2025-09-05 20:08
CPI data set for Thursday, PPI a day earlier Markets widely expect Fed rate cut at September 16-17 meeting Weak jobs report on Friday raises expectations for easing Tariff uncertainty re-emerges following court ruling NEW YORK, Sept 5 (Reuters) - A spate of inflation data confronts U.S. stock investors in the coming week as markets grapple with fresh uncertainty over tariffs and government bond yields, while equities hover at lofty valuations. The benchmark S&P 500 index (.SPX) , opens new tab closed at a record high on Thursday despite an uneven start to September, which has been the worst month for stocks on average over the past 35 years. Stocks were pulling back on Friday after the monthly U.S. employment report showed job growth weakened in August. Sign up here. "September has been known to see a wearing down of the sentiment picture," said Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments. At the same time, he said, "stocks aren't pricing in a lot of risks right now. They look fully valued." The monthly U.S. consumer price index on Thursday highlights next week's economic releases, with investors focused on signals from the inflation data about the prospects for interest rate cuts and the fallout from tariffs on prices. Following Federal Reserve Chair Jerome Powell's remarks late last month that flagged rising risks to employment, markets have been widely expecting the central bank to lower rates for the first time in nine months at its September 16-17 meeting. Investors bet on even more accelerated easing after the weak jobs report. Fed Funds futures were baking in a 90% chance of a quarter-point rate cut at the meeting, and a roughly 10% chance of a heftier half-percentage point cut, LSEG data as of Friday afternoon showed. Only a CPI number that comes in "egregiously higher" than estimates could dent assumptions of imminent monetary policy easing, said Art Hogan, chief market strategist at B Riley Wealth. About 70 basis points of easing, or nearly three standard cuts, are projected by December, according to the futures data. Recently, "the prospect of the Fed cutting has been the overwhelming factor driving equity sentiment to be more positive," Miskin said. "And so if that reverses, then it could be problematic for equities." Along with CPI, a Wednesday report on producer prices could also reveal impacts from import tariffs. Last month's PPI data showed U.S. producer prices increased by the most in three years in July as the costs of goods and services surged. Tariffs and their economic implications were the main risk facing markets earlier this year, but other factors such as questions over Fed independence and caution about the artificial intelligence trade have been more prominent recently. The issue returned to the fore this week after a U.S. appeals court ruled that most of President Donald Trump's tariffs are illegal. While the Trump administration has asked the U.S. Supreme Court to hear a bid to preserve the sweeping tariffs, the ruling injected fresh uncertainty for markets. "It felt as though the fog of trade war was clearing, and now we're just back into the thick of it," Hogan said. "And that doesn't help corporate America make decisions, consumers make decisions, and investors make decisions." The potential of lost tariff revenue exacerbating the U.S. fiscal deficit was one factor investors said may have driven long-dated U.S. government debt yields sharply higher at the start of the week, moves that also followed big jumps in yields in the UK and other regions. While long-dated yields globally have since calmed, their spikes were cited as contributing to stock weakness initially during the week. The 30-year U.S. Treasury yield this week hit 5% for the first time in over a month. That yield level has been "problematic" for risk appetite over the past few years, said Adam Turnquist, chief technical strategist for LPL Financial. The long-bond yield was last around 4.78%, with yields falling broadly on Friday after the jobs data. The S&P 500 was up about 10% so far in 2025, helped recently by a solid second-quarter earnings season. The S&P 500's price-to-earnings ratio climbed to 22.4 times, based on earnings estimates for the next 12 months, a valuation well above its long-term average of 15.9, according to LSEG Datastream. "Investors face ongoing threats from trade and tariff unknowns as well as potential economic releases ... that could ultimately challenge elevated stock valuations," Anthony Saglimbene, chief market strategist at Ameriprise Financial, wrote in a commentary. "That said, investors have been navigating those dynamics for months, and stocks have continued to grind higher." https://www.reuters.com/business/wall-st-week-ahead-inflation-data-looms-markets-stocks-hover-near-records-2025-09-05/
2025-09-05 20:01
WASHINGTON, Sept 5 (Reuters) - Energy Secretary Chris Wright said on Friday that he is not worried that any Russian sales of gas to China would harm U.S. exporters of the fuel. Russia and China gave their blessing earlier this week to a gas pipeline called Power of Siberia 2, underscoring Chinese President Xi Jinping's disregard for Western demands that he row back from a deepening partnership with Moscow. Sign up here. Wright touted the Trump administration's focus on rapidly expanding liquefied natural gas exports at an event at the Council on Foreign Relations on Friday. "I think in this administration, it'll become the single largest export of our country, because exports will double during this administration," he said. "This is a way to get European allies off Russian gas." Wright told reporters after the event that Russia has lost much more market share of gas exports from traditional customers in Europe than it's gaining in China. "I don't worry about that for U.S. energy exports," Wright said, about China's interest in Russian gas. "But we do worry about it more in that (President Donald Trump's) top agenda item is, end the killing in Ukraine, and so the pressure to try to reduce Russian revenue from selling energy, that's the issue." Trump, in his second administration, has put additional 25% tariffs on goods coming into the U.S. from India in response to the country's buying of Russian oil. Since coming back to office, Trump has not imposed direct sanctions on Russian energy entities. https://www.reuters.com/business/energy/russian-gas-sales-china-would-not-harm-us-energy-secretary-says-2025-09-05/
2025-09-05 20:01
US unemployment rate for August rose to 4.3% Spot gold up 37% so far this year Record prices stifle physical gold buying in top Asian hubs Silver heads for third consecutive weekly gain Sept 5 (Reuters) - Gold's powerful rally took on fresh legs on Friday, with prices just cents away from $3,600 per ounce, as weak U.S. jobs data further raised expectations for bullion-supportive Federal Reserve rate cuts. Spot gold was up 1.4% at $3,596.55 per ounce, as of 2:47 p.m. EDT (1847 GMT), having hit a record $3,599.89 earlier. The metal is now on track for its strongest weekly gain in nearly four months. U.S. gold futures for December delivery settled 1.3% higher at $3,653.30. Sign up here. Bullion has surged 37% so far this year after a 27% gain in 2024 - driven by U.S. dollar weakness, central bank buying, a softening monetary policy backdrop and wider geopolitical and economic uncertainty. Data showed U.S. job growth weakened sharply in August while the unemployment rate increased to 4.3%, confirming that labour market conditions were softening. Traders are now betting an 90% chance of a 25-basis-point rate cut and a 10% chance of a 50 basis-point cut in September. "Gold makes new highs; bulls are looking at the clearly weakening trend of employment translating into multiple rate cuts," said Tai Wong, an independent metals trader. "The outlook is undoubtedly bullish for gold as labour concerns override inflation for the short, probably medium term. However, I think we are still too far away from 4,000 unless there is a massive dislocation," Wong added. Analysts have also flagged the independence of the Fed as a key factor in shaping gold's trajectory - an issue thrust into the spotlight after U.S. President Donald Trump attempted to fire Fed Governor Lisa Cook and put repeated pressure on the central bank to slash rates. Bullion, which does not pay interest, tends to shine when rates are low and uncertainty is high, making it a go-to asset for investors seeking safety. China and India are top gold consumers. Physical demand for gold in these hubs dropped this week due to record high prices. August gold in reserves data from China's central bank, due on Sunday, will not catch the September record highs, but may still provide more clarity on how demand from central banks was being affected by high bullion prices. Among other metals, spot silver rose 0.8% to $40.98 per ounce and was heading for its third consecutive weekly gain. Platinum gained 0.5% to $1,373.92 and palladium fell 1.5% to $1,110.32. https://www.reuters.com/world/india/gold-nears-record-3600oz-level-weak-us-jobs-data-fuels-rate-cut-bets-2025-09-05/
2025-09-05 19:38
SAO PAULO, Sept 5 (Reuters) - Large food retailers in Europe have urged global grain traders to defend Brazil's soy moratorium initiative, a pact designed to protect the Amazon rainforest from soy-driven deforestation amid farmer efforts to suspend the program. In a letter dated Sept. 5 seen by Reuters, food grocers -including Tesco (TSCO.L) , opens new tab, Sainsbury's (SBRY.L) , opens new tab, Lidl and Aldi - directly ask the CEOs of ADM, Bunge, Cargill, Louis Dreyfus Company and China's Cofco to publicly reaffirm their commitment to banning soybean purchases from Amazonian farmers who cleared land there after a 2008 cut-off date. Sign up here. "We are writing to you at a critical moment for the future of the Amazon Soy Moratorium, an initiative your companies have championed, protecting the Amazon for nearly two decades...", the letter said, adding Brazil's competition authority CADE decision to suspend the program in August "poses a serious threat to this vital agreement." The letter suggests consumers and large companies will renew pressure on traders if they don't refrain from sourcing soy grown on deforested Amazon land. Brazil, the world's largest soy producer and exporter, sells most of it to China, which needs it to make feedstock. The traders did not immediately respond to a Reuters request for comment. Credited with slowing soy-driven deforestation in the Amazon, the moratorium has disgruntled farmers for years. Eventually, farmers' powerful lobbying in Congress pushed CADE to investigate it. In the letter, which is also signed by Britain's National Pig Association and privately owned food producers based in the UK, grain traders are praised for their efforts to appeal CADE's decision. "Even though a temporary injunction was put in place concerning the immediate implementation of the (CADE) order, action is needed to remove any market uncertainty over this time regarding the protections of this vital ecosystem," the letter said. According to signatories of the letter, if any suspension of the soy moratorium occurs, they expect the grain traders to be prepared "to immediately deploy an interim compliance measure on an individual company basis until a longer-term solution is secured" to protect the Amazon. https://www.reuters.com/sustainability/climate-energy/food-grocers-urge-grain-traders-uphold-brazils-soy-moratorium-initiative-2025-09-05/
2025-09-05 19:28
Non-farm payrolls rise by 22,000 jobs last month Dollar falls against yen and Swiss franc Euro gains, pound sterling rises Gold hits fresh record high Traders pricing in 12% chance of 50 bps cut NEW YORK, Sept 5 (Reuters) - The U.S. dollar fell sharply against major peers on Friday after crucial monthly jobs data showed that American employers hired fewer workers than expected, which affirms weakening labor market conditions and likely guarantees a Federal Reserve interest rate cut. Labor Department data showed that nonfarm payrolls increased by only 22,000 jobs last month, far short of the 75,000 positions estimated by economists polled by Reuters. Sign up here. The dollar fell across the board following the report. It weakened 0.70% to 147.44 against the Japanese yen , but was still on track for the second straight week of gains. The greenback dropped 0.91% to 0.79830 against the Swiss franc and was poised for the fourth consecutive week of losses against the currency. "The data is giving evidence of what was feared, which is that what companies have experienced throughout the year because of changes in trading policy has added costs when it comes to tariffs," said Juan Perez, director of trading at Monex USA in Washington. "These costs can only be absorbed for so long and what is being manifested is that companies are struggling with hiring." The euro was up 0.55% at $1.171675 and was set to notch a weekly gain against the dollar. The dollar index fell 0.48% to 97.767 and was set to shed 0.23% this week. "It's definitely not a good story for the U.S. dollar and it's not a good story for the United States because what today truly establishes is that we are experiencing very serious stagflation," Perez added. U.S. Treasury yields fell. The rate-sensitive 2-year note yield fell 8.1 basis points to 3.511%. The yield on benchmark U.S. 10-year notes fell 8.8 basis points to 4.088%. Wall Street's main indexes, including the S&P 500 (.SPX) , opens new tab, Nasdaq (.IXIC) , opens new tab and the Dow (.DJI) , opens new tab, reversed gains in early trade and were all trading down. Traders are now pricing a 10% chance of a 50-basis point cut at the Fed's next meeting later this month, while the probability of a 25-basis point cut is at nearly 90%, according to the CME's FedWatch tool. "The pendulum has swung very far in favor of a Fed rate cut that even the market is pricing in a 10% chance of a 50 basis-point cut," said Marc Chandler, chief market strategist at Bannockburn Global Forex. "But a 50 basis-point cut would make it seem like they made a mistake by not cutting previously and I don't think they want to admit to that . . . The prudent thing to do, and I think the Fed is prudent, is a 25-basis-point cut." The pound rose versus a weaker dollar after Friday's news that British Deputy Prime Minister Angela Rayner resigned , opens new tab after admitting to underpaying property tax on a new home, in a fresh blow for her boss, Prime Minister Keir Starmer. It strengthened 0.51% to $1.35055 and was on track to gain 0.02% for the week. Gold hit a fresh record high of $3,599.89 as the dollar weakened. Spot gold rose 1.35% to $3,593.04 an ounce. https://www.reuters.com/world/africa/dollar-drops-against-peers-after-weaker-than-expected-jobs-report-2025-09-05/
2025-09-05 18:25
Sept 5 (Reuters) - Federal Reserve Bank of Chicago President Austan Goolsbee, speaking Friday after data showed further job-market weakening, said he is still undecided whether September is the right timing for an interest rate cut, while also defending the need to keep the U.S. central bank insulated from short-term political pressure. In an interview on Bloomberg TV, Goolsbee said he is "totally opposed" to any move to take away the Fed's independence. Goolsbee, however, said he does not think that's what is being attempted and said he expects that any nominee to the central bank will do their job "seriously." Sign up here. President Donald Trump's nominee for the Fed, Stephen Miran, said Thursday he would take an unpaid leave from the White House while he serves at the Fed through January, a move that Democrats said shows Miran would not be independent. https://www.reuters.com/business/feds-goolsbee-says-hes-undecided-sept-rate-cut-defends-fed-independence-2025-09-05/
