2025-06-26 11:17
June 26(Reuters) - Sterling rose to its highest in nearly four years against the dollar on Thursday, as worries around the credibility of the U.S. Federal Reserve dragged the greenback lower on its fourth consecutive day of losses. The pound was up 0.56% against the dollar at $1.374, after earlier in the session surpassing January 2022 highs to trade at levels not seen since October 2021. Sign up here. "(Sterling) price action is baffling," said Nick Rees, head of macro research at Monex Europe, as it "completely ignores the difficulties facing the UK government". Rees pointed to a brewing rebellion among lawmakers of Prime Minister Keir Starmer's Labour party which he said "is going to torpedo" proposed reforms to the welfare system. Due to ballooning welfare spending, which was on course to top 100 billion pounds by 2030, Labour said in March it planned to cut more than 5 billion pounds from its welfare budget by 2029/30 as it sought to avoid a rise in taxes or borrowing, "neither of which are outcomes that markets are going to like," Rees said. He pointed to late 2022, when British markets were racked by then-Prime Minister Liz Truss's failed "mini-budget", and another drop in sterling and rise in gilts, albeit to a lesser extent, when British finance minister Rachel Reeves announced a tax-and-spend budget in October that investors worried would reignite inflation and weigh on growth. While the euro is set to gain more than 1% over the pound this month, sterling regained some ground in recent days. It was broadly steady against the euro, which was down 0.1% at 85.27 pence. This week, a survey showed Britain's labour market was showing further signs of slowdown, which pointed to below-inflation pay growth and a drop in job vacancies, especially for graduate-level jobs. Bank of England Governor Andrew Bailey on Tuesday said there were now signs that Britain's labour market was softening and he repeated his view that interest rates were likely to continue falling. Markets see a 64% chance of a rate cut from the BoE in August. Sterling gained more than 2% against the dollar so far this week. "I think once things calm down and markets have a little bit more time to focus on the UK fiscal situation, I think big, big downside risk is building for the pound that could start to play out," Rees said. https://www.reuters.com/world/uk/sterling-gains-against-weaker-dollar-amid-fed-credibility-worries-2025-06-26/
2025-06-26 11:17
Slovakia, Hungary oppose new sanctions on Russia Slovakia won't vote on 18th sanctions package, Fico says European diplomats expect issue to be resolved at EU summit June 26 (Reuters) - Slovakia will not support a new European Union sanctions package on Russia and will demand a delay in the vote until Slovak concerns over gas supplies after 2027 are resolved, Prime Minister Robert Fico said on Thursday. The European Commission on June 10 proposed a new round of sanctions against Russia for its invasion of Ukraine more than three years ago, targeting Moscow's energy revenues, banks and military industry. Sign up here. Slovakia and Hungary have opposed the sanctions due to their disagreement with Commission proposals to end Russian energy imports by the end of 2027, which would force the two countries to look for alternatives. European diplomats have said they expect the issue to be resolved at the summit. Fico reiterated his position that the new sanctions could lead to supply shortages and price increases as well as up to 20 billion euros ($23.4 billion) in losses from arbitration for breaching a long-term contract with Russian supplier Gazprom (GAZP.MM) , opens new tab. Fico said he would back the summit's conclusions, but he would still not agree to the sanctions now. "Tomorrow, Slovakia will not vote on the 18th sanctions package," he told a parliamentary committee on Thursday before he left for the summit. "We consider it to be one package with (the end of imports plan) and until fundamental issues are resolved, we cannot adopt further sanctions." Fico met European Commission President Ursula von der Leyen on Thursday but it was not known if that changed his position. Polish European Affairs Minister Adam Szlapka said at the summit he hoped Slovakia and Hungary could be brought on board as they had been in the past. "As in the previous sanction packages, I am optimistic here, we are working on it," he said. "I hope that it will be possible to close it by the end of the (EU) Polish presidency, and as we know, there are four days left." Sanctions proposals require unanimity in the bloc for adoption. Hungary has frequently threatened to withhold its approval during discussions on aid for Ukraine as well as on sanctions renewals, which take place every six months. ($1 = 0.8536 euros) https://www.reuters.com/world/slovakia-demands-delay-vote-russian-sanctions-over-energy-concerns-2025-06-26/
2025-06-26 11:11
SYDNEY, June 26 (Reuters) - Australia is suing a Chinese-linked company and a former associate over a breach of foreign investment laws linked with rare earths miner Northern Minerals (NTU.AX) , opens new tab, the national treasurer said on Thursday, adding it was the first case of its kind. Indian Ocean International Shipping and Service Company was one of five foreign investors with ties to China subject to an order by Treasurer Jim Chalmers to divest shares on national interest grounds in June last year. Sign up here. Chalmers said in a statement he had lodged a legal action in the Federal Court and was seeking penalties, declarations and costs. “Foreign investors in Australia are required to follow Australian law,” Chalmers said. “We are doing what is necessary to protect the national interest and the integrity of our foreign investment framework.” The statement, which said the case was the first to be brought by a Treasurer before the Federal Court for an alleged breach of foreign investment laws, did not give details of the current stake holdings. It named Indian Ocean, but did not name the former associate. Indian Ocean International Shipping and Service Company could not immediately be contacted for comment. Australia has sought to build a rare earths supply chain to decrease China’s dominance over the elements used in products from smartphones to wind turbines and missiles and radar systems. Northern Minerals, a supplier of rare earths to a refinery being built by Iluka Resources (ILU.AX) , opens new tab in Western Australia, became a flashpoint for the contest after Australia blocked Singapore-based Yuxiao Fund from doubling its stake in the company to almost 20% in 2023. Yuxiao, controlled by Chinese businessman Wu Tao, along with four other entities, including Black Stone Resources of the British Virgin Islands and Indian Ocean International Shipping and Service Company based in the United Arab Emirates, were ordered in 2024 to sell shares worth 10.37% of Northern Minerals’ share capital within three months to unconnected associates. https://www.reuters.com/world/china/australia-sues-china-linked-rare-earths-investors-2025-06-26/
2025-06-26 11:04
SEOUL, June 26 (Reuters) - South Korea's Nuclear Safety and Security Commission approved on Thursday the first dismantlement of a nuclear power plant in the country, the Kori-1, which was permanently shut down in 2017 after 39 years of operation, it said in a statement. The panel authorised a plan by the nuclear operator Korea Hydro and Nuclear Power (KHNP) to take down the plant at a cost of 1.1 trillion won ($810 million) over 12 years that would include the handling of approximately 170,000 tonnes of nuclear waste, it said. Sign up here. The decision marks the first such operation by the country, the world's fifth-largest producer of nuclear energy according to the International Atomic Energy Agency and a major global builder of atomic power plants, to decommission a nuclear plant. The nuclear safety commission said it concluded the plan submitted by KHNP met the technical requirements under the country's nuclear safety management laws. Experts have said the dismantlement operation could help South Korea enter the global nuclear decommissioning market, which is now dominated by the United States with countries such as Japan and Germany having also entered the race. South Korea generated 31.7% of its electric power from nuclear power stations in 2024, according to government data. It now operates 26 power plants and the Kori-1 power plant was the first to be commissioned for commercial operation in 1978. ($1 = 1,357.4100 won) https://www.reuters.com/world/asia-pacific/south-korea-nuclear-watchdog-approves-first-dismantlement-nuclear-power-plant-2025-06-26/
2025-06-26 10:57
LONDON, June 26 (Reuters) - What matters in U.S. and global markets today By Mike Dolan , opens new tab, Editor-At-Large, Finance and Markets Sign up here. The U.S. dollar is on course for its worst first half year since 1973, as it plummeted again on Thursday amid rising expectations for Federal Reserve easing and statements from President Donald Trump about his pick for the next Fed chair. I'll discuss this and the rest of the market news below. Make sure to check out today's column, where I discuss what the Bank of England’s rethink of its bond-selling strategy may signal about long-term yields and balance sheets across the developed markets. Today's Market Minute * U.S. President Donald Trump said on Wednesday he would likely seek a commitment from Iran to end its nuclear ambitions at talks next week and credited U.S. strikes on Iran with bringing a swift end to the war between Israel and Tehran. * In their rush to retain President Trump's support for NATO, the alliance's European members have promised to more than double the amount of wealth they set aside for military spending. * Asian stocks wobbled and the dollar was under pressure on Thursday as the prospect of an early appointment of the next Federal Reserve Chair by President Donald Trump stoked concerns over the independence and credibility of the U.S. central bank. * Much of the "de-dollarization" debate has focused on foreign exposure to U.S. securities like stocks and bonds. But ROI columnist Jamie McGeever warns investors should not ignore foreign direct investment flows, the traditionally sticky capital that may also be sending out warning signals. * Asia's imports of crude oil rose in the first half of 2025 as a surge in June arrivals overcame a soft start in the early months of the year. Read the latest from ROI columnist Clyde Russell. Dollar plunges as Trump pummels Powell The dollar's index against the most traded world currencies (.DXY) , opens new tab has now lost more than 10% in 2025 to date just as the half-year mark approaches next week and it is now at its weakest in three years. That is the index's worst six month performance since 1991, and it is its worst first half since the start of the floating exchange rate era 52 years ago. The euro soared above $1.17 to its highest in almost four years, the Swiss franc hit its strongest in a decade and sterling hit its best level since 2021. The dollar slide has snowballed since Trump's trade war unfolded in April amid worries about foreign investor flight and uncertainty about U.S. policymaking. A revival of Europe's economic outlook has been the flipside, spurred by a ratcheting up of regional defense spending and Germany's dramatic fiscal boost. Wary of the inflationary effects of tariff increases, the Fed has held the line on interest rates while other central banks continued easing. But speculation about a resumption of rate cuts this year has mounted again this month - with particular focus on what happens after Fed Chair Powell's term ends next May. The trigger for the overnight dollar lurch lower appears to have been Trump's latest salvo against Powell and his reluctance to back a rate cut now - a stance the Fed boss underlined in congressional testimonies this week. But attending the NATO summit in The Hague on Wednesday, where the alliance pledged to lift defense spending toward 5% of GDP over the next decade, Trump said he would soon name his picks to replace what he called a "terrible" Powell next year. With splits emerging among the Fed policymakers about how soon to start cutting rates again, markets have started to stack up easing bets amid reports of a Trump-appointed "shadow" Fed chair emerging over the remainder of the year to undermine Powell's authority. Fears for Fed policymaking independence from politics are now rife. Fed futures pricing now expects rates to fall by 137 basis points to 3% by early 2027, 30 bps more than it priced in one month ago. There is now a one-in-four chance of a cut as soon as July and some 63 bps of Fed cuts expected by year-end. Negotiating another heavy week of debt sales, two and 10-year Treasury yields fell to near two-month lows on Thursday. The Fed also unveiled a proposal on Wednesday that would overhaul how much capital large global banks must hold against relatively low-risk assets, as part of a bid to boost participation in U.S. Treasury markets. That lifted bank stocks. The full reversal of recent oil price gains this week as the Israel-Iran ceasefire holds added to a more benign inflation picture and U.S. crude is back registering losses of 20% year-on-year. Trump said on Wednesday the U.S. had not given up its maximum pressure on Iran, but signaled a potential easing in enforcement of restrictions on the sales of Iranian oil to help the country rebuild. Talks with Iran are due next week. Stock markets were firmer across the world, with MSCI's all-country index (.MIWD00000PUS) , opens new tab eking out a new record high and the Nasdaq 100 (.NDX) , opens new tab hitting a new record on Wednesday. The S&P 500 is now within 1% of its all-time high too as the second-quarter earnings season nears next month. Although it ended flat on Wednesday, futures were higher ahead of Thursday's bell. Thursday sees a stream of economic updates on May trade and weekly jobs, with this week's consumer confidence and housing updates readings showing notable weakness. In the backdrop, markets are watching for the possible passing of Trump's fiscal bill and debt ceiling rise in Congress by the July 4 holiday and then early next month sees the spotlight falling on an expiry of his 90-day pause on April's "reciprocal" tariff hikes. With no further bilateral trade deals announced of late, speculation is rising about an extension of the pause. Treasury Secretary Scott Bessent, meantime, extended the department's authority to continue extraordinary cash management measures to keep from breaching the federal debt ceiling by nearly a month, until July 24. Elsewhere, oil giant Shell (SHEL.L) , opens new tab said it had not bid for BP (BP.L) , opens new tab and was not actively considering such a move, adding it was bound by UK regulations which mean such a statement banned it from making a bid for BP for the next six months. The Wall Street Journal reported on Wednesday that Shell was in talks to acquire BP. Chart of the day Fed futures pricing now sees rates falling 137 basis points to 3% by early 2027 - 30 bps more than it priced a month ago. There is now a one-in-four chance of a cut as soon as July and some 63 bps of Fed cuts by year-end. Today's events to watch * U.S. May goods trade balance, May durable goods orders, weekly jobless claims, May retail/wholesale inventories, May pending home sales, May Chicago Federal Reserve activity index, Kansas City Fed June business survey, final Q1 GDP revision, Q1 corp profits revision (8:30 a.m. EDT) Mexico May trade balance (8:00 a.m. EDT) * Mexico central bank policy decision (3:00 p.m. EDT) * Minneapolis Federal Reserve President Neel Kashkari, Richmond Fed President Thomas Barkin, Cleveland Fed chief Beth Hammack and Fed Board Governor Michael Barr speak; European Central Bank President Christine Lagarde and ECB board member Isabel Schnabel speak; Bank of England governor Andrew Bailey speaks * European Union summit in Brussels * U.S. Treasury sells $44 billion 7-year notes * U.S. corporate earnings: Nike, Walgreens Boots Alliance, McCormick Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/business/finance/global-markets-view-usa-2025-06-26/
2025-06-26 10:14
LONDON, June 26 (Reuters) - British retail sales slumped this month and expectations within the industry for July also deteriorated, a Confederation of British Industry survey showed on Thursday. The CBI's monthly gauge of how retail sales compared with a year earlier fell to -46 in June from -27 in May. Sign up here. A measure of expected sales for July fell to -49 from -37 for June. https://www.reuters.com/business/retail-consumer/uk-retail-sales-tumble-june-worse-seen-july-cbi-says-2025-06-26/
