2025-10-07 19:24

Possibly on chopping block: GM EV plant funding in Lansing, Michigan Stellantis Illinois electric truck plant also potential target Blue Bird electric school bus plant could also get funds cut WASHINGTON, Oct 7 (Reuters) - The U.S. government is considering cancelling billions of dollars in funding for clean energy programs, including awards for auto manufacturing and carbon capture, according to a list of targeted projects seen by Reuters. Projects on the list include two major direct air capture hubs that received billion-dollar awards from former President Joe Biden's administration, including one that involves oil company Occidental (OXY.N) , opens new tab . Sign up here. Semafor reported the list earlier and said it could impact $12 billion in projects. Also on the list is $500 million awarded last year to General Motors (GM.N) , opens new tab to convert its Lansing Grand River Assembly Plant in Michigan to EVs; $335 million for Stellantis (STLAM.MI) , opens new tab to convert the shuttered Belvidere Assembly plant in Illinois to build mid-size electric trucks; and $250 million for Stellantis to convert its Indiana Transmission Plant in Kokomo to produce EV components. Last week, the Department of Energy announced plans to cancel , opens new tab $7.56 billion in financing for hundreds of energy projects it said would not provide sufficient returns to taxpayers. The Energy Department is also considering rescinding a $32 million award to Hyundai Mobis (005380.KS) , opens new tab which operates a Stellantis supplier in Ohio to produce plug-in hybrid components and battery packs and $89 million for Harley-Davidson (HOG.N) , opens new tab expand its York, Pennsylvania plant for EV motorcycle manufacturing. Also on the list is a $80 million award for Blue Bird (BLBD.O) , opens new tab to convert a former Georgia plant to build electric school buses; and $75 million to engine company Cummins (CMI.N) , opens new tab to convert part of an existing Indiana plant to make zero-emission components and electric powertrain systems. The DOE also is considering cutting $208 million for the Volvo Group (VOLVb.ST) , opens new tab to upgrade plants in Maryland, Virginia and Pennsylvania to increase EV production capacity. The Energy Department said in a statement it "continues to conduct an individualized and thorough review of financial awards made by the previous administration. No determinations have been made other than what has been previously announced." Occidental, GM, Harley-Davidson and Stellantis declined or did not immediately comment. The total sum of the grants in question was uncertain. The list included some projects that DOE said in May it canceled. The previous cancellations included $331 million at an olefins plant carbon reduction at Exxon's Baytown, Texas refinery; $500 million to Heidelberg Materials, US in Louisiana; and $375 million to Eastman Chemical Company (EMN.N) , opens new tab in Texas White House budget director Russell Vought said in a post on X last week that the administration would terminate nearly $8 billion in climate-related funding in 16 Democratic-led states, including California and New York. https://www.reuters.com/sustainability/climate-energy/trump-administration-mulls-additional-12-billion-clean-energy-funding-cut-2025-10-07/

2025-10-07 19:10

Market jitters sank Grupo Mexico shares on Monday Analysts had speculated a bidding war could break out Citi still leaning toward other offer, IPO MEXICO CITY, Oct 7 (Reuters) - Grupo Mexico (GMEXICOB.MX) , opens new tab will not enter a bidding war for Citi's (C.N) , opens new tab retail unit in the country, known as Banamex, as its offer already places the lender at a higher value than a previously accepted competing bid, the miner and transport conglomerate said on Tuesday. The firm seemed to be looking to calm market jitters after shares plunged on Monday on the bid, wiping off around $10.7 billion in market value - more than its $9.3 billion offer for Banamex. Sign up here. Shares ticked back up around 1.5% in mid-day trading Tuesday. Analysts had speculated that Grupo Mexico - controlled by German Larrea, one of the nation's wealthiest men - could engage in a back-and-forth for Banamex, more than two years after scrapping a previous offer. The miner's fresh bid launched last week comes after Citi announced a deal to sell a 25% stake in Banamex to Mexican billionaire Fernando Chico Pardo, chairman of airport operator ASUR (ASURB.MX) , opens new tab, for around $2.3 billion. BACK IN ACTION Grupo Mexico bowed out of the race for Banamex in 2023 after tensions with the government of then-President Andres Manuel Lopez Obrador tangled up talks, leading Citi to opt to list the unit. After Chico Pardo's tie-up, Citi aimed to move ahead with an IPO and gauge interest from other Mexican magnates. It still backs that plan despite Grupo Mexico's offer, though investors may favor the upfront cash. Still, Citi is hoping Chico Pardo's pricetag sets a floor for a potential share price in an IPO, a source told Reuters. DIGGING FOR A DEAL Grupo Mexico said on Tuesday that its bid would involve selling off 40% of Banamex to Mexican private investors and pension funds, and that it already had commitments lined up to carry out the sale. It could also launch a public offer at a later date to include smaller investors, it said. On Friday, the miner said it would also consider allowing Chico Pardo to move forward with his stake purchase, if Grupo Mexico were to purchase the rest at the same valuation. Grupo Mexico said on Tuesday that its existing investment plans were still on track, with or without the Banamex purchase. And to fund the deal, it would not need to significantly raise its debt load, the miner said. The most needed would be under $2 billion, already covered through agreed-upon credit lines, it added. https://www.reuters.com/business/grupo-mexico-wont-raise-banamex-bid-plans-share-stake-with-local-investors-2025-10-07/

2025-10-07 17:32

IMF says FX market spillover effects 'underappreciated' Supervisors should monitor liquidity risks Swap lines, international reserves a 'stabilizing force' LONDON, Oct 7 (Reuters) - Financial institutions that dominate the $9.6 trillion currency market should hold the necessary liquidity and capital buffers and run enhanced stress tests to prevent disruptions to the financial system, according to an International Monetary Fund report released on Tuesday. "Although stress testing and systemic risk monitoring have advanced, the role of FX markets as a conduit for risk transmission and cross-border spillovers remains underappreciated," the IMF said in one of the chapters of its semi-annual Global Financial Stability Report. Sign up here. "Enhancing FX liquidity stress tests is essential to assess the sectoral resilience to funding shocks," according to the IMF. DERIVATIVES ADD TO VULNERABILITY Global banks have significant dollar exposure in their balance sheets, making them vulnerable to potential funding shocks. The increasing involvement of non-bank financial institutions and growing trade in derivatives "may also raise the global FX market’s vulnerability to adverse shocks," the IMF said. Stress in the FX market "can spill over to other asset classes, tightening financial conditions and posing risks to macro financial stability—especially in countries with significant currency mismatches and fiscal vulnerabilities," the IMF added. Reuters reported earlier this year that European and U.K. regulators have asked banks to monitor and stress test their resilience to U.S. dollar shocks, in the latest sign of how the Trump administration's policies are eroding trust in the U.S. as bedrock of financial stability. "A shifting global macro financial landscape underscores the need to strengthen FX market resilience," the IMF said on Tuesday, noting that following the US tariff announcements in early April 2025, investors in some countries have reduced their US dollar holdings. Supervisors and banks should effectively monitor and manage liquidity risks in significant currencies, it added. STRENGTHENING SWAP LINES The Federal Reserve has lending facilities with other central banks to alleviate shortages of dollars and to keep financial stress from spilling over into the United States. But European central banking and supervisory officials for months have been questioning whether they can still rely on the Fed, Reuters has previously reported. For the IMF, "strengthening and expanding the network of central bank swap lines can enhance global FX liquidity backstops and help reduce contagion risks". "Policy backstops are critical for stabilizing the global FX market during adverse shocks. Among the most effective tools are the Federal Reserve’s US dollar liquidity swap lines." The IMF also highlighted that "international reserves are a stabilizing force during stress episodes" as they can be used when private funding dries up. https://www.reuters.com/sustainability/boards-policy-regulation/imf-warns-banks-supervisors-liquidity-risks-96-trillion-fx-market-2025-10-07/

2025-10-07 17:17

NEW YORK, Oct 7 (Reuters) - Federal Reserve Governor Stephen Miran on Tuesday said that the U.S. bond market’s current relative calm supports a swift push to lower interest rates. Given that market signals in reaction to Fed policy changes can carry valuable feedback in the wake of a policy change, Miran said "I would actually argue that the bond market behavior last year bore out my argument" that rates needed to be higher, "and this year, thus far, it is again bearing out my argument" for a swift pace of easing. He was speaking at an event held by the Managed Funds Association in New York. Sign up here. Miran, who is on leave from the Trump White House to serve as a Fed governor, wanted the central bank to implement a more aggressive rate cut than the Federal Open Market Committee delivered at last month's policy meeting. Miran reiterated in his appearance that an expected moderation in inflation as well as changes in the underlying state of the economy continue to argue for aggressive rate cuts. That the bond market took the Fed's latest easing with little reaction is a sign it supports a swift move down in rates, Miran said. The central banker also said that amid a government shutdown over political wrangling over the budget, U.S. government data are still the "gold standard," although "there has been some deterioration in quality in recent years due in part to declining response rates." "People have to believe that the data are reflective of the true state of the economy and not...doctored to achieve a particular, to achieve a particular political outcome," Miran noted. His comment comes as Trump moves to install an ally at the Bureau of Labor Statistics after he fired a key government statistical official in August in the wake of a weak jobs report, raising questions about the reliability of the data. Given some of the issues with government data, "I do think it's important to have democratic accountability so that you can make sure that you are putting into place leadership , opens new tab" in government agencies that gets to "improving things over time, but that's not really a Federal Reserve issue," Miran said. https://www.reuters.com/sustainability/boards-policy-regulation/feds-miran-says-calm-bond-market-shows-support-rate-cuts-2025-10-07/

2025-10-07 16:13

Euro's global role limited by small investment market Critics warn stronger euro could hurt exporters Lagarde cites internal barriers as cause of economic issues FRANKFURT, Oct 7 (Reuters) - European Central Bank President Christine Lagarde renewed her call on Tuesday for a beefed-up global role for the euro currency, arguing that the bloc is now an innocent bystander, suffering shocks created in Washington and elsewhere. The euro, the world's second most-used currency behind the dollar, has appreciated sharply this year as investors fled the U.S. currency on policy uncertainty, picking up safe assets, like gold and top-tier European bonds, among others. Sign up here. But the 20-nation currency bloc's market for investment grade sovereign debt and stocks is relatively small compared to the U.S., putting it at risk of volatility in case of such flows. "We are innocent bystanders of policy decisions made in Washington and of portfolio allocation decisions made worldwide, which we don’t have much influence over," Lagarde said in Paris. "It is not a sustainable position." "We cannot remain a passive safe haven, absorbing the shocks created elsewhere," Lagarde said in a speech. "We need to be a currency that shapes its own destiny." Critics argue that a larger market share would mean appreciation for the currency, an unwelcome trend putting exporters at a disadvantage. The argument is that foreign demand for reserve assets would mean a steady inflow into the bloc and that would strengthen the currency and not just lower borrowing costs. But Lagarde argued that there is no such mechanical relationship and the bloc could mitigate such risks by shifting more of its foreign trade to euros and expanding domestic trade. In any case, many of Europe's economic difficulties were self-inflicted that could be resolved by bolder policy initiatives, she argued. "Our weaker performance compared with the United States largely reflects internal barriers of our own making: including fragmented regulations, tax regimes, bankruptcy rules and incomplete capital markets," she said. "Structural challenges such as high energy costs, low productivity and reluctance to finance common projects are also, to a large extent, within our own control." https://www.reuters.com/business/ecbs-lagarde-renews-calls-beefed-up-role-euro-2025-10-07/

2025-10-07 14:34

August merchandise trade deficit widened to C$6.32 billion Total exports dropped by 3% while imports increased 0.9% Trade surplus with the U.S. falls to C$6.43 bln in Aug OTTAWA, Oct 7 (Reuters) - Canada's merchandise trade deficit widened in August to C$6.32 billion ($4.53 billion), its second highest on record, as exports both to the U.S. and the rest of the world fell, data showed on Tuesday. The August data had been expected to show a more permanent impact of U.S. President Donald Trump's tariffs on Canada, after exports increased earlier in the year to beat the tariffs and then dropped off sharply. Sign up here. Total exports dropped by 3% in August from July while imports increased 0.9%, Statistics Canada said. It was the first decrease in total exports since April. In volume terms exports fell 2.8% in August. "This was not a good report. It was a pretty rough month," said Stuart Bergman, chief economist at Export Development Canada. "What we are starting to see is the impact of tariffs coming into full view," he said, adding that as the volatility of the fist few months have passed, the more normalized impact on trade was visible. Analysts polled by Reuters had forecast the August trade deficit at C$5.55 billion, up from a upwardly revised C$3.82 billion in the prior month. Trump imposed sectoral tariffs on Canada early this year, forcing businesses to reorient supply chain from its biggest trading partner. But the shift has been volatile, erratic and difficult. Overall, exports dropped in eight of the 11 product sections in August with forestry, industrial machinery and metals leading the charge. Exports to the U.S. were at C$44.18 billion, down 3.4% from July, StatsCan said, adding it was primarily led by unwrought gold exports. But other product categories contributed to the decline, including lumber, machinery and equipment. Canada's share of exports to the U.S. fell below 70% a few months ago before recovering to 73% in August, compared with 75% during the same period last year. Prime Minister Mark Carney will be meeting with Trump on Tuesday as he comes under pressure to address the impacts of U.S. tariffs on critical sectors such as steel, cars and lumber. Imports from the U.S. were down 1.4% in August on a monthly basis, shrinking the total trade surplus with its southern neighbor to C$6.43 billion from C$7.42 billion in July. Exports to countries other than the United States were down 2% in August, a third consecutive monthly decline, Statscan said. Lower exports of crude oil and nuclear fuel contributed the most to the monthly decrease. However, Canada's imports from the rest of the world barring the U.S. rose 4.2%, reaching a record in August, StatsCan's data showed, pushing Canada's trade deficit with countries other than the United States to a record high of C$12.8 billion in August from C$11.2 billion in July, StatsCan said. The Canadian dollar was slightly weaker after the trade data, down 0.13% to 1.3960 to the U.S. dollar, or 71.63 U.S. cents. Yields on the two-year government bonds were up 0.2 basis points to 2.469%. ($1 = 1.3958 Canadian dollars) https://www.reuters.com/world/americas/canadas-august-trade-deficit-widens-more-than-forecast-exports-drop-2025-10-07/