2025-09-19 07:42

Pound heads for biggest two-day drop since July Public borrowing surges in headache for finance minister Reeves UK bond yields up after Bank of England debt sales tweaks LONDON, Sept 19 (Reuters) - The pound headed for its biggest two-day drop since late July on Friday, after a surge in UK public borrowing and a Bank of England rate decision that highlighted the difficulties policymakers face in balancing growth and inflation. Official data on Friday showed public sector borrowing between April and August totalled 83.8 billion pounds ($113.39 billion), 11.4 billion pounds more than forecast by the Office for Budget Responsibility earlier this year. Sign up here. The surge compounds the problem finance minister Rachel Reeves faces with her November budget, in which she had already been expected to announce new tax rises to stay on track to meet her fiscal rules and avoid unsettling financial markets. "The pound has sunk on this data, and is testing support at $1.35, it is the second-worst performing currency in the G10 FX space today," XTB research director Kathleen Brooks said. Sterling fell as much as 0.4% in early trading before paring some of that decline to trade down 0.3% at $1.351. It has lost almost 0.9% in the last two days alone, the largest such decline since July 31. Meanwhile, the BoE left interest rates unchanged on Thursday, as expected, and opted to reduce the pace of its government bond sales to minimise the impact on the more volatile longer-dated section of the market. With inflation running at nearly double the central bank's 2% target, the BoE has only limited scope to lower rates much more to help shore up the economy, where evidence is mounting of weakness in the labour market. UK bond yields rose on Friday, with long-dated 30-year gilts up 4.3 basis points at 5.547%. Data on Friday showed retail sales rose by more than expected in August, thanks to sunny weather, although sales growth in July was revised down. A number of major retailers, including Primark owner Associated British Foods (ABF.L) , opens new tab and budget supermarket Aldi UK have signalled concern about the outlook for consumer spending given upcoming tax rises and a deteriorating jobs market. "This is yet another disappointing piece of economic news which will add to Chancellor Rachel Reeves's woes. But as we saw yesterday, the Bank of England dare not cut rates given that inflation is nearly double the official target of 2%, and likely to rise further," Trade Nation senior market analyst David Morrison said. The pound also fell sharply against the yen, which staged a broad rally after the Bank of Japan left rates unchanged, but two surprise dissenters voted for a hike. Japan's central bank also decided to start selling its holdings of riskier assets, which suggests it may phase out its monetary stimulus programme sooner than expected. Sterling was down 0.45% at 199.73 yen . https://www.reuters.com/markets/europe/pound-rattled-by-surprise-surge-uk-borrowing-2025-09-19/

2025-09-19 07:24

LONDON, Sept 22 (Reuters) - It's back to scouring data for signs of how quickly, if at all, further rate cuts could come from big economies, Switzerland's central bank meets and world leaders gather in New York for the UN General Assembly against a tense geopolitical backdrop. Here's all you need to know about the week ahead in global markets from Lewis Krauskopf in New York, Rae Wee in Singapore and Amanda Cooper, Sara Rossi and Karin Strohecker in London. Sign up here. 1/ BACK TO RATE CUTS The U.S. Federal Reserve has just cut rates for the first time since December and indicated more is to come. That's the backdrop to the slew of U.S. data out in coming days including housing, durable goods, consumer sentiment and inflation. Monthly reports on new and existing home sales are due as investors weigh whether the prospect of a series of rate cuts can lift the housing market. An updated look at Q2 gross domestic product will paint more of a picture about growth, before the week closes on Friday with a consumer sentiment survey and the personal consumption expenditures price index, a closely watched inflation gauge. As focus shifts to the economic outlook over inflation, any weaker-than-expected numbers could further hurt the dollar - it touched its lowest level since 2022 on Wednesday . 2/ A FRANC DISCUSSION The Swiss National Bank meets on Thursday and traders expect no change to the benchmark rate, currently at 0%. SNB officials have indicated the bar is high for a drop into negative territory, even in light of the headache caused by a strong Swiss franc. It has rallied by around 15% against the dollar year-to-date and is set for its largest annual gain since 2002 . Its gain on the euro has been more modest, up around 0.5%, but it has pushed higher almost uninterruptedly against the single European currency for the last seven years, for a total rise of 30%. For Swiss exporters, such as Nestle (NESN.S) , opens new tab, Novartis (NOVN.S) , opens new tab or Richemont (CFR.S) , opens new tab, currency strength adds to hefty U.S. tariffs. Swiss inflation has picked up, which could give the SNB more wiggle room to do nothing, for now. 3/ TARIFF BAROMETER After a spate of central bank meetings, economies across the globe will assess the health of business activity. In Europe, Tuesday's preliminary estimates for the September euro zone PMI could show further improvement in the manufacturing sector and a stabilisation in expansionary territory for services. The data should also provide more clarity on the impact of U.S. tariffs, following a mixed picture from recent figures. If confirmed, the PMI picture would align with the European Central Bank's optimistic economic outlook after it left rates steady at 2% in September. Britain's flash PMI, also out Tuesday, follows the latest BoE decision to leave rates steady. Companies' concerns about the prospect of tax rises and the highest inflation among advanced economies should remain, even though services grew by the most in over a year in August. 4/ ABATING PRESSURES Australia's August consumer price reading on Wednesday comes ahead of the September 30 Reserve Bank of Australia policy meeting, where officials are widely expected to stand pat on rates. Investors and policymakers will be hoping that latest inflation figures show some signs of easing, after July's shock 2.8% above-forecast headline reading following a surge in electricity prices. That's likely to be the case, given that new electricity rebates are set to be reflected in last month's numbers and seasonal travel pressures would have faded. August jobs data also pointed to a gradual cooling in the labour market, as employment unexpectedly fell while the jobless rate held steady. Still, the RBA remains cautious, with Assistant Governor Sarah Hunter saying the economic outlook is balanced at the moment with risks on both the upside and downside. 5/ NOT SO UNITED NATIONS World leaders are meeting in New York for the United Nations General Assembly at a fraught time for global politics. There is no shortage of hot button issues at the annual gathering which will be dominated by Trump's return to the rostrum, war in Gaza and Ukraine and nuclear tensions with Iran. Leaders gather on Monday for a summit - hosted by France and Saudi Arabia - that aims to build momentum toward a two-state solution between Israel and the Palestinians. Trump will speak on Tuesday, while Israeli Prime Minister Benjamin Netanyahu - wanted by the International Criminal Court over alleged war crimes and crimes against humanity in Gaza that Israel denies - is due to address the assembly on Friday. On Sunday, Britain, Canada, Australia and Portugal all recognised a Palestinian state in a move borne out of frustration over the Gaza war and intended to promote a two-state solution, prompting a furious response from Israel. Both Ukrainian President Volodymyr Zelenskiy and Russian Foreign Minister Sergei Lavrov will address the assembly while a diplomatic push by Tehran seeks to avoid a return of snapback sanctions over Iran's nuclear programme. https://www.reuters.com/business/take-five/global-markets-themes-graphic-2025-09-19/

2025-09-19 07:12

MADRID, Sept 19 (Reuters) - Spanish Economy Minister Carlos Cuerpo said on Friday his government supported the efforts made by the European Commission to monetize underlying frozen Russian assets held in the EU to help finance the Ukrainian government. "From Spain, we've been advocating for increasing as much as possible the financing for Ukraine..." Cuerpo said in an interview with Bloomberg TV. "We are advocating to actually look at creative ways to also use those immobilized assets." Sign up here. Cuerpo also said Spain, which is one of the main importers of Russian liquefied natural gas in the European Union, was working to reduce those imports and diversify with supplies from countries such as the U.S. https://www.reuters.com/business/finance/spain-backs-eu-efforts-use-frozen-russian-assets-cuts-gas-imports-russia-2025-09-19/

2025-09-19 07:11

Large oil supplies, declining demand push prices lower Refinery turnaround season will also cut demand for crude Benchmarks gain for a second straight week HOUSTON, Sept 19 (Reuters) - (This Sept 19 story has been corrected to show Brent and WTI prices fell for the week, not rose for a second consecutive week, in paragraph 3) Oil prices dropped on Friday as worries about large supplies and declining demand outweighed expectations that the year's first interest-rate cut by the U.S. Federal Reserve would trigger more consumption. Sign up here. Brent crude futures settled at $66.68 a barrel, down 76 cents or 1.1%. U.S. West Texas Intermediate futures finished at $62.68, down 89 cents or 1.4%. Both benchmarks fell for the week. "Oil supplies continue to remain robust and OPEC is reducing its oil production cuts," said Andrew Lipow, president of Lipow Oil Associates. "We haven't seen an impact on Russian crude oil exports" from sanctions. The Fed cut its policy rate by a quarter of a percentage point on Wednesday and indicated that more cuts would follow as it responded to signs of weakness in the U.S. jobs market. Lower borrowing costs typically boost demand for oil and push prices higher. John Kilduff, partner with Again Capital, said future Fed rate cuts of a quarter of a percentage point would likely not boost oil markets because they would further weaken the dollar, making oil more expensive to buy. "The Fed will have to be more aggressive than they have been," Kilduff said. "We need a 50 (basis-point increase) to boost demand. The Fed's action is not translating to growth for the crude market due to underlying market fundamentals." On the demand side, all energy agencies, including the U.S. Energy Information Administration, have signaled concern about weakening demand, tempering expectations of significant near-term price upside, said Priyanka Sachdeva, an analyst at Phillip Nova. Lipow also saw effects on the demand side. "The refinery turnaround season will further reduce demand," he said. Refineries shut production units in the spring and fall for overhauls, called turnarounds. A higher-than-expected increase of 4 million barrels to U.S. distillate stockpiles (USOILD=ECI) , opens new tab raised worries over demand in the world's top oil consumer and pressured prices. The latest economic data added to concerns, with the U.S. jobs market softening while single-family homebuilding plunged to a multi-year low in August, discouraged by a glut of unsold new houses. https://www.reuters.com/business/energy/oil-little-changed-demand-concerns-overshadow-us-rate-cut-buoyancy-2025-09-19/

2025-09-19 07:04

OPEC producer Iraq can't generate electricity 24/7 Turkmen gas swap deal would involve Iran's state-owned firm US ended waivers for Iraqi imports of Iranian power Baghdad in delicate balancing act between US and Iran DUBAI/BAGHDAD, Sept 19 (Reuters) - Iraq's attempt to ease its chronic power shortage with gas from Turkmenistan routed through neighbouring Iran has failed under U.S. pressure, leaving Baghdad scrambling for alternatives to keep the lights on. Oil-rich Iraq has struggled to provide its citizens with power since the 2003 U.S.-led invasion that toppled Saddam Hussein, forcing many to rely on expensive private generators, causing economic hardship and sparking social unrest. Sign up here. Hussain Saad, a 43-year-old owner of a butcher shop in the Kasra neighbourhood of Baghdad, is struggling to protect his livelihood and keep his meat from spoiling in the scorching heat. "This isn't just my suffering — it's the suffering of the entire Iraqi people," he said. A deal first proposed in 2023 would have seen Turkmenistan export gas to Iraq through Iran, which lies between the two countries. Under the swap deal, Iran would receive the gas and supply it to Iraq, but this risked violating U.S. sanctions on Tehran - requiring Washington's approval. That approval never came. U.S. President Trump's administration has doubled down on a "maximum pressure" campaign against Tehran. CAUGHT BETWEEN TWO ALLIES Reuters spoke to four Iraqi officials and reviewed seven official documents to reveal how Baghdad had sought Washington's approval for months to let it import roughly 5 billion cubic metres (bcm) of Turkmen gas via Iran. Iraq sought to import 5.025 bcm of Turkmen gas a year, facilitated via Iran's state-owned National Iranian Gas Company (NIGC), according to a draft contract of the swap deal seen by Reuters. Iran would receive no money, but would get gas for its own needs amounting to no more than 23% of the overall daily volume coming from Turkmenistan, a document showed. Baghdad also offered to allow a third-party international monitor to oversee the deal's compliance with U.S. sanctions and anti-money laundering rules, the same document showed. But despite months of lobbying, U.S. objections ultimately scuppered the deal as Washington ramps up pressure on Iran over its nuclear plans. That has left Baghdad facing an increasingly difficult balancing act between its main allies in Washington and Tehran. "Proceeding (with the Turkmen deal) could trigger sanctions on Iraqi banks and financial institutions, so the contract is currently suspended," Adel Karim, adviser to Iraq's prime minister for electricity affairs, told Reuters. The U.S. Treasury declined to comment but a U.S. source familiar with the matter said the Trump administration would not approve arrangements that could benefit Iran, though it was working with Iraq on its energy needs. The Iranian government, oil ministry, NIGC and Turkmen foreign ministry did not respond to Reuters requests for comment. IRAQ'S RELIANCE ON IRANIAN GAS Iraq has relied on gas and power imports from Iran for the past decade. Iranian gas covers nearly a third of Iraq's power generation and in 2024 gas imports reached 9.5 bcm, said an Iraqi power official, who asked not to be named due to the sensitivity of the issue. "If we lose Iranian gas, we'll face a serious problem in electricity generation," Karim said. Although Iraq is OPEC's second-largest oil producer, it burns off much of the gas it produces alongside oil due to under-investment and lack of infrastructure to capture and process it. The country extracted just 11 bcm of gas in 2023 that could be used for power or industrial needs, according to the IEA. Iraq's gas needs vary seasonally, with demand surging in summer to around 45 million cubic metres (mcm) per day, Karim said, otherwise dropping to 10–20 mcm per day. SANCTIONS SCUPPER TURKMEN DEAL In March, the Trump administration ended a sanctions waiver that since 2018 had allowed Iraq to pay for Iranian power, curtailing imports. The lack of gas supplies from Iran led to a loss of about 3,000 megawatts of power generation since the waivers ended and peak summer demand set in - more than 10% of Iraq's roughly 28,000 megawatts of total capacity, Karim said, enough to impact around 2.5 million homes according to Iraqi electricity officials. Baghdad hoped to diversify its supply and avoid the risk of breaching sanctions with the Turkmen deal, sources said and documents showed. Failing to secure that deal could jeopardise Baghdad's ability to sustain gas plants during peak summer demand, Iraq's electricity ministry warned in a letter to state-owned Trade Bank of Iraq (TBI) on May 27, three months prior to a nationwide blackout in August. DIVERSIFICATION THROUGH LNG, QATAR With the Turkmen route blocked, Iraq is exploring alternatives to plug its power needs gap, including building infrastructure to import liquefied natural gas (LNG) from Qatar. Hamza Abdul Baqi, head of the state-owned South Gas Company, told Reuters in March that Iraq would lease a floating LNG terminal to handle Qatari and Omani gas. The government had tasked the oil ministry with finding alternatives to Iranian gas in case the U.S. decided to restrict it, he said. The country has also signed deals with global oil majors such as TotalEnergies, BP and Chevron over the past two years to speed up its gas projects. French oil major TotalEnergies said this week it has launched the second development phase at Iraq's Ratawi field, the final stages of a $27 billion project that aims to boost Iraq's oil, gas and power production. Britain's BP said in March it has received final government approval for the redevelopment of Iraq's giant Kirkuk oilfields, with an initial plan to produce 3 billion barrels of oil equivalent. "We're expanding our gas-fired power plants," Karim said. "We'll need more gas and more sources." https://www.reuters.com/business/energy/iraq-fails-win-us-approval-import-turkmen-gas-via-iran-2025-09-19/

2025-09-19 06:54

Sept 19 (Reuters) - British online trading platform IG Group (IGG.L) , opens new tab said on Friday it had acquired Australian cryptocurrency exchange Independent Reserve for A$178 million ($117.41 million), expanding its digital offerings and presence in the Asia-Pacific region. IG said the deal is expected to be accretive to cash earnings per share in the first full financial year after closing it. Sign up here. ($1 = 1.5161 Australian dollars) (This story has been corrected to fix IG Group's ticker symbol in paragraph 1) https://www.reuters.com/world/asia-pacific/uk-trading-platform-ig-group-buys-australian-crypto-exchange-2025-09-19/