2025-08-25 06:55

Aug 24 (Reuters) - Major brokerages, including Barclays, BNP Paribas and Deutsche Bank, now expect a 25-basis-point U.S. Federal Reserve rate cut in September following Chair Jerome Powell's shift in tone at Jackson Hole toward rising risks in the labor market. Powell's remarks at the Jackson Hole symposium emphasized a change in the Fed's reaction function, with greater weight now placed on labor market risks. Sign up here. "This unusual situation suggests that downside risks to employment are rising," Powell said, warning that such risks could materialize quickly in the form of layoffs and a spike in unemployment. In notes released on Friday after Powell's speech, Barclays pulled forward its previously expected September 2026 cut to September 2025, saying his speech introduced "an easing bias" and raised the bar for not cutting. "Powell made (it) clear that the Fed intends to deliver a 'fine-tuning' rate cut in September unless the data dictates otherwise," wrote BNP economists, led by Calvin Tse. They reversed the brokerage's long-standing call for the Fed to stay on hold, forecasting cuts in both September and December. Meanwhile, both Macquarie and Deutsche Bank revised their expectations of a cut in September and December, respectively, to a 25-bp cut each in those two months. Bank of America, which expects no rate cuts this year, said "barring further deterioration of the labor market, we think that the Fed would risk a policy error if it were to cut rates," and pointed to signs of a rebound in economic activity and persistent inflation pressures. Morgan Stanley also does not expect a September cut yet, but said such a move is likely if incoming labor and inflation data confirm further softening. Markets are now pricing in an 87% chance of a quarter-point rate cut at the September policy meeting, according to the CME FedWatch Tool, up from 75% before Powell's speech. The rate-setting Federal Open Market Committee (FOMC) is scheduled to meet again on September 16 and 17. Goldman Sachs and J.P. Morgan, meanwhile, reaffirmed their expectations for a September cut, aligning with the broader market view that softening data may warrant policy easing. https://www.reuters.com/business/major-brokerages-pivot-sept-fed-rate-cut-powells-labor-warning-2025-08-25/

2025-08-25 06:53

Gold hit near two-week high on Friday Powell opened door to September rate cut Asia shares up on hopes for US rate cuts Aug 25 (Reuters) - Gold slipped from a near two-week high on Monday as the dollar strengthened, although rising bets of interest rate cuts by the U.S. Federal Reserve following Chair Jerome Powell's dovish pivot last week, lent some support to bullion. Spot gold inched down 0.1% at $3,367.86 per ounce, as of 0632 GMT, after hitting its highest since August 11 on Friday. Sign up here. U.S. gold futures for December delivery eased 0.2% to $3,412.50. The dollar index (.DXY) , opens new tab rose 0.1% against its rivals after dropping to a four-week low, making gold less attractive to overseas buyers. "There's a decent level of support for gold around $3,350 over the near term, with Powell's dovish hints allowing gold to carve out a prominent swing low on Friday," City Index senior analyst Matt Simpson said. "A sustained rally likely requires softer PCE inflation and weaker employment data going forward. But with inflation likely to remain elevated, gold's gains could remain capped beyond the expected initial bounce." Powell on Friday signalled a possible rate cut at the Fed's meeting next month, saying that risks to the job market were rising but inflation remained a threat, and that a decision wasn't set in stone. Markets are now pricing in an 87% chance of a quarter-point rate cut in the September policy meeting, and a cumulative reduction of 48 basis points by this year-end, according to CME FedWatch Tool. Gold tends to appreciate in a low-interest-rate environment, which reduces the opportunity cost of holding non-yielding bullion. Asian share markets rallied on Monday as investors celebrated the likely resumption of U.S. rate cuts. Investors now await U.S. personal consumption prices data on Friday, which is expected to show core inflation creeping up to its highest since late 2023 at 2.9%. Elsewhere, spot silver rose 0.3% to $38.94 per ounce, platinum fell 0.2% to $1,359.66 and palladium was flat at $1,126.41. https://www.reuters.com/world/china/gold-eases-off-two-week-peak-dollar-ticks-up-2025-08-25/

2025-08-25 06:49

Aug 25 (Reuters) - Keurig Dr Pepper (KDP.O) , opens new tab will buy Dutch coffee company JDE Peet's (JDEP.AS) , opens new tab for 15.7 billion euros ($18.4 billion) in cash, a 20% premium to its stock market valuation at the end of last week, the U.S. company said on Monday. Shares of JDE Peet's jumped 18% in early trade, on track for their best day on record. Sign up here. The merged company, aiming to expand its coffee offering to more than 100 countries, plans to separate its beverage and coffee units "as soon as practicable", Keurig said. The two resulting companies, "Beverage Co." and "Global Coffee Co.", will be listed in the United States, and led by Keurig CEO Tim Cofer and CFO Sudhanshu Priyadarshi, respectively. Keurig said that Global Coffee Co., with around $16 billion in combined annual net sales, will be well positioned to profit from the world's $400 billion coffee market, while Beverage Co., with more than $11 billion in yearly net sales, will focus on North America's $300 billion refreshment beverage market. Keurig Dr Pepper, created in 2018 through the merger of Keurig Green Mountain and Dr Pepper Snapple, owns brands including Dr Pepper, Snapple, 7UP, and Green Mountain Coffee. The company has a market valuation of about $48 billion, while Amsterdam-listed JDE Peet's, with brands including Jacobs, L’Or, Tassimo and Douwe Egberts, was valued at 12.76 billion euros at Friday's market close, according to LSEG data. Keurig's shares have risen nearly 10% this year on strong beverage sales. Both it and JDE Peet's have flagged the impact of high coffee bean prices, which are seen rising again after U.S. President Donald Trump slapped a 50% levy on beans imported from Brazil from August 6. Prices of Arabica and Robusta beans touched record highs this year as unpredictable weather patterns pressured supply, and have been volatile recently. JDE Peet's is majority-owned by Germany’s JAB, which also holds a significant minority stake in Keurig Dr Pepper, according to LSEG data. ($1 = 0.8544 euros) https://www.reuters.com/business/keurig-dr-pepper-buy-dutch-coffee-company-jde-peets-over-18-billion-2025-08-24/

2025-08-25 06:42

Orsted's project was 80% complete before US halt US government's order jeopardises $9.4 billion share issue US President Trump has repeatedly criticised wind energy COPENHAGEN, Aug 25 (Reuters) - Orsted (ORSTED.CO) , opens new tab said on Monday it would continue with a plan to raise capital after the Trump administration ordered the offshore wind farm developer to stop construction on a near-completed project off Rhode Island, sending its shares down 17%. The company, 50.1% owned by the Danish state, said earlier this month it would seek to shore up its finances through a $9.4 billion emergency . Sign up here. "The planned rights issue had been sized to provide the required strengthening of Orsted's capital structure to execute its business plan, even when taking into account the impact of this uncertainty on Orsted's U.S. offshore wind portfolio," it said in a statement. The Trump administration's Bureau of Ocean Energy Management (BOEM) published its stop-work order late on Friday, forcing suspension of a project that was 80% complete with 45 out of 65 wind turbines installed. The timing of the halt to Revolution Wind off Rhode Island was particularly damaging to Orsted, which announced earlier this month a plan to raise 60 billion Danish crowns ($9.42 billion) through a rights issue. Orsted's shares, already down 30% since announcing its plan on August 11, fell as much as 17% in early trading on Monday. "This is a huge hurdle with regards to raising capital," Sydbank analyst Jacob Pedersen told Reuters, adding he was "stunned." AlphaValue analyst Pierre-Alexandre Ramondenc said the U.S. move could jeopardise the success of the rights issue. "The news came as a major shock and amounts to nothing less than political hostage-taking by the U.S. administration, given the project's advanced stage," Ramondenc said. On his first day in office in January, President Donald Trump suspended new offshore wind leasing pending environmental and economic review of projects. He has repeatedly criticised wind energy as ugly, unreliable and expensive. ($1 = 6.3685 Danish crowns) https://www.reuters.com/sustainability/climate-energy/orsted-cash-plan-risk-trump-government-blocks-us-wind-project-2025-08-25/

2025-08-25 06:42

Exclusivity period extended to September 19 HY profit falls 22.3% but beats analysts' estimates Interim dividend 13.4 cents per share Shares rise as much as 1% but remain well below proposed offer Aug 25 (Reuters) - Australian gas producer Santos (STO.AX) , opens new tab on Monday agreed to further extend the exclusivity period for an $18.7 billion takeover bid from a group led by Abu Dhabi National Oil Co (ADNOC), and reported a better-than-feared 22% drop in first-half profit. Its shares rose 1% after the company extended the due diligence period to September 19 to give the consortium led by ADNOC's investment arm XRG more time to finalise a binding offer. Sign up here. The consortium last week flagged it would need extra time on top of its due diligence period to seek internal approvals for a bid. Santos said "customary protections" would be included in any negotiations to protect the company's investors if the deal is further dragged out once an agreement is signed. It declined to give any details on those inclusions. Large corporate buyouts typically involve break fees or "ticking fees" where the buyer may have to stump up more if there are delays. "We're pleased with the progress we've made. We've worked well with the folks from XRG over the last few weeks," Santos Chief Executive Kevin Gallagher told analysts on a conference call. "Given that the consortium has again confirmed that it's found nothing in due diligence that would make it consider withdrawing its offer, we've agreed to extend the process deed." Analysts said the shares would likely be supported on Monday by confirmation the deal was still progressing despite the delays. The deadline for the exclusive talks between Santos and the consortium expired last Friday. Santos can engage with a bidder if a higher offer is made, but is prevented from talks with any parties who match the XRG offer. The proposed offer requires approval from regulators in Australia, Papua New Guinea, and the U.S. given Santos holds assets in each of those jurisdictions. Gallagher said Santos could not predict when regulatory approval would be finalised or when the company's shareholders could be asked to vote on the deal. Santos reported its first-half underlying earnings fell to $508 million from $654 million a year earlier, hurt by weaker realised prices for its liquefied natural gas (LNG) and oil. The result was 3% above Visible Alpha forecast consensus. While its shares rose to A$7.81 per share on Monday, they remain more than a dollar below the consortium's proposed offer of A$8.89 apiece. The gain outpaced a 0.1% rise in the broader S&P/ASX200 (.AXJO) , opens new tab index. Santos said oil production from its Pikka project in Alaska is now expected to begin in the first quarter of 2026, brought forward from the first half of that year. https://www.reuters.com/business/energy/santos-extends-exclusivity-187-billion-adnoc-led-offer-profit-drops-2025-08-24/

2025-08-25 06:11

Aug 25 (Reuters) - South African petrochemical firm Sasol (SOLJ.J) , opens new tab said on Monday it swung to an annual profit on the back of higher chemicals prices, tighter cost controls and lower asset writedowns. The company, which produces fuel and chemicals from coal and gas, posted basic earnings per share of 10.60 rand ($0.6070) for the year ended June 30, compared to a 69.94 rand loss per share last year. Sign up here. Sasol also benefited from a 4.3 billion rand payout from Transnet, after it claimed in a legal suit the state-owned logistics firm had overcharged for oil transportation over several years. The company said its turnover fell 9%, mainly due to lower sales volumes and reductions in rand oil prices and refining margins. However, it managed to keep cash fixed cost increases below inflation, while capital expenditure of 25.4 billion rand was 16% lower than the previous year. Sasol also recorded significantly lower impairments of 20.7 billion rand, compared with 74.9 billion rand in the previous year. Asset writedowns in the 2025 financial year were related to its Secunda and Sasolburg liquid fuels refinery operations, Mozambique gas production sharing agreement and exploration project, and Italian chemicals business. The bulk of Sasol's impairments the previous year was related to its U.S chemicals operations, hit by low prices and weak demand. Sasol once again skipped dividend payments as its $3.7 billion net debt remained above the $3 billion debt cap in terms of its dividend policy. ($1 = 17.4620 rand) https://www.reuters.com/business/energy/sasol-swings-profit-higher-chemical-prices-lower-writedowns-2025-08-25/