2025-08-08 12:44

Aug 8 (Reuters) - J.P.Morgan now expects the U.S. Federal Reserve to cut interest rates by 25 basis points at its September meeting, citing signs of weakness in the labor market and uncertainty around President Donald Trump's latest Fed nomination. The brokerage had earlier forecast one 25-basis-point rate cut in December but said in a note on Thursday that the risks now point to an earlier move, followed by three more quarter-point cuts before the Fed pauses. Sign up here. "For (Fed chair Jerome Powell), the risk management considerations at the next meeting may go beyond balancing employment and inflation risks," J.P.Morgan analyst Michael Feroli wrote. Trump on Thursday nominated Stephen Miran, chair of the Council of Economic Advisers, to fill a temporary seat on the Federal Reserve's governing board, replacing outgoing Governor Adriana Kugler. The White House, according to Trump, is actively looking for a candidate to serve in a permanent capacity when the 14-year Fed board seat becomes vacant on February 1, and is also considering potential replacements for Powell, whose term ends on May 15, 2026. Miran's confirmation before the September 16–17 policy meeting remains uncertain, but JPM said his presence could increase divisions within the rate-setting committee. The move follows Trump's repeated, but unsuccessful, attempts to pressure Fed policymakers to lower interest rates. By appointing Miran to the central bank, even in a temporary role, Trump gains a potentially more direct path to influence monetary policy and exert sway over the world's most influential central bank. The appointment could intensify internal divisions at the Fed, with JPM suggesting Miran's presence might lead to three dissents. BofA Global Research is anticipating at least one more dissent in September if rate cuts don't materialize, citing Miran's critical stance toward the central bank. The Fed's decision may hinge on August jobs data. JPM said an unemployment rate of 4.4% or higher could justify a larger cut, while a lower reading may prompt resistance from policymakers focused on inflation. Separately, the JPM note said that Fed Governor Christopher Waller is emerging as the frontrunner to succeed Jerome Powell as Fed Chair, a move it said would likely be welcomed by financial markets. Analysts at Barclays echoed the sentiment, saying Waller's appointment would reduce uncertainty around how the Fed responds to economic data, which could support longer-dated bonds. Traders now price in a 89.2% chance of a rate cut in September, compared with 37.7% last week, according to CME Group's FedWatch tool. https://www.reuters.com/business/jpmorgan-brings-forward-fed-rate-cut-forecast-september-2025-08-08/

2025-08-08 12:20

US gold futures jump to an all-time high of $3,534.10 US imposes tariffs on 1-kg gold bars, FT reports Spot gold on track for second straight weekly gain, up 0.7% Aug 8 (Reuters) - U.S. gold futures surged to a record on Friday after a report that Washington has imposed tariffs on imports of 1-kg bullion bars, widening the spread between New York futures and spot prices. December U.S. gold futures were up 0.7% to $3,476.70, after hitting a record $3,534.10. Sign up here. Spot gold was down 0.3% at $3,386.63 per ounce as of 1151 GMT. Bullion is on track for a second straight weekly gain, up 0.7% so far this week. The futures-spot spread widened to more than $100 after the Financial Times reported that the United States had imposed tariffs on imports of 1-kg gold bars, citing a July 31 Customs and Border Protection letter. The letter said 1-kg and 100-ounce gold bars should be classified under a customs code subject to higher duties. "Given the volatility of U.S. trade-related decision-making, it is difficult to make longer-term predictions, but assuming a scenario in which tariffs remain in place ... one would expect spot prices to be affected and to rise, narrowing the spread relative to the futures," said Ricardo Evangelista, senior analyst at ActivTrades. Switzerland is the world's largest gold refining hub and the major exporter to the United States. U.S. President Donald Trump's higher tariffs on imports from dozens of countries kicked in on Thursday, leaving major trade partners such as Switzerland, Brazil and India hurriedly searching for a better deal. "All developments ... for now solidify the London spot price as the most reliable source telling us what the real value of gold is," said Saxo Bank's head of commodity strategy, Ole Hansen. "Spot prices remain stuck in a range since April, with a break above $3,450 needed to change that." Gold, a traditional safe-haven asset, is also drawing support from expectations that the Federal Reserve will cut interest rates next month. Weaker U.S. payroll data last week pushed CME Group's FedWatch Tool , opens new tab to price in an 89% chance of a 25-basis-point cut in September. Elsewhere, spot silver was steady $38.31 per ounce, platinum fell 0.5% at $1,326.91 and palladium was down 2.3% at $1,124.93. https://www.reuters.com/world/china/gold-futures-climb-fresh-record-after-report-us-tariff-move-2025-08-08/

2025-08-08 12:07

Dollar firms slightly versus peers Weighed down this week by rate cut bets, Trump's Fed pick Traders pricing in two US rate cuts this year Pound boosted by narrow BoE vote to cut rates SINGAPORE/LONDON, Aug 8 (Reuters) - The dollar firmed slightly on Friday but was heading for a weekly fall as U.S. President Donald Trump's temporary choice for a fill-in Federal Reserve governor stoked expectations for a dovish pick to replace chair Jerome Powell when his term ends. The yen weakened 0.4% against the dollar to 147.740 yen. The dollar also rose 0.17% against the euro to $1.1645 and strengthened 0.2% against the Swiss franc to 0.8077 francs. Sign up here. As concerns over softening U.S. economic momentum, especially in the labour market, boost speculation of Fed rate cuts, the dollar was down 0.6% on the week so far, against a basket of peers. On the day the dollar index was up 0.27% at $98.239. Markets are focused on Trump's nomination of Council of Economic Advisers Chairman Stephen Miran to fill a newly vacant seat at the Fed, while the White House seeks a permanent occupant. Miran replaces Governor Adriana Kugler following her surprise resignation last week. "In many ways it reinforces what we already knew, which is that we're now looking at a much more political Fed and a much less independent Fed," said Michael Brown, senior research strategist at Pepperstone. Brown said that the news would contribute to his longer-term dollar bear case. "We're all expecting at the September FOMC and any meeting he joins after that that he'll (Miran) be very dovish and will be pushing for large rate cuts and that that will come effectively because the President has asked him to," said Brown. While investors remain worried about the U.S. central bank's independence and credibility after repeated criticism from Trump for not cutting interest rates, some analysts feel Miran's appointment is unlikely to have a material impact. "We still maintain that central bank independence is going to be very much intact," said Raisah Rasid, global market strategist at J.P. Morgan Asset Management in Singapore. She expects the central bank to focus on incoming data and the overall health of the U.S. economy. Trump's scathing attacks on Powell and the likelihood of a dovish pick as the next Fed chair have weighed on the dollar this week, although Trump recently backed off threats to oust Powell before his term ends on May 15. Fed Governor Christopher Waller, who voted for a rate cut in the Fed's last meeting, is emerging as a top candidate to be the next chair, Bloomberg News said on Thursday. Investor focus will now switch to next week's U.S. consumer price inflation data, with economists polled by Reuters expecting month-on-month core CPI to have nudged higher to 0.3% in July. The data will offer clues on whether tariff-driven price pressures are materialising and shape the Fed's policy path. Atlanta Fed president Raphael Bostic said on Thursday that while risks to the job market had increased, it remained too soon to commit to rate cuts, with more data lined up ahead of the Fed's policy review scheduled for September 16 and 17. Traders are pricing in a 93% chance of a U.S. rate cut in September, with at least two rate cuts priced in by the end of the year. The dollar has struggled broadly this year and is down 9.4% against a basket of major peers, as investors sought alternatives, worried over Trump's erratic trade policies. Analysts anticipate the dollar to remain under pressure but see the fall unlikely to be as steep. "We're looking for a bending but not breaking sort of scenario (on the dollar)," Rasid said. Sterling touched a fresh two-week high of $1.34515, clinging to Thursday's sharp gains when the Bank of England cut interest rates but only after a narrow 5-4 vote, showing a lack of conviction in its easing bias. The vote split "implies one of the most hawkish versions of a 25bp cut that reasonably could have been expected," analysts at Goldman Sachs said. The pound is on course for its best weekly performance since late June. "I think the pound is still benefitting from this, this re-assessment of the hawkishness of the BoE over the last couple of weeks," said Michael Pfister, FX analyst at Commerzbank. "They voted in June relatively closely for unchanged interest rates, so one could have expected that we would have seen another dovish vote (on Thursday), but in the end they surprised everyone." https://www.reuters.com/world/middle-east/dollar-firms-track-weekly-loss-after-trumps-fed-governor-pick-2025-08-08/

2025-08-08 12:06

LONDON, Aug 8 (Reuters) - Bank of England Chief Economist Huw Pill said on Friday that inflation pressures were likely to continue weakening, but there was a risk that future rate cuts could be delayed by shifts in longer-term price- and wage-setting behaviour in the economy. "If that's more the driver of this increase in the upside risk to inflation, that might lead us to ... have to question whether the pace at which we're reducing Bank Rate over the last year, a pace of one quarter-point cut every quarter, is that sustainable?," Pill said in an online briefing to businesses. Sign up here. "I think that's kind of where more of the dissenting members focus, the members of the committee who were voting ultimately to hold rates at 4.25% yesterday," he said. The BoE cut its benchmark Bank Rate to 4.0% from 4.25% on Thursday but Pill and three other Monetary Policy Committee members favoured keeping rates on hold due to inflation pressures, resulting in an unexpectedly tight 5-4 vote. The outcome raised the prospect of the BoE slowing its run of rate cuts. Investors are not fully pricing in a next quarter-point reduction before February. https://www.reuters.com/world/uk/bank-englands-pill-sees-risks-that-could-slow-pace-rate-cuts-2025-08-08/

2025-08-08 11:49

Markets eye dovish tilt at Fed as Miran appointed Nasdaq futures rise, on track for third day of gains Gold futures jump on report of US tariffs SINGAPORE/LONDON, Aug 8 (Reuters) - Global shares rose on Friday, along with the dollar, as investors clung to the view that U.S. interest rates may fall further this year, while gold futures rallied on a report of duties on U.S. imports of bullion bars. An index of world stocks traded near record highs, shrugging off weakness on Wall Street overnight, and in Europe, shares got a lift from a series of robust earnings and from optimism that the hefty U.S. tariffs that kicked in on Thursday would be subject to negotiation. Sign up here. The outlook for monetary policy in the United States, a linchpin for global markets, has become even more open to question due to a series of changes at the Federal Reserve, where policymakers are divided on the impact of inflation and the central bank's leadership is shifting. U.S. President Donald Trump said on Thursday he would nominate Council of Economic Advisers Chairman Stephen Miran to fill a vacant seat at the Fed for a few months while the White House seeks a permanent addition to the central bank's governing board and continues its search for a new chair. Miran holds similar views to Trump, who has berated Chair Jerome Powell for being "too late" in cutting interest rates, even though growth is holding up and inflation is ticking higher. "It locks in a vote for rate cuts at all the meetings between now and the end of January," said Ray Attrill, head of FX strategy at National Australia Bank in Sydney. "Markets are already travelling with a very strong expectation that there will be a rate cut," he added. "Though there's a question mark over whether he'll succeed in ratification in time for the September meeting." The MSCI All-Country index (.MIWD00000PUS) , opens new tab was up 0.1% on the day, just below record highs struck two weeks ago, and was heading for a 2% rise this week, its best performance since mid-June. Europe's STOXX 600 (.STOXX) , opens new tab was up 0.2%. Zurich's SMI index (.SSMI) , opens new tab, which on Thursday shrugged off Switzerland's 39% U.S. tariff coming into effect, eased 0.14%. The market is also digesting a Bloomberg News report that Fed Governor Christopher Waller is the top candidate to replace Powell, whose term ends on May 15, 2026. "The effective shock (from tariffs) is there. So the question now is: How is it going to impact the economy and the data, and when? Because up to now, up to now, let's be fair, it's been less severe than most have anticipated," Lombard Odier economist Samy Chaar said. Overall tariffs may be lower than many had feared back in April, but they are at their highest in at least a century. Relief over lower-than-expected duties may be short-lived as a result. A case in point would be the European Union, which now has a 15% tariff, rather than the 50% that Trump had threatened, Chaar said. "That's the vulnerability in the market ... it is focusing on the good news, which is not getting the 50%, but getting the 15%. And then the problem is that 15% is actually a big shock and, at some point, it's going to show in the data," he said. U.S. gold futures hit a record high after a report in the Financial Times that the U.S. had imposed tariffs on imports of 1-kg gold bars, which comprise the bulk of Switzerland's bullion exports to the U.S., citing a letter from Customs and Border Protection. Spot gold edged up 0.1% to $3,400 an ounce, while gold futures rose as much as 2.3% to an all-time peak of $3,477. U.S. stock futures , were both up 0.2%, pointing to a modest rise at the opening bell later. The rally for stocks comes "against the backdrop of an emerging titanic dovish pivot at the Federal Reserve", said Tony Sycamore, market analyst at IG in Sydney. The yield on benchmark 10-year Treasury notes rose to 4.2442%, unchanged from the U.S. close on Thursday, after weak demand at an auction of 30-year bonds, the latest in a string of lacklustre sales this week. The dollar rose 0.1% against the yen to 147.24 . The euro dipped 0.2% to $1.1648, having gained 2.13% in a month, while the dollar index , which tracks the greenback against a basket of currencies of other major trading partners, was up 0.2% at 98.21. https://www.reuters.com/business/media-telecom/global-markets-wrapup-3-2025-08-08/

2025-08-08 11:42

LONDON, Aug 8 (Reuters) - The pound neared two-week highs versus the dollar on Friday as traders continued to digest Thursday's Bank of England meeting, which saw interest rates cut to 4% as well as the central bank's first ever re-vote. At 1124 GMT the pound was unchanged at $1.345 , having risen to its highest level since July 25 in early trading. Sign up here. The dollar was marginally stronger across the board on Thursday, though headed for a weekly loss, as traders mull U.S. President Donald Trump's temporary choice for a fill-in Federal Reserve governor. Meanwhile, sterling was stronger against the euro, which eased 0.2% to 86.59 pence . The BoE cut rates on Thursday, but four of its nine policymakers voted to keep borrowing costs on hold, leading to the Monetary Policy Committee holding two rate votes for the first time in its history. The meeting saw the pound rise by 0.7% against the dollar on Thursday, its biggest one-day rally in 11 weeks. It is on track for a 1.3% rise this week. "The key takeaway is that they did maintain their gradual and careful guidance when it comes to future policy easing," said Michael Brown, senior research strategist at Pepperstone. "...if you cut out all the noise about having to vote twice...that guidance is still there and...kind of implies that that means a quarterly pace of monetary easing," Brown said. Traders are placing a 93% chance of no change to the bank rate at the BoE's next meeting in September. "As Bailey said, the direction of travel for rates is lower, I still think they go again this year, it's just a question of the conviction behind that vote has waned a little bit," said Brown. In a note, Commerzbank FX strategists said BoE decision-makers appear increasingly concerned about persistent inflation. "It seems extremely unlikely that interest rates will be raised. Rather, the question is when we can expect the next rate cut," they wrote, adding that a cut at the September meeting now seems highly improbable, and one at the November meeting could be called into question if inflation remains high. "For the time being, this is good news for the pound," they said. https://www.reuters.com/markets/currencies/sterling-two-week-high-traders-digest-boe-vote-split-2025-08-08/