2025-06-26 10:57
LONDON, June 26 (Reuters) - What matters in U.S. and global markets today By Mike Dolan , opens new tab, Editor-At-Large, Finance and Markets Sign up here. The U.S. dollar is on course for its worst first half year since 1973, as it plummeted again on Thursday amid rising expectations for Federal Reserve easing and statements from President Donald Trump about his pick for the next Fed chair. I'll discuss this and the rest of the market news below. Make sure to check out today's column, where I discuss what the Bank of England’s rethink of its bond-selling strategy may signal about long-term yields and balance sheets across the developed markets. Today's Market Minute * U.S. President Donald Trump said on Wednesday he would likely seek a commitment from Iran to end its nuclear ambitions at talks next week and credited U.S. strikes on Iran with bringing a swift end to the war between Israel and Tehran. * In their rush to retain President Trump's support for NATO, the alliance's European members have promised to more than double the amount of wealth they set aside for military spending. * Asian stocks wobbled and the dollar was under pressure on Thursday as the prospect of an early appointment of the next Federal Reserve Chair by President Donald Trump stoked concerns over the independence and credibility of the U.S. central bank. * Much of the "de-dollarization" debate has focused on foreign exposure to U.S. securities like stocks and bonds. But ROI columnist Jamie McGeever warns investors should not ignore foreign direct investment flows, the traditionally sticky capital that may also be sending out warning signals. * Asia's imports of crude oil rose in the first half of 2025 as a surge in June arrivals overcame a soft start in the early months of the year. Read the latest from ROI columnist Clyde Russell. Dollar plunges as Trump pummels Powell The dollar's index against the most traded world currencies (.DXY) , opens new tab has now lost more than 10% in 2025 to date just as the half-year mark approaches next week and it is now at its weakest in three years. That is the index's worst six month performance since 1991, and it is its worst first half since the start of the floating exchange rate era 52 years ago. The euro soared above $1.17 to its highest in almost four years, the Swiss franc hit its strongest in a decade and sterling hit its best level since 2021. The dollar slide has snowballed since Trump's trade war unfolded in April amid worries about foreign investor flight and uncertainty about U.S. policymaking. A revival of Europe's economic outlook has been the flipside, spurred by a ratcheting up of regional defense spending and Germany's dramatic fiscal boost. Wary of the inflationary effects of tariff increases, the Fed has held the line on interest rates while other central banks continued easing. But speculation about a resumption of rate cuts this year has mounted again this month - with particular focus on what happens after Fed Chair Powell's term ends next May. The trigger for the overnight dollar lurch lower appears to have been Trump's latest salvo against Powell and his reluctance to back a rate cut now - a stance the Fed boss underlined in congressional testimonies this week. But attending the NATO summit in The Hague on Wednesday, where the alliance pledged to lift defense spending toward 5% of GDP over the next decade, Trump said he would soon name his picks to replace what he called a "terrible" Powell next year. With splits emerging among the Fed policymakers about how soon to start cutting rates again, markets have started to stack up easing bets amid reports of a Trump-appointed "shadow" Fed chair emerging over the remainder of the year to undermine Powell's authority. Fears for Fed policymaking independence from politics are now rife. Fed futures pricing now expects rates to fall by 137 basis points to 3% by early 2027, 30 bps more than it priced in one month ago. There is now a one-in-four chance of a cut as soon as July and some 63 bps of Fed cuts expected by year-end. Negotiating another heavy week of debt sales, two and 10-year Treasury yields fell to near two-month lows on Thursday. The Fed also unveiled a proposal on Wednesday that would overhaul how much capital large global banks must hold against relatively low-risk assets, as part of a bid to boost participation in U.S. Treasury markets. That lifted bank stocks. The full reversal of recent oil price gains this week as the Israel-Iran ceasefire holds added to a more benign inflation picture and U.S. crude is back registering losses of 20% year-on-year. Trump said on Wednesday the U.S. had not given up its maximum pressure on Iran, but signaled a potential easing in enforcement of restrictions on the sales of Iranian oil to help the country rebuild. Talks with Iran are due next week. Stock markets were firmer across the world, with MSCI's all-country index (.MIWD00000PUS) , opens new tab eking out a new record high and the Nasdaq 100 (.NDX) , opens new tab hitting a new record on Wednesday. The S&P 500 is now within 1% of its all-time high too as the second-quarter earnings season nears next month. Although it ended flat on Wednesday, futures were higher ahead of Thursday's bell. Thursday sees a stream of economic updates on May trade and weekly jobs, with this week's consumer confidence and housing updates readings showing notable weakness. In the backdrop, markets are watching for the possible passing of Trump's fiscal bill and debt ceiling rise in Congress by the July 4 holiday and then early next month sees the spotlight falling on an expiry of his 90-day pause on April's "reciprocal" tariff hikes. With no further bilateral trade deals announced of late, speculation is rising about an extension of the pause. Treasury Secretary Scott Bessent, meantime, extended the department's authority to continue extraordinary cash management measures to keep from breaching the federal debt ceiling by nearly a month, until July 24. Elsewhere, oil giant Shell (SHEL.L) , opens new tab said it had not bid for BP (BP.L) , opens new tab and was not actively considering such a move, adding it was bound by UK regulations which mean such a statement banned it from making a bid for BP for the next six months. The Wall Street Journal reported on Wednesday that Shell was in talks to acquire BP. Chart of the day Fed futures pricing now sees rates falling 137 basis points to 3% by early 2027 - 30 bps more than it priced a month ago. There is now a one-in-four chance of a cut as soon as July and some 63 bps of Fed cuts by year-end. Today's events to watch * U.S. May goods trade balance, May durable goods orders, weekly jobless claims, May retail/wholesale inventories, May pending home sales, May Chicago Federal Reserve activity index, Kansas City Fed June business survey, final Q1 GDP revision, Q1 corp profits revision (8:30 a.m. EDT) Mexico May trade balance (8:00 a.m. EDT) * Mexico central bank policy decision (3:00 p.m. EDT) * Minneapolis Federal Reserve President Neel Kashkari, Richmond Fed President Thomas Barkin, Cleveland Fed chief Beth Hammack and Fed Board Governor Michael Barr speak; European Central Bank President Christine Lagarde and ECB board member Isabel Schnabel speak; Bank of England governor Andrew Bailey speaks * European Union summit in Brussels * U.S. Treasury sells $44 billion 7-year notes * U.S. corporate earnings: Nike, Walgreens Boots Alliance, McCormick 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-2025-06-26/
2025-06-26 10:14
LONDON, June 26 (Reuters) - British retail sales slumped this month and expectations within the industry for July also deteriorated, a Confederation of British Industry survey showed on Thursday. The CBI's monthly gauge of how retail sales compared with a year earlier fell to -46 in June from -27 in May. Sign up here. A measure of expected sales for July fell to -49 from -37 for June. https://www.reuters.com/business/retail-consumer/uk-retail-sales-tumble-june-worse-seen-july-cbi-says-2025-06-26/
2025-06-26 10:08
MUMBAI, June 26 (Reuters) - The Indian rupee strengthened to a fortnightly peak on Thursday, bolstered by broad weakness in the dollar on the back of concerns over the future independence of the U.S. Federal Reserve. The rupee rose 0.4% to close at 85.7050 per U.S. dollar, tracking gains in its regional peers. Sign up here. The dollar index fell to its lowest level since March 2022 and was last quoted at 97.1, down 0.3% on the day. While the dollar had perked up on the back of safe-haven demand during the Iran-Israel conflict, the ceasefire has deflated the geopolitical risk premium. Its troubles were compounded by the prospect of President Donald Trump making an early appointment of the next Federal Reserve Chair, which spurred worries over the independence of the U.S. central bank. "A candidate who is perceived as being more open to lowering rates in line with President Trump's demands would reinforce the U.S. dollar's current weakening trend," MUFG Bank said in a note. The dollar index is down over 10% on the year so far. Among major Asian currencies, the Taiwan dollar led the charge on Thursday with a 0.6% gain, while India's equity benchmarks, the BSE Sensex (.BSESN) , opens new tab and Nifty 50 (.NSEI) , opens new tab, topped gains in regional stock. Locally, dollar sales from at least two large foreign banks, likely on behalf of custodial clients, also helped the rupee on the day, a trader at a private bank said. Meanwhile, dollar-rupee forward premiums perked up with the 1-year implied yield touching a one-month peak of 2.02% before paring gains. An uptick in wagers on a July Fed rate cut, alongside the Reserve Bank of India's announcement of a measure to withdraw excess cash from the banking system, spurred paying interest on forward premiums, traders said. https://www.reuters.com/world/india/rupee-hits-two-week-high-fed-credibility-worries-compound-dollars-troubles-2025-06-26/
2025-06-26 10:05
MANILA, June 26 (Reuters) - The Philippines lowered its growth target for this year and narrowed its growth goals for 2026 to 2028 to reflect global uncertainties stemming from tensions in the Middle East and shifts in U.S. trade policies, its budget secretary said on Thursday. Growth for 2025 is now projected at 5.5%-6.5%, down from the government’s earlier forecast of 6%-8%, while the targets for 2026 to 2028 were narrowed to 6%-7%, from the previous range of 6%-8%. Sign up here. "The revisions take into account heightened global uncertainties such as unforeseen escalation of tensions in the Middle East and the imposition of U.S. tariffs," Budget Secretary Amenah Pangandaman told a press conference. The government was prepared to "deploy timely and targeted measures to mitigate their potential impact on the Philippine economy," she added. The government also trimmed its inflation assumption for 2025, lowering it to 2%-3% from 2%-4%, but maintained its outlook for 2026 to 2028 at 2%-4%, Pangandaman said. It also revised its fiscal program with the budget deficit as a share of GDP now expected to widen to 5.5% this year and 5.2% in 2026, from previous projections of 5.3% and 4.7%, respectively. Gross domestic product grew by an annual 5.4% in the first quarter of 2025, in line with the previous quarter's 5.3% growth. Citing the need to support growth amid global uncertainties, the Bangko Sentral ng Pilipinas cut rates for a second meeting in a row on June 19 and left the door open for at least one more reduction this year. Central bank deputy governor Zeno Abenoja said the updated economic outlook was "broadly consistent" with the central bank's expectations that inflation would remain manageable and that growth would moderate but stay resilient. Inflation has averaged 1.9% in the first five months of the year, below the central bank's 2%-4% target range. https://www.reuters.com/markets/asia/philippines-revises-2025-growth-target-down-55-65-2025-06-26/
2025-06-26 07:24
June 26 (Reuters) - Spanish energy company Repsol (REP.MC) , opens new tab said on Thursday it has agreed to sell a 24% stake in Indonesia's Corridor Block gas operation to Jakarta-listed Medco Energi (MEDC.JK) , opens new tab for $425 million. The deal is part of Repsol's strategy to dispose assets to raise cash to fund investments in renewable energy. Sign up here. According to its own calculations, the sale will have a positive impact of about $70 million on its full-year income and it will help reduce its net debt by about $350 million, Repsol said. The company expects the transaction to be closed in the third quarter of 2025. https://www.reuters.com/business/energy/repsol-sells-stake-an-indonesian-gas-operation-425-million-2025-06-26/
2025-06-26 07:02
June 26 (Reuters) - British outsourcing firm Serco (SRP.L) , opens new tab said on Thursday that it expects its North American market to drive organic growth in the first half of 2025, fuelled by a high volume of defence contracts secured last year. Serco, which provides defence, security, immigration, health and transport services for governments, has positioned itself to benefit from geopolitical tensions, as countries ramp up defence budgets to strengthen their military and security services. Sign up here. With its recent acquisition of Northrop Grumman's (NOC.N) , opens new tab Mission Training and Satellite Ground Network Communications (MT&S) business in May, defense has become Serco's largest sector, now accounting for around 40% of total revenue. For the year ending in December, Serco reaffirmed its underlying operating profit forecast of around 260 million pounds ($356.41 million), but raised its organic sales growth outlook to about 1%, supported by improved immigration business and continued organic growth in the UK. The company also named Keith Williams as board chair-designate, set to succeed John Rishton, who will step down on December 31. ($1 = 0.7295 pounds) https://www.reuters.com/business/aerospace-defense/uks-serco-sees-north-american-market-driving-first-half-growth-defence-contracts-2025-06-26/
