2025-08-11 04:34
A look at the day ahead in European and global markets from Wayne Cole. It's been a quiet start to the week, what with Japan on holiday and President Trump busy playing golf. Notably Nikkei futures traded in Chicago are just a whisker from all-time highs, suggesting the cash index could well reach it this week. Sign up here. The Nikkei still only has a PE of 19, compared with 22 for the S&P 500 and almost 33 for Nasdaq, which is essentially a premium for AI. It would seem to be negative news, then, that Nvidia (NVDA.O) , opens new tab and AMD (AMD.O) , opens new tab have agreed to give the U.S. government 15% of revenue from sales to China of AI chips in return for export licenses. That would be an extraordinarily unusual deal, especially as the U.S. had initially blocked the sales for national security reasons. Is this a tax? A fee? Where will the money go? How would it be administered? So many unknowns. For the dollar and bonds, the main economic event will be U.S. consumer prices on Tuesday, where the impact of tariffs could nudge the core up 0.3% to an annual pace of 3.0% and further away from the Federal Reserve's target of 2%. Forecasts range from 2.9% to 3.2%, suggesting some upside risk, which would test market wagers for a September rate cut. Analysts assume it would have to be a real shocker to move the dial much given the recent downward lurch in payrolls is now dominating the policy outlook. Also on Tuesday is the supposed deadline for a U.S. trade deal with China. While everyone assumes it will be extended, there's yet to be any word on it for either side. Chaos appears to be more a feature than a bug. Take COMEX gold futures, which surged last week after U.S. customs indicated the most widely traded bullion bars - produced mainly by Switzerland - would be slapped with tariffs. The White House assured the market on Friday that this was "misinformation" and would be clarified, but again no more has been heard. Copper markets went through similar tariff-induced convulsions the week before. Last week, Japan's trade team had to hotfoot it to Washington to correct the double-taxation of its exports. Japan assumes that was fixed, but there's still nothing in writing. Now, oil prices have slipped just in case the talks between Trump and Russian leader Putin due this Friday actually make progress on Ukraine. Progress seems unlikely, however, given the White House has been floating the idea of a land swap which Ukraine would never agree to. There are also reports from Europe that Trump envoy Steve Witkoff misunderstood what Putin was proposing at a meeting last week, suggesting some risk the entire Alaska adventure might be called off ahead of time. Key developments that could influence markets on Monday: - No major data due https://www.reuters.com/world/china/global-markets-view-europe-2025-08-11/
2025-08-11 03:14
MUMBAI, Aug 11 (Reuters) - The rupee is set to open higher on Monday, supported by its recovery in the non-deliverable forward market, while traders remain focused on potential fallout from U.S. tariffs and the upcoming U.S. inflation data. The 1-month non-deliverable forward indicated the rupee will open in the 87.52-87.56 range versus the U.S. dollar, compared with 87.66 on Friday. Sign up here. The NDF move feels "purely positional" and there was no real shift in underlying sentiment, a currency trader at a Mumbai-based bank said, with the structural bias on USD/INR remaining higher till the tariff overhang is in play. The tactical adjustment in NDF likely reflects some trimming of heavy-dollar positions, with the Reserve Bank of India's intervention likely prompting speculators who were betting on a quick leg higher in USD/INR to think twice, the trader said. Over the last two weeks, the RBI has intervened in the non-deliverable forward and onshore spot markets to cushion the rupee against tariff pressures stemming from U.S. President Donald Trump’s actions. SOFT US DOLLAR A broadly softer dollar, on growing bets of a Federal Reserve rate cut next month, is expected to aid the rupee amid the tariff noise. The dollar index fell on Monday, extending losses from last week, while most Asian currencies advanced. July U.S. inflation data, due on Tuesday, will be key to gauging Fed rate-cut expectations and the dollar's direction. While the full impact of the latest tariffs may take time to filter into the inflation numbers, the July print will still be heavily scrutinised, MUFG Bank said in a note, adding that June data already showed signs that tariff rates are starting to have a bigger impact. Traders currently see a 90% chance of a September Fed rate cut and are pricing in just over two cuts for the year. KEY INDICATORS: ** One-month non-deliverable rupee forward at 87.66; onshore one-month forward premium at 12 paise ** Dollar index down at 98.08 ** Brent crude futures down 0.5% at $66.3 per barrel ** Ten-year U.S. note yield at 4.28% ** As per NSDL data, foreign investors sold a net $629.4 million worth of Indian shares on Aug 7 ** NSDL data shows foreign investors bought a net $69.1 million worth of Indian bonds on Aug 7 https://www.reuters.com/world/india/rupee-rise-open-ndf-lift-us-tariffs-inflation-radar-2025-08-11/
2025-08-11 01:36
MUMBAI, Aug 11 (Reuters) - The Indian rupee's trajectory will depend on developments around U.S. tariffs and the Reserve Bank of India's response if the currency comes under renewed pressure, while government bonds will track inflation data from both India and the United States. The rupee weakened by 0.1% last week to 87.66, following a 1% drop the week before, after U.S. President Donald Trump imposed additional tariffs on Indian goods, placing India among the countries subject to the highest U.S. import duties. Sign up here. High tariffs increase downside risks to India's economic growth, Morgan Stanley said in a note last week. The brokerage said it is monitoring developments in trade negotiations and high-frequency growth indicators. The sixth round of negotiations between India and the United States are scheduled for August 25. The rupee's decline over the past fortnight would likely have been steeper if not for the RBI's intervention. The central bank has been staunchly defending the rupee's all-time low level of 87.95 against the dollar. "We wait to watch how long the RBI protects that level," Anil Bhansali, head of treasury at Finrex Treasury Advisors, said. The July U.S. inflation data, due on Tuesday, could influence the Federal Reserve's rate-cut expectations and the broader dollar sentiment. Meanwhile, India's 10-year benchmark 6.33% 2035 bond yield settled at 6.4121% last week, up 4 basis points over the week, which saw volatile moves on both directions. Traders anticipate the yield will remain in the 6.33% to 6.43% band during the holiday-truncated week, with focus on U.S. inflation as well as local retail inflation also due on Tuesday. The 10-year benchmark bond yield saw sharp volatile moves, after expectations of dovishness met with the RBI leaving its key policy rate unchanged. Additionally, the RBI maintained its growth forecast, with Governor Sanjay Malhotra noting that although inflation is currently well below expectations, it is set to rise by the end of the year. The market is now divided, with several analysts saying that there may be no more rate cuts, while some expect growth and inflation to undershoot forecasts, which will open the door for at least one more rate cut. "We feel the hawkish tone of policy may create volatility in markets in the near term," said Amit Somani, deputy head of fixed income, Tata Asset Management. "However, a firm eye on inflation should provide comfort to markets in the longer term. We feel the RBI policy framework will continue to remain supportive of growth, even as the threshold for further policy cuts is high." KEY EVENTS: India ** July consumer price inflation data - August 12, Tuesday (4:00 p.m. IST) (Reuters poll: 2.50%) ** July wholesale price inflation data - August 14, Thursday (12:00 p.m. IST) (Reuters poll: 0.52%) U.S. ** July consumer price inflation - August 12, Tuesday (6:00 p.m. IST) (Reuters poll: 2.80%) ** Initial weekly jobless claims for week ended August 4 - August 14, Thursday (6:00 p.m. IST) ** July PPI machine manufacturing - August 14, Thursday (6:00 p.m. IST) ** July import prices - August 15, Friday (6:00 p.m. IST) ** July retail sales - August 15, Friday (6:00 p.m. IST) ** July industrial production - August 15, Friday (6:45 p.m. IST) ** August U Mich sentiment prelim - August 15, Friday (7:30 p.m. IST) https://www.reuters.com/world/india/rupee-outlook-hinges-us-tariffs-rbi-action-bonds-track-inflation-data-2025-08-11/
2025-08-11 00:30
SEOUL, Aug 11 (Reuters) - South Korea and Vietnam will pledge deeper economic and strategic cooperation when their leaders hold a summit on Monday as the former Cold War-era foes seek to leverage their business ties to navigate a challenging global trading environment. South Korean President Lee Jae Myung hosts Vietnamese leader Lam To as his first state guest since taking office on June 4 and will discuss promoting trade and investment in the Southeast Asian country, Lee's office said. Sign up here. Lam, who is the Vietnamese Communist Party general secretary, leads a delegation of industry, trade, foreign and technology ministers and senior party and parliament members on the four-day state visit. The countries plan to sign at least 10 memoranda of understanding at the summit meeting, pledging cooperation in nuclear and renewable energy, monetary and financial policies, and science and technology, Lee's office said. The rare visit by the Vietnamese leader is expected to contribute to a favourable condition for South Korean businesses to invest in major infrastructure and nuclear energy projects planned in Vietnam, it said. A number of major South Korean companies including Samsung Electronics have used Vietnam as an export hub, benefiting for years from lower labour costs, generous tax incentives and Hanoi's numerous free trade pacts with dozens of countries. But the trade policy of U.S. President Donald Trump, who imposed sweeping new tariffs on the Asian countries in recent weeks, has increased uncertainty over future business commitments, with Vietnamese official data showing a slowdown in new investment. South Korean companies have been cited as potential investors in Vietnam's planned nuclear energy, LNG power plants and high-speed rail projects. Trump has imposed a tariff rate of 15% for South Korean goods and 20% for imports from Vietnam. https://www.reuters.com/world/asia-pacific/south-korea-vietnam-leaders-pledge-deeper-ties-amid-trade-challenges-2025-08-11/
2025-08-10 22:47
Aug 11 (Reuters) - Santos (STO.AX) , opens new tab said on Monday it had extended the period of exclusive due diligence to an international consortium led by Abu Dhabi's National Oil Company (ADNOC), which had offered $18.7 billion for Australia's second biggest gas producer. The period for exclusive due diligence has been extended until August 22, it said. Sign up here. ADNOC's investment arm XRG, along with Abu Dhabi Development Holding Company (ADQ) and private equity firm Carlyle, had offered $5.76 (A$8.89) per Santos share when the proposal was announced in mid-June. XRG now stands on the cusp of a deal that would give it stakes in major operations across Australia and Papua New Guinea— pending regulatory approval. Santos has already expressed its support for the takeover. If the deal goes through, Santos will form the Asia-Pacific platform of a global LNG business, as ADNOC looks to diversify beyond the Middle East amid rising geopolitical tensions in the region. https://www.reuters.com/business/energy/australias-santos-extends-due-diligence-deadline-187-billion-adnoc-led-offer-2025-08-10/
2025-08-10 21:41
Fed is independent, when asked about Trump's calls for rate cuts Dollar will be naturally strong if US has good economic policies FX will 'take care of itself' if BOJ focuses on fundamentals TOKYO, Aug 11 (Reuters) - U.S. Treasury Secretary Scott Bessent said the new Federal Reserve chair should be someone "who can examine the whole organization" as the Fed's mission has included so many things outside of monetary policy and has put its independence at risk, Japan's Nikkei newspaper reported. "It's someone who has to have the confidence of the markets, the ability to analyze complex economic data," Bessent told the Nikkei in an interview, when asked about the qualities the new Fed chair should possess. Sign up here. "And it's also someone who wants to be, I think, very attuned to forward thinking, as opposed to relying on historical data," Bessent was quoted as saying in the interview, which was conducted in Washington on August 7 and published on Monday. A source has told Reuters that Bessent is leading a search for a successor to Fed Chair Jerome Powell, with an expanded list that includes a longtime economic consultant and a past regional Fed president. When asked about President Donald Trump's calls for the Fed to cut interest rates, Bessent said while Trump makes his opinion known, "at the end of the day, the Fed is independent." On exchange rates, Bessent said his administration's definition of a strong dollar was not about the price on the screen, which was set by the market, but the relative price against other currencies, according to the Nikkei. "The strong dollar policy is to have policies that continue to keep the U.S. dollar the reserve currency. And if we have good economic policies, then the dollar will naturally be strong," Bessent was quoted as saying. Bessent has overseen U.S. discussions with Japan on exchange rates with his counterpart Katsunobu Kato. At their meeting held on the sidelines of a G7 gathering in May, the two agreed that the dollar-yen exchange rate at the time reflected fundamentals. In its exchange-rate report to Congress in June, the U.S. Treasury Department said the Bank of Japan (BOJ) should keep tightening monetary policy, which would support a "normalization of the yen's weakness." "I think that as long as the BOJ focuses on economic fundamentals, inflation and growth, the currency will take care of itself," Bessent said. "So, I believe that governor (Kazuo) Ueda and the BOJ board is targeting an inflation outcome, not a currency outcome," he was quoted as saying. The BOJ last year exited a decade-long, massive stimulus and raised short-term interest rates to 0.5% in January on the view Japan was close to durably hitting its 2% inflation target. But it has stressed the need to tread carefully in raising rates further, with the slow pace of hikes seen by some analysts as a factor that has kept the yen low against other currencies. While inflation remains above the BOJ's 2% target for more than three years, Ueda has called for the need to scrutinise the impact U.S. tariffs could have on Japan's fragile economy. https://www.reuters.com/world/us/bessent-says-new-fed-chair-should-be-someone-who-can-examine-organization-nikkei-2025-08-10/
