2025-02-07 06:32

Dollar up after US payrolls report U.S. job growth slowed in January Trump plans to announce reciprocal tariffs next week NEW YORK, Feb 7 (Reuters) - The dollar rose in choppy trading on Friday after data showed that U.S. job growth slowed in January but that the unemployment rate edged down to 4.0%, giving the U.S. Federal Reserve cover to hold off cutting interest rates until at least June. The U.S. currency was also boosted by comments from President Donald Trump that he plans to announce reciprocal tariffs on many countries next week, without specifying which countries. The dollar index , which measures the U.S. currency against the yen, sterling and other peers, was last up 0.353% at 108.04. It was on track for a weekly fall after investor fears about a global trade war receded. Nonfarm payrolls increased by 143,000 jobs last month after rising by an upwardly revised 307,000 in December, the Labor Department's Bureau of Labor Statistics said in its closely watched employment report. Economists had expected the survey to show 170,000 jobs added. "We don't really have a trend in nonfarm payrolls," said Joseph Trevisani, senior analyst at FX Street. "We don't have a declining trend, and we don't really have a strengthening trend. It's pretty much par for the course, so I don't think you're going to get a lot of market movement out of this." Investor nerves about global trade wars returned on Friday after Trump pledged to impose more tariffs as part of a broad effort that he said could also help solve U.S. budget problems. Trump made the announcement during a meeting with visiting Japanese Prime Minister Shigeru Ishiba. He said auto tariffs remained on the table amid reports that the White House was weighing potential exemptions. Britain's pound was down 0.2% at $1.2413 after falling 0.54% on Thursday when the BoE lowered rates to 4.5% and said the UK economy would grow just 0.75% this year, half the previous forecast. The pound fell as much as 1.1% just after the decision but regained some ground when BoE Governor Andrew Bailey told Bloomberg that markets should not read too much into a switch by some policymakers to vote for deeper rate cuts. The euro was last down 0.49% at 1.0333. YEN STRENGTH The dollar fell 0.09 % against the yen to 151.365 after falling below 151 yen for the first time since Dec. 10 in early Asian trade on bets that the BOJ will raise rates more than previously expected this year, supported by wage data earlier this week. Adding to the higher rate expectations were comments by Bank of Japan board member Naoki Tamura, one of the board's most hawkish members, who said on Thursday the central bank must raise rates to at least 1% in the latter half of fiscal 2025. "(Tamura) was a little bit more hawkish than before ... I think there is less chance that the BOJ will delay a rate hike until September," said Mizuho's Yamamoto. The early days of the Trump administration have kept investors on edge. Trump this week suspended planned tariff measures against Mexico and Canada at the last minute, but imposed additional 10% levies on imports from China, which quickly announced measures of its own on U.S. imports. Meanwhile, U.S. Treasury Secretary Scott Bessent's pledge to contain yields on 10-year Treasury notes signalled that the Fed may be out of the administration's direct line of sight. Bessent said in an interview with Fox Business on Wednesday that, while Trump wants lower interest rates, he will not ask the Fed to cut rates, and that he and the president were intently focused on the 10-year Treasury yield. Sign up here. https://www.reuters.com/markets/currencies/yen-marches-higher-rate-hike-bets-us-jobs-data-focus-2025-02-07/

2025-02-07 06:29

Feb 7 (Reuters) - Swiss nylon maker EMS Chemie (EMSN.S) , opens new tab said on Friday it had taken steps to mitigate any impact of "punitive" U.S. tariffs on imports from Europe, as it posted higher net operating income. EMS Chemie, whose major markets are Germany and China, already has two sites in the United States, where it generated around 20% of its net sales in 2023. "The consequences of the economic policy measures announced by U.S. President Trump are unpredictable and will have a destabilizing effect, particularly on global supply chains", EMS Chemie said in its results statement. "We will remain unaffected," EMS Chemie said, adding it had set up trade routes for raw materials and sales products ahead of any potential international trade barriers. Europe's chemical industry, which has long suffered from weak demand and high production costs, faces uncertainty as European leaders seek to dissuade Trump from imposing tariffs. "Production in the U.S. has now been increased, probably through production movement to the U.S. sites," Vontobel analyst Sibylle Bischofberger said of EMS Chemie's statement. As a result, it produces nearly all of its products on U.S. sites, which would avoid the announced tariffs, she added. EMS Chemie generates about half of its sales in the automotive market, which has recently struggled due to sluggish demand, rising costs and intensifying electric vehicle (EV)competition, particularly from Chinese manufacturers. It supplies Chinese EV giant BYD (002594.SZ) , opens new tab, as it makes the lightweight polymer car parts used in electric vehicles, which typically weigh more due to heavy batteries. "It will impact them negatively with lower sales, they cannot escape weak markets," Bischofberger said. EMS Chemie, which was not immediately available for comment, forecast 2025 net sales below 2024's level, impacted by currency effects, and earnings before interest and tax (EBIT) to be slightly above 2024's level. It said EBIT for 2024 was 539 million Swiss francs, while net sales fell 5.4% to 2.07 billion francs due to a strengthening Swiss currency, despite higher relative volumes. Shares in EMS Chemie, which proposed a dividend of 17.25 Swiss francs, were 0.9% higher at 641.5 francs at 1010 GMT. ($1 = 0.9063 Swiss francs) Sign up here. https://www.reuters.com/markets/commodities/ems-chemie-posts-strong-2024-net-operating-income-growth-2025-02-07/

2025-02-07 06:19

Feb 7 (Reuters) - The Reserve Bank of India (RBI) reduced its key repo rate on Friday for the first time since May 2020, aiming to provide stimulus to the sluggish economy, which is projected to grow at its slowest pace in four years during the current fiscal year. The Monetary Policy Committee, which consists of three RBI and three external members, cut the repo rate (INREPO=ECI) , opens new tab by 25 basis points, as expected, to 6.25%, after having kept the rate unchanged for 11 consecutive policy meetings. COMMENTARY SHISHIR BAIJAL, CHAIRMAN AND MANAGING DIRECTOR, KNIGHT FRANK INDIA, MUMBAI "We hope that interest rate cuts will be passed on to consumers, making home loan rates more attractive. This, along with the previously announced tax incentives, should stimulate residential demand across various price brackets, especially in the under 5-million-rupee category, which has seen a persistent drop in demand." RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE "The RBI's monetary policy committee voted unanimously for the rate cut, adopting a cautious view on growth, while winter disinflation in food is expected to mitigate risks to price stability. Recent rupee depreciation was not a hurdle for the policymakers, with intervention tools likely to be tapped to defend the currency. "This positions the RBI alongside regional central banks, which have prioritized domestic concerns, viewing volatility in their currency and bond markets as largely influenced by global factors. "The MPC refrained from an outright dovish signal by maintaining a "neutral" stance." ANIRUDH GARG, PARTNER AND FUND MANAGER AT INVASSET PMS, MUMBAI "For the auto sector, the rate cut could have a positive impact by making vehicle loans more affordable, which may encourage consumer demand, particularly in the passenger and two-wheeler segments. "Additionally, improved liquidity conditions could support credit flow to businesses, benefiting automakers and dealers. "However, factors such as higher import costs due to currency depreciation and potential inflationary pressures could influence pricing and profitability in the industry." SACHCHIDANAND SHUKLA, GROUP CHIEF ECONOMIST, LARSEN & TOUBRO, MUMBAI "Given the long and variable lags, the rate reduction avoids the risk of falling further behind the curve and buys some growth insurance in hugely uncertain and volatile global environment." SAKSHI GUPTA, PRINCIPAL ECONOMIST, HDFC BANK, GURUGRAM "The governor emphasised that the central bank's approach to regulations will be balanced, considering both the benefits and costs of any regulations, while allowing sufficient time for implementation. "However, a clear communication on the implementation of the new LCR (Liquidity Coverage Ratio) norms remained absent. "We expect the central bank to front-load its rate cuts and deliver another rate cut in the April policy." DEVENDRA KUMAR PANT, CHIEF ECONOMIST, INDIA RATINGS AND RESEARCH, GURUGRAM "The rationale for the rate cut is a sustained decline in retail inflation, based on the assumption of no supply-side shocks and a favourable rabi output. The temperature in January and February has been higher than normal and this may have an impact on the rabi output and inflation. "The RBI has reiterated its stance of provision of durable liquidity. The impact on growth would be more from the decline in inflation rather than the rate cut." GARIMA KAPOOR, ECONOMIST, INSTITUTIONAL EQUITIES, ELARA SECURITIES, MUMBAI "The policy tone was neutral, but the governor's remarks on the macro-prudential draft guidelines suggest that the current RBI dispensation is likely to take a more pragmatic approach to the implementation. "The assurance of liquidity provision was also comforting and suggests that measures are likely to continue through OMOs and swaps." GAURA SENGUPTA, INDIA ECONOMIST, IDFC FIRST BANK, MUMBAI "The decision signals a gradual shift towards less-restrictive monetary policy, as inflation is expected to align with target levels. "We see limited downside risk to the RBI GDP estimate of 6.7% for FY26. On the liquidity front, though no new measures were announced, we expect the RBI to continue to infuse durable liquidity via OMO purchase and USDINR buy-sell swap. As per our estimate, the RBI will need to infuse nearly 3 trillion rupees ($34.30 billion) of durable liquidity this year to ensure effective transmission and support credit growth. "We expect the rate-cut cycle to be shallow and a 25-bps reduction in April." DEEPAK AGRAWAL, CIO DEBT AT KOTAK MAHINDRA AMC, MUMBAI "The central bank has guided to ensure sufficient durable liquidity in the system and will take pro-active measures for the same. The rate cut, combined with assurances on liquidity, should help boost consumption and revive growth. "We maintain our expectations of an incremental 25 bps rate cut until June 2025." ANUJ PURI, CHAIRMAN, ANAROCK GROUP, MUMBAI "The RBI's decision to reduce the repo rate by 25 bps, combined with the recent taxation benefits announced in the union budget, is expected to positively impact the housing sector. "As such, it is undeniably a major boost to the homebuyers, particularly for affordable housing buyers. Many first-time homebuyers who had been hesitating to take the plunge are likely to make their move now as home loan rates will reduce - as long as banks pass on the key benefits to buyers. "That said, the rate cut may be less effective by rising property prices if inflation remains as high as it is now. Also, it remains to be seen if banks pass on the full benefit to borrowers in a timely and seamless manner." KUNAL KUNDU, INDIA ECONOMIST, SOCIETE GENERALE, BENGALURU "In light of the budget announcement on lower tax burden on households, a rate cut was appropriate to support domestic demand, which is clearly on a weaker footing. "With both domestic and global factors impacting India's economic activity, a rate cut now can also act as an insurance against the economic impact of continued uncertainty. "That said, we do not see it as a panacea that can push the growth rate meaningfully upwards. Central to this are multiple reform measures, some of which we had hoped to see in the budget but were notably absent." BOMAN IRANI, PRESIDENT, CONFEDERATION OF REAL ESTATE DEVELOPERS' ASSOCIATIONS OF INDIA, MUMBAI "The RBI's repo rate cut complements recent budget measures designed to boost spending and stimulate economic growth. This monetary policy was imperative, especially after the recent 50-basis-point cut in the Cash Reserve Ratio (CRR), which has already injected significant liquidity into the banking system. "While the current cut may have a limited direct impact, we anticipate that a further rate reduction in the next MPC meeting will provide stronger impetus to overall demand, accelerating housing sales, particularly in the mid-income and affordable segments." UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI "The MPC's decision to cut repo rate by 25 bps and maintain a "neutral" stance is completely in line with our expectations. The softening growth and inflation outlook has provided room to monetary easing. The RBI will need to monitor liquidity conditions more closely to ensure liquidity stance remains in sync with the policy stance." Sign up here. https://www.reuters.com/markets/rates-bonds/view-indias-central-bank-cuts-repo-rate-first-time-nearly-5-years-2025-02-07/

2025-02-07 05:36

A look at the day ahead in European and global markets from Ankur Banejee An action-packed week in the markets is heading for a more subdued finish as traders await U.S. payrolls data, although the lingering threat of a trade war kept investors hesitant about placing major bets. Stock trading in Asia was mostly directionless with the notable exception of China, where an AI-fuelled rally sent Hong Kong's Hang Seng (.HSI) , opens new tab surging to a three-month high on Friday and its strongest weekly gain in almost four months. Investors are betting the artificial intelligence advance of home-grown startup DeepSeek will lead to a boom in the sector, while for now mostly shrugging off the trade war saga that kicked off at the start of the week. U.S. President Donald Trump imposed and then suspended tariffs on Mexico and Canada early this week but his duties on Chinese goods went ahead. Beijing followed with retaliatory measures, seen by most investors as the opening gambit of long, drawn-out negotiations. But with little news on whether and when Trump and Chinese President Xi Jinping would talk, investors are focusing on the broader economic picture and company earnings. A social media post could change all that, but for now things are looking bright for European stock bourses. They have had a stellar start to the year as investors seize on the valuation gaps between relatively cheap European stocks and some of their foreign counterparts. The pan-European STOXX 600 index (.STOXX) , opens new tab, which closed at a record high on Thursday, has risen 8% since the start of 2025, while benchmark indexes in Germany (.GDAXI) , opens new tab and France (.FCHI) , opens new tab are up about 10%. The S&P 500 (.SPX) , opens new tab is up 3% for the same period. On Friday, though, futures indicate a subdued open for European stocks, suggesting a bit of profit-taking might be on the cards. The main focus during U.S. trading hours will be the nonfarm payrolls data, which is expected to show an increase of 170,000 jobs last month after surging 256,000 in December, according to a Reuters poll of economists. Slow U.S. job growth in January is unlikely to be enough to prod the Federal Reserve to resume interest rate cuts before the end of the first half. Markets are fully pricing in the next 25 basis point cut in July. Key developments that could influence markets on Friday: German December industrial and trade data UK housing price data for January U.S. payrolls data for January Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2025-02-07/

2025-02-07 05:35

Philippine buyers renegotiate due to steep price drop Rice prices fall to multi-year low after India eased curbs Philippines declares food security emergency SINGAPORE, Feb 7 (Reuters) - Rice importers in the Philippines have delayed purchases of around 350,000 metric tons of Vietnamese rice and have been renegotiating deals, after a steep decline in prices, two trade sources with direct knowledge said. Rice prices in key exporting countries have dropped to about two-year lows after India, by far the biggest supplier of the grain, eased restrictions on overseas sales last year following a bumper harvest. "There has been a big drop in Vietnamese rice prices in the last few weeks," said one Singapore-based senior executive at an international grain trading company. "Now buyers are not willing to take the expensive rice." Rice importers had signed deals at around $620 per metric ton, free on board, for Vietnamese fragrant rice late last year but now the price has dropped to around $500 per ton, the two trade sources said. "This is happening just before the new harvest starts in Vietnam," said the second trading source at an international rice trading firm in Bangkok. "It is big jolt to Vietnamese exporters as some of these deals could turn into defaults." Bumper rice harvests in Vietnam, the world's No. 3 exporter after India and Thailand, will provide additional stock for international markets. "The crop is looking good, it bigger than last year. Rice prices are likely to face more pressure," the Singapore-trader said. Earlier this week, the Philippines, among the world's largest rice importers, declared a food security emergency to bring down the cost of rice, which it said has stayed elevated despite lower global prices and a reduction in rice tariffs last year. Indian prices this week hit their lowest since June 2023 while Vietnamese prices have slid to the weakest since September 2022. The rice market had rallied in 2023 after India, by far the world's biggest exporter, curbed overseas sales following poor monsoon rains. But rice inventories in India surged to a record high at the start of December, reaching more than five times the government's target and potentially boosting exports. Sign up here. https://www.reuters.com/markets/commodities/philippine-rice-buyers-delay-350000-tons-vietnamese-cargoes-sources-2025-02-07/

2025-02-07 05:34

US non-farm payroll data due later in the day Bullion hit a record high of $2,882.16 on Wednesday Silver, platinum head for weekly gains Feb 7 (Reuters) - Gold firmed on Friday and was on track for a sixth consecutive week of gains on a trade war-fuelled safe-haven demand, while attention turned to the upcoming U.S. non-farm payrolls report for cues on the Federal Reserve's interest rate path. Spot gold gained 0.3% to $2,865.36 per ounce as of 1212 GMT, rising more than 2% this week. Bullion hit an all-time high of $2,882.16 on Wednesday. U.S. gold futures added 0.4% to $2,889.50. The new administration appears committed to using tariffs, casting a dark shadow over global economic growth prospects, further enhancing the appeal of safe-haven gold, said Ricardo Evangelista, senior analyst at ActivTrades. Earlier this week, U.S. President Donald Trump kick started a trade war as he followed through on his threat to impose duties on China. Meanwhile, Trump granted Mexico and Canada a one-month reprieve. Market's focus is now on non-farm payrolls report due later in the day, with a Reuters poll predicting that U.S. job growth likely slowed in January, dropping to 170,000 new jobs from 256,000 in December 2024. "I anticipate the data will confirm a slowdown in the U.S. labour market... this scenario would reinforce dovish expectations for the Fed and provide support for gold prices," Evangelista said. A strong economy with full employment and easing inflation allows the Fed to cut rates, but tariff uncertainties call for caution, Chicago Fed President Austan Goolsbee said. Gold's physical demand in India and China was muted due to record prices. Perth Mint's January gold sales hit a 10-month low, while silver sales plunged 61% from the previous month. Spot silver rose 0.1% to $32.23 per ounce and platinum added 0.2% to $987.10. While palladium fell 1.04% to $968.44. Silver and platinum were headed for weekly gains, while palladium was down 3.9% for the week. Sign up here. https://www.reuters.com/markets/commodities/gold-set-sixth-successive-weekly-gain-us-payrolls-report-looms-2025-02-07/