2025-10-31 05:33

A look at the day ahead in European and global markets from Ankur Banerjee A whirlwind October is set to end with investors unsure of the global monetary policy path in the near term, while a trade truce between the world's top two economies calmed market nerves even as a mixed bag of mega-cap earnings kept momentum in check. Sign up here. The action-packed week started with signs of cooling tensions between the U.S. and China. It also had the Federal Reserve delivering an expected rate cut, but with a warning from Chair Jerome Powell that this cut might be the last one in 2025. That helped firm up the dollar, which is on pace for a nearly 2% gain for the month. The yen, on the other hand, was loitering around its lowest level since February at just under 154 per dollar, spurring some verbal jawboning by Tokyo officials. The Bank of Japan held rates steady on Thursday as expected, but markets interpreted comments from Governor Kazuo Ueda as dovish even though he dropped hints that a rate hike remains on the table. The slump in the yen, down nearly 4% in October, has been a boost for the Nikkei (.N225) , opens new tab, which breezed past another record high and is on pace for a 16% surge in the month, its strongest monthly performance since January 1994. The "Takaichi trade" in all its glory. South Korea's Kospi (.KS11) , opens new tab, the best-performing stock market in the world this year, is on course for a 20% rise in October, the biggest surge since January 2001. Much of the enthusiasm in the stock market this year has been about artificial intelligence. The earnings season has sketched out a mixed picture so far, with investors desperately seeking a clearer sense of how the massive - and still growing - capex binge around AI will boost future earnings. Amazon (AMZN.O) , opens new tab shares soared as cloud revenue rose at its fastest pace in nearly three years, lifting Nasdaq futures and setting up a strong Halloween for tech stocks. The online retailer benefited as businesses continue to spend relentlessly on AI software development. Watch out for a boost from Apple (AAPL.O) , opens new tab as well after the iPhone maker gave forecasts for holiday quarter revenue that surpassed Wall Street expectations. Key developments that could influence markets on Friday: Economic events: October inflation data for euro zone and France, September retail sales for Germany https://www.reuters.com/world/china/global-markets-view-europe-2025-10-31/

2025-10-31 05:32

MUMBAI, Oct 31 (Reuters) - The Indian rupee fell on Friday but managed to hold above its all-time low on the back of intermittent dollar sales by state-run banks that also helped the currency end the month on a quiet note. The rupee had rallied to a peak of 87.6250 earlier this month following heavy-handed intervention by the central bank, but has since shed those gains to once again hover close to its record low of 88.80, hit in late-September. Sign up here. The currency ended Friday's session slightly lower at 88.7650 and was little changed month-on-month. India's benchmark equity indexes, the BSE Sensex (.BSESN) , opens new tab and Nifty 50 (.NSEI) , opens new tab, were both down 0.4% each, tracking weakness in Asian peers, but were set to end October over 4.5% higher - their best monthly gain since March. While traders expect the Reserve Bank of India to continue keeping a lid on rupee volatility, the broad bias is geared towards depreciation in the absence of clear progress on a U.S.-India trade deal. A pact between New Delhi and Washington is "very near," a senior government official said last week. Elsewhere, signs of cooling U.S.-China trade tensions helped support Asian currencies this week, even as a hawkish tilt in the U.S. Federal Reserve's commentary boosted the dollar and U.S. bond yields. "Measures of FX volatility have fallen to fresh year to date lows this week highlighting that current market conditions remain supportive for FX carry trades," MUFG said in a note. Carry trades involve borrowing low interest currencies to buy currencies with better yields. The dollar index was last at 99.54, on course to end the month 1.8% higher, while Asian currencies were mostly stronger. The rupee was down 1% for the week. Traders will keep a close watch on portfolio flows related to initial public offerings next week that could help the rupee find modest relief. https://www.reuters.com/world/india/rupee-likely-inch-higher-asian-cues-rbi-support-hopes-2025-10-31/

2025-10-31 05:06

BOJ holds rates, disappoints traders hoping for hawkish stance Fed dampens expectations for December rate cut, dollar gains Euro and sterling fall as ECB and BOE maintain rates NEW YORK, Oct 31 (Reuters) - The Japanese yen was heading for a monthly loss against the U.S. dollar on Friday after the Bank of Japan disappointed traders hoping for a more hawkish stance on future rate hikes, while the Federal Reserve dampened expectations for a December rate cut. The yen clawed back some losses after Japanese Finance Minister Satsuki Katayama said the government has been monitoring foreign exchange movements with a high sense of urgency as the yen weakens. Sign up here. Core inflation in Tokyo also accelerated in October and stayed above the central bank's 2% target, data showed on Friday. But disappointment after BOJ Governor Kazuo Ueda adopted a less hawkish tone on future rate hikes than hoped held the yen in check. The Japanese central bank kept rates on hold at 0.5%. Noel Dixon, global macro strategist at State Street Global Markets, said he remains constructive on the yen, adding that “the BOJ ultimately is still going to have to normalize policy at least to 1%.” “From a multi-year perspective, wages are definitely higher than they've been … and the fiscal spending is only going to exacerbate that prospect,” Dixon said. Japan’s newly elected leader, Sanae Takaichi, is expected to pursue more fiscally expansive policies to boost economic growth. The yen was last flat on the day and heading for its worst month since July, with the dollar up 4.2% against the currency this month. The dollar index rose 0.35% to 99.82 and is on track for a 2% monthly gain, its best since July. DIVIDED FEDERAL RESERVE The greenback has been boosted by optimism over the economic outlook even as the labor market weakens, while Fed policymakers remain concerned about inflation. Fed Chair Jerome Powell said on Wednesday that a policy divide within the U.S. central bank and a lack of federal government data may put another interest rate cut out of reach this year. “It sounded like he was just trying to give himself some optionality,” said Dixon. The Fed cut rates on Wednesday, as expected, though two policymakers dissented. Governor Stephen Miran again called for a deeper reduction in borrowing costs, while Kansas City Fed President Jeffrey Schmid favored no cut. Schmid said on Friday that he dissented out of concern that continued high inflation and signs of price pressures spreading in the economy could raise doubts about the central bank's commitment to its 2% inflation target. Dallas Fed President Lorie Logan said on Friday that the Fed should not have cut interest rates this week and Cleveland Fed President Beth Hammack said she also opposed the rate cut. Atlanta Fed President Raphael Bostic said on Friday a December rate cut is not locked in. Fed funds futures traders are pricing in a 63% probability of a cut in December, down from 93% a week ago, according to the CME Group’s FedWatch Tool. Dixon said he expects the dollar index to consolidate under technical resistance at around 102, before gaining next year when growth is likely to accelerate. “From a positioning standpoint, it's clear that investors, at least from a real money perspective, are maxed out from a short perspective, so I think it's difficult to short it,” he added. EURO, STERLING DROP The euro dropped 0.37% to $1.1522 after the European Central Bank kept interest rates unchanged at 2% for the third meeting in a row on Thursday and repeated that policy was in a "good place" as economic risks recede. The single currency has fallen 1.8% this month, as the dollar gains broadly. Sterling fell 0.14% to $1.3132, the lowest since April 14, as political pressures grew surrounding British Finance Minister Rachel Reeves. Against the euro, the pound reached its weakest since May 2023. The pound is heading for a 2.3% drop this month, while gilt yields have dropped on concern over what Reeves' November budget might mean for businesses, households and overall economic activity. Traders are also pricing in rising odds of a Bank of England interest rate cut, though the British central bank is viewed as most likely keeping rates on hold when it meets next week. "While we think GBP sentiment has turned overly bearish, we have long argued against fading the move ahead of the Budget, not to mention the tail risk of the BoE cutting rates next week," Bank of America analysts said in a report. In cryptocurrencies, bitcoin gained 1.34% to $108,972. https://www.reuters.com/world/asia-pacific/dollar-three-month-high-markets-puzzle-over-outlook-2025-10-31/

2025-10-31 02:21

TOKYO, Oct 31 (Reuters) - Japanese Minister of Finance Satsuki Katayama on Friday said the government has been monitoring foreign exchange movement "with a high sense of urgency", her strongest comment on currency since assuming the role last week as the yen sits at a nine-month low. "We have been recently seeing one-sided, rapid moves," Katayama said at a regular news conference. "The government has been monitoring, with a high sense of urgency, excessive fluctuations and disorderly movements on the currency market, including those driven by speculators." Sign up here. The yen on Thursday touched 154.45 against the U.S. dollar - the weakest since mid-February - after the Bank of Japan emerged from its policy meeting with a less hawkish tone than traders expected, while the greenback received a boost after U.S. Federal Reserve Chair Jerome Powell said a December interest rate cut was not guaranteed. Katayama's foreign exchange comments since her appointment were previously limited to general principles such as that rate movement should be stable and reflect economic fundamentals. Asked about the central bank maintaining its interest rate on Thursday, Katayama said the decision was "extremely reasonable in light of current circumstances". Regarding U.S. Treasury Secretary Scott Bessent saying in an X post that Japan's government should give the central bank scope to raise interest rates, Katayama said Bessent "didn't say anything that would be beyond what we ourselves could do". "Secretary Bessent is someone who is well-versed in Japan's systems," she said, pointing out that the central bank is independent and entrusted with the means of adjusting monetary policy. "About two weeks prior, he had exchanged views with BOJ Governor (Kazuo) Ueda, so I imagine he understood Governor Ueda's stance and probably anticipated that the BOJ wouldn't take action this time," Katayama said. https://www.reuters.com/world/asia-pacific/japan-finance-minister-warns-against-forex-volatility-after-yen-plunge-2025-10-31/

2025-10-31 01:00

Oct 30 (Reuters) - U.S. Federal Reserve Vice Chair for Supervision Michelle Bowman plans to reorganize the agency's supervision and regulation division and cut the unit's staff by about 30%, according to an email sent to staff Thursday. The reduction will be through attrition, retirements and voluntary separation incentives, according to the email seen by Reuters. Bloomberg News first reported on the planned staffing cuts. Sign up here. The Fed said earlier in the year that on a larger scale it plans to shrink its workforce by about 10% over the coming years, bringing the U.S. central bank in line with President Donald Trump's broader efforts to streamline the federal government. Powell had directed the Fed leadership to find "incremental" ways to trim operations, with a goal of shrinking the Fed's roughly 24,000-person headcount nationwide. The move also comes as the Fed moves to adjust the U.S. central bank's supervisory framework for large banks. https://www.reuters.com/sustainability/boards-policy-regulation/feds-bowman-moves-reduce-bank-supervision-unit-by-about-30-bloomberg-news-2025-10-30/

2025-10-31 00:55

Oct 31 (Reuters) - Australia's Hastings Technology Metals (HAS.AX) , opens new tab said on Friday its Yangibana joint venture project in Western Australia has agreed to negotiate for a potential offtake deal with North American rare-earths processing company Ucore Rare Metals Inc. The Yangibana rare-earths and niobium project is a joint venture with Australian billionaire Andrew Forrest's Wyloo Metals, which holds a 60% stake, and rare-earths developer Hastings, which owns the remaining 40% through its subsidiary, Yangibana Jubilee. Sign up here. "The joint evaluation of a downstream Hydromet plant in the U.S. demonstrates the efforts by Wyloo, Ucore and Hastings to access the financing and commercial opportunities arising from the recently announced rare-earths deal by the U.S. and Australian governments to jointly support "ready to go" projects," said Hastings CEO Vince Catania. The potential deal covers up to 37,000 tons a year of Yangibana's high-grade rare-earth concentrate, while both parties assess the feasibility of building a downstream hydrometallurgy plant in Louisiana. The parties will work towards executing a definitive agreement, which is expected to be finalised after June 2026, Hastings said in a statement. Shares of the Australian rare-earths developer rose as much as 19.3% to A$0.68, set for their strongest session in more than a week, if the current momentum persists. https://www.reuters.com/business/australias-hastings-negotiate-offtake-deal-with-ucore-yangibana-project-2025-10-31/