2025-07-21 10:04
LONDON, July 21 (Reuters) - The British pound edged higher against the dollar and euro on Monday, but remained close to the multi-week lows it reached against both currencies last week as investor attention remains on Bank of England policy and the deteriorating fiscal picture. The pound was up 0.3% against the dollar at $1.3452, just above last week's eight-week low of $1.33655. Sign up here. Britain's economic data was mixed on balance last week - the labour market showed signs of a further cooling, while consumer price inflation unexpectedly rose to its highest in more than a year. A quarter-point rate cut from the Bank of England at its meeting on August 7 remained almost fully priced after the data, with about 50 basis points of easing priced in by the end of the year. The pound was also up about 0.2% at 86.575 pence per euro , having touched a 14-week low last week. "We think a rising fiscal risk premium is the main driver of the recent outperformance of EUR/GBP," said Goldman Sachs FX strategists in a note. Britain remains in a precarious fiscal position, exacerbated earlier this month after the government suffered a major rebellion against welfare reforms which fed doubts about its ability to cut spending. Many economists and analysts believe the government will have to raise billions of pounds in taxes later this year to meet its fiscal rules as growth remains elusive. "The pound's struggle to keep pace with the euro this year reflects a shift in market optimism in favour of Germany and the euro zone," said Rabobank senior FX strategist Jane Foley. "In view of the UK's fiscal concerns, we continue to favour buying EUR/GBP on dips," Foley added. Deloitte on Monday said its consumer confidence index dropped to its lowest since the first quarter of 2024, reflecting increased worries about job security and income growth. Retail sales data due on Friday could give a clearer picture on the state of the consumer, while a preliminary survey of purchasing managers on business activity is set for release on Thursday. https://www.reuters.com/world/uk/sterling-inches-up-against-euro-dollar-remains-near-multi-week-lows-2025-07-21/
2025-07-21 07:56
Investors unfazed by prospect of more fiscal largesse Japan's net creditor nation status is a plus for its debt Growth will also reduce focus on gross debt SINGAPORE, July 21 (Reuters) - A weekend election in Japan has made real the prospect of bigger government spending and deficits in the world's most indebted developed nation, although for now foreign investors and a growing economy could keep its bond yields from spiking sharply. Japan's upper house election on Sunday dealt a big blow to the ruling coalition and Prime Minister Shigeru Ishiba ahead of a looming tariff deadline with the United States. Sign up here. Investors are bracing for scenarios ranging from Ishiba continuing to run a minority government, a deal with a smaller opposition party or even his ouster, but one thing they are certain of is that Japan is heading for tax cuts and a wider fiscal deficit. Under normal circumstances, that should lead to a selloff in bonds and higher yields as investors demand to be compensated for risk to lend to a country with debt exceeding $8 trillion, or nearly 2-1/2 times the size of its economy. But while Japanese long-term bond yields have been rising, they are nowhere near levels reflecting such government profligacy. Thirty-year bonds fetch just 3%. A weak yen and a legacy of low interest rates, Japan's return to inflation, huge domestic savings and the Bank of Japan's policies have worked to anchor Japanese government bond (JGB) yields. Analysts expect some of that support for bonds will continue. "With some of the proposals at the margin, with the changed political dynamics, potentially you could see more clamour for fiscal support including consumption taxes," said Michael Wan, a senior currency analyst at MUFG. But Wan and other analysts point to Japan's economic growth and emergence from deflation in the past three years as reasons the debt burden is manageable and likely to decline in the coming years. Japan’s fiscal situation isn’t as dire as many think," Marcel Thieliant, Capital Economics’ head of Asia Pacific, said in a note. While Japan's gross debt to GDP is the highest of any major economy, net debt is much lower, he said. "Relative to other countries, Japan is a net creditor. So you do have, in theory, a lot of funds on the sidelines, from domestic institutions who have invested abroad, which could cap any sharp and dislocation in yield spikes over the medium term," MUFG's Wan said. FOREIGN BID Its role as one of the world's biggest creditors sets Japan apart from other G7 nations with debt and rising bond yields, such as Britain and the United States. Together with pension giant GPIF and life insurance firms, the country has about $3.6 trillion dollars invested overseas, of which half is in U.S. assets. While Japan can tap into its huge pool of domestic savings if needed, for now its low yields and weakening currency are luring foreign investors, who can switch dollars or euros for yen and earn a spread on the currency swap. Swapping dollars to yen to invest in one-year JGBs, for instance, yields about 30 basis points more than the 3.9% yield on one-year U.S. Treasuries. "Global managers or index guys actually look at the developed market as a relative value play, like whichever bounces up the most," said Rong Ren Goh, a portfolio manager in the fixed income team at Eastspring Investments. "Of course it makes more sense for me to rotate out and do my asset swapping to get the best swap-adjusted return." The steepness of the Japanese government curve has helped entice bond investors. Foreigners have poured more than 15 trillion yen ($101.17 billion) into Japanese bonds so far this year. Thirty-year yields are up 80 basis points (bps) at all-time highs this year and the yield curve is at its steepest in years, with the spread between 10-year and 30-year bonds above 150 bps. Thieliant still expects the 10-year JGB yield will rise to 2% by the end of 2026 from current levels around 1.5%, but that he said is based on a hawkish monetary policy view. ($1 = 148.2600 yen) https://www.reuters.com/business/growth-foreign-fervour-yield-give-japan-fiscal-wiggle-room-2025-07-21/
2025-07-21 07:22
Albert Manifold to succeed Helge Lund as BP chairman in October Lund re-elected with reduced support in April Appointment comes as BP navigates major strategy shift July 21 (Reuters) - BP (BP.L) , opens new tab named Albert Manifold, the former boss of building materials producer CRH (CRH.N) , opens new tab, as its new chairman on Monday, as it looks to address investor concerns about its strategy and weak share performance. Manifold, who has not previously held a senior position in the energy sector, will succeed Helge Lund from October as BP navigates a major strategy revamp under persistent takeover and break-up speculation. During his tenure at CRH, its shares soared nearly fivefold. Sign up here. "(Manifold's) impressive track record of shareholder value creation at CRH demonstrates he is the ideal candidate to oversee BP's next chapter," said Amanda Blanc, BP's senior independent director, who led the succession process on behalf of the board. Under his 11-year stint as CEO of CRH, the Irish company reshaped its portfolio by buying and selling assets and moved its primary listing to New York in 2023. BP's shares rose 0.5% to 402.05 pence in early London trading. Norwegian national Lund, 62, who has been BP's chair since 2019, fell out of favour with investors after he backed ex-CEO Bernard Looney's ill-fated foray into renewables. He was re-elected in April with sharply reduced support after coming under pressure from activist investor Elliott Management and criticism from climate-focused shareholders. BP said in April that Lund intends to exit the firm, "likely" in 2026. Sam Laidlaw, the former chief executive of British Gas owner Centrica (CNA.L) , opens new tab and Ken MacKenzie, retired chair of mining group BHP (BHP.AX) , opens new tab, were also reportedly approached to succeed Lund. https://www.reuters.com/business/bp-appoints-albert-manifold-chairman-amid-strategy-revamp-2025-07-21/
2025-07-21 07:19
ANKARA, July 21 (Reuters) - The under-utilisation of an oil pipeline between Iraq and Turkey is unfortunate and Ankara wants a "new and vibrant phase" in the matter to benefit both parties and the region, a senior Turkish official told Reuters on Monday. In a presidential decision published in the Official Gazette earlier on Monday, Ankara said the Turkey-Iraq Crude Oil Pipeline Agreement - agreed by Turkey's government in 1973 and put into effect in 1975 - and all subsequent protocols or memorandums will be halted from July 27, 2026. Sign up here. The official said the pipeline had the potential to become a "highly active and strategic pipeline for the region", and added Turkey had invested heavily in its maintenance, while repeatedly noting its importance for regional projects like the Development Road - a planned trade route involving Turkey and Iraq. "A new and vibrant phase for the Iraq-Turkey Pipeline will benefit both countries and the region as a whole," the person said. https://www.reuters.com/business/energy/turkey-wants-new-vibrant-phase-iraq-turkey-oil-pipeline-official-says-2025-07-21/
2025-07-21 07:07
EU sanctions target Russian crude supply, impact uncertain Iran nuclear talks for Friday may affect oil market dynamics U.S. tariffs on EU imports could influence oil demand SINGAPORE/BEIJING, July 21 (Reuters) - Oil prices were little changed on Monday as traders assess the impact of new European sanctions on Russian oil supplies while they also worry about tariffs possibly weakening fuel demand as Middle East producers are raising output. Brent crude futures dropped 10 cents to $69.18 a barrel by 0655 GMT after settling 0.35% lower on Friday. U.S. West Texas Intermediate crude was at $67.33 a barrel, down 1 cent, following a 0.30% decline in the previous session. Sign up here. The European Union approved on Friday the 18th package of sanctions against Russia over the conflict in Ukraine, which also targeted India's Nayara Energy, an exporter of oil products refined from Russian crude. Kremlin spokesperson Dmitry Peskov said on Friday that Russia had built up a certain immunity to Western sanctions. The EU sanctions followed U.S. President Donald Trump's threats last week to impose sanctions on buyers of Russian exports unless Russia agrees a peace deal in 50 days. ING analysts said the lack of reaction showed the oil market is not convinced by the effectiveness of these sanctions. "However, the part of the package likely to have the biggest market impact is the EU imposing an import ban on refined oil products processed from Russian oil in third countries," the analysts led by Warren Patterson said. "But clearly, it will be challenging to monitor crude oil inputs into refineries in these countries and, as a result, enforce the ban." Iran, another sanctioned oil producer, is due to hold nuclear talks in Istanbul with Britain, France and Germany on Friday, an Iranian Foreign Ministry spokesperson said on Monday. That follows warnings by the three European countries that a failure to resume negotiations would lead to international sanctions being reimposed on Iran. In the U.S., the number of operating oil rigs fell by two to 422 last week, the lowest since September 2021, Baker Hughes said on Friday. U.S. tariffs on European Union imports are set to kick in on August 1, although U.S. Commerce Secretary Howard Lutnick said on Sunday he was confident the United States could secure a trade deal with the bloc. "U.S. tariff concerns will continue to weigh in the lead up to August 1 deadline, while some support may come from oil inventory data if it shows tight supply," IG market analyst Tony Sycamore said. "It feels very much like a $64-$70 range in play for the week ahead." Brent crude futures have traded between a low of $66.34 a barrel and a high of $71.53 after a ceasefire deal on June 24 halted the 12-day Israel-Iran war. https://www.reuters.com/business/energy/oil-prices-little-changed-investors-eye-impact-new-sanctions-russia-2025-07-21/
2025-07-21 07:03
ECB policy meeting due on July 24 Japan's government loses upper house control Palladium up more than 1% July 21 (Reuters) - Gold prices climbed on Monday, supported by a weaker dollar as investors monitored developments in U.S. trade talks and awaited potential market-moving catalysts, including the Federal Reserve's policy meeting scheduled for next week. Spot gold was up 0.6% at $3,369.02 per ounce, as of 0654 GMT. U.S. gold futures rose 0.5% to $3,376.40. Sign up here. "Dollar has made a subdued start to the week, which has left the door open for gold to post gains early doors with tariff deadlines looming large," KCM Trade Chief Market Analyst Tim Waterer said. "The closer we move towards the key August 1 deadline without any new trade deals emerging, the more likely gold is to start fancying another run to towards the $3,400 level and perhaps beyond." The dollar index (.DXY) , opens new tab weakened 0.2% against its rivals, making gold less expensive for other currency holders. Investors are eyeing developments in trade negotiations ahead of U.S. President Donald Trump's August 1 deadline, as U.S. Commerce Secretary Howard Lutnick remains optimistic about reaching a deal with the European Union. Trump might visit China before going to the Asia-Pacific Economic Cooperation summit between October 30 and November 1, or he could meet Chinese leader Xi Jinping on the sidelines of the APEC event in South Korea, reports said. At its meeting later this week, the European Central Bank is expected to hold interest rates steady at 2.0% following a string of cuts. Last week, Federal Reserve Governor Christopher Waller said he still believes that the U.S. central bank should cut rates at its policy meeting next week. Gold, often considered a safe-haven asset during economic uncertainties, tends to do well in a low interest rate environment. In Japan, the ruling coalition lost control of the upper house in an election on Sunday, further weakening Prime Minister Shigeru Ishiba's grip on power as the U.S. tariff deadline looms. Elsewhere, spot silver gained 0.4% to $38.33 per ounce, platinum added 1.1% to $1,437.53 and palladium climbed 1.3% to $1,256.98. https://www.reuters.com/world/china/gold-gains-softer-dollar-investors-await-us-trade-updates-2025-07-21/
