2025-08-26 05:07

SEOUL, Aug 26 (Reuters) - A top South Korean official said on Monday that the U.S. and South Korea had decided to establish a non-binding agreement to define the operation and structure of $350 billion in investment funds agreed as part of a July trade deal. Seoul agreed with Washington last month on a trade deal to cut U.S. tariffs in exchange for pledging the investments, though differences emerged on how the sides interpreted details of the plan, including how profits would be distributed. Sign up here. Presidential policy adviser Kim Yong-beom said on Monday the two sides were making progress in reaching an agreement in broad terms during his visit to Washington for the summit between U.S. President Donald Trump and South Korean President Lee Jae Myung. During his trip, Kim said he had held a separate meeting with U.S. Commerce Secretary Howard Lutnick for two hours. Kim said that the U.S. hoped to agree a memorandum of understanding (MOU) to oversee the investment plan as soon as possible. The "financial package" would be used to support strategic industries such as key minerals, batteries, chips, pharmaceuticals, artificial intelligence and quantum computing, Kim said. He reiterated that up to $150 billion had also been earmarked for shipbuilding. Seoul would create a task force to work on detailed implementation plans, led by the finance ministry and joined by state-funded banks, Kim said. South Korean officials previously disputed Lutnick's remarks suggesting the U.S. would take 90% of the profits from the investments. Officials in Seoul also said equity investments would account for a small part, while loans and guarantees would make up a majority of the funds. In July, Trump said South Korea would invest in projects "owned and controlled by the United States" and selected by him. South Korean officials have said a safety mechanism would be added to reduce financing risk, including U.S. commitments to buy products from the projects and invest in commercially feasible projects. https://www.reuters.com/world/asia-pacific/south-korea-eyes-non-binding-deal-steer-350-bln-us-investments-2025-08-26/

2025-08-26 04:36

A look at the day ahead in European and global markets from Rocky Swift Markets like it when central banks can steer economic policy without political meddling, and they prize data that matches reality. Sign up here. That faith has helped global shares climb to successive record highs this month, but it was shaken again by U.S. President Donald Trump's latest attack on the independence of the U.S. central bank. Equity markets in Asia and stock futures in Europe and the U.S. turned lower after Trump declared he was firing Federal Reserve Governor Lisa Cook over alleged improprieties in obtaining mortgage loans. Long-term Treasuries fell after the news while shorter-term debt rose, signalling both diminished faith in the long-term credit of the United States and increased assurance that Trump will get the "rocket fuel" Fed rate cuts he's been after. Fed Funds futures traders are pricing in 83% odds of a September rate cut, according to the CME Group's FedWatch Tool. Trump, who was last week relieved of the penalty though not a finding of fraud in his own property dealings, said in a letter to Cook that "the American people must be able to have full confidence in the honesty" of those setting policy. Cook, whose term at the Fed runs to 2038, vowed to stay on, saying the president had no authority to remove her. Indeed, the legality of the move is unclear, but it comes after numerous threats to fire Fed Chair Jerome Powell. Trump lacks the legal authority to fire the Fed chair except "for cause". That plus the Fed chief's term expiration in May seem to have tempered his assaults on the central bank for now. Not so lucky was the Labor Department official who was cashiered this month after delivering jobs data that disappointed Trump. Apart from the Fed showdown, Trump kept playing the hits, issuing new tariff threats against countries that have digital taxes, another headache for the European Union. Sources said earlier that the Trump administration was considering imposing sanctions on EU or member state officials responsible for implementing the bloc's landmark Digital Services Act. The data calendar is light today. Markets remain focused on Nvidia's NVDA.O , opens new tab quarterly earnings on Wednesday, a critical test of the scorching artificial intelligence trade. Key developments that could influence markets on Tuesday: - U.S. data: durable goods for July, consumer confidence for August - France consumer confidence for August - U.S. Treasuries two-year auction - Earnings: Bank of Montreal, Foot Locker, Kohls - Riksbank publishes minutes of August 19 monetary policy meeting https://www.reuters.com/world/china/global-markets-view-europe-2025-08-26/

2025-08-26 04:20

RBA ponders about gradual or faster pace of rate cuts The central bank has only cut in Feb, May, August Labour market key to interest rate outlook SYDNEY, Aug 26 (Reuters) - Australia's central bank board judged further policy easing would likely be needed over the coming year when it cut rates this month, and the pace could be gradual or quicker depending on the flow of economic data. Minutes of its August 11-12 policy meeting showed the Reserve Bank of Australia saw a strong case for a quarter-point reduction in the cash rate to 3.6% as data had shown inflation was heading towards the mid-point of its 2-3% target band. Sign up here. Policymakers also discussed the policy strategy over the coming year, adding that preserving full employment and maintaining low and stable inflation were likely to require some further cuts in the cash rate. The board saw arguments for a gradual pace of easing and for a quicker series of moves, with the outcome uncertain as yet. "It was important for the pace of decline in the cash rate to be determined by incoming data on a meeting-by-meeting basis," the minutes showed. The central bank has tended to emphasise caution in easing, having only cut rates in February, May and August following the release of quarterly inflation data. A gradual pace in policy easing may be warranted as the labour market remained somewhat tight, private demand was showing signs of picking up and there was much uncertainty about where the neutral rate was. A faster pace could be needed if the labour market weakened and there was a risk inflation might undershoot the midpoint of the 2-3% target range. A global slowdown or renewed strains from U.S. tariff policy might also add to the case for quicker easing. The minutes suggested upside risks to inflation have now been superseded by potential downside risks to the labour market, said Belinda Allen, head of Australian economics at the Commonwealth Bank of Australia. "We currently see the cash rate troughing at 3.35% but if the pick-up in the economy is slower than we expect, further easing is likely over the coming year." Investors are wagering the RBA will skip a move in September and wait until its November meeting to ease to 3.35%. Rates are seen settling around 3.10%, or perhaps as low as 2.85%. Headline inflation eased to 2.1% in the June quarter, while the trimmed mean measure of core inflation hit a fresh three-year low of 2.7%. The labour market, on the other hand, is easing from full employment levels although at a gradual pace. Employment rebounded in July and the jobless rate edged down from a 3-1/2-year high, calming concerns about a sharp labour market downturn. The RBA said board members discussed whether the central bank should increase the pace at which its holdings of government bonds were running down, but they decided there should be no change to its current strategy of letting them mature. https://www.reuters.com/world/asia-pacific/australias-rba-signals-more-rate-cuts-ahead-pace-undecided-2025-08-26/

2025-08-26 04:20

SYDNEY, Aug 26 (Reuters) - Australia's central bank board judged further policy easing would likely be needed over the coming year when it cut rates this month, and the pace could be gradual or quicker depending on the flow of economic data. Minutes of its August 11-12 policy meeting showed the Reserve Bank of Australia saw a strong case for a quarter-point reduction in the cash rate to 3.6% as data had shown inflation was heading towards the mid-point of its 2-3% target band. Sign up here. They also discussed the policy strategy over the coming year, adding that preserving full employment and maintaing low and stable inflation was likely to require some further cuts in the cash rate. The board saw arguments for a gradual pace of easing and for a quicker series of moves, with the outcome uncertain as yet. "It was important for the pace of decline in the cash rate to be determined by incoming data on a meeting-by-meeting basis," the minutes showed. The central bank has tended to emphasize caution in easing, having only cut rates in February, May and August following the release of quarterly inflation data. A gradual pace in policy easing may be waranteed as the labour market remained somewhat tight, private demand was showing signs of picking up and there was much uncertainty about where the neutral rate was. A faster pace could be needed if the labour market weakened and there was a risk inflation might undershoot the midpoint of the 2-3% target range. A global slowdown or renewed strains from U.S. tariff policy might also add to the case for quicker easing. Investors are wagering the RBA will skip a move in September and wait until its November meeting to ease to 3.35%. Rates are seen settling around 3.10%, or perhaps as low as 2.85%. Headline inflation eased to 2.1% in the June quarter, while the trimmed mean measure of core inflation hit a fresh three-year low of 2.7%. The labour market, on the other hand, is easing from full employment levels although at a gradual pace. Employment rebounded in July and the jobless rate edged down from a 3-1/2 year high, calming concerns the labour market was about to fall over. The RBA said board members discussed whether the central bank should increase the pace at which its holdings of government bonds were running down, but they decided there should be no change to its current strategy of letting them mature. (([email protected] , opens new tab; +61 0 427901124;)) Keywords: AUSTRALIA RBA/MINUTES https://www.reuters.com/world/asia-pacific/australia-central-bank-sees-more-rate-cuts-ahead-pace-undecided-2025-08-26/

2025-08-26 03:08

MUMBAI, Aug 26 (Reuters) - The Indian rupee looks set to stay under pressure on Tuesday, with looming U.S. tariff hikes casting a shadow over sentiment. The dollar's decline after President Donald Trump’s latest attack on the Federal Reserve will offer little reprieve for the currency, traders said. Sign up here. The 1-month non-deliverable forward indicated the rupee will open in the 87.64 to 87.68 range versus the U.S. dollar, compared with 87.58 in the previous session. Indian goods face U.S. tariffs of up to 50% with effect from Wednesday - among the highest levied on any U.S. trading partner. Washington has already imposed 25% duties on shipments from India. Trump had in the first week of August said U.S. will impose additional 25% tariff on Indian goods from August 27, citing New Delhi's continued imports of Russian oil. The U.S. Department of Homeland Security published a notice of implementation of additional tariffs, that are set to take effect from August 27. "The notice underscores that the tariffs are set to kick in as planned," said a Mumbai-based FX trader at a bank. "USD/INR is struggling to find a bottom — tariff overhang is crowding out whatever relief may be there. Importers have been buying dips and will continue to chase it higher. I suspect vols (volatility) will be bid too," the trader said. DOLLAR DROPS The dollar index dropped after Trump said he was removing Federal Reserve Governor Lisa Cook from her position for allegedly committing mortgage fraud. Longer maturity U.S. yields rose. Trump's unprecedented move further undermines confidence in the Fed's independence and U.S. assets, analysts said. The removal of Cook comes after the president has regularly threatened to fire Fed Chair Jerome Powell. https://www.reuters.com/world/india/rupee-braces-us-tariff-storm-trump-fuelled-dollar-decline-offers-no-respite-2025-08-26/

2025-08-26 02:18

TOKYO, Aug 26 (Reuters) - Japan remains alarmed over foreign exchange movement, Finance Minister Katsunobu Kato said on Tuesday, after the yen strengthened following U.S. President Donald Trump's announcement of the removal of a Federal Reserve governor. Asked about the removal of Lisa Cook from her position on the Fed's board of directors, Kato told a press conference that he would refrain from commenting on foreign authorities and on foreign exchange levels. Sign up here. "That being said, it's important for currencies to move in a stable manner reflecting fundamentals and we remain alarmed over FX moves, including those driven by speculators," he said. https://www.reuters.com/business/japan-remains-alarmed-over-forex-movement-finance-minister-says-2025-08-26/