2025-10-03 11:15

Oct 3 (Reuters) - The pound firmed slightly against a broadly weaker dollar on Friday, with traders digesting news that business activity growth was slowing while they awaited remarks from Bank of England governor Andrew Bailey. They were also looking ahead to British finance minister Rachel Reeves' budget due in eight weeks. Sign up here. At 1040 GMT, the pound was up 0.1% against the dollar at $1.3449 , and 0.1% lower versus the euro at 87.25 pence . A PMI survey published Friday showed British business activity grew at the slowest pace in five months in September as companies and consumers put big spending decisions on hold as they waited to see if they would be hit by tax rises in November's budget. It follows a Bank of England survey that on Thursday showed British businesses have the joint weakest hiring intentions since 2020 and expect the fastest consumer price inflation since early 2024. Market players will be listening carefully when governor of the Bank of England Andrew Bailey delivers a keynote speech at a farewell symposium for Dutch central bank governor Klaas Knot later on Friday. "If he does indeed touch on monetary policy, we think that he will side with the hawks and indicate to markets that persistent inflation pressures are likely to put pay to further cuts during the rest of the year," said Matthew Ryan, head of market strategy at Ebury. Traders are betting on no change to interest rates at the BoE's next meeting on November 6, and on a further two cuts next year. Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said that cable remained unappealing due to budget pressures, and pointed to elevated yields on British gilts that are also diverging from U.S. 10-year yields. "That’s a drag on sterling, as higher yields narrow fiscal headroom, raise the chance of further tax hikes or spending cuts, and lower UK growth expectations," wrote Ozkardeskaya. https://www.reuters.com/world/uk/sterling-firms-traders-digest-pmis-await-bailey-speech-2025-10-03/

2025-10-03 10:44

LONDON, Oct 3 (Reuters) - What matters in U.S. and global markets today By Anna Szymanski, Editor-in-Charge, Reuters Open Interest Sign up here. Hello Morning Bid readers! Global equity markets mostly shrugged off the U.S. government shutdown this week, with all three major U.S. indices recording record highs on Thursday and Asian and European markets on track to deliver weekly gains early on Friday. While history suggests markets may be right not to panic, this shutdown will likely delay the release of vital government data, making the Federal Reserve’s job even more challenging. The Fed already faces a head-scratching economic environment, with almost 4% annualized growth and little job creation, something that might be explained by the artificial intelligence boom. Staying on the AI theme, ROI Financial Markets Editor-at-Large Mike Dolan argues that if the AI equity “bubble” bursts, it might take the U.S. economy down with it. Private payrolls for September were released on Wednesday. While economists tend not to put too much stock in this data, investors took note of the biggest monthly drop in employment in over two years. Meanwhile, hopes for continued Fed easing helped put gold on track for its seventh consecutive weekly gain. In the energy markets, oil prices fell throughout much of the week on expectations of rising supply, including possible accelerated production increases from OPEC+ , opens new tab, but Brent crude was down 1% early on Friday following news of a fire at Chevron’s El Segundo refinery, one of the largest on the U.S. West Coast. Zooming out, ROI Energy Columnist Ron Bousso argues that Big Oil is becoming increasingly bullish about the future outlook even as it grows ever more bearish about the near term. Predicting what’s going to happen in oil markets this year has become quite tricky, argues ROI Asia Commodities Columnist Clyde Russell, given that three of the biggest current drivers of crude prices are the unwinding of OPEC+ production cuts, China storage flows and geopolitical tensions , opens new tab – all of which are challenging to forecast accurately. On the renewables side, ROI Energy Transition Columnist Gavin Maguire explains why Italy’s economic woes may have a climate upside. And Clyde Russell discusses critical minerals and why the weak pricing for many of them does not reflect their supposed importance to the global energy transition. And, finally, over in the metals world, ROI Metals Columnist Andy Home looks at the fragility of the copper supply chain, highlighting the catastrophic events at Freeport-McMoRan's Grasberg mine last month. As we head into the weekend, check out the ROI team’s recommendations for what you should read, listen to, and watch to stay informed and ready for the week ahead. I’d love to hear from you, so please reach out to me at [email protected] , opens new tab . , opens new tab This weekend, we're reading... GAVIN MAGUIRE, ROI Global Energy Transition Columnist: This analysis by Carbon Brief , opens new tabexplains that electricity demand in Great Britain was fully covered by clean energy sources for a record long stretch in 2025. That's pretty impressive for a country that was over 75% powered by fossil fuels up to 2010. ANDY HOME, ROI Metals Columnist: My read of the week comes courtesy of Anjana Ahuja in the Financial Times. , opens new tab She writes about ground-breaking work on the concept of black hole stars, which pose the cosmological question of which came first: galaxies full of matter or black holes? RON BOUSSO, ROI Energy Columnist: The book More and More and More by Jean-Baptiste Fressoz , opens new tab is a fascinating overview of the history of energy through the centuries. It argues that the idea of an energy transition is false, suggesting instead that the world has always been adding new sources of energy. JAMIE MCGEEVER, ROI Markets Columnist: United States, Inc. , opens new tab is a collection of four Project Syndicate articles highlighting several fundamental flaws in trying to run the U.S. government like a business. We're listening to... ANNA SZYMANSKI, ROI Editor-in-Charge: Reuters' newest podcast, On Assignment, , opens new tab does a deep dive on the UN General Assembly. From broken escalators to high-stakes diplomacy, Reuters correspondents explore the challenges facing global multilateralism at a challenging moment in history. MIKE DOLAN, ROI Financial Markets Editor-at-Large: "Facing Coming Storms" is a podcast by the British Army's Centre for Historical and Conflict Research and the Project for Study of the 21st Century. In this episode, Reuters columnist and PS21 executive director Peter Apps speaks with Admiral Nils Vang, former head of the Danish Navy, about the future of naval warfare in an era defined by drones, AI, and hybrid threats , opens new tab. And we're watching... ANNA SZYMANSKI, ROI Editor-in-Charge: In the latest episode of AI Weekly , opens new tab, Reuters rounds up some of the week's biggest stories from this space, including Amazon's goals for AI and how military drones could reshape the future of air combat. 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 authors. 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-2025-10-03/

2025-10-03 10:38

MUMBAI, Oct 3 (Reuters) - India's central bank on Friday proposed linking corporate foreign borrowing limits to financial strength and scrapping cost caps on most such debt in a push to improve funding flows under wider measures unveiled this week by Governor Sanjay Malhotra. The RBI's proposal allows firms to raise up to $1 billion or 300% of net worth, whichever is higher. This replaces the earlier $1.5 billion cap under the automatic route, which needed specific approval for larger sums. Sign up here. The central bank also suggested scrapping cost caps, permitting external commercial borrowings at market-determined interest rates, instead of the previous ceiling of a global benchmark, plus 500–550 basis points. For borrowings of less than three year maturity, costs will be capped in line with those applicable for trade credit. Along with that, the RBI also proposed widening the pool of eligible borrowers and lenders and easing restrictions on the use of such borrowings. The central bank proposed allowing any India-incorporated entity, including firms under restructuring or investigation, to tap external borrowings. Companies under restructuring would need approval under a resolution plan, while those under investigation could borrow with adequate disclosures. Previously, only entities eligible for foreign direct investment could access overseas debt. The RBI has invited feedback on the proposals until Oct. 24 before finalising the rules. https://www.reuters.com/world/india/india-central-bank-proposes-ease-external-borrowing-rules-boost-credit-flow-2025-10-03/

2025-10-03 10:07

MUMBAI, October 3 (Reuters) - The Indian rupee closed slightly weaker on Friday, steadying just above its all-time low, but sentiment remained skewed against the currency on the back of ongoing U.S.-India trade frictions and portfolio outflows. The currency remained under pressure even as the dollar was on course to notch its worst week since August against major peers as investors held firm to expectations of policy easing by the Federal Reserve, despite a government shutdown delaying key economic data releases. Sign up here. The rupee closed at 88.7725 against the U.S. dollar, down marginally on the week but within touching distance of its all-time low of 88.80 hit on Tuesday. A fortnightly Reuters poll of forecasters released on Thursday showed that the rupee was the most-shorted currency among major Asian peers. On the day, competing forces drove the rupee's price action with traders pointing to sustained dollar demand from local importers alongside activity from state-run banks near Friday's trough of 88.7825. The rupee is biased towards further depreciation but there is limited appetite to initiate wagers against the currency in case the central bank steps in more strongly to defend these levels, a trader at a mid-sized private bank said. Frequent interventions by the Reserve Bank of India helped the rupee avert steeper losses this week. "We continue to forecast INR underperforming core G10 and Asian currencies, and see USD/INR rising above 89.00 over time," analysts at MUFG said in a note. Meanwhile, India's benchmark equity indexes, the BSE Sensex (.BSESN) , opens new tab and Nifty 50 (.NSEI) , opens new tab closed slightly stronger on the day and notched a weekly gain of nearly 1%. Foreign investors net sold over $2.5 billion of local stocks in September. https://www.reuters.com/world/india/rupee-caps-rough-week-quiet-note-pressure-likely-persist-2025-10-03/

2025-10-03 10:04

No Labor Department jobs report Friday due to the government shutdown Wall Street routine upended; TV regulars and market commentators get a break Payrolls is seen as "the king of the numbers," making its absence particularly notable Some traders may close positions early if the data drought extends past mid‑October, citing unacceptable risk NEW YORK, Oct 3 (Reuters) - The release of U.S. jobs data typically has traders and investors glued to their screens at 8:30 am waiting for the all-important numbers. This Friday, however, is giving some a sudden surplus of free time along with the problem of trying to piece together the economic jigsaw puzzle from other sources. With the U.S. government shutting down much of its operations on Wednesday as deep partisan divisions prevented Congress and the White House from reaching a funding deal, the U.S. Labor Department will suspend economic data releases, including the closely watched monthly employment report, due Friday. Sign up here. Cue an unusual quiet on trading floors and in investment firms. "Friday does have all the makings of a rather long lunch somewhere now," quipped Michael Brown, senior research strategist at Pepperstone in London. For him, the report would normally land in the afternoon. The data disruption will upend the usual Friday routine for many on Wall Street. "Usually economists and strategists are dialed in at 8:30 in the morning; now you can potentially get some other work done," Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments, said. "It'll be nice to have a Friday morning where your eye's not twitching waiting minutes until that jobs report hits," Miskin said. PAYROLL DATA CONSIDERED 'THE KING OF THE NUMBERS' Still, the timing is awkward. Investors are laser-focused on the labor market for clues to how the Federal Reserve's newly-resumed rate cutting efforts might unfold. It also comes not long after a market-shocking weak scorecard on U.S. jobs prompted President Donald Trump to fire a top Labor Department official. "A few weeks ago we were questioning the accuracy of the data, and now all of a sudden we can't live without it," Michael Arone, chief investment strategist at State Street Investment Management, said. It's not just trading desks that will miss the familiar ritual. Social media usually lights up with #NFP and #NFPguessposts, a reference to the closely watched nonfarm payrolls figure. Those posts can number 10,000 to 50,000, in the 24 hours around the release, with activity spiking on big surprises, according to Grok, an AI chatbot on X. For Interactive Brokers Chief Strategist Steve Sosnick, a frequent guest on financial news shows breaking down the U.S. jobs report, Friday will be different. "I'll just sleep in," he joked about his plans for Friday. For others, like James Cordier, head trader at Alternative Options, far from affording extra sleep, the lack of data can spell sleepless nights, he said. Should the data drought last beyond mid October, Cordier, who trades commodities, might have to prematurely close trades because the risk of keeping them in place in the absence of data is too great. Interactive Brokers' Sosnick said missing out on the payrolls update was particularly problematic. "It is really sort of the king of the numbers, so to speak. The king, I guess, takes a vacation now." The data disruption, something that hasn't happened since the 2013 government shutdown delayed the employment report by a couple of weeks, could even make traders more jumpy. "Investors will fill the informational void left by the government shutdown with new trading narratives based on incomplete and misleading private-sector data releases, unfounded anecdotes, and flimsy rumors," Karl Schamotta, chief market strategist with payments company Corpay in Toronto, said "The risk of overreaction will grow." https://www.reuters.com/business/payroll-data-ice-gives-wall-street-newfound-free-time-big-problem-reading-2025-10-03/

2025-10-03 09:10

Oct 6 (Reuters) - The U.S. government has shut down, but that hasn't prevented stocks from hitting more record highs, fully confident that bullish rate cuts will keep momentum going. The one hitch is a complete lack of visibility when it comes to what is actually happening in the economy right now. Here's your weekahead from Alden Bentley in New York, Rocky Swift in Tokyo and Alun John, Dhara Ranasinghe and Amanda Cooper in London. Sign up here. 1/ DOLLAR BEARS SHARPEN THEIR CLAWS The dollar starts this final quarter of 2025 in fairly decent shape. Having fallen in the first two quarters, as U.S. exceptionalism came under fire, the greenback ended Q3 with a 1% gain against major rivals . It's still down 10% so far this year, although its stabilisation has bought some calm to the almost $10 trillion-a-day FX markets. On the plus side, immediate threats to Federal Reserve independence - a potential source of dollar stress - have abated for now. On the negative, labour market weakness adds to Fed rate-cuts bets. Dollar bears may not hibernate for long - especially if a U.S. government shutdown is lengthy. The yen, in particular, looks favourable - say FX experts - while the euro could still hit that $1.20 milestone it came so close to last month. 2/ WHO NEEDS DATA? This week's U.S. data calendar is light, so further market disruption from the government shutdown should be minimal and the U.S. Treasury will hold a normal auction of notes and bonds. The market will likely make do without Tuesday's U.S. International Trade report, and instead will focus on Friday's private University of Michigan preliminary October sentiment index. The Treasury sells $58 billion in three-year notes on Tuesday, $39 billion of the 10-year note Wednesday and $22 billion in 30-year bonds on Thursday. The bond market can't yet compute possible fiscal implications of an indefinite furloughing of federal workers. But with the benchmark 10-year yield above 4%, demand could remain solid. An early taste of third-quarter results comes with Delta Airlines (DAL.N) , opens new tab and Levi Strauss (LEVI.N) , opens new tab among others on Thursday, before the earnings parade kicks off with Wall Street's biggest banks next week. 3/ SHOT IN THE ARM Battered global pharmaceutical stocks got a boost from the deal between Pfizer and the U.S. to lower prescription drug prices in the Medicaid programme in exchange for tariff relief. U.S. President Donald Trump had taken aim at the sector over high U.S. medicine prices, sending drugmaker shares to multi-decade lows. But investors now bet the more benign agreement will open the door for more deals. U.S. healthcare stocks (.SPXHC) , opens new tab were up 7% last week, their biggest weekly gain in over three years, while European equivalents rose 9% in their best week since 2008. (.SXDP) , opens new tab Now it's time to wait to see if these deals materialise and justify that optimism. The U.S. has also slapped tariffs on imported timber as well as kitchen cabinets and furniture, while Trump said he would impose a 100% tariff on all films produced overseas that are then sent into the U.S. 4/ BARRELLING ON Oil is struggling under the weight of hefty global supplies that only seem to be getting bigger, while demand cannot seem to keep pace. The International Energy Agency says there could be an implied surplus of over 3 million barrels per day in 2026, compared with an expected excess of 600,000 bpd this year. The OPEC+ group, which includes OPEC and other exporters including Russia, at the weekend agreed to increase output by another 137,000 bpd in November, as it unwinds the curbs on output that it imposed during the pandemic. At around $65 a barrel, crude is worth roughly half what it was when Russia invaded Ukraine in 2022. The wildcard for forecasters, producers and consumers alike will remain, as always, geopolitics. 5/ DIRECTION DOWN UNDER The Reserve Bank of New Zealand will almost certainly cut rates this week. The question is: by how much? The RBNZ cut rates to a three-year low of 3% in August. Data last month showed New Zealand's economy contracted 0.9% in the second quarter, due to tariff uncertainty and a weak housing market. Money markets have fully priced in a quarter-point cut to 2.75% when the RBNZ meets on October 8, but the chances of a half-point reduction have grown to 43% from about 25% a week ago. Policy divergence between the RBNZ and the Reserve Bank of Australia, which kept rates unchanged in September, could spell further weakness in the kiwi, which is already at a three-year low against its Antipodean counterpart. https://www.reuters.com/business/take-five/global-markets-themes-graphic-2025-10-03/