2025-08-25 19:38

Powell's Jackson Hole speech upped expectations for September cut Odds of Fed cut next month at 84% Euro expected to extend 12% year-to-date gain as Fed cuts near Focus on US inflation, labor market data NEW YORK, Aug 25 (Reuters) - The dollar advanced against major currencies on Monday, bouncing from a steep fall last week that followed remarks from Federal Reserve Chair Jerome Powell that boosted expectations for a rate cut next month. The dollar index , which measures the greenback against a basket of currencies, rose 0.49% to 98.32, and was on track for its biggest daily percentage gain since July 30, with the euro down 0.69% at $1.1634, after hitting a four-week high of $1.174225 on Friday. Sign up here. Major brokerages, including Barclays, BNP Paribas and Deutsche Bank, expect a 25-basis-point Fed rate cut in September following Powell's remarks on Friday when he said risks to the U.S. jobs market were rising, although he also said inflation remained a threat. "While Powell and company are undoubtedly still leaning toward cutting interest rates next month, the combination of this week’s Core PCE report, next week’s NFP release, and August’s CPI data could still sway the central bank toward holding off if they unanimously point to higher inflation and a weakening jobs outlook," said Matt Weller, global head of market research at StoneX. "In other words, forex traders are realizing that a September rate cut isn’t quite a done deal yet, and traders are hedging their bets against the potential for a split decision to hold rates unchanged for another month, leading to a modest but broad-based recovery in the U.S. dollar." Traders were pricing in an 84.3% chance for a cut of at least a quarter-point at the Federal Reserve's September meeting, down slightly from the 84.7% in the prior session, according to CME's FedWatch tool , opens new tab but well above the 61.9% expectation a month ago. Measured against a basket of six major currencies , the dollar has weakened by more than 9% this year. The euro has been the lead gainer in the basket with a climb of more than 12%. Samy Chaar, chief economist at Lombard Odier, expects the euro to strengthen to about $1.20-$1.22 over the next six-to-12 months. Meanwhile, euro zone bond yields moved higher on Monday, reversing a fall from late last week as traders reassessed their expectations for the Fed and the impact on Europe. They also processed data showing an uptick in German business morale. Germany's 10-year bond yield, the benchmark for the euro zone, rose 3.9 basis points to 2.758%, nearing a five-month peak of 2.787% hit last week. U.S. Treasury yields were also slightly higher across the curve as traders calibrated positioning. The two-year Treasury yield , especially sensitive to interest rate expectations, was last up 4 basis points at 3.728%. Apart from the Fed's policy path, investors are likely to stay focused on U.S. President Donald Trump's attacks on Powell and other Fed policymakers, which have raised concerns about the central bank's independence. White House economic adviser Kevin Hassett told CNBC in an interview that the Trump administration's move to replace Powell as head of the central bank will likely take months as the president decides on a replacement. "Renewed efforts to reshape the Fed present a potential challenge to longer maturities," analysts at Goldman Sachs said in a note. The 30-year U.S. Treasury yield inched up 0.1 basis point and was last at 4.8836%. Upcoming data points which could influence the central bank's policy path include the Fed's preferred inflation gauge, the PCE price index, on Friday, and monthly payrolls figures for August, due a week later. https://www.reuters.com/markets/currencies/dollar-rebounds-slump-spurred-by-powells-dovish-surprise-2025-08-25/

2025-08-25 19:34

Pipeline currently owned by Ares, Diamondback, and Kinetik Valuation likely will fall in range of $2.5-$3.5 billion Diamondback, Kinetik CEOs have hinted openness to dealing stakes EPIC Crude ships 600,000-plus barrels per day to US Gulf coast NEW YORK/HOUSTON, Aug 25 (Reuters) - The owners of the EPIC Crude pipeline are exploring a sale, with any deal likely to value the energy infrastructure at around $3 billion including debt, people familiar with the matter said. EPIC Crude is one of the major pipelines which brings oil from the Permian and Eagle Ford shale basins of Texas to export facilities on the U.S. Gulf coast. It entered full service in 2020 and has a capacity of more than 600,000 barrels per day. Sign up here. EPIC Midstream, controlled by investment firm Ares Management (ARES.N) , opens new tab, owns around 45% of the company which holds EPIC Crude. The rest is held equally by Diamondback Energy (FANG.O) , opens new tab and Kinetik (KNTK.N) , opens new tab. The owners are working with investment bankers on the sale and have begun sounding out potential buyers for EPIC Crude, according to four people familiar with the matter. A pipeline company with existing Permian oil assets is the most likely buyer, said some of the sources. All the sources cautioned that a deal was not guaranteed and spoke on condition of anonymity to discuss private deliberations. EPIC and Ares declined comment. Diamondback and Kinetik did not respond to requests for comment. Both the chief executives of Diamondback and Kinetik hinted in calls with analysts this month they could be open to dealing their stakes, which are not core to their main businesses. Diamondback's Kaes Van't Hof said a sale could form part of efforts by the company to raise $1.5 billion from divestments, and Kinetik's Jamie Welch said it could sell "if someone shows up with the right number". In September last year, the pair announced they were buying 30% of the pipeline from EPIC Midstream for an undisclosed price. This bumped their total ownership to 55%. Any deal is expected to value EPIC Crude between $2.5 billion and $3.5 billion including debt, the sources estimated. One of the sources noted that, to achieve the top end of the valuation range, EPIC Crude would need to strike contracts with oil producers that would allow it to green-light its expansion. EPIC Crude can be expanded to carry up to 1 million barrels per day, and is one of the last readily expandable oil pipelines of scale left in the Permian, according to its website. As well as more than 700 miles of pipeline, running primarily from Orla, Texas, to the port of Corpus Christi, EPIC Crude has around 6.8 million barrels of storage capacity. EPIC Midstream was formed by Ares in 2017 to develop and operate midstream infrastructure in Texas. As well as the crude pipeline, the portfolio company built a natural gas liquids system which was sold in April for $2.2 billion to Phillips 66 (PSX.N) , opens new tab. https://www.reuters.com/legal/transactional/epic-crude-pipeline-owners-explore-3-billion-sale-sources-say-2025-08-25/

2025-08-25 19:04

Wall Street stocks end lower Traders price in 84% odds of Fed rate cut in September Dollar strengthens after Friday's fall NEW YORK, Aug 25 (Reuters) - Major stock indexes eased on Monday after gaining on Friday when U.S. Federal Reserve Chair Jerome Powell indicated that a September interest rate cut was likely but not certain, while the dollar gained. The dollar fell last week following Powell's remarks at the Fed's annual symposium in Jackson Hole, Wyoming. U.S. Treasury yields were higher on Monday. Sign up here. Major brokerages, including Barclays, BNP Paribas and Deutsche Bank, now expect a 25-basis-point Fed rate cut in September. Fed funds futures traders are pricing in 84% odds of a September cut, according to the CME Group’s FedWatch Tool. "On Friday there was a lot of enthusiasm about Powell basically indicating that there would likely be a rate cut. The market may have overreacted to his comments," Peter Cardillo, chief market economist at Spartan Capital Securities in New York, said. "I do believe we will get a rate cut, but I don't think it will be more than 25 basis points, and a lot depends on this Friday's PCE price inflation index." Data for August due before the Fed’s September 16-17 meeting could still sway Fed policy. The U.S. personal consumption prices reading, due on Friday, is considered the Fed's preferred inflation gauge. Hotter-than-expected U.S. producer price data last month raised some questions over the certainty of a cut. Investors are also keen to hear from AI chipmaker Nvidia (NVDA.O) , opens new tab, whose results are expected on Wednesday. The Dow Jones Industrial Average (.DJI) , opens new tab fell 349.27 points, or 0.77%, to 45,282.47, the S&P 500 (.SPX) , opens new tab fell 27.59 points, or 0.43%, to 6,439.32 and the Nasdaq Composite (.IXIC) , opens new tab fell 47.24 points, or 0.22%, to 21,449.29. Nvidia is among the last of the S&P 500 companies to report on the most recent quarter. Overall results so far have been much better than expected and have helped to support stocks. Year-over-year estimated earnings growth for the S&P 500 was at 12.9% as of Friday, sharply higher than 5.8% on July 1, according to LSEG. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab fell 2.33 points, or 0.24%, to 952.96. The pan-European STOXX 600 (.STOXX) , opens new tab index fell 0.44%. In deal news, U.S. soft drinks giant Keurig Dr Pepper (KDP.O) , opens new tab is set to create a global coffee giant to rival market leader Nestle (NESN.S) , opens new tab with an $18 billion takeover of JDE Peet's (JDEP.AS) , opens new tab, Europe's largest acquisition in more than two years. London markets were closed for a holiday, thinning overall trading volumes in Europe. On the trade front, U.S. President Donald Trump said on Monday he wanted to meet with North Korean leader Kim Jong Un this year and that he was open to further trade talks with South Korea even as he criticized the visiting Asian ally. The Korean won weakened 0.5% against the dollar. The dollar index , which measures the greenback against a basket of currencies, rose 0.56% to 98.39, with the euro down 0.79% at $1.1623. Against the Japanese yen , the dollar strengthened 0.5% to 147.67. U.S. Treasury yields also rose as traders prepared for auctions this week. The Treasury will sell short- and intermediate-dated debt this week. The yield on benchmark U.S. 10-year notes rose 1.9 basis points to 4.277%. Earlier, euro zone bond yields also rose, reversing their fall from late Friday. Oil prices extended last week's gains as traders anticipated more U.S. sanctions on Russian oil and Ukrainian attacks on Russian energy infrastructure that could disrupt supplies. U.S. crude futures gained $1.14 to settle at $64.80 a barrel, while Brent futures gained $1.07 to $68.80. Spot gold fell 0.21% to $3,364.47 an ounce. https://www.reuters.com/world/china/global-markets-wrapup-8-graphic-2025-08-25/

2025-08-25 16:35

Argentina's stock market benchmark drops over 3% 2038 bond falls to lowest level in over four months Milei's popularity and economic agenda could be affected, analyst says BUENOS AIRES, Aug 25 (Reuters) - Argentina's international dollar bonds fell on Monday as corruption allegations threatened to embroil figures close to President Javier Milei, with the 2038 issue down over 4 cents. Local media published audio recordings last week in which a voice that sounds like that of then-head of the disability agency, Diego Spagnuolo, can be heard discussing bribery within the agency. He alludes to Karina Milei, the president's sister and chief of staff, as receiving bribery payments. Sign up here. Spagnuolo was later fired by the president. Government officials have not confirmed the authenticity of the audio and Milei has not commented publicly on the issue. His sister has also made no public comment. Cabinet chief Guillermo Francos has said that, according to Milei, Spagnuolo had never mentioned the alleged bribery. Opposition legislators on Monday called for the chief of Argentina's health ministry, which oversees the disability agency, to answer questions about the matter in Congress. Late on Friday, various properties including Spagnuolo's residence were raided as part of a government investigation. The 2038 note fell 4.1 cents on Monday to 65.71 cents on the dollar, its lowest level in over four months according to LSEG data. The 2041 issue also fell over 4 cents. Argentina's stock market benchmark (.MERV) , opens new tab fell more than 3% on Monday following a 3.8% decline last week. The peso was down over 2% against the U.S. dollar . Marcelo Garcia, director for the Americas at New York-based risk consultancy Horizon Engage, said foreign investors worry a potential decline in Milei’s popularity would get in the way of his economic agenda. “It affects the government’s capacity to be reputable enough to continue to introduce tough reform in the next two years,” Garcia said. “The Milei political strategy of continued confrontation with everyone requires him to be very popular.” Garcia said the disability bribery scandal is particularly sensitive because it hits at the stigma that Milei "doesn’t care for the weak and the poor.” A spokesperson for Milei's government did not respond to a request for comment. The allegations come weeks ahead of a key local election in the Buenos Aires province and national midterm elections in October, where Milei's party is hoping to increase its presence in the opposition-controlled Congress. The libertarian president's popularity has been resilient even as his policies forced spending cuts and initially increased poverty levels across the country. https://www.reuters.com/world/americas/argentinas-international-dollar-bonds-tumble-amid-government-corruption-2025-08-25/

2025-08-25 16:27

Aug 25 (Reuters) - Panama's economy is expected to grow this year as the impact from the closure in late 2023 of First Quantum Minerals' (FM.TO) , opens new tab Cobre Panama copper mine fades, and non-mining sectors continue to grow, the International Monetary Fund's executive board said on Monday. WHY IT IS IMPORTANT Panama's economy is recovering after the Cobre Panama mine, one of the world's largest open-pit copper deposits, was shut in 2023 following protests from local residents over tax contributions and its environmental impact. Sign up here. BY THE NUMBERS The IMF expects Panama's economy to grow 4.5% in 2025 and to keep growing 4% yearly through 2030. As a comparison, the Central American country's economy grew 2.9% in 2024. KEY QUOTES "The economy is recovering from the impact of the Cobre Panama mine closure," the IMF said in a statement. It added the country's economy "is expected to continue its recovery, but the outlook is subject to significant downside risks and a high degree of uncertainty." The IMF also said a spending reduction plan approved by the cabinet, if fully implemented, could bring the government’s 2025 fiscal target within reach. CONTEXT The closure of Cobre Panama, which had contributed 1% to global copper production, impacted both Panama's and First Quantum's financial prospects. Panama, one of the world's fastest-growing economies in the last decade, recorded a significant slowdown in gross domestic product growth in 2024 from the previous year's 7.4% expansion, as the copper mine closed and air transport declined. https://www.reuters.com/world/americas/imf-sees-panama-gdp-up-45-this-year-rebound-copper-mine-closure-2025-08-25/

2025-08-25 14:00

Currency appreciation against the dollar pressures European exports to US US tariff hit also seen eating into revenues Service sector firms also monitoring impact of currency moves Aug 25 (Reuters) - U.S. tariffs and an appreciation in European currencies caused by dollar weakness have eroded companies' top line performance in the second quarter, increasing pressure on them to relocate operations or put jobs into the United States. Earlier this month, U.S. President Donald Trump put a 39% tariff rate on Swiss firms, prompting some to say they could consider moving operations stateside, adding to cases in the European Union and Britain facing tariffs of 15% or 10%. Sign up here. The euro and the Swiss franc have jumped around 13% this year while sterling is up about 8% as uncertainty over Trump's policies and concern about rising U.S. debt hit the dollar. "The tariffs, the trade negotiations, etcetera, that's where we're seeing the bigger picture," UBS equity strategist Sutanya Chedda said. "When we look at things like revenue misses ... a lot of it has been due to the underestimation of the FX impact." Reuters reviewed more than 30 European corporate results for the second quarter and found that tariffs and currency moves were repeatedly mentioned as headwinds by companies. Chedda and her team estimate Europe could suffer a 1.5% decline in revenues generated in developed markets this year compared to 2024 because of currency movements. Deutsche Telekom (DTEGn.DE) , opens new tab said its second quarter earnings were around 400 million euros ($467.88 million) lower from converting primarily dollars into euros. The German telecoms giant depends heavily on its U.S. business T-Mobile (TMUS.O) , opens new tab. Dutch paint maker AkzoNobel (AKZO.NS) , opens new tab and Swiss freight forwarder Kuehne + Nagel (KNIN.S) , opens new tab both cut their full year guidance because of negative currency effects. Meanwhile, to limit tariff exposure, several European companies say they will consider moving production to the U.S., including German premium carmakers, Swiss army knife maker Victorinox and Italian premium coffee maker Illycaffe. Some Swiss companies are also considering moving operations within Europe to reduce exposure to tariffs or the Swiss franc. Swiss medical technology company Ypsomed signalled it could shift some production to Germany to avoid tariffs. Swiss banks with major franc costs are also considering moving jobs. Swiss private bank Julius Baer (BAER.S) , opens new tab said its assets under management (AUM) in the first half of 2025 registered a negative currency impact of 37.7 billion Swiss francs. With 53% of its costs in francs and 14% in euros, and 52% of its AUM in dollars, the bank is addressing the mismatch by shifting some operations to service centres in Spain and India, chief financial officer Evie Kostakis said last month. Meanwhile wealth manager EFG International (EFGN.S) , opens new tab said in July a 10% fall in the dollar-franc exchange rate worsened its cost income ratio by 2.2%, and that it could potentially shift part of its cost base to help compensate. Switzerland is still negotiating with Washington in the hope it can reduce its tariff burden. While uncertainty persists, companies such as aircraft manufacturer Pilatus have simply opted to halt exports to the United States. ($1 = 0.8549 euros) https://www.reuters.com/business/finance/currency-spikes-trump-tariffs-take-bite-out-european-results-2025-08-25/