2025-10-28 11:39

Oct 28 - What matters in U.S. and global markets today By Mike Dolan , opens new tab, Editor-At-Large, Finance and Markets Sign up here. As U.S. stock indexes hit new records on Monday ahead of a likely Federal Reserve interest rate cut and megacap earnings later this week, gold's retreat deepened - extending back below $4,000 per ounce and now down more than 10% from this month's peak. I'll get into all the market-moving news below. In today's column, I discuss the possible end to the Fed's balance sheet rundown at this week's policy meeting and whether it matters more broadly beyond the runes of money market plumbing. Today's Market Minute Gold sold, stocks stall Although stock market optimism was aided by hopes for a breakthrough in U.S.-China trade talks at Thursday's planned summit in South Korea, the latest runup in U.S. stocks was once again driven by AI chip excitement and another upbeat series of business surveys home and abroad. Qualcomm led the charge with a 13% surge after it unveiled two AI chips for data centers that will rival Nvidia's. Five of the "Magnificent Seven" tech megacaps report this week - with a combined market cap that's a quarter of the S&P 500. U.S. futures and global benchmarks dialed back a bit today from Monday's heady highs, however, as the week's big events lined up. Beyond trade and tech, attention was squarely on the Fed's likely rate cut on Wednesday and a possible end to its balance sheet runoff, or 'quantitative tightening' policy. A Bank of Canada rate cut is due the same day, with policy moves less likely at the European Central Bank and Bank of Japan meetings. But even after mixed results from two big Treasury note auctions on Monday, yields have resumed their declines - aided by the glow of slightly below-forecast U.S. inflation readings last Friday. Even though there are doubts about when the October inflation update will now be released, amid the general outage of government data due to the ongoing Washington shutdown, short-run inflation expectations ebbed somewhat and bond market volatility plunged. The MOVE index of implied Treasury vol dropped on Monday to its lowest in almost four years, with the VIX equity market equivalent subsiding to its lowest in a month. That provided the backdrop to gold's retreat. Overseas, the Chinese yuan hit its strongest in more than a month ahead of Thursday's summit and Japan's yen climbed sharply too - with U.S. President Donald Trump touring the region all week and the BOJ meeting on the radar. As Trump met Japan's new Prime Minister Sanae Takaichi in Tokyo, Treasury Secretary Scott Bessent helped lift the yen as he called for "sound monetary policy" during his meeting with Japanese counterpart Satsuki Katayama, comments seen as a swipe at the slow pace of BOJ rate hikes. Chart of the day As Spain's economic growth outstrips all its euro zone peers, its blue-chip index IBEX 35 hit a new record high on Tuesday, surpassing its previous peak from November 2007 and closing a year in which it's outperformed every major European market. The bank-heavy IBEX 35 has been buoyed by a remarkable performance by domestic lenders so far this year. Shares in Santander, the euro zone's biggest bank by market value, have risen around 90% this year, while its competitors in the index have risen between 67% and 82%. Today's events to watch * October consumer confidence (10:00 AM EDT) Richmond Federal Reserve Oct business survey (3:00 PM EDT) Dallas Fed Oct service sector business survey (3:30 PM EDT) US August house prices (9:00 AM EDT) * U.S. Federal Reserve's Federal Open Market Committee starts two-day meeting on interest rates - decision Wednesday * U.S. corporate earnings: Visa, UPS, UnitedHealth, NextEra Energy, PayPal, Invesco, MSCI, Sysco, Booking, Regeneron, CoStar, Edison, Ecolab, American Tower, Royal Caribbean Cruises, PPG, Advantest, Sherwin-Williams, Mondelez, Corning, DR Horton, Hubbell, Electronic Arts, Regency, Teradyne, Seagate Technology, Expand Energy, Equity Residential, Veralto, AO Smith, BXP, ONEOK, Labcorp, Incyte, Xylem, Zebra * U.S. Treasury sells $44 billion of 7-year notes 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-2025-10-28/

2025-10-28 11:36

SINGAPORE/NEW DELHI, Oct 28 (Reuters) - Asian oil refining profits have rallied to their heftiest in 20 months, boosted by robust diesel performance on a tightening outlook after the United States sanctioned two major Russian suppliers, analysts and trade sources said. Singapore's complex refining margin, a proxy for Asia refining profitability, rose to nearly $9 a barrel on Tuesday, the widest since February 2024, based on LSEG data, up from about $2 per barrel in early October. Sign up here. The strength has mainly been driven by the global diesel market, which has staged an upward swing in recent weeks on robust demand and tighter supply prospects. Refining cracks for benchmark 10ppm sulphur gasoil breached $26 a barrel on Tuesday, holding at more than 1-1/2 year highs. European markets have followed a similar trend, rallying on supply concerns, with benchmark diesel margins up to above $30 a barrel on Monday, their highest since mid-February 2024. US SANCTIONS RUSSIAN OIL EXPORTERS Markets were further boosted by U.S. sanctions last week on Russian oil exporters Rosneft (ROSN.MM) , opens new tab and Lukoil (LKOH.MM) , opens new tab. "The latest sanctions on Russia threaten diesel flows, as Russia exports around 1 million barrels per day of diesel," ING commodities strategists said in a research note. "There is also the risk that Indian refiners reduce run-rates if they stop buying Russian oil. This would lead to lower middle-distillate export volumes from India," ING added. Before the latest sanctions, diesel supplies from India had been pivoting to Europe as refineries entered peak maintenance season and production fell. "The current diesel rally was built up from reduced Russian diesel exports due to Ukrainian drone attacks, seasonal refinery turnaround and limited Chinese clean product export quotas into Q4," June Goh, senior oil market analyst at Sparta Commodities, told Reuters. "Additionally, the Arab Gulf and West Coast India distillate arbitrages are pointing east and firmly shut into Europe. Thus the diesel tightness faced in Europe will be even more substantial," said Goh. Market talk of fewer spot cargoes from Asian suppliers, including South Korea, China and Taiwan, for November shipments also supported sentiment in the short run. OTHER PARTS OF THE BARREL Profit on processing a barrel of gasoline has surged nearly 30% this month to around $13 per barrel, driven by tight supply from unplanned Southeast Asian outages, even as margins narrow in other regions heading into winter, traders said. "Strong margins should keep refinery runs high, and rising OPEC+ crude supply, especially medium sours, will improve crude slate optimisation and boost clean product yields," Energy Aspects said in its monthly outlook for middle distillates. Meanwhile, naphtha cracks were rangebound this month, and fuel oil margins remained lacklustre. Low-sulphur fuel cracks have edged lower, while high-sulphur fuel logged recent gains but were broadly rangebound. https://www.reuters.com/business/energy/asia-refining-margins-soar-sanctions-threaten-russian-supplies-2025-10-28/

2025-10-28 10:58

MUMBAI, Oct 28 (Reuters) - Foreign ownership of Indian government bonds touched a record high, with investors prizing their diversification value and potential for gains with more rate cuts, even as the central bank protects the rupee. Foreign investors held 3.11 trillion rupees ($35.35 billion) of government bonds under the Fully Accessible Route (FAR) as on October 27, accounting for approximately 6.8% of the outstanding issuance. Sign up here. A significant proportion of FAR-designated bonds are included in global indexes, undergirding demand. "Positive demand for emerging market local debt and dollar weakness is driving demand for diversification," said Shamaila Khan, head of fixed income emerging markets and Asia Pacific at UBS Asset Management. India joined JPMorgan's emerging market debt index in June 2024, Bloomberg's debt index in January 2025, and was recently added to FTSE Russell's emerging market debt index from September. Radhika Rao, executive director and senior economist at DBS Bank, noted, "relatively attractive returns, duration interest, better debt supply mix and a favourable macro environment, including low inflation and dovish guidance, have stoked interest in domestic bonds." Rao expects a central bank rate cut in December. The Reserve Bank of India has cut its key policy rate by 100 basis points so far in 2025 and signaled further easing at its latest meeting. The next monetary policy decision is due in early December, with most analysts predicting a 25 basis-point reduction, while Nomura, MUFG, and Capital Economics also anticipate another 25 bps cut in February. Currency management by the central bank has also bolstered foreign investor confidence. The RBI is estimated to have sold $5 billion on a single day this month to support the rupee, preventing it from reaching record lows. "The currency has been supported by the Reserve Bank of India recently, and that helps sentiment," UBS Asset Management's Khan added. Trade negotiations between India and the United States remain on the radar, though foreign investors appear unfazed by potential tariff issues. Philippe Gijsels, chief strategy officer at BNP Paribas Fortis, emphasized that India's political stability is a draw for capital flows. "A stable political country like India will continue to attract capital flows, even in a world in which the tariff environment may be challenging." ($1 = 88.2950 Indian rupees) https://www.reuters.com/world/india/favorable-rate-outlook-fx-stewardship-spur-record-high-foreign-ownership-india-2025-10-28/

2025-10-28 09:58

OBR expected to cut productivity forecast Downgrade will affect budget shortfall LONDON, Oct 28 (Reuters) - Britain's budget watchdog is expected to cut a key productivity forecast by a larger-than-expected 0.3 percentage points, people familiar with the situation said, potentially leading to a 20 billion-pound ($26.8 billion) hit to the public finances. Finance minister Rachel Reeves has said the Office for Budget Responsibility is likely to cut its productivity forecast after acknowledging it had been too optimistic in the past. Sign up here. But a 0.3% downgrade - first reported by the Financial Times and larger than the 0.1 or 0.2 percentage-point cut that had been expected - will place more pressure on Reeves as she prepares her budget for November 26. The Institute for Fiscal Studies, a think tank, estimates that each 0.1 percentage point downgrade to annual productivity growth would raise public borrowing by 7 billion pounds by the 2029/30 financial year. MASSIVE SPENDING SHORTFALL NEEDS ADDRESSING Analysts had already expected Reeves to need to fill a spending shortfall of up to 30 billion pounds based on the lower productivity downgrade as well as a reversal of planned welfare savings by Prime Minister Keir Starmer and other factors. Speculation has mounted as to which tax rises and spending cuts will be needed to keep the government on track for its fiscal targets and avoid upsetting bond investors. The finance ministry said it would not comment on the media reports. Reeves, speaking at a conference in Saudi Arabia on Monday, reiterated that the expected downgrade was due to weak productivity numbers since the 2008 financial crisis and Britain's departure from the European Union in 2020. The OBR's outlook for trend productivity - measured as output per hour worked - is central to its economic projections which, in turn, underpin its fiscal estimates. Those estimates have yet to be finalised. 'SEVERAL MOVING PARTS' TO ESTIMATING IMPACT TO BUDGET JP Morgan economist Allan Monks said there were several moving parts involved in estimating the size of the hit to the budget from the reported productivity downgrade which, he said, could reach almost 27 billion pounds. But other factors such as a recent fall in borrowing costs in financial markets or more people coming into the jobs market could help limit the damage. "For now, we are still assuming a 20-30 billion-pound range, but with the risk that this could be exceeded to some degree," Monks said. As well as offsetting the productivity and welfare hit, Reeves has said she would like to raise her headroom for meeting her budget targets - including a goal to balance day-to-day borrowing with tax revenues by 2030 - from the relatively small 9.9 billion-pound buffer she previously given herself. ($1 = 0.7451 pounds) https://www.reuters.com/world/uk/uk-budget-watchdog-expected-cut-trend-productivity-growth-forecast-by-about-03-2025-10-27/

2025-10-28 07:43

Oct 28 (Reuters) - British cryptocurrency company KR1 (KR1.ASE) , opens new tab said on Tuesday it plans to uplist its stock to the main market of the London Stock Exchange, to enhance its visibility and broaden investor base. KR1's move comes at a time when decentralised blockchain companies have gained a strong foothold in the global financial system and are of great interest to institutional investors. Sign up here. The UK, which has one of the fastest-growing crypto markets globally, has been revising regulations and positioning itself as a hub for the maturing sector. KR1, currently listed on the Aquis Stock Exchange, said it would also establish a placing programme to issue new shares to expand its staking operations, which involve validating transactions on blockchain networks in exchange for rewards. The company's stock migration is subject to approval of a prospectus by the Financial Conduct Authority and shareholder approval. https://www.reuters.com/business/british-crypto-firm-kr1-targets-london-main-market-listing-2025-10-28/

2025-10-28 07:34

LONDON, Oct 28 (Reuters) - Global miner Anglo American (AAL.L) , opens new tab on Tuesday posted a 9% drop in copper production in the first nine months of the year but maintained its 2025 guidance for the transition metal, and raised its outlook for iron ore output. Anglo said its copper output stood at 183,500 metric tons in the July to September quarter, compared to 181,000 tons in the same period of 2024, but fell to 526,000 tons in the first nine months from 575,000 in 2024. Sign up here. The London-listed miner in September announced a plan to merge with Canada's Teck Resources (TECKb.TO) , opens new tab, hoping to forge a new global copper-focused heavyweight. The deal came as Anglo was in the middle of restructuring its business after fending off a $49 billion takeover offer from bigger rival BHP Group (BHP.AX) , opens new tab in 2024. Anglo still expects to produce 690,000-750,000 tons of copper and raised its iron numbers to 58-62 million tons from 57-61 million previously, after a pipeline inspection at its Minas-Rio operation in Brazil completed ahead of schedule. https://www.reuters.com/business/anglo-american-reports-flat-copper-production-third-quarter-2025-10-28/