2025-12-16 10:50
FTSE 100 down 0.3%; FTSE 250 flat UK labour market shows strain, unemployment rises to 5.1% BoE expected to cut interest rates amid economic concerns Dec 16 (Reuters) - London's FTSE 100 slipped on Tuesday, weighed by losses in energy and defence stocks, while investors assessed fresh jobs data that reinforced expectations for an interest rate cut by the Bank of England later in the week. The UK's blue-chip FTSE 100 (.FTSE) , opens new tab fell 0.3% by 1022 GMT after closing 1% higher in the previous session, while the midcap FTSE 250 (.FTMC) , opens new tab index was largely unchanged. Sign up here. Energy stocks (.FTNMX601010) , opens new tab fell 1.1%, tracking a fall in oil prices as prospects for a Russia-Ukraine peace deal appeared to strengthen, raising expectations of a potential easing of sanctions. The Aerospace and Defence index (.FTNMX502010) , opens new tab declined 1.8% following talks of a potential Ukraine peace deal. Britain's biggest listed defence companies - Rolls-Royce (RR.L) , opens new tab, BAE Systems (BAES.L) , opens new tab, and Babcock (BAB.L) , opens new tab were down between 1.4% and 4.1%. U.S. officials said on Monday Ukraine could receive security guarantees modelled on NATO's Article 5 mutual defence pledge under a proposed peace deal with Russia. On the flip side, precious metals and miners (.FTNMX551030) , opens new tab jumped 1.4%, while travel-focussed index (.FTNMX405010) , opens new tab added 0.9%. At least 17 sectors were trading in the green. Meanwhile, Britain's unemployment rate hit its highest since the start of 2021 and private sector pay growth was the weakest in nearly five years in the run-up to finance minister Rachel Reeves' annual budget last month. The weak jobs data added to expectations that the Bank of England will cut rates on Thursday to support a faltering economy. Among individual stocks, IG Group (IGG.L) , opens new tab rose 5.6% after the online trading platform said it expects to deliver revenue growth around the mid-point of its guided range in 2026. Serica Energy (SQZ.L) , opens new tab rose 2.71% after the company said it had agreed to acquire a portfolio of Southern North Sea assets from Spirit Energy. Across the Atlantic, investors stayed cautious ahead of a slate of U.S. data, including the jobs report, that may help gauge the trajectory for Federal Reserve policy next year. Wall Street futures were trading lower. https://www.reuters.com/business/aerospace-defense/uks-ftse-100-falls-oil-defence-stocks-weigh-domestic-unemployment-climbs-2025-12-16/
2025-12-16 07:56
SEOUL, Dec 16 (Reuters) - Most Bank of Korea board members were worried about a weaker won fueling financial instability and price pressure as they kept interest rates unchanged on November 27, minutes of the meeting showed, signalling that the current easing cycle could end soon. "High volatility in the foreign exchange market due to imbalances in foreign exchange supply and demand and external uncertainty is also a burden," one member said, when arguing why the bank should keep rates steady. Sign up here. The Bank of Korea's monetary policy board voted to keep the benchmark interest rate (KROCRT=ECI) , opens new tab unchanged at 2.50% at last month's policy meeting, in line with expectations. Asia's fourth-largest economy is entering a consumption upswing just as its currency is slumping, leaving little room for policymakers to support growth without fueling inflation. The won is the worst performing Asian currency so far this quarter apart from the yen. Earlier on Tuesday, South Korea's Vice Finance Minister Lee Hyoung-il met key exporters, including Samsung Electronics and SK Hynix, to ask for their support in "stabilising forex markets," the ministry said in a statement. Another board member cautioned it may be time to "keep in mind the capacity for future monetary policy responses" in case of any economic downturns, as the current policy interest rate is already sitting "within the neutral interest rate range," according to the minutes. https://www.reuters.com/world/asia-pacific/bank-korea-board-members-wary-fx-risks-preserving-policy-room-minutes-show-2025-12-16/
2025-12-16 07:50
Dec 16 (Reuters) - France's TotalEnergies (TTEF.PA) , opens new tab said on Tuesday it had signed a 21-year power supply deal with Alphabet's Google (GOOGL.O) , opens new tab, pledging to supply 1 terawatt hour of renewable energy to support its data centres in Malaysia. The French energy major said the power would be generated by the new Citra Energies solar plant in Malaysia, which is scheduled for construction in early 2026. Sign up here. The power supply contract is expected to take effect in the first quarter of next year. In a separate deal signed in November, TotalEnergies also agreed to power Google's U.S-based data centres in Ohio. Data centres founded predominantly by Big Tech companies are requiring increasing amounts of energy as tech groups race to meet AI development demands, often surpassing the capacity of the domestic electricity utilities. https://www.reuters.com/sustainability/climate-energy/totalenergies-wins-21-year-deal-power-google-data-centres-malaysia-2025-12-16/
2025-12-16 07:37
Russia-Ukraine peace talks raise hopes for easing sanctions Surge in Chinese buying from Venezuela, glut in floating storage limit market impact of US tanker seizure DENVER, Dec 16 (Reuters) - Oil futures settled at their lowest level since February 2021 on Tuesday amid ongoing jitters surrounding oversupply and as the prospect of a Russia-Ukraine peace deal appeared to strengthen, raising expectations sanctions could be eased. Brent crude futures settled down $1.64 a barrel, off roughly 2.71%, to $58.92 a barrel, while U.S. West Texas Intermediate crude closed at $55.27, down $1.55, or 2.73%. Sign up here. "Brent has dropped this morning to below $60 per barrel for the first time in months, as the market assesses a potential peace deal resulting in additional Russian volumes becoming available and oversupplying the market further," said Rystad analyst Janiv Shah. The U.S. offered to provide NATO-style security guarantees for Kyiv and European negotiators reported progress in talks on Monday, sparking optimism that an end to the war was closer. Russia, meanwhile, said it was not willing to make any territorial concessions, state news agency TASS quoted Deputy Foreign Minister Sergei Ryabkov as saying. The six-month Brent futures spread moved into a contango for the first time since October. Barclays analysts expect Brent to average $65/bbl in 2026, slightly ahead of the forward curve, due to the expected 1.9 million bpd surplus they see as being priced in already. “This price decline underscores the structural dynamics of today’s energy market—ample supply and sluggish demand. Unless geopolitical risks or policy shifts intervene, this softness could persist well into next year," KPMG U.S. Energy Strategy Leader Angie Gildea wrote in a note. Adding to the pressure, soft Chinese economic data on Monday further fuelled concerns that global demand may not be strong enough to absorb recent supply growth, said IG market analyst Tony Sycamore. China's factory output growth slowed to a 15-month low, official data showed. Retail sales also grew at their slowest pace since December 2022, during the COVID-19 pandemic. Fears of an oversupply were marginally offset by the U.S. seizing an oil tanker off Venezuela last week, but traders and analysts said a glut of floating storage and a surge in Chinese buying from Venezuela in anticipation of sanctions were also limiting the market impact. https://www.reuters.com/business/energy/oil-moves-lower-ukraine-talks-weak-china-data-2025-12-16/
2025-12-16 07:36
Central bank tightens oversight on gold-related forex transactions Commercial banks asked to monitor foreign currency inflows Baht has risen nearly 9% against dollar so far this year BANGKOK, Dec 16 (Reuters) - Thailand's central bank has moved to contain rapid gains in the baht , ordering tighter scrutiny of foreign exchange transactions linked to gold trading and instructing commercial banks to closely monitor foreign currency inflows, the bank chief said on Tuesday. The baht traded at 31.5 per dollar on Tuesday. It has strengthened by 8.8% against the dollar so far this year to become Asia's second-best performing currency, putting further pressure on Southeast Asia's second-largest economy, which has been struggling with U.S. tariffs and high household debt. Sign up here. Since early this month, the baht has appreciated by about 2.5%, driven mainly by a weaker U.S. dollar, seasonal inflows from year-end tourism and exports, as well as foreign inflows into equities and bonds, Governor Vitai Ratanakorn said in a statement. Transactions by gold traders have also risen notably, with a significant increase in sales of U.S. dollars to buy baht, he said. "Transactions by gold traders during certain periods account for 20% of total foreign exchange trade, contributing to baht volatility," he added. The central bank has stepped in to manage the currency and tighten supervision over dollar sale transactions by gold businesses wanting to purchase baht, the governor said. The move came a day after Finance Minister Ekniti Nitithanprapas said the baht was too strong and was hurting the economy. Prime Minister Anutin Charnvirakul told reporters on Tuesday that he had asked the finance minister to hold discussions with the central bank about tackling the baht's strength. The Bank of Thailand has instructed commercial banks to strictly verify documentation for dollar-sales-for-baht transactions by gold traders. It is also seeking a Finance Ministry directive that would authorise the central bank to request relevant foreign exchange transaction data from major gold dealers, Vitai said. The central bank has also asked the Finance Ministry to assign an agency to oversee the gold trade, particularly online gold trading platforms where transaction sizes have expanded significantly, spilling over into currency volatility, Vitai said. The central bank will inspect foreign currency sales-for-baht transactions to prevent undesirable inflows unrelated to normal business operations or personal transfers. Commercial banks are required to strictly monitor foreign currency inflows, the governor said. https://www.reuters.com/world/asia-pacific/thai-central-bank-is-taking-action-baht-worried-by-rapid-rise-2025-12-16/
2025-12-16 07:26
Jobless rate rises to 5.1%, highest since January 2021 Private sector pay grows by least since late 2020 Payrolled employment falls by 38,000 in November Bank of England expected to cut rates on Thursday LONDON, Dec 16 (Reuters) - Britain's unemployment rate hit its highest since the start of 2021 and private sector pay growth was the weakest in nearly five years in the run-up to finance minister Rachel Reeves' annual budget last month, official figures showed on Tuesday. The downbeat data reinforced the chances that the Bank of England will cut interest rates on Thursday to help the almost stagnant economy. Sign up here. The jobless rate edged up to 5.1% in the three months to October, its highest since the three months to January 2021, while private-sector pay growth, excluding bonuses, slowed to 3.9% from 4.2%. JOB MARKET 'VISIBLY BUCKLED' BEFORE BUDGET "The UK's jobs market visibly buckled ahead of the budget," Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, said. "The unrelenting uncertainty from a torrent of policy speculation and a slumping economy forced more firms to reduce recruitment and curb wage settlements." Official data last week showed the economy unexpectedly shrank by 0.1% in the three months to October. After months of media speculation over possible tax increases, Reeves announced 26 billion pounds ($35 billion) of tax hikes in her budget on November 26. But she delayed the introduction of most of them and spared employers the hit that she imposed in her first budget a year earlier. Many employers have said they scaled back hiring this year after Reeves raised their social security contributions in October 2024. A measure of payrolls data provided by the tax office showed a monthly drop of 38,000 in November. A fall of 32,000 first reported for October was revised to show a decline of 22,000 people in payrolled employment. The drop in the number of people employed reinforces the general message from the unemployment data, which is based on a survey that the ONS says has shortcomings and is trying to improve. PRIVATE SECTOR PAY GROWTH AT WEAKEST SINCE 2020 The ONS said annual pay growth in the private sector, excluding bonuses, slowed to its weakest since the end of 2020. The BoE is watching that measure closely as it tries to gauge how much inflation pressure remains in the economy. By contrast, public sector wage growth accelerated to 7.6% from 6.6%, the fastest rise in records dating back to 2001, reflecting wage deals that kicked in at an earlier point this year than in 2024. The pace of overall regular wage growth stood at 4.6%, slowing from an upwardly revised 4.7% in the third quarter and its lowest since April 2022. Economists polled by Reuters had forecast a slightly weaker 4.5% increase. The pound briefly rose against the dollar and the euro immediately after the data was published while government bond prices were little changed. BUDGET UNCERTAINTY, LOSS OF MOMENTUM IMPACT EMPLOYMENT Jack Kennedy, senior economist at jobs website Indeed, said a more fundamental loss of momentum in the economy, as well as the budget uncertainty, was weighing on employment. "Looking ahead, planned increases in the minimum wage and the expansion of workers' rights are set to be further headwinds to labour demand in 2026, particularly in lower-paid sectors where job postings are already down 9% year-on-year," he said. Financial markets are almost fully pricing a quarter-point rate cut by the BoE on Thursday and investors are watching for any signals about the monetary policy outlook in 2026. Inflation data, due on Wednesday, is expected to show the main gauge of price growth in Britain slowed to a 3.5% increase in November from a 3.6% rise in October, still almost double the BoE's 2% target. ($1 = 0.7473 pounds) https://www.reuters.com/sustainability/sustainable-finance-reporting/uk-wage-growth-slows-46-three-months-october-ons-says-2025-12-16/
