2025-10-20 00:51

Investors digest US credit risks and US-China trade tensions Politics back in focus as Takaichi looks set to become Japan PM Yen caught between hawkish BOJ and dovish fiscal expectations Markets still wary about French political risks Oct 20 (Reuters) - The dollar edged higher against the yen on Monday as investors shifted their focus to political developments in Japan and the euro area, while U.S. credit risk concerns lingered. The yen edged lower as hardline conservative Sanae Takaichi is almost certain to become Japan's first female prime minister after a decisive parliamentary vote. Sign up here. Her expected premiership, backed by a new coalition with the right-wing Japan Innovation Party, has raised investor concerns over potential fiscal expansion, which could weigh on the yen. "Market participants will now be watching closely to see what fiscal plans are put together by the new coalition government," said MUFG senior currency economist Lee Hardman. The dollar was up 0.08% to 150.710 yen . Bank of Japan board member Hajime Takata, who voted against keeping rates steady in September, reiterated on Monday his case for resuming hikes, giving the Japanese currency some support. Japan's benchmark Nikkei stock index (.N225) , opens new tab closed more than 3% higher, hitting an all-time peak. The BOJ next decides monetary policy on October 30, with market-implied odds of a quarter-point rate increase at 23%, LSEG data shows. The euro edged slightly higher against the dollar as French political tensions eased, but investor caution lingered. Markets have yet to fully price out French risk from the euro, with the government’s decision to freeze pension reform offering only a temporary political breather. The euro was down 0.06% at $1.164. U.S. stock indexes ended higher on Friday after U.S. President Donald Trump said his proposed 100% tariffs on China would not be sustainable, while upbeat quarterly results from regional banks helped ease credit risk concerns. After a turbulent week in which some regional U.S. banks flagged bad loan and fraud issues, investors are now awaiting more earnings to check for signs of wider sector strain. The U.S. dollar index, a measure of its value relative to a basket of other major foreign currencies, rose 0.053% to 98.587. It hit 98.025 on Friday, its lowest level since October 6. "The immediate danger seems to have passed as investors are convinced that the bankruptcies, bad loans and fraud accusations are all isolated incidents, and not part of widespread failings within the banking sector," David Morrison, senior market analyst at Trade Nation, said in a note. Economists said the dollar's resilience will be tested on multiple fronts. "One, the government shutdown is hurting economic activity, both directly and indirectly," said Klaus Baader, global chief economist at Societe Generale Corporate and Investment Banking (SGCIB), adding U.S.-China tensions were a second major concern. "Three, the (import) tariffs that are already in effect continue to feed through, slowing real household income growth and weighing on corporate margins," he said. Barclays flagged that, with no obvious catalyst to end the federal government shutdown in the next few weeks, the stoppage may extend well into November, when political and economic pressures should intensify. The Australian dollar rose 0.48% to $0.652 on Monday, cheered by data from top trade partner China showing its economy reasonably resilient to U.S. tariffs. Official data showed China's economy grew 1.1% in the third quarter, topping forecasts, while industrial output also beat with a 6.5% rise. Although the 4.8% annual growth rate marked the weakest pace in a year, it kept China on track to meet its official target of around 5%. https://www.reuters.com/world/asia-pacific/yen-eases-with-dovish-takaichi-set-become-japan-pm-aussie-gains-2025-10-20/

2025-10-20 00:44

Centrist senator defeats conservative in runoff Bolivia's economic crisis drives voters toward moderate change President assumes office on November 8, faces fiscal challenges Paz's Christian Democratic Party lacks majority, needs alliances to govern LA PAZ, Oct 19 (Reuters) - Centrist Rodrigo Paz won Bolivia's presidential runoff on Sunday, defeating conservative rival Jorge "Tuto" Quiroga, as the country's worst economic crisis in a generation helped propel the end of nearly two decades of leftist rule. Paz, a senator from the Christian Democratic Party, won 54.6% of the vote, ahead of Quiroga's 45.4%, according to early results from Bolivia's electoral tribunal. But Paz's party did not win a majority, forcing him to forge alliances to govern effectively. Sign up here. The new president takes office on November 8. The 58-year-old senator's win marks a historic shift for the South American country, governed almost continuously since 2006 by Bolivia's Movement to Socialism, or MAS, which once enjoyed overwhelming support from the country's Indigenous majority. Paz's moderate platform — pledging to maintain social programs while promoting private sector-led growth — appeared to resonate with left-leaning voters disillusioned by the ruling MAS, founded by former President Evo Morales, but wary of Quiroga's proposed austerity measures. Support for MAS cratered in the August first round amid a deepening economic crisis. "This election marks a political turning point," said Glaeldys Gonzalez Calanche, analyst for the Southern Andes at International Crisis Group. "Bolivia is heading in a new direction," she said. Outside a polling station in La Paz, Lourdes Mendoza said she had grown weary of the MAS era. "My children were born and raised with a single government," she said, "I hope they can see other possibilities and alternatives." Bolivia's fragile economy dominated the runoff campaign. Once plentiful natural gas exports have plummeted, inflation is at a 40-year high, and fuel is scarce. VOTERS WANT ECONOMIC CHANGE Both candidates campaigned to roll back elements of the MAS era, state-led model, but differed over how drastically. Paz favored gradual reform, including tax incentives for small businesses and regional fiscal autonomy, while Quiroga proposed sweeping cuts and an IMF bailout. "We're going for a new stage of Bolivian democracy in the 21st century," Paz told Reuters two days before the election at his family's ranch in the southern gas-producing region of Tarija. "We're going to try to build an economy for the people," he said, one where "the state is no longer going to be the central axis." Like his opponent, Paz has pledged to improve diplomatic ties with Western countries, including the United States, after years where Bolivia had aligned itself with Russia and China. Voters like businesswoman Marcela Martinez, 52, who cast her ballot for Paz on Sunday said she supported his plans to open up the economy to investment. "We're totally cut off from the outside world, " said Martinez. Other voters said they were not convinced that his victory represented a true break from MAS: "I think he's a puppet of the outgoing government," said 21-year-old Esther Miranda from La Paz, who works in a nail salon. "I just hope we get a president who's more decent, someone who helps people," Miranda said. RUNNING MATE'S POPULIST APPEAL BOOSTS PAZ Paz's campaign was boosted by his running mate Edman Lara, a former police officer known for viral TikTok videos exposing corruption. Lara's populist appeal helped Paz connect with younger and working-class voters, analysts said. Economists warn the incoming administration faces immediate challenges, including securing fuel supplies and building coalitions in a fragmented legislature. Outgoing hydrocarbons minister Alejandro Gallardo said last week that the state energy company was struggling to obtain foreign currency for fuel imports. Paz told Reuters he was already addressing the issue through deferred payment agreements with fuel suppliers to ensure diesel and gasoline arrive within days of his inauguration. Paz said he would also begin phasing out universal fuel subsidies. Targeted support would go to vulnerable groups, while bigger industries such as agribusiness would pay market rates for fuel. "The market will have to adjust prices, but there are sectors that will have government support until the economy is reactivated," he said. Bolivia's main labor union, the Central Obrera Boliviana (COB), has previously warned it would oppose any threats to the social and economic gains achieved so far, in a sign of the juggling act before Paz's government to avoid street protests. Paz's PDC won 49 of 130 seats in the lower house and 16 of 36 in the Senate, just ahead of Quiroga's coalition, which secured 43 seats in the lower house and 12 in the Senate. https://www.reuters.com/world/americas/bolivia-centrist-rodrigo-paz-wins-presidential-runoff-early-official-count-shows-2025-10-20/

2025-10-20 00:24

13,000 air travel controllers will miss paychecks on October 28 Lawmakers in both parties have raised growing concerns about impact of shutdown on air safety FAA says it slows flights when it does not have enough air travel controllers to fully staff towers WASHINGTON, Oct 19 (Reuters) - The Federal Aviation Administration said late Sunday that air traffic control staffing issues were delaying travel at airports in Dallas, Chicago, Atlanta and Newark as a U.S. government shutdown hit its 19th day. The FAA said numerous staffing triggers had been received for the evening shift and flights could also be delayed in Las Vegas and Phoenix because of air traffic control absences. Sign up here. FlightAware said more than 5,800 flights had been delayed on Sunday. Weather issues and a Formula 1 race in Austin were also impacting flights. More than 20% of American Airlines (AAL.O) , opens new tab and Southwest Airlines (LUV.N) , opens new tab flights were delayed Sunday, according to FlightAware. Some 13,000 air traffic controllers and about 50,000 Transportation Security Administration officers must work during the government shutdown, but are not being paid. Earlier this month, more than 23,000 flights were delayed over a week and Transportation Secretary Sean Duffy said 53% of flight delays were due to staffing issues, compared with 5% normally, but staffing issues have largely improved over the last week. Air traffic control has become a flashpoint in the debate over the shutdown with both parties blaming the other. Unions and airlines have urged a quick end to the standoff. The Trump administration is airing videos at some airport security checkpoints blaming Democrats, but many airports have refused to run them. In 2019, during a 35-day shutdown, the number of absences by controllers and TSA officers rose as workers missed paychecks, extending checkpoint wait times at some airports. Authorities were forced to slow air traffic in New York and Washington, which put pressure on lawmakers to quickly end the standoff. The FAA is about 3,500 air traffic controllers short of targeted staffing levels and many had been working mandatory overtime and six-day weeks even before the shutdown. https://www.reuters.com/business/autos-transportation/faa-says-us-air-traffic-control-staffing-issues-causing-flight-delays-2025-10-19/

2025-10-20 00:19

Three major US stock indexes up 1% each Gold prices rise more than 2% US Treasury yields dip, but stay in holding pattern NEW YORK, Oct 20 (Reuters) - Major stock indexes gained sharply on Monday with investors looking forward to quarterly earnings reports from big U.S. companies this week, while U.S. Treasury yields edged lower ahead of upcoming U.S.-China trade discussions. Gold prices rose more than 2% on expectations of further U.S. interest rate cuts and sustained safe-haven demand. Sign up here. Investors are also monitoring the U.S. federal government shutdown, now in its 20th consecutive day. Key economic reports have not been published by government agencies as a result, although the September U.S. Consumer Price Index report is expected to be released on Friday. White House economic adviser Kevin Hassett said on Monday the shutdown was likely to end this week. The U.S. quarterly reporting period has unofficially entered its second week, and investors are keen to see reports this week from Tesla (TSLA.O) , opens new tab, IBM (IBM.N) , opens new tab, Netflix (NFLX.O) , opens new tab, Procter & Gamble (PG.N) , opens new tab, Coca-Cola (KO.N) , opens new tab and other big names. On Wall Street, the three major U.S. stock indexes each rose more than 1%. "Some big, large-cap stalwarts are going to be reporting," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. "Of course, if we see some disappointing earnings, that could affect the market negatively. But investors have come into the week with rose-colored glasses on, feeling very good about where we've gone this year." The Dow Jones Industrial Average (.DJI) , opens new tab rose 515.97 points, or 1.12%, to 46,706.58, the S&P 500 (.SPX) , opens new tab advanced 71.12 points, or 1.07%, to 6,735.13 and the Nasdaq Composite (.IXIC) , opens new tab climbed 310.57 points, or 1.37%, to 22,990.54. As U.S. regional banks' earnings keep rolling in, some market watchers said tighter credit conditions could remove some froth in the market. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab rose 11.79 points, or 1.20%, to 995.69. European shares closed higher as initial concerns over the stability of the U.S. banking sector eased. The pan-European STOXX 600 (.STOXX) , opens new tab index rose 1.03%. On the U.S. trade front, U.S. Treasury Secretary Scott Bessent said on Friday he expects to meet this week with Chinese Vice Premier He Lifeng in Malaysia to try to forestall an escalation of U.S. tariffs on Chinese goods that U.S. President Donald Trump said was unsustainable. Trump also confirmed he would meet with Chinese President Xi Jinping in two weeks in South Korea and expressed admiration for the Chinese leader. The yield on benchmark U.S. 10-year notes fell 2.7 basis points to 3.982%, from 4.009% late on Friday. The dollar edged higher against the yen and other currencies. Markets were reducing the odds of a Bank of Japan rate hike this month to just over 20%, while in France, political tensions eased. In Japan, a coalition deal set the stage for pro-stimulus Sanae Takaichi to become prime minister. The Federal Reserve still is widely expected to cut interest rates by a quarter-point next month and again in December. The dollar index , which measures the greenback against a basket of currencies, rose 0.07% to 98.61, with the euro down 0.08% at $1.1642. Against the Japanese yen , the dollar strengthened 0.06% to 150.71. Spot gold rose 2.5% to $4,354.79 an ounce, while oil prices settled at their lowest since early May amid worries about a potential supply glut. Brent crude futures fell 28 cents, or 0.46%, to settle at $61.01 a barrel. U.S. West Texas Intermediate futures eased 2 cents, or 0.03%, to $57.52. https://www.reuters.com/business/autos-transportation/global-markets-wrapup-1-2025-10-20/

2025-10-19 23:13

Ueda says he wants to collect more data ahead of October meeting BOJ chief likely got little clarity from meetings in Washington Ueda faces pressure from hawks on BOJ's board Central bank's next policy meeting is set for October 29-30 WASHINGTON, Oct 20 (Reuters) - Bank of Japan Governor Kazuo Ueda likely left Washington last week with little conviction that global headwinds will allow the central bank to raise interest rates as soon as this month, with finance officials from around the world warning of downside risks amid renewed U.S.-China trade tensions. But the resilience of the global economy, which was touted by the International Monetary Fund in its latest World Economic Outlook last week, also gives him cover to proceed with a near-term rate hike if a hawkish-leaning BOJ board prefers to move sooner rather than later. Sign up here. Ueda, as a result, left his options open by offering few clues on the timing of a rate hike, which markets bet will happen by January of next year. "There's not much of a gap in how I see global and U.S. economies now and how I saw it back in Japan," Ueda said in a press conference on Thursday after attending the G20 finance leaders' gathering in Washington. "I would like to keep gathering more information and scrutinize various data that comes out leading up to our October policy meeting," he said, when asked about the chance of a rate hike at the October 29-30 session. Markets have been focusing on Ueda's comments in Washington, after he said earlier this month he hoped the talks with finance officials and bankers would provide information that helped BOJ policymakers decide whether to hike rates in late October. Ueda has repeatedly cautioned against raising borrowing costs too soon, stressing the need to gauge the strength of the U.S. economy and the extent of the damage from President Donald Trump's tariffs on Japan's export-reliant economy. The meetings in Washington likely gave Ueda little clarity on how soon the fog shrouding the global outlook would clear. PRESSURE WITHIN BOJ BOARD TO RAISE RATES QUICKER The IMF last week lifted its 2025 global growth forecast but warned that a renewed U.S.-China trade war could slow output. While describing global growth as resilient, IMF member countries voiced concerns about emerging strains and risks to the outlook. A senior IMF official told Reuters there were downside risks to Japan's economy and urged the BOJ to be "very gradual" in raising rates due to high uncertainty about the outlook. While Ueda may have plenty of reasons to put rates on hold, he faces pressure from within his board to move quicker. With inflation above the BOJ's 2% target for three straight years and Japan's economy weathering the hit from U.S. tariffs so far, the central bank's board is gradually leaning toward resuming rate hikes that had been put on hold since it raised its key interest rate to 0.5% in January. Two of the BOJ's nine board members unsuccessfully proposed raising rates in September on mounting inflationary pressure. Another dovish member then surprised markets by saying the need for a rate hike was increasing "more than ever." Delaying rate hikes for too long could also trigger a renewed slide in the yen, which could further push up the cost of living by inflating import prices. "If the BOJ holds off on raising rates in October, the next chance would be in December," said Tomoyuki Shimoda, a former BOJ executive. "During that time, there's a risk the yen could slide further." Still, the overall tone of Ueda and his staff suggests the BOJ will take a go-slow approach partly because hiking its key rate to 0.75% would bring it to levels unseen in three decades. Japan's parliament will likely vote to choose a new prime minister on Tuesday, giving the BOJ little time to communicate with a new administration before its next policy meeting. The expected new prime minister, Sanae Takaichi, is a proponent of loose monetary policy. "We don't know how exactly the economy will react" to rate hikes, BOJ Assistant Governor Seiichi Shimizu said during a seminar in Washington on Thursday. "This is another type of uncertainty we are facing now" that warrants moving cautiously, he said. https://www.reuters.com/world/asia-pacific/bank-japans-ueda-keeps-cards-close-chest-ahead-october-meeting-2025-10-19/

2025-10-19 22:32

TRIPOLI, Oct 20 (Reuters) - Libya's Zueitina Oil Company has contained a 'limited' leak on a 16-inch line connecting the Sabah and Zella oilfields, with no environmental impact reported, Libya's state-run National Oil Corp (NOC) said in a statement on Monday. "Technical teams repaired the leak site without recording any environmental impact or damage to nearby agricultural areas", the statement added. Sign up here. The NOC posted a video showing a stream of leaked oil in the desert, while a bulldozer digging in the area of the leaking oil. Oil flow was being gradually restored to the line between the two fields, while field teams continue on-site monitoring to ensure the integrity of the pipeline and prevent any future leaks, NOC said. Libya is one of Africa's biggest oil producers but output has been disrupted repeatedly in the chaotic decade since 2014, when the country split between rival authorities in the east and west following the NATO-backed uprising that toppled Muammar Gaddafi. https://www.reuters.com/business/energy/libyas-zueitina-oil-company-contains-limited-pipeline-leak-statement-says-2025-10-19/