2025-10-15 21:18

SYDNEY, Oct 16 (Reuters) - Australia's central bank is seeing signs that financial conditions are loosening after three interest rate cuts this year and credit is readily available to households and businesses. In a speech in Sydney on Thursday, Reserve Bank of Australia Assistant Governor Christopher Kent said the central bank's forecasts in August had been based on market pricing for more policy easing, but that outlook was subject to considerable uncertainty. Sign up here. "We will continue to reassess it in light of what the incoming data mean for the economic outlook and evolving risks," Kent said. The RBA has cut interest rates three times this year to 3.6% but recent data has surprised on the strong side with disinflationary pulses stalling and consumers continuing to spend. Housing prices, in particular, have surged to new record highs. Kent downplayed the concept of a neutral rate - where policy is neither restrictive or stimulatory - arguing that it was not a suitable guide to monetary policy with estimates ranging widely from 1% to 4%. "We can have some confidence that cash rates well above the range of central estimates would constrain aggregate demand. But we can be less certain for rates closer to or within that range, as is currently the case," said Kent. Given those limitations, the central bank is also looking at financial indicators such as banks' funding costs, household credit and business debt, which showed early signs of responding to the rate cuts this year. https://www.reuters.com/business/finance/australias-central-bank-sees-signs-financial-conditions-loosening-after-rate-2025-10-15/

2025-10-15 21:00

Bessent says new Argentina debt facility would bring US support to $40 billion US purchased pesos on Wednesday morning, US Treasury chief says Bessent says IMF SDRs to back $20 billion swap line from Exchange Stabilization Fund WASHINGTON, Oct 15 (Reuters) - The U.S. again purchased Argentine pesos in the open market on Wednesday, Treasury Secretary Scott Bessent told reporters, adding that the department was working with banks and investment funds to create a $20 billion facility to invest in the South American country's sovereign debt. Bessent said during a press conference that the facility would sit alongside a new $20 billion U.S. currency swap line for Argentina, providing a total of $40 billion in support for Latin America's third-largest economy. Sign up here. Bessent did not provide details of the peso operation, which follows an initial U.S. purchase on October 9. The action contributed to recovery in Argentine stocks after U.S. President Donald Trump's comment on Tuesday that appeared to call U.S. support for Argentina into question. Local stocks ended up 1.7% after rising more than 4% earlier, while international dollar bonds ticked up after selling off on Tuesday. But the peso weakened after Bessent's announcement, declining 1.7% to 1,378 per dollar. Trump said on Tuesday that the U.S. would not "waste our time" with Argentina if President Javier Milei's party loses in parliamentary elections on October 26. But Bessent clarified that the U.S. would continue to support Argentina financially as long as Milei's government pursues "good policies," regardless of the election outcome. Bessent said the Trump administration's support for Argentina "is not election-specific," but a win for Milei's La Libertad Avanza party would ensure that the right-wing Argentine president has a sufficient majority to veto policies aimed at ending his libertarian fiscal austerity agenda and free-market overhaul of the country's crisis-prone economy. "It is policy-specific. So as long as Argentina continues enacting good policy, they will have U.S. support," Bessent said. Asked if the peso operation would be accompanied by U.S. purchases of Argentine debt, Bessent said, "We could," without elaborating. Work on the private-sector debt investment facility has been underway for weeks, but Bessent did not provide a timeline for any debt purchases. "So it is a private-sector solution to Argentina's upcoming debt payments," Bessent said. "Many banks are interested in it, and many sovereign funds have expressed interest in being part of it." ARGENTINA PROMISES POLICY CONTINUITY In Buenos Aires, Argentina's Economy Minister Luis Caputo said on Wednesday that he hopes "very soon" to execute the terms of the $20 billion U.S. currency swap, ideally before the October 26 vote. Despite Trump's support for ideological ally Milei, a key local election in Buenos Aires recently handed a resounding victory to his socially focused opposition. Caputo said that regardless of the outcome of the vote, the policies of the Milei administration would remain the same. He added that the Argentine administration was working on additional financial options it could not yet disclose, and that some U.S. businesses had informally pledged billions of dollars in investment during recent meetings. The Trump administration has disclosed few details about the swap line arrangement, aimed at improving Argentina's market liquidity. Bessent confirmed it would be backed by International Monetary Fund Special Drawing Rights assets that are held in the Treasury's Exchange Stabilization Fund and would be converted to dollars. Asked whether the U.S. would assume a preferred creditor status ahead of the IMF or private-sector lenders, Bessent said: "No, that's what China does, we don't do that." Milei said the government is in talks with the U.S. over a potential agreement that would grant the South American country trade advantages. "There is an issue of trade advantages that the United States would be giving us; the U.S. has strongly favored Argentina," Milei said in a television interview. ECONOMIC 'MONROE DOCTRINE' Bessent said the Trump administration was motivated not by any systemic risk emanating from Argentina, but views the country as the centerpiece of an "Economic Monroe Doctrine," a reference to the 1823 U.S. foreign policy doctrine aimed at ensuring U.S. influence over the Americas. China has gained influence in Latin America in recent years, and maintains its own $18 billion swap line with Argentina. Bessent said Milei's government is a "beacon" for resisting past socialist policies and its success could help shift other governments in the region to the right. https://www.reuters.com/world/americas/bessent-says-us-buys-more-argentine-pesos-working-20-billion-debt-facility-2025-10-15/

2025-10-15 20:59

TSX ends up 0.9%, at 30,637.12 Eclipses October 6 record closing high Materials group rises 3.2% as gold climbs Technology adds 0.9% TORONTO, Oct 15 (Reuters) - Canada's main stock index rose to a record high on Wednesday, with technology and metal mining shares leading gains as investors bet the Federal Reserve and the Bank of Canada would continue to cut interest rates. The S&P/TSX composite index (.GSPTSE) , opens new tab ended up 283.51 points, or 0.9%, at 30,637.12, eclipsing the record closing high on October 6. Sign up here. U.S. benchmark the S&P 500 also ended higher, with Morgan Stanley and Bank of America rallying after solid quarterly results. "It's been strong right across the board," said Robert Gill, a portfolio manager at Fairbank Investment Management. "Canada in particular is strong. It's been considerably stronger than the other North American markets this year, predominantly driven by metals and mining, and the precious metals in particular." The TSX has advanced 23.9% this year, substantially beating the S&P 500's gain of 13.4%. "It looks like we're going to have more interest rate cuts coming which continue to fuel the market, continue to fuel cheaper capital," Gill said. On Tuesday, Fed Chair Jerome Powell left the door open to interest rate cuts at the U.S. central bank's final two meetings this year. Bank of Canada Governor Tiff Macklem is due on Thursday to speak on Canada's economic outlook. Investors see a roughly 60% chance that the central bank will ease rates at a policy decision on October 29. 0#CADIRPR , opens new tab The materials group, which includes fertilizer companies and metal mining shares, rose 3.2% as the price of gold traded above $4,200 an ounce for the first time. Technology (.SPTTTK) , opens new tab added 0.9%, with shares of electronic equipment company Celestica Inc (CLS.TO) , opens new tab jumping 9%. Energy was the only one of the 10 major sectors to end lower, dipping 0.2%. The price of oil settled 0.7% lower at $58.27 a barrel, pressured by escalating U.S.-China trade tensions. https://www.reuters.com/business/tsx-futures-rise-fed-rate-cut-optimism-surging-metal-prices-2025-10-15/

2025-10-15 20:50

Lawsuit argued Trump's energy policies would cause a litany of harms Judge say lawsuit would have him overstep his powers, was unworkable Our Children’s Trust lawyers say to appeal ruling Trump administration says activists should seek redress through the political process Oct 15 (Reuters) - A federal judge in Montana on Wednesday threw out a lawsuit by youth activists seeking to block U.S. President Donald Trump’s pro-fossil fuel energy policies, saying it asked the court to take on a sweeping role overseeing potentially hundreds of government rules and regulations. A group of young people represented by the nonprofit Our Children’s Trust sued in May, arguing Trump’s executive orders aimed at “unleashing” American energy were unconstitutional. Their lawyers said they would appeal Wednesday's ruling. Sign up here. U.S. District Judge Dana L. Christensen said in an order that while the activists had shown they would be harmed by Trump's policies, they asked him to assume a sweeping role in climate regulation that would overstep his powers as a judge. "This court would be required to monitor an untold number of federal agency actions to determine whether they contravene its injunction. This is, quite simply, an unworkable request for which plaintiffs provide no precedent," Christensen said. Our Children’s Trust chief legal counsel Julia Olson said in a statement that Trump's energy policies are causing irreparable harm to the health, safety and future of the 22 young people who brought the case. "We will appeal — because courts cannot offer more protection to fossil fuel companies seeking to preserve their profits than to young Americans seeking to preserve their right," Olson said. Adam Gustafson of the Justice Department's Environment and Natural Resources Division praised the ruling in a statement on Wednesday, saying the lawsuit was a baseless attack on Trump’s energy agenda. Trump, a Republican, unveiled executive orders in January aimed at maximizing oil and gas production, rolling back environmental protections and withdrawing the U.S. from an international pact to fight climate change. The United Nations has said scientific evidence clearly shows greenhouse gas emissions from fossil fuels are responsible for rising temperatures and destructive changes to earth’s climate. In their lawsuit, the activists said Trump's policies would cause them a litany of harms, including life-threatening health conditions stemming from rising temperatures, air pollution from wildfires and flooding from increasingly powerful storms. They asked the court to declare Trump’s orders illegal, block their implementation and roll back all policy changes stemming from them. The Trump administration said the activists had no right to dictate climate policy through litigation and should instead seek redress through the political process. “A self-designated group of children and young plaintiffs claim they are better positioned to set national energy policy than the President of the United States," U.S. Department of Justice lawyers said in a court filing. https://www.reuters.com/legal/litigation/us-judge-dismisses-youth-activists-lawsuit-challenging-trumps-pro-fossil-fuel-2025-10-15/

2025-10-15 20:46

Oct 15 (Reuters) - Argentina's Economy Minister Luis Caputo said he hopes to "very soon" execute a framework that will contain the terms of a $20 billion currency swap the U.S. recently agreed with Argentina's central bank, ideally before this month's midterm election. President Javier Milei is seeking to expand his minority presence in Argentina's legislature in the October 26 vote, and U.S. President Donald Trump has signaled his support of Argentina is conditional on the success of ideological ally Milei. Sign up here. "Hopefully we'll very soon be able to execute the framework and agreement that will contain the terms of the swap," Caputo said during an Atlantic Council panel discussion alongside central bank president Santiago Bausili. Caputo said the idea was to activate the framework within the next two weeks, ideally before the midterm vote. Despite Trump's support for Milei, who has campaigned to solve Argentina's economic woes through a tough austerity program and dramatically shrinking the size of government, a key local election in Buenos Aires recently handed a resounding victory to his socially-focused opposition. Trump's announcement that financial support depended on the outcome of the upcoming vote shook Argentina's market this week. Caputo said that regardless of the outcome of the vote, the policies of his administration would remain the same. He added that the administration was working on additional financial options it could not yet disclose, and that some U.S. businesses had informally pledged billions of dollars in investment during recent meetings. The swap line was blasted as a "bailout" by some critics in the U.S. concerned by Argentine competition selling soy to China. Bausili said U.S. Treasury Scott Bessent had been clear that the swap line was independent of any agreements with China. https://www.reuters.com/business/finance/argentina-hopes-finalize-us-20-billion-swap-line-before-midterm-vote-2025-10-15/

2025-10-15 20:45

US repo rates hit high of 4.36% on Wednesday Liquidity is declining, should be monitored, analyst says US Treasury settlements are one factor for funding rate rise NEW YORK, Oct 15 (Reuters) - U.S. banks borrowed $6.5 billion from the Federal Reserve's Standing Repo Facility (SRF) on Wednesday, central bank data showed, and repurchase rates rose, suggesting tightness in meeting funding obligations with a large net Treasuries settlement due this week. That was the biggest daily borrowing from the Fed since the COVID-19 pandemic, excluding end-of-quarter periods. Sign up here. The SRF acts as a liquidity backstop for potential funding shortfalls. Introduced in July 2021 in response to the pandemic, the Fed's facility provides twice-daily overnight cash loans in exchange for eligible collateral such as U.S. Treasuries. The general collateral or GC repo rate, which is the cost of borrowing short-term cash using Treasuries or other debt securities as collateral, hit a high of 4.36% on Wednesday, according to Curvature Securities. It closed the session at 4.12%. On Tuesday, the GC rate touched a peak of 4.32%, up from Friday's 4.20%. The rise in the repo was unusual, traders said, given that it is not a month-end or quarter-end, when repo rates tend to jump as banks pull away from acting as middlemen due to higher balance sheet costs required at those times for reporting purposes. "This is just more signs that liquidity is slowly, but surely, decreasing. Nothing alarming yet, but if SRF is continuously tapped the Fed should pay even more attention," said Jan Nevruzi, U.S. rates strategist at TD Securities in New York. Fed Chair Jerome Powell has signaled that quantitative tightening "is likely to be done soon and this emphasizes the possible need to announce the end as early as the October meeting," Nevruzi said. Powell said on Tuesday the end could be approaching for the central bank's long-running quantitative tightening, aimed at shrinking the size of its holdings. "Some signs have begun to emerge that liquidity conditions are gradually tightening, including a general firming of repo rates along with more noticeable but temporary pressures on selected dates," Powell said at a gathering held by the National Association for Business Economics in Philadelphia. Analysts also said there is a large volume of Treasury settlements that need to be paid. On Wednesday, $40 billion in bills and coupons were due for payment, data on Treasury financing flows from Wrightson ICAP showed. On Thursday, there will be another $23 billion. The U.S. Treasury has been aggressively issuing shorter-term debt, hitting record levels in the last few weeks, as it tries to reduce borrowing of longer-term debt and bring down yields on that part of the curve. When new Treasuries are issued, investors such as dealers, banks and money market funds must pay cash to the U.S. Treasury on settlement day. This payment drains reserves and cash from the private sector and moves them to the Treasury General Account, which is the Treasury's account at the Fed. Fewer available reserves make it more expensive to borrow cash in the repo market, pushing rates higher. https://www.reuters.com/business/us-banks-tap-fed-repo-facility-overnight-rates-climb-signaling-funding-strain-2025-10-15/