2025-02-06 01:46
Feb 5 (Reuters) - U.S. Federal Reserve Vice Chair Philip Jefferson on Wednesday said he is content to keep the central bank's policy rate in its current position until policymakers get a better sense of the net effects of the Trump administration's policies on tariffs, immigration, deregulation and taxes. Even after 100 basis points of rate cuts in the latter part of 2024, Jefferson told students at Swarthmore College that Fed policy remains restrictive and is exerting downward pressure on inflation. "We can be patient and wait to see the net effect of any policy changes by the current administration," he said. Sign up here. https://www.reuters.com/markets/us/feds-jefferson-no-rush-reduce-level-policy-restraint-2025-02-06/
2025-02-06 00:43
SYDNEY, Feb 6 (Reuters) - Australia's surplus on trade goods narrowed sharply in December as a surge in imports of capital equipment outweighed gains in iron ore exports, data showed on Thursday. The Australian Bureau of Statistics reported the surplus on goods narrowed to A$5.1 billion ($3.20 billion) in December, from a revised A$6.8 billion in November, well under market forecasts of A$7.0 billion. Exports rose 1.1% on iron ore and rural goods, while imports jumped 5.9% with capital goods, petroleum and consumption goods all seeing sizeable increases. ($1 = 1.5921 Australian dollars) Sign up here. https://www.reuters.com/markets/australia-dec-goods-surplus-shrinks-a51-bln-imports-surge-2025-02-06/
2025-02-06 00:40
51% of traders cite inflation and tariffs as top market concerns Trump's tariff threats caused market volatility, impacting currencies Volatility seen as biggest challenge, unexpected timing noted by traders NEW YORK, Feb 5 (Reuters) - Traders across the globe project that tariffs and inflation will have the biggest impact on global markets in 2025 as they brace for volatility, an annual survey , opens new tab of institutional trading clients by JPMorgan Chase (JPM.N) , opens new tab showed on Wednesday. The bank said 51% of its 4,233 respondents named inflation and tariffs together as the top potential developments likely to dominate markets this year. Last year, inflation was also a top concern, but only for 27% of the interviewees. U.S. President Donald Trump's threats to impose tariffs on foreign-imported goods and others aimed at specific sectors or countries already have whipsawed markets this year. Major stock indexes fell on Monday after Trump announced on Saturday hefty new tariffs of 25% on imports from Mexico and Canada, and 10% on China. The following day, they rose after the president delayed tariffs on Mexico and Canada. Many market participants see the tariff policy as inflationary. “At the beginning of the week, we saw traders engaging in significantly more activity, attempting to rebalance their portfolios due to movements of 1 to 2 percent in individual currencies such as the Canadian dollar, the Mexican peso, and the offshore Chinese yuan,” said Chi Nzelu, global head of fixed income, currencies and commodities e-Trading at JPMorgan. On the flip side, fewer traders believe that a potential recession could move markets this year: 7% versus 18% in 2024. When asked about the biggest challenge in 2025, volatility was the topic most mentioned by the traders, repeating a 2024 concern. This year, 41% of respondents cited it as the top challenge, while 28% of the respondents mentioned it in the 2024 survey. “What distinguishes this year is the somewhat unexpected timing of volatility. Unlike in the past, when volatility was tied to scheduled events like elections or nonfarm payroll data, we're seeing more sudden fluctuations in response to news headlines around the administration’s plans, leading to knee-jerk reactions in the marketplace,” said Eddie Wen, global head of digital markets at JPMorgan. JPMorgan's e-Trading report also asked traders about their biggest concerns in terms of market structure, with access to liquidity, regulatory change and market data access and costs leading the pack. Among the trends captured by the bank's survey is the increase of electronic trading, which traders predict will increase among all products traded next year, from emerging market rates to commodities and credit spread. Sign up here. https://www.reuters.com/markets/traders-see-tariffs-inflation-2025s-biggest-market-movers-survey-shows-2025-02-06/
2025-02-06 00:26
FMC plunges 33.5% on lower quarterly revenue forecast Alphabet falls 7.3% after downbeat earnings, heavy AI spend Indexes up: Dow 0.71%, S&P 0.39%, Nasdaq 0.19% Feb 5 (Reuters) - All three major stock indexes closed higher on Wednesday, rebounding from declines earlier in the session as investors brushed off disappointing Alphabet earnings and weighed the prospect of future interest rate cuts from the U.S. Federal Reserve. Google-parent Alphabet (GOOGL.O) , opens new tab dropped 7.3% after posting downbeat cloud revenue growth on Tuesday and earmarking a higher-than-expected $75 billion investment for its AI buildout this year. Some AI-related stocks showed signs of recovery after being rocked last week following the soaring popularity of a low-cost Chinese artificial intelligence model developed by startup DeepSeek. Nvidia (NVDA.O) , opens new tab, which registered one of the biggest losses, rose 5.4% on Wednesday. Broadcom (AVGO.O) , opens new tab also rose 4.3%. "Ultimately, demand is not going away for AI even with the DeepSeek news. They’re all going to have to spend more money and that’s what the AI story has been. This is a fairly long cycle story," said Rob Haworth, senior investment strategist at U.S. Bank Asset Management. Advanced Micro Devices (AMD.O) , opens new tab, meanwhile, fell 6.3% after CEO Lisa Su said the company's current-quarter data center sales - a proxy for its AI revenue - would drop about 7% from the previous quarter. On the data front, investors are looking ahead to the January nonfarm payrolls report, expected to be released on Friday. U.S. services sector activity unexpectedly slowed in January amid cooling demand, helping curb price growth, a report from the Institute for Supply Management showed on Wednesday. "There are some concerns that the Fed may need to ease faster, that the economy is slowing, but that’s actually positive news for the markets because they’re looking for those Fed rate cuts," Haworth said. The next Federal Open Markets Committee meeting is in March, and while only 16.5% of traders expect a rate cut then, a majority of traders anticipate a cut in June, according to CME's FedWatch Tool. Richmond Fed president Thomas Barkin said the Fed was still leaning towards more rate cuts this year, but flagged uncertainty around the impact of new tariffs, immigration, regulations and other initiatives from U.S. President Donald Trump's administration. The Dow Jones Industrial Average (.DJI) , opens new tab rose 317.24 points, or 0.71%, to 44,873.28, the S&P 500 (.SPX) , opens new tab gained 23.60 points, or 0.39%, to 6,061.48 and the Nasdaq Composite (.IXIC) , opens new tab gained 38.32 points, or 0.19%, to 19,692.33. Eight of the S&P 500 sectors traded higher, with real estate (.SPLRCR) , opens new tab leading the gains while communication services (.SPLRCL) , opens new tab fell almost 3%. Shares of Apple (AAPL.O) , opens new tab slipped 0.1% as Bloomberg News reported that China's antitrust regulator was preparing for a possible investigation of the iPhone maker. Uber Technologies (UBER.N) , opens new tab dropped 7.6% after the ride-hailing company forecast current-quarter bookings below estimates. Fiserv (FI.N) , opens new tab advanced 7.1% as the payments firm beat estimates for fourth-quarter profit, helped by strong demand in its banking and payments processing unit. Markets also await developments on the tariffs front after Trump said on Tuesday he was in no hurry to speak to Chinese President Xi Jinping to try to defuse a new trade war between the countries. The Cboe Volatility Index (.VIX) , opens new tab, known as Wall Street's fear gauge, dropped 7.9% on Wednesday to 15.85. In corporate movers, FMC Corp (FMC.N) , opens new tab plunged 33.5% after the agrichemicals producer forecast first-quarter revenue below estimates. Johnson Controls (JCI.N) , opens new tab jumped 11.3% as the building solutions company named Joakim Weidemanis as chief executive officer and lifted its 2025 profit forecast. Advancing issues outnumbered decliners by a 2.74-to-1 ratio on the New York Stock Exchange. There were 169 new highs and 46 new lows on the NYSE. On the Nasdaq, 2,935 stocks rose and 1,422 fell as advancing issues outnumbered decliners by a 2.06-to-1 ratio. Volume on U.S. exchanges was 13.85 billion shares, compared with the 15.32 billion average for the full session over the last 20 trading days. Sign up here. https://www.reuters.com/markets/us/nasdaq-futures-lag-alphabet-amd-slide-after-bleak-forecasts-2025-02-05/
2025-02-06 00:12
BoE expected to cut Bank Rate to 4.5% from 4.75% New forecasts may show weaker growth, higher inflation British central bank has been more cautious than others Markets expect at least 2 further rate cuts in 2025 Focus on signals from BoE about outlook for monetary policy LONDON, Feb 6 (Reuters) - The Bank of England looks set to cut interest rates on Thursday for only the third time since just after the start of the COVID-19 pandemic in 2020, as it juggles the need to help the sluggish economy with still-strong inflation pressures. Hit by worries about finance minister Rachel Reeves' tax increases for employers, the risk of a global trade war led by U.S. President Donald Trump and rising costs, the British economy has barely grown since mid-2024. But price pressures remain hot, limiting what Governor Andrew Bailey and his colleagues can say on Thursday about their plans for 2025. The BoE's benchmark Bank Rate stands at 4.75%, the highest among big rich economies. Thursday's widely expected quarter-point cut would bring it to the same level as in Norway and close to the U.S. Federal Reserve's 4.25-4.5% range. The European Central Bank has reduced rates five times since mid-2024 compared with the BoE's two cuts, reflecting the weaker inflation dangers in the euro zone. At its last meeting in December, the BoE's Monetary Policy Committee voted 6-3 to keep rates on hold. SIGNS OF STAGNATION Matt Swannell, chief economic advisor to the EY ITEM Club, a forecasting organisation, said growing signs of stagnation in Britain's economy were likely to weigh on more of the BoE interest rate-setters. "That does not take away from the longer-term dilemma facing the BoE, as its latest set of projections are likely to show that growth will be weaker but near-term inflation will be higher than when it met three months ago," Swannell said. The BoE will publish its latest projections for the economy as well as its decision on interest rates at 1200 GMT, 30 minutes before Bailey and other senior officials are due to hold a press conference. Investors are pricing at least three quarter-point cuts by the end of 2025, while most economists polled by Reuters last month predicted a total of four. That would be good news for Prime Minister Keir Starmer and Reeves, who risk being knocked off course to meet their fiscal rules by high borrowing costs and the slowing economy, potentially requiring more tax increases or spending cuts to get back on track. However, the BoE is also worried about price pressures. Surveys have shown consumers increasing their expectations for inflation and companies planning to raise prices in the year ahead. Wage growth unexpectedly sped up in late 2024. "The MPC's cutting cycle is entering a more difficult phase," economists at Citi said in a note to clients. "A reversal in energy prices alongside a sharp increase in labour costs suggests a renewed pickup in inflation – we think to 3.5% in April. This is even as the labour market deteriorates." Inflation stood at 2.5% in December, above the BoE's 2% target, and some analysts have forecast it will jump to 3% in January on the back of higher domestic fuel costs. Sign up here. https://www.reuters.com/world/uk/bank-england-poised-cut-rates-inflation-worries-linger-2025-02-06/
2025-02-06 00:11
Feb 5 (Reuters) - TotalEnergies (TTEF.PA) , opens new tab rejected opportunities to become a long-term customer of Venture Global LNG's U.S. terminals because it did not trust the company, CEO Patrick Pouyanné told Reuters on Wednesday. Venture Global (VG.N) , opens new tab has become the most valuable U.S. LNG company after a blockbuster initial public offering last month, but has been roiled by legal challenges from huge clients like BP (BP.L) , opens new tab and Shell (SHEL.L) , opens new tab for taking years to honor supply contracts as it commissions its projects. "I don't want to deal with these guys, because of what they are doing. ... I don't want to be in the middle of a dispute with my friends, with Shell and BP," Pouyanné said. He said Venture Global had approached Total, initially to see if it would be interested in a long-term supply contract for liquefied natural gas from the Calcasieu Pass terminal in Louisiana. Pouyanné said he had rebuffed that offer out of a lack of trust. "The price of the LNG was so low," he said. "I said to my colleague, How is it possible to pay $1 less than the rest of the market? What is the trick?" He said Total later rejected the opportunity to take cargoes from Plaquemines, Venture Global's second and more recent terminal - also in Louisiana - which is still under construction, because of the controversy around the slow commissioning at Calcasieu Pass. He said, however, that Total is prepared to buy Venture Global's spot cargoes if they are cheap enough. Venture Global said it was surprised by Pouyanné's comments. "We have great respect for Total and are surprised to hear this. We continue to honor our contracts and execute the construction of our facilities safely and at a record pace," a Venture Global spokesperson said. Venture Global said it expects to move from commissioning to commercial operations at the Calcasieu Pass project by the end of the first quarter of 2025. That plant has been producing and shipping LNG for almost three years. But it has been selling cargoes onto the relatively lucrative spot market instead of supplying contracted customers like BP, Shell, Repsol (REP.MC) , opens new tab, Orlen (PKN.WA) , opens new tab and Edison (EDNn.MI) , opens new tab, arguing the plant is not yet fully operational. As of December 2024 the project had earned up to $8.6 billion in operating profits, according to SEC filings. The company's Plaquemines plant is only partly constructed, but has already begun to process large quantities of gas. On Wednesday, it was on track to pull about 1.3 billion cubic feet, according to data from financial firm LSEG. The U.S. is the world's largest exporter of LNG, and Venture Global its second largest LNG producer behind Cheniere (LNG.N) , opens new tab. The ramp-up at Plaquemines is expected to help the U.S. maintain its No. 1 status in 2025. Sign up here. https://www.reuters.com/business/energy/total-ceo-says-company-rejected-venture-global-lng-supplier-over-lack-trust-2025-02-06/
