2025-10-20 04:46

21 of 28 economists expect BI to cut by 25 basis points to 4.50% BENGALURU, Oct 20 (Reuters) - Bank Indonesia (BI) will cut its key interest rate at its fourth consecutive meeting on Wednesday, taking it to 4.50%, as policymakers put greater weight on supporting economic growth despite continued weakness in the rupiah, a Reuters poll of economists showed. Last month, the central bank surprised markets with a rate cut and Governor Perry Warjiyo said it was going "all out" to bolster growth while maintaining financial market stability. Sign up here. The rupiah has regained some ground in the last few weeks due to currency market intervention but is about 3% weaker this year. The central bank is mandated to keep the currency stable. Although second-quarter economic growth exceeded expectations, several economists warned domestic demand is losing momentum. Combined with inflation at 2.65% - within the central bank's 1.5% to 3.5% target range - that has strengthened expectations for another rate cut this week. A majority of economists, or 21 of 28, in the Reuters poll expect BI to lower its benchmark seven-day reverse repurchase rate (IDCBRR=ECI) , opens new tab by 25 basis points to 4.50% on October 22. The rest saw no change from 4.75%. The survey, conducted October 13-20, also showed expectations the overnight deposit and lending facility rates would be trimmed by 25 basis points to 3.50% and 5.25%, respectively, based on a smaller sample. "Officials are placing more weight on concerns about growth," said Jason Tuvey, deputy chief emerging markets economist at Capital Economics. "Low-profile data suggest the economy is losing momentum. Vehicle sales have fallen in recent months, consumer confidence has weakened, and export growth has slowed. Growth concerns alongside the recent appreciation of the rupiah mean we expect BI to deliver a 25 basis point interest rate cut." Median forecasts showed the key policy rate will end the year 50 basis points lower at 4.25% and remain at that level through 2026. "We're expecting a slightly, but not significantly, higher tolerance of rupiah weakness in favor of further monetary easing. While real interbank rates have already come off, there's probably still some more room to move lower," said Adam Ahmad Samdin, an economist at Oxford Economics. While further easing appears likely, economists expressed concern about the central bank's independence following a recent burden-sharing agreement and a draft bill that would increase parliament's role in assessing BI's performance. "If policy easing continues and turns out to be more aggressive than analysts are expecting, that would inevitably raise fears officials are bowing to political pressure," Capital Economics' Tuvey said. "Over time, it would run the risk of the economy overheating, leading to rising inflation, higher risk premia on Indonesian assets and weaker long-term growth." The poll showed Indonesia's economy was expected to expand by about 5% in 2025 and the following two years, which is well below President Prabowo Subianto's ambitious 8% target but broadly consistent with recent trends. Inflation was forecast to average 1.8% this year and rise to around 2.5% in 2026 and 2027. (Other stories from the October Reuters global economic poll) https://www.reuters.com/world/asia-pacific/bank-indonesia-set-cut-rates-again-growth-trumps-rupiah-concerns-2025-10-20/

2025-10-20 04:41

LAUNCESTON, Australia, Oct 20 (Reuters) - China's crude oil stockpile flows dropped sharply in September as lower imports and higher refinery processing cut the surplus that was available for storage. China's surplus of crude stood at 570,000 barrels per day (bpd) in September, down from 1.01 million bpd in August, according to calculations based on official data. Sign up here. The decline in crude imports and the increase in refinery throughput are an example of how China smoothes out the volatility in oil prices. Imports dropped in September to 11.5 million bpd, the lowest level since January, as refiners trimmed purchases after prices surged in June during the brief military conflict between Israel and Iran. Cargoes arriving in September would largely have been arranged at a time when crude prices were elevated, with benchmark Brent futures hitting a six-month high of $81.40 a barrel on June 23. China does not disclose the volumes of crude flowing into or out of its strategic and commercial stockpiles, but an estimate can be made by deducting the amount of oil processed from the total crude available from imports and domestic output. September's domestic oil output was 4.32 million bpd, according to official data released on Monday, giving a total available to refiners from imports and local production of 15.82 million bpd. Refiners processed 15.25 million bpd in September, up from 14.94 million bpd in August, according to data from the National Bureau of Statistics. This means that there was a surplus of 570,000 bpd of crude in September. It is worth noting that not all of the surplus crude was likely to have been added to storage, with some being processed in plants not captured by the official data. But even allowing for gaps in the official data, it is clear that from March onwards, China was importing crude at a far higher rate than it needed to meet domestic fuel demand. For the first nine months of the year, the average volume of surplus crude in China was 930,000 bpd, with the lower surplus in September causing the year-to-date number to drop from 990,000 bpd for the eight months to August. The surplus has been built up after refiners made a rare draw on inventories in January and February, when processing rates exceeded available crude by about 30,000 bpd. This was the first time since September 2023 that throughput exceeded the amount of crude from imports and domestic output. The draw on inventories at the start of 2025 came amid rising oil prices, with Brent futures reaching their highest point so far this year of $82.63 a barrel on January 15, having risen steadily from levels around $70 in early December. MORE STORAGE FLOWS The question for the market is whether China will accelerate its crude stockpiling in light of the declining trend in oil prices. Brent crude dropped to a six-month low of $60.14 a barrel on October 17 and was trading at $61.12 in Asia on Monday. That price is likely low enough to encourage Chinese refiners to continue building their inventories. But there are other factors at work, including mounting pressure on China and India to substantially reduce the volume of Russian crude oil they buy as part of Western efforts to put pressure on Moscow to negotiate an end to the war in Ukraine. It is likely that China could source sufficient crude to keep stockpiling from other suppliers even if it does trim imports from Russia. Prices will be key to what happens next. If oil prices remain in the current downtrend as the eight members of OPEC+ end the bulk of their voluntary production cuts, then history suggests Chinese refiners will move to absorb most of any available surplus. Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn , opens new tab and X , opens new tab. The views expressed here are those of the author, a columnist for Reuters. https://www.reuters.com/markets/commodities/chinas-crude-oil-storage-flows-slump-september-2025-10-20/

2025-10-20 04:37

Oct 20 (Reuters) - A look at the day ahead in European and global markets from Wayne Cole. The Takaichi trade has been in full swing since the Liberal Democratic Party did a deal with the Japan Innovation Party to form a coalition government, bringing Japan closer to its first female prime minister. Sign up here. Analysts assume Sanae Takaichi would be pro-stimulus and against further hikes in interest rates, a negative for the yen and bonds but a plus for equities. The Nikkei duly jumped 2.9% to an all-time high, while the yen slipped modestly. Even ultra-long JGBs caught a bid, perhaps on relief there would actually be a government, albeit a minority one. JAPAN BUTTRESSES ASIA MARKETS AFTER MIXED CHINA DATA The jump in the Nikkei helped lead most of Asia higher, with markets successfully navigating a slate of mixed Chinese economic news. The giant economy topped forecasts by growing 1.1% in the third quarter versus three months prior, while the annual pace slowed as expected to 4.8%. Industrial output also beat forecasts, while retail sales were bang in line and home prices remained weak. On face value, the data were solid enough to give China confidence it can outlast the United States in a trade war, with President Trump conceding 100% tariffs were unsustainable. Top Chinese policymakers convene this week to discuss the Five-Year Plan, though investors have long given up on expecting aggressive stimulus. Analysts were also not quite sure what to make of news that China's top trade negotiator Li Chenggang had been removed from his post as the country's permanent representative at the World Trade Organization. US WORKS TO DELIVER DATA AMID GOVERNMENT SHUTDOWN In the U.S., there is no end in sight to the government shutdown and the longer it drags on the more impact it will have on economic growth, even if markets seem complacent about it right now. The statistics bureau is making a special effort to get the CPI out on Friday since it is needed for all sorts of indexing, including for TIPS. An acceleration in core inflation to 3.1% is widely expected and shouldn't move the dial on rate cut expectations given the Federal Reserve has not pushed back on a near 100% probability for a move this month. On the corporate side, companies reporting earnings this week include Tesla (TSLA.O) , opens new tab, Ford (F.N) , opens new tab, GM (GM.N) , opens new tab, Netflix (NFLX.O) , opens new tab, Procter & Gamble (PG.N) , opens new tab and Coca-Cola (KO.N) , opens new tab, along with aerospace and defence giant RTX (RTX.N) , opens new tab and tech stalwarts IBM (IBM.N) , opens new tab and Intel (INTC.O) , opens new tab. The bar is high and markets have a habit of punishing results that don't knock the lights out. Options suggest average share loss of around 6% on the smallest disappointment. BofA is tipping earnings growth of 11%, led by a 20% rise in the tech sector and Nvidia (NVDA.O) , opens new tab alone driving a quarter of growth in total earnings per share. Key developments that could influence markets on Monday: https://www.reuters.com/world/china/global-markets-view-europe-2025-10-20/

2025-10-20 03:27

U.S. soybean imports to China drop to zero amid trade tensions Brazil dominates China's soybean imports with 85.2% share Trade talks between U.S. and China show signs of progress BEIJING, Oct 20 (Reuters) - China imported no soybeans from the U.S. in September, the first time since November 2018 that shipments fell to zero, while South American shipments surged from a year earlier, as buyers shunned American cargoes during the ongoing trade dispute between the world's two largest economies. Imports last month from the U.S. fell to zero from 1.7 million metric tons a year earlier, data from China's General Administration of Customs showed on Monday. Sign up here. Shipments fell because of the high tariffs China has imposed on U.S. imports and as previously harvested U.S. supplies, known as old-crop beans, have already been traded. China is the world's biggest soybean importer. "This is mainly due to tariffs. In a typical year, some old-crop beans would still enter the market," said Wan Chengzhi, an analyst at Capital Jingdu Futures. Brazil arrivals last month jumped 29.9% year-on-year to 10.96 million tons, accounting for 85.2% of China's total imports of the oilseed, customs data showed, while shipments from Argentina rose 91.5% to 1.17 million tons, or 9% of the total. China's soybean imports reached 12.87 million metric tons in September, the second-highest level on record. China has not purchased any U.S. soybean cargoes from this autumn's harvest. The window for U.S. soybean purchases is rapidly closing as buyers secure shipments through November, largely from Brazil and Argentina, helped by Argentina's brief tax holiday. Without a breakthrough in trade talks, U.S. farmers could face billions in losses as Chinese crushers continue sourcing from South America. Beijing, however, may also face a potential supply crunch early next year before Brazil's new crops hit the market. "A soybean supply gap may emerge in China between February and April next year if there's no trade deal in place. Brazil has already shipped a huge volume, and no one knows how much old-crop stock remains," said Johnny Xiang, founder of Beijing-based AgRadar Consulting. Trade negotiations between Beijing and Washington appear to be regaining momentum after weeks of fresh tariff threats and export controls. U.S. President Donald Trump said on Sunday he believed a soybean deal would be reached. For the January-September period, China imported 63.7 million tons from Brazil, up 2.4% year-on-year, and 2.9 million tons from Argentina, up 31.8% year-on-year. Even as Chinese buyers are shunning this year's U.S. harvest, purchases earlier in 2025 mean that year-to-date imports of American beans have totalled 16.8 million tons, up 15.5%, data showed. https://www.reuters.com/world/china/china-imports-no-us-soybeans-september-first-time-seven-years-2025-10-20/

2025-10-20 01:34

MUMBAI, Oct 20 (Reuters) - Indian rupee traders will focus on the Reserve Bank of India in the holiday-truncated week following its heavy-handed support for the currency, and on potential updates on trade talks with the U.S., while bond yields will hold a tight range. India's debt and foreign exchange markets are shut for local holidays on Tuesday and Wednesday. Sign up here. The RBI's surprise heavy dollar sales last week helped the rupee post its best weekly performance in nearly four months. The rupee was further buoyed by U.S. President Donald Trump's comment that Indian Prime Minister Narendra Modi promised to halt Russia crude imports. The Indian government has not yet confirmed the pledge. India's continued purchases of discounted Russian crude have long been a point of friction with Washington and are a reason Indian goods face tariffs of 50%, among the highest levied by the United States. If the trade narrative turns positive, it adds another tailwind for the rupee, said Kunal Kurani, assistant vice president at FX advisory firm Mecklai Financial. Meanwhile, India's 10-year benchmark 6.33% 2035 bond yield settled at 6.5131% on Friday, down 3 basis points week-on-week. Traders anticipate the benchmark yield to remain in the 6.47% to 6.53% band this week amid limited triggers. Bond yields had eased in anticipation of dovish commentary from the members of India's rate-setting panel in the minutes of October's policy meeting, which were released in the middle of the week. The members flagged room for future rate cuts as the country's inflation outlook eases. RBI Governor Sanjay Malhotra said the benign outlook for headline and core inflation as a result of the downward revision of projections opens up policy space to further support growth. "Given the declining interest rate environment along with the possibility of additional rate cut, investors can add longer-dated government bonds or invest in actively managed long-duration funds in their portfolio in the medium term," said Abhishek Bisen, head of fixed income at Kotak Mahindra Mutual Fund. A majority of market participants now expect a rate cut in December, while Nomura, Capital Economics and MUFG are predicting another reduction in February, which will take the repo rate to 5.00%. Bisen further added that the yield curve is too steep and is likely to flatten going forward. "We were (already) positioned on relatively higher duration than peers in the portfolio." KEY EVENTS: ** India October HSBC manufacturing, services and composite Flash PMI - October 24, Friday (10:30 a.m. IST) U.S. ** September existing home sales - October 23, Thursday (7:30 p.m. IST) ** September consumer price inflation - October 24, Friday (6:00 p.m. IST) (Reuters poll: 3.1%) ** October S&P Global manufacturing, services and composite Flash PMI - October 24, Friday (7:15 p.m. IST) ** September U-Mich sentiment - October 24, Friday (7:30 p.m. IST) ** September new home sales units - October 24, Friday (7:30 p.m. IST) ** Initial weekly jobless claims for week to October 13 - October 23 - 29 (6:00 p.m. IST) https://www.reuters.com/world/india/rupee-take-cues-rbi-after-assertive-action-bonds-seen-rangebound-2025-10-20/

2025-10-20 01:00

Infrastructure cycles mean more fragmented market US, India to drive copper demand as China's growth slows China's copper demand growth to slow, impacting global market LONDON, Oct 20 (Reuters) - Copper consumption in the United States and India is set to emerge from China's shadow over the next decade as demand growth in the world's largest consumer of the industrial metal slows. Beijing's industrial and infrastructure expansion has helped fuel a rally that has seen copper prices rise to above $10,000 a metric ton from $1,500 25 years ago. Sign up here. But while China is forecast to remain the largest market for copper into the next decade and beyond, analysts expect other demand and price influences to increasingly come into play. Changing regional policies, infrastructure cycles and geopolitical shifts are likely to mean producers, consumers, traders and investors need to adapt to a market that has many different drivers. "China will reduce its rate of copper consumption and stockpiling. We are going back to old-fashioned drivers of copper, which is basically replacement cycles outside China," said Panmure Liberum analyst Tom Price. The impact has yet to be seen, but moves by the U.S. and other countries to promote local manufacturing also mean China's export machine and manufacturing activity is expected to slow and weigh on its demand for refined copper, which is estimated at around 15 million tons this year. Meanwhile, the data centres needed to support AI technology and upgrades to power grid infrastructure mean copper demand growth outside China will become the driving force for prices. "China has built its infrastructure, including its power distribution grid. Its activity will drift to a lower level to match (its) requirement," said Price, who forecasts Chinese demand will be 6% lower in 2031 than in 2026. Price predicts China will account for 52% of global consumption of primary copper, at around 27 million tons, in 2031 compared with 57% in 2026. And he expects U.S. copper demand of 2.2 million tons in 2031, up nearly 50% from 2026, while for India, he forecasts copper demand to rise above 1 million tons, representing a rise of more than 30%. 'INCREASING PUSHBACK BY COUNTRIES IN THE WEST' Analysts also expect U.S. President Donald Trump's imposition of 50% tariffs on copper pipes and wiring to help encourage local production. For China, the likely outcome is the loss of a major market for its exports of copper pipe. Trade Data Monitor ranks the U.S. as China's fourth biggest market for the product. Last year, it imported 14.4 million tons of copper tubes and pipes directly from China and in the first seven months of this year these totalled some eight million tons, TDM data shows, underlining the potential loss of a major market for Beijing. "China's output of manufactured goods, particularly for export, is likely to slow down to some extent as a function of increasing pushback by countries in the West," said Duncan Hobbs, research director at Concord Resources. Those exports will include copper wire used for power grid infrastructure. In its last network-infrastructure review a decade ago, the U.S. Department of Energy found 70% of U.S. transmission lines were more than 25 years old. Meanwhile, India is expanding its transmission infrastructure to support its goal of 500 GW of non-fossil fuel-based capacity by 2030. And in Asia, excluding China, consultancy Benchmark Mineral Intelligence expects copper demand to jump 25% to more than 9.2 million tons between 2025 and 2030. For electric infrastructure which includes power grids and generation, data centres and telecoms, BMI expects demand to rise 35% to 2.2 million tons. BMI's forecasts for China are 4% and 11% respectively. MODERNISING INFRASTRUCTURE Grid improvements in the West mainly mean modernising infrastructure. This will be slow and steady and not as copper intensive as building from scratch, as China has been doing. Robert Edwards, principal analyst at metals consultancy CRU has expected China's influence on the copper market to wane for some years. But this did not materialise because of Chinese investment in electric vehicles, renewables and its power grid. CRU expects China's consumption of global mined and recycled copper consumption to fall to 57% of 31.36 million tons in 2030, from 59% of 27.62 million tons this year. "Demand growth potential in China is limited. You should see more growth in the rest of the world," said Edwards. https://www.reuters.com/sustainability/climate-energy/new-copper-demand-drivers-us-india-china-juggernaut-slows-2025-10-20/