2025-11-07 10:30

Nov 7 (Reuters) - Sterling was headed for its third straight weekly loss against the dollar and the euro on Friday as investors digested the Bank of England’s rate decision and looked ahead to the government’s budget later this month. A narrow vote and signs that BoE Governor Andrew Bailey may soon join those favouring a cut have raised the odds of a December easing move. Sign up here. The BoE held rates, disappointing the most dovish expectations after a minority of analysts had bet on a 25-basis-point cut. MORE ROOM TO EASE IN 2026 Markets now expect the British government to unveil a significant fiscal tightening package in its Autumn Statement, creating more room for the BoE to ease further next year. The greenback was on track for a modest weekly gain as investors weighed the Fed's hawkish tilt against lingering concerns over the U.S. economy. Sterling fell 0.27% to $1.3105, set for a 0.50% weekly drop. It fell 1.1% last week and 0.90% the week before. Investors are betting on a December rate cut after Thursday's tight vote, with this month’s budget likely to add volatility for the pound. “We expect pound weakness to extend against the euro into year-end if slower inflation is confirmed in October and November,” said Lee Hardman, senior currency analyst at MUFG. The euro rose 0.25% to 88.10 pence and was on track to end the week up 0.44%, after gains of 0.42% last week and 0.64% the week before. "There is scope for lower short-term rates and a weaker pound," said Chris Turner, global head of forex strategy at ING, noting markets were not fully pricing a December cut. “We expect the euro to find good support near 0.8760 and trade above 0.88 heading into the Budget later this month,” he added. Traders are pricing a 60% chance of a 25 bps BoE cut and 58 bps of easing by end-2026. British 2-year yields , more sensitive to expectations for policy rates, were up 1.5 bps at 4.11% on Friday, after falling 6.5 bps the day before. Markets expect the European Central Bank's key policy rate to remain steady at 2% through early 2027. (This story has been refiled to add a byline, with no changes to text) https://www.reuters.com/world/uk/pound-set-third-consecutive-weekly-fall-versus-euro-dollar-2025-11-07/

2025-11-07 10:12

LONDON, Nov 6 (Reuters) - The Bank of England kept borrowing costs on hold on Thursday, but the narrow vote signals a rate cut could come in December, when they hold their next meeting after the government budget later this month. Mindful of Britain's still high headline inflation rate, the nine-strong Monetary Policy Committee voted 5-4 to keep the central bank's benchmark Bank Rate at 4.0%, the BoE said. Sign up here. Here's what Bank of England officials said in a press conference following that decision: ANDREW BAILEY, GOVERNOR On the future path of rates "We are likely to continue to be on a gradual downward path for bank rate." "The market curve at the moment, does give a reasonable view of, I think, of a sensible path (for rates)." On inflation "We need to wait and see that the downward path of inflation becomes more established before we can cut bank rate again." "The recent pickup in inflation has been driven in part by food and energy prices. These are salient to consumers and often affect inflation expectations, so we have to remain careful that this does not lead to any additional second round effects on wage and price setting in the UK economy." "The point is that we are, you know, we are quite an important moment here, because we've had one set of inflation numbers, which I think can give us some encouragement, can point us in a direction, but we need to see more than that." On terminal rate "There are those, and I'm in this group, who don't actually, frankly, feel that there is enough confidence around any measure of an equilibrium terminal rate, and that when we look at this question of restrictiveness, we're looking much more at the at the evidence on the sort of the change over time, as it were, in the path of restrictiveness, rather than looking at terminal rates." On asset purchase costs "(The) upcoming APF Quarterly Report will include a new measure which will take into account wider implications for government debt issuance and servicing costs, including continuing savings resulting from quantitative easing...This will show a somewhat different picture of the costs." On AI "It is, of course, perfectly possible and perfectly consistent that AI could be the next big mover in terms of productivity ... My own view personally is, I think, more likely than not it probably is. "But we've still got quite a way to go to actually sort of see that demonstrated. At the same time, we could have a bubble, because obviously the markets are pricing the future stream of returns from this, and that's uncertain. And so, you know, those two things are not inconsistent." "The markets could overprice the returns, but the returns could still be substantial...So we'll see, but we are watching the ... implications for financial stability." DAVE RAMSDEN, DEPUTY GOVERNOR On AI "Were that (AI) bubble to deflate or burst, that would represent a tightening in financial conditions that would weaken global demand, and that would have spillovers back to the UK." https://www.reuters.com/business/finance/bank-england-policymakers-speak-after-keeping-rates-hold-2025-11-06/

2025-11-07 09:03

LONDON, Nov 10 (Reuters) - From a focus on how quickly tech-driven, frothy equity markets unwind, to the impact of the U.S. shutdown, there's plenty to mull over next week. And don't forget China data, UK budget speculation and a U.N. climate change summit. Sign up here. Here's all you need to know about the coming week in financial markets by Rae Wee in Singapore, Alden Bentley in New York and Amanda Cooper, Marc Jones and Libby George in London. 1/ BACK TO REALITY? The week starts on an upbeat mood as the U.S. Senate on Sunday moved forward on a measure aimed at reopening the federal government and ending a now 40-day shutdown that has sidelined federal workers, delayed food aid and snarled air travel. If an agreement is finalised, data must still be compiled and rescheduled, meaning a scheduled inflation release on Thursday is unlikely. So the data fog may continue for now. The disruption since October 1 has surpassed the record shutdown in Donald Trump's first term as president. Relief may prove temporary, as the impact of the shutdown on the economy emerges. Others note that any agreement might be temporary, meaning markets could be back to shutdown watch in the not too distant future. 2/ LACKING DATA CHEER As investors look past an uneasy Sino-U.S. trade truce, at least until things turn sour again, focus returns to domestic data for clues on how China will score on the 2025 economic report card as the year nears a close. Data on Sunday showed producer price deflation eased in October and consumer prices returned to positive territory. House prices and retail sales, among the slew of Friday's data releases, are also unlikely to move the needle on a bleak outlook. China's exports unexpectedly fell in October, data last week showed. But markets are less sensitive to China's weak run of economic data, with stocks still ripping higher, buoyed by the nation's push for greater technological self-reliance and a modern industrial system. 3/ A VERY BRITISH DATA MINEFIELD UK investors are gearing up for a December rate cut from the Bank of England. But first, there's a forest of data to get through - much of which will be key to BoE decision-making - before finance minister Rachel Reeves reveals her budget on November 26. Reeves paved the way for tax rises in a rare pre-budget speech on Tuesday, although she did not indicate whether her plan would break any manifesto pledges. Sterling is at its weakest since 2023 against the euro and at its lowest since April against the dollar . The coming week's numbers on consumer prices, wage inflation and economic growth may set the tone for UK markets before that key budget, while trade balance numbers may outline how much Trump's tariffs have affected the UK/U.S. "special relationship". 4/ EMERGING MARKETS: NOT GETTING TRUMPED? Nigeria joined a list of emerging nations in Trump's crosshairs after the U.S. president threatened military action if the West African oil producer doesn't do more to protect its Christians. Investors barely registered the threat, and days later, a Nigerian bond sale was oversubscribed. A pattern of Trump threats over trade or other perceived failures followed by a modest market reaction has played out in Brazil, Mexico, Colombia and South Africa. Trump's aid cuts have hurt vulnerable economies and his trade policy puts hundreds of thousands of jobs at risk in exporting nations. But investors' risk-on mood, lower global borrowing costs, a softer dollar and positive local growth and reform stories suggest a strong anti-Trump buffer is in place. Even China is luring cash. Nigerian stocks dipped after Trump's Sunday salvo, but emerging market equities broadly have notched returns of nearly 32% in dollar terms this year, an asset performance second only to gold, according to BofA. 5/BAD COP The COP30 global climate summit kicks off on Monday in Belem, the Brazilian city symbolically chosen for its rainforest location at the mouth of the Amazon. It's shaping up to be a highly contentious few weeks. The diminished set of leaders attending are bemoaning the fracturing of global consensus on climate action, taking swipes at the climate-change-denying U.S. government while trying to assure the world they remain unswerving in their own commitments. Whether the world buys that is another question. Even host Brazil, trying to drum up $125 billion to protect world rainforests, has just taken the highly controversial decision to begin drilling for oil in the Amazon. The gathering also marks three decades since global climate negotiations began. Countries have curbed a climb in carbon emissions somewhat, but not enough to prevent what scientists consider extreme climate change in coming decades. https://www.reuters.com/business/take-five/global-markets-themes-graphic-2025-11-07/

2025-11-07 07:49

US crude stocks rose more than expected last week Private reports suggest US labor market weakened in October Gunvor withdraws proposal to buy Lukoil's overseas assets HOUSTON, Nov 7 (Reuters) - Crude prices recovered from a midday dip on Friday on hopes Hungary can use Russian crude oil as U.S. President Donald Trump met Hungary's Prime Minister Viktor Orban at the White House. Brent crude futures settled at $63.63 a barrel, up 25 cents or 0.39%. U.S. West Texas Intermediate crude finished at $59.75 a barrel, up 32 cents, or 0.54%. Sign up here. Both benchmarks are poised to register weekly declines of around 2% as leading global producers raise output. "We're sort of watching that Trump meeting with Orban to see if some deal comes out that eases sanctions on Lukoil and Rosneft," said John Kilduff, partner with Again Capital. Hungary has maintained its reliance on Russian energy since the start of the 2022 conflict in Ukraine, prompting criticism from several European Union and NATO allies. Prices had fallen earlier in the day with Brent registering a loss on the impact of flight cuts due to a shortage of air traffic controllers, who are not being paid because the U.S. government shutdown. "The fact that we're shutting down flights is taking out a lot of diesel demand," said Phil Flynn, senior analyst for Price Futures Group. The U.S. Federal Aviation Administration ordered airlines to cut thousands of flights because of the shortage of air traffic controllers. Lower demand for jet fuel came as "the market continues to weigh a rising oil surplus against mixed macro," said SEB analyst Ole Hvalbye. An unexpected U.S. inventory build of 5.2 million barrels reignited oversupply fears this week, said IG Markets analyst Tony Sycamore. U.S. crude stocks rose more than expected on higher imports and reduced refining activity while gasoline and distillate inventories declined, the Energy Information Administration said on Wednesday. Private reports also pointed to a weakening U.S. labor market. U.S. Labor Department employment reports are not being issued because of the shutdown. The Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, decided on Sunday to increase output slightly in December. However, the group also paused further increases for the first quarter of next year, wary of a supply glut. The well-supplied market prompted Saudi Arabia, the world's top oil exporter, to announce a sharp reduction to prices for its crude for Asian buyers in December. European and U.S. sanctions on Russia and Iran, meanwhile, are disrupting supplies to the world's largest importers, China and India, providing some support for global markets. China's crude imports in October rose 2.3% from September and were up 8.2% from a year earlier at 48.36 million tons, customs data showed, against a backdrop of high utilisation rates at refineries in the world's largest oil importer. "China kept importing elevated amounts of crude in October," UBS analyst Giovanni Staunovo said. "That move keeps those barrels away from the OECD, where inventories remain low." Swiss commodities trader Gunvor said on Thursday that it had withdrawn its proposal to buy the foreign assets of Russian energy company Lukoil (LKOH.MM) , opens new tab after the U.S. Treasury called it Russia's "puppet" and signalled that Washington opposed the deal. "Gunvor scrapping its Lukoil assets purchase suggests the U.S. is maintaining its maximum pressure campaign against Russia, and potential strict enforcement of sanctions on Rosneft and Lukoil," said Vandana Hari at oil market analysis provider Vanda Insights. https://www.reuters.com/business/energy/oil-heads-second-weekly-loss-supply-concerns-weigh-2025-11-07/

2025-11-07 07:43

Russian wine sales surge to 60% of market share Pprices of imported wines up by about 30-40% Western countries have imposed more than 25,000 sanctions on Russia ANAPA, Russia, Nov 7 (Reuters) - Once dominated by French Burgundy and Italian Barolo wines, Russia's supermarket shelves are now stocked with an array of domestic vintages as Western sanctions linked to the war in Ukraine push consumers toward local vineyards. Sanctions imposed after President Vladimir Putin sent troops into Ukraine in early 2022 have reshaped Russia's consumer habits, driving up prices of foreign wines and narrowing brand availability of imports. Sign up here. Russian wine sales have surged to make up around 60% of the market, up from about 25% 10 years ago. "Russian wine has gained a very high share of the Russian market," said Yury Yudich, the head of the Federation of Restaurateurs and Hoteliers' committee on Russian winemaking, citing higher taxes on "unfriendly countries." "Gradually the market began to change, and wine prices began to rise. Imported wines have probably increased (in price) by 30-40%," he said, though Yudich added that consumers were still "getting used to" local wine flavors. RUSSIAN WINE SALES 'ARE STILL INCREASING' In Moscow supermarkets, Russian, Georgian and Armenian wines dominate where previously French, Italian and South American brands took pride of place. Western countries have imposed more than 25,000 different sanctions on Russia since Moscow annexed Crimea in 2014, with the lion's share coming after the Ukraine invasion in 2022. Grapes have been grown around the Black Sea for thousands of years but the travails of revolution, civil war and later Soviet anti-alcohol campaigns, particularly under Mikhail Gorbachev in 1985, destroyed many Russian vineyards. But as the economy emerged from the decade of chaos that followed the 1991 fall of the Soviet Union, some pioneering investors began to buy up land in southern Russia and bring back top-level vintners from France and Italy. At the Côte Rocheuse winery, nestled near the Black Sea, the shift in Russia's wine market is clear. "We began selling wines in 2022, and that same year we opened to tourists. Since then, we have been increasing production volumes every year, and sales are still increasing," said chief vintner and production director Irina Yakovenko. "However, we have a limit on both vineyards and winemaking capacity - 500,000 bottles per year." 'OUR WINES ARE THE BEST' The Côte Rocheuse winery cultivates classic European grape varieties - Merlot, Cabernet Sauvignon, Pinot Noir, Chardonnay - as well as Krasnostop Zolotovsky, a native Russian grape from the Rostov region. Despite relying on mostly French and Italian equipment, the wines are distinctly local, shaped by Russian soil and climate. Putin has repeatedly touted Russia's economic endurance under so many sanctions and has urged companies and officials to find a way to evade sanctions - which he casts as illegal and unjustified. "I want other people, mainly our children, to see this, so they don't buy Italian or German wines, but ours," Galina Romanova, a tourist at the winery, told Reuters. "Our wines are the best." https://www.reuters.com/business/western-sanctions-force-russians-turn-domestic-wines-2025-11-06/

2025-11-07 07:37

BRUSSELS, Nov 7 (Reuters) - Belgium's Liege airport has resumed flights after a temporary halt due to a drone sighting, the country's air traffic control service said on Friday in the second such incident this week. The Skeyes air traffic control service said it received a report of a drone being spotted over the airport around 06:30 GMT, leading to a closure of the airport for about 30 minutes. Sign up here. "We have to take every report seriously", Kurt Verwilligen, a spokesperson for the service said. He added flights had resumed. Drones spotted flying over airports in the capital Brussels and in Liege, in the country's east, forced on Tuesday the diversion of many incoming planes and the grounding of some due to depart. Sightings of drones over airports and military bases have become a constant problem in Belgium in recent days, and have caused major disruptions across Europe in recent months. They have forced temporary closures of airports in several countries including Sweden on Thursday. Some officials have blamed the incidents on "hybrid warfare" by Russia. Moscow has denied any connection with the incidents. The Belgian government called an emergency meeting of key government ministers and security chiefs on Thursday to address what the defence minister called a coordinated attack. https://www.reuters.com/world/europe/belgiums-liege-airport-temporarily-halted-again-due-drone-sighting-belga-says-2025-11-07/