2025-12-02 05:47

A look at the day ahead in European and global markets from Tom Westbrook There was relief in the Japanese government bond market on Tuesday, where a 10-year auction went off quite well and helped to stabilise a sell-off that had ricocheted around the world. Sign up here. A healthy bid-to-cover ratio of nearly 3.6 was the highest since September and the "tail" or gap to where the market had been trading before the sale was negligible, with the benchmark yield just below a 17-year high at 1.86%. Global bonds had been hammered after Bank of Japan Governor Kazuo Ueda laid the groundwork for a hike in December by saying policymakers would be weighing the "pros and cons" of a move. Rising yields in Japan bring the nagging worry that the world's biggest creditor nation may temper its demand for foreign debt, so the solid auction result could also sound a warning that Japan's investors are staying home. Australian bonds stayed under pressure in the Asia session, though U.S. Treasuries steadied. Another source of nerves, in cryptocurrencies, also stabilised in the Asia session after another withering drop in the price of bitcoin. Bitcoin hovered around $87,000 and is down 7% in a year where many expected it to soar thanks to a crypto-friendly administration taking office in the U.S. The market value of cryptocurrencies tracked by analytics firm CoinGecko has fallen nearly $1.4 trillion from a peak of $4.4 trillion in October. Stocks were mostly steady save in South Korea, where a drop in U.S. tariffs lifted chipmakers. Flash inflation data for the euro zone, due on Tuesday, is expected to show pretty sticky price rises, though it's unlikely to shift the rates outlook much because markets expect the European Central Bank to stay on hold through 2026. Key developments that could influence markets on Tuesday: - Euro zone inflation - CrowdStrike (CRWD.O) , opens new tab earnings (after market) https://www.reuters.com/world/china/global-markets-view-europe-2025-12-02/

2025-12-02 05:10

MUMBAI, Dec 2 (Reuters) - The Indian rupee dropped to an all-time low on Tuesday, with sustained flow pressures and the lack of a US–India trade deal overshadowing robust domestic fundamentals, prompting the central bank to step in the prevent the currency from breaking past the 90 level. The rupee was down 0.28% at 89.7975 per dollar, inching past Monday’s all-time low of 89.7575. It briefly fell to 89.85, at risk of slipping past the 90 level before the Reserve Bank of India intervened to stem the decline. Sign up here. "We expect RBI to actively intervene to cap USD/INR," analysts at MUFG Bank said in a note. The currency is losing ground despite robust economic growth in India in the quarter through September and low inflation that would typically lend support to the currency. Those fundamentals have been set aside by investors focused on currency flow dynamics, with both portfolio and investment inflows remaining tepid while India’s trade deficit has been widening. India’s ballooning trade deficit is expected to push the current account deficit wider in the ongoing fiscal year, economists say. HSBC forecasts that India’s current account deficit will rise to 1.4% of GDP in the current fiscal year from 0.6% last year. Underlying fundamentals point to further rupee weakness, suggesting the RBI may eventually allow the currency to slip past 90 over time, according to MUFG Bank. Alongside the prospects of a wider current account deficit, foreign investors have withdrawn nearly $17 billion from Indian equities year-to-date. . Adding to the rupee's woes has been a pick-up in hedging by importers, who are increasingly front-loading their dollar purchases on expectations that the rupee will weaken further. Bankers say this has amplified pressures on the rupee. On the other hand, exporters have been slow to hedge, preferring to delay currency conversions in anticipation of better levels. The lack of a U.S–India trade deal has been a drag on the rupee’s outlook, rather than what many analysts had expected to be a meaningful catalyst for improvement in sentiment around the Indian currency. The RBI has been consistently present in the foreign-exchange market, stepping in to slow the rupee’s slide. For several weeks, the central bank had defended the 88.80 level, traders say. Once that level finally gave way, the rupee faced incremental depreciation pressure, cumulating in a move to near the 90 mark. https://www.reuters.com/world/india/rupee-hits-record-low-feeble-foreign-flows-drawing-rbi-defend-90-level-2025-12-02/

2025-12-02 04:27

Witkoff and Kushner meet Putin in the Kremlin Trump says the war is 'a mess' Putin tells Europe: Russia does not want war with Europe Putin dismisses European proposals on Ukraine Zelenskiy warns against dealing behind Ukraine's back MOSCOW, Dec 2 (Reuters) - Russian President Vladimir Putin met U.S. President Donald Trump's special envoy Steve Witkoff and son-in-law Jared Kushner in the Kremlin on Tuesday for talks on a possible way to end the deadliest European conflict since World War Two. Just before the meeting, Putin warned Europe that it would face swift defeat if it went to war with Russia, and he dismissed European counter-proposals on Ukraine as being absolutely unacceptable to Russia. Sign up here. Trump has repeatedly said he wants to end the war, but his efforts, including a summit with Putin in Alaska in August and meetings with Ukrainian President Volodymyr Zelenskiy, have not brought peace. A leaked set of 28 U.S. draft peace proposals , opens new tab emerged last week, alarming Ukrainian and European officials who said it bowed to Moscow's main demands on NATO, Russian control of a fifth of Ukraine and restrictions on Ukraine's army. European powers then came up with a counter-proposal, and at talks in Geneva, the United States and Ukraine said they had created an "updated and refined peace framework" to end the war. TALKS ONGOING A smiling Putin told Witkoff he was glad to see him and asked him about his and Kushner's walk around Moscow, which included a stroll across Red Square past the mausoleum of Soviet founder Vladimir Lenin to the towers of the Kremlin. "It is a magnificent city," Witkoff told Putin, along with foreign policy aide Yuri Ushakov and Putin investment envoy Kirill Dmitriev. Both sides had interpreters. The Kremlin talks were ongoing past Moscow midnight after more than four hours. "Our people are over in Russia right now to see if we can get it settled. Not an easy situation, let me tell you. What a mess," Trump said at a cabinet meeting in Washington, adding that there were casualties of 25,000 to 30,000 per month in the war. U.S. Secretary of State Marco Rubio, who has led efforts to recraft the original peace plan to account for Ukrainian and European concerns, said Witkoff was trying to end the war. PUTIN ACCUSES EUROPEANS OF TRYING TO BLOCK PEACE Just before the Kremlin meeting, Putin accused Europe of seeking to undermine Trump's peace efforts by making proposals that it knew were unacceptable to Russia. "They are on the side of war," Putin said of the European powers. "We can clearly see that all these changes are aimed at only one thing: to block the entire peace process altogether, to make such demands which are absolutely unacceptable to Russia." Putin said Russia did not want war with Europe, but that if Europe started one, it would end so swiftly that there would be no one left for Russia to negotiate with. Putin threatened to sever Ukraine's access to the sea in response to drone attacks on tankers of Russia's "shadow fleet" in the Black Sea. Ukraine's Foreign Minister, Andrii Sybiha, said Putin's remarks showed he was not ready to end the war. Russian forces control more than 19% of Ukraine, or 115,600 square km (45,000 square miles), up only one percentage point from two years ago, though they have advanced in 2025 at the fastest pace since 2022, according to pro-Ukrainian maps. But nearly four years into the Ukraine war, Russia has failed to conquer Ukraine, a much smaller neighbour that has been supported by European powers and the United States. Zelenskiy, speaking in Dublin, said everything would depend on the talks in Moscow but that he was afraid the United States could lose interest in the peace process. "There will be no easy solutions ... It is important that everything is fair and open, so that there are no games behind Ukraine's back," he said. PUTIN SEES POSSIBLE 'BASIS FOR FUTURE AGREEMENTS' Putin has said the discussions so far are not about a draft agreement but about a set of proposals that he said last week "could be the basis for future agreements." Putin has said he is ready to talk peace, but that if Ukraine refuses an agreement, then Russia's forces will advance further and take more Ukrainian territory. Russia invaded Ukraine in February 2022, triggering the biggest confrontation between Moscow and the West since the depths of the Cold War. Conflict first erupted in eastern Ukraine in 2014 after a pro-Russian president was toppled in Ukraine's Maidan Revolution. Russia annexed Crimea and Moscow-backed separatists battled Kyiv's armed forces in eastern Ukraine. In video footage released on the eve of Witkoff's visit, Putin hailed what his commanders said was Russia's capture of the city of Pokrovsk in eastern Ukraine as an important victory after a prolonged campaign. Ukraine's military told Reuters its forces were still holding the northern part of the city and had attacked Russian forces in southern Pokrovsk. U.S. officials have put the casualty toll in the war at more than 1.2 million killed or wounded. Neither Ukraine nor Russia discloses its losses. The conflict has also caused widespread destruction in Ukrainian towns and cities and forced many people from their homes. Since the U.S. draft proposals emerged last month, European powers have been trying to bolster Ukraine against what they see as a punitive peace deal that could open Russia to U.S. investment in oil, gas and rare earths and return Moscow to the G8. Key Russian demands include a pledge that Ukraine would never join NATO, caps on the Ukrainian army, Russian control of the whole of Donbas, recognition of Russian control of the regions of Crimea, Donbas, Zaporizhzhia and Kherson, and protection for Russian speakers in Ukraine. Ukraine says these would amount to capitulation and leave it vulnerable to eventual Russian conquest, though Washington has also floated a 10-year security guarantee for Kyiv. Ukraine and European powers view the war as an imperial-style land grab by Moscow and have warned that if Russia wins, then it will one day attack NATO members. Zelenskiy says Russia must not be rewarded for a war it started. https://www.reuters.com/world/china/witkoff-kushner-meet-putin-moscow-discuss-an-end-ukraine-war-2025-12-02/

2025-12-02 02:51

MUMBAI, Dec 2 (Reuters) - The Indian rupee fell to a record low on Tuesday, extending losses sparked by the absence of a trade deal between India and the United States, which has dented trade and portfolio inflows. The currency touched 89.9475 against the U.S. dollar before ending at 89.87, down nearly 0.4% on the day and logging its fifth consecutive daily fall. Sign up here. Shortly after the local spot market closed, the rupee weakened to 90 per U.S. dollar on the inter-bank order matching system before trimming losses. The South Asian currency has stayed under pressure despite strong economic growth in India in the quarter through September, underscoring the strains on the country’s external sector. Analysts expect the rupee to face more weakness but say the Reserve Bank of India’s market interventions, like Tuesday’s, should help keep volatility in check. "Since the current stance of (INR) weakness continues, we have been advising exporters to just sell (USD) on cash/spot basis and keep minimum hedges," said Anil Bhansali, head of treasury at Finrex Treasury Advisors. "Importers have been advised to buy all dips (on USD/INR)," he added. The splintered behaviour has also manifested in market activity as importers rush to lap up dollars while exporters hesitate, adding pressure on the rupee. In November, importers booked forward hedges worth nearly $31 billion, up 11% compared to the average between 2020-24 while exporter activity declined about 5% to about $21 billion compared to the same benchmark. Dollar-rupee forward premiums also surged on Tuesday, reflecting the rising cost of hedging against rupee weakness as the currency nears the 90 per U.S. dollar mark. The 1-month forward premium rose to over 19 paisa, the highest since May while the 1-year implied yield climbed 7 basis points to 2.33%. Elsewhere, global FX markets were largely subdued with Asian currencies and the dollar index hovering sideways as investors held on to wagers that the U.S. Federal Reserve will cut rates this month. https://www.reuters.com/world/india/rupee-may-extend-losses-despite-rbis-move-hold-line-90-2025-12-02/

2025-12-02 01:35

TOKYO, Dec 2 (Reuters) - Japanese Finance Minister Satsuki Katayama said on Tuesday she sees no gap between the government and the Bank of Japan on their assessment of the economy, after the central bank chief voiced confidence in the outlook and hinted at a rate hike. "We believe there is no discrepancy between the BOJ's and government's view that the Japanese economy is recovering modestly, so we don't see this as a problem," Katayama said at a regular press conference, when asked about BOJ Governor Kazuo Ueda's comments on Monday. Sign up here. Ueda said on Monday the BOJ would consider the pros and cons of raising interest rates at its next policy meeting in December, offering the strongest hint so far that a hike may materialise this month. Katayama said she expects the BOJ to continue working closely with the government and conduct monetary policy to achieve a 2% inflation target, accompanied by wage increases. "At this point, given those expectations, I have nothing further to add," she said. "Looking ahead, we need to monitor whether price increases will persist, as well as developments in U.S. trade policy. In addition, given the various fluctuations in global financial and capital markets, we must closely watch corporate trends." https://www.reuters.com/world/asia-pacific/japan-finance-minister-says-no-divergence-with-boj-economic-assessment-2025-12-02/

2025-12-02 00:44

SYDNEY, Dec 2 (Reuters) - Australia's government spending jumped in the third quarter to add to a long-awaited rebound in business investment, setting the stage for a solid economic performance. Data on Tuesday from the Australian Bureau of Statistics showed government spending added 0.4 percentage points to gross domestic product (GDP) in the September quarter, after barely contributing in the previous quarter. Sign up here. That, coupled with solid business investment, suggested risks to economic growth are to the upside last quarter. The ABS also said on Tuesday net exports would subtract 0.1 percentage point from GDP, in line with expectations. A Reuters poll showed the economy likely expanded 0.7% in the quarter, the fastest pace since the fourth quarter of 2022. That leaves the annual rate at 2.2%, above the Reserve Bank of Australia's estimate of trend growth at 2%. The GDP data is due on Wednesday. The stronger economic performance is one reason that inflation re-accelerated in the third quarter, which dashed all hopes for any more policy easing from the RBA after three rate cuts this year. Adam Boyton, head of Australian Economics at ANZ, dropped his call for one more rate cut from the RBA next year given the recent inflation pressures and now sees the central bank on an extended hold. "Signs of ongoing inflation pressures in the monthly CPI, GDP growth running around the RBA’s estimate of potential and the RBA’s view that the labour market is tight all suggest the RBA’s Board is likely to be cautious about further easing," said Boyton. Swaps imply the RBA will remain on hold until the second half of next year, with a 70% probability of a rate hike at the end of 2026. Separate released on Tuesday showed the total value of housing stock in Australia jumped to a record high of A$12 trillion ($7.85 trillion) last quarter, boosting household wealth and underpinning consumer spending. Home prices have leapfrogged almost 8% this year to new record highs as policymakers worry financial conditions might not be restrictive enough to keep inflation in check. ($1 = 1.5295 Australian dollars) https://www.reuters.com/world/asia-pacific/australia-q3-current-account-deficit-widens-drags-gdp-2025-12-02/