2025-12-12 02:37

MUMBAI, Dec 12 (Reuters) - The Indian rupee ended little changed after hitting a record low on Friday but notched its second weekly fall in a row as investors continued to fret over prolonged U.S.-India trade deal negotiations. Bankers and analysts expect the currency to keep drifting lower in the near term with interventions by the central bank keeping a lid on volatility. Sign up here. The rupee closed at 90.4150 per dollar, down 0.5% on the week. It fell to 90.55 in early trading but held above that level once the central bank stepped in to support the currency, traders said. "Pressure on the currency has persisted since steep U.S. tariffs came into effect. We expect this to continue into 2026," analysts at Standard Chartered said in a note, forecasting the rupee to weaken to 93 over the next 12 months. The rupee is Asia’s worst-performing currency this year, down more than 5% against the dollar. However, despite this week’s slide, near-tenor volatility stayed contained, with one-month implied volatility at 4.2%, only slightly above its 2025 average. Indian Prime Minister Narendra Modi said he spoke with U.S. President Donald Trump by phone on Thursday, as New Delhi seeks relief from up to 50% U.S. tariffs on some of the country's key exports. Trade negotiations collapsed in late July, after India resisted opening its market for U.S. farm products. Talks have resumed since then with a U.S. trade delegation visiting the country earlier this week. Most Asian currencies rose on Friday, with the Chinese yuan hitting a 14-month high even as the People’s Bank of China signalled unease over its rapid gains. The divergence has pushed the rupee down about 8% against the yuan this year. It hit a record low versus the Chinese currency on Friday. https://www.reuters.com/world/india/wobbly-dollar-may-offer-fleeting-relief-rupee-outflows-remain-pain-point-2025-12-12/

2025-12-11 23:41

Geothermal projects gain traction after recent breakthroughs Eastern Caribbean reserves could power region many times over Countries reviving pursuit of clean and cheaper power Islands collaborate to cut costs amid slow grants flow BELEM, Brazil, Dec 11 (Reuters) - Five Caribbean nations are pushing to develop geothermal energy by pooling expertise and separating drilling from power plant development to work around scarce funding, aiming to cut costs in a region with some of the world's highest power tariffs. After multiple failed attempts since the 1970s in the region, Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines said after the U.N. COP30 climate conference in Brazil that they were looking to supply clean and cheap power in places where high electricity bills strangle household budgets and curtail tourism competitiveness. Sign up here. The five nations hold an estimated 6,290 megawatts (MW) of geothermal potential, enough to power the region many times over and to save each country $5 million to $30 million annually by cutting diesel imports by more than 90%, according to the Organisation of Eastern Caribbean States (OECS). Electricity tariffs in the region average between $0.29 and $0.40 per kilowatt-hour - more than double the U.S. average of about $0.15, OECS data showed. The nations currently operate small and isolated grids and aging diesel generators that depend on expensive imports. Saint Lucia intensified geothermal testing before commencing civil works and adjusted drilling contracts this year to avoid cost overruns such as those from a site redesign in Dominica, said Arthur Antoine, technical director at its Renewable Energy Sector Development Project. Dominica's 10 MW geothermal plant, which could meet over 75% of its total electricity needs and is due for completion early next year, has needed a decade to gather a $68 million financing package from multiple lenders. Globally, geothermal projects are gaining traction after breakthroughs in drilling and heat extraction techniques. Relying entirely on grant financing for exploration has caused delays and design changes in Grenada but shielded taxpayers from risk, said a spokesperson for the geothermal project management unit at the country's ministry of climate resilience, the environment and renewable energy. Grenada hopes its planned 15 MW project will start generating power in 2033 and supply every household at 2024 consumption levels. "The sizing is based on current demand and resource confirmation, and future expansion depends on confirmed resource and financing," the spokesperson said in an emailed statement. CLIMATE RISKS Successful execution would boost the finances of island nations vulnerable to extreme weather, said James Fletcher, climate envoy for the Caribbean Community, a group of 21 countries where hurricanes regularly destroy infrastructure and disrupt diesel shipments. "Caribbean governments just don't have that kind of fiscal space that would allow them to borrow as it has been eroded by having to constantly respond to extreme weather events," he said on the sidelines of the COP30 conference last month. OECS is facilitating joint management of drill rigs to slash upfront costs, which had stalled Dominica's attempts to secure financing, said Chamberlain Emmanuel, who heads the environmental sustainability division at the OECS. Saint Kitts and Nevis, which expects to start drilling in early 2026, tripled its project capacity to 30 MW, secured financing upfront and backed a debt-funded private power plant to offset risks, said Albert Gordon, general manager at the Nevis Electricity Co. Gordon said he expects the plant to be commissioned by 2029. https://www.reuters.com/business/energy/caribbean-nations-team-up-cut-power-costs-revive-geothermal-push-2025-12-11/

2025-12-11 22:03

ORLANDO, Florida, Dec 11 (Reuters) - Wall Street was mostly higher on Thursday - the Dow and Russell 2000 indices hit new highs but the Nasdaq fell - while shock U.S. jobless claims figures rekindled concern over the labor market and dragged the dollar and Treasury yields lower. More on that below. In my column today, I look at how Fed Chair Jerome Powell hopes to thread the needle between strong growth and benign inflation - high productivity. Sign up here. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Today's Talking Points * QE or not QE, that is the question The Fed's decision to buy $40 billion of T-bills a month - a surprise to many, but not regular readers here - is to ensure there are plentiful bank reserves in the system. This will avert financial system dislocation, prevent a spike in interbank rates, and ensure the fed funds rate stays within target range. So, it's not QE. Or is it? Many analysts argue it effectively is, as the Fed is still expanding its balance sheet, only just at the ultra-short end of the curve. Plus, with the Treasury borrowing more heavily in bills, it is akin to monetizing the debt. This debate will rage into next year. * There's plenty claim to go around Powell on Wednesday made the eyebrow-raising observation that, due to issues with the way jobs data are collated, the U.S. economy could be shedding around 20,000 jobs a month rather than the recent average gain of around 40,000. On Thursday, weekly jobless claims surged to a four-and-a-half-year high. This may be skewed by the recent government shutdown, but it will no doubt embolden the Fed doves, including Powell. It also adds another layer of complexity to the Fed debate - should policy be calibrated to counter employment or inflation risks? * Oracle, Cisco ships pass in the night AI bubble talk and comparisons with the internet boom and bust are raging again, with two giants of the dotcom era back in the news. Oracle shares sank as much as 16% on Thursday, at one point their worst day since March 2001, while Cisco shares are back above $80 for the first time since the market peak of March 2000. It's hard to envisage another Cisco today, where a bellwether stock takes nearly a quarter of a century to revisit its bubble peak. And in some ways, Oracle has behaved like a meme stock this year - up 36% in a day, more than doubling year-to-date, then plunging 50% in a few months. The AI ride next year is shaping up to be something of a rollercoaster. Powell bets big on productivity boost rescuing boxed-in Fed Federal Reserve Chair Jerome Powell admitted on Wednesday that there is still no "risk-free" path for the central bank as it seeks to bring down stubbornly high inflation while also supporting an increasingly creaky labor market. But he suggested the Fed might have a "get-out-of-jail-free" card: higher productivity. Speaking to reporters after the Fed cut its policy rate by 25 basis points and published its revised economic projections, Powell indicated that productivity may square the circle of solid growth, sticky inflation and a soft jobs market. High productivity means workers are producing more output per hour. This keeps a lid on unit labor costs and therefore inflation, while also helping to drive stronger wage growth, purchasing power, and overall economic activity. It is a big factor behind Fed officials' rosier outlook for 2026 and expectation for only one more quarter-point rate cut next year. Policymakers raised their median 2026 GDP growth projection to 2.3% from 1.8% in September, while lowering their outlook for headline inflation to 2.4% from 2.6%. Powell said almost half of the growth upgrade reflects a reacceleration of activity following the government shutdown, but much of it is due to high productivity too. And that's not only because of artificial intelligence. Powell said the U.S. economy's elevated productivity rate of around 2% for the last several years predates the recent AI boom. But the new technology is helping. "There is no risk-free path for monetary policy," said Jeffrey Roach, chief economist for LPL Financial, echoing Powell, "but it seems the committee is banking on higher productivity, implying stronger growth despite softer job creation." BETTING ON THE WRONG HORSE? But there are potential problems with the productivity story. First, relying on it as a silver bullet is a gamble, both because productivity is notoriously challenging to forecast – or even to measure properly – and because it is too early to say what the economic impact of AI will be. As a recent Institute of International Finance report warned, "if AI adoption remains concentrated among a handful of hyperscalers and specialized firms, returns will likely plateau, leaving overall growth vulnerable once the current investment cycle peaks." What's more, the flip side of AI's positive impact on productivity could be massive job losses. This could create "social and labor market implications that we don't have the tools to deal with," Powell said. Second, higher sustained productivity implies faster growth and therefore a higher neutral rate of interest, or "r-star." That's the neutral interest rate that neither stimulates nor restricts activity when the economy is running at full employment with stable inflation. Powell said policy is now in a broadly neutral range, with rates having been cut 175 basis points since September last year. But if there is a productivity boom underway and potential growth is higher, r-star and the fed funds rate should be higher too. In this scenario, current policy might actually be too loose. "All things equal yes, but all things aren't equal," Powell said when asked on this matter on Wednesday. "There are many things pushing in different directions on where the neutral rate would be." Estimates of r-star, a theoretical figure, are understandably varied. Two closely watched models co-created by New York Fed President John Williams put r-star at 1.37% or 0.84% at the end of June. Fed officials' median long-run implied r-star projection is around 1%. Productivity may offer the Fed some breathing room. Powell indicated that the Fed will pause to assess the incoming data before determining its next move. Rates futures markets believe him and are not fully pricing in another rate cut until June. "They are buying into the AI productivity story. That's the only way you can interpret this," said David Kelly, chief global strategist at JP Morgan Asset Management. Of course, if that story does not play out, Powell and his successor will have their work cut out for them in 2026. What could move markets tomorrow? Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. 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/world/china/global-markets-trading-day-graphic-2025-12-11/

2025-12-11 21:40

Dec 11 (Reuters) - The Trump administration plans to appeal a judge's decision ordering the release of Kilmar Abrego Garcia from immigration detention, the White House said Thursday. "The administration opposed this activism from a judge who is really acting as a judicial activist, which we've unfortunately seen in many cases across the country," White House Press Secretary said Thursday at a briefing. Sign up here. https://www.reuters.com/legal/government/trump-administration-plans-appeal-abrego-garcia-decision-white-house-says-2025-12-11/

2025-12-11 21:38

Dec 11 (Reuters) - The Federal Reserve on Thursday said 11 of its regional bank presidents had been reappointed to their positions with the unanimous agreement of the U.S. central bank's Board of Governors, wrapping up an ordinarily routine process that had come under heightened scrutiny amid pressure from President Donald Trump and his administration. Their new five-year terms will begin on March 1, the Fed said in a statement. The reappointments, which were approved by the seven-member Fed board, included each regional bank's first vice president. Sign up here. The reappointments covered all of the regional reserve bank presidents except for Atlanta Fed President Raphael Bostic, who previously announced plans to retire early next year. The Atlanta Fed's first vice president, Cheryl Venable, was reappointed and will serve as acting president until the bank's board finds a successor. By law, the reserve bank presidents serve concurrent five-year terms and must undergo a reappointment process near the end of each term. That process this time was concluded by the Fed board earlier than at any time since at least 2006, according to U.S. central bank records. The re-upping process typically garners little attention, but Trump's efforts to fire Fed Governor Lisa Cook - a matter now before the Supreme Court - and Treasury Secretary Scott Bessent's recent criticisms of the reserve bank presidents for being hired from outside their districts had cast a light on it. The unanimous agreement appears to have included Governor Stephen Miran, whom Trump appointed to the Fed board a few months ago after Adriana Kugler resigned unexpectedly. The regional bank presidents in recent months have formed the core of a wing of Fed policymakers hesitant to cut interest rates further. The reappointment was announced a day after the Fed cut interest rates by a quarter of a percentage point for the third straight meeting. Two of the regional Fed presidents voted against the action on Wednesday in favor of leaving rates unchanged. The slow pace of rate reductions has riled Trump, who routinely lashes out at the central bank and Fed Chair Jerome Powell for not slashing borrowing costs much more. https://www.reuters.com/business/fed-regional-bank-presidents-reappointed-unanimous-vote-2025-12-11/

2025-12-11 21:01

Indexes: Dow rises 1.34%, S&P 500 adds 0.21%, Nasdaq falls 0.25% Oracle update drags down some tech, AI stocks Value outperforms growth, small outperforms large Dec 11 (Reuters) - The S&P 500 and the Dow boasted record closing highs on Thursday after a Federal Reserve policy update that was less hawkish than expected while the tech-heavy Nasdaq underperformed as Oracle's financial update made investors wary of artificial intelligence bets. Oracle (ORCL.N) , opens new tab shares tumbled 10.8% in their biggest one-day drop since late January and they were the top S&P 500 decliner after the company's quarterly forecasts fell short of analysts' estimates. It had also warned that annual spending would run $15 billion higher than previously planned, stoking fears about its big push into AI. Sign up here. The cost of insuring Oracle debt against default surged as investors feared that the company's heavy reliance on debt financing could be part of an AI bubble similar to the dotcom bust of the early 2000s. While Oracle helped drag other technology names lower, the Dow rallied along with the Russell 2000 (.RUT) , opens new tab small-cap index, which closed up 1.2% and the S&P 500 value index (.IVX) , opens new tab, up 0.6%, outperformed the growth index (.IGX) , opens new tab, which ended off 0.12%. "The name of the game is market rotation. We're seeing small caps, the Dow and cyclicals all start to do better in anticipation of a reacceleration of global growth," said Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments. Investors also continued to digest the U.S. central bank's update from Wednesday, when the Fed lowered borrowing costs by 25 basis points and Chair Jerome Powell signaled a pause on further easing. However, investors were relieved that the Fed still had some rate cuts on its dot plot as it balanced still-elevated inflation with signs of labor market weakness. Mark Malek, CIO at Siebert Financial, said that continued digestion of the Fed meeting and Powell's commentary brought a tailwind on Thursday. "Clearly, the market was tempering itself for a more hawkish cut. Most of us were certainly anticipating Chairman Powell to come out of the gate with a little bit more of a negative tone," he said, adding that the Fed's focus on employment as "something that they have to watch carefully" was notable. As if to illustrate that point, Thursday's data from the Labor Department showed jobless claims rose to 236,000 for the week ending December 6, compared with estimates of 220,000. The Dow Jones Industrial Average (.DJI) , opens new tab rose 646.26 points, or 1.34%, to 48,704.01, vaulting above its November 12 closing record. The S&P 500 (.SPX) , opens new tab gained 14.32 points, or 0.21%, to 6,901.00, breaching its October 28 record close. The Nasdaq Composite (.IXIC) , opens new tab lost 60.30 points, or 0.25%, to 23,593.86. Communications services (.SPLRCL) , opens new tab and technology stocks (.SPLRCT) , opens new tab were the biggest losers among the S&P 500's 11 major industry sectors, falling 1% and 0.6% respectively. The Philadelphia Semiconductor Index (.SOX) , opens new tab - also central to the AI-trade - closed down 0.8%. The strongest sector gainers were materials (.SPLRCM) , opens new tab, which rallied 2.2% and financials (.SPSY) , opens new tab, which added 1.8% and was the S&P 500's biggest index point boost. Broadcom (AVGO.O) , opens new tab shares fell 1.6% in the regular session but rose 4% in late trading after the company forecast revenue of about $19.1 billion for the current quarter, compared with Wall Street expectations for $18.27 billion, according to data compiled by LSEG. The blue-chip Dow (.DJI) , opens new tab included several financial stocks among its top gainers. Visa V.N led the charge with a 6.1% rally while American Express (AXP.N) , opens new tab, JP Morgan (JPM.N) , opens new tab and Goldman Sachs (GS.N) , opens new tab all rose more than 2%. Walt Disney Advancing issues outnumbered decliners by a 2.2-to-1 ratio on the NYSE, where there were 673 new highs and 69 new lows. On the Nasdaq, 2,667 stocks rose and 2,087 fell as advancing issues outnumbered decliners by a 1.28-to-1 ratio. The S&P 500 posted 52 new 52-week highs and 3 new lows while the Nasdaq Composite recorded 185 new highs and 81 new lows. On U.S. exchanges, 17.05 billion shares changed hands, compared with the 17.39 billion 20-day moving average. https://www.reuters.com/business/wall-street-futures-slide-oracles-forecast-revives-ai-bubble-fears-2025-12-11/