2025-10-29 06:00

Fed cuts by 25 basis points as expected Powell throws cold water on December rate cut Nvidia tops $5 trillion market capitalization NEW YORK, Oct 29 (Reuters) - Global stocks reversed course and were on pace to snap a four-session streak of gains on Wednesday, while the U.S. dollar extended gains after Federal Reserve Chair Jerome Powell dampened expectations for another U.S. interest rate cut by the central bank in December. The Fed cut rates by 25 basis points, noting the limited data visibility due to the current U.S. government shutdown, and said it is ending the drawdown of its $6.6 trillion balance sheet, also known as quantitative tightening (QT) amid evidence that money market liquidity conditions have begun tightening and bank reserve levels are dropping. Sign up here. Stocks initially held gains after the statement but retreated after Powell said "a further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it, policy is not on a preset course." This sent U.S. Treasury yields and the dollar higher. "He has basically done that in basically every press conference in which they have had a rate move, he has walked back market expectations for the next meeting," said Tony Welch, chief investment officer at SignatureFD in Atlanta. "We do think the risk to inflation in 2026 is higher and I do believe that December could end up being the last cut in this cycle. The market is expecting three cuts next year, and the market may be sorely disappointed on that." Markets were pricing in a roughly 85% chance of a December cut, which stumbled to about 65% following Powell's comments, according to CME's FedWatch Tool , opens new tab. On Wall Street, U.S. stocks finished off their earlier highs, with the S&P ending the session virtually flat. U.S. stocks have been rallying to record levels recently on cooling U.S.-China trade tensions, expectations for rate cuts from the Fed, outsized spending related to artificial intelligence, and a solid start to the corporate earnings season. Nvidia (NVDA.O) , opens new tab became the first company to cross the $5 trillion valuation mark on Wednesday. Its shares ended up 3%, a day after jumping 5% as CEO Jensen Huang said the AI chip leader will build seven new supercomputers for the U.S. Department of Energy, and that the company has $500 billion in bookings for its chips. After the closing bell, Microsoft (MSFT.O) , opens new tab shed about 3%, Alphabet (GOOGL.O) , opens new tab gained nearly 4% and Meta (META.O) , opens new tab stumbled more than 6% as each of the megacap companies posted quarterly results. The Dow Jones Industrial Average (.DJI) , opens new tab fell 74.37 points, or 0.16%, to 47,632.00, the S&P 500 (.SPX) , opens new tab dropped 0.30 points, or 0.00%, to 6,890.59 and the Nasdaq Composite (.IXIC) , opens new tab rose 130.98 points, or 0.55%, to 23,958.47. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab slipped 0.61 points, or 0.06%, to 1,012.99 after hitting an intraday record of 1,017.24 while the pan-European STOXX 600 (.STOXX) , opens new tab index closed down 0.06%. Policy announcements from the Bank of Japan and European Central Bank are due later this week. The dollar index , which measures the greenback against a basket of currencies extended gains after Powell's comments and was last up 0.54% to 99.21, with the euro down 0.47% at $1.1594. Against the Japanese yen , the dollar strengthened 0.47% to 152.82, while sterling weakened 0.67% to $1.318. The Canadian dollar weakened 0.04% versus the greenback to C$1.395 per dollar. The Canadian currency had initially strengthened after the Bank of Canada reduced its key overnight interest rate to 2.25% on Wednesday, as widely expected, and signaled this could mark an end to its cutting cycle unless the outlook for inflation and the economy changes. U.S. President Donald Trump and South Korean President Lee Jae Myung finalized details of their fraught trade deal at a summit in South Korea, and Trump also sounded an optimistic note about an upcoming summit with China's Xi Jinping. In U.S. Treasuries, the yield on benchmark U.S. 10-year notes extended gains after the policy announcement along with the Fed chair's comments, and was last up 9.5 basis points at 4.0785, its biggest one-day jump since June 6. The 2-year note yield, which typically moves in step with rate expectations for the Fed, surged 10.8 basis points to 3.602%, also the biggest rise since June 6. U.S. crude settled up 0.55% to $60.48 a barrel and Brent rose to settle at $64.92 per barrel, up 0.81% on the day on a large drop in U.S. stockpiles and optimism surrounding trade policies. https://www.reuters.com/world/china/global-markets-wrapup-1-2025-10-29/

2025-10-29 05:34

A look at the day ahead in European and global markets from Rae Wee It's a busy day for markets with a key policy decision from the Federal Reserve and a host of earnings in Europe and from Wall Street's tech giants, with much riding on the latter in particular to drive the next leg of the market rally. Sign up here. Results from Microsoft (MSFT.O) , opens new tab, Alphabet (GOOGL.O) , opens new tab and Meta (META.O) , opens new tab are due after the bell. The bar is high for them to deliver solid numbers that would justify stretched valuations. Asia stocks were upbeat on Wednesday thanks to spillover from Wall Street on more optimism over artificial intelligence, with Nvidia (NVDA.O) , opens new tab announcing it would build seven supercomputers for the U.S. Department of Energy. Microsoft meanwhile reached a deal allowing OpenAI to restructure into a public benefit corporation while giving the software giant a stake of 27% in the ChatGPT maker. Things are looking rosy for now, but the key question remains: is the AI boom headed for a bubble or not? Any signals that demand is tailing off or that the massive spending is not paying off as anticipated could spark a rush out of crowded positions in Big Tech stocks. As for the Fed, a 25-basis-point rate cut on Wednesday is pretty much baked in, so investors will be looking for validation of further easing in December. While an ongoing U.S. government shutdown has halted the flow of key economic data at a moment of uncertainty about the health of the U.S. job market, some signs of cooling labour conditions and milder-than-expected inflation should give policymakers confidence to lower rates. Also in focus will be whether the central bank finally announces an end to its long-running balance sheet reduction programme, known as quantitative tightening (QT). Elsewhere in markets, the yen strengthened after U.S. Treasury Secretary Scott Bessent urged Japan's government to give its central bank scope to hike rates, escalating his warning to Tokyo against keeping the yen too weak through prolonged low borrowing costs. The Australian dollar rose after data showed domestic consumer prices jumped by the most in 2-1/2 years in the September quarter, while a shockingly large jump in core inflation seemed to rule out a near-term interest rate cut. And it's golf clubs to golden crowns for U.S. President Donald Trump, who landed in South Korea on Wednesday for the final leg of his Asia trip. He is set to discuss trade, investment and peace with South Korean President Lee Jae Myung in bilateral talks. Lee will gift Trump a replica gold crown and award him with the "Grand Order of Mugunghwa", the country's highest decoration, the presidential office said. Trump arrived in South Korea from Tokyo, where he lavished praise on Japan's first female prime minister, Sanae Takaichi, welcoming her pledge to accelerate a military buildup and signing deals on trade and rare earths. Takaichi had gifted Trump with a putter used by Shinzo Abe, his golfing buddy and Japan's late leader - one of several references to Trump's bond with Abe that underpinned ties between the countries during the U.S. president's first term. Key developments that could influence markets on Wednesday: - Federal Reserve, Bank of Canada rate decisions - Microsoft, Alphabet, Meta earnings - Mercedes-Benz, UBS, Adidas, GSK, Airbus earnings https://www.reuters.com/world/china/global-markets-view-europe-2025-10-29/

2025-10-29 05:32

NEW DELHI, Oct 29 (Reuters) - Goldi Solar, one of India's largest solar module makers, has raised 14.22 billion rupees ($171 million) in growth capital led by electrical equipment major Havells India (HVEL.NS) , opens new tab, the company said on Wednesday. The funding round also drew investments from high-net-worth individuals and firms, including Ambit Global Private Client, Nikhil Kamath, founder of discounted broker Zerodha, Shahi Exports, SRF Transnational Holdings, and NSFO Ventures. Sign up here. The funds raised will support Goldi Solar's manufacturing expansion and solar cell production in Gujarat. The capital infusion, advised by SBI Capital Markets and Saraf and Partners, comes as Goldi ramps up its annual solar PV module capacity nearly five-fold to 14.7 gigawatts, and deepens its push into high-efficiency solar technologies, the company said. The fundraising underscores growing investor interest in India's clean energy transition landscape as the country is looking to double its annual non-fossil fuel power generation capacity to 500 GW. India's clean energy-related manufacturing is also ramping up as Prime Minister Narendra Modi's government is looking to reduce dependence on China through "Make in India" initiatives. Starting June 2026, India's clean energy policy will require developers of government projects and tenders to use only locally-made modules and cells. Most Indian companies use cheaper Chinese solar cells. https://www.reuters.com/sustainability/climate-energy/indias-goldi-solar-secures-171-million-havells-led-funding-round-2025-10-29/

2025-10-29 05:00

WELLINGTON, Oct 29 (Reuters) - New Zealand central bank Governor Christian Hawkesby said on Wednesday that people did not need to look far to see central bank independence under attack around the globe and that the independence of these banks to set policy remains crucial. Hawkesby said in a speech at a central bank workshop in Auckland that 10 years ago it would have been unheard of for a U.S. president to openly disagree with an interest rate policy decision or call the Federal Reserve chairman a string of names but it has become commonplace. Sign up here. "The worry amongst the global central banking community is that this rubs off and becomes normalised internationally," Hawkesby said. He said that monetary policy is most effective when there are clear, transparent, measurable targets, and a high degree of credibility in the targets and that the government had a role to play in setting those targets. But once the government has set policy objectives "it is crucial that the Reserve Bank has, and is perceived to have, full operational independence to pursue these objectives," Hawkesby said. https://www.reuters.com/world/asia-pacific/rbnz-governor-hawkesby-says-it-is-crucial-central-banks-have-full-independence-2025-10-29/

2025-10-29 00:59

Headline CPI rises 1.3% in Q3, largest in 2-1/2 years Core inflation beats at 1.0%, above RBA's forecasts Market pricing for Nov cut at just 8%, Dec less than 25% SYDNEY, Oct 29 (Reuters) - Australian consumer prices jumped by the most in 2-1/2 years in the September quarter as electricity and travel costs climbed, while a shockingly large increase in the core inflation reading seemed to rule out any imminent rate cuts. Investors gave up any remaining hopes for a rate cut from the Reserve Bank of Australia next week, which is now just 8% priced in, down from 40% before the data. The chance of a cut in December is now seen as less than 25%. Sign up here. Rates are seen bottoming at 3.35% by mid-2026 from the current 3.6%, implying just one last cut in the easing cycle. Economists at the Commonwealth Bank of Australia abandoned their call for one more rate cut in February after the hot inflation figures and now expect the cash rate to remain on hold for a prolonged period. "It would take a material upside move in the unemployment rate and more moderate inflation prints to bring the RBA back to the easing table," said Belinda Allen, head of Australian economics at CBA. "Instead, the RBA will now turn more hawkish and look to prevent a return to higher inflation." Data from the Australian Bureau of Statistics on Wednesday showed the consumer price index (CPI) rose 1.3% in the third quarter, topping forecasts of a 1.1% increase. The annual CPI inflation rate jumped to 3.2%, from 2.1%, above the top end of the RBA's 2% to 3% target band. Crucially, the key trimmed mean measure of core inflation accelerated by 1.0% in the quarter, well above forecasts of a 0.8% gain and unwelcome news for the RBA, which had looked for something nearer 0.6%. The annual pace rose to 3.0%, from 2.7%, the first increase since a peak of 6.8% in late 2022. The Australian dollar gained 0.2% to 66 cents after the data release, while three-year government bond futures fell 11 ticks to 96.43, the lowest in two weeks. Westpac too joined the other 'big four' banks on Wednesday in calling a rate hold in November after the inflation data. ELECTRICITY, HOLIDAY TRAVEL COSTS RISE Rate-cut hopes have faded since RBA Governor Michele Bullock said on Monday that even a 0.9% rise in the core measure would be a "material miss" to the central bank's forecasts, while labelling an unexpected surge in the jobless rate to 4.5% a statistical quirk. Adam Boyton, head of Australian economics at ANZ, said if the economy proves to be materially weaker than anticipated, the RBA does have the option to ease in December, but the hurdle for any easing this year is now very high. "We expect the more likely path for policy will be a final 25 bps easing in the first half of 2026, albeit now with the risk that our expectation of a final rate cut in February ends up occurring later or not at all." Details of the inflation report showed the largest price gains in the September quarter came in electricity, which jumped 9% as government energy subsidies ended, and local government charges paid by property owners, which surged 6.3%, the fastest pace since 2014. There was also upward pressure on services costs, with annual services inflation picking up to 3.5% in the quarter. Holiday travel and accommodation prices rose 2.5%, thanks to robust demand over school holidays. From next month, the bureau will publish complete monthly inflation data, versus partial data at present. But the RBA has said it will still focus on the quarterly reports as the seasonal adjustments in the new monthly reports will take some time catching up. https://www.reuters.com/world/asia-pacific/australia-core-inflation-jumps-q3-red-flag-rate-cut-2025-10-29/

2025-10-29 00:58

Japan must balance growth, inflationary concerns, Bessent says Remark adds to complications for monetary dove Takaichi BOJ meets for policy setting, markets see rates on hold TOKYO, Oct 29 (Reuters) - U.S. Treasury Secretary Scott Bessent urged Japan's government on Wednesday to give the central bank scope to raise interest rates, escalating his warning to Tokyo against keeping the yen too weak through prolonged low borrowing costs. The dollar fell 0.3% to 151.59 yen after the comments, which revived market expectations of a near-term interest rate hike by the Bank of Japan. Sign up here. "I am encouraged by her deep understanding of how Abenomics has moved from a purely reflationary policy to a program that must balance growth and inflationary concerns for the citizens of Japan," Bessent said in an X post about his meeting with Japanese Finance Minister Satsuki Katayama on Monday. "The government's willingness to allow the Bank of Japan policy space will be key to anchoring inflation expectations and avoiding excess exchange rate volatility," he added. The comments come ahead of the BOJ's two-day policy meeting ending on Thursday, when markets widely expect the central bank to hold off on raising interest rates. They also followed a statement by Bessent on Tuesday, which said he called for a "sound monetary policy" in Japan to anchor inflation expectations during his meeting with Katayama. "Bessent might have felt that without his pressure, the BOJ could keep delaying rate hikes," said Mari Iwashita, executive rates strategist at Nomura Securities. "But just raising rates once more won't move the yen much. I think Bessent is asking for clearer communication on how far the BOJ will eventually push up borrowing costs," she said. Bessent's comments add to complications for the administration of new Prime Minister Sanae Takaichi, who is known as an advocate of expansionary fiscal and monetary policy. Japan's top government spokesperson Minoru Kihara declined to comment on Bessent's X post. "Specific means of monetary policy falls under the jurisdiction of the BOJ," he told a news briefing on Wednesday. CONDITIONS ARE DIFFERENT NOW TO 'ABENOMICS' TIME Takaichi was close to former premier Shinzo Abe, who deployed his "Abenomics" fiscal and monetary stimulus policies 12 years ago to pull Japan out of deflation and combat a yen spike that had been hurting the export-reliant economy. Japan now faces different challenges. With inflation above its target, the BOJ exited remnants of Abenomics last year and raised rates twice through January. A weak yen has become a political headache by boosting import costs and inflation. "Bessent is correct in pointing out that Japan's economic and price conditions have changed dramatically from the time Abenomics was deployed," said Shotaro Mori, senior economist at SBI Shinsei Bank. "The BOJ understands that well, which means we should brace for the chance of a rate hike in December, or January next year." In overseeing Washington's trade and exchange-rate talks with Tokyo, Bessent has repeatedly signalled his preference for tighter Japanese monetary policy. Some analysts see Washington pursuing a weak-dollar policy that would boost U.S. exports, thereby applying pressure on Japan to allow the yen to appreciate against the dollar. https://www.reuters.com/world/asia-pacific/us-treasurys-bessent-urges-japan-government-allow-boj-policy-space-2025-10-29/