2025-06-06 17:56

Financial leaders warn of U.S. deficit impact on bond market Citadel Securities plans to expand cryptocurrency trading under new SEC rules Market volatility boosts Citadel Securities' trading revenue and profits NEW YORK, June 5 (Reuters) - The U.S. government's growing debt pile is a "ticking time bomb" and how the Trump administration reacts to this crisis is going to be "super important", Citadel Securities President Jim Esposito said on Thursday. Several other leaders of the financial services industry have issued similar warnings about the current U.S. deficit in recent weeks. Earlier in June, JPMorgan Chase (JPM.N) , opens new tab CEO Jamie Dimon said the U.S. national debt is a "big deal" that could create a "tough time" for the bond market that causes spreads to widen. Sign up here. "The stock of debt and the budget deficit is a ticking time bomb. No one is smart enough to predict when exactly it will rear its ugly head. We've been talking about this for more than 20 years, so in some ways the market's gone into complacency, but over a multi-year period we can work this out," Esposito said at the Piper Sandler Global Exchange & Trading Conference. Shifting U.S. economic policies have sent bond markets tumbling in recent weeks. In May, ratings agency Moody's downgraded the U.S. sovereign credit rating. Long-dated bonds have been under pressure due to deficit concerns, with investors delivering a tepid response to a 20-year auction in May and sending the 30-year bond yield to its highest level since October 2023. Higher bond yields can translate into higher borrowing costs for consumers, businesses and governments. Citadel Securities, a market-making behemoth that was founded by hedge fund billionaire Ken Griffin, plans to double down on cryptocurrency trading this year under a new regulatory framework. "This year you'll see us getting more active providing liquidity on specific crypto exchanges. So that's a part of our strategic plan. I think we'll execute on that in this calendar year, like everybody else," said Esposito. "We're excited by the prospects of the SEC (U.S. Securities and Exchange Commission) coming out with the rule set. So crypto is definitely a space we're going to get bigger in, and we're excited about the prospects," he added. The market volatility this year has boosted the fortunes of large market makers like Citadel Securities and Jane Street. During the first quarter of 2025, Citadel Securities' net trading revenue surged 45% to $3.4 billion, while its profit jumped 70% - a record for the firm, according to people familiar with the matter. "The number of growth opportunities that lie in front of us is almost unlimited. In our core businesses, our equity business at the moment is a bit too skewed towards the U.S. at the expense of the rest of the world - so Europe is a very big growth opportunity for us," Esposito said. https://www.reuters.com/business/finance/citadels-esposito-says-us-deficit-is-ticking-time-bomb-2025-06-05/

2025-06-06 15:49

BUENOS AIRES, June 6 (Reuters) - The last eleven months have seen a net outflow of $12.3 billion from Argentina, affecting the central bank's ability to accumulate reserves, according to the bank's latest report. As President Javier Milei has attempted to maintain the value of the peso to combat high inflation, relatively high prices for domestic goods and services have encouraged imports and discouraged tourists. Sign up here. The report said that in April, 636 million more dollars left Argentina than entered, the latest in almost a year of outflows. This does not include funds from Argentina's recent deal with the International Monetary Fund. Argentina currently has 38.7 billion in dollar reserves and the $12 billion Argentina has received from the IMF so far has allowed it to lift capital controls that had long blocked foreign investment. "Payments for imports, the negative balance in services and interest, and the structural tourism deficit explain the deterioration of this account this year," it said. "The services sector registered a deficit of $1.161 billion in April ... This deficit was explained by net outflows under 'Travel, tickets, and other card payments,' 'Other services,' and 'Freight and insurance' …, partially offset by net inflows under 'Professional and technical business services,'" the central bank reported. Analysts predicted that the current trend is unlikely to reverse in the short term. "It is happening in an election campaign, with macroeconomic factors supporting the outflow of funds - purchase of goods and services, travel - and in a few months agricultural exports will decrease because of seasonal factors," with major harvests ending, said Pablo Besmedrisnik, economist and director of VDC Consulting. The same central bank report describes how the large fluctuations in the goods sector and continued deficits in the services and primary income, which includes interest payments and dividends, pose a challenge for the government's access to foreign currency. https://www.reuters.com/world/americas/argentina-reserves-build-up-stalls-dollars-exit-2025-06-06/

2025-06-06 15:38

Trump criticizes Powell for being too late with rate cuts Fed expected to leave rates steady amid tariff and inflation concerns Markets expect a quarter-point Fed rate cut in September June 6 (Reuters) - The U.S. Federal Reserve should cut interest rates by a full percentage point, President Donald Trump said on Friday as he reiterated his view that Fed Chair Jerome Powell has been too slow to lower borrowing costs. "Europe has had 10 rate cuts, we have had none. Despite (Powell), our Country is doing great. Go for a full point," Trump wrote in a social media post. Central banks typically limit rate moves to quarter point changes outside of crises. Sign up here. The Fed last September did reduce rates by a half of a percentage point, after a faster-than-expected decline in inflation and a marked slowdown in the labor market. By the end of 2024 it had delivered two additional quarter-point rate cuts, and has held the policy rate steady since then, citing uncertainty over tariff policy and inflation still above its 2% target. Trump said the Fed could always raise rates again if cuts led to inflation. 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. Powell has said the Fed will make policy decisions based solely on economic conditions and the outlook, with no political considerations. The Fed in May left the policy rate in the 4.25%-4.50% range, where it has been since December, and policymakers have since signaled they may leave it there for another few months as they wait for more clarity on how Trump's tariff and other policies affect inflation and the labor market. Financial markets are currently betting the Fed will resume cutting rates in September with a quarter-point reduction, after a Labor Department report Friday showed the job gains have slowed while the unemployment rate was steady at 4.2%. The market's policy rate bets are in line with Fed policymakers' own projections, as of March, for 50 basis points of cuts this year. The European Central Bank has cut interest rates eight times since last June, and this month signaled it may now pause. https://www.reuters.com/world/us/fed-should-cut-interest-rate-by-full-point-trump-says-2025-06-06/

2025-06-06 14:36

June 6 (Reuters) - Brazilian President Luiz Inacio Lula da Silva said on Friday that growth in the agriculture sector may allow Latin America's largest economy to defy current projections and expand this year more than in 2024, when it notched growth of 3.4%. Lula's optimistic remarks diverge from his own government's forecast, as the Finance Ministry sees Brazil's gross domestic product (GDP) growth slowing to 2.4% in 2025 amid tight monetary conditions. Sign up here. The comments followed the publication of Brazil's first-quarter GDP figures last week, which showed year-on-year growth of 2.9% fueled by a jump in agricultural activity thanks to a bumper harvest of soybeans, the country's top farm export. The South American country is the world's largest exporter of soy, coffee, cotton, sugar, beef and chicken, as well as a top supplier of corn and pork. "Our first-quarter growth demonstrates that we can once again surprise the world and grow above the global average," Lula told an event in Paris, where the country was recognized as free of foot-and-mouth disease without vaccination. "If last year we grew 3.4% with agriculture not expanding as much as we expected, I think agriculture growth this year can allow us to think about growing a bit more," the leftist leader added. Private economists polled on a weekly basis by the central bank expect Brazil's GDP to grow 2.13% this year. https://www.reuters.com/world/americas/brazils-lula-bets-agriculture-drive-higher-growth-2025-2025-06-06/

2025-06-06 13:15

NEW YORK, June 5 (Reuters) - U.S. job growth slowed in May, while the unemployment rate held steady, potentially giving the Federal Reserve a buffer to delay the resumption of interest rate cuts. Nonfarm payrolls increased by 139,000 jobs last month after rising by a downwardly revised 147,000 in April, the Labor Department said on Friday. Sign up here. Economists polled by Reuters had forecast 130,000 jobs added last month after a previously reported 177,000 advance in April. The unemployment rate held steady at 4.2% and matched expectations. MARKET REACTION: STOCKS: S&P 500 E-minis added to gains and were up 51.25 points, or 0.86% BONDS: The yield on benchmark U.S. 10-year notes rose 6.5 basis points to 4.46%, the two-year note yield climbed 6.9 basis points to 3.993% FOREX: The dollar index extended gains a loss and was up 0.49% to 99.17, while the euro was down 0.44% at $1.1394 COMMENTS: JOSH JAMNER, INVESTMENT STRATEGY ANALYST, CLEARBRIDGE INVESTMENTS, NEW YORK “May's jobs report showed continued resilience for the labor market as the bite from tariffs began to impact the U.S. economy. Solid job gains along with a pickup in wages mean that aggregate incomes are continuing to grow 5% (year-over-year), which provides a solid foundation for continued consumption. "The Fed is likely to continue to have little urgency to change course in light of today’s steady jobs report, with scant evidence that the labor market is in imminent need of policy support. Fed Fund futures priced out one-quarter (percent) of a rate cut at September FOMC meeting following the jobs report, which is pushing up rates along the yield curve. The move higher at the long end could curb the upside for equities, but overall today’s report should be supportive for risk assets and embedded earnings expectations near term.” GARY SCHLOSSBERG, GLOBAL STRATEGIST, WELLS FARGO INVESTMENT INSTITUTE, SAN FRANCISCO, CA "The report itself is a positive report overall, in line with expectations, with the employment number a little bit stronger than expected. It shows the labor market is still intact." "There's one blemish there that stands out. The household-based employment number that's used in the calculation of the unemployment rate was down sharply. There was a big increase in both the household-based employment number and in the supply of Labor in April. We just reversed both by a large amount in such a way that the unemployment rate remains steady. We were afraid it would be going higher and the fact that it held steady is an encouraging sign." "The market is taking the jobs report as a sign the economy is still holding up well. It's not that we're powering ahead. Its moderate growth but there's little sign we're losing momentum from the jobs report mid-way through the second quarter." MALCOLM POLLEY, CHIEF MARKET STRATEGIST, STRATOS INVESTMENT MANAGEMENT, BEACHWOOD, OHIO “If you look at the trend, it looks like job growth actually bottomed mid/late next year, so the trend looks to be higher. As interesting as today’s numbers were, the more interesting data were yesterday’s – the unit labor costs and productivity. Productivity was lower and labor costs higher. That ultimately translates into higher inflation. "As long as job growth holds up, the employment data is positive. The other piece of this, in my mind, if you already have had more job openings than candidates, does it make sense to post another job? We cannot find qualified people, I keep hearing. The bottom line, is that the Fed is likely to stay on hold.” ART HOGAN, CHIEF MARKET STRATEGIST AT B RILEY WEALTH "Things are slowing, but they're not collapsing and that's the good news. We're not seeing a serious degradation of the jobs market." WILL COMPERNOLLE, MACRO STRATEGIST, FHN FINANCIAL, CHICAGO “The sell-off (in Treasuries) really reflects this idea that growth sentiment is heading in a bullish direction. We have yet another month of hard data resilience. There is positive progress on tariffs moderating, even if there's nothing final yet. And a lot of the doomsday scenarios people thought were always one month away - it just seems to be a less likelihood that it's coming. "There's relief, or bearish for bonds, that there are no signs of significant deterioration that people were expecting.” BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN "The rise in payrolls was better than expected, but the previous months were revised significantly lower, taking some sheen off this report. The diffusion index for manufacturing was abysmally low, showing that payroll gains are concentrated while losses are widespread. On its face, this shows an economy that’s holding up under the weight of a trade war, but the details show plenty of cracks forming." PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK “Payrolls came in a little higher than consensus and more than I was looking for, but basically with the exception of hourly wages, the report really doesn't indicate that the Fed would be ready to do anything to help out the labor market. “In fact, the rise in hourly wages by 0.4% - I don't want to say significant, but it's noticeable. And so that you know just means that the Fed stays on hold and the labor market, although there are definitely signs that it's cooling and obviously that's attributed to the trade war because many people are not hiring due to the uncertainties. “Bottom line, it’s a report that's not going to move the markets very much and I would, I would classify this as a mediocre report.” JAMIE COX MANAGING PARTNER, HARRIS FINANCIAL GROUP, RICHMOND VIRGINIA "The labor market is strong, but cooling. I expect this report, with all its revisions to bring the Fed back into cutting mode in July. Wages are stable, for now, but that is likely to change in the coming months. "One of the biggest factors with labor is housing - the housing market is showing early signs of trouble, and a cooling labor market will make that worse." https://www.reuters.com/business/view-us-payrolls-growth-slows-may-unemployment-rate-steady-2025-06-06/

2025-06-06 12:45

BUDAPEST, June 6 (Reuters) - Hungary has successfully contained an outbreak of foot-and-mouth disease, leading to the lifting of European Union restrictions, the country's farm minister Istvan Nagy told local news site Index.hu in an interview published on Friday. Hungary reported its first case of foot-and-mouth disease for over 50 years in March, leading to infections in five farms near its border with Slovakia and Austria and triggering border closures and the mass slaughter of cattle. Sign up here. "There hasn’t been a single new outbreak on the farms for over a month and a half. Disinfection work is ongoing, cleaning is happening at full speed, we’re preparing for repopulation at all the sites ... the virus is gone," Nagy said. The farm minister also said that the European Union was lifting restrictions introduced after the outbreak. The disease, which poses no danger to humans, mostly affects cattle and other cloven-hoofed animals like swine, sheep and goats, causing fever and mouth blisters. Outbreaks often lead to trade restrictions and livestock culls. Authorities were still investigating the origins of the outbreak and testing several theories, Nagy said. He reiterated that terrorism had not been ruled out. Prime Minister Viktor Orban's chief of staff in May suggested a "biological attack" as a possible source of the outbreak, without giving further details. Restrictions have also been eased in Slovakia since May as the country has not seen any fresh outbreaks in recent months. In the Czech Republic, where no cases were reported, remaining measures to prevent the spread across its borders were due to end on Friday. https://www.reuters.com/business/healthcare-pharmaceuticals/foot-and-mouth-disease-contained-hungary-farm-minister-says-2025-06-06/