2025-04-22 12:55
April 22 (Reuters) - The Trump administration's on again, off again approach to tariffs has whipsawed global markets, prompting investors to seek shelter in safe haven assets such as gold. At the same time, the raging trade war with China and the possibility of a U.S. recession have spurred talks of overseas investors reducing their dollar and U.S. debt positions - also considered traditional hedges against market turmoil. Sign up here. Here's a look at major economies/central banks and their holdings of gold and Treasuries in recent months: GOLD Sustained demand from central banks has created a reliable floor under gold prices, supporting bullion's historic rally this year. Spot gold prices surged as high as $3,500.05 per ounce on Tuesday, surpassing the $3,500/oz milestone for the first time. "With all the geopolitical tensions, central banks do want to diversify away from the dollar and have something that won't be sanctioned ... gold is one of those asset classes that could fit the bill," Marex analyst Edward Meir said. The following is a table of gold holdings of major central banks: All figures are in tonnes. * China's central bank gold holding as of the end of March 2025 is 2292.38 tonnes. Source: International Monetary Fund, People's Bank of China TREASURIES The two top owners of U.S. Treasuries - Japan and China - increased their U.S. debt holdings in February, when they braced for U.S. President Donald Trump's erratic trade policies. Foreign holdings of U.S. Treasuries rose 3.4% to $8.817 trillion in February, data from the Treasury Department showed. "When you have an excess amount of money, like all these entities do, you have to do something with that money. And what they would do was buy debt, buy Treasury," said Adam Sarhan, chief executive of 50 Park Investments. "But when you have a trade war going on, the dynamic changes. I can almost guarantee you that data can be much different." Following is a table of major foreign holdings of U.S. Treasuries: The figures below are in billions of U.S. dollars: Source: U.S. Department of Treasury https://www.reuters.com/markets/safe-haven-play-economies-holdings-gold-vs-treasuries-2025-04-22/
2025-04-22 12:37
Hedge funds tend to shift to defensive stocks when fear recession Sell-off of discretionary stocks centered on US, Europe Leisure sector hard hit LONDON, April 22 (Reuters) - Hedge funds are fleeing the stocks of companies that provide discretionary items and services consumers want but do not need, in a sign they anticipate an economic downturn, a Goldman Sachs (GS.N) , opens new tab prime brokerage note showed. Hedge funds dumped long positions last week in consumer discretionary and it is the most net sold stock sector this year, said the note to clients seen by Reuters on Tuesday and published Friday. A short position bets that an asset value will decline. Sign up here. "Hedge funds dumping consumer discretionary stocks strongly suggests they’re bracing for economic trouble, likely a recession," Bruno Schneller, managing director at Erlen Capital Management, said. U.S. tariff uncertainty has rocked world markets and increased fears of economic recession. Morgan Stanley analysts this month stopped short of calling a recession, but said the gap between a "sluggish growth outlook and a downturn has narrowed," Reuters reported. A recession is technically defined by economists as two consecutive quarters of negative GDP growth. Erlen Capital's Schneller said hedge funds also track other indicators such as bond market volatility and consumer confidence. A fall in consumer confidence can deter people from spending, hampering economic growth. The U.S. Conference Board's consumer confidence index hit a four-year low in March. Hedge funds' "aggressive selling, particularly in February and March 2025, aligns with a souring economic outlook and negative wealth effects hitting high-end consumers," Schneller said. He added the selling indicates hedge funds may shift into defensive assets like consumer staples, or utilities and away from stocks that thrive in growth periods. "Tariff-driven bond market disruptions and spiking junk bond spreads, the worst since 2008, amplify fears of a consumer-led economic slowdown by late 2025," he said. Hedge funds' selling centered on North America and Europe, with retail and specialty retail stores, hotels, restaurants and leisure companies, autos and textiles, hardest hit, the Goldman Sachs note showed. https://www.reuters.com/business/finance/hedge-flow-hedge-funds-2025-selling-focuses-discretionary-stocks-goldman-data-2025-04-22/
2025-04-22 12:22
NEW DELHI, April 22 (Reuters) - India's smaller steel mills plan to delay job cuts and other measures such as trimming output, executives said, after the government imposed a temporary tariff to protect local producers from a surge in cheap imports, chiefly from China. On Monday, India, the world's second-biggest producer of crude steel, imposed a 12% temporary tariff, or provisional safeguard duty, on some steel imports for 200 days. Sign up here. The Directorate of General Remedies, which is still conducting its investigation, is expected to submit its final findings by August-September, following which the government will decide the rate and duration of the tariff, Steel Secretary Sandeep Poundrik said at a news conference on Tuesday. "We have put the decision to cut jobs on hold and we will see how demand fares," said Adarsh Garg, chairman and managing director at northern Indian state Punjab's Jogindra Group. "The industry was in losses and this duty might bring relief and the opportunity to raise prices," Garg said. In the western city of Pune, Enlight Metals was seeing an increased order flow from the early hours of Tuesday, director Vedant Goel said, adding that rising demand would help it retain external labour set to be removed due to cheaper imports. New Delhi's tariffs are primarily aimed at China, the second-biggest exporter of steel to India behind South Korea in 2024/25. "There are various measures which the government is taking to ensure that domestic steel industry is not harmed by low-cost dumping," Poundrik said. Beijing's shipments may slow, traders and analysts said. "China's steel exports to India in 2025 might return to a level seen three years ago, around 1 million tons, or a third of its exports to India last year," said Xu Xiangchun, Beijing-based director of content at consultancy Mysteel. India was a net importer of finished steel for a second straight year in 2024/25, with shipments reaching a nine-year high of 9.5 million metric tons, according to provisional government data. Restricting import channels into India "will place increasing pressure on Chinese officials to move faster in mandating domestic steel production capacity reforms to balance excess supply with deteriorating local and global demand," said Atilla Widnell, managing director at Navigate Commodities. The industry is also set to increase production in India to meet growing demand, executives said. "India has added 14 million tons of new steel capacity since January 2024, which when ramped up can meet the gap left by restricted imports," said Shankhadeep Mukherjee, principal steel analyst at London-headquartered CRU Group. "We also forecast that India will again become net exporter of steel in 2025, reclaiming a position last seen in 2022." https://www.reuters.com/business/world-at-work/indias-small-steel-mills-pause-job-cuts-after-measures-curb-chinese-imports-2025-04-22/
2025-04-22 12:17
NEW DELHI, April 22 (Reuters) - India and Saudi Arabia are exploring joint projects in refineries and petrochemicals, Indian Prime Minister Narendra Modi told Arab News in an interview, as he began a two-day visit to the country on Tuesday. "We are now working on feasibility studies for electricity grid interconnectivity between India and Saudi Arabia and the wider region," he added. Sign up here. https://www.reuters.com/business/energy/india-saudi-arabia-exploring-joint-refinery-petrochemical-projects-modi-says-2025-04-22/
2025-04-22 12:08
April 22 (Reuters) - The European Central Bank could hit its 2% inflation target in the coming few months but the broader economic outlook is far too uncertain for the bank to provide any meaningful guidance about its next policy move, ECB policymaker Peter Kazimir said. The ECB cut interest rates for the seventh time in a year on Thursday but offered few signals about future moves, even as it warned that erratic U.S. trade policy is bound to weigh on growth and risked heightened economic volatility. Sign up here. "Inflation is approaching its target, and I am confident that we will reach it within the next few months," Kazimir, Slovakia's central bank governor, said in a blog post. The bank earlier predicted that inflation would only get to 2% in early 2026 so Kazimir's comments suggest that price growth could fall quicker in the current environment than last forecast. Kazimir also argued that rate cuts have now put the ECB's 2.25% deposit rate in a range that no longer restricts economic growth and it could be considered to be near a neutral stance. Kazimir cautioned against trying to predict where policy is going because of risks and "today's volatile and often chaotic conditions." "We are operating in a fast-shifting environment," Kazimir said. "Uncertainty dominates the economic landscape." "Heightened global trade tensions, particularly those stemming from U.S. tariff policies, have introduced significant ambiguity into the system, eroding confidence," he added. Markets still price at least two more rate cuts this year and see a 50% chance of a third move, suggesting that the deposit rate could end 2025 at 1.50% or 1.75%. Kazimir, however, insisted that decisions would be based on incoming data and the ECB was not on a preset course. "June's decision will depend heavily on new data, updated forecasts and risk assessment," Kazimir said. "This reinforces our commitment to flexibility and agility." https://www.reuters.com/business/finance/ecb-close-hitting-inflation-target-kazimir-says-2025-04-22/
2025-04-22 11:48
April 22 (Reuters) - RTX (RTX.N) , opens new tab reported a better than expected first-quarter profit and reaffirmed its annual outlook on Tuesday after strong demand for jet repair and maintenance services helped to offset weaker sales in the company's defense unit. Despite reaffirming 2025 guidance, RTX shares sank 4% in pre-market trading after the company said tariffs could hurt profit by about $850 million over the year. The figure assumed that in 2025 customers did not change buying habits, Canada, Mexico, steel and aluminum tariffs remained at 25%, China tariffs remained at 145% and global reciprocal tariffs remained at 10%. Sign up here. The aerospace and defense company has benefited from steady demand for parts and maintenance as airlines fly aging fleets amid jet production delays, even as broader market uncertainty grows due to U.S. President Donald Trump's trade war and ongoing supply chain challenges. "The current environment is clearly very dynamic, but our company is well positioned to perform operationally and our teams remain focused on executing on our commitments and delivering our robust backlog," CEO Chris Calio said. On an adjusted basis, it reported a first-quarter profit per share of $1.47, compared with analysts' estimates of $1.35, according to data compiled by LSEG. Collins Aerospace, RTX's aerospace and avionics arm, posted an 8% rise in revenue that touched $7.22 billion in the quarter, while the Pratt and Whitney unit, which makes engines for Airbus' (AIR.PA) , opens new tab A320neo jets, saw sales rise 14%. Pratt is currently in the process of conducting an inspection drive for potentially flawed components in its Geared Turbofan engines that has led to the grounding of hundreds of planes in recent months. Raytheon, RTX's defense unit, reported a 5% fall in sales year-over-year, primarily driven by the divestiture of its cybersecurity, intelligence and services business completed last year. Defense contractors, continuing to benefit from surging demand amid heightened geopolitical tensions, may also get a potential boost from Trump's review on military equipment export rules that he is seeking to ease. Some experts have suggested a higher defense budget supports backlog at contractors, providing stability in revenue for key government programs. Arlington, Virginia-based RTX reported total revenue of $20.31 billion for the quarter ended March 31, higher than analysts' expectations of $19.79 billion. https://www.reuters.com/business/aerospace-defense/rtx-posts-higher-quarterly-profit-strong-demand-jet-services-2025-04-22/
