2025-08-04 05:42

Dollar rebounds slightly after Friday's slide Weak jobs data, uncertainty over Fed independence undermine US economy Investors pricing in more than 90% chance of September Fed cut SINGAPORE, Aug 4 (Reuters) - A battered dollar found some support on Monday after a dismal U.S. jobs report and President Donald Trump's firing of a top labour official stunned investors and led them to ramp up bets of imminent Federal Reserve rate cuts. Data on Friday showed U.S. employment growth undershot expectations in July while the nonfarm payrolls count for the prior two months was revised down by a massive 258,000 jobs, suggesting a sharp deterioration in labour market conditions. Sign up here. Adding to headwinds for markets, Trump fired Bureau of Labor Statistics (BLS) Commissioner Erika McEntarfer the same day, accusing her of faking the jobs numbers. An unexpected resignation by Fed Governor Adriana Kugler also opened the door for Trump to make an imprint on the central bank much earlier than anticipated. Trump has been at loggerheads with the Fed for not lowering interest rates sooner. The barrage of developments dealt a one-two punch to the dollar, which sank more than 2% against the yen and roughly 1.5% against the euro on Friday. The greenback recovered some of its losses against the Japanese currency on Monday, last trading 0.2% higher at 147.67 yen . Still, it was down about 3 yen from its peak on Friday. The euro fell 0.06% to $1.1579 , while sterling was little changed at $1.3281. Trump said on Sunday he will announce a candidate to fill an open position at the Fed and a new BLS head in the next few days. Against a basket of currencies, the dollar edged up 0.1% to 98.75, after sliding more than 1% on Friday. "Market reactions to Friday night's events were swift and decisive," said Tony Sycamore, a market analyst at IG. "Equities and the U.S. dollar tumbled, along with yields." U.S. TREASURY YIELDS DROP The two-year Treasury yield fell to a three-month low of 3.6590% on Monday as traders heavily scaled up bets of a Fed cut in September, while the benchmark 10-year yield strayed not too far from a one-month low at 4.2493%. Markets are now pricing in a more than 90% chance the Fed will ease rates next month owing to the weaker-than-expected jobs data, with just under 60 basis points worth of cuts expected by December. "We pull forward our baseline call for a 25 bps cut from the FOMC to September," said David Doyle, head of economics at Macquarie Group. "While we don't see significant further weakness in the labour market, the results of this report are likely to shift the FOMC's assessment of the balance of risks to the outlook." In other currencies, the Australian dollar rose 0.09% to $0.64815, after rising 0.8% on Friday against a weaker greenback. The New Zealand dollar eased 0.11% to $0.59125. The Swiss franc weakened more than 0.1% to 0.8054 per dollar. Switzerland was left stunned on Friday after Trump hit the country with one of the highest tariffs in his global trade reset, with industry associations warning of tens of thousands of jobs being put at risk. https://www.reuters.com/world/india/dollar-finds-footing-after-us-jobs-drubbing-2025-08-04/

2025-08-04 05:21

TOKYO, Aug 4 (Reuters) - Japanese trading house Mitsubishi (8058.T) , opens new tab on Monday posted a net profit of 203.1 billion yen ($1.4 billion) in the three months to June 30, down 43% from a year ago but beating analysts' forecasts. An LSEG poll of analysts had expected the company to post 180.3 billion yen in first-quarter net profit. In the same period last year, Mitsubishi saw a net profit of 354.4 billion yen. Sign up here. This year, profit was mainly down due to the absence of gains from asset sales and because of lower prices in the Australian steelmaking coal business, the company said. Mitsubishi left its forecast for the fiscal year ending next March unchanged at 700 billion yen. Asked about the impact of U.S. tariffs, Chief Financial Officer Yuzo Nouchi said there was no notable direct impact on first-quarter earnings, although some indirect effects were felt through affiliates. "Uncertainty over the economic impact of U.S. tariffs on the U.S., Chinese, and broader Asian economies could indirectly affect our businesses going forward," he told a news conference. Regarding its domestic offshore wind power projects, Mitsubishi is still reviewing their feasibility and aims to complete the assessment around this summer, Nouchi said. "At this point, we are not in a position to definitively estimate the additional losses we may incur from these projects," he said. In February, Mitsubishi booked a 52.2 billion yen ($353 million) impairment charge on its domestic offshore wind projects for the nine-month period ended December, and said it was reviewing how to proceed with the projects given rising costs and interest rates among other factors. Billionaire investor Warren Buffett's Berkshire Hathaway has taken minority stakes in Japan's top five trading houses, including Mitsubishi. ($1 = 147.7500 yen) https://www.reuters.com/markets/asia/japans-mitsubishi-q1-profit-down-43-beats-expectations-2025-08-04/

2025-08-04 04:37

Aug 4 (Reuters) - A look at the day ahead in European and global markets from Wayne Cole. It's been a case of buy the dip so far on Monday as U.S. and European stock futures edge up, along with the dollar. The Nikkei suffered a delayed reaction to Friday's Wall Street rout and a jump in the yen, but the rest of Asia fared better. Sign up here. Early trade saw Fed fund futures price in 65 bps of interest rate cuts by December, but that's back to 60 bps now. That's still a world away from the 33 bps seen before Friday's weak U.S. payrolls report, and September is still 83% for an easing. In fact, the 25 bps drop in two-year yields on Friday was essentially the market doing a Fed rate cut for them, given how borrowing costs in the States are tied to yields not the funds rate. Ten-year yields also fell a steep 14 bps but met resistance around 4.20%, a level they have repeatedly struggled to break under since October last year. Longer term, downward revisions to payrolls have seriously challenged the U.S. claim to economic out-performance and the dollar's crown of exceptionalism. The latter was also tarnished by President Trump firing the head of the Bureau of Labor Statistics, an institution with an invaluable reputation for scrupulous honesty that won the trust of investors worldwide. Or, at least, it used to be. Now, Trump says he will chose a new head for the BLS in the next few days. Will it be an independent-minded statistician dedicated to providing credible data, or a Trump loyalist eager to please their master? U.S. assets enjoy a trust premium that will be really hard to maintain as Trump bends all levels of government to his will. Trump also just floated the idea of using some of the windfall from tariffs to pay "dividends" to a lucky group of Americans chosen by him - no doubt with special cheques bearing a "TRUMP" logo. So you slap taxes on everyone that buys imports, whether they have a choice or not, and then use part of the revenue to pay money to those you favour, in your name rather than the government that's actually doing the work. Talking of tariffs, a U.S. appeals court late last week heard arguments on the legality of Trump's "reciprocal" levies and sounded inclined to support the original ruling that the tariffs were illegal. Such a ruling would likely still go to the Supreme Court, which has tended to favour unbridled presidential power. Yet, should the tariffs be found illegal, not only would all the trade deals agreed or underway be null and void, but the Treasury would have to refund all the money collected. Wouldn't that be fun... Key developments that could influence markets on Monday: Trying to keep up with the latest tariff news? Our new daily news digest offers a rundown of the top market-moving headlines impacting global trade. Sign up for Tariff Watch here. https://www.reuters.com/world/china/global-markets-view-europe-2025-08-04/

2025-08-04 03:03

MUMBAI, August 4 (Reuters) - The Indian rupee is set to open higher on Monday, riding the dollar's plunge after a weak U.S. jobs data boosted bets that the Federal Reserve will cut rates at its September meeting. The 1-month non-deliverable forward indicated the rupee will open in the 87.18-87.22 range versus the U.S. dollar, up from 87.54 on Friday. Sign up here. The rupee fell over 1% last week to its lowest level since February, pressured by equity outflows and concerns over a 25% U.S. tariff on imports from India. "The broader trend (on USD/INR) remains bid. While Friday’s dollar move is an unexpected turn for dollar longs, dip-buying interest will persist," a forex spot trader at a private bank said. "At worst, dollar longs will have to endure a drop to 87." The dollar index slumped 1.35% on Friday, its worst day since mid-April, after July employment data revealed a notable slowdown in U.S. job additions. Not only did the latest job additions miss expectations, data for the previous two months was revised down significantly. U.S. equities slid, Treasury yields fell and the odds of a Fed rate cut at the September meeting climbed to 80% . The disappointing data comes on the back of a slightly hawkish tone adopted by Fed Chair Jerome Powell at the July 29-30 meeting presser, which had provided a boost to the dollar. "A wholly weak U.S. jobs report has pulled the rug from under Jerome Powell’s hawkish stoicism and stopped the dollar’s rally in its tracks," ING Bank said in a note. The bank added that the dollar has likely marked out a near-term peak. Asian currencies climbed on Monday with the Malaysian ringgit and Indonesian rupiah leading the way. The dollar index was up slightly following Friday's dive. Meanwhile, the maturity of a $5 billion dollar-rupee buy/sell swap conducted by the India's central bank six months back will be in focus on Monday. KEY INDICATORS: ** One-month non-deliverable rupee forward at 87.32; onshore one-month forward premium at 12.50 paise ** Dollar index at 98.77 ** Brent crude futures down 0.2% at $69.5 per barrel ** Ten-year U.S. note yield at 4.25%; dropped 14 basis points on Friday ** As per NSDL data, foreign investors sold a net $702.8mln worth of Indian shares on July 31 ** NSDL data shows foreign investors sold a net $11mln worth of Indian bonds on July 31 https://www.reuters.com/world/india/us-jobs-jolt-fans-fed-rate-cut-buzz-rupee-ride-dollar-slump-2025-08-04/

2025-08-04 01:31

MUMBAI, Aug 4 (Reuters) - The rupee is likely to stay under pressure this week as concerns over steep U.S. tariffs on Indian exports linger, while the Reserve Bank of India's upcoming policy decision also looms large over the currency and government bonds. The rupee closed at 87.54 against the U.S. dollar on Friday, down 1.2% for the week, pressured by persistent foreign portfolio outflows and a 25% levy on Indian exports. Sign up here. While the local unit is hovering near its weakest level since February, fresh tariff announcements on dozens of U.S. trading partners also pushed other Asian currencies to multi-month lows. The dollar index, meanwhile, posted its best weekly gain since 2022 as expectations of a U.S. rate cut in September faded. The odds of a reduction in September rose to 80% after data released on Friday showed that the U.S. economy added fewer jobs than expected, while the unemployment rate rose to 4.2%. Meanwhile, the maturity of a $5 billion dollar-rupee buy/sell swap conducted by the RBI earlier this year will be in focus on Monday. "It would be prudent to break the swap into delivery and rollover. The rupee has probably seen its worst for this quarter and some support will bring it to a desirable level, while not disturbing liquidity, said Alok Singh, group head of treasury at CSB Bank. Traders expect the rupee to trade between 87.00 and 87.80 this week and reckon that the central bank may continue to intervene to limit excessive volatility. Meanwhile, India's 10-year benchmark 6.33% 2035 bond yield , settled at 6.3680% last week, up 2 basis points (bps). Traders anticipate the yield will remain in the 6.33%-6.38% band till the RBI's policy decision on Wednesday. The range could be tested on either side, depending on policymakers' decision and guidance. Although some market participants expect a rate cut, a majority of economists polled by Reuters believe RBI will hold rates steady this time. "While it is a close call, our bias remains for a 25 bps rate cut at the August meeting," Citi said. A drop in India's retail inflation to a more-than-six-year low in June, coupled with expectations that it may slip to a record low in July, have heightened hopes of a rate cut. However, RBI Governor Sanjay Malhotra last month said that the bar for further easing is now higher than it would have been if the stance was still "accommodative". The central bank slashed rates by a steeper-than-expected 50 bps in June and shifted its policy stance to "neutral" from "accommodative". "As the RBI awaits the impact of the large easing it has already done, we believe it will stay put on repo rate changes on 6 August," HSBC said in a note. Key Factors: India ** July HSBC services PMI and composite PMI - August 5, Tuesday (10:30 a.m.) ** Reserve Bank of India's monetary policy decision - August 6, Wednesday (10:00 a.m.)(Reuters poll - no change) U.S. ** June factory orders - August 4, Monday (7:30 p.m. IST) ** June international trade - August 5, Tuesday (6:00 p.m. IST) ** July S&P Global composite PMI final - August 5, Tuesday (7:15 p.m. IST) ** July S&P Global services PMI final - August 5, Tuesday (7:15 p.m. IST) ** July ISM non-manufacturing PMI - August 5, Tuesday (7:30 p.m. IST) ** Initial weekly jobless claims for week to July 28 - August 7, Thursday (6:00 p.m. IST) https://www.reuters.com/world/india/indian-rupee-seen-under-pressure-us-tariff-worries-rbi-policy-focus-2025-08-04/

2025-08-04 00:40

Asian stock markets: Nikkei slips in delayed reaction, S&P futures steady U.S. jobs shock leads markets to price in more rate cuts Dollar flat after Friday's sharp reversal Oil slips as OPEC+ increases production SYDNEY, Aug 4 (Reuters) - Asian share markets followed Wall Street lower on Monday as fears for the U.S. economy returned with a vengeance, spurring investors to price in an almost certain rate cut for September and undermining the dollar. Some early resilience in U.S. stock futures and a continued retreat in oil prices did help limit the losses, but the bleak message from the July payrolls report was hard to ignore. Sign up here. Not only had revisions meant payrolls were 290,000 below where investors had thought they would be, but the three-month average slowed to just 35,000 from 231,000 at the start of the year. "The report brings payroll growth closer in line with big data indicators of job gains and the broader growth dataset, both of which have slowed significantly in recent months," noted analysts at Goldman Sachs. "Taken together, the economic data confirm our view that the U.S. economy is growing at a below-potential pace." Neither did the reaction of President Donald Trump instil confidence, as the firing of the head of Labor Statistics threatened to undermine confidence in U.S. economic data. Likewise, news that Trump would get to fill a governorship position at the Federal Reserve early added to worries about the politicisation of interest rate policy. Analysts assume the appointee will be loyal to Trump alone, though the president did grudgingly concede that Fed Chair Jerome Powell would likely see out his term. "It opens the prospect of broader support on the Fed Board for lower rates sooner rather than later," said Ray Attrill, head of FX research at NAB. "Fed credibility, and the veracity of the statistics on which they base their policy decisions, are both now under the spotlight." Markets moved quickly to price in a lot more easing with the probability of a September rate cut swinging to 90%, from 40% before the jobs report. Futures extended the rally on Monday to imply 65 basis points of easing by year-end, compared to 33 basis points pre-data. Markets have essentially already eased for the Fed with two-year Treasury yields down another 4 basis points at 3.661%. They tumbled almost 25 basis points on Friday in the biggest one-day drop since August last year. DOLLAR DENTED The prospect of lower borrowing costs offered some support for equities and S&P 500 futures inched up 0.1%, while Nasdaq futures rose 0.2%. Asian share markets, however, were still catching up with Friday's retreat and the Nikkei (.N22%) , opens new tab fell 2.1%, while South Korea (.KS11) , opens new tab dipped 0.2%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab broke the mould and firmed 0.3%. Wall Street has also taken comfort in an upbeat results season. Around two-thirds of the S&P 500 have reported and 63% have beaten forecasts. Earnings growth is estimated at 9.8%, up from 5.8% at the start of July. Companies reporting this week include Disney (DIS.N) , opens new tab, McDonald's (MCD.N) , opens new tab, Caterpillar (CAT.N) , opens new tab and some of the large pharmaceutical groups. The dismal U.S. jobs data did put a dent in the dollar's crown of exceptionalism, snuffing out what had been a promising rally for the currency. The dollar dipped 0.1% to 147.24 yen , having shed an eye-watering 2.3% on Friday, while the euro stood at $1.1585 after bouncing 1.5% on Friday. The dollar index was pinned at 98.659 , having been toppled from last week's top of 100.250. Sterling was more restrained at $1.3287 as markets are 87% priced for the Bank of England to cut rates by a quarter point at a meeting on Thursday. The BoE board itself is expected to remain split on easing, while markets still favour two further cuts by the middle of next year. In commodity markets, gold was flat at $3,361 an ounce , having climbed more than 2% on Friday. Oil prices extended their latest slide as OPEC+ agreed to another large rise in output for September, which completely reverses last year's cuts of 2.2 million barrels per day. Brent dropped 0.6% to $69.24 a barrel, while U.S. crude also fell 0.6% to $66.93 per barrel. https://www.reuters.com/world/china/global-markets-wrapup-1-2025-08-04/