2025-06-26 20:53
Decision brings rate to lowest in nearly three years One bank governor voted to hold at 8.5% Markets had expected 50 bp cut Central bank still sees inflation trending down Past language about adjusting rate in "similar magnitudes" is absent from statement June 26 (Reuters) - The Bank of Mexico lowered its benchmark rate by 50 basis points on Thursday as largely expected, although the decision by the central bank's five-member governing board was not unanimous. The move brings the rate to 8.0%, the lowest since August 2022. Sign up here. Deputy Governor Jonathan Heath was the sole dissenter, voting to hold the rate at its previous 8.5% level. In prior decisions, he agreed with rate cuts by the board. Markets had largely expected the 50 basis point cut, with 21 of 26 analysts polled by Reuters expecting the decision. The Mexican peso strengthened just over 0.2% against the dollar after the central bank's decision. Heath told Reuters earlier this month he supported a "more cautious, more prudent" approach until inflation resumed a clear downward trajectory. Annual headline inflation in Latin America's No. 2 economy has ticked up in recent months and jumped above the central bank's target range in May. It cooled slightly in the first half of June from the second half of May, hitting 4.51%, but still outside the central bank's target range of 3% plus or minus a percentage point. In its statement on Thursday, the central bank raised its forecast for year-end average headline inflation to 3.7% from its May forecast of 3.3%, although the bank held its estimate that inflation will converge to 3% in the third quarter of 2026. Banxico, as the Bank of Mexico is known, is balancing dual challenges: It is seeking to bring down inflation while also stimulating the economy amid weak economic growth and uncertainty tied to trade tensions and geopolitical developments. The board said in its statement that its decision was "made considering the behavior of the exchange rate, the weakness of economic activity, and the possible impact of changes in trade policies worldwide." "Looking ahead, the Board will assess further adjustments to the reference rate," the statement said. Notably, Thursday's decision did not include language from the most recent three monetary policy decisions about considering future cuts of "similar magnitudes." Private sector analysts polled by Reuters in May projected that Banxico will downsize its rate cuts for the rest of the year. Their median forecast was that the central bank will end 2025 with a benchmark rate of 7.5%. https://www.reuters.com/world/americas/bank-mexico-cuts-key-interest-rate-near-three-year-low-2025-06-26/
2025-06-26 20:44
Indexes up: Dow 0.94%, S&P 500 0.80%, Nasdaq 0.97% Bank stocks rise as Fed proposes relaxed leverage rules Economic data shows mixed signals with durable goods orders up, GDP down Record copper prices send Freeport-McMoRan, Southern Copper higher NEW YORK, June 26 (Reuters) - Wall Street closed higher on Thursday, nudging the S&P 500 and the Nasdaq nearer to record closing highs as the Israel-Iran ceasefire continued to hold and a raft of economic indicators appeared to support the case for the U.S. Federal Reserve lowering borrowing costs this year. All three major U.S. stock indexes advanced in a broad rally which placed them on track for weekly gains. Sign up here. The S&P 500 and the Nasdaq are now within a hair's breadth of all-time closing highs, and as the seconds ticked down to the closing bell, it looked as if those records could be reached. "Clearly, the pull forward of rate cuts into 2025 is one of the more significant factors" of the market's price action, says Bill Northey, senior investment director at U.S. Bank Wealth Management, Billings, Montana. "Expectations now point to three rate cuts this year." Bank stocks outperformed after the Fed unveiled a proposal to relax its leverage rules, which would ease the capital that big banks are required to hold against relatively low-risk assets. The S&P 500 banks index (.SPXBK) , opens new tab advanced 1.6%. "This administration came in promising deregulation," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. "And this is not just an example of that, but kind of a signpost that there could be more to come." Richmond Fed President Thomas Barkin cautioned against taking options off the table amid ongoing economic uncertainty, but added that he did not expect tariffs to be "as inflationary as a lot of people worry about." A muted tariff effect could help make the case for a rate cut this fall, according to San Francisco Fed President Mary Daly. Boston Fed President Susan Collins said on Wednesday she's leaning toward a rate cut later this year amid an uncertain economic outlook. These remarks follow Fed Chair Jerome Powell's two-day congressional testimony, at which he reiterated the central bank's wait-and-see policy stance with respect to rate cuts and economic tariff effects. Financial markets are currently pricing in nearly a 21% likelihood of a 25 basis point reduction the Fed Funds target rate at the July Fed meeting, and more than a 75% probability that this year's first rate cut will come in September, according to CME's FedWatch tool. "As we look at economic data, including the labor market, economic activity and price levels, we see that some additional easing is appropriate through the end of this year," Northey added. "The question remains around both magnitude and importantly timing of the first cut." Last week, the Fed released its updated Summary of Economic Projections, which showed policymakers anticipate cutting the key policy rate by about half a percentage point by year-end. A spate of economic data showed first quarter GDP contracted more than previously reported due to weaker than expected consumer spending, while ongoing jobless claims reaching multi-year highs, suggesting potential cracks appearing in the labor market. On the other hand, new orders for durable goods and pending home sales provided robust surprises to the upside. The Dow Jones Industrial Average (.DJI) , opens new tab rose 404.41 points, or 0.94%, to 43,386.84, the S&P 500 (.SPX) , opens new tab gained 48.86 points, or 0.80%, to 6,141.02 and the Nasdaq Composite (.IXIC) , opens new tab gained 194.36 points, or 0.97%, to 20,167.91. Among the 11 major sectors of the S&P 500, communication services (.SPLRCL) , opens new tab enjoyed the largest percentage gains, while real estate (.SPLRCR) , opens new tab was the biggest laggard. Micron (MU.O) , opens new tab forecast better-than-expected fourth quarter revenue late Wednesday. Even so, the tech firm's shares dropped 1.0%. Copper prices jumped to a three-month high, boosting miners Freeport-McMoRan FCX.N , opens new tab and Southern Copper SCCO.N , opens new tab by 6.8% and 7.8%, respectively. Advancing issues outnumbered decliners by a 4.76-to-1 ratio on the NYSE. There were 338 new highs and 66 new lows on the NYSE. On the Nasdaq, 3,128 stocks rose and 1,359 fell as advancing issues outnumbered decliners by a 2.3-to-1 ratio. The S&P 500 posted 29 new 52-week highs and 6 new lows while the Nasdaq Composite recorded 79 new highs and 67 new lows. Volume on U.S. exchanges was 16.22 billion shares, compared with the 18.10 billion average for the full session over the last 20 trading days. https://www.reuters.com/business/us-stock-futures-rise-chips-gain-micron-results-gdp-data-ahead-2025-06-26/
2025-06-26 20:43
Indigenous groups worry they will not be adequately consulted Carney says legislation needed to spur economy, counter US tariffs Opponents promise legal challenges, protests TORONTO, June 26 (Reuters) - Canada's Senate passed a bill to fast-track approval for natural resource and infrastructure projects on Thursday despite opposition from Indigenous and environmental groups who have threatened protests and legal action. The bill's passage and implementation are a test for Carney, who was elected in April promising to transform Canada's economy in the face of what he repeatedly called a national crisis due to U.S. tariffs. Sign up here. The Liberal government's proposal speeds up approval of "national interest" projects, potentially including mines and oil pipelines, and eliminates some trade barriers between provinces. It passed the lower chamber last week with some Conservative support and cleared the Senate just before Parliament breaks for the summer. So-called Henry VIII clauses give Cabinet the power to decide how and whether some laws apply to such "national interest" projects. The bill had raised the ire of eight environmental and Indigenous leaders Reuters spoke to, and threatens to upend years of work toward reconciliation between Canada's government and its first peoples. Some groups have promised a legal fight over the legislation, while others have pledged demonstrations. "Prime Minister Carney is likely going to be followed by an Indigenous protest if he continues on this course," said lawyer and former Couchiching First Nation Chief Sara Mainville, whose clients are considering legal action. In Canada the duty to consult First Nations is a constitutional requirement recognized by courts. Indigenous groups argue fast-tracking project approval sidesteps that obligation and denies them a real say. "This bill represents a major threat to First Nations rights," Assembly of First Nations National Chief Cindy Woodhouse Nepinak said. "We won't give up the fight." Indigenous protesters have opposed projects in the past. In early 2020, protesters shut down , opens new tab key rail lines and roads across Canada for weeks to show solidarity with an Indigenous group in British Columbia that was trying to stop a gas pipeline from being built across its land. Carney has said the right to consultation is enshrined in the bill, which he has called the core domestic response to U.S. President Donald Trump's tariffs. Consultation alone is not enough, Mainville said. Accommodation is required - the assurance "that you are going to change something because you've heard concerns." The law will come into effect when it is signed by Governor General Mary Simon, the personal representative of King Charles, Canada's head of state. A similar measure, in Ontario, gives that province's Cabinet even broader powers; British Columbia passed an act to fast-track infrastructure projects last month. Canada is the world's No. 4 oil exporter and a mining powerhouse. The Ontario bill, which became law earlier this month, aims to push mining in the "Ring of Fire" in the province's north. Canada is trying to wean itself from economic dependence on the United States, where it sends some 75% of its exports. LEGAL CHALLENGES Meanwhile, some environmental advocates worry projects would be greenlit before their risk has been assessed and will be pursued regardless of risk, said Joshua Ginsberg, director of the Ecojustice Environmental Law Clinic at the University of Ottawa. Carney has plans to meet with Indigenous leaders this summer. But he sidestepped a question last week as to whether a nation could effectively veto one of these prioritized projects. His office did not respond to request for comment. Abram Benedict, Ontario regional chief with the Chiefs of Ontario, said there will "definitely" be legal challenges. "There will be challenges to the legislation itself, the constitutionality of the legislation. There will also be challenges once the bill is operationalized so that projects are started." https://www.reuters.com/markets/commodities/canadian-senate-approves-law-fast-track-major-resource-projects-2025-06-26/
2025-06-26 20:40
Fermi plans to launch 'Hypergrid' project on July 4 Aims to supply up to 11 GW, starting with 1 GW online late 2026 No completion date set, delays costs, often plague nuclear US nuclear regulator says it is reviewing applications WASHINGTON, June 26 (Reuters) - Fermi America, a Texas company co-founded by former U.S. Energy Secretary Rick Perry, aims to build the largest energy and data complex of its kind powered by nuclear, natural gas and solar, it said on Thursday. Fermi plans to partner on the "Hypergrid" project with Texas Tech University and said it will be launched on July 4. Sign up here. Perry, who also served as Texas governor, said that China is building 22 nuclear reactors while the U.S. is building none. "We’re behind - and it's all hands on deck. We need to be doing everything in our power to win this race, because this is the race that really matters." Interest in building new nuclear plants has spiked after President Donald Trump issued executive orders last month that aim to fast track applications for new reactors and overhaul the Nuclear Regulatory Commission. Nuclear critics and some proponents have criticized the overhaul as potentially detrimental to the industry and putting politics ahead of safety and public health. Trump this month also fired Democratic NRC commissioner Chris Hanson. Fermi said the Amarillo campus has the potential to deliver up to 11 gigawatts (GW) of new nuclear, gas and solar power, about enough for more than 8.2 million homes, with 1 GW expected online by late 2026. It did not say how much the project would cost or how it is being financed. Fermi said the project will be the largest U.S. nuclear power complex, but did not say when it would be completed. U.S. nuclear power has been plagued by delays and cost overruns, with the last reactor coming online last year in Georgia. The last two reactors completed in Vogtle, Georgia, cost a total of more than $30 billion, according to the U.S. Energy Information Administration The NRC said it is reviewing applications from Fermi which should be public soon. The Washington Post said the project has applied for four 1-GW nuclear reactors. Fermi did not immediately confirm that. The nearly 5,800-acre (2,347-hectare) campus will also have capacity for large artificial intelligence data centers. The site, near the Department of Energy's Pantex nuclear weapons plant, "underscores Fermi’s strategic position to build clean, safe, new nuclear power for America’s next-generation AI," Fermi said. The site is also situated near some of the largest U.S. gas pipelines and atop a large natural gas field. https://www.reuters.com/business/energy/texas-firm-aims-build-worlds-largest-data-energy-complex-with-nuclear-gas-solar-2025-06-26/
2025-06-26 20:18
TSX ends up 0.7% at 26,751.95, Eclipses Tuesday's record high Materials group adds 1.7% as copper prices climb Industrials rise 0.9%, financials add 0.8% June 26 (Reuters) - Canada's commodity-linked main stock index rose on Thursday to a record high as copper prices jumped and investors grew optimistic that the Federal Reserve would resume its easing campaign. The S&P/TSX composite index (.GSPTSE) , opens new tab ended up 185.63 points, or 0.7%, at 26,751.95, eclipsing Tuesday's record closing high. Sign up here. Wall Street also rose as the Israel-Iran cease-fire continued to hold and a raft of economic indicators appeared to support the case for the Fed's lowering borrowing costs this year. "While the overall TSX is performing strongly, we're certainly seeing a divergence between sectors," said Victor Kuntzevitsky, a portfolio manager at Stonehaven, Wellington-Altus Private Counsel. Positive investor sentiment for gold mining shares has contributed significantly to the TSX's gains, he added. The materials sector, which includes metal mining shares, rose 1.7% as the price of gold , a major safe-haven asset, remained elevated and copper climbed more than 3%. A three-year low for the U.S. dollar (.DXY) , opens new tab against a basket of major currencies gave copper a boost. Shares of copper producer Teck Resources Ltd (TECKb.TO) , opens new tab ended 7.9% higher. Industrials added 0.9% and heavily weighted financials were up 0.8%, while technology and consumer staples were the only two major sectors to end lower. "We are shying away from companies that are heavily tied to the Canadian consumer," Kuntzevitsky said. "We still see the Canadian consumer as stretched." Canadian home prices are set to decline 2% this year and stagnate in 2026, a significant downgrade from expectations of modest rises just three months ago, according to a Reuters poll of property experts who showed significant concern over the U.S.-led trade war. https://www.reuters.com/world/americas/tsx-futures-edge-up-israel-iran-ceasefire-holds-2025-06-26/
2025-06-26 20:06
Decision follows a string of shortcomings with core figures Resources have been 'spread too thin' Problems with employment data cause worries at BoE LONDON, June 26 (Reuters) - Britain's statistics office will split its leadership and invest more money as part of a push to fix problems with its economic data that have hampered the Bank of England and exasperated private economists. After a string of shortcomings with core figures from the Office for National Statistics, a review published on Thursday called for the temporary separation of the role of national statistician from that of ONS permanent secretary. Sign up here. The ONS also said it would invest 10 million pounds ($13.7 million) into core economic and population statistics over the next two years as part of plans to "restore quality and confidence" in its data, followed by additional extra funding. "We have sometimes tried to be all things to all people, spreading our resources too thin, limiting our investment in our core statistics," said Grant Fitzner, the agency's acting director general for economic statistics. "The ONS regrets these quality issues and understand the significant challenges they have presented for our users." Problems with the ONS' employment data - stemming from a slump in responses to its surveys - have caused headaches at the BoE, which needs to know how much inflation pressure is lingering in the jobs market as it sets interest rates. Governor Andrew Bailey has described the shortcomings of the data as a "substantial" problem for policymakers. The review, by senior retired civil servant Robert Devereux, said the economic data failures were the "almost inevitable consequence of the choices made (and not made) at the top of ONS, over several years." "Most of the well-publicised problems with core economic statistics are the consequence of ONS's own performance," Devereux added in the report. Concerns emerged in 2023 when the ONS said it had detected problems with the low response rates to its Labour Force Survey (LFS). An improved version of that survey might be released only in 2026 or possibly 2027. Fitzner said the turnaround plan would focus on using the best available source data, including an expansion of the face-to-face surveys that underpin the LFS, and on significant investment to upgrade systems used for processing raw data. Teams would be taken off social and public policy work to focus on the ONS's core economic statistics and a streamlining of management and support roles would help provide the 10 million pounds investment, along with 150 new skilled roles. ($1 = 0.7283 pounds) https://www.reuters.com/world/uk/uk-split-leadership-statistics-office-address-data-issues-2025-06-26/
