2025-06-07 02:41

BEIJING, June 7 (Reuters) - China's foreign exchange reserves rose by a less-than-expected $3.6 billion in May, official data showed on Saturday, as the dollar continued to weaken against other major currencies. The country's foreign exchange reserves, the world's largest, rose 0.11% to $3.285 trillion last month, below the Reuters forecast of $3.292 trillion. They were $3.282 trillion in April. Sign up here. The increase in reserves was due to "the combined effects of factors such as exchange rate conversion and asset price changes," China's State Administration of Foreign Exchange said in a statement. The yuan weakened 1.05% against the dollar in May, while the dollar slid 0.23% against a basket of other major currencies . https://www.reuters.com/markets/asia/chinas-forex-reserves-up-36-billion-may-less-than-expected-2025-06-07/

2025-06-07 01:34

June 6 (Reuters) - St. Louis Federal Reserve President Alberto Musalem has put the likelihood of Donald Trump's trade war causing a prolonged surge in inflation at "50-50," warning that U.S. policymakers would face uncertainty "right through the summer," the Financial Times reported on Friday. Musalem told the newspaper that while U.S. President Trump's tariffs could boost inflation for "a quarter or two," there was "an equally likely scenario where the impact of tariffs on prices could last longer." Sign up here. Trump’s tariff hikes and a $2.4 trillion budget bill have shaken markets, prompting a wait-and-see stance from the Fed after last year’s rate cuts. Musalem said he believes officials could benefit from a favorable scenario where uncertainty over trade and fiscal policy "goes away in July," which would put the Fed back on track to cut interest rates in September, according to the FT. He also highlighted, however, the possibility of a scenario "where inflation begins to rise materially and we will not know whether that is a temporary, one-off increase in the price level or whether it has more persistence," the report said. The Fed is expected to hold rates steady at its mid-June meeting, when it will release updated economic projections. https://www.reuters.com/markets/us/feds-musalem-estimates-50-50-chances-tariffs-triggering-prolonged-us-inflation-2025-06-07/

2025-06-06 23:36

USDA delays quarterly ag trade report, cites internal review process Delayed report published without its usual explanatory text Text of report had linked Trump's tariffs to rising agricultural trade deficit Analysts worry that staff cutbacks may affect future reports CHICAGO/WASHINGTON, June 6 (Reuters) - Analysts voiced concerns this week about the integrity of U.S. Department of Agriculture reports after the agency delayed a report and excluded findings that point to tariffs as a reason for a forecasted increase in the agricultural trade deficit, according to Reuters interviews with four analysts. The administration of President Donald Trump has pledged to shrink the farm trade deficit and has said tariffs will strengthen the farm economy, but farm groups have been critical of the approach. Sign up here. The agency's delay of a quarterly agricultural trade report and exclusion of its typical explanatory text were concerning because the moves raised questions about the objectivity of the data, two analysts said. "The trade is uneasy about USDA statistics now," said Charlie Sernatinger, head of grains with Marex, a brokerage and financial services company. A USDA spokesperson said the report was delayed by an internal review. "The report was hung up in internal clearance process and was not finalized in time for its typical deadline. Given this report is not statutory as with many other reports USDA does, the department is undergoing a review of all of its non-statutory reports, including this one, to determine next steps," the spokesperson said. The quarterly trade outlook report jointly published by the USDA's Economic Research Service and Foreign Agricultural Service was scheduled to be released on May 29. Shortly before it was set to publish, its authors were told to stop its release, according to a source familiar with the situation. The authors were then questioned by leaders at the ERS, FAS and USDA Office of the Chief Economist about the report's attribution of the growing agriculture trade deficit to tariffs and sentiments like "Buy Canadian" that have reduced demand for U.S. goods, the source said. In the delayed report released on Monday, the USDA raised its forecast of the U.S. agriculture trade deficit for fiscal-year 2025 to $49.5 billion, from the $49 billion it previously forecast in February. The version of the report published on Monday contains correct and unaltered data, the source said, but excludes explanatory text typically contained in the forecasts. The report delay and redaction were first reported by Politico. Such trade reports would typically be reviewed by communications and policy staff, but the removal of the explanatory text was highly unusual, according to a second source familiar with the report publication process. Two other analysts said they were confident in the USDA data for now, but expressed concern about how Trump's disruption of the federal government could affect future reports. "Departures of key personnel limit the ability of agencies to collect and analyze information," said Patrick Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri. The USDA has lost about 27% of ERS employees and 14% of FAS employees to terminations or voluntary incentives to leave the agency as the Trump administration works to reduce the size and cost of the federal government, according to Reuters reporting. The U.S. had an agricultural trade surplus for decades but in recent years, imports of high-value goods like alcohol, fruits and vegetables have driven a growing deficit, according to USDA data. https://www.reuters.com/world/us/usda-redaction-trade-analysis-causes-concern-about-report-integrity-2025-06-06/

2025-06-06 23:30

Trump says Xi will let critical minerals flow Remark follows rare call between two leaders China did not immediately comment WASHINGTON, June 6 (Reuters) - U.S. President Donald Trump said on Friday that Chinese President Xi Jinping agreed to let rare earth minerals and magnets flow to the United States, a move that could lower tensions between the world's biggest economies. Asked by a reporter aboard Air Force One whether Xi had agreed to do so, Trump replied: "Yes, he did." Sign up here. The Chinese embassy in Washington did not immediately respond to a request for comment. Trump's comment came one day after a rare call with Xi aimed at resolving trade tensions that have been brewing over the topic for weeks. At that time, Trump said there had been "a very positive conclusion" to the talks, adding that "there should no longer be any questions respecting the complexity of Rare Earth products." In another sign of easing tensions over the issue, China has granted temporary export licenses to rare-earth suppliers of the top three U.S. automakers, two sources familiar with the matter said. The U.S. president's top aides are set to meet their Chinese counterparts in London on Monday for further talks. "We're very far advanced on the China deal," Trump told reporters on Friday. The countries struck an agreement on May 12 in Geneva, Switzerland, to roll back for 90 days most of the triple-digit, tit-for-tat tariffs they had placed on each other since Trump's January inauguration. Financial markets that had worried about trade disruptions rallied on the news. But China's decision in April to suspend exports of a wide range of critical minerals and magnets has continued to disrupt supplies needed by automakers, computer chip manufacturers and military contractors around the world. Trump had accused China of violating the Geneva agreement and ordered curbs on chip-design software and other shipments to China. Beijing rejected the claim and threatened counter measures. Rare earths and other critical minerals are a source of leverage for China as Trump could come under domestic political pressure if economic growth sags because companies cannot make mineral-powered products. Since returning to the White House in January, Trump has repeatedly threatened an array of punitive measures on trading partners, only to revoke some of them at the last minute. The on-again, off-again approach has baffled world leaders and spooked business executives. https://www.reuters.com/world/china/trump-says-chinas-xi-agreed-restart-flow-rare-earth-minerals-2025-06-06/

2025-06-06 23:12

Trump hints at imminent Fed chair decision Warsh seen as frontrunner for Fed chair role Trump criticizes Powell's rate policy again WASHINGTON, June 6 (Reuters) - President Donald Trump said on Friday that a decision on the next Federal Reserve chair will be coming out soon, adding that a good Fed chair would lower interest rates. "It's coming out very soon," Trump told reporters on Air Force One. Sign up here. When asked specifically about former Fed governor Kevin Warsh, Trump said, "he's very highly thought of." Warsh is considered a frontrunner to be Trump's pick to be the next Fed chair. Earlier on Friday, Trump said the Federal Reserve should cut interest rates by a full percentage point and he reiterated his view that Chair Jerome Powell has been too slow to lower borrowing costs. The president has repeatedly berated Powell for not cutting rates as he desires. The two men met face-to-face for the first time last week, with Trump telling Powell he was making a "mistake" by not lowering rates. https://www.reuters.com/world/us/trump-says-decision-fed-chair-will-be-out-soon-2025-06-06/

2025-06-06 22:16

HOUSTON, June 6 (Reuters) - The spread between U.S. West Texas Intermediate and Brent crude futures narrowed to its tightest level since September 2023 on Friday as U.S. prices rose on a sliding rig count and Canadian wildfires that cut supplies, analysts and traders said. U.S. futures ended the week 4.9% higher, while Brent futures rose 2.75%, as OPEC+ output increases put a cap on gains. Sign up here. WHY IT'S IMPORTANT A narrower spread indicates a closed arbitrage window for traders and weaker shipping economics to Europe and Asia. The tighter spread can act as an early indicator that U.S. crude exports will likely fall in the next few weeks, assuming the premium for Brent crude remains weak. The inclusion of WTI-Midland crude in the dated Brent index has meant that the spread between the two is increasingly correlated to freight rates, as the price of Dated Brent is set by WTI Midland on many trading days. BY THE NUMBERS The spread between the two crude benchmarks narrowed to as little as $2.78 a barrel during the session on Friday. A discount of $4 per barrel is typically considered the level that encourages U.S. exports to Europe, as traders see an open arbitrage route. The spread has remained narrower than $4 a barrel since May 1, according to data from LSEG, partly due to concerns around U.S. production, helping keep more barrels onshore, according to Phil Flynn, senior analyst with Price Futures Group. CONTEXT Since April, OPEC+ countries including Saudi Arabia and Russia have made or announced increases totaling 1.37 million barrels per day, or 62% of the 2.2 million bpd they aim to add back to the market. Meanwhile the U.S. oil and gas rig count, an early indicator of future output, fell by four to 559 in the week to June 6, the lowest since November 2021, energy services firm Baker Hughes (BKR.O) , opens new tab said in its closely followed report on Friday, stoking some concerns around future U.S. production. This has helped create pricing that encourages U.S. oil to remain in the domestic market, traders and analysts said. Wildfires burning in Canada's oil-producing province of Alberta have further buoyed U.S. crude futures, analysts said, with Canadian daily crude production down by about 7%. "With Canadian wildfire season underway, further disruption could push the WTI/Brent spread below $3 this summer," said analysts at Sparta Commodities. KEY QUOTES "When you look at the WTI/Brent spread, you can see the concerns a little bit around leveling off U.S. production and concerns about export barrels tightening up," said Price Futures Group's Flynn. https://www.reuters.com/business/energy/wti-brent-spread-narrowest-almost-two-years-us-prices-rise-2025-06-06/