2025-11-05 05:36

A look at the day ahead in European and global markets by Gregor Stuart Hunter A fuse lit on Wall Street turned explosive a day later in Asia, sparking the biggest losses for stocks in Japan and South Korea since April's "Liberation Day" tariff announcement. Sign up here. The Nikkei 225 (.N225) , opens new tab tumbled on Wednesday, almost 7% below a record high set the day before, while South Korea's KOSPI slumped as much as 6.2% at one point before recovering, as many high-flying tech sector stocks cratered. On the bonfire was Softbank Group (9984.T) , opens new tab, plunging as much as 14.4%, as one of Asia's biggest tech investors digested a 2% decline for the Nasdaq Composite overnight, while Samsung Electronics (005930.KS) , opens new tab fell as much as 7.8% and SK Hynix (000660.KS) , opens new tab dropped as much as 9.2%. European stocks looked set to join the selloff in early trading, with pan-region futures down 0.7%, German DAX futures falling 0.6% and FTSE futures off 0.3%. Bitcoin rebounded 1.8% to $102,104 after falling below the $100,000 mark for the first time since June, while gold was last up 0.8% at $3,962 per ounce. U.S. e-mini futures slid 0.1% after a 1.2% drop for the S&P 500 (.SPX) , opens new tab overnight on fears equity markets may have become overstretched after the CEOs of Wall Street heavyweights Morgan Stanley (MS.N) , opens new tab and Goldman Sachs (GS.N) , opens new tab questioned whether sky-high valuations can be sustained. Despite the volatility in equity markets, FX remained mostly unbothered, with the U.S. dollar index grazing a five-month high of 100.25. The yield on benchmark 10-year Treasury notes fell to a low of 4.0542% compared with its U.S. close of 4.091% on Tuesday, but has since edged upwards. Aside from markets, fireworks of a different kind were set off by Democrats in the U.S., who swept major elections in Virginia, New Jersey and New York City in the first electoral test of U.S. President Trump's latest administration. Democratic socialist Zohran Mamdani was triumphant in the race to become mayor of New York City, the first Muslim to hold the office in America's biggest city. Key developments that could influence markets on Wednesday: Earnings: Marks and Spencer Group, BMW, Novo Nordisk, Enel, Telecom Italia Economic data: Germany: Industrial Orders for September, Manufacturing O/P for September, Consumer Goods SA for September, HCOB Services and Composite PMI for October France: Industrial Output for September, HCOB Services and Composite PMI for October UK: New Passenger Cars Registration for October S&P Global Service and Composite PMI for October, Reserve Assets Total for October Debt auctions: Germany: 16-year and 19-year government debt https://www.reuters.com/world/china/global-markets-view-europe-2025-11-05/

2025-11-05 04:43

US private payrolls rebound in October Risk-off tone in Asia eases in European trading Sterling higher but remains near 7-month low ahead of BoE meeting NEW YORK, Nov 5 (Reuters) - The U.S. dollar held near a five-month high against a basket of currencies on Wednesday, as economic data assuaged concerns about the U.S. economy and the labor market, prompting investors to weigh the likelihood of another interest rate cut this year. The dollar index , which measures the buck's strength against a basket of six rival currencies, was about flat on the day at 100.16, having risen 1.5% since last Wednesday, when the Federal Reserve cut rates but cooled expectations for further easing this year. The index is at its highest since late May. Sign up here. Data on Wednesday showed U.S. private payrolls rose by 42,000 jobs in October, exceeding expectations of a 28,000 gain, according to a Reuters poll of economists. The turnaround likely does not suggest a material shift in the labor market because some industries such as professional business services shed jobs for a third straight month, but it did help soothe worries about labor market weakness. Separately, data showed the U.S. services sector activity picked up in October amid a solid increase in new orders. "The ongoing hawkish repricing in rates and currency markets was given added momentum this morning when ADP reported a stronger-than-expected rebound in private sector job creation," said Karl Schamotta, chief market strategist with payments company Corpay in Toronto. "With the preponderance of available data pointing to resilience in American labour markets, the case for an aggressive course of monetary easing is looking fairly flimsy here, and investors are growing reluctant to place big directional bets on lower yields ahead," Schamotta said. RISK OFF The dollar, which had been helped in the previous session by a bout of risk aversion sweeping global financial markets, eased from session highs on Wednesday as investors crept back into riskier currencies. The risk-sensitive Australian dollar was up 0.3% to $0.651 on Wednesday, while the safe-haven yen, which gained as much as 0.5% earlier in the session, reversed course to trade down 0.3% against the buck. That left the dollar index at an inflection point, analysts said. "A push through the low 100 level would suggest that the general USD rebound is likely to extend, potentially quite significantly over the next few weeks," FX strategists at Scotiabank said in a note. "A stall and reversal from the low 100 area, meanwhile, implies a continuation of the broad consolidation range for the DXY in place since the middle of the year," they wrote. Investors were focused on a U.S. Supreme Court hearing where justices on Wednesday raised doubts about the legality of President Donald Trump's sweeping tariffs, a case that could test presidential powers and reshape the global economy and currency markets. BANK OF ENGLAND TO MEET ON THURSDAY Sterling steadied after its recent selloff, last up 0.2% on the day on the dollar at $1.305, but still near multi-month lows on the dollar and multi-year lows on the euro. The Bank of England meets on Thursday, and with market pricing showing a roughly one-in-three chance of a 25 basis point rate cut, whatever the BoE decides could cause a knee-jerk reaction in the pound. The dollar was 0.1% lower against the Swedish crown after the Riksbank's decision to hold rates steady, as expected. Norway's central bank was also scheduled to meet on Thursday. Leading cryptocurrency bitcoin rose 4% to around $103,995, after bouncing back from earlier losses. It slid 6.1% on Tuesday to below $99,000 for the first time since June 22. https://www.reuters.com/world/asia-pacific/safe-haven-yen-dollar-shine-amid-selloff-stocks-nz-dollar-slides-2025-11-05/

2025-11-05 00:38

Typhoon Kalmaegi leaves at least 85 dead, dozens missing Cebu hardest hit, homes destroyed, residents salvage belongings Kalmaegi to strengthen over South China Sea, heads towards Vietnam CEBU, Philippines, Nov 5 (Reuters) - Residents of the central Philippines on Wednesday began scraping mud from streets and homes that survived after Typhoon Kalmaegi killed at least 85 and left dozens missing as it tore through the region. Scenes of destruction emerged in the hardest-hit province of Cebu, a major tourist hub, as floodwaters receded, revealing the scale of the damage: homes reduced to rubble, overturned vehicles, streets choked with debris, and lives upended. Sign up here. In Cebu City, 58-year-old Marlon Enriquez tried to salvage what was left of his family's belongings as he scraped off the thick mud coating his house. "This was the first time that has happened to us. I've been living here for almost 16 years and it was the first time I've experienced flooding (like this)," he said. HELICOPTER CRASH DEATHS But not everyone had homes to return to. In the neighbouring city of Talisay, 38-year-old Eilene Oken walked through what used to be her neighbourhood, only to find her home completely destroyed. "We worked and saved for this for years, then in an instant, it was all gone," she said, her voice breaking. But Oken said she remains grateful because her family, including her two daughters, were unharmed. Among the 85 fatalities were six military personnel whose helicopter crashed in Agusan del Sur on the island of Mindanao during a humanitarian mission. The disaster agency reported 75 people missing, and 17 injured. The devastation from Kalmaegi, locally named Tino, comes just over a month after a magnitude 6.9 earthquake struck northern Cebu, killing dozens and displacing thousands. STORM EXPECTED TO GAIN STRENGTH The storm submerged homes and caused widespread flooding and power outages. More than 200,000 people were evacuated across the Visayas region, including parts of southern Luzon and northern Mindanao. Kalmaegi, the 20th storm to hit the Philippines, is forecast to gain strength while over the South China Sea. It is on its way to Vietnam where preparations are underway ahead of the typhoon's expected landfall on Friday. China has warned of a "catastrophic wave process" in the South China Sea and activated maritime disaster emergency response in its southernmost province of Hainan, state broadcaster CCTV said. The report on Wednesday did not specify which coastal areas or parts of the sea would be affected, but China claims a number of islands in the vast waters, including the Spratly Islands and the Paracel Islands which it says are administered by Hainan's provincial government. In September, Super Typhoon Ragasa swept across the northern Philippines, forcing schools and government offices to shut down as it brought fierce winds and torrential rain. https://www.reuters.com/business/environment/typhoon-kalmaegi-kills-least-58-philippines-heads-toward-vietnam-2025-11-05/

2025-11-05 00:33

One member saw need to hold to avoid surprising markets Another saw timing ripe for hike from Japan economic perspective Two members unsuccessfully proposed a hike to 0.75% in September Some warned of cost of waiting, favour hike at regular intervals BOJ kept rate steady in Sept, Oct; focus on Dec meeting TOKYO, Nov 5 (Reuters) - A growing number of policymakers at the Bank of Japan believed that conditions were falling into place for interest rates to rise, with two members advocating an immediate increase, minutes of the central bank's September meeting showed on Wednesday. At the two-day meeting through September 19, the nine-member board kept interest rates steady at 0.5%, turning down proposals made by two hawkish members to raise borrowing costs to 0.75%. Sign up here. In a sign the focus of debate was shifting towards the exact timing of the next rate hike, several members said it would not be too late to await "a little more hard data," the minutes showed. "Although conditions needed for raising rates were gradually being met, hiking rates at this point would come as a surprise to the market and should be avoided," another member was quoted as saying. A third member cited uncertainty over the U.S. economic slowdown as a reason to hold off hiking rates, but added it might be time to consider raising rates again "judging solely from the perspective of Japan's economic conditions," the minutes showed. The minutes highlight a growing momentum within the board towards resuming rate hikes as concerns recede that higher U.S. tariffs could derail Japan's fragile economy. While the BOJ kept rates steady again at a subsequent meeting in October, Governor Kazuo Ueda sent the strongest signal to date that a hike was possible as soon as December. The minutes revealed that board members debated the pros and cons of waiting, as members weighed downside risks to growth and inflationary pressure from stubbornly high food costs. One member called for raising rates at "somewhat regular intervals", stating that a wide range of information would be available such as corporate first-half earnings, full-year earnings outlook and the BOJ's "tankan" business survey. Another member said that while waiting longer to raise rates would give the BOJ additional insight into the U.S. economic outlook, the cost of doing so would "gradually increase", the minutes showed. Doves, however, warned of Japan's long experience with deflation as a reason to go slow with one pointing to the fact that inflation expectations have yet to be anchored at the central bank's 2% target, the minutes showed. "As long as inflation expectations were considered to be not well anchored, it was appropriate for the BOJ to maintain accommodative financial conditions as much as possible," the member was quoted as saying. Last year, the BOJ exited a decade-long, massive stimulus programme. It raised rates to 0.5% in January on the view Japan was close to durably hitting its 2% inflation target. It has kept interest rates steady since then. Core consumer inflation has exceeded the BOJ's target for more than three years, but Ueda has stressed the need to tread cautiously until underlying inflation - or price moves excluding one-off factors - stabilises around 2% backed by sustained wage gains. https://www.reuters.com/world/asia-pacific/boj-board-debated-pros-cons-rate-hike-pause-september-minutes-shows-2025-11-05/

2025-11-05 00:26

SAO PAULO, Nov 4 (Reuters) - Brazilian lender Itau Unibanco on Tuesday reported third-quarter net recurring profit in line with analysts' estimates and raised its projection for 2025 net interest income with the market. Itau, Latin America's largest private lender by total assets, reported an 11.9 billion reais ($2.20 billion) net recurring profit for the July-September period, matching the expectations of analysts polled by LSEG. Sign up here. Return on equity stood at 23.3%, increasing 0.6 percentage points from the same period a year earlier, but stable from the previous quarter. "Once again, the bank demonstrated its capacity to maintain an already high profitability," Citi analysts led by Gustavo Schroden wrote to clients, noting an "overall solid bottom line." The lender revised upward its yearly projection for net interest income with the market to between 3 billion reais ($555.2 million) and 3.5 billion reais ($647.7 million), from a previous estimate of between 1 billion and 3 billion reais. "This revision mostly reflects the more positive dynamics of the trading desk's accumulated results compared to the original expectation," Itau said, adding all other 2025 projections remain unchanged. Itau's total credit portfolio reached 1.4 trillion reais in the quarter, rising 6.4% year-on-year, while Itau's net interest income increased 10.1% to 31.4 billion reais. The over-90-day delinquency rate came in at 1.9%, stable quarter-on-quarter, while the rate between 15 and 90 days rose 0.3 percentage points to 2%, with Itau citing the impact of an unnamed large client. Itau has not been releasing the year-over-year comparison for delinquency rates following a regulatory change on provisions that took effect in Brazil in January. Itau's rivals Santander Brasil and Bradesco released their third-quarter earnings last week, while Banco do Brasil (BBAS3.SA) , opens new tab and Nubank (NU.N) , opens new tab are set to publish results next week. ($1 = 5.4039 reais) https://www.reuters.com/business/finance/brazils-itau-hikes-net-interest-income-outlook-posts-line-recurring-profit-2025-11-04/

2025-11-05 00:02

LONDON, Nov 5 (Reuters) - British finance minister Rachel Reeves needs to embark on major tax rises in her November 26 budget or risk a repeat of the loss of market confidence that cost former prime minister Liz Truss her job, a leading think-tank said on Wednesday. The National Institute of Economic and Social Research said Reeves should build 30 billion pounds ($40 billion) of margin for error against economic shocks, up from 10 billion at her last budget. Sign up here. Combined with a likely 20-30-billion pound downgrade to Britain's fiscal outlook by the government's Office for Budget Responsibility, that makes a fiscal consolidation of 50 billion pounds necessary, it added. As Reeves had set out long-term spending plans in June, the bulk of this would need to come from tax rises. "It's a vital message that all the MPs (members of parliament) need to understand, that a large adjustment needs to happen on the fiscal side," NIESR director David Aikman said. "The risk is that markets react badly to whatever comes out in the budget later this month and..., rather than the credibility dividend we could see happening, we see the opposite of that, something more like the Liz Truss moment," he told reporters. TRUSS BUDGET TRIGGERED SPIKE IN GOVERNMENT BORROWING COSTS Reeves has repeatedly contrasted her approach with that of Truss, whose Conservative government's unfunded plans for tax cuts announced in September 2022 triggered a surge in government borrowing costs that required the Bank of England to step in. While British long-term borrowing costs fell to a seven-month low on Tuesday, over the past year they have been sensitive to concerns that Reeves only aims to meet her budget goals by a narrow margin and could be knocked off course by economic shocks. In a speech on Tuesday, Reeves - whose centre-left Labour Party came to power in July 2024 - renewed her criticism of the Conservatives' economic legacy, saying "we will all have to contribute" at her next budget. Speculation has been widespread in British media and financial markets that Reeves is preparing to break Labour's pre-election promise not to raise income tax. A 50-billion-pound tax rise would require a 5 percentage point increase in income tax rates, which have not risen for most British workers since the 1970s. NIESR's estimate of the size of Britain's fiscal hole, and the amount of headroom Reeves should build against future shocks, is at the top end of economists' forecasts. ($1 = 0.7451 pounds) https://www.reuters.com/world/uk/uk-needs-big-tax-rises-avoid-second-liz-truss-episode-think-tank-says-2025-11-05/