2025-10-22 06:12

Sterling falls 0.4% against dollar and euro BoE rate cut probability rises to 75% for December Difficult budget looms LONDON, Oct 22 (Reuters) - The British pound dipped against the dollar and the euro on Wednesday, after the annual rate of Britain's consumer price inflation unexpectedly held steady in September, undershooting forecasts for a rise. The consumer price index remained at 3.8% for the third month running, the Office for National Statistics said on Wednesday, below expectations from a Reuters poll and the Bank of England itself, which had foreseen a rise to 4%. Sign up here. Sterling was last down 0.4% against the dollar at $1.3323, its biggest single-day fall in almost two weeks, as investors added to BoE rate cut bets. Against the euro, it was down 0.4% at 87.05 pence . INFLATION OPENS RATE CUT DOOR Core inflation - which strips out volatile food and energy prices - and services inflation both also undershot forecasts, the data showed, prompting investors to add to their expectations for a rate cut from the BoE later this year. "The BoE has been very focused on food inflation and that came in markedly lower," said ING FX analyst Francesco Pesole. "That is quite a dovish signal for them." Interest rate futures were now pricing in about a 75% chance that the BoE's Monetary Policy Committee will cut the Bank Rate to 3.75% by the December meeting, up from about 46% before the data. "The MPC meeting in November is certainly live, but it comes ahead of the 26 November Budget, which could add to the Committee’s caution," said Jefferies economist Modupe Adegbembo in a note. "A move in December would allow the BoE to assess policy announcements in the Budget as well as additional data on inflation and wages." BUDGET CASTS CLOUD OVER STERLING Investors remain cautious before next month's tax and government spending announcement. Data on Tuesday showed Britain's borrowing in the first half of the financial year was the highest on record outside of the coronavirus pandemic, keeping up pressure on Finance Minister Rachel Reeves. ING's Pesole said there are two plausible budget scenarios that could both weigh on sterling. "If Reeves delivers a convincing budget that helps the gilt market, then it could weigh on rate expectations at the BoE," Pesole said. "On the other hand, if she fails to calm bond markets and the gilt market got a bit nervous it could spill into the pound. Both scenarios, which aren't too unrealistic, can harm the pound in a way," Pesole added. https://www.reuters.com/world/uk/sterling-dips-after-softer-than-forecast-cpi-2025-10-22/

2025-10-22 06:05

'Climate risk is financial risk,' fund says Says it prioritises dialogue over divestment Some NGOs say fund should threaten divestments U.S. climate policy rollback contrasts with fund's goals OSLO, Oct 22 (Reuters) - Norway's $2 trillion wealth fund is maintaining pressure on companies it invests in to cut their greenhouse gas emissions to net zero by 2050, it said on Wednesday, despite the growing U.S. backlash against climate-friendly policies. The world's largest sovereign wealth fund first formulated the goal of bringing all 8,500 companies in its portfolio in line with the Paris Agreement target in 2022. Sign up here. In its newly updated climate plan, the fund said it would continue to do so and would increase the pressure somewhat, by for instance increasing its scrutiny of companies' lobbying on climate change. It also said it could vote against the board of a company if the fund disagreed with its approach on climate change. It could also file its own shareholder proposals on the issue. "Climate risk is financial risk," said the plan. "The fund therefore has an interest in an orderly transition to global net zero emissions." NORWAY FUND CONTRASTS WITH INTENSIFYING US CLIMATE BACKLASH The fund's updated guidelines come at a time when some international investors are backing away from ESG policies on climate change. U.S. President Donald Trump's administration is, meanwhile, boosting fossil fuel production, rolling back climate policies at home, and working against international climate initiatives abroad, including withdrawing from the Paris climate agreement. The wealth fund, which manages the Norwegian state's revenues from oil and gas production, has invested about half of its value, or about $1 trillion, in the U.S., across bonds, equities and real estate. Fund CEO Nicolai Tangen told Reuters he had discussed the risk of a possible backlash from the U.S. to the plan with the board of the central bank, among other issues. Still, the plan will go because "it's our money and we have to safeguard our investments the way we see fit," he said in an interview. He declined to say whether the risk of a U.S. backlash had been discussed with the ministry of finance. DIALOGUE PRIORITISED OVER DIVESTMENT Some close observers of the fund cautiously welcomed the plan. "The fund's commitment to increased scrutiny of corporate policy advocacy as it relates to climate change is new and very welcome, as is the explicit acknowledgement of voting against boards as an escalation tool," said Brynn O'Brien, Executive Director of the Australasian Centre for Corporate Responsibility, an advocacy group. But she and others noted the threshold for the fund to take escalating steps, should engagement with a company not lead to change, was lacking. "The real test for the fund is how they deal with companies not willing to meet expectations. Sadly, the plan is almost devoid of any strategy to influence those companies still unwilling to transition," Diego Foss, Programme Co-Lead at the Nordic Center for Sustainable Finance, told Reuters. In response, the fund says engagement leads to more effective results than divestment. "Engagement is our main tool. Divestment does not take down emissions," Carine Smith Ihenacho, the fund's Chief Governance and Compliance Officer, told a seminar launching the plan. The plan presented on Wednesday is mostly distinct from the ethical guidelines set by parliament, which lead to regular divestments by the fund. https://www.reuters.com/sustainability/cop/norways-wealth-fund-intensifies-net-zero-emission-pressure-amid-us-climate-2025-10-22/

2025-10-22 05:30

Pound falls as UK inflation below forecasts Dollar index down after three-day jump Yen rises slightly, eyes on BoJ NEW YORK, Oct 22 (Reuters) - The pound fell on Wednesday after British inflation in September came in below forecasts, while the U.S. dollar fell slightly against the Japanese yen. The British pound was the weakest major currency on Wednesday after inflation unexpectedly held at 3.8%, undershooting expectations of economists and of the Bank of England. Sign up here. Sterling fell by as much as 0.5% against the dollar. It was last down 0.13% at 1.336. "When the BoE started sending hawkish signals recently, they had this out-of-consensus view that inflation would prove stronger than what markets or economists were expecting and it's not really proving to be the case at the moment," said Francesco Pesole, FX analyst at ING. Investors are pricing in about a 75% chance that the Bank lowers interest rates by year-end, up from around a 46% chance before the data. "Overall, our economists view today's data as providing meaningful and genuine softer inflation news, and as raising the risk that the BoE's next rate cut is earlier than their February meeting base-case," Goldman Sachs analysts said in a research note. YEN MARKS BIGGEST MONTHLY DECLINE SINCE JULY The U.S. dollar was last 0.04% weaker at 151.875 yen . Against the dollar, the yen hit a one-week low on Tuesday as sources told Reuters that new Prime Minister Sanae Takaichi is preparing an economic stimulus package likely to exceed last year's 13.9 trillion yen ($92.19 billion) to help households tackle inflation. The yen has lost 2.5% this month as Takaichi jostled to become Japan's prime minister, marking its biggest monthly decline against the dollar since July, as investors anticipated expansionary fiscal policy and a testy relationship with Japan's central bank would weigh on the currency. "Takaichi's first statements as prime minister suggest she wants to calm markets and not exacerbate any weakness in the yen for the moment," ING's Pesole said. Takaichi, an advocate for loose fiscal and monetary policy, said on Tuesday that it was up to the Bank of Japan to decide the specifics of monetary policy. New finance minister Satsuki Katayama said on Wednesday that it is necessary for the government and the Bank of Japan to coordinate to make economic and monetary policies effective. The BoJ is scheduled to announce its latest policy decision on October 30. Futures imply about a 20% chance of a quarter-point rate hike to 0.75%. DOLLAR INCHES UP FOR FOURTH DAY The dollar index , which measures the dollar's strength against a basket of six currencies, was last trading at 98.897, down 0.08% after three consecutive days of gains. President Donald Trump on Tuesday rebuffed a request by leading Democratic lawmakers to meet until the three-week-old U.S. government shutdown ends. The standoff complicates the task facing the Federal Reserve at its meeting on Oct. 29. But the U.S. central bank is still expected to lower its key interest rate by 25 basis points next week and again in December, according to a Reuters poll of economists who remain deeply divided on where rates will be by the end of next year. Fed funds futures imply a 97% probability of a 25-basis-point cut to interest rates, according to LSEG data. The euro was up 0.09% at $1.16 as a planned summit between Trump and Russian President Vladimir Putin was put on hold after Russia rejected an immediate ceasefire in Ukraine. https://www.reuters.com/world/asia-pacific/yen-climbs-gold-plunge-triggers-market-volatility-2025-10-22/

2025-10-22 04:48

US stocks end down as investors digest earnings London stocks jump after inflation data Gold declines again after sharpest fall in over 5 years Netflix shares drop after disappointing outlook NEW YORK, Oct 22 (Reuters) - Most major stock indexes fell on Wednesday, with Netflix (NFLX.O) , opens new tab shares down after the company's outlook disappointed, while spot gold prices declined, a day after they had the sharpest single-day drop in over five years. Gold, one of the year's best-performing trades, slid as investors booked profits. It remains on course for its strongest year since the 1979 oil crisis and is up more than 50% so far this year. Spot gold was last down 0.53% at $4,102.09 an ounce. Sign up here. Wall Street's three major indexes ended lower, with shares of Netflix falling 10.1% and weighing on the market. Tesla (TSLA.O) , opens new tab, the first of the Magnificent Seven group of megacap stocks to report this U.S. earnings season, ended the session down 0.8% ahead of its quarterly report. They were slightly lower in extended trading following the company's results. Investors also digested developments on the trade front. Reuters reported, citing a U.S. official and three people briefed by U.S. authorities, that the Trump administration is considering a plan to curb a dizzying array of software-powered exports to China, from laptops to jet engines, to retaliate against Beijing's latest round of rare earth export restrictions. "It looks like we're letting a little air out of the balloon," said Oliver Pursche, senior vice president at Wealthspire Advisors in Westport, Connecticut. "Given the sharp rally and gains that we've made year to date, and in particular since the beginning of April, combined with the concerns over future economic growth and the absence of data due to the government shutdown, there's no reason to make material moves in either direction," but maybe "you're going to take some profits; you're going to do some rebalancing," he said. Wednesday marked the 22nd consecutive day for the U.S. federal government shutdown. The Dow Jones Industrial Average (.DJI) , opens new tab fell 334.33 points, or 0.71%, to 46,590.41, the S&P 500 (.SPX) , opens new tab fell 35.95 points, or 0.53%, to 6,699.40 and the Nasdaq Composite (.IXIC) , opens new tab fell 213.27 points, or 0.93%, to 22,740.40. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab fell 4.16 points, or 0.42%, to 990.69. The pan-European STOXX 600 (.STOXX) , opens new tab index fell 0.18%. However, London stocks rose for a third consecutive day as investors increased bets on interest rate cuts from the Bank of England after data showed inflation unexpectedly held steady. The blue-chip FTSE 100 (.FTSE) , opens new tab gained 0.9%. Sterling fell by as much as 0.5% against the dollar. It was last down 0.13%. U.S. Treasury yields slid for a third straight session, though the market was range-bound as the U.S. federal government dragged on with no resolution in sight. U.S. yields further extended their fall in afternoon trading after a decent $13-billion auction of 20-year bonds. In afternoon trading, the benchmark 10-year yield was down 1.4 basis points (bps) at 3.949% . The Federal Reserve is expected to reduce rates two more times this year, with a quarter-percentage-point cut baked in for the October 28-29 meeting, according to LSEG calculations using rate futures. The dearth of U.S. economic data due to the ongoing shutdown means that policymakers could be left flying blind at the meeting, a less-than-ideal situation as they remain divided over which risks deserve the most attention. The yen was nearly flat against the dollar. Japan's new Satsuki Katayama said on Wednesday that it is necessary for the government and the Bank of Japan to coordinate to make economic and monetary policies effective. The BoJ is scheduled to announce its next policy decision on October 30. On Tuesday, sources told Reuters that the new prime minister, Sanae Takaichi, is preparing an economic stimulus package likely to exceed last year's 13.9 trillion yen ($92.19 billion) to help households tackle inflation. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, fell 0.05% to 98.93, with the euro up 0.06% at $1.1605. Against the Japanese yen , the dollar strengthened 0.04% to 151.99. Oil prices ended higher. U.S. crude rose $1.26 to settle at $58.50 a barrel and Brent gained $1.27 to settle at $62.59. https://www.reuters.com/world/china/global-markets-wrapup-1-2025-10-22/

2025-10-22 04:47

DBS sees Singapore GDP doubling to $1.4 trillion by 2040 Minister Chee sees ASEAN as fourth-largest economy by 2030 DBS CEO Tan urges innovation, says S$5 billion programme helpful STI could climb to 10,000; SGD may hit USD parity SINGAPORE, Oct 22 (Reuters) - DBS Group Research on Wednesday said it expects Singapore's gross domestic product to double by 2040, with the state's benchmark Straits Times Index (.STI) , opens new tab nearing 10,000 and the Singapore dollar reaching parity with the U.S. dollar. In a report, the research arm of Singapore's largest bank, DBS (DBSM.SI) , opens new tab, said annual real GDP growth is likely to average 2.3% over the next 15 years, outpacing other advanced economies. Sign up here. In the foreword to the report, Timothy Wong, group head at DBS Group Research, said Singapore's long-term outlook remains constructive despite heightened global uncertainty. The researcher said GDP would more than double to $1.2 trillion to $1.4 trillion by 2040 from $547 billion in 2024. It said disciplined policy, safe-haven capital inflow, steady productivity gain and a sustained current account surplus could drive long-term currency appreciation. It also noted the Straits Times Index breaking a 17-year stalemate, surpassing 4,000 in 2025, which it said marked a medium-term bullish shift. Singapore is strengthening capital markets through the Monetary Authority of Singapore's S$5 billion ($3.86 billion) equity market development programme, aimed at revitalising the market and boosting liquidity in small- and mid-cap stocks. Speaking at a DBS event on Wednesday, National Development Minister Chee Hong Tat said Singapore will "stay open, stay connected, and stay competitive" to remain a trusted hub for global capital. He also said the Association of Southeast Asian Nations is on track to become the fourth-largest economy by 2030, from fifth now, and that Singapore's financial sector grew 6.8% last year, with assets under management topping S$6 trillion. Chee, who is also MAS deputy chairman, said the de facto central bank is working to deepen market liquidity through the equity market development programme and other initiatives to enhance investor engagement. DBS Group CEO Tan Su Shan at the event said Singapore must safeguard its stability and trusted ecosystem while embracing innovation, and that the equity market development programme is a helpful step. ($1 = 1.2942 Singapore dollars) https://www.reuters.com/world/asia-pacific/dbs-expects-singapore-gdp-double-by-2040-singapore-dollar-parity-with-greenback-2025-10-22/

2025-10-22 04:33

A look at the day ahead in European and global markets from Rae Wee All eyes will be on the release of British consumer price figures later on Wednesday, where a hotter-than-expected print is likely to dash hopes of another rate cut from the Bank of England (BoE) this year. Sign up here. Expectations are for the inflation rate to have risen to 4% in September, the highest among the world's big rich economies and double the BoE's target. Currently, markets are pricing in a nearly 15% chance that the central bank could ease rates by 25 basis points at its November meeting. But an upside surprise in Wednesday's figures is almost certain to wipe out those bets. That would also cloud the rate outlook for the central bank into the year-end, as policymakers remain divided between those who want aggressive action to offset the slowing job market, others who worry about persistent inflation pressure and a majority in the middle who favour gradual rate cuts. The fast pace of price growth in the UK - which continues to strain households and keep borrowing costs elevated - adds to the challenge for finance minister Rachel Reeves, who has pledged to ease cost-of-living pressures and speed economic growth. Reeves has signalled that she will raise taxes and cut spending in her November 26 budget plan as she tries to stay on course to meet her fiscal targets and avoid upsetting investors who have already pushed up British borrowing costs sharply. Elsewhere in markets, investors were still reeling from the sudden plunge in gold prices, which has stalled the metal's blistering rally despite no obvious trigger. Asian shares similarly retreated, while Japan's Nikkei (.N225) , opens new tab reversed early losses to trade higher after a report that the country's new Prime Minister, Sanae Takaichi, is preparing an economic stimulus package that is likely to exceed last year's 13.9 trillion yen ($92.19 billion) to help households tackle inflation. Global money managers are circling back to Japan's stock and debt markets, drawn by the promises of its new reflationist government and a desire to diversify from pricier U.S. and European markets. Key developments that could influence markets on Wednesday: - UK inflation (September) - Barclays, Tesla earnings https://www.reuters.com/world/china/global-markets-view-europe-2025-10-22/