2025-07-03 08:59
MUMBAI, July 3(Reuters) - The Indian rupee rose on Thursday after weak U.S. jobs data bolstered Fed rate cut bets, while a U.S.-Vietnam trade deal lifted regional sentiment. Dollar-rupee forward premiums were helped by increased odds of rate cuts by the U.S. central bank as well with the 1-year implied yield touching an over one-month peak. Sign up here. The rupee rose to 85.55 as of 11:30 a.m. IST, up 0.2% on the day. Asian currencies were mostly rangebound while regional equities traded in the green, with India's benchmark indices, the BSE Sensex (.BSESN) , opens new tab and Nifty 50 (.NSEI) , opens new tab up about 0.4% each. The odds of a Fed rate cut in July rose to one-in-four after a private sector payrolls report released on Wednesday surprised with the first fall in over two years. Those odds were at about one-in-five before the data was released, per CME's FedWatch tool. President Donald Trump also announced on Wednesday that the U.S. has struck a trade deal with Vietnam, including a 20% tariff on exports to the U.S. This helped fuel hopes that more deals may be struck ahead of the July 9 deadline. U.S. and Indian negotiators are pushing try to land a tariff-reducing deal ahead of the deadline but some disagreements remained unresolved, sources familiar with the talks said. Traders expect the rupee to be range-bound in the near-term with resistance pegged around 85.40 and support near the 86 handle. A trade deal "would be a sentimental positive," for the rupee but substantial gains are likely only if it spurs a pick up in portfolio inflows, a trader at a foreign bank said. Later in the day, the focus will be on the U.S. non-farm payrolls report for May which is expected to influence expectations around the future trajectory of benchmark policy rates. "Quite bearish positioning on the broad US dollar index also suggests that a near-term squeeze on dollar shorts may be on the cards, though the broader trend is still for Asian currencies to continue strengthening," MUFG said in a note. https://www.reuters.com/world/india/rupee-forward-premiums-hoisted-by-uptick-fed-rate-cut-wagers-2025-07-03/
2025-07-03 07:05
Chinese tech giants have applied for stablecoin licences Sources say Chinese policymakers receptive to idea of yuan stablecoin Exporters using Tether, undermining yuan in trade settlement July 3 (Reuters) - China's tech giants JD.com and Alibaba affiliate Ant Group are urging the central bank to authorise yuan-based stablecoins to counter the growing sway of U.S. dollar-linked cryptocurrencies, people with direct knowledge of the discussions said. The two firms propose China allow the launch of stablecoins in Hong Kong pegged to its offshore yuan to help promote global use of the Chinese currency and fend off the dollar's growing digital influence, the two sources said. Sign up here. The moves come as Hong Kong races the United States in setting up a regulatory framework for stablecoins, competing for a greater reach in global digital finance and trade. Their lobbying efforts, if successful, would mark a major shift in the way Beijing views cryptocurrencies, which it banned in 2021, and could reshape China's strategy in promoting international use of the yuan. Stablecoins are digital tokens, in the form of cryptocurrencies pegged to liquid assets, so far mostly the U.S. dollar but also in some cases gold or other currencies. Their underlying blockchain technology enables instant, borderless and round-the-clock transfer of funds at low cost, giving them the potential to disrupt traditional cross-border payment systems. Both JD.com and Ant already plan to issue stablecoins backed by the Hong Kong dollar, after the island's new legislation takes effect on August 1. But in closed-door discussions with the People's Bank of China, JD.com has argued that offshore yuan stablecoins are urgently needed as a tool to promote yuan internationalisation, the sources told Reuters. Such a view has also been expressed by other industry players. "The global expansion of U.S. dollar stablecoins is posing fresh challenges to yuan internationalisation," Wang Yongli, co-chairman of Digital China Information Service Group (000555.SZ) , opens new tab said in an article posted on his social media account last month. "It would be a strategic risk if cross-border yuan payment is not as efficient as dollar stablecoins," said Wang, former vice head of Bank of China. The PBOC, JD.com and Ant did not immediately respond to Reuters requests for comment. DOLLAR DOMINATES The global stablecoin market is currently small at about $247 billion, according to crypto data provider CoinGecko. However, Standard Chartered Bank estimates it could grow to $2 trillion by 2028. Over 99% of stablecoins are U.S. dollar-denominated, according to the Bank for International Settlements. China has long harboured ambitions for the yuan to be a global currency, similar to the euro or dollar and reflecting its weight as the world's second-biggest economy. One roadblock to this aim, however, is its reluctance to remove tight capital controls. The yuan's share as a global payment currency fell to 2.89% in May, the lowest in almost two years, according to payment platform SWIFT. The dollar commands a 48.46% market share. "China has reached a point where it can no longer avoid taking action," said Xiao Feng, chairman of Hong Kong-based crypto exchange operator HashKey. Many Chinese exporters now use dollar stablecoins as "more and more overseas merchants are sending payments in USDT", he said, referring to the world's more popular stablecoin Tether. Several exporters told Reuters capital controls at home, geopolitical tensions and the risks of currency volatility in smaller emerging markets have spurred the shift into stablecoins. Crypto HK, Hong Kong's biggest crypto OTC exchange, said the monthly volume of trading in the USDT token by its Chinese clients for trade settlement purposes has jumped five-fold since 2021. INEVITABLE? Marking a major U.S. shift, President Donald Trump backed stablecoins days after his inauguration in January and is establishing a regulatory framework that helps legitimise dollar-pegged cryptocurrencies. Even in China, where cryptocurrencies remain banned, policymakers are becoming increasingly interested in stablecoins. PBOC governor Pan Gongsheng said last month the boom in digital currencies and stablecoins poses huge challenges to financial regulation. PBOC advisor Huang Yiping told local media in a recent interview that an offshore yuan stablecoin in Hong Kong is "a possibility". Ant is preparing to apply for stablecoin licences in both Hong Kong and Singapore, one of the sources said. Ant is also preparing for offshore yuan stablecoins, he said. JD.com chairman Richard Liu has also disclosed plans to apply for such licenses in major currency countries globally, in a bid to facilitate foreign exchange and cross-border payment. In discussions with the PBOC, JD.com argued a yuan-pegged stablecoin was needed because the Hong Kong dollar is pegged to the U.S. dollar, which does not help promote the yuan's use in trade, one of the sources said. JD.com has proposed China allow yuan stablecoin issuance in Hong Kong, before expanding the pilot scheme to offshore markets within China's free trade zones, said a company source, adding the suggestion had been well received by regulators. https://www.reuters.com/world/china/chinas-tech-giants-lobby-offshore-yuan-stablecoin-sources-say-2025-07-03/
2025-07-03 06:53
Pause on US tariffs set to end on July 9 OPEC+ expected to raise output by 411,000 bpd US crude inventories rise unexpectedly LONDON, July 3 (Reuters) - Oil prices fell slightly on Thursday as the possibility of U.S. tariffs being reinstated raised demand concerns ahead of an expected supply boost by major producers. Brent crude futures fell 21 cents, or 0.3%, to $68.90 a barrel by 1217 GMT. U.S. West Texas Intermediate crude declined 15 cents, or 0.2%, to $67.30. Sign up here. Both contracts had hit one-week highs on Wednesday as Iran suspended cooperation with the U.N. nuclear watchdog, raising concerns the lingering dispute over its nuclear programme could again devolve into armed conflict. A preliminary trade deal between the U.S. and Vietnam also boosted prices. Tariff uncertainty looms large, however. The 90-day pause on the implementation of higher U.S. tariffs ends on July 9, with several large trading partners yet to wrap up trade deals, including the European Union and Japan. The OPEC+ group of oil producers, meanwhile, is expected to agree to raise output by 411,000 barrels per day (bpd) at its policy meeting this weekend. Adding to negative sentiment, a private-sector survey showed that service activity in China - the world's biggest oil importer - expanded at its slowest pace in nine months in June as demand weakened and new export orders declined. A surprise build in U.S. crude inventories also highlighted demand concerns in the world's biggest crude consumer. The U.S. Energy Information Administration said on Wednesday that domestic crude inventories rose by 3.8 million barrels to 419 million barrels last week. Analysts in a Reuters poll had expected a drawdown of 1.8 million barrels. The market will be watching for the U.S. monthly employment report on Thursday, which is likely to shape expectations over the depth and timing of interest rate cuts by the Federal Reserve in the second half of the year, analysts said. Lower interest rates could spur economic activity that would boost oil demand. https://www.reuters.com/business/energy/oil-falls-signs-weak-us-demand-ahead-key-jobs-report-2025-07-03/
2025-07-03 06:43
ABU DHABI, July 3(Reuters) - The expansion in Saudi Arabia's non-oil private sector activity accelerated in June, driven by robust client demand and a surge in hiring, a survey showed on Thursday. The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) rose to a three-month high of 57.2 from May's 55.8, putting it further above the 50-point line denoting growth. Sign up here. New order growth quickened to a four-month high, with the subindex rising to 64.3 in June from 62.5 in May. Domestic sales were the primary driver of this upturn, supported by successful client acquisitions and enhanced marketing strategies. However, export sales growth remained marginal. "Firms largely linked the pickup in activity to improving sales, new project starts, and better demand conditions, although the pace of output growth was softer compared to previous highs," said Naif Al-Ghaith, chief economist at Riyad Bank. Non-oil private companies hired staff at the fastest rate since May 2011, as firms expanded teams to manage increased workloads. Input prices also rose sharply, aligning with the second-quarter trend, leading firms to pass on higher costs to customers. Output prices increased solidly, the strongest rise in a year-and-a-half, following reductions in previous months. Despite cost pressures, Saudi non-oil firms remained optimistic about future activity, the survey showed, with the Future Output Index reaching a two-year high. Confidence was buoyed by resilient domestic economic conditions and robust demand. Last month, the International Monetary Fund raised its 2025 GDP growth forecast for Saudi Arabia to 3.5% from 3%, partly on the back of demand for government-led projects, and supported by the OPEC+ group's plan to phase out oil production cuts. (This story has been corrected to say June, not May, in paragraph 1) https://www.reuters.com/world/middle-east/saudi-arabias-non-oil-sector-growth-quickens-june-strong-demand-pmi-shows-2025-07-03/
2025-07-03 06:20
China's north and west on alert for heavy rains Storms in China's southwest led to deadly flash floods Extreme rainfall increasingly poses a major challenge for China BEIJING, July 3 (Reuters) - China's north and west braced for more flash floods and landslides on Thursday as annual 'Plum Rains' left a trail of destruction and prompted the mobilisation of thousands of rescue workers to pull people from floodwaters. Red alerts were issued tracing the rains as they moved from the southwestern province of Sichuan through the northwestern province of Gansu, and up to the northeastern province of Liaoning. Sign up here. While some Beijing-bound trains were suspended and one of the city's airports experienced flight delays and cancellations late on Wednesday and into the early hours. Extreme rainfall and severe flooding, which meteorologists link to climate change, increasingly pose major challenges for policymakers as they threaten to overwhelm ageing flood defences, displace millions and wreak havoc on China's $2.8 trillion agricultural sector. Economic losses from natural disasters exceeded $10 billion last July, when the 'Plum Rains' - named for their timing coinciding with plums ripening along China's Yangtze River during the East Asia monsoon - typically reach their peak. State media said over 1,000 rescue workers were dispatched to the town of Taiping in central China's Henan province on Wednesday, after torrential rains caused a nearby river to burst its banks, killing five people in a flash flood and leaving three others missing. Two more people died in a landslide at a construction side in Gansu province caused by heavy rains over Wednesday and Thursday, a separate state media report said. During a two-day visit to the northern province of Hebei, which borders Henan, Vice Premier Zhang Guoqing urged local officials to step up efforts ahead of anticipated heavy rain to minimise casualties by preemptively evacuating people, state news agency Xinhua reported on Wednesday. While China has a nationwide severe weather monitoring and forecasting system, scientists say very localised predictions remain a challenge, testing the ability of particularly rural communities with fewer forecasting resources to evacuate local populations quickly ahead of any extreme weather. Further south, in China's Guangxi region, several buildings slid down hillsides over the last two days after their foundations gave way in waterlogged soil, local media reported. Footage verified by Reuters shows a five-storey building under construction in the town of Xinzhou collapsing into a nearby river within seconds, as the ground beneath it suddenly gave way. Between June 30 and July 1, the Lengshui River which flows through Xinzhou experienced its worst flooding in records going back to 2005, said a separate local media report, citing the Ministry of Water Resources. The report also instructed readers on how to recognise early signs of flash flooding. Meanwhile, in Pingliu Village, some 80 km (50 miles) west of Xinzhou, 21 people from seven households were evacuated on Tuesday after a landslide collapsed two houses and damaged four others, other local media reported. In contrast, the national meteorological centre forecast scorching heat along the country's eastern seaboard. https://www.reuters.com/sustainability/climate-energy/chinas-north-west-alert-after-sweeping-rains-trigger-deadly-floods-2025-07-03/
2025-07-03 06:15
US job growth beats expectations in June Dollar rose after non-farm payrolls data US House Republicans head toward final vote on Trump's sweeping tax-cut bill July 3 (Reuters) - Gold fell 1% on Thursday as stronger-than-expected U.S. payroll data cemented expectations that the Federal Reserve is unlikely to cut interest rates as early as previously anticipated, denting the metal's appeal. Spot gold fell 0.9% to $3,328.63 per ounce as of 0200 p.m. EDT (1800 GMT), after falling over 1% earlier in the session. Sign up here. U.S. gold futures settled 0.4% higher at $3,342.9. The dollar (.DXY) , opens new tab and U.S. stock index futures rose after non-farm payrolls increased by 147,000 jobs last month, the Labor Department's Bureau of Labor Statistics showed. Economists polled by Reuters had forecast payrolls rising 110,000. A stronger dollar makes bullion more expensive for overseas buyers. "The better than expected jobs number means we see a lesser likelihood of a Fed rate cut earlier than currently anticipated. As a result, the dollar strengthened, which is adding pressure to the gold market," said David Meger, director of metals trading at High Ridge Futures. "The key is the fact that the idea or possibility of a July rate cut is off the table." Investors are now pricing in 51 basis points of Federal Reserve rate cuts by the end of the year, starting in October, down from around 66 basis points expected prior to the report. Non-yielding gold tends to perform well in a low-interest-rate environment. On the trade front, an agreement between the United States and Vietnam was announced on Wednesday ahead of a July 9 deadline when U.S. tariffs are set to take effect. Meanwhile, Republicans in the U.S. House of Representatives advanced Trump's massive tax-cut and spending bill, estimated to potentially add $3.4 trillion to the nation's debt, toward a final yes-or-no vote. "As the indebtedness of the U.S. continues to grow, investors might become more concerned about the U.S. dollar, which should benefit gold in the longer-term," said Carsten Menke, an analyst at Julius Baer. Spot silver was up 0.7% at $36.84 per ounce, while platinum lost 3.1% to $1,374.89 and palladium shed 1.5% to $1,137.69. https://www.reuters.com/world/india/gold-eases-investors-await-us-payroll-data-fed-policy-clues-2025-07-03/
