2025-07-02 15:46

Sterling, British stocks also fall sharply Tumbles reflect investor fears about UK deficit, draws comparison with Liz Truss Traders eye finance minister's Rachel Reeves' position LONDON, July 2 (Reuters) - British government bonds tumbled sharply on Wednesday as a tearful appearance by Chancellor Rachel Reeves in parliament a day after the government backed down on its welfare reforms reignited concern over Britain's finances. Reeves was attending Prime Minister's Questions on Wednesday following the government's decision to sharply scale back plans to cut benefits. The sharp plunge in British assets immediately drew comparisons with Liz Truss' short-lived premiership nearly three years ago, which was derailed by a bond market selloff. Sign up here. Investors are monitoring Reeves' status after the British government's reversal on welfare reforms meant the plans would no longer save taxpayers any money, shredding the margin Britain relies on to meet its fiscal rules. The welfare reform U-turn was "signalling that the Labour Party is a lot less concerned about what the gilt market thinks," said Gordon Shannon, portfolio manager, TwentyFour Asset Management. "I would have thought it was seared into politicians' memories what happened to Liz Truss." The yield on the 10-year government bond, or gilt, rose as much as 22 basis points on the day at one point, to 4.681% , as investors ditched British debt. It then recovered somewhat to 4.60%. At its peak, the benchmark yield was set for its largest one-day jump since October 2022, the aftermath of Truss' chaotic package of large, unfunded tax cuts that scuttled her premiership. During the depths of the 2022 crisis, the yield on the 10-year gilt rose by 50 bps in a single day at one point. The selloff also hit very long dated gilts, and 30-year yields rose 17 basis points. “The latest headline would suggest more uncertainty with regards to the current government," said Simon Blundel, head of European fundamental fixed income investments at BlackRock. "It's another thing for us to look at and position for,” he said, though he added that BlackRock had generally taken a positive stance towards gilts and the market was not as vulnerable as it was in 2022, when turmoil in Britain's pensions sector exacerbated moves. Investors in bonds around the world are growing increasingly nervous about government deficits from Japan to the United States, with Britain seen as among the more vulnerable. REEVES' POSITION IN FOCUS Earlier on Wednesday, British assets were trading slightly lower, but the selloff intensified rapidly after Reeves appeared alongside Prime Minister Kier Starmer during the weekly prime minister's questions looking exhausted and upset. Traders also focused on comments from Starmer seemingly not endorsing Reeves, though Starmer's press secretary later said Reeves has his full support, and she was upset because of "a personal matter". Reeves has repeatedly emphasised her commitment to self-imposed fiscal rules, limiting the amount Britain will borrow, and, analysts said, Wednesday's market moves reflected fears that she would be replaced, creating even more uncertainty. "The gilt market is largely concerned that a new chancellor will rip up Reeves' fiscal rules and go for excessive unfunded borrowing. Combine that with a plan that has not delivered or is unlikely to deliver much growth or productivity gains, then it looks a very risky strategy to adopt!" Craig Inches, head of rates and cash at Royal London Asset Management, said. Reeves has also been blamed by some Labour members of parliament for pushing for billions of pounds of savings that were described as cruel and targeting the most vulnerable. Sterling dropped around 1% against the dollar and also weakened sharply against the euro, which rose 0.8% to its highest on the pound in two months. , Britain's domestically focused mid-cap index (.FTMC) , opens new tab was down 1.3% on the day, sharply underperforming European stocks. "The deficit is going to have to be closed somehow, clearly the signal from yesterday is that can’t come from substantial spending cuts, I don’t think it’s possible for the government to borrow the money, that leaves tax rises," Nick Rees, head of macro research at Monex Europe, said. "It's a pretty ugly outlook for sterling." https://www.reuters.com/world/uk/uk-bonds-suffer-biggest-selloff-since-october-2022-worries-build-over-finance-2025-07-02/

2025-07-02 14:35

BRASILIA, July 2 (Reuters) - Brazil's central bank said on Wednesday that technology services provider C&M Software, which serves financial institutions lacking connectivity infrastructure, had reported a cyberattack on its systems. The bank did not provide further details of the attack, but said in a statement that it ordered C&M to shut down financial institutions' access to the infrastructure it operates. Sign up here. C&M Software commercial director Kamal Zogheib said the company was a direct victim of the cyberattack, which involved the fraudulent use of client credentials in an attempt to access its systems and services. C&M said critical systems remain intact and fully operational, adding that all security protocol measures had been implemented. The company is cooperating with the central bank and the Sao Paulo state police in the ongoing investigation, added Zogheib. Brazilian financial institution BMP told Reuters that it and five other institutions experienced unauthorized access to their reserve accounts during the attack, which took place on Monday. BMP said the affected accounts are held directly at the central bank and used exclusively for interbank settlement, with no impact on client accounts or internal balances. BMP added it has taken all necessary operational and legal steps and holds sufficient collateral "to fully cover the impacted amount, without any harm to its operations or business partners." An official familiar with the ongoing investigation, who spoke on condition of anonymity, said C&M provides services to around two dozen small financial institutions, and the amounts involved in the attack do not reach into the billions of reais. Another source said there were no losses suffered by clients. The central bank has used the term "financial institutions lacking their own connectivity infrastructure" to refer to digital payment institutions, which have grown rapidly in Latin America's largest economy, boosted by innovations driving competition in the sector. For instance, the Pix instant payment system, developed and operated by the central bank, was launched in late 2020 and has become the most widely used payment method in the country. https://www.reuters.com/world/americas/brazils-cm-software-hit-by-cyberattack-central-bank-says-2025-07-02/

2025-07-02 12:40

July 2 (Reuters) - Tech billionaire Joe Lonsdale said on Wednesday he is investing in a new crypto-focused U.S. bank being launched by Anduril co-founder Palmer Luckey that aims to fill the void left by Silicon Valley Bank's collapse. Before a March 2023 liquidity crisis, SVB had long been a major primary banking channel for early-stage technology firms and venture capitalists - entities deemed too risky by traditional banks. Sign up here. Many startups struggled to access capital and meet immediate obligations such as payrolls after the bank collapsed. Lonsdale, who co-founded Palantir (PLTR.O) , opens new tab, said in an emailed statement to Reuters that he is a "proud investor" in the project. The proposed lender, called Erebor, has applied for a national bank charter and plans to serve technology businesses in areas such as artificial intelligence, crypto, defense and manufacturing, as well as individuals who work at or invest in them, according to its charter application. Like Anduril and Palantir, Erebor takes its name from J.R.R. Tolkien's "The Lord of the Rings" series. In the books, Erebor is the "Lonely Mountain", a fortress whose treasures are reclaimed from the dragon Smaug. The application for Erebor, to be headquartered in Columbus, Ohio, outlines a digital-only model, with a secondary office in New York. According to the charter application, the bank will be led by Owen Rapaport and Jacob Hirshman, a former adviser to stablecoin company Circle (CRCL.N) , opens new tab. Erebor is also planning to hold stablecoins on its balance sheet. A crypto asset class pegged to currencies such as the U.S. dollar, stablecoins are designed to hold a steady value backed by reserves. Fintechs and established financial institutions are increasingly adopting stablecoins to accelerate cross-border payments faster, simplify settlements and expand access to digital financial services. The bank in a regulatory filing said it aims to be "the most regulated entity conducting and facilitating stablecoin transactions." The Financial Times first reported the news and said that the group of tech billionaires backing Erebor also includes Peter Thiel's Founders Fund. Luckey and Lonsdale are not expected to be involved in the day-to-day management of the bank, the Financial Times report said. Luckey, Thiel, and a spokesperson for Erebor did not immediately respond to Reuters' requests for comment. https://www.reuters.com/business/tech-billionaires-led-by-palmer-luckey-launch-new-bank-rival-svb-ft-reports-2025-07-02/

2025-07-02 12:29

BUENOS AIRES, July 2 (Reuters) - The rallying Mexican peso is set to slip in the coming months after a temporary freeze on U.S. tariff hikes against other countries expires next week, a Reuters poll showed. This would end a run-up that brought the currency to its strongest in almost a year last quarter following a sharp drop due to trade concerns at the end of 2024. Sign up here. So far, the recovery has been supported by what turned out to be relatively benign new rules for Mexican exports in U.S. President Donald Trump's overhaul of trade, as well as by the dollar's retreat. The peso is forecast to fall by a moderate 5.5% over the next 12 months to 19.80 per dollar from 18.72 on Tuesday, according to the median estimate of 22 FX experts polled June 27-July 2. That new one-year consensus view is the firmest since an estimate of 19.20 per dollar in October. Year-to-date, the Mexican peso is up 13.2%. In the last week of a 90-day pause on steep tariffs for many countries that Trump announced in April, tensions remain high between the United States and China, the European Union and Japan as trade partners work on different proposals. While global frictions could weigh on its volatile currency, Erick Martinez, Latam FX and rates strategist at Barclays said: "Mexico is not subject to reciprocal tariffs, taking pressure off the peso into the global July 9 deadline." Any weakness should be limited "thanks to the protection of the USMCA (agreement) by which Mexico has maintained preferential trade treatment in the U.S.," said Alejandro Saldaña, chief economist at Ve por Mas. Monetary policy also looks supportive as the Mexican central bank's cautious easing cycle and the possibility of rate cuts in the United States mean the market anticipates high local interest rate spreads will persist. However, the potential renegotiation of Mexico's trade agreement with the U.S. and Canada is likely to stoke uncertainty. In Brazil, the real , will likely depreciate 4% to 5.69 per dollar from 5.46 on Monday in 12 months. The currency is shielded by the highest local interest rate in two decades. In Argentina, the peso is seen dropping 17% in one year to 1,465 per dollar, a moderate variation for the crisis-stricken currency that would still leave it within government targets. Year-to-date, the Brazilian real has gained 11.2% and the Argentine peso has shed 15.7%. (Other stories from the July Reuters foreign exchange poll) https://www.reuters.com/world/americas/mexico-peso-set-slip-after-expiry-us-tariff-hike-freeze-2025-07-02/

2025-07-02 12:16

Revised US Senate bill boosts wind power prospects Vestas shares rise 9%, Nordex up 1.3% Revised bill extends US renewable cycle to 2030, analysts say July 2 (Reuters) - Shares in European renewable energy companies rose on Wednesday after the U.S. Senate passed a revised budget bill the previous day which was more positive for wind power compared to an earlier version. U.S. President Donald Trump's "Big Beautiful Bill" makes it harder to develop wind and solar energy projects in the U.S. by effectively phasing out renewable energy tax credits after 2026 if projects have not started construction. Sign up here. In the Senate's final version, projects will be able to use the lucrative credits if they begin construction before 2026. A previous version was based on when the projects enter service. "Last-minute changes provide significantly better conditions for the wind industry compared to the previous draft," Sydbank analysts say in a research note. Shares of Danish wind turbine manufacturer Vestas (VWS.CO) , opens new tab were up 9%, while German peer Nordex (NDXG.DE) , opens new tab rose about 1.3%. Vestas and other renewable energy stocks in Europe have been sensitive to the news around the bill this year. The Americas accounted for about 39% of Vestas' revenue last year. Citi analysts said in a note that the revised text removes a 2027 "cliff" and essentially extends the U.S. cycle into 2030. "We see significant incentives for developers to place orders no later than H1 '26 in order to lock-in credits for in-service from 2028," they said. Danish offshore wind developer Orsted (ORSTED.CO) , opens new tab and Portuguese renewable energy firm EDP Renovaveis (EDPR.LS) , opens new tab were up 3.6% and 1.8%, respectively. "With regard to our business...the current proposal has no impact on our projects currently under construction and offers investment security for these," German utility RWE (RWEG.DE) , opens new tab said. Shares in RWE, the world's second-largest developer of offshore wind farms, were up 0.2%, while solar inverter maker SMA Solar (S92G.DE) , opens new tab jumped 10% to its highest price since March. https://www.reuters.com/sustainability/climate-energy/european-renewable-energy-companies-shares-rise-after-revised-us-senate-bill-2025-07-02/

2025-07-02 11:59

LONDON, July 2 (Reuters) - Highlights of the third day at the Wimbledon tennis championships on Wednesday (times GMT): 2120 FRITZ BATTLES PAST DIALLO IN LATE THRILLER American fifth seed Taylor Fritz was taken to five sets before overcoming Canadian Gabriel Diallo 3-6 6-3 7-6(0) 4-6 6-3, in a match which lasted more than three hours. Sign up here. Fritz, who was also taken the distance in the first round, was able to finish the match after the roof was closed on Court Number One, with play suspended for the night on the other courts. READ MORE: Tarvet's Wimbledon journey ends with Alcaraz lesson in mental toughness Tiafoe not surprised at Wimbledon seeds' exodus Raducanu back to her carefree best as she knocks out Vondrousova Rakhimova knocks Paolini out in Wimbledon second round From despair to Wimbledon third round, Argentina's Sierra cashing in on lucky break Normality returns to Wimbledon as Alcaraz and Sabalenka ease through Sabalenka urges Zverev to open up to family over mental health issues Big hits, small margins as Rublev rethinks grasscourt game Alcaraz ends Tarvet fairytale to reach Wimbledon third round Djokovic faces Evans test at Wimbledon, Rybakina takes on Sakkari Norrie returns to favourite Wimbledon stage to stun Tiafoe Keys stays on course for rare Australian Open-Wimbledon double Sabalenka sees off Bouzkova to reach Wimbledon third round Wimbledon’s AI judges receive mixed reviews from players and fans Zverev considers therapy after shock first round Wimbledon exit 1950 PLAY SUSPENDED FOR TWO MATCHES BUT FRITZ CONTINUES The match between Canadian Felix Auger-Aliassime and German Jan-Lennard Struff was suspended, level after two sets, as was British wildcard Arthur Fery's clash with Luciano Darderi, with the Italian two sets up. The roof was closed on Number One Court, where play continued between American fifth seed Taylor Fritz and Canada's Gabriel Diallo, with Fritz two sets to one ahead. 1935 LEHECKA OUSTED BY BELLUCCI Czech 23rd seed Jiri Lehecka, who reached the Queen's Club last month, was beaten 7-6(4) 6-1 7-5 by Mattia Bellucci, and the Italian will face Britain's Cameron Norrie in the third round. Lehecka was the 15th men's seed to exit the tournament. 1930 KRUEGER BECOMES 15TH WOMEN'S SEED TO EXIT TOURNAMENT American 31st seed Ashlyn Krueger was beaten 7-6(4) 6-4 by Russian Anastasia Pavlyuchenkova, making it 15 of the 32 seeds who are also out of the women's draw halfway through the second round. 1905 SVITOLINA SAILS PAST SASNOVICH Ukrainian 14th seed Elina Svitolina had a comfortable 6-2 6-4 win over Belarusian qualifier Aliaksandra Sasnovich and will meet Belgian Elise Mertens in the third round. 1855 LAST YEAR'S FINALIST PAOLINI KNOCKED OUT BY RAKHIMOVA Russian Kamilla Rakhimova came from a set down to stun last year's finalist Jasmine Paolini, beating the Italian fourth seed 4-6 6-4 6-4 to set up a third-round clash with Czech 30th seed Linda Noskova. Paolini became the fourth top-five seed to exit the women's draw after Coco Gauff, Jessica Pegula and Zheng Qinwen. 1848 RADUCANU BEATS VONDROUSOVA TO SET UP SABALENKA CLASH Britain's Emma Raducanu reached the third round with a 6-3 6-3 win over 2023 champion Marketa Vondrousova, repeating her second-round victory in 2021 over the Czech and earning a meeting with world number one Aryna Sabalenka. "I guess there's no pressure on me at all in the next match," a laughing Raducanu said in her on-court interview. 1845 BOULTER, SHNAIDER STUNNED Argentine lucky loser Solana Sierra pulled off a remarkable comeback to beat home favourite Katie Boulter 6-7(7) 6-2 6-1 and reach the third round where she faces Spain's Cristina Bucsa. Russian 12th seed Diana Shnaider lost 6-4 6-1 to French qualifier Diane Parry, who also booked a place in the last 32 against home hope Sonay Kartal. 1757 ALCARAZ EXTENDS WINNING RUN TO REACH THIRD ROUND Defending champion Carlos Alcaraz cruised past British qualifier Oliver Tarvet 6-1 6-4 6-4 to notch up his 20th consecutive victory on tour. The Spanish second seed will face either Felix Auger-Aliassime or Jan-Lennard Struff in the third round. 1725 RUSSIANS RUBLEV, KHACHANOV PROGRESS Russian 17th seed Karen Khachanov edged past Japan's Shintaro Mochizuki 1-6 7-6(7) 4-6 6-3 6-4 in a hard-fought five-setter to reach the third round. Compatriot Andrey Rublev, seeded 14th, rallied from a set down to beat South Africa's Lloyd Harris 6-7(1) 6-4 7-6(5) 6-3. 1510 NORRIE DOWNS TIAFOE Cameron Norrie became the first Briton to reach the men's third round after he fought back to upset American 12th seed Frances Tiafoe 4-6 6-4 6-3 7-5. 1414 SABALENKA ADVANCES TO ROUND THREE World number one Aryna Sabalenka was forced to battle through a difficult opening set before going on to beat Czech Marie Bouzkova, a former Wimbledon quarter-finalist, 7-6(4) 6-4. 1330 KEYS EASES PAST DANILOVIC Australian Open champion Madison Keys fired off 19 winners to claim a 6-4 6-2 win over Serbian Olga Danilovic in an hour and 15 minutes to reach the third round. 1318 LOCAL HOPE KARTAL ADVANCES Briton Sonay Kartal sealed a comfortable 6-2 6-2 victory over Bulgarian Viktoriya Tomova to move into round three. "I felt good on court today. I was hitting it really clean. It was one of those good days at the office," Kartal said. 1155 PLAY UNDER WAY Players walked out on to the court at the All England Club after a delay lasting more than one-and-a-half hours due to rain. 1045 START FURTHER DELAYED BY RAIN Play on all outside courts at Wimbledon will not begin until at least 1115 GMT due to rain. 1000 RAIN DELAYS START The start of day three at Wimbledon has been pushed back by 45 minutes to 1045 GMT due to rain. The temperature is around 19 degrees Celsius and intermittent rain is expected throughout the day, after the first two days of the tournament were played in very hot and sunny conditions. WIMBLEDON ORDER OF PLAY ON WEDNESDAY (prefix number denotes seeding) CENTRE COURT (play begins at 1230 GMT) 1-Aryna Sabalenka (Belarus) v Marie Bouzkova (Czech Republic) Oliver Tarvet (Britain) v 2-Carlos Alcaraz (Spain) Emma Raducanu (Britain) v Marketa Vondrousova (Czech Republic) COURT NUMBER ONE (play begins at 1200 GMT) Cameron Norrie (Britain) v 12-Frances Tiafoe (France) Katie Boulter (Britain) v Solana Sierra (Argentina) 5-Taylor Fritz (U.S.) v Gabriel Diallo (Canada) COURT NUMBER TWO (play begins at 1000 GMT) Olga Danilovic (Serbia) v 6-Madison Keys (U.S.) Nuno Borges (Portugal) v Billy Harris (Britain) Naomi Osaka (Japan) v Katerina Siniakova (Czech Republic) Arthur Fery (Britain) v Luciano Darderi (Italy) https://www.reuters.com/sports/tennis/wimbledon-day-three-2025-07-02/