2025-08-22 05:23

SEOUL, August 22 - U.S. President Donald Trump hosts South Korean President Lee Jae Myung in Washington for their first summit meeting on Monday, after the countries struck a trade deal last month lowering U.S. tariffs on the Asian ally to 15% from a threatened 25%. Alongside trade, U.S. pressure to redefine the decades-long military alliance is set to be a focus, while Trump has said more South Korean investment plans will be announced in addition to a $350 billion package agreed last month. Sign up here. Here are some of the main items that could be discussed. DEFENCE COSTS Trump has accused its Asian ally of "free-riding" on U.S. military might, with some 28,500 American troops stationed in South Korea to deter nuclear-armed North Korea. Just before Trump won the presidential election in November last year, Seoul agreed to increase its contribution by 8.3% to 1.52 trillion won ($1.09 billion) for the first year in 2026, under a five-year plan. Washington also wants its allies to increase defence spending to 5% of GDP. South Korea is currently well short of that after allocating 61.25 trillion won, or 2.3% of GDP, this year. 'MODERNISING' ALLIANCE, CHINA DETERRENCE South Korea's presidential security adviser Wi Sung-lac said "modernising" its alliance with the U.S., including by Seoul increasing defence spending, and "cementing" a trade deal reached in July would be among the main agenda items. U.S. Under Secretary of Defense Elbridge Colby called , opens new tab South Korea a "role model" in taking a greater role in deterring North Korea, but also called for modernising the alliance. Experts say the summit may include discussions on the idea of adjusting the role of U.S. troops from a focus on countering North Korea to also managing tensions in the Taiwan Strait and deterring China. This could be sensitive for Seoul given how President Lee has, alongside declaring full support for the U.S. alliance, sought to take a balanced approach to ties with Beijing. Experts also warn giving U.S. forces multiple missions could impede their primary focus of deterring and defeating a North Korean attack. South Korean Foreign Minister Cho Hyun has denied Seoul was in talks with Washington over whether to allow U.S. forces to be redeployed in the event of a Taiwan Strait emergency. NORTH KOREA South Korea and the United States are on the same page when it comes to the approach of seeking to dismantle North Korea's nuclear weapons programme, top security adviser Wi said. Lee has sought to reduce tensions with Pyongyang since taking office in June, while Trump still boasts of his historic summits with North Korean leader Kim Jong Un in his first term. Lee and Trump have expressed a willingness to restart dialogue with Kim and they may deliver a joint message to North Korea, said Sydney Seiler, a senior adviser at the Center for Strategic and International Studies. But North Korea has so far dismissed Lee's peace overtures, including dismantling loudspeaker propaganda broadcasts across the border. SHIPBUILDING During his U.S. trip, Lee will visit the Pennsylvania-based Philly Shipyard, acquired by South Korean shipbuilder Hanwha Ocean (042660.KS) , opens new tab and its parent group. Officials in Seoul touted shipbuilding cooperation to help the U.S. industry as instrumental in reaching a trade deal. South Korea has agreed to invest $150 billion out of the overall investment package on U.S. shipbuilding cooperation and more details may be announced during the summit. NUCLEAR POWER Foreign Minister Cho told parliament that South Korea could try to win approval from Washington to reprocess or enrich its own nuclear material during the summit, saying this is not for nuclear armament, but for industrial and environmental purposes. South Korea is not allowed to reprocess spent nuclear fuel - which can be used to make nuclear weapons - without U.S. consent under an agreement , opens new tab between the countries. While President Lee has rejected the idea of nuclear armament, his intelligence agency chief this year called for Seoul to secure the right to enrich uranium to demonstrate its "potential nuclear capabilities." Wi said South Korea was in talks about cooperating on nuclear power projects in the United States. CORPORATE INVESTMENT South Korea said the leaders will discuss cooperation in sectors such as chips, batteries, shipbuilding, as well as "economic security" in areas such as cutting-edge technologies and key minerals. Presidential adviser Kim Yong-beom said investments announced during the summit should include already announced projects such as Samsung Electronics' (005930.KS) , opens new tab new chip factory in Texas and Hyundai Motor's (005380.KS) , opens new tab car factory in Georgia, as well as Hanwha's plan to expand its U.S. shipyard. A South Korean newspaper reported Seoul would offer $150 billion of additional investment, or about six times its U.S. foreign direct investment in 2024, according to government data. South Korea's industry minister said it had not been decided. The leaders may also discuss the timeframe to cut U.S. tariffs on South Korean car imports from 25% to 15% as agreed under the trade deal. The countries have appeared to have a different interpretation of details of the $350 billion investment fund, while Seoul denied U.S. assertions that it had agreed to open up its rice market. ($1 = 1,399.6000 won) https://www.reuters.com/business/autos-transportation/what-issues-are-likely-be-discussed-us-south-korea-summit-2025-08-22/

2025-08-22 05:19

Aug 22 (Reuters) - An area of disorganized showers and thunderstorms associated with a tropical wave located a couple of hundred miles east-northeast of the northern Leeward Islands has 70% chance of cyclone formation in the next 48 hours, the U.S. National Hurricane Center (NHC) said on Friday. "Environmental conditions appear conducive for further development of this system, and a tropical depression is likely to form this weekend while it moves northwestward and then northward, in between the Lesser Antilles and Bermuda," the NHC said. Sign up here. https://www.reuters.com/business/environment/nhc-says-70-chance-cyclone-next-48-hours-storm-near-leeward-islands-2025-08-22/

2025-08-22 04:52

A look at the day ahead in European and global markets from Gregor Stuart Hunter It's possible that there is a cure for those summertime blues after all, and it's Jerome Powell. Sign up here. But as the Federal Reserve chair prepares to take the stage at the central bank's annual symposium in Jackson Hole, Wyoming, lethargic traders were still in need of a shot in the arm. Financial markets continued to drift while waiting for clues from Fed officials about the path of monetary policy and the likelihood of a September rate cut after recent signs of job market weakness. S&P 500 futures were flat, showing little enthusiasm for breaking the cash gauge's five-day losing streak on Wall Street, which has left it on track for its biggest one-week decline this month. Traders had ramped up bets for a September cut following a weak payrolls report at the start of this month, and after consumer price data showed limited upward pressure from tariffs. However, market pricing pulled back slightly following the release of minutes from the Fed's July meeting. Traders are now pricing in a 75.3% probability of a cut in September, down from 82.4% on Thursday, according to the CME Group's FedWatch tool. The euro slipped 0.2% to $1.1589 as the EU and the U.S. set out details of a framework trade deal struck in July. Meanwhile the yen weakened, with the greenback gaining 0.2% to 148.45 yen per dollar after data showed Japan's core consumer prices in July exceeded analysts' estimates and the Bank of Japan's inflation target. Governor Ueda will also speak at the Jackson Hole forum this weekend. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab was also flat, supported by a 1.2% gain for China's blue-chip CSI 300 Index (.CSI300) , opens new tab, on track for its third consecutive day of gains. Oil prices moved lower, with Brent crude last trading down 0.2% at $67.54 per barrel, after strong gains on Thursday as Russia and Ukraine blamed each other for a stalled peace process while U.S. data showed signs of strong demand in the top oil consuming nation. Key developments that could influence markets on Friday: Germany: Q2 GDP French: Business Climate Indicator for August UK: 1-month, 3-month and 6-month government debt auctions https://www.reuters.com/world/china/global-markets-view-europe-2025-08-22/

2025-08-22 03:03

MUMBAI, Aug 22 (Reuters) - The Indian rupee is expected to open largely flat to slightly weaker on Friday, with near-term sentiment titled bearish ahead of Federal Reserve Chair Jerome Powell's speech post market that may offer cues on the interest rate outlook. The one-month non-deliverable forward indicated the rupee will open in the 87.26-87.30 range versus the U.S. dollar, compared with 87.27 on Thursday. Sign up here. The rupee rose past the 87 per dollar mark in the last session before coming under pressure throughout the afternoon. The currency posted its biggest one-day percentage decline in a month, with traders attributing the drop to heavy dollar demand from oil companies and other importers. Before Thursday's decline, the rupee had been surprising markets, moving higher despite what most consider a challenging backdrop. The rupee traded "to an extent like a U.S. tariff-vulnerable currency" on Thursday, a currency trader at a private bank said, pointing to heavy importer dollar demand. The comment referred to the possibility of Washington imposing additional tariffs of up to 50% on Indian goods from August 27. The bias on the rupee now is "definitely" towards more declines, he said. POWELL TAKES CENTRE STAGE Jerome Powell's speech at Jackson Hole later in the day will be scrutinised for clues on the likelihood of a September rate cut and for rest of the year. The key will be whether Powell pushes back on the more than 80% probability priced in for a rate cut next month. While his recent comments have leaned hawkish, they preceded the weaker July jobs report. "We expect some modest dovish tilt, though certainly not a 180-degree shift in tone, given the continued uncertainty around the tariff impact on inflation," MUFG Bank said in a note. KEY INDICATORS: ** One-month non-deliverable rupee forward at 87.44; onshore one-month forward premium at 12.25 paise ** Dollar index up at 98.64 ** Brent crude futures falls 0.2% to $67.5 per barrel ** Ten-year U.S. note yield at 4.32% ** As per NSDL data, foreign investors sold a net $34.2 million worth of Indian shares on August 20 ** NSDL data shows foreign investors bought a net $38.7 million worth of Indian bonds on August 20 https://www.reuters.com/world/india/rupee-momentum-falters-downside-risks-re-merge-ahead-powells-speech-2025-08-22/

2025-08-22 00:57

Inflation concerns tied to tariffs complicate rate-cut outlook Markets put chance of Fed rate cut next month at 70% Investors hope for clear signal from Fed chief Powell on Friday NEW YORK/JACKSON HOLE, Wyoming, Aug 21 (Reuters) - Federal Reserve officials appeared lukewarm on Thursday to the idea of an interest rate cut next month, as investors geared up for U.S. central bank chief Jerome Powell's speech to the annual Jackson Hole conference in Wyoming. "I walk into every meeting with an open mind," Cleveland Fed President Beth Hammack said in an interview with Yahoo Finance on the sidelines of the three-day symposium, which is hosted by the Kansas City Fed. "But with the data I have right now and with the information I have, if the meeting was tomorrow, I would not see a case for reducing interest rates," Hammack said. Sign up here. Speaking on CNBC, Kansas City Fed President Jeffrey Schmid said, "I think we're in a really good spot and I think we really have to have very definitive data to be moving that policy right now." In a separate public appearance, Atlanta Fed President Raphael Bostic said he still has a rate cut penciled in for this year, but added that any forecast is surrounded by uncertainty and "I'm not stuck on anything." Meanwhile, Chicago Fed leader Austan Goolsbee acknowledged the upcoming meeting is "live" and could bring a change in interest rate policy, although he noted mixed economic data and recent unexpectedly high inflation data give him pause about the prospect of an imminent easing in interest rates. "The last inflation report that came in, where you saw services inflation, which is probably not driven by the tariffs, really start shooting up, is a danger, it's a dangerous data point," he said in a Bloomberg TV interview. One Fed official, Boston Fed President Susan Collins, speaking in a Wall Street Journal interview, took a different path and highlighted job market challenges. She said if the data going into the next Fed meeting shows “the risks of worsening labor market conditions relative to those risks of elevated inflation…then it may be appropriate soon to begin dialing back” interest rates. The Fed officials spoke ahead of Powell's highly anticipated keynote address on Friday, which investors hope will offer firm clues on whether the central bank plans to cut rates at its September 16-17 meeting. Financial markets are betting that the Fed will lower its benchmark interest rate by a quarter of a percentage point at the meeting next month, and it's possible that Powell will in fact send such a signal. Unexpectedly weak July hiring data coupled with big downward revisions to hiring in May and June bolstered hopes of a coming reduction in borrowing costs. Futures markets currently put a 70% probability on a quarter-percentage cut next month in the Fed's policy rate, currently set in the 4.25%-4.50% range. Goldman Sachs researchers said they did not expect Powell's remarks on Friday "to decisively signal a September cut, but the speech should make it clear to markets that he is likely to support one." TWO-SIDED RISKS The challenge for Fed policymakers is that even as there have been signs of labor market weakening, which on its own would call for lower rates, inflation remains above the central bank's 2% target and could well go higher due to the Trump administration's aggressive hiking of tariffs on imports. Although the tariffs are widely expected to increase prices, that effect is only starting to be seen in the data. There's an active debate within the Fed as to whether any jump in inflation will be a one-off hit that can be ignored by policymakers, or the making of something more persistent. "My biggest concern is that inflation has been too high for the past four years, and right now it's been trending in the wrong direction," Hammack said. She added that firms have been trying to hold off on tariff-related price hikes, but that trend can only go on for so long. Hammack added that the full impact of the tariffs won't be known until next year. Some Fed policymakers, including Governor Christopher Waller, have argued that everything the economics profession knows about tariffs suggests the hit will be a one-time adjustment. But Hammack noted in her interview that "theory and practice can be quite different," underscoring her caution about a rate cut now. Atlanta Fed economists said in a report released on Thursday that "we find evidence for the potential of tariffs to touch off another bout of high inflation," in part because even firms that are not exposed to tariff costs are expecting stronger price pressures. Schmid noted in his interview that with inflation well above the Fed's target, officials would need to take into account how reducing rates now might influence public expectations. "I think we've got to be careful about what lowering short-term rates would do to the inflation mentality," he said. https://www.reuters.com/sustainability/boards-policy-regulation/fed-officials-lukewarm-september-rate-cut-markets-await-powell-speech-2025-08-21/

2025-08-21 23:39

Indexes off: S&P 0.4%, Nasdaq 0.34%, Dow 0.34% Walmart slides after missing quarterly profit expectations July sales of existing U.S. homes unexpectedly rose Coty plunges on weak U.S. spending forecast Aug 21 (Reuters) - Wall Street's main indexes fell on Thursday as investors feared potentially hawkish remarks by the Federal Reserve chair on Friday that could spark volatility, while big-box retailer Walmart's quarterly results dampened sentiment. All eyes are on the Jackson Hole Economic Policy Symposium where Fed Chair Jerome Powell is scheduled to speak on Friday at 10 a.m. ET. Traders will closely monitor his speech for any clues on U.S. interest rate cuts in September following recent job market weakness. Sign up here. "We still have roughly 80% likelihood that the Fed will cut interest rates, but that is now being brought into question. So that is, in a sense, being worked into investors' forecasts," said Sam Stovall, chief investment strategist at CFRA Research. "Investors are saying, 'You know what? Let's take some profits right now.'" Traders have pared down bets on a 25-basis-point interest rate cut in September to 79% from 99.9% last week, according to data compiled by LSEG. Thin August trading volumes are likely to magnify any market moves following Powell's comments. Volume on U.S. exchanges was 12.28 billion shares on Thursday, compared with the 17.08 billion average for the full session over the last 20 trading days. "Jitters over what's going to transpire tomorrow at Jackson Hole is certainly weighing on risk appetite a little bit with Chair Powell's speech," said Adam Turnquist, chief technical strategist for LPL Financial. "There could be a decent selloff if we get a more hawkish than expected event." Multiple policymakers, including Cleveland Fed President Beth Hammack, Atlanta President Raphael Bostic and Kansas City Fed President Jeffrey Schmid, have struck a cautious tone and acknowledged the need to stay data-dependent. The Dow Jones Industrial Average (.DJI) , opens new tab fell 152.81 points, or 0.34%, to 44,785.50, the S&P 500 (.SPX) , opens new tab lost 25.61 points, or 0.40%, to 6,370.17 and the Nasdaq Composite (.IXIC) , opens new tab lost 72.54 points, or 0.34%, to 21,100.31. A private report indicated business activity picked up pace in August, reflecting a complex environment for the U.S. central bank, which will deliberate on interest rates next month. Another report also showed July sales of existing U.S. homes unexpectedly ticked higher. Yields on U.S. Treasuries rose following the reports, also putting pressure on stocks. Nine of the 11 S&P 500 sectors were down, led by consumer staples, which declined 1.18% after Walmart (WMT.N) , opens new tab raised its fiscal year sales and profit, driven by strong demand from shoppers across all income levels, but missed quarterly profit estimates and flagged higher costs from tariffs. Shares of the retailer tumbled 4.5%. The spotlight was on reports from retailers, including Target (TGT.N) , opens new tab and Home Depot (HD.N) , opens new tab, this week as investors gauged the impact of U.S. tariffs on consumer spending. "There's a bit of a mixed picture within the consumer space and there's uncertainty in the economy - whether that's the job market or whether that's prices (increasing) from a tariff pass-through," said Chris Zaccarelli, chief investment officer at Northlight Asset Management. A technology stocks selloff earlier this week appeared to lose some steam, but Nvidia (NVDA.O) , opens new tab, Meta (META.O) , opens new tab, Amazon.com (AMZN.O) , opens new tab and Advanced Micro Devices (AMD.O) , opens new tab remained weaker. The selloff signaled investor fears that tech stocks, which have soared from April lows, are overvalued, while Washington's growing interference in the sector has also raised alarms. Among other market movers, Coty (COTY.N) , opens new tab shares plummeted 21.4% after the beauty products maker forecast lower current-quarter sales on weak U.S. spending. Declining issues outnumbered advancers by a 1.6-to-1 ratio on the NYSE. There were 124 new highs and 46 new lows on the NYSE. The S&P 500 posted six new 52-week highs and no new lows while the Nasdaq Composite recorded 63 new highs and 101 new lows. https://www.reuters.com/business/wall-street-closes-down-investors-brace-powells-speech-2025-08-21/