2025-05-22 04:38

A look at the day ahead in European and global markets from Johann M Cherian Markets have been dealing with the steep selloff in Treasuries worried about the U.S. fiscal health, and in Europe the next test will be how businesses have been faring in the face of an uncertain trade environment. Sign up here. Manufacturing and services sector surveys for May will grab the spotlight on Thursday, and forecasts indicate that business activity in the eurozone and Germany has broadly been steady from the previous month. European earnings so far show that corporate health has been better than initially feared and stocks have been riding the tide of the temporary U.S. tariff pause and signs that China, a top customer for European firms, is striving to revive consumption. That has left the pan-European STOXX 600 (.STOXX) , opens new tab outperforming the S&P 500 (.SPX) , opens new tab and the Nasdaq (.IXIC) , opens new tab this year. The export-heavy German benchmark (.DAX) , opens new tab closed at a record high on Wednesday and is the best performing major stock market in the world. However, the path ahead would depend on whether European Union leaders can manage to negotiate trade deals with the U.S. and on the impact of the highly anticipated German fiscal stimulus package. European futures indicated a dour start to the day as risk sentiment was shrouded by lingering worries of how the U.S. could manage to finance its ballooning fiscal debt as investors exit U.S. assets. President Donald Trump's massive tax and spending bill cleared an important procedural hurdle in the Republican-controlled House of Representatives, setting it up for a vote that could take place within hours. Also worrying investors was the lacklustre auction of Treasury bonds that reinforced the "Sell America" narrative, weighing on not just the dollar but Wall Street as well, with traders already jittery after Moody's cut the U.S. triple-A credit rating last week. The yield on 30-year Treasury bonds US30YT=RR stayed above 5% after hitting a 1-1/2 year high earlier in Asian hours. However, not all assets were taking it on the chin. Bitcoin prices touched a fresh record high on improving sentiment around digital assets. The world's most valuable cryptocurrency has gained nearly 50% from the early April selloff, breaking above the $100,000 mark. Prices of gold were also making a comeback from a recent slip, given that investors perceive the precious metal to be a safe-haven favourite in times of uncertainty. Key developments that could influence markets on Thursday: Data: - Business activity surveys out of the eurozone, UK and the U.S. along with weekly jobless claims out of the United States - Remarks from European central bank policymakers including Philip Lane, Luis de Guindos expected - Bank of England Deputy Governor Sarah Breeden and Chief Economist Huw Pill to speak later in the day - Comments from U.S. Federal Reserve's Thomas Barkin due Trying to keep up with the latest tariff news? Our new daily news digest offers a rundown of the top market-moving headlines impacting global trade. Sign up for Tariff Watch here. https://www.reuters.com/world/europe/global-markets-view-europe-2025-05-22/

2025-05-22 03:01

MUMBAI, May 22 (Reuters) - The Indian rupee is likely to open higher on Thursday, supported by the strength in Asian peers, with investors shying away from the dollar due to U.S. fiscal concerns. The 1-month non-deliverable forward indicated a open in the 85.55 to 85.58 range, versus 85.6375 in the previous session. The offshore Chinese yuan rose past 7.1950 to the U.S. dollar, the Indonesian rupiah rallied 0.6% and the Malaysian ringgit and the Taiwanese dollar were both up 0.4%. Sign up here. Based on recent price action, it’s more likely than not that the rupee will remain rangebound after the open, said a currency trader at a Mumbai-based bank. "I am currently playing the 85.30 to 85.80 band, looking to fade moves on either side.” The Indian rupee has struggled to benefit from the dollar’s broader weakness against Asian peers, an outcome that has surprised bankers. The dollar index dipped below 99.50 while Treasury yields climbed and equities sold off — a combination suggesting that American assets were out of favour with investors. The 10-year U.S. Treasury yield jumped nearly 12 basis points on Wednesday to hit 4.60%, while the 30-year climbed past the 5% handle. Soft demand at the 20-year auction triggered a selloff in Treasuries, highlighting investor concerns over the U.S. fiscal outlook. U.S. lawmakers are wrangling over a tax and spending that estimates put the costs $3.8–4.5 trillion over a decade. The U.S. House of Representatives Rules Committee voted to advance President Donald Trump's sweeping tax-cut, setting the stage for a vote on the House floor. "We think that the first pain point (30-year yields > 5%) has been breached and it is another warning from bonds that fiscal deficit is the key focal point (US tariff worries have gone into the backburner)," DBS Bank said in a note. "The other two market markers to watch would be if 10Y breach 5% and / or swap spreads blow out again." KEY INDICATORS: ** One-month non-deliverable rupee forward at 85.68; onshore one-month forward premium at 13.25 paise ** Dollar index down at 99.48 ** Brent crude futures down 0.1% at $64.8 per barrel ** Ten-year U.S. note yield at 4.59% ** As per NSDL data, foreign investors sold a net $1,175 mln worth of Indian shares on May 20 ** NSDL data shows foreign investors bought a net $7.5 mln worth of Indian bonds on May 20 https://www.reuters.com/world/india/us-fiscal-concerns-drive-dollar-down-propel-rupee-higher-2025-05-22/

2025-05-22 02:23

MUMBAI, May 22 (Reuters) - The Reserve Bank of India (RBI) bought a net of $14.36 billion in the spot foreign exchange market in March, data released on Wednesday as part of the central bank's monthly bulletin showed. The RBI said it purchased $41.52 billion and sold $27.16 billion. In February, the central bank had sold a net of $1.6 billion in the spot market. Sign up here. The Indian rupee rallied more than 2% in March, aided by a fall in the U.S. dollar and foreign inflows, which prompted investors to unwind bearish bets. The domestic unit traded in a wide range of 85.39 to 87.44 in March. The RBI's net outstanding forward sale stood at $84.35 billion as of end-March, compared with a net sale of $88.7 billion at the end of the previous month, the data showed. The central bank intervenes in the spot and forwards market to curb exchange rate volatility. The currency was at 85.6375 to the dollar on Wednesday. https://www.reuters.com/world/india/india-cenbank-bought-net-1436-billion-spot-forex-market-march-bulletin-shows-2025-05-22/

2025-05-22 00:08

Body of a man found in flooded home, another from flood waters Major flooding occurring in rural towns in New South Wales More than 100 schools closed, thousands without power SYDNEY, May 22 (Reuters) - Flash flooding on Australia's southeast coast has killed two people and cut off towns, isolating tens of thousands of residents, as officials on Thursday warned more downpours were expected over the next 24 hours. Major flooding hit several rural towns in the Hunter and Mid North Coast regions of New South Wales, Australia's most populous state, with most of the Mid North Coast region facing further heavy rainfall through Thursday. Sign up here. Police said the body of a 63-year-old man was found in a flooded home near Taree, more than 300 km (186 miles) north of Sydney, while another body believed to be that of a missing man aged in his 30s had been discovered in flood waters on the Mid North Coast. "We're bracing for more bad news in the next 24 hours. This natural disaster has been terrible for this community," New South Wales Premier Chris Minns said during a media briefing. "There's 140 flood warnings, 50,000 people are in the range where they have been asked to prepare to evacuate and could be isolated, and there's been 9,500 properties in the direct vicinity. So, we're far from out of the woods here." Two men and one woman have been reported missing in separate incidents, authorities said earlier. More than 100 schools were closed on Thursday, while thousands of properties remained without power. Cundletown in the Mid North Coast has been entirely cut off by floods, said Nicole Sammut, a nurse caring for 67 elderly residents at an aged care home, which is also being used as a shelter by emergency teams. "I came to work on Tuesday and haven't left," Sammut told Reuters. "We are up on a hill but behind us is all water. We are isolated. I've never seen the water this high." The Manning River in nearby Taree had exceeded a 100-year-old flood record, emergency authorities said. Sherinah Peck was evacuated at 2 a.m. on Wednesday from her farmhouse on the river, but her belongings were swept away, with some furniture later washing up on the coast. As she searched Old Bar beach on Thursday, strewn with debris and dead and lost livestock, for a treasured bicycle that belonged to her late mother, Peck was knocked over by a cow and injured, she said. "The cow was distressed - a wave came. I had to scramble up the sand," she told Reuters. MORE HEAVY RAIN A slow-moving coastal trough has dumped about four months of rain over the past two days, cutting off entire towns and stranding residents on roofs and the second floors of their homes, as rescuers struggle to access the area by boat or air. Minns apologised to people who had to wait for several hours for rescue crews, but assured efforts had been ramped up with 2,500 emergency services personnel being deployed. Twenty-two people had been rescued by helicopter, including 18 winched from flooded homes and roads, and four rescued from a bridge, NSW Police said. The helicopters have been directing more boat rescues. Australia's Bureau of Meteorology forecast that some areas could receive up to 200 mm (8 inches) of rain through Friday, triggering life-threatening flash flooding, before the weather system is expected to weaken and track south towards Sydney. https://www.reuters.com/business/environment/torrential-rain-ravages-australian-towns-thousands-brace-isolation-2025-05-22/

2025-05-21 23:40

WASHINGTON, May 21 (Reuters) - U.S. President Donald Trump said on Wednesday he will make a decision in the near future about taking mortgage finance firms Fannie Mae and Freddie Mac public, saying that he is giving "very serious consideration" to doing so. In a post on Truth Social, Trump said he will speak with Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Federal Housing Finance Director William Pulte. Sign up here. "Fannie Mae and Freddie Mac are doing very well, throwing off a lot of CASH, and the time would seem to be right," Trump said, without providing further details. Fannie and Freddie, which operate as for-profit corporations with private shareholders, were created by the U.S. Congress to expand the national home lending market by buying home loans from private lenders and repackaging them as mortgage-backed securities. When the housing market collapsed in 2008, Fannie Mae and Freddie Mac suffered overwhelming losses. To avoid catastrophic effects for the U.S. economy, they were placed in conservatorship under the newly created Federal Housing Finance Agency. Previous attempts to rid government control of the organizations, including under Trump's first term in office, have been unsuccessful. In February, Bessent said the release of Fannie and Freddie from their conservatorship would depend on mortgage rate implications. "The priority for a Fannie and Freddie release, the most important metric that I'm looking at, is any study or hint that mortgage rates would go up," Bessent said in an interview with Bloomberg. https://www.reuters.com/business/trump-says-hes-seriously-considering-taking-fannie-mae-freddie-mac-public-2025-05-21/

2025-05-21 23:15

Indexes: Dow down 1.91%, S&P 500 down 1.61%, Nasdaq down 1.41% Wolfspeed plunges after reports of potential bankruptcy Target falls after cutting annual sales forecast UnitedHealth drops after report on secret payments, HSBC downgrade NEW YORK, May 21 (Reuters) - U.S. stocks closed sharply lower on Wednesday as Treasury yields spiked on worries that U.S. government debt would swell by trillions of dollars if Congress passes President Donald Trump's proposed tax-cut bill. All three major Wall Street indexes closed with their biggest daily losses in a month. Small cap stocks also fell sharply, with the Russell 2000 index (.RUT) , opens new tab posting its biggest daily loss since April 10. Sign up here. Longer-dated Treasury yields rose after the Treasury Department's $16 billion sale of 20-year bonds met soft demand from investors. The yield on benchmark U.S. 10-year notes rose 10.8 basis points to 4.589%. During the session, the 10-year yield hit its highest since mid-February. A Congressional committee set an unusual hearing as House Republicans sought to overcome internal divisions about proposed budget cuts, including to the Medicaid health program. Nonpartisan analysts said the Republican bill could add between $3 trillion and $5 trillion to the federal government's $36.2 trillion debt. "There are any number of headlines, all of which have consequences if indeed they come to pass," said Michael Farr, chief executive officer at investment advisory firm Farr, Miller & Washington in Washington. "Many of these things are threats that fade rather quickly and markets are trying to digest what's important or what's material or what's perhaps negotiating bluster on behalf of the administration." The Dow Jones Industrial Average (.DJI) , opens new tab fell 816.80 points, or 1.91%, to 41,860.44, the S&P 500 (.SPX) , opens new tab lost 95.85 points, or 1.61%, to 5,844.61 and the Nasdaq Composite (.IXIC) , opens new tab lost 270.07 points, or 1.41%, to 18,872.64. Ten of the 11 S&P 500 sectors fell, led by real estate, healthcare, financials, utilities, consumer discretionary and technology equities. Communication services stocks gained. Google parent Alphabet (GOOGL.O) , opens new tab rose 2.7%, while Nvidia (NVDA.O) , opens new tab lost 1.9%, Apple (AAPL.O) , opens new tab fell 2.3% and Tesla (TSLA.O) , opens new tab shed 2.7%. UnitedHealth Group (UNH.N) , opens new tab dropped nearly 6% after a Guardian report said the healthcare conglomerate secretly paid nursing homes thousands of dollars in bonuses to help reduce hospital transfers for ailing residents. HSBC downgraded the stock to "reduce" from "hold". Target (TGT.N) , opens new tab fell 5.2% after slashing its annual forecast due to a pullback in discretionary spending. Wolfspeed (WOLF.N) , opens new tab plunged nearly 60% following a report that the semiconductor supplier was preparing to file for bankruptcy within weeks. The S&P 500 has climbed more than 17% from its April lows, when Trump's reciprocal tariffs roiled global markets. Morgan Stanley upgraded its stance on U.S. equities to "overweight", saying the global economy was still expanding, albeit slowly, amid policy uncertainty. Declining issues outnumbered advancers by a 5.82-to-1 ratio on the NYSE. There were 188 new highs and 104 new lows on the NYSE. The S&P 500 posted 15 new 52-week highs and 4 new lows while the Nasdaq Composite recorded 53 new highs and 92 new lows. Volume on U.S. exchanges was 19.39 billion shares, compared with the 17.5 billion average for the full session over the last 20 trading days. https://www.reuters.com/business/us-stock-futures-dip-bond-yields-climb-trumps-tax-bill-standoff-unfolds-2025-05-21/