2025-07-16 11:37

MOSCOW, July 16 (Reuters) - Prolonged high interest rates in Russia may drive mergers and acquisitions of distressed assets, a study by leading law firms showed, though Western-led sanctions and a liquidity shortage among buyers are likely to restrain growth in deals for now. Russia's M&A market grew by just 2% in 2024 to $39.2 billion, the study showed, hampered by interest rates climbing to their highest in more than 20 years at 21% and Moscow tightening exit terms for Western companies selling their assets in the wake of the conflict in Ukraine. Sign up here. Increased investor uncertainty due to trade wars sparked by U.S. President Donald Trump's tariffs has added to M&A market pressure so far in 2025, according to the study, which collated the views of around 20 Russian law and M&A advisory firms. The study noted that 84% of 50 respondents expected a rise this year in the number of deals involving businesses being forced to sell to larger players capable of servicing their high debt burdens. The problems are most acutely felt in capital-intensive industries like real estate, infrastructure and heavy industry, the study said. That could include Western companies still looking to dispose of Russian assets. Russia's benchmark interest rate remains high at 20% after a 1% cut last month and government officials and business leaders are exerting pressure on the central bank to reduce borrowing costs more quickly. Some companies are trying to sell certain projects to reduce their credit load, said Anatoly Klinkov, director of investor relations at A101. "But here, the market is completely on the buyer's side," Klinkov said. "Money is very expensive." With rates so high, buyers face less competition and have increased leverage in negotiations. Some industries, such as the coal sector, have noted rising bankruptcies and entities being forced to close. Major exporters have cut the planned volume of exports they send by rail, a Russian Railways document showed in May, as Russia's economy slows. "In tight monetary policy conditions we will likely observe growth in deals for problem assets and restructuring projects," said Pavel Terentyev of Advance Capital. https://www.reuters.com/markets/europe/high-interest-rates-russia-could-prompt-distressed-asset-ma-surge-study-shows-2025-07-16/

2025-07-16 11:18

MUMBAI, July 16 (Reuters) - India's gold imports in June fell 40% from a year ago to their lowest level in more than two years, as a price rally to a record high sapped demand, a government and two industry officials told Reuters. Imports to India, the world's second-largest gold consumer, fell to 21 tons, the lowest since April 2023, said a government official, who declined to be named as he was not authorised to talk to the media. Sign up here. In value terms, gold imports fell to $1.84 billion in June from $2.48 billion a year ago, the official said. In the past decade, on average, India imported 52.4 tons of gold in June. In the first half of 2025, India's gold imports fell 30% from a year ago to 204.1 tons, the lowest since the first half of 2020, when the COVID-19 outbreak led to lockdown, the trade ministry data showed. The rapid surge in prices has been discouraging retail buyers from making jewellery purchases, said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji. Domestic prices hit an all-time high of 101,078 rupees per 10 grams in June. Gold prices have risen 27% so far this year after rising 21% in 2024. Gold imports would remain subdued even in July, as demand is still tepid because of higher prices, Jain said. Silver imports in June nearly doubled from a year ago to 197 tons, but were significantly lower than the 544 tons imported in May, the government official said. In recent months, Indian investors, traditionally obsessed with stockpiling gold, are increasingly turning to silver , as its returns this year outpaced those of gold. https://www.reuters.com/world/india/indias-june-gold-imports-fall-two-year-low-record-price-dents-demand-2025-07-16/

2025-07-16 11:18

July 16 (Reuters) - France's EDF is weighing options to bring in capital to both its North American and Brazilian renewables businesses, said a company spokesperson on Wednesday, which could include stake sales of as much as 50%. The comments followed a report by Bloomberg News citing people familiar with the matter as saying the state-owned utility was mulling a stake sale in its North American business that could fetch 2 billion euros ($2.32 billion). Sign up here. "We are studying the possibility to open the capital of some of our subsidiaries to partners," said EDF Power Solutions spokesman Mathieu Baratier. EDF's new CEO Bernard Fontana is currently seeking ways to bring in money to finance construction of six new nuclear reactors, and has said he was weighing possible asset sales. Fontana previously told lawmakers that he is looking to prioritise domestic nuclear projects, as the country is looking to shore up its electricity production long-term which mainly comes from its ageing fleet of 57 nuclear reactors. ($1 = 0.8610 euros) https://www.reuters.com/business/energy/edf-mulls-sale-232-billion-stake-north-american-renewables-arm-bloomberg-news-2025-07-16/

2025-07-16 11:12

LONDON, July 16 (Reuters) - U.S. long-bond rates have climbed back above 5% with the June consumer price report showing signs of tariff-related inflation, agitating global bond markets anew in an edgy week for government debt. I'll get into this and the rest of today's market news below. Make sure to check out my column today, where I discuss how the dollar’s sharp decline may simply have replaced one bubble with another. Sign up here. Today's Market Minute * China's economy posted robust 5.2% growth in the second quarter, showing its export-heavy model has so far withstood U.S. tariffs. But beneath the headline resilience, cracks are widening. * Britain's annual rate of consumer price inflation unexpectedly rose to its highest in over a year at 3.6% in June, official figures showed on Wednesday, potentially making it a tougher call for the Bank of England to cut interest rates next month. * Rising prices in the U.S. across an array of goods from coffee to audio equipment to home furnishings pulled inflation higher in June in what economists see as evidence of the Trump administration's increasing import taxes passing through to consumers. * U.S. President Donald Trump's threat to choke off Russia’s oil revenue via secondary sanctions would deal a hammer blow to Moscow's finances, but as ROI energy columnist Ron Bousso claims, markets are betting that the risk of higher energy prices will keep Washington from following through. * The astonishing rebound in stocks since early April largely reflects investors' bet that U.S. President Donald Trump won't follow through on his tariff threats. But ROI columnist Jamie McGeever says that the market's very resilience may encourage the president to push forward, which could be bad news for equities in both the U.S. and Europe. Tariff inflation irks bonds As the headlines hit on Tuesday, the CPI report looked reasonably contained. Core inflation increased at a 2.9% annual rate in June, slightly below the 3% forecast even if a little faster than in May. Top-line inflation accelerated to a higher-than-expected 2.7% from 2.4% the previous month. But rising prices across an array of goods, from coffee to audio equipment to home furnishings, were seen as worrying evidence that import tax hikes were indeed passing through to households - reinforcing Federal Reserve caution in cutting rates, not least with much wider tariff moves due next month. The producer price report on Wednesday will hold that take up to the light again. Fed futures shifted to reduce the chances of another Fed rate cut as soon as September to little more than 50%, and full-year easing bets were pared back to as low as 42 basis points. "My base case is that we'll need to keep interest rates modestly restrictive for some time to complete the work of returning inflation sustainably to the 2% target," Dallas Fed boss Lorie Logan said on Tuesday, with debate largely hinged on whether tariff hikes would amount to one-off inflation jolts or be a persistent aggravator. The Fed stance comes amid repeated attacks on Chair Jerome Powell from President Donald Trump, who insisted again on Tuesday that rates should be cut by at least 300 bps immediately. Political pressure on the Fed is starting to unnerve many on Wall Street. Speaking after the bank's results on Tuesday, JPMorgan boss Jamie Dimon said Fed independence was "absolutely critical". "Playing around with the Fed can often have adverse consequences, absolutely opposite of what you might be hoping for," Dimon said. Even though global investors see Treasury Secretary Scott Bessent as favorite to get the nod as new Fed Chair once Powell's term ends next year, Trump doused that by saying: "I like the job he's doing." U.S. Treasuries reacted badly to the CPI, meanwhile, with 30-year yields recapturing the 5% handle they last topped back in May, while 10-year yields hit their highest in over a month at just shy of 4.5%. Ten-year inflation expectations of 2.4% crept to their highest since March. The darkening Fed horizon knocked the S&P 500 back into the red - even as Nvidia's (NVDA.O) , opens new tab resumption of AI chip sales to China lifted both its stock and the tech-heavy Nasdaq (.IXIC) , opens new tab to new records. But, in a resumption of its link with yields that seemed periodically absent during a torrid first half of the year for the greenback, the U.S. dollar (.DXY) , opens new tab rallied with Treasury rates, most obviously to its highest level against Japan's yen since April 2's tariff shock. While Tuesday's focus was on the tariff-related inflation hit to Treasuries, it's been a rough week for government bonds everywhere - especially in Japan as long-term yields there hit new highs this week ahead of the July 20 upper house election and related fiscal policy worries. With Prime Minister Shigeru Ishiba's shaky minority government beholden to an array of opposition parties, the rise in support for a small new 'Japanese First' party, Sanseito, could become a factor in the election outcome. JGB yields pulled back on Wednesday, however, and relieved some of the pressure. French and German government debt yields also retreated slightly from three-month highs after a series of French budget cuts were announced the previous day. But Britain was faced with its own bout of renewed inflation angst as the June annual CPI rate raced well above forecasts to 3.6% - casting some questions over the timing of further Bank of England monetary easing. Sterling was steady, but five-year gilt yields hit a one-month high and 30-year gilt yields hit their highest since May. Back on Wall Street, the second-quarter earnings season started on a somber note on Tuesday. JPMorgan (JPM.N) , opens new tab slipped despite raising its 2025 net interest income outlook, while Wells Fargo (WFC.N) , opens new tab fell even as its profit rose on reduced loan-loss reserves. BlackRock (BLK.N) , opens new tab notched a new milestone for assets under management, yet its shares slid too. Bucking the trend, Citigroup (C.N) , opens new tab climbed after its traders delivered a windfall that boosted second-quarter profit. Morgan Stanley and Goldman Sachs are among those reporting on Wednesday. In Europe, ASML ASML.AS fell almost 7% earlier on Wednesday after the world's biggest supplier of computer chip-making equipment warned that it may not achieve growth in 2026, even after its second-quarter bookings beat market expectations. Chart of the day The rising price of U.S. household furnishings, along with other categories such as recreational goods, apparel and outdoor equipment in the consumer price basket, has been spotlighted in the June inflation report as a worrying sign of tariff-related price jumps that could elevate the overall inflation rate through the rest of the year. That's especially so if another wave of tariff rises are due next month. All year, Fed officials have cited tariff-related uncertainty on the inflation front as a key reason for caution in further lowering interest rates. Today's events to watch * U.S. June producer price report (8:30 AM EDT); June industrial production (9:15 AM EDT); Federal Reserve 'Beige Book' release of economic conditions * U.S. corporate earnings: Bank of America, Morgan Stanley, Goldman Sachs, PNC, M&T, United Airlines, Johnson & Johnson, Progressive, Kinder Morgan, Prologis * Fed Board Governor Michael Barr, New York Fed President John Williams, Cleveland Fed President Beth Hammack and Richmond Fed chief Thomas Barkin all speak * German Finance Minister Lars Klingbeil and French counterpart Eric Lombard hold joint press conference in Berlin Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website , opens new tab, and you can follow us on LinkedIn , opens new tab and X. , opens new tab Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/business/finance/global-markets-view-usa-2025-07-16/

2025-07-16 11:07

Dollar Index down nearly 10% this year Weaker U.S. currency helps companies convert foreign earnings more favorably Every 10% drop in the dollar leads to a 2% earnings upside Analysts note broader economic and geopolitical factors could temper FX impact on stock prices NEW YORK, July 16 (Reuters) - Large U.S. multinationals should soon start showing the positive effects of the dollar's tumble in recent months, reversing the situation in the past few years when the greenback's strength hurt companies with significant foreign revenue. The Dollar Index (.DXY) , opens new tab, which measures the buck's strength against six major currencies, is down about 10% for the year, due to rapidly changing U.S. trade policy and worries about U.S. growth and government debt. Sign up here. About half of that drop happened since April 2, when U.S. President Donald Trump announced outsized import tariffs against trading partners that started a panic about investing in U.S. assets. For the April-June period, the index, which is heavily weighted toward the euro, averaged 99.74, down 6.5% from the first quarter average, the largest such decline over consecutive quarters in more than 30 years. The effects of the dollar's slide are expected to start showing up in second-quarter earnings season just getting underway. While that dollar's fall reflects investor worries about the U.S. economy's strength, it can help some companies. A weaker U.S. currency makes it cheaper for multinational companies to convert foreign profits into dollars, while also boosting the competitiveness of exporters' products. "It's an absolutely huge move," Greg Boutle, head of U.S. equity & derivative strategy at BNP Paribas, said. "It is going to flatter earnings a little bit this quarter and also feed its way to guidance." The dollar's impact on overall earnings is usually small, but can grow more meaningful when the currency experiences a large swing. Every 10% drop in the dollar translates into a profit surprise of about 2%, at the S&P 500 level, according to estimates from research and strategy firm Macro Hive. That would be welcomed by investors increasingly worried about the earnings impact of evolving trade and tariff policies. The second-quarter profit reporting season started this week. "Whatever the beat, miss or forward guidance was going to be without the FX effect will obviously be a little bit better with it," Boutle said. The dollar's weakness this year, after a 7% rise in 2024, which hurt corporate results last year, took many market watchers by surprise. "Certainly a lot of companies came into the year assuming a headwind .... That's flipped. That's a positive for earnings," Patrick Kaser, portfolio manager at Brandywine Global, said. While earnings growth is expected to decelerate from the first quarter, the weaker dollar could help to offset possible tariff effects. Analysts are forecasting second-quarter earnings growth of 5.8% year-over-year compared with 13.7% in the first quarter, LSEG data show. Even in the first quarter, the dollar was a drag on year-over-year S&P 500 earnings growth of about 1%, but now could lift earnings growth by about 0.5% in the second quarter, according to David Lefkowitz, head of U.S. equities at UBS Global Wealth Management. "If the dollar stays at these levels, the boost on a year-over-year basis will get progressively larger," Lefkowitz said, estimating the dollar could generate a lift to year-over-year S&P 500 earnings growth by about 1% and 1.5% for the third and fourth quarter respectively. FOREIGN EXPOSURE S&P 500 companies generate about 41% of their revenue from outside the United States, according to FactSet. Companies with major exposure to the Asia-Pacific region are particularly in focus with the euro having appreciated 12% against the buck while the yen is up about 6%. However, not all index constituents are equally affected by the dollar's swings. The information technology sector tops the list with the most international revenue exposure, at about 55%, followed by the materials and communication services sectors, at 52% and 49%, respectively, according to FactSet. For instance, on Tuesday, BMO Capital Markets analyst Brian Pitz lifted his second-quarter revenue growth estimate for Netflix (NFLX.O) , opens new tab to 17.2% from 16.4%, largely boosted by a weaker dollar. Netflix will report results on Thursday. Investors are divided on the impact of a weaker dollar on stock prices. Some, like UBS's Lefkowitz, believe any benefits are already priced in by Wall Street and will not significantly move markets during earnings reports, but others still anticipate a positive boost. "A lot of buy-side investors are obviously very acutely aware of this already, but nevertheless, we do think it's not in sell-side consensus numbers," BNP's Boutle said. "So we just think it creates a mechanical tailwind for earnings." Still, analysts cautioned against counting on a big lift to stock prices from earnings beats driven by the weaker dollar. Many companies, including chipmakers, which stand to benefit from a weaker dollar, are also the ones most vulnerable to a hit from tariffs, Macro Hive research analyst Viresh Kanabar said. Investors may also be preoccupied with the potential impacts companies could see from the recent passage of the sweeping tax-cut and spending bill. "In an environment where nothing else was going on, the move in the dollar would matter," Brandywine's Kaser said. "With all these other things going on, I don't think the currency effect is going to be as big as in an environment that maybe is quieter from a macroeconomic and geopolitical side of things." https://www.reuters.com/business/media-telecom/battered-dollar-boon-us-multinational-companies-2025-07-16/

2025-07-16 11:02

FTSE 100 up 0.2%; FTSE 250 flat UK inflation unexpectedly rises in June AstraZeneca down after drug fails late-stage study goal Antofagasta gains on higher copper output July 16 (Reuters) - London's main stock indexes were subdued on Wednesday, as a stronger-than-expected rise in domestic inflation slightly cooled bets of interest rate cuts from the Bank of England. The blue-chip FTSE 100 (.FTSE) , opens new tab was up 0.2% as of 1035 GMT, while the midcap FTSE 250 index (.FTMC) , opens new tab was flat. Sign up here. Britain's annual rate of consumer price inflation unexpectedly rose to its highest in over a year at 3.6% in June, as higher costs of motor fuel, transport and food pushed up prices. "There is a real threat of stagflation as the rate of inflation moves higher and the economy is stuck in the mud. It puts the Bank of England in a tricky situation with regards to monetary policy decisions," said Dan Coatsworth, investment analyst at AJ Bell. The central bank is largely expected to cut interest rates by a quarter-point in August after recent economic data fuelled concerns of weaker domestic growth and labour market, but the chances of such a move dimmed after Wednesday's inflation data. The BoE will closely watch the employment and wages figures due on Thursday. Meanwhile, UK finance minister Rachel Reeves on Tuesday announced measures to boost the finance sector, including reforming requirements for banks to separate retail and investment banking activities, easing regulations and a plan to get more savers investing in stocks. In corporate updates, AstraZeneca (AZN.L) , opens new tab fell 1.1% after the drugmaker's experimental therapy, anselamimab, failed to meet the main goal of a late-stage study for the treatment of AL amyloidosis, a rare condition that causes a buildup of protein deposits in the body. Rio Tinto (RIO.L) , opens new tab rose 1.3% after the mining giant reported its strongest second-quarter iron ore production since 2018, a day after promoting its iron ore chief Simon Trott to CEO. Antofagasta (ANTO.L) , opens new tab edged up 0.5% after the Chilean miner said its copper production rose 11% in the first half of 2025, on improved output from its two concentrators. https://www.reuters.com/world/uk/uk-stocks-muted-inflation-data-dims-interest-rate-cut-bets-2025-07-16/