2025-12-01 06:49

JAKARTA, Dec 1 (Reuters) - Indonesia posted a smaller-than-expected trade surplus in October after exports unexpectedly fell, official data showed on Monday, amid curtailed demand from China and weak shipments of mining products. The surplus stood at $2.4 billion, smaller than the $3.72 billion forecast by economists polled by Reuters and September's $4.34 billion surplus. It was the smallest monthly surplus since April, according to LSEG data. Sign up here. Exports dropped 2.31% from a year earlier to $24.24 billion. Analysts had predicted 3.38% growth. The decline was due to lower shipments of coal and copper products, a Statistics Indonesia official told reporters. The contraction stems from weaker demand from China, amid a softening economy and ongoing normalisation of trade with the United States following a tit-for-tat escalation in tariffs earlier this year, said Permata Bank economist Faisal Rachman. Indonesian exporters had front-loaded their shipments to the U.S. ahead of the onset of tariffs in August. Meanwhile, the country's biggest copper producer, Freeport Indonesia, experienced a fatal mud-flow disaster at its Grasberg complex in September, which forced the company to temporarily halt production. It has since resumed operation at its two smaller mines in Grasberg, but it lowered its production targets for 2025 and 2026 due to ongoing recovery work at the complex. Southeast Asia's biggest economy has enjoyed a relatively large trade surplus almost every month in 2025, supported by higher shipments of palm oil, gold and jewellery - and even as prices of its top commodities, coal and nickel, remain weak. Imports contracted by 1.15% to $21.84 billion in October amid lower demand for consumer goods and raw materials, although that was less than the forecast fall of 2.2% in the Reuters poll. Separately, Indonesia's annual inflation rate slowed to 2.72% in November, slightly less than analysts' median forecast of 2.77% and comfortably within the central bank's 1.5% to 3.5% target range, data showed on Monday. The inflation rate stood at 2.86% in October. Core inflation, which excludes government-controlled prices and volatile food items, was steady at 2.36% in November. https://www.reuters.com/world/asia-pacific/indonesias-october-trade-surplus-smaller-than-expected-2025-12-01/

2025-12-01 06:44

MUMBAI, Dec 1 (Reuters) - The Indian rupee fell to a record low on Monday as sluggish trade and portfolio flows, coupled with the lack of a U.S.-India trade deal, overshadowed the impact of stellar economic growth. The rupee declined to 89.7575 against the U.S. dollar, dipping past its previous record low of 89.49 hit about two weeks ago. Sign up here. The drop came right after India posted a blowout GDP number that exceeded all expectations. The economy expanded 8.2% in the September quarter. The rupee ranks among Asia's worst-performing currencies this year despite resilience in domestic economic fundamentals which have boosted shares to record highs. The losses on the rupee would have been larger if not for the regular intervention from the central bank, traders say. Bankers said the robust growth has offered little respite to the currency, which remains pressured by the lack of progress on a U.S.-India trade deal, importer hedging activity, and a balance of payments position that has turned less supportive. The maturity of positions in the non-deliverable forwards market also hurt the rupee, traders said, while state-run banks were spotted offering dollars intermittently. A "calibrated" rupee depreciation is "both inevitable and desirable" in the current macroeconomic environment, economists at J.P. Morgan said in a note. The longer there is no trade deal, the greater the onus on rupee depreciation would be to provide that offset, the economists said. Comments from U.S. and Indian officials last month had raised hopes that the steep 50% tariffs on Indian exports would soon be reduced, but a deal has not been finalised. The U.S. tariffs have dented trade and portfolio flows into Indian equities, leaving the currency reliant on central bank interventions for support. Foreign investors have net pulled out over $16 billion from Indian shares over the year so far. India's merchandise trade deficit hit an all-time high in October. The rupee's rough patch has brought down its 40-currency real effective exchange rate, a measure of competitiveness, to undervaluation territory. At the end of October, the measure stood at 97.47, per central bank data. A level below 100 signals that a currency is undervalued relative to those of its trading partners. Last month, the International Monetary Fund reclassified India's foreign exchange framework as a "crawl-like arrangement", noting that "while the exchange rate has exhibited increasing two-way movement this year, there remains room for additional exchange rate flexibility." https://www.reuters.com/world/india/rupee-record-low-weak-flows-stalled-trade-deal-eclipse-blowout-growth-2025-12-01/

2025-12-01 06:44

Wall Street stocks finish lower after five straight days of gains Brent crude settles up more than 1% Benchmark 10-year yields rise Gold hits six-week high NEW YORK, Dec 1 (Reuters) - Global shares fell and U.S. Treasury yields rose on Monday as investors took a breather following five straight sessions of gains and ahead of key economic data that could support bets on Federal Reserve interest rate cuts. Equities on Wall Street finished lower, with utilities, healthcare and industrial stocks leading losses. Energy stocks were the top gainers as Brent crude prices settled up more than 1%. Sign up here. The Dow Jones Industrial Average (.DJI) , opens new tab fell 0.90%, the S&P 500 (.SPX) , opens new tab slipped 0.53%, and the Nasdaq Composite (.IXIC) , opens new tab dropped 0.38%. All three indexes had finished higher in the prior five trading days. European stocks slipped, with a drop in defense stocks helping fuel weakness. The pan-European STOXX 600 (.STOXX) , opens new tab index fell 0.20%. The MSCI World Equity Index was down 0.40% on the day (.MIWD00000PUS) , opens new tab following five consecutive sessions of gains. "The bull argument, both technically and fundamentally, is as strong as it has been in some time, while the bears are reliant on AI and valuation scepticism," said Nationwide Chief Market Strategist Mark Hackett. U.S. Treasury yields rose across the board. The yield on benchmark U.S. 10-year notes rose 7.3 basis points to 4.092%. The 2-year note yield, which typically moves in step with Fed rate expectations, rose 4.3 basis points to 3.535%. "The modest pullback today would not be unexpected, but it's more of a pressure release valve following the rally than a sign of stress," Hackett added. Data on Monday showed U.S. manufacturing contracted for the ninth straight month in November as the drag from import tariffs persisted. Other economic data including the closely watched Personal Consumption Expenditures Price Index are due later this week. The Fed will hold its next policy meeting on December 9 and 10. Bank of Japan Governor Kazuo Ueda said , opens new tab the central bank will consider the "pros and cons" of raising rates at its next policy meeting, causing traders to sharply increase their rate-hike bets. The Japanese yen strengthened 0.47% against the greenback to 155.45 per dollar. The euro was up 0.13% at $1.161. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, fell 0.04% to 99.40. Bitcoin , opens new tab was down 5.49% at $86,172.03 , extending losses and putting bitcoin-buying companies under pressure. Gold , opens new tab hit its highest level in six weeks, driven by expectations of U.S. rate cuts, and was last at $4,239.69 , up 0.22%. "The rate cut expectations have jumped up significantly in the past couple of weeks, although much of it is priced for next week," said Wasif Latif, chief investment officer at Samarya Partners. "Today's drop could be a combination of a deleveraging from crypto and risk assets tied to the facts that the rate cuts are priced and people are taking some profits." https://www.reuters.com/world/china/global-markets-global-markets-2025-12-01/

2025-12-01 06:25

Yen gains against euro, pound and Australian dollar US manufacturing slump deepens in November Fed interest rate cut this month nearly fully priced in Dollar eases as traders weigh outlook for US rates, Fed leadership NEW YORK, Dec 1 (Reuters) - The dollar slipped against the Japanese yen on Monday following Bank of Japan Governor Kazuo Ueda's strongest indication to date that a December interest rate increase could be under consideration, providing support to the embattled yen. Meanwhile, mounting expectations for a December interest rate reduction by the Federal Reserve exerted downward pressure on the dollar. Sign up here. Ueda said on Monday the BOJ would consider the pros and cons of raising interest rates at its next policy meeting in December, offering the strongest hint so far that a hike may materialise this month. He subsequently told a press conference that he would elaborate on the central bank's future rate hike path once rates are raised to 0.75%, adding that December's policy decision would take into account wage information and other data. That pushed the dollar down by nearly 1% to 154.665 yen, before the U.S. currency pared losses to trade down 0.7% at 155.09 yen. "It does seem like the BOJ is indicating greater comfort with moving towards hikes," Jayati Bharadwaj, head of FX strategy at TD Securities, said. "We expect them to actually hike in December, so it does take us closer to our call and that's actually helping the yen." Traders have priced in a growing chance of a December hike from the BOJ, with the yen's slide to 10-month lows last month adding to the case for raising rates. The yen rallied against a range of currencies, leaving the euro down 0.4% and the pound down 0.6%. DOLLAR DOWNBEAT In the broader market, the dollar traded with a softer tone as investors braced for a pivotal month that could bring the Fed's final rate cut of the year and the confirmation of a dovish successor to Chair Jerome Powell. Data on Monday showed U.S. manufacturing contracted for the ninth straight month in November, with factories facing slumping orders and higher prices for inputs as the drag from import tariffs persisted. The euro rose 0.5% to a more than two-week high of $1.1652, before paring gains to trade up 0.1%. Sterling was 0.2% lower at $1.3254 after logging its best week in over three months last week in a relief rally after British Finance Minister Rachel Reeves' budget revelations. Traders are now pricing in an 88% chance the Fed will cut by 25 basis points when it convenes next week, according to the CME FedWatch tool. What is less clear-cut is what happens after December. Money markets right now show very little chance of another cut before spring. Some analysts believe December might even yield a "hawkish cut" - trader-speak for a cut accompanied by indications from policymakers that another near-term fall in borrowing costs may not be forthcoming. FED LEADERSHIP The dollar is struggling as investors treat a December cut as nearly a done deal. Adding to the pressure was a report that White House economic adviser Kevin Hassett could be the next Fed chair, which contributed to the dollar's worst weekly performance against a basket of major currencies in four months last week. "With December FOMC now closer to fully pricing a 25bp cut, we think the market will increasingly focus on the pricing of subsequent meetings," Goldman Sachs economists said in a note. "Division on the committee is restraining more dovish pricing, but with a large amount of labor market data due before the January meeting we think too little is priced in Q1." Trading on the foreign exchange market was back to normal on Monday following an hours-long outage at the world's largest exchange operator CME Group last week, which upended transactions across stocks, bonds, commodities and currencies. Bitcoin fell below $90,000 on Monday, as a selloff gathered pace following the steepest monthly decline since mid-2021, as renewed risk aversion drove investors out of stocks and digital assets. Bitcoin was last down 6% at $85,464. https://www.reuters.com/world/asia-pacific/dollar-braces-crucial-december-with-fed-meeting-powells-successor-pick-2025-12-01/

2025-12-01 06:12

LONDON, Dec 1 (Reuters) - China financed and built Indonesia's nickel industry, transforming the country into the world's largest producer in the space of a decade. But now China is not so sure it needs all that nickel. Chinese electric vehicle manufacturers are pivoting away from nickel-chemistry batteries. Sign up here. Ever more of what Indonesia digs out of the ground is destined not for an EV battery plant but rather a London Metal Exchange warehouse. Global exchange inventories of refined nickel have ballooned from 54,000 metric tons in January 2023 to 366,000 tons, equivalent to around 10% of global usage last year. The weight of surplus has tamed nickel's wildness, which peaked with the suspension of LME trading in 2022. Prices have spent most of this year churning at rock-bottom levels. Indonesia's nickel sector is still growing as the country pursues its ambition of becoming an EV powerhouse, but there is a very real risk it has bet too much on a battery metal that its biggest customer is growing cold on. YOU WANT MORE NICKEL? "Please mine more nickel," was Elon Musk's rallying call to the mining industry back in 2020. The head of Tesla (TSLA.O) , opens new tab was concerned there wouldn't be enough of the stuff to meet what was expected to be explosive demand growth from the EV battery sector. Indonesia and its Chinese operators duly obliged. The country's mined production surged from 780,000 tons in 2020 to 2.3 million tons in 2024. Its share of global supply rose from 30% to 70% over the same period. The first wave of Chinese investment in Indonesia's giant nickel reserves was all about stainless steel, still the largest consuming sector for nickel. Huge amounts of ore were shipped to China and then, when Indonesia banned the export of unprocessed ore in 2020, the trade shifted to nickel pig iron. The second wave has been all about nickel as a battery metal. Spurred on by the Indonesian government to build downstream processing capacity, Indonesian operators now churn out a range of products such as matte, mixed hydroxide and even refined metal. Most of the intermediates are sent to China for further processing into nickel sulphate, a form that is used in EV batteries. BATTERY REVOLUTION Well, that was the plan anyway. The problem is that nickel has fallen out of favour with Chinese EV manufacturers, who are increasingly using batteries without any nickel or other high-price inputs such as cobalt. Lithium-iron-phosphate (LFP) batteries have been around for a long time, but the consensus until recently was that they could never deliver enough power for anything other than small run-around city vehicles. Chinese battery makers such as CATL (300750.SZ) , opens new tab have shattered that myth, developing ever more powerful LFP products. The company recently unveiled its latest Shenxing Pro , opens new tab battery, which boasts a 758-km driving range and super-fast charging. The LFP battery is cheaper and safer than other battery chemistries and has already grabbed a dominant share of the Chinese market, the world's largest. As Chinese EV makers ramp up exports, it is also taking a growing slice of the global market. Battery demand for nickel is still rising, but largely because the global EV market is still expanding so fast. In terms of the amount of nickel deployed per newly sold vehicle, usage was up just 1% year-on-year in September, compared with 7% for lithium, according to consultancy Adamas Intelligence. MARKETS OF LAST RESORT The result of this shift in battery chemistry is Chinese processors switching from producing nickel sulphate to churning out refined metal that can be delivered to the market of last resort. There was no Chinese-brand nickel in the LME storage system as recently as August 2023. The tally at the end of October was 173,000 tons, representing 70% of total warranted inventory. Indonesian metal has also been shipped straight to LME warehouses, with 11,300 tons registered with the exchange last month. It's not just the LME. Excess supply has been seeping into Shanghai Futures Exchange warehouses as well. Stocks of 40,782 tons are the highest they've been since 2018. Rising inventory is keeping prices pinned to the production-cost floor, calculated at around $15,000 per ton by Macquarie Bank. LME three-month metal has been struggling to hold even that level, with a November dip to $14,330 per ton, its lowest point since April. BIG BET The Indonesian government has shown signs of wanting to slow the breakneck expansion of its nickel sector. But no-one's told its miners or processors, still mostly Chinese. Macquarie calculates that another million tons of high-pressure acid-leaching refinery capacity could ramp up by 2030. Unless the brakes are applied more forcefully, the bank expects Indonesian overproduction to result in at least five more years of global oversupply. The International Energy Agency agrees, projecting the market will only move into a supply deficit from 2030 onwards. By which time, there could be a mountain of nickel sitting in LME warehouses. Indonesia is gambling that demand will eventually catch up and absorb any inventory overhang. But it's ultimately a bet that nickel will remain a core battery input. Even if it does, which is a big assumption given the rate of change in the battery industry, Indonesia's nickel buyers will be mainly European or American rather than Chinese. Nickel chemistries are still dominant in Western EV markets and China's recent restrictions on LFP technology exports have given nickel an unexpected booster. But Western buyers are likely to be much more fussy about environmental and carbon footprint than their Chinese peers, which is a problem for Indonesia's coal-powered nickel sector. Indonesia's nickel resource nationalism has inspired many other mineral-rich countries wanting to keep a greater value-added share of their assets. But Indonesia is now caught in a resource trap of a different kind, its fortunes inextricably tied to China and its waning appetite for nickel batteries. Andy Home is a Reuters columnist. The opinions expressed are his own Enjoying this column? Check out Reuters Open Interest (ROI) for thought-provoking, data-driven commentary on markets and finance. Follow ROI on LinkedIn , opens new tab, opens new tab and X , opens new tab, opens new tab. https://www.reuters.com/markets/commodities/china-built-indonesias-nickel-boom-could-yet-bust-it-2025-12-01/

2025-12-01 05:39

A look at the day ahead in European and global markets from Ankur Banerjee The year that started with a rate hike in Japan might just end with another after the clearest signal yet from Bank of Japan Governor Kazuo Ueda of a possible move soon, setting up the stage for a pivotal month for monetary policy divergence. Sign up here. Ueda said the BOJ will consider the "pros and cons" of raising interest rates at its next policy meeting in two weeks, helping strengthen the frail yen and pushing Japanese government bond yields to 17-year highs. It comes just as investors contend with the prospect of an interest rate cut from the U.S. Federal Reserve next week after dovish comments from a series of policymakers. Fed Chair Jerome Powell is due to speak later in the day and his comments will be picked apart by traders to gauge the near-term rates path. The contrasting moves from the BOJ and the Fed have provided some relief to the yen, which has been loitering near 10-month lows leading to intervention worries. The currency strengthened 0.5% to 155.41 per U.S. dollar on Monday. Analysts, though, are quick to point out that the yen weakness may not completely end soon as even with policy normalisation in Japan there will still be a wide gap between the U.S. and Japan rates. While the spread between U.S. and Japanese 10-year bond yields is tightest since April 2022 at 219 basis points, U.S. yields remain significantly higher than Japanese yields. Back in April 2022, though, the yen was trading around 123 to the dollar. Meanwhile, after a strong end to November, risk aversion has taken hold at the start of the month as investors look ahead to a slew of economic data across the globe, with European manufacturing data taking centre stage. European futures indicate a lower open in a tepid start to the month after the pan-European STOXX 600 (.STOXX) , opens new tab clocked its fifth straight month of gains in November. Markets will also be hoping to get a clearer picture of who will succeed Powell, whose term is set to end next year, with White House economic adviser Kevin Hassett emerging as a frontrunner, a move that may put the dollar under pressure. Key developments that could influence markets on Monday: Economic data: November PMI data for Germany, France, UK and euro zone https://www.reuters.com/world/china/global-markets-view-europe-2025-12-01/