east/dollar-makes-feeble-recovery-worries-about-fed-independence-linger-2025-08-27/

2025-08-27 04:39

A look at the day ahead in European and global markets from Ankur Banerjee Markets have decided to nervously look away from the brewing Trump v Fed saga for now, putting the spotlight on the political crisis gripping France that has triggered a sharp selloff in stocks and bonds of the euro zone's second-biggest economy. Sign up here. French Prime Minister Francois Bayrou's gamble to win backing for his deeply unpopular debt-reduction plan backfired on Tuesday, plunging the country deeper into political and financial instability. FRENCH WORRIES Investors will keep an eye on France's blue-chip CAC40 index (.FCHI) , opens new tab, which is down more than 3% this week as well as the banking stocks that have borne the worst of the beating so far. The bond market reaction will also be crucial after the gap between French and German 10-year yields, a gauge of the premium investors require to hold French debt, widened on Tuesday to around 79 basis points - its largest since April. We have been here before as France lost its last prime minister, Michel Barnier, to a no-confidence vote over the budget in late 2024, after just three months in office following another snap election in July that year. Stock futures and currencies have been fairly calm in Asian hours but with the economic calendar light, political and fiscal worries may take centre-stage. Bond-market ruction is being felt across the globe again with the U.S. Treasuries curve steepening after President Donald Trump on Monday ordered the firing of Federal Reserve Governor Lisa Cook, an unprecedented move that could lead to a legal tussle. Cook intends to file a lawsuit to prevent her firing. Markets appear to be nervous but have broadly shrugged off the attack on the Fed's independence, with the yield on the 30-year Treasury note not even threatening to breach 5% as would reasonably be expected. Perhaps investors are being complacent or they are waiting for big institutional money to make a shift in moving away from the U.S. assets. As history tells us, it's OK until it's not. Just look at Turkey. NVIDIA Wednesday's main event no doubt will be the earnings report from Nvidia that will set the tone for near-term risk appetite and whether the sky-high valuation for AI darlings is justified. Caught in the crossfire of Washington and Beijing's ongoing trade war, the fate of Nvidia's China business hangs on where the world's two largest economies land on tariff talks and chip trade curbs. That is where investor attention will be. Overall, the $4.4 trillion AI chipmaker is set to report a 53% rise in second-quarter revenue to $46 billion, LSEG data showed, and yet it may not be enough to satiate investors as that jump is still a far cry from the triple-digit growth it witnessed for many recent quarters. Therein lies the challenge for a stock that has risen 35% this year and sways the broader market on its every movement. Options traders are pricing in a swing of about $260 billion in the firm's market capitalisation after the result. Key developments that could influence markets on Wednesday: https://www.reuters.com/world/china/global-markets-view-europe-2025-08-27/

2025-08-27 03:11

Australia CPI +2.8% y/y in July, vs 1.9% in June Power bills jump as some households did not get rebates Core inflation also picks up, July data not complete CPI SYDNEY, Aug 27 (Reuters) - Australian consumer prices jumped by far more than forecast in July as electricity costs spiked due to the timing of government rebates, while core inflation also jumped in a blow to hopes of a rate cut as soon as next month. Investors pared the chance for an easing from the Reserve Bank of Australia next month to just 22% from about 30% before the data, although they are still confident of a move in November. Sign up here. Data from the Australian Bureau of Statistics on Wednesday showed its monthly consumer price index (CPI) rose 2.8% in July compared to a year earlier, up from 1.9% in June and well above median forecasts of 2.3%. The Australian dollar got a brief lift from the data but was last flat at $0.6494, while three-year government bond futures clawed back earlier losses to be down just 2 ticks at 96.57. "We don’t anticipate today's surprise increase in inflation will have a material impact on markets and the broader economy," said Russel Chesler, head of investments and capital markets at VanEck. "This inflation spike, combined with the recency of the last rate cut and continued strength of the labour market, reinforce our expectation that another rate cut is unlikely before November." The trimmed mean measure of core inflation ran at an annual 2.7% in July, up from 2.1% in June. A measure excluding volatile items and holiday travel climbed to 3.2%, from 2.5%. In the month, CPI rose 0.9% from June as electricity prices jumped 13% and holiday travel and accommodation rose 5% thanks to robust demand over school holidays. The bureau said the spike in electricity prices was in part due to the end of federal government electricity rebates for households in the state of New South Wales and Australian Capital Territory. "This means that those households had higher out-of-pocket costs for electricity in July. In addition to this, prices rose due to annual electricity price reviews coming into effect," said Michelle Marquardt, head of prices statistics. New rebates will be reflected in August data, she said. That suggests the spike in electricity will partially unwind in August and seasonal travel pressures typically fade once school holidays end, said Sunny Kim Nguyen, head of Australian economics at Moody’s Analytics. "Even so, the core measure, which strips out the noisy stuff, reminds us that service prices haven't fully cooled and that inflation is still hovering a little above the comfort zone." The RBA cut interest rates this month for the third time and opened the door to more policy easing as inflation cooled. The board said the pace of easing over the next year could be gradual or quicker depending on the flow of economic data. The RBA forecast headline inflation - which ran at 2.1% last quarter - to pick up to 3.1% by mid-next year as electricity rebates fade, but core inflation is expected to stay anchored around 2.6% over the coming years. Much focus is now on the labour market, which has eased from full employment levels albeit at a gradual pace. The inflation update for the first month of the quarter only covers a portion of the full CPI basket and is concentrated on goods rather than services. The statistics bureau will have the full monthly inflation data from November onwards. Wednesday's report showed rents rose 3.9% in the 12 months to July, the lowest annual growth since late 2022, while clothing and footwear rose a chunky 1.7% in the month. "Our base remains that the RBA will continue to deliver three more rate cuts but the risks are tilted towards less easing," said Marcel Thieliant, head of Asia-Pacific at Capital Economics. https://www.reuters.com/sustainability/boards-policy-regulation/australias-inflation-tops-forecasts-electricity-prices-surge-2025-08-27/

2025-08-26 23:44

Aug 26 (Reuters) - The Senate Banking Committee will hold a hearing next week to consider U.S. President Donald Trump's nomination of White House economic adviser Stephen Miran as a Federal Reserve governor, Bloomberg News reported on Tuesday, citing a person familiar with the matter. Reuters could not immediately verify the report. Sign up here. https://www.reuters.com/world/us/senate-panel-prepares-hold-hearing-trumps-fed-pick-bloomberg-news-reports-2025-08-26/