2025-09-08 10:43
LONDON, Sept 8 (Reuters) - What matters in U.S. and global markets today By Mike Dolan , opens new tab, Editor-At-Large, Finance and Markets Sign up here. Markets face a politically-charged start to the week in Japan and France , but attention will soon turn back to the U.S. where interest rate markets are once again mulling the chance of half-point Federal Reserve rate cut next week after another soft August payrolls report jarred markets on Friday. Ahead of August inflation reports due later in the week and annual payroll revisions out tomorrow, two- and 10-year Treasury yields on Friday plunged to their lowest levels since April, while the dollar and S&P 500 stocks fell . * Japan's Nikkei rose as the yen weakened slightly after Prime Minister Shigeru Ishiba resigned on Sunday and ruling Liberal Democratic lawmakers prepared bids to replace him - with fiscal dove Sanae Takaichi and Shinjiro Koizumi the frontrunners. But with market bets on an October Bank of Japan rate rise halved to just a 20% chance over the past week, Japan's 30-year bond yield climbed to new record highs. French stocks, bond prices and the euro were firmer, however, as the latest French government faces a confidence vote today. * Friday's U.S. employment report showed the jobless rate ticking up to its highest in four years, as expected, but weak job creation reinforced fears of a weakening labor market. Even though Fed officials are in a blackout period ahead of next week's meeting, this week's CPI report will now be critical to the outcome and the New York Fed's inflation expectations survey is due later today. Political pressure on the Fed intensified on Friday as Treasury Secretary Scott Bessent called for renewed scrutiny of the Federal Reserve, including its power to set interest rates, as the Trump administration intensifies its efforts to exert control over a central bank. * Elsewhere, world stocks were generally higher - even in China where the latest trade numbers showed China's export growth slowed to a six-month low in August and imports also missed forecasts. China's exports to the U.S. fell 33.12% year-on-year in August, while its shipments to Southeast Asian nations rose 22.5% in the same period. Oil prices climbed more than $1, regaining some of last week's losses, after the weekend OPEC+ output hike was seen as modest due to concerns over more sanctions on Russian crude. The European Central Bank meets on Thursday, with economists expecting no change to policy rates as inflation hovers near the central bank's 2% target. Today's column looks at why the dollar's much-vaunted 'safe haven' status during the 2008 bank crash may have been a mirage. Today's Market Minute * U.S. President Donald Trump said on Sunday he is ready to move to a second phase of sanctioning Russia, the closest he has come to suggesting he is on the verge of ramping up sanctions against Moscow or its oil buyers over the war in Ukraine. * Ruling party lawmakers in Japan prepared their bids to replace outgoing premier Shigeru Ishiba on Monday, as financial markets recoiled on the political uncertainty and the possibility of his successors ramping up government spending. * South Korean Foreign Minister Cho Hyun will head to the U.S. on Monday as he seeks to resolve the fallout over the detention of hundreds of Korean workers during an immigration raid at a time when Seoul has committed to massive investment plans in America. * OPEC+’s surprise announcement that it will further accelerate oil production may seem like a threat to an already oversupplied market, but ROI energy columnist Ron Bousso argues that the actual market impact is likely to be limited. * Summer is over, and TPW Advisory Founder Jay Pelosky says that means one thing: we’re about to see fund managers’ mad dash to year-end as everyone seeks to boost performance. He offers three counterintuitive points to keep in mind amid the scramble. Chart of the day France's fourth prime minister in three years, François Bayrou, faces almost certain defeat in a confidence vote, tipping the euro zone's second-biggest economy further into political uncertainty. The upheaval threatens France's ability to rein in its debt, with the risk of further credit downgrades looming and Fitch due to give its verdict on Friday. France faces acute pressure to repair its finances, with last year's deficit nearly double the EU's 3% limit of economic output and public debt at 113.9% of GDP. Today's events to watch * U.S. August employment trends (10:00 AM ET), July consumer credit (3:00 PM ET), New York Fed's August survey of consumer expectations * French parliament holds confidence vote in government, National Assembly begins meeting at 8:00 AM ET * Norwegian Parliament election, final day of voting -- 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 (The opinions expressed here are those of the author, a columnist for Reuters) https://www.reuters.com/business/finance/global-markets-view-usa-2025-09-08/
2025-09-08 10:38
Sept 8 (Reuters) - Futures tied to Canada's main stock index inched up on Monday, after a surprise job loss in August boosted expectations for a Bank of Canada rate cut later this month. Futures on the S&P/TSX index gained 0.23% to 1,724.30 points by 06:24 a.m. ET (1024 GMT). The benchmark index ended higher for the eighth straight session on Friday, notching another record rally. Sign up here. Data showed on Friday that Canada's economy shed 65,500 jobs in August, largely in part-time work, and the unemployment rate climbed to 7.1%. That's the highest level of unemployment since May 2016, excluding the pandemic. Money market now sees a 89% chance that the BoC will resume its easing campaign on September 17 after leaving its benchmark rate on hold at 2.75% since March. Investors are also are expecting a rate cut that same day by the U.S. Federal Reserve after Friday's nonfarm payrolls report confirmed the U.S. labor market was deteriorating. In commodities, gold prices rose to a record high on Monday while oil and copper prices also edged up. In corporate news, Canadian oil and gas producer Strathcona Resources (SCR.TO) , opens new tab raised its offer for MEG Energy (MEG.TO) , opens new tab, seeking to outbid Cenovus Energy (CVE.TO) , opens new tab. FOR CANADIAN MARKETS NEWS, CLICK ON CODES: TSX market report Canadian dollar and bonds report CA/ Reuters global stocks poll for Canada , Canadian markets directory https://www.reuters.com/markets/europe/tsx-futures-rise-bank-canada-rate-cut-hopes-2025-09-08/
2025-09-08 10:33
Sept 8 (Reuters) - Indonesia's well-regarded finance minister Sri Mulyani Indrawati was removed from her position on Monday as part of a broader cabinet reshuffle, with the president appointing an economist, Purbaya Yudhi Sadewa, to replace her. The country's main stock index fell 1.3%, while the rupiah spiked 0.7%, set for its biggest intraday gain in over two months. Sign up here. Here are analyst comments on the changes. JASON TUVEY, DEPUTY CHIEF EMERGING MARKETS ECONOMIST, CAPITAL ECONOMICS, LONDON: "The removal of Indonesia's well-respected Finance Minister Sri Mulyani from her post will raise concerns that, in the wake of recent protests in the country, President Prabowo Subianto will seek to loosen the fiscal rules and potentially place greater pressure on the central bank to support the government's economic objectives. "At this stage, his (Purbaya Yudhi Sadewa) views on economic policy are unclear, but the key risk is that he proves to be more pliant to the president’s wishes. That could lead to efforts to ditch, or at least look for ways around, the existing fiscal rules. There could even be pressure on the central bank to loosen monetary policy more aggressively and more proactively support government programmes." TRINH NGUYEN, SENIOR ECONOMIST FOR EMERGING ASIA, NATIXIS, HONG KONG: "The key question for markets is whether Prabowo can have his cake and eat it too. To afford the lunch program, she (Mulyani) had to make the difficult decision of cutting expenditure very aggressively to maintain fiscal sustainability and also the negative 3% of GDP fiscal limit. "The issue is how is the new Finance Minister going to afford the 1.5% of GDP lunch program and at the same time raise spending for sectors such as defense without punching a larger hole in the deficit. For investors, that will be a key concern." SAKTIANDI SUPAAT, REGIONAL HEAD OF FX RESEARCH AND STRATEGY, GLOBAL MARKETS, MAYBANK, SINGAPORE: "The rupiah reacted quite sharply... I suppose the reaction is not surprising, because it was unexpected. "I think that there would definitely be concerns about how the fiscal situation would be in terms of fiscal policy developments out of Indonesia going forward, but I think markets are probably going to wait for the finance ministry's statement and comments about, under the new leadership, what their plans will be. But I think in the interim, there will be some efforts by BI to make sure the currency remains stable ... in terms of reducing any unexpected sharp volatility that may impact business conditions. "Sri Mulyani has been a stable anchor ... and she has international standing. So I think whoever fills her shoes has very big shoes to fill, but also foreign investors would need to hear some statements from the ministry to get some reassurance." ANINDA MITRA, HEAD OF ASIA MACRO STRATEGY, BNY INVESTMENT INSTITUTE, SINGAPORE: "I would say today's decision seems quite abrupt and unexpected. In the context of the recent turmoil in local and global markets, market participants will want certainty about policy settings and a steady hand at the fiscal till. The IDR may have to bear the brunt of the removal of Indonesia's veteran finance minister until greater confidence about what the cabinet reshuffle entails for any prospective shifts in budgetary outlays and funding sources." MOHIT MIRPURI, FUND MANAGER, SGMC CAPITAL, SINGAPORE: "Mulyani's departure, though not unexpected after recent unrest, marks the end of an era of fiscal credibility." HASNAIN MALIK, EM EQUITY AND GEOPOLITICS STRATEGIST AT TELLIMER, DUBAI: "Mulyani was the safeguard of prudent fiscal policy. Therefore, her departure will stir up fears of widening deficits under an unconstrained and, after the protests, under-pressure Prabowo." RYOTA ABE, ECONOMIST, SMBC, SINGAPORE: "Sri Mulyani Indrawati’s departure poses significant damage to the Indonesian fiscal position and to global investors in the near term. "In the near term, Bank Indonesia is likely to be forced to intervene intensively in the financial markets to prevent the IDR from falling further." https://www.reuters.com/world/asia-pacific/analyst-reactions-indonesia-naming-new-finance-minister-2025-09-08/
2025-09-08 10:02
FRANKFURT, Sept 8 (Reuters) - The European Central Bank is easing some of the checks it makes on euro zone banks, from how lenders get approval for share buybacks to how stress tests are carried out, ECB supervisor Sharon Donnery said on Monday. The ECB is coming under pressure from lenders it oversees to ease the supervisory burden as the Trump administration promises easier rules in the United States and shadow banks gain ground in the credit business. Sign up here. Writing in a blog post, Donnery listed measures the ECB has taken, including speeding up the approval of new appointments, buybacks and internal models, and reducing the amount of work demanded from banks during stress tests. But she repeated her position that simplification should not go too far if the sector is to remain robust. "The ECB is turning words into action and making banking supervision as simple as possible, but not simpler, to make sure banks are able to stay resilient and are well prepared to manage risks in their portfolios," she wrote. An ECB task-force, chaired by Vice President Luis de Guindos and also including Donnery, has recently presented a number of possible simplification measures to the Governing Council that are now being discussed by the euro zone's 20 national central banks. Germany's bank regulators have proposed creating a separate regime for "small and non-complex banks", which would subject them to a single capital requirement rather than the full array foreseen under EU rules. Under this optional regime, banks with less than 10 billion euros ($11.73 billion) in assets, with a strong domestic focus and a small trading book would be required to have a leverage ratio - capital expressed as a percentage of total assets - "significantly higher than 3%", the non-paper prepared by Germany's Bundesbank and Bafin shows. Donnery said earlier this year that the regulatory framework was already less strict for "small and non-complex" banks, although she saw scope for "more proportionality". The EU delayed new, global rules governing banks' trading earlier this year as it awaited more clarity regarding the U.S. administration's plans to deregulate its financial sector. ($1 = 0.8527 euros) https://www.reuters.com/technology/ecb-eases-bank-checks-buybacks-stress-tests-donnery-says-2025-09-04/
2025-09-08 09:16
Yen weakens, Nikkei rises 1.8% after Ishiba's resignation Stocks rise as traders pencil in rate cut in September French political quagmire adds to investor angst US inflation data this week also in focus SINGAPORE/LONDON, Sept 8 (Reuters) - Stocks rose and Treasury yields held lower on Monday after last week's dismal U.S. labour data sealed the case for an interest rate cut this month, with investors preparing for a week heavy on politics, crucial data and central bank activity. U.S. S&P 500 futures were up about 0.2%, leaving the index set to head back towards the record intraday high hit following last week's jobs data, while European (.STOXX) , opens new tab and Asian shares were up 0.2% and 0.7%, respectively. (.MIAPJ0000PUS) , opens new tab Sign up here. The first political drama of the week took place in Japan, where the yen and longer-dated bonds fell and stocks rose following the resignation of Prime Minister Shigeru Ishiba, as traders bet heightened political uncertainty would make the Bank of Japan less likely to raise rates in the near term. Attention is turning to who will replace Ishiba, and whether it could be an advocate of looser fiscal and monetary policy such as Liberal Democratic Party veteran Sanae Takaichi, who has criticised the BOJ's interest rate hikes. Meanwhile, France could be forced to look for its fifth prime minister in three years as the incumbent Francois Bayrou faces a confidence vote on Monday that he is expected to lose. The selloff in French assets after Bayrou called the vote last month has eased, and French stocks and bonds were slightly outperforming European peers on Monday. (.FCHI) , opens new tab But uncertainty about whether President Emmanuel Macron would try to appoint another prime minister or call fresh parliamentary elections if Bayrou loses means French and wider European assets are not yet out of the woods. A slew of upcoming French debt rating reviews are also on investors' radar. DOLLAR HELD IN CHECK The political uncertainty in France and Japan is also keeping the dollar in check - even after last Friday's soft jobs data, which has left markets fully pricing in a 25 basis point rate cut from the Fed later this month, and showing a small chance of a 50 basis point cut. The numbers raise "the question as to whether US employment conditions are now shifting from cooling to deteriorating and if the Fed should cut rates faster," said Paul Mackel, global head of FX research at HSBC. He said this had "opened the door" for the dollar to weaken again, but with "political noise around the yen and euro, the likelihood of dollar weakness will be reflected more easily against other currencies". The dollar hit a six-week low against a basket of currencies on Friday after the jobs data . On Monday, while it was down markedly on the Swiss franc, and Antipodean currencies, , the euro was just 0.1% higher at $1.1731 and the dollar was even a touch higher on the yen at 147.6 yen. , U.S. Treasury yields dropped sharply on Friday but were last steadier, with the benchmark 10-year yield marginally softer on the day at 4.08% and the rate sensitive two-year yield at 3.50%. U.S. CPI data due on Wednesday will be the last major data point before the Fed's meeting, and a hot print could temper bets on a super-sized rate cut. The European Central Bank meets on Thursday, but is expected to hold rates steady for a second straight meeting. In commodities, gold continued to surge, hitting its latest all time high of 3,616 an ounce. The precious metal is up 37% this year after rising 27% in 2024. Oil prices climbed after the OPEC+ group agreed over the weekend to raise output at a slower pace from October on expectations of weaker global demand. Brent crude and U.S. West Texas Intermediate crude rose 1.6% each. https://www.reuters.com/world/china/global-markets-wrapup-4-2025-09-08/
2025-09-08 09:01
Annual medium-term programme is roadmap for economy GDP growth forecast at 3.3% in 2025, 5% in 2028 VP Yilmaz expects disinflation to carry on this year Last year, Turkey forecast single-digit CPI by 2026 Yilmaz: FX interventions rare, address extreme moves ANKARA, Sept 8 (Reuters) - Turkey's government expects inflation to slow to 28.5% this year and to 16% in 2026 before dropping to single digits the following year - about a year later than previously predicted, according to an economic roadmap announced on Monday. In its annual medium-term economic programme, which covers the next three years, the government also forecasts economic growth would slow to 3.3% this year as tight monetary policy weighs, before it rebounds and returns to around trend growth of 5% in 2028. Sign up here. Vice President Cevdet Yilmaz, presenting the programme in Ankara, said disinflation will continue through year end, supported by fiscal policies and the moderate course of commodity prices. Authorities intervene at times to smooth "extreme" moves in the foreign-exchange rate, Yilmaz said, but added that Turkey has a floating FX regime and no target for the lira currency. The lira slipped to 41.2650 against the dollar on Monday, on track for another record low close after a year in which it has depreciated slowly but steadily. The inflation forecast marked a retreat from last year's medium-term programme in which the government predicted single-digit consumer price inflation by 2026, not 2027. Last month, annual inflation was higher than expected at nearly 33%. That, combined with unexpectedly high GDP growth in the second quarter, prompted analysts to predict the central bank will slow its rate cuts to only 200 basis points this week. RECOVERY AFTER CRISIS The major emerging market economy is slowly coming out of a protracted economic crisis that sent inflation soaring and the lira plunging since 2018, due largely to unorthodox low interest-rate policies championed by President Tayyip Erdogan. Since mid-2023, a new cabinet and central bank leadership have reversed course with tight monetary policy - including a policy rate raised as high as 50% - meant to rein in inflation that had soared as high as 85%. In July, the central bank cut rates by 300 basis points to 43%, relaunching an easing cycle it had paused in March due to market turmoil over a widespread legal crackdown on the main opposition party. Markets were jolted again last week when a court ousted the party's Istanbul provincial head, dealing another judicial blow to Erdogan's opponents and triggering falls in shares and bonds. Finance Minister Mehmet Simsek, also presenting the programme, said there were no "extraordinary" market moves in the last week and that it was not possible to isolate the potential economic impact of any domestic political issues. FORECASTS The programme, released around midnight in the Official Gazette, forecast economic growth of 3.3% in 2025, 3.8% in 2026 and 5% in 2028, and added that potential GDP growth was expected to rise by 0.5% during this time due to structural reforms. Tourism revenues were expected to rise to $75 billion by 2028 from $64 billion this year. Exports were seen climbing to $308.5 billion by 2028 from $273.8 billion this year. The unemployment rate was expected to be relatively stable this year and next year at 8.5%. The current account-to-GDP ratio was forecast to be 1.4% in 2025, before reaching 1% in 2028. The current account deficit was seen narrowing to $18.5 billion by 2028, from $22.6 billion this year, while the budget deficit was forecast to widen from 2,208.3 billion lira ($53.55 billion) this year to 2,805.1 billion lira in 2028. The programme also listed a series of planned structural reforms ranging from transitioning into digital or high value-added technology industries to a green transformation and ways to increase agricultural efficiency. ($1 = 41.2358 liras) https://www.reuters.com/world/middle-east/turkey-forecasts-285-inflation-this-year-single-digits-by-2027-2025-09-07/
