2025-10-24 07:07

Polls show tight race between Milei's party and Peronists Analysts warn gains by Milei would not ensure reforms Peso hit record lows this week, investors expect further softening NEW YORK/LONDON, Oct 24 (Reuters) - Investors are bracing for a renewed round of Argentine currency and bond market swings, as this Sunday's midterm elections mark a defining moment for President Javier Milei's economic reform efforts. Milei is not on the ballot himself but his La Libertad Avanza party is, making the vote a key test for his right-wing stabilization strategy and far-reaching austerity plan, which endeared him to U.S. President Donald Trump and helped to secure a $20 billion U.S. swap line. Sign up here. Even so, it's been far from a smooth ride in the markets in recent weeks, and with most polls showing a tight race, investors see the potential for gyrations either way once the election results are in. The peso stumbled to a record low against the dollar this week and investors expect further weakness ahead. Argentina's heavily traded international bonds, star performers across emerging markets last year, have sunk into losses in 2025. As investors look ahead to Sunday's election, Trump has added to the pressure by threatening that he won't waste more time on Argentina if Milei loses. "It just demonstrates the transactional nature of the relationship with the United States these days," said Carl Ross, partner and sovereign credit analyst at asset manager GMO, which is overweight Argentina's international dollar bonds. "It makes it more difficult to play it, because it becomes even more of a key-man risk, and it becomes even more binary of an outcome." MILEI WIN COULD TRIGGER RALLY In the midterm vote, half of Argentina's lower Chamber of Deputies as well as a third of the Senate are up for grabs. Milei's party will need about one-third of the votes in each house to thwart future attempts to override his spending vetoes. The election math is complex, though anything in the region of 35% or above is seen as a success for Milei, using as a barometer the 30% he secured in the first round of the 2023 presidential election. "If Milei doesn't perform well, I think we get a (market) correction because my view is that this U.S. mini-bailout will not be available in such size," said Diliana Deltcheva, head of emerging market debt at Robeco, who calls the election a coin toss. "I can see another three to five points of upside (in bonds) if Milei does well, but the market has already rallied back to the highs of the year so the downside is pretty large," she said, adding that the firm could add to its current market-weight holdings if bonds sold off. Local brokerage Max Capital said sovereign dollar bonds are pricing a win from left-leaning opposition Peronists by about 4 percentage points in Sunday's vote. A better result than that for Milei's party could see upside of about 15% in the bonds, they said. Aside from the U.S. swap line, the Trump administration is negotiating with U.S. banks the formation of a $20 billion fund to purchase Argentine sovereign debt, U.S. officials have said. U.S. SUPPORT IS CONDITIONAL But with U.S. support conditional on a continuation of Milei's previous policies, his party's election results will be closely scrutinized. JPMorgan's baseline sees Milei's bloc on track to secure enough seats to protect his veto power but warned that such a result alone would not deliver reforms or bring down risk premiums. "In this scenario U.S. support is poised to intensify, providing a tailwind for the administration. Political risk premium, which has weighed heavily on markets, would likely recede," JPMorgan analysts said. Any ballot underperformance by Milei's party could also be seen as an early gauge of his longer-term political standing, including his prospects for retaining power in the 2027 general election, said Alejo Czerwonko, CIO for emerging markets in the Americas at UBS Global Wealth Management. "Beyond the election, a sustained rally will require a credible strategy to rebuild international reserves, likely involving a significant devaluation," Czerwonko said. https://www.reuters.com/world/americas/argentina-braces-market-turbulence-midterm-elections-loom-2025-10-24/

2025-10-24 06:48

US September CPI up 3.0% on year Trump to meet Chinese President Xi Jinping next week Silver down over 6% so far this week Oct 24 (Reuters) - Gold prices pared losses on Friday after slightly softer-than-expected U.S. inflation data reinforced expectations that the Federal Reserve will cut interest rates next week, but the metal was still set for its first weekly loss in 10 weeks. Spot gold fell 0.2% at $4,118.29 per ounce by 01:42 p.m. ET (1742 GMT), after falling nearly 2% earlier in the session. The price is down over 3% for the week. Sign up here. U.S. gold futures for December delivery settled 0.2% lower at $4,137.8 per ounce. "Gold and silver jump as September core CPI comes in lower than expectations but it's likely insufficient to entirely blunt this week's selloff. Price action suggests that gold and, especially silver, need another leg lower before consolidation," said Tai Wong, an independent metals trader. Spot gold notched a record high of $4,381.21 on Monday, but has fallen over 6% since, as investors booked profits and signs of easing U.S.-China trade tensions dented safe-haven demand. Spot silver was down 0.6% at $48.65/oz, on track for a weekly loss of over 6%. Labor Department data showed that U.S. consumer prices rose 3.0% in the 12 months through September, slightly below economists' expectations of a 3.1% increase. Traders are almost fully pricing in a rate cut at the U.S. central bank's meeting next week, with another expected in December. FEDWATCH Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold. Meanwhile, the White House confirmed on Thursday that U.S. President Donald Trump will meet Chinese President Xi Jinping next week, ahead of the November 1 deadline for additional U.S. tariffs on Chinese imports. "If (gold prices) fall below $4,000, we're going to continue to see more of a dramatic washout in the market, perhaps down to $3,850, the next major support level," said Phillip Streible, chief market strategist at Blue Line Futures. Bullion has gained 55% this year, on geopolitical and trade tensions, robust central bank buying and expectations of U.S. interest rate cuts among other factors. Elsewhere, platinum slipped 1% to $1,608.77, and palladium fell 0.5% to $1,450.05. https://www.reuters.com/world/china/gold-set-snap-nine-week-winning-streak-us-inflation-test-looms-2025-10-24/

2025-10-24 06:47

Indonesian firm expands into Singapore fuel retail Nearly 60 Esso stations included, deal to close by year-end ExxonMobil to still supply fuel to stations SINGAPORE, Oct 24 (Reuters) - Chandra Asri Pacific (TPIA.JK) , opens new tab said on Friday it will acquire Exxon Mobil's (XOM.N) , opens new tab network of Esso-branded retail petrol stations in Singapore as the U.S. major streamlines its downstream operations. The deal is expected to be completed by the end of this year, subject to regulatory approvals, the Indonesian conglomerate said in a statement. The value of the deal, which includes nearly 60 stations and associated supply agreements, was not disclosed. Sign up here. The Indonesian company will continue to use the Esso brand, buy fuels for the stations from Exxon, and take on Exxon staff running the business, Chandra Asri said in its statement. The company said in reply to an email that it was unable to share commercial details of the deal. The announcement confirms a Reuters report in April that Chandra Asri's joint venture was in talks with Exxon Mobil to buy the assets as the U.S. energy firm was exiting Singapore’s retail fuel market. Shares of Chandra Asri Pacific were last up 2.1% on Friday, LSEG data showed. The stock is down roughly 2.7% year-to-date and has a market value near $37 billion. Chandra Asri, in a joint venture with Glencore (GLEN.L) , opens new tab, owns Aster Chemicals and Energy, which announced a string of investments in recent months, including an upgrade at Singapore's Bukom refinery and the purchase of a petrochemical plant operated by Chevron Phillips Singapore Chemicals. Exxon will continue running its refining and petrochemical complex on Jurong Island to provide fuels to its customers in the region and globally, a company spokesperson said. Earlier, the U.S. major announced an expected cut of 10%-15% to its 3,500-strong Singapore workforce by 2027 as part of a global restructuring plan to streamline its operations. Exxon previously sold its retail network in Thailand to Bangchak Petroleum for $603 million in 2023. UK bank Barclays was the financial adviser to Exxon for the Singapore deal, Reuters earlier reported, while global law firm Baker McKenzie represented Chandra Asri. https://www.reuters.com/business/energy/chandra-asri-says-it-will-buy-exxons-singapore-retail-fuel-stations-2025-10-24/

2025-10-24 06:23

TOKYO, Oct 24 (Reuters) - Japanese Prime Minister Sanae Takaichi told parliament on Friday that homemade sources of energy like nuclear power and perovskite solar cells are important for the country. The first woman to lead Japan, Takaichi, 64, was elected prime minister this week. She faces a nagging inflation problem, which is partly attributable to high fossil fuel import prices, after her ruling Liberal Democratic Party was defeated in recent elections amid rising consumer costs. Sign up here. "A stable and affordable energy supply is essential to sustain citizens' livelihoods and domestic industries, and to strengthen our competitiveness", Takaichi said. "Domestically produced energy sources, particularly nuclear power and perovskite solar cells, are particularly important for that ... We will maximize the use of decarbonised power sources." Perovskite solar cells are a next generation solar technology developed by Japan. She added that Japan would deploy innovative reactors and roll out fusion-generated energy. Only 14 of the 54 nuclear plants that were operating in Japan before the 2011 Fukushima disaster have been brought back online. Takaichi has said reviving nuclear power is key to Japan's energy security. Japan is seeking to have nuclear power account for 20% of its electricity mix in 2040, up from less than 10% at present. It also needs to meet power demand from data centres, which is reversing years of decline. According to government data, electricity costs in Japan's western region of Kansai and Kyushu in the south - with around a third of the power supply coming from nuclear - were 30% to 40% cheaper in the last fiscal year than in Hokkaido in the north with no restarts. Another four idled reactors have been given initial restart permits by authorities, while eight more are undergoing safety checks and a further 10 could apply for restarts. Japan's nuclear sector welcomed Takaichi's election as it wants greater support for building new reactors, including via state-run capacity auctions, an industry association head told Reuters this week. Much of Japan's nuclear focus has been on restarting shuttered reactors - the government recently extended operating lifetimes to 60 years from 40 - with just one new plant currently on the drawing board. https://www.reuters.com/sustainability/boards-policy-regulation/nuclear-power-perovskite-solar-japans-domestic-energy-sources-are-important-pm-2025-10-24/

2025-10-24 06:21

UK retail sales volumes +0.5% in Sept vs forecast 0.2% fall Q3 sales volumes rise 0.9% on quarter to highest since 2022 Boost for GDP growth in third quarter Online gold sales, new iPhones help lift spending Economists see headwinds from inflation, possible tax rises LONDON, Oct 24 (Reuters) - British retail sales unexpectedly rose 0.5% in September, giving a lift to broader growth after a boost from tech sales - including Apple's (AAPL.O) , opens new tab new iPhone models - and demand for gold from online jewellers, official figures showed on Friday. The Office for National Statistics said third-quarter sales growth of 0.9%, up from 0.2% in the second quarter, was likely to add 0.04 percentage points to third-quarter GDP growth, welcome news for an economy that has been forecast to slow in the second half. Sign up here. Economists polled by Reuters had predicted that retail sales would fall 0.2% in September. Sterling rose against the dollar after the data. Retail sales had performed relatively strongly over the summer, helped by unusually warm weather boosting clothing sales. ONS statistician Hannah Finselbach said tech store sales had risen notably, while online jewellers reported strong demand for gold. Gold prices on commodity markets have surged to record highs in recent weeks. RETAIL VOLUMES RISE TO HIGHEST SINCE Q3 2022 September retail volumes were 1.5% higher on the year, where economists had expected a 0.4% rise, driven by the fastest growth in online spending since April 2021. For the whole quarter, overall volumes were up 1.0% to their highest in three years. Britain's longest-running consumer survey, from GfK, rose slightly to give an October reading that was the joint-highest since August 2024. However, many economists see clouds on the horizon. "Against a backdrop of weak employment, high inflation and with tax rises on the horizon, we doubt the retail sector will be able to sustain this strength," said Alex Kerr, UK economist at Capital Economics. Overall consumer spending has been subdued due to a high savings rate, which economists say may reflect 2022's surge in inflation, a more recent weakening in the jobs market and concerns about tax increases in November's budget. Consumer inflation has held at 3.8% for three months - almost double the Bank of England's target - while wage growth is slowing and finance minister Rachel Reeves is expected to announce at least 20 billion pounds ($27 billion) of tax rises or spending cuts. Updates from major retailers have been mixed. Tesco (TSCO.L) , opens new tab, the biggest food retailer, raised its full-year profit forecast and said it was betting on a good Christmas. However, fast-food chain Greggs (GRG.L) , opens new tab reported a further slowdown in sales growth and discounter B&M (BMEB.L) , opens new tab warned on profit twice in less than three weeks. Online technology retailer Shopify said its survey showed British shoppers expected to spend an average of 181 pounds on seasonal goods such as advent calendars and Christmas ornaments, up from 159 pounds last year. ($1 = 0.7451 pounds) https://www.reuters.com/world/uk/british-retail-sales-rise-unexpectedly-september-2025-10-24/

2025-10-24 06:16

LONDON, Oct 24 (Reuters) - The British public's expectations for inflation over the next 12 months rose to 4.2% in October, the highest since April, a monthly survey by YouGov for U.S. bank Citi showed on Friday. Citi said the reading was likely to reinforce the wariness some members of the Bank of England's Monetary Policy Committee feel about cutting interest rates further, even after September inflation came in below the BoE's 4% forecast. Sign up here. Financial markets moved rapidly to price in a nearly 80% chance of a further quarter-point rate cut this year after weak labour market data last week was followed by lower-than-expected headline inflation. Previously, the next BoE rate cut had not been expected until March or April next year after August's rate cut was only approved by a narrow 5-4 margin due to some policymakers' fears that inflation was becoming too persistent. "We think inflation expectations remain an important aspect of the monetary policy framework, particularly for those who are cautious about further cuts," Citi economists Callum McLaren-Stewart and Michel Nies wrote. "For those who favour a hold, a further drift in expectations may be at least as significant as an undershoot in realised CPI," they added. Year-ahead inflation expectations had stayed in a narrow range of 3.9% to 4.0% for the previous five months on Citi's measure. Long-term inflation expectations also rose to 4.2% in October from 4.1% in September, Citi said. The results were based on a YouGov survey of 2,005 adults conducted on October 21 and October 22. https://www.reuters.com/world/uk/uk-inflation-expectations-rose-42-october-citiyougov-2025-10-24/