2025-10-21 19:20

US jury told BNP to pay compensation over Sudan verdict BNP shares, which fell sharply on Monday, down 2% BNP Paribas CFO: Swiss law applies in the case PARIS, Oct 21 (Reuters) - BNP Paribas (BNPP.PA) , opens new tab sought to reassure investors on Tuesday that it faces limited exposure to a Sudan-related litigation, although analysts said there was continued uncertainty and shares in the lender dropped again. A U.S. jury on Friday found the French bank helped Sudan's government commit genocide by providing banking services that violated American sanctions. Sign up here. The court ordered the euro zone's biggest lender by assets to pay a combined $20.5 million to three Sudanese plaintiffs who testified about human rights abuses perpetrated under former President Omar al-Bashir's rule, raising concerns about potential further claims. BNP shares, which tumbled sharply on Monday as investors assessed the implications, were down 1.6% on Tuesday afternoon, underperforming both the broader market (.STOXX50E) , opens new tab and the banking sector (.SX7P) , opens new tab. Chief Financial Officer Lars Machenil told analysts the bank made no provisions for Sudan-related litigation in its upcoming third-quarter results, due on October 28, as it expects the verdict to be overturned on appeal. Machenil also said that Swiss law applied in this case, offering a potential shield for the bank. "The U.S. court ruled that Swiss civil law applies in this case, as the relevant transactions were carried out from Geneva. Moreover, Swiss civil law does not allow for the liability being claimed, and the Swiss government has officially confirmed that there is no legal basis for such liability," Machenil said. Analysts said doubts remained. "While the bank sees the risk of broader claims as low, we cannot rule it out entirely. The uncertainty around this matter will weigh on the share price until more clarity emerges from BNP's appeal," said Johann Scholtz, an analyst at Morningstar. Traders at banks said in notes to clients that the CFO's comments during the analysts' call on Tuesday raised more questions than answers. NO PRECEDENT FOR SIMILAR CASES Machenil downplayed the risks of a class action, describing it as a "case by case" situation. "This is neither a regulatory fine nor a criminal penalty, but a private legal dispute. The verdict concerns only three plaintiffs, and it does not set a precedent for similar cases," he said. He added that the judge had said any individual compensation claims related to the Sudan case would require separate trials. Asked how many additional plaintiffs could come forward, Machenil said: “I don’t have a crystal ball.” He also declined to say how long the appeal process might take, noting it would be at least a couple of months and not more than 12 months. NO LINK TO 2014 LITIGATION Lawyers for the three plaintiffs, who now reside in the United States, said on Friday the verdict opens the door for more than 20,000 Sudanese refugees in the U.S. to seek billions of dollars in damages from the French bank. After law firms jointly representing the plaintiffs said they could no longer work together because of disputes over ethics, the judge overseeing the case in July severed the three victims from the rest of the class, meaning their claims would no longer have any binding effect on others. However, the judge reappointed the three victims as class representatives days before the trial began, after the plaintiffs' lawyers said their relationship had improved. BNP Paribas previously pleaded guilty in 2014 to violating U.S. sanctions against Sudan, Cuba and Iran, agreeing to pay an $8.9 billion penalty. The bank was then accused of processing billions of dollars of transactions through the U.S. financial system on behalf of Sudanese entities despite sanctions designed to block such transactions. "The current litigation has nothing to do with the 2014 criminal proceedings," Machenil said in the call. https://www.reuters.com/sustainability/boards-policy-regulation/bnp-paribas-made-no-provisions-sudan-related-litigation-q3-results-cfo-says-2025-10-21/

2025-10-21 19:19

LONDON, Oct 21 (Reuters) - British finance minister Rachel Reeves said Brexit along with spending cuts by previous governments had weighed more heavily on the economy than originally thought as she readies a budget likely to include tax increases but also measures to boost growth. In comments reported by the Guardian newspaper, Reeves said she was aiming to defy an expected downgrade in the economic growth forecasts from Britain's independent fiscal watchdog, the Office for Budget Responsibility. Sign up here. "We also know - and the OBR, I think, is going to be pretty frank about this - that things like austerity, the cuts to capital spending and Brexit have had a bigger impact on our economy than even was projected back then," she was quoted as saying by the newspaper during a conference in Birmingham. "That's why we are unashamedly rebuilding our relations with the European Union to reduce some of those costs that were, in my view, needlessly added to businesses since 2016 and since we formally left a few years ago." The OBR has estimated that Brexit will reduce Britain's long-term level of productivity by 4% compared with remaining in the European Union. On Saturday, Bank of England Governor Andrew Bailey said Brexit was likely to continue to weigh on British economic growth over the coming years. Data published earlier showed Britain's public borrowing in the first half of the financial year was the highest on record except during the height of the coronavirus pandemic, keeping up the pressure on Reeves ahead of the November 26 budget. Later on Tuesday, Reeves was quoted by the Financial Times as saying she hoped to see further cuts to interest rates by the Bank of England after measures in her budget which will be aimed at easing the cost of living burden on families. "There will be targeted action in the budget around prices because I want to bring down the cost of living for families," Reeves said. "And I want to see interest rates, which have gone down five times in the last year and a bit, come down further." Britain has the highest inflation rate among Group of Seven economies, at 3.8% in August, and the BoE thinks it will peak at 4% in September before falling back to the central bank's 2% target only in the spring of 2027. Governor Andrew Bailey and his colleagues have said the outlook for inflation is still unclear, making it hard to predict when interest rates are likely to be cut again. https://www.reuters.com/world/uk/uks-reeves-says-brexit-austerity-hit-harder-than-thought-2025-10-21/

2025-10-21 18:45

NEW YORK, Oct 20 (Reuters) - Glencore's (GLEN.L) , opens new tab global head of naphtha trading, Oliver Bowen, is set to leave for rival Vitol, four sources told Reuters on Tuesday, making him the latest top trader to depart from the London-listed commodities trading and mining firm in recent months. Bowen will start at Vitol on November 7 and oversee the world's largest commodities trader's European naphtha book, one of the sources said. Sign up here. The sources requested anonymity to discuss confidential information. Bowen could not be contacted for comment. Vitol and Glencore declined to comment. Bowen's departure from Glencore comes as the company undertakes a broader reorganization of its trading operations, after facing a sharp slump in earnings from that department. Core earnings from Glencore's energy and steelmaking coal trading activities fell to $306 million in the first half of this year, the lowest for that period since 2016, the company reported in August. Bowen, 42, has been Glencore's head of naphtha trading since at least 2017, according to a profile on the UK government's Companies House. He served as a director of the UK-based Petrochemical Feedstock Association since February 2017 until he resigned in April this year, the profile showed. Glencore's current head of oil and gas trading, Alex Sanna, is set to step down from his role at the end of this year, Reuters earlier reported, citing a staff memo. Another Glencore veteran, Maxim Kolupaev, who currently heads gas and power trading for the firm, will replace Sanna, who headed the company's oil trading desk for the past six years. https://www.reuters.com/business/glencores-global-head-naphtha-oliver-bowen-join-rival-vitol-sources-say-2025-10-21/

2025-10-21 16:26

WASHINGTON, Oct 21 (Reuters) - The U.S. Federal Reserve is studying the creation of a new account that would provide access to Fed payment services for firms that currently rely on third parties like banks for that access, a senior official said on Tuesday. Fed Governor Christopher Waller said the so-called "payment account" is a prototype idea that could grant access to firms seeking to utilize the Fed for payment services, without granting them full access to the services and backstops the Fed provides to banks. Waller said the idea is just a prototype currently and could change. But it could provide broader access to Fed payment services typically reserved for banks, potentially opening the door to fintechs and other firms that have sought entry into the system, but faced resistance from a Fed wary of providing master accounts typically reserved for banks to less intensely regulated institutions. Sign up here. "Payments innovation moves fast, and the Federal Reserve needs to keep up," he said in opening remarks at a daylong payments conference hosted by the central bank. Waller, who chairs the Fed's internal payments committee, detailed how these "skinny" master accounts might work, granting firms access to the Fed's payments infrastructure without accompanying services and backstops. For example, the account could be limited in size, not pay interest, and not allow for overdrafts. The accounts also may not have access to the Fed's discount window for emergency lending, but could receive streamlined reviews, he added. "The payments landscape, as well as the types of providers, has evolved dramatically in recent years, and, accordingly, a new payments account could better reflect this new reality," said Waller. https://www.reuters.com/sustainability/boards-policy-regulation/waller-says-fed-staff-studying-streamlined-payment-accounts-2025-10-21/

2025-10-21 15:43

Investors drawn to Japan's stock market due to new government policies Concerns over coalition dynamics and policy consistency in Japan Weak yen impacts foreign investment decisions in Japan SINGAPORE/LONDON/NEW YORK, Oct 21 (Reuters) - Global money managers are circling back to Japan's stock and debt markets, drawn by the promises of its new reflationist government and a desire to diversify from pricier U.S. and European markets. Flows into yen-denominated stocks and bonds have been sustained this month, fund managers said, as investors watched Japan's coalition partners wrangle and cut deals while positioning for right-winger Sanae Takaichi to become the country's premier. Takaichi was eventually elected the country's first female prime minister on Tuesday. Sign up here. Her promises of stimulative spending, tax breaks, low interest rates and investments have powered Japan's Nikkei (.N225) , opens new tab to record highs and are spurring investors to think about diversifying some cash from Europe and a frothy-looking Nasdaq (.IXIC) , opens new tab. Takaichi's election along with "the psychological impact of having finally overcome the ‘lost decades’ of Japanese stocks, can certainly spur inflows," said Boston-based Peter Vassallo, FX portfolio manager at BNP Paribas Asset Management. "It could dovetail with concerns about U.S. valuations and policy uncertainty to encourage some investors to reallocate away from what have become highly concentrated U.S. positions to Japan on the margin." Financial markets have been on a tear since September as the Federal Reserve cuts interest rates, broadening a rally that had until then been concentrated in global technology and artificial intelligence giants. Wall Street's big (.SPX) , opens new tab and small indices, European and Japanese stocks (.STOXX) , opens new tab, gold and bitcoin have all hit record highs recently. Japan's allure lies in its stock market valuation. While the Nasdaq is up 19% this year and trades at 34 times current earnings, the Nikkei is up 24% and cheaper at a price-earnings (P/E) ratio of 22 and Europe's STOXX index is up 13% for the year and at a P/E of 18. Heading into the Japanese leadership election, foreigners bought 4.36 trillion yen ($28.9 billion) worth of Japanese stocks in the two weeks through October 11, the biggest amount of purchases in consecutive weeks since at least 2005. They had been selling for three weeks prior to that. But money managers expect the rotation from other markets into Japan to be measured and selective. The biggest risk to the "Takaichi trade" as it is known is that investors do not yet understand the dynamics between the ruling Liberal Democratic Party and its new coalition partner Ishin, nor are they familiar with the new finance minister, Satsuki Katayama. While ideologically aligned, Ishin advocates a small government and Takaichi has already begun cutting back on her promises of higher spending to revive the economy and support households squeezed by inflation. TRUMP OR TRUSS James Malcolm, a Japan market analyst at financial advisor JB Drax Honore in London, has been inundated with calls from hedge funds and real-money investors since the Japanese election. Money managers who initially worried that conflicting agendas of the coalition partners might mean policy flip-flops, like those that cut short UK Prime Minister Liz Truss' leadership to just 45 days in 2022, now say Takaichi's latest nationalist comments and machinations are also quite like those of U.S. President Donald Trump. "There is a bit of the Trump trade there, there's going to be a lot more stimulus," Malcolm said. "But she has less political latitude, no AI boom and a submerging economy instead to steer." "In the short term, yes, people will look at it as a good thing, and they will look at it as a bad thing when interest rates start to rise more quickly or when the currency weakens." The weakening yen has become the sticking point in investment decisions. In the rates markets, the "Takaichi trade" has been to sell both the yen and longer-term Japanese government bonds (JGBs) for fear of low rates and more stimulus in an economy with one of the highest debt burdens in the developed world. At multi-month lows and down nearly 4% this month, a weak yen helps Japan's export-led economy but is anathema to foreign investors. Nigel Foo, head of Asian fixed income at First Sentier Investors, believes the Bank of Japan will keep raising rates, despite the political pressure not to, and he is bullish on JGBs. "We are always the type who will buy more when everyone else is panicking, because that's when you see value," said Foo. "Especially when you look at the valuation compared to bunds, it's looking very attractive. And also another thing that could be on our side is, if the distrust towards the U.S. government is to continue, I can imagine more Japanese money will come back to their home turf." Van Luu, global head of solutions strategy for fixed income and foreign exchange for Russell Investments in London, also thinks Japanese money invested in Treasuries will move home. "Repatriation of Japanese investments from the U.S. seems the most likely source of reallocations at the time," Luu said. ($1 = 150.7800 yen) https://www.reuters.com/business/finance/global-markets-investors-japan-analysis-2025-10-21/

2025-10-21 14:38

CPI rises on slower fall in gasoline costs, higher food prices Bank of Canada's preferred core measures largely stable in September CPI up 0.1% in September on monthly basis after 0.1% fall in August OTTAWA, Oct 21 (Reuters) - Canada's annual inflation rate increased to 2.4% in September, mainly led by a smaller decline in gasoline prices on a yearly basis when compared with the previous month and a rise in food prices, data showed on Tuesday. The report is the most crucial piece of data to be released before the Bank of Canada meets for its next monetary policy decision later this month, when analysts and investors expect the bank to cut rates for a second time in a row. Sign up here. Analysts polled by Reuters had forecast annual inflation would rise to 2.3% in September from 1.9% in August. The CPI rose 0.1% on a month-over-month basis in September, after a 0.1% decline in August, StatsCan said. Gasoline prices have been on a declining trend on an annual basis after the Canadian government scrapped a carbon levy on the fuel that had kept prices up all of last year. However, the decline in September was less than in August mainly due to a big fall in gasoline prices in September 2024, when the price of the fuel dropped 7.1% on a dour global economic outlook. Excluding gasoline, the CPI rose 2.6% in September following a 2.4% acceleration in August. Economists have focused on the BoC's preferred core measures of inflation, which exclude the impact of tax measures, to gauge price trends. One of the core measures of inflation, the CPI-median, or the centermost component of the CPI basket, was at 3.2% in September, unchanged from the upwardly revised number last month on an annual basis. The other core measure, CPI-trim, which excludes the most extreme price changes, edged up to 3.1% in September from 3.0% in August, StatsCan said. The share of the CPI basket that was above a 3% price rise was 37.9% in last month and the share of the CPI basket that was below a 1% rise was 38.5%. "While there might be scope for debate about inflation, there should be no disagreement that the economy is weak and in need of support," said Royce Mendes, managing director and head of macro strategy at Desjardins. Money markets put a more than 86% probability on a 25-basis-point rate cut on October 29, which would bring the benchmark policy rate down to 2.25%. The Canadian dollar was trading up 0.12% to 1.4018 against the U.S. dollar, or 71.34 U.S. cents. Food prices increased 3.8% annually last month, after a 3.4% increase in August. This rise was mainly due to a 4% increase in food purchased from stores, against a 3.5% increase seen in the previous month. The increase in grocery prices last month marks the largest year-over-year rise since the most recent low in April 2024, the statistics agency said. Rents also contributed to a year-over-year increase in CPI, with a 4.8% jump in September. That move took shelter inflation, the biggest component of the CPI basket, to 2.6%. https://www.reuters.com/world/americas/canadas-annual-inflation-rate-rises-24-september-2025-10-21/