2025-03-05 05:37
A look at the day ahead in European and global markets from Kevin Buckland With so much going on in markets right now, it's hard to know where to look. The raging Trump-led trade war - branded "dumb" by Canadian Prime Minister Justin Trudeau - certainly has investors' attention, keeping sentiment subdued across asset classes. For instance, one index of global equities has lost some 2% so far this week and Brent crude is plumbing six-month lows. But it's not as simple as that, with Wall Street poised to open higher following a sell-off on Tuesday, and futures indicating even bigger gains for European bourses. The parties hoping to form Germany's next government have given reason for optimism, with landmark agreements to create a 500 billion euro ($530 billion) infrastructure fund and loosen fiscal rules to boost defence spending and revitalise growth. In a similar vein, the European Commission has proposed borrowing up to 150 billion euros to lend to EU governments under a rearmament plan. The backdrop of course is the volatile negotiations for peace in Ukraine, with Washington seeming to pull away from allies in Europe and to draw closer to Moscow. But rapprochement suddenly looks closer, with U.S. President Donald Trump sounding very satisfied with a reconciliatory letter from Ukrainian President Volodymyr Zelenskiy after their extraordinary clash in the Oval Office last week. Trump revealed the letter in his first address to Congress following his return to office, in which he touched on the breadth of his many executive orders merely six weeks since inauguration. In what analysts said might be a cause for concern, Trump advocated scrapping a bipartisan law giving $52.7 billion in subsidies for semiconductor manufacturing, though initial reaction in markets was barely noticeable. Meanwhile, investors have judged tit-for-tat tariff countermeasures to have been relatively tame so far. Chinese policymakers are girding for any trade war with a promise to unlock more fiscal stimulus. That comes from the just-begun annual session of the National People's Congress, which runs until Tuesday, leaving lots of time for more details to emerge. Developments that could influence markets on Wednesday: ($1 = 0.9418 euros) Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2025-03-05/
2025-03-05 04:50
Trump reiterates tax cut commitment U.S. should "get rid of" CHIPS Act, Trump tells Congress Pledge to impose reciprocal tariffs concerns investors March 4 (Reuters) - Investors took comfort in U.S. President Donald Trump's commitment to cutting taxes in a major address to Congress but voiced concerns about his continued focus on tariffs and a proposal to ditch a semiconductor chip manufacturing subsidy. The president's remarks come at a pivotal point for markets, as the post-election wave of exuberance and excitement has given way to anxiety that Trump's policies are weighing on economic growth and contributing to inflation. Trump urged Congress to extend his 2017 tax cuts on Tuesday, a proposal which investors have welcomed. Trump, however, said he would impose reciprocal tariffs on April 2, a move that could roil financial markets. "The volatility in the market around tariffs is likely to continue, because it doesn't look like there's going to be a change in policy or the U.S. is ready to back off of these tariffs," said Anthony Saglimbene, chief market strategist at Ameriprise Financial, who said the fact that Trump mentioned tax cuts again is a positive for markets. Major U.S. stock indexes fell in a volatile session on Tuesday after Trump's new 25% tariffs on imports from Mexico and Canada took effect, along with a doubling of duties on Chinese goods to 20%. The benchmark S&P 500 (.SPX) , opens new tab has now given up its gains for the year and is in negative territory for 2025. The tech-heavy Nasdaq Composite (.IXIC) , opens new tab at one point on Tuesday was down more than 10% from its mid-December peak, before recovering somewhat. During Trump's speech the dollar and U.S. stock futures recouped a little of their losses. "Cutting taxes ... will incentivize business spending as long as corporations believe the consumer will be there to spend," said Michael Schulman, chief investment officer at Running Point Capital Advisors. "Investor reaction should overall be positive since disposable income may rise when these policies are passed." Art Hogan, strategist at B. Riley Wealth, said the one concerning aspect of the president's comments was on tariffs. Another concern to some was that Trump said on Tuesday that U.S. lawmakers should get rid of a landmark 2022 bipartisan law to give $52.7 billion in subsidies for semiconductor chips manufacturing and production and use the proceeds to pay debt. "The CHIPS Act pullback is a significant shift," said Charu Chanana, chief investment strategist at Saxo. If followed through, that stance could impact investment plans, supply chain resilience, and U.S. competitiveness in chip manufacturing, she said. "Companies that have been counting on government support for domestic production might reconsider expansion plans, while foreign rivals could gain an edge. Market reaction will depend on whether this is political posturing or a genuine policy shift." Sign up here. https://www.reuters.com/markets/wealth/investors-brace-more-volatility-with-trump-set-address-congress-2025-03-04/
2025-03-05 04:42
MUMBAI, March 5 (Reuters) - The Indian rupee gained on Wednesday on broad-based interbank dollar sales and after the central bank's firm defence of 87.40-87.50 levels in recent sessions helped keep a lid on speculative bets against the currency. The rupee was at 87.1550 against the U.S. dollar as of 10:00 a.m. IST, up 0.1% on the day. The dollar index was at 105.6, hovering close to a three-month low hit on Tuesday amid worries about a slowdown in the U.S. economy and the uncertain inflation-growth impact of U.S. trade tariffs. Following U.S. President Trump's 25% tariffs on Canada and Mexico and a cumulative 20% charge on Chinese imports, Canada and China announced counter-levies with Mexico expected to do so by later this week. "Markets remain increasingly concerned that higher tariffs could also slow the U.S. economy, leading to lower U.S. yields and a weaker U.S. dollar," MUFG Bank said in a note. Amid the global market volatility sparked by Trump's tariffs, the Reserve Bank of India has been stepping in routinely to aid the rupee with trades pointing to dollar sales by state-run banks near 87.40-87.50 levels. A "somewhat firm resistance (for USD/INR) has formed in that zone and should hold unless there is a major risk off event in the near-term," a trader at a state-run bank said. The RBI has stepped in to support the currency as persistent outflows from local stocks and expectations of rate cuts have sparked a near 2% decline in the rupee this year, making it one of Asia's worst performing currencies. Foreign investors have net sold nearly $15 billion of local stocks year-to-date. While India's benchmark equity index, Nifty 50 (.NSEI) , opens new tab, was in the green on the day, it has declined nearly 6% over the year so far. Sign up here. https://www.reuters.com/markets/currencies/rupee-strengthens-following-rbis-firm-defence-8740-8750-territory-2025-03-05/
2025-03-05 03:30
SINGAPORE, March 5 (Reuters) - Iron ore futures faltered on Wednesday, pressured by tit-for-tat tariffs between the United States and top metals consumer China, outweighing optimism about improved demand for Chinese steel. The most-traded May iron ore contract on China's Dalian Commodity Exchange (DCE) closed 1.34% lower to 771 yuan ($106.18) a metric ton. The benchmark April iron ore on the Singapore Exchange was down 1.42% at $99.4 a ton, as of 0705 GMT. U.S. President Donald Trump's doubling of duties on Chinese goods to 20% took effect on Tuesday, prompting swift retaliation from Beijing and spurring trade war concerns. Beijing hiked import levies covering $21 billion worth of American agricultural and food products, and suspended the soybean import licenses of three U.S. firms and halted log imports. "Sentiment was also impacted by the prospect of further tariffs," ANZ analysts said. U.S. tariffs on steel and aluminium are due to kick in on March 12. China unlocked more fiscal stimulus on Wednesday, promising greater efforts to support consumption and cushion the impact of an escalating trade war with the United States, with specific measures including a significant expansion in Beijing's trade-in scheme launched last year. China said it would restructure its giant steel industry through output cuts, although it did not announce any target in its most recent intervention to address an overcapacity in the sector. "Both supply and demand of imported iron ore in China are predicted to strengthen in March, usually a month when steel consumption in the country is robust," Chinese consultancy Mysteel said. "This should keep prices of the steelmaking material firm." Most steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar dipped 0.7%, hot-rolled coil fell 0.56%, wire rod eased nearly 0.8%, while stainless steel posted a modest gain of 0.38%. Other steelmaking ingredients on the DCE declined, with coking coal and coke losing 3.32% and 2.66%, respectively. ($1 = 7.2614 Chinese yuan) Sign up here. https://www.reuters.com/markets/commodities/iron-ore-dips-sino-us-tit-for-tat-tariffs-stoke-trade-war-tensions-2025-03-05/
2025-03-05 03:05
MUMBAI, March 5 (Reuters) - The Indian rupee's intraday direction on Wednesday will be dictated by moves in the Asia FX space amid news on U.S. President Donald Trump's tariffs. The 1-month non-deliverable forward indicated that the rupee will open largely unchanged to the U.S. dollar from 87.2650 in the previous session. Asian currencies were mixed on Wednesday, contending with headlines on U.S. tariffs. The U.S. and Canadian officials are in talks about reducing or lifting tariffs that Trump imposed and a deal may be reached on Wednesday, the Wall Street Journal reported. Meanwhile, the New York Times reported that Trump has signalled privately he will stick with the tariffs. The reports follow comments made by U.S. Commerce Secretary Howard Lutnick on Tuesday that Trump may reach a middle ground with Canada and Mexico on tariffs. "You will have all these headlines on what Trump will now do.. and you need to be nimble on your positions," a currency trader at a bank said. "Keeping all the tariff noise aside, the direction of travel on (dollar/rupee pair) is on the upside. Looking to buy into dips to near 87.00-87.10 level, if we reach there." The rupee will be supported by the dollar's struggles amid worries over the U.S. growth outlook. The dollar index has dropped by 2% over Monday and Tuesday and is hovering at a three-month low. In response to mounting worries over U.S. growth, investors are betting that the Federal Reserve will be forced to deliver more rate cuts this year than previously expected. "From speculating the Fed might hike rates just a couple of weeks ago to now pricing in three 25 basis points rate cuts this year and a 28% chance of a fourth 25 bps cut. Perceived US recession risks are rising," ANZ Bank said in a note. KEY INDICATORS: ** One-month non-deliverable rupee forward at 87.47; onshore one-month forward premium at 20 paise ** Dollar index at 105.68 ** Brent crude futures down 0.4% at $70.7 per barrel ** Ten-year U.S. note yield at 4.26% ** As per NSDL data, foreign investors sold a net $533.9mln worth of Indian shares on March 3 ** NSDL data shows foreign investors bought a net $164.2mln worth of Indian bonds on March 3 Sign up here. https://www.reuters.com/markets/currencies/rupee-alongside-asian-peers-sway-us-tariff-news-flow-2025-03-05/
2025-03-05 00:06
Ford and General Motors fall Target drops on bleak FY forecast Walgreens jumps on reports of take-private deal Indexes down: Dow -1.55%; S&P 500 -1.22%; Nasdaq -0.35% NEW YORK, March 4 (Reuters) - U.S. stocks ended lower on Tuesday, with the tech-heavy Nasdaq veering near correction territory, as trade tensions escalated following U.S. President Donald Trump's new tariffs on Canada, Mexico and China. The 25% tariffs on imports from Mexico and Canada, along with doubled duties on Chinese goods, took effect on Tuesday. China and Canada retaliated while Mexican President Claudia Sheinbaum vowed to respond likewise, without giving details. The Nasdaq Composite ended lower after veering into correction territory during the session but pared losses in choppy trading. The index closed down 9.3% from its record closing high on December 16. "Equity valuations have been very elevated and there's been yellow flags all over the horizon given moves to cut government spending," said Ben McMillan, chief investment officer at IDX Insights in Tampa, Florida. "Now on top of that, we have all this rhetoric around tariffs." Shares in financials (.SPSY) , opens new tab and industrials (.SPLRCI) , opens new tab were the biggest losers among the benchmark S&P 500's 11 main sectors. Citigroup (C.N) , opens new tab and JPMorgan Chase & Co (JPM.N) , opens new tab fell 6.2% and nearly 4%, respectively, sending the bigger banks index (.SPXBK) , opens new tab down 4.7%. The CBOE market volatility index (.VIX) , opens new tab rose 3.20% to its highest since December 20. "The fear here is that it's going to slow (economic) growth," said Adam Sarhan, CEO of 50 Park Investments in New York. "And when you have a slowdown in economic conditions, it's a situation where banks specifically make less money because fewer goods and services are traveling through the economy." The Dow Jones Industrial Average (.DJI) , opens new tab fell 670.25 points, or 1.55%, to 42,520.99, the S&P 500 (.SPX) , opens new tab lost 71.57 points, or 1.22%, to 5,778.15 and the Nasdaq Composite (.IXIC) , opens new tab lost 65.03 points, or 0.35%, to 18,285.16. Car makers Ford (F.N) , opens new tab and General Motors (GM.N) , opens new tab, which have vast supply chains across North America, fell 2.9% and 4.6%, respectively. The domestically focused Russell 2000 index (.RUT) , opens new tab dropped 1%. Wall Street is really concerned, McMillan said. "The likelihood of tariffs will lead to higher prices and therefore lower spending." Target (TGT.N) , opens new tab shares fell 3% after the retailer forecast full-year comparable sales below estimates. Best Buy (BBY.N) , opens new tab slumped 13.3% after the electronics retailer issued a downbeat forecast, while Walgreens (WBA.O) , opens new tab jumped as a report hinted that the pharmacy chain is closing in on a take-private deal by Sycamore Partners. Declining issues outnumbered advancers by a 2.97-to-1 ratio on the NYSE. There were 86 new highs and 450 new lows on the NYSE. The S&P 500 posted 41 new 52-week highs and 43 new lows while the Nasdaq Composite recorded 35 new highs and 595 new lows. Total volume across U.S. exchanges was 18.42 billion shares, compared with the 20-day moving average of 15.87 billion shares. Sign up here. https://www.reuters.com/markets/us/futures-steady-after-wall-st-selloff-trade-war-worries-2025-03-04/
