2025-09-03 05:28

Sterling, yen struggle to regain footing Investors worried about rising debt levels globally Uncertainty over Japan's political future clouds BOJ outlook SINGAPORE, Sept 3 (Reuters) - The British pound and the yen came under pressure on Wednesday, following heavy selling stoked by renewed investor worries about the health of government finances globally and political uncertainty in Japan. Traders had dumped long-end government bonds in Europe and the U.S. in the previous session as focus once again shifted to rising debt levels across major economies, rekindling fears that governments around the world are losing their grip over fiscal deficits. The activity spilled over into Japan on Wednesday. Sign up here. The selloff was stark in the gilt market as Britain's 30-year borrowing costs rose to their highest levels since 1998, which also left sterling vulnerable as it tumbled more than 1% on Tuesday. The pound last traded 0.18% lower at $1.3370. "It's a problem Europe-wide, basically. I think France has got the same issues...it's been in the background for quite some time," said Ray Attrill, head of FX research at National Australia Bank, referring to the worsening fiscal positions of governments. "It's probably resonating a bit more in the UK because of memories of the Liz Truss episode... I think part of the concern is that there's an autumn statement or a budget that's coming up," he said. "I think at this stage, there's a lack of confidence in markets that the government is willing to address effectively the scale of the budget deficit and the speed of debt buildup." Over in Japan, the yen was similarly down more than 0.1% at 148.60 per dollar, having slid 0.8% in the previous session after the Japanese ruling party's Secretary-General Hiroshi Moriyama, a close aide to Prime Minister Shigeru Ishiba, said he intended to resign from his post. That could potentially affect the fate of Ishiba, who has resisted calls to quit over an election loss. "On the surface, political uncertainty, and the possibility that Prime Minister Shigeru Ishiba might resign in the coming days or weeks, is having a debilitating impact on the yen," said Kit Juckes, Societe Generale's chief global FX strategist. Sanae Takaichi, one of the leading contenders to replace Ishiba, is known for favouring low domestic interest rates. The yen hardly reacted to comments from Bank of Japan Governor Kazuo Ueda, who said he discussed various topics on the economy and markets, including foreign exchange rate moves, in a meeting with Ishiba on Wednesday. Meanwhile, the slide in sterling and the yen in turn lifted the dollar, which last stood at 98.43 against a basket of currencies having gained 0.66% on Tuesday. The euro was down 0.08% at $1.1631, extending its 0.6% fall from the previous session, while the Australian dollar was little changed at $0.6520. The New Zealand dollar last traded 0.06% lower at $0.5861. Fiscal and political worries aside, investors also had their eye on a slew of U.S. labour market data releases this week, headlined by Friday's nonfarm payrolls report. That could provide investors and the Federal Reserve a clearer picture of the labour market that has become the centre of policy debate, and could either underscore or cast doubt on expectations of a rate cut later this month. The two-year U.S. Treasury yield , which typically reflects near-term rate expectations, eased slightly to 3.6556% on Wednesday, though the 30-year yield was just a whisker away from the 5% level, in line with the global rise in long-end bond yields. https://www.reuters.com/world/africa/sterling-yen-undermined-by-fiscal-political-concerns-2025-09-03/

2025-09-03 05:18

MUMBAI, Sept 3 (Reuters) - The Indian rupee rose on Wednesday, defying tepid sentiment across Asian markets, with traders noting that the bearish bias in options has faded. The rupee was quoting at 88.00 to the U.S. dollar, up 0.18% on the day. The local currency advanced despite weakness in Asian peers and a rally in the dollar index to 98.50. Sign up here. Bankers noted that the options market is signalling less near-term downside pressure on the rupee after it breached the 88 level last Friday. In particular, the 1-month USD/INR risk reversal, which had shown dollar calls trading at a premium to puts when the rupee breached the 88 mark, has now flattened, indicating lower demand for downside hedges on the currency. "The slight skew that was favouring dollar calls has disappeared, which is not surprising when you consider the price action post Friday's breakout (for USD/INR)," an FX derivatives trader at a private sector bank said. He noted that while the rupee hit a fresh all-time low of 88.33 on Monday, the move was largely orderly and did not trigger undue stress. On Tuesday, the currency rallied to 87.85 before dipping, and on Wednesday it pushed higher again to retest 88, underscoring that price action over the past three sessions has been contained. DOLLAR FINDS BUYERS The dollar index rallied 0.66% on Tuesday and inched up further in Asian trade on Wednesday amid fiscal concerns in several major economies, especially the UK and Japan. Britain's 30-year borrowing costs rose to their highest levels since 1998, highlighting investor anxiety about the UK's ability to keep its finances under control. https://www.reuters.com/world/india/rupee-rises-despite-tepid-asian-cues-options-shed-bearish-lean-2025-09-03/

2025-09-03 05:07

NEW DELHI, Sept 3 (Reuters) - Widespread flooding has hit several parts of northern India, officials said, with more thunderstorms forecast for Wednesday as local media reported that 10,000 people were evacuated from the river banks in capital Delhi. The monsoon season in India has been particularly intense this year, killing at least 130 people in August alone in north India, wiping out villages and destroying infrastructure. Sign up here. The latest round of flooding has hit northern Jammu and Kashmir, Himachal Pradesh, Uttarakhand and Punjab, where the Chenab and Tawi rivers have risen above the danger mark at several spots. The swollen rivers have triggered landslides and damaged many roads, disconnecting parts of the mountainous regions of Jammu and Himachal from the rest of India. A woman and her daughter were killed after rains brought down a wall in their house in Jammu and Kashmir's Rajouri district, a regional official said. The India Meteorological Department warned of heavy to very heavy rain in the region on Wednesday, with more downpours expected in Uttarakhand and Uttar Pradesh. The Central Water Commission said the swollen Yamuna had breached its danger mark on Tuesday in Delhi. Local media reported that nearly 10,000 people had been evacuated to relief camps set up by the government along the main highways as a precautionary measure for those living in low-lying areas. Residents living along the Yamuna in Delhi were evacuated in 2023 as well after floodwaters entered their homes and the river hit its highest level in 45 years. Many tourist spots in Himachal Pradesh have been hit by landslides in recent weeks, as raging rivers damaged infrastructure. Three people were killed in Mandi district in the latest landslide, state Chief Minister Sukhvinder Singh Sukhu said on Wednesday, and two more were feared trapped under the debris. Educational institutions were ordered shut, authorities said, asking people to remain indoors due to flood warnings. In neighbouring Punjab, the government said 30 people have been killed and nearly 20,000 evacuated since August 1. Water gushing through the plains in India's breadbasket Punjab state has destroyed 150,000 hectares of crops, the government said on Tuesday. Continuous rain prompted authorities to release water from dams, which has caused flooding in plains in India and Pakistan in recent days. https://www.reuters.com/sustainability/climate-energy/heavy-rain-lashes-northern-india-yamuna-river-breaches-danger-mark-delhi-2025-09-03/

2025-09-03 05:06

Fiscal worries send super long bond yields higher Investor await jobs report for cues US rate outlook Dollar finds support as sterling, yen under pressure Gold races above $3,500 to record peak TOKYO, Sept 3 (Reuters) - A global slide in long-dated bonds extended into Asia on Wednesday, with Japanese yield hitting a record high while gold scaled a new peak as mounting concerns over government debt and economic growth rattle investors. Bond yields especially on super-long-dated 30-year tenors have been soaring around the world, with investors anxious about the scale of debt in countries from Japan to the United States. Sign up here. The 30-year Japanese government bond (JGB) yield hit an unprecedented 3.255%, following a run-up in similarly dated gilts and Treasuries on Tuesday. European futures indicated a higher open but much will depend on whether the bond selloff takes a breather as focus remains on the potential collapse of the French government and UK's ability to stabilise its finances. The pan-region Euro Stoxx 50 futures were up 0.36%, while German DAX futures gained 0.25%. FTSE futures were flat. Ben Bennett, Asia Head of Investment Strategy at L&G, said huge fiscal deficits are weighing on long-dated bonds as investors have to absorb significant issuance. "I think higher rates in Japan is also a major factor, as global bond markets no longer benefit from the Japanese hunt for yield. It’s a perfect storm for long-dated bonds and a headache for governments." Japan's Nikkei (.N225) , opens new tab fell 0.69% as worries about the nation's financial health returned after Prime Minster Shigeru Ishiba's close aide said he intended to resign from his post. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab was down 0.4%. Attention now turns to services data in Europe for indications of how countries are weathering the unpredictable tariff policies of U.S. President Donald Trump and to key U.S. labour data on Friday for signals on rate cuts by the Federal Reserve. Trump on Tuesday said his administration will ask the Supreme Court for an expedited ruling on tariffs that an appeals court found illegal last week. The court allowed for the tariffs to stay in place until October 14. U.S. manufacturing contracted for a sixth straight month in August as factories grappled with the impact of import tariffs, data showed on Tuesday. Purchasing managers indexes for the euro zone and Britain are due for release on Wednesday. U.S. nonfarm payrolls on Friday will be preceded by data on job openings and private payrolls, giving clarity on the labour market that has become the focus of policy debate at the Fed. Markets widely expect the Fed to lower interest rates later this month, pricing in an 89% chance of a 25-basis-point cut. The 30-year JGB yield jumped 8 basis points (bps) to a record high of 3.28% as markets brace for a sale of the debt on Thursday. The yield on the 30-year Treasury was last at 4.985%, just below the psychologically important 5% mark it last hit mid-July. "A lot hinges now on the August U.S. jobs report this Friday," said Vasu Menon, managing director of investment strategy at OCBC Bank. "If it comes in significantly below market expectations, this could cause long-end yields to ease slightly although we may not see a big move lower until we get the U.S. August CPI figures on 11 September." The dollar found its footing, rising 0.3% to 148.79 yen. Sterling eased 0.2% to $1.3367 , while the euro last bought $1.163. The pound slumped 1.1% in the previous session and 30-year gilt yields hit their highest since 1998, underscoring investor angst about the Labour government's ability to exercise fiscal constraint. British finance minister Rachel Reeves is expected to raise taxes in her autumn budget to remain in line with her fiscal targets, while in France Prime Minister Francois Bayrou looks set to lose a confidence vote as opposition parties balk at his cuts to government spending. Gold prices extended their record run on Wednesday, holding firm above the key $3,500 level and were last at $3,537.81 per ounce. U.S. crude eased 0.2% to $65.41 a barrel. https://www.reuters.com/world/china/global-markets-wrapup-2-2025-09-03/

2025-09-03 04:43

SINGAPORE, Sept 3 (Reuters) - Economists have raised their forecasts for Singapore's growth this year and expect monetary policy to be held steady at a review next month, a survey of forecasters by the Monetary Authority of Singapore showed on Wednesday. Geopolitical tensions were cited as a top downside risk for the city-state, while an easing of trade tensions and a sustained tech cycle upturn were seen as potential upside risks, the responses from 20 economists for the September quarter survey found. Sign up here. The median forecast for growth this year was raised to 2.4% from 1.7% in the June quarter survey. In August, the government raised its forecast range for 2025 growth to 1.5% to 2.5% due to a better-than-expected first half performance. Economists expected year-on-year growth of 0.9% in the third quarter, the survey found. The MAS held policy settings steady at a review in July, after easing in January and April, and the survey found a majority of economists expected no change to policy at the next review in October. Policy was also seen on hold at the January 2026 review. The median forecasts for core inflation, which excludes private road transport and accommodation costs, edged down to 0.7% from 0.8% in the Q2 survey, while the median forecast for headline inflation was steady at 0.9%, the survey showed. At a policy review in April, the MAS lowered its forecast range for core inflation to 0.5% to 1.5% in 2025. In March and July, the annual core inflation rate was 0.5%, the lowest rate in more than three years. The survey published on Wednesday was sent out on August 12, the day that data showed the economy grew an annual 4.4% in the second quarter and the government revised its growth forecast. (This story has been corrected to remove an extraneous word in paragraph 7 and show that the core rate was also at 0.5% in March) https://www.reuters.com/world/asia-pacific/singapore-mas-survey-shows-economists-lift-gdp-forecast-see-steady-policy-2025-09-03/

2025-09-03 04:42

A look at the day ahead in European and global markets from Rocky Swift A day after U.S. President Donald Trump re-emerged in the Oval Office to dispel rumours about his health, Chinese President Xi Jinping made a defiant show of strength at his nation's largest ever military parade. Sign up here. Trump returned from days of public absence to face court challenges to his tariff policies, immigrant deportations, and ability to fire any public official he pleases. The optics were very different in Beijing, as Xi, Russia's Vladimir Putin and North Korea's Kim Jong Un watched processions of missiles, tanks and drones. Kim even followed the "bring your daughter to work" tradition, showing off to the world his potential successor and evidence that autocracies still have a lot of life in them. Away from geopolitics, bond markets are again sounding alarm over mounting government deficits and debt piles. U.S. Treasury yields ticked up in Asian trading and Japan's 30-year yields reached an all-time high. Sterling sank even lower after a 1.1% slide on Tuesday when 30-year gilt yields soared to the highest since 1998. With stocks shaky and bonds looking perilous, you can always count on gold. The precious metal hit an all-time high of $3,546.99 in the Asian trading day. On the data front, purchasing managers indexes (PMIs) for the euro zone and Britain will lead the way, with July JOLTS figures in the United States to follow as a prelude to key nonfarm payrolls on Friday. Markets are pricing in an 89% chance of a 25-basis-point reduction in the Federal Reserve's key policy rate this month, and weak labour data would increase the odds for more cuts. Equity futures are pointing to openings in positive territory in Europe, with the pan-region Euro Stoxx 50 contracts up 0.34% at 5,317, German DAX futures gaining 0.3% to 23,609, and FTSE futures inching up 0.1% at 9,151. And keeping on the positive theme, Trump sounded a conciliatory note to Xi, posting on social media: "Please give my warmest regards to Vladimir Putin and Kim Jong Un as you conspire against the United States of America." Key developments that could influence markets on Wednesday: - PMIs for Britain, euro zone, Chicago - Bank of England's Sarah Breeden and Catherine Mann speak at separate events - European Central Bank President Christine Lagarde speaks - Euro zone PPI inflation (July) - France: Reopening of 3-month, 4-month, 6-month and 11-month government debt auctions - Germany: Reopening of 7-month, 2-year, 7-year and 10-year government debt auctions - Britain: - Reopening of 1-month, 3-month, 6-month and 3-year government debt auctions - Federal Reserve officials scheduled to speak include St. Louis Fed President Alberto Musalem and Minneapolis Fed President Neel Kashkari - U.S. data durable goods and JOLTS job openings for July https://www.reuters.com/world/china/global-markets-view-europe-2025-09-03/