2025-09-23 18:58

International dollar bonds rise more than 2 cents Stocks tick up after Monday rally Shape and size of US support remains unclear; World Bank to deploy $4 billion NEW YORK/LONDON, Sept 23 (Reuters) - Argentina's international bonds extended gains on Tuesday and the local peso firmed against the dollar after U.S. President Donald Trump spoke in support of his right-wing peer in Argentina, Javier Milei, and his economic program. The World Bank said it aims to deploy up to $4 billion in Argentina in the coming months to support the South American country's reform agenda. Sign up here. Argentine assets rose as Trump said the U.S. will help Milei's economic program to "ensure both countries' success," adding that the South American grains exporter will not need an outright bailout. Milei faces a key midterm election on October 26. The day's market moves lifted bonds up by 2 to 3 cents, data from MarketAxess showed, with the 2046 up 2.8 cents at 59 cents on the dollar. The peso rose 4% to the dollar following a similar gain on Monday. Stocks drifted higher, with the local benchmark (.MERV) , opens new tab up 1% after a Monday gain near 8%, and shares traded in U.S. exchanges (.BKAR) , opens new tab rose 3%. Argentine assets rallied , opens new tabon Monday after U.S. support was initially announced by Treasury Secretary Scott Bessent. Specifics of that support have not been disclosed. "We're still awaiting more details, but the core aim is to stabilize Argentinean assets," said Shamaila Khan, head of fixed income for emerging markets and Asia Pacific at UBS. "The statements from Bessent yesterday were remarkably strong and unprecedented in their support for Argentina," she added. "Regardless of the specific announcements, we anticipate that Argentina will receive the necessary support." WHAT WILL U.S. SUPPORT LOOK LIKE? The country's embattled peso currency strengthened nearly 5% to the dollar, extending Monday's rise in a sharp reversal from last week, when the Argentine central bank burned through more than $1 billion of reserves to defend its currency. Lack of detail on what the Trump administration would provide to Argentina had investors speculating on the shape and size of the support. "For the short term, it's certainly good," said Juan Perez, director of trading at Monex. "But in the long term, we'll see what the commitment actually materializes into." He said Argentina is benefiting from being politically aligned with the Trump administration. "The U.S. administration has made it very clear that when it comes to global trade, any type of commercial relationship is not going to be based solely on numbers or business. It's also going to be somewhat embedded with an agenda or with some sort of political goal behind it." Earlier this year, Argentina renewed a $5 billion swap line with China's central bank, which forms part of an overall $18 billion facility with the PBOC that has helped the South American nation to shore up its reserves, but has also drawn ire from Washington. MILEI'S REFORMS ON TRACK? Financial assets of Argentina, a serial defaulter on its debt, have been on a rollercoaster in recent months and years. Investors have broadly warmed to Argentina since Milei became president in December 2023 and launched an ambitious reform program. However, markets have fallen sharply in recent weeks, with international bonds still down near 10% for the year and the peso coming under pressure after corruption allegations inside Milei's inner circle and a larger-than-expected loss in a local election in Buenos Aires triggered concern over his ability to reshape the economy. https://www.reuters.com/business/finance/argentina-markets-extend-stellar-rebound-ahead-expected-trump-milei-meeting-2025-09-23/

2025-09-23 18:17

By Promit Mukherjee and David Ljunggren OTTAWA, Sept 23 (Reuters) - President Donald Trump's actions are raising questions about the continued independence of U.S. monetary policy and have also dented the safe haven appeal of the U.S. dollar, Bank of Canada Governor Tiff Macklem said on Tuesday. Sign up here. The observations mark the first time Macklem has commented on Trump's attempts to influence the Federal Reserve. In the last few months, Trump has cranked up his demands for a rate cut, tried to remove one of the Fed's governors and repeatedly insisted that chair Jerome Powell resign. "President Trump's attempts to influence the Federal Reserve are raising questions about the continued independence of U.S. monetary policy," Macklem told the Saskatoon Chamber of Commerce in the western province of Saskatchewan. Macklem said the new global uncertainty, triggered in part by tariffs, underscored the need for Canada to boost productivity and find new foreign markets. "The question now is whether U.S. dominance in global financial flows will ebb as the United States pulls back from trade and runs large fiscal deficits. The recent performance of the U.S. dollar may be telling us something," he said. The greenback, he noted, was losing its appeal, falling almost 10% since Trump unleashed a barrage of tariffs globally in April. This, Macklem said, had called the dollar's safe haven role into question. "For now, the greenback remains dominant, and — without a clear alternative — I suspect it will remain the global reserve currency for the foreseeable future. But for many, its value as a hedge in times of stress has been dented," he said. He said the shifting trade equation with the U.S. had immense ramifications for Canada. "We can't afford to wait this out," he said, adding that Canadian businesses as well as political and economic leaders would need to chart a new course. "We should have been making these changes 15 years ago. But the next best time is now," he said. Canada has long suffered from anemic productivity which economists and businesses say is helping fuel inflation. "We need to diversify our trade by growing our internal market and finding new overseas markets. And we need to improve our productivity and make ourselves more attractive to investors," Macklem said. Canada's economy will work less efficiently, costs will go up and incomes will shrink due to increased trade friction with the U.S., he said, but noted monetary policy would not be able to soften these impacts. "Monetary policy cannot undo the efficiency costs of U.S. tariffs ... nor can counter-cyclical fiscal stimulus," he said, adding that only positive structural reform could offset that. ((Reuters Ottawa bureau)) Keywords: CANADA CENBANK/ https://www.reuters.com/world/americas/bank-canada-head-trump-is-raising-questions-about-independence-us-monetary-2025-09-23/

2025-09-23 17:42

NEW YORK, Sept 23 (Reuters) - U.S. Federal Reserve Chair Jerome Powell said on Tuesday the central bank is in a "challenging situation" with an ongoing risk of faster-than-expected inflation at the same time that weak job growth has raised concern about the health of the labor market. In prepared comments to Rhode Island's Greater Providence Chamber of Commerce, Powell offered little indication of when he thinks the Fed might next cut interest rates, noting that there was danger to both cutting too fast and risking a new surge of inflation, or reducing rates too slowly and possibly causing unemployment to rise unnecessarily. Sign up here. MARKET REACTION STOCKS: The S&P 500 (.SPX) , opens new tab extended declines and was last down 40.71 points, or 0.60%, to 6,653.37. BONDS: Treasury yields moved lower, with the yield on the benchmark U.S. 10-year note off 2.7 basis points to 4.118% and the two-year note yield off 0.9 basis point to 3.592%. FOREX: The dollar index briefly strengthened before reversing and was last down 0.1% to 97.23. COMMENTS: OLIVER PURSCHE, SENIOR VICE PRESIDENT, WEALTHSPIRE ADVISORS, NEW YORK: “I think market participants have priced in 50 basis points worth of cuts (this year). We've gotten 25. And (Powell’s) comments, along with the comments from the other Fed governor yesterday, put doubt into whether or not we're going to see another rate cut this year. “As we've seen for the better part of this year, while there's certainly been resilience in the economy, the data has hardly been even and consistent and is now dipping to more of a slowdown. “The economy is surprisingly resilient and the consumer is surprisingly resilient. However, we know from history that when the job market starts to weaken and we shift from a lack of hiring to layoffs, which is the fear; it hasn't materialized, but that's the concern. Then the consumer tends to also slow down. And heading into the fourth quarter, that's potentially problematic. I think that the market needs to start to consider that as a very real possibility. “And by the way, Powell has flat-out said that. In these prepared remarks he says that inflation risks are real and persistent, and that's what's putting them in such a difficult position.” “The take-away should be that, with this being the third year of double digit returns for the S&P 500, there needs to be another strong catalyst to move stocks materially higher. And right now, it is not clear what that catalyst can be.” ADAM SARHAN, CHIEF EXECUTIVE, 50 PARK INVESTMENTS, NEW YORK: "Powell has made it very clear there's still uncertainty with respect to inflation, and inflation still remains elevated. It's not a deal breaker... but it's not an all-clear, either. So we're in a situation now where we're likely to continue to get small, slow-and-steady modest cuts from the Fed, but anyone who was expecting like a 200-basis-point cut most likely that's not going to happen, until inflation comes down. "It's a muted reaction. He's not telling us anything new. We know inflation is high, and we know with the jobs environment that there's some uncertainty there." EUGENE EPSTEIN, HEAD OF TRADING AND STRUCTURED PRODUCTS, MONEYCORP, NEW JERSEY: “Powell reiterated some of his tone from the Fed decision last week really. His tone now and last week is dovish, I would argue. The question was always would his dovishness meet the expectations of dovishness, meaning how dovish he was going to be. And I would say it didn’t really meet expectations. . . There was a high bar for dovishness that was set, and I don’t think it was met. Regardless, the tone was and is still concern over the job market. That’s why I think you can make the argument that the dollar didn’t retrace substantially.” https://www.reuters.com/business/view-feds-powell-repeats-no-risk-free-path-job-inflation-risks-weighed-2025-09-23/

2025-09-23 17:08

Sept 23 (Reuters) - The Inter-American Development Bank is aiming to attract private capital to Latin America by helping turn a pool of up to $500 billion of regional local loans into investable global assets, the lender said on Tuesday. ReInvest+, a partnership between the IDB Group and Brazil's presidency of the COP30, seeks to convert performing loans already on local bank balance sheets into investment-grade, hard-currency securities by adding political and foreign exchange risk insurance. The move is designed to attract institutional investors who typically shy away from early-stage, unrated, and local-currency projects. Sign up here. “Up until now, we’ve asked investors to change their risk appetite,” IDB President Ilan Goldfajn said. “We’re flipping the script. The projects must go where the money is.” The initiative is part of a broader push to close the $1.3 trillion annual climate financing gap in developing countries outside China. Public funds cover only a fraction of that need, and private flows have lagged due in part to the perceived added risks. A study commissioned by the IDB estimates that the global pool of eligible loans could exceed $3 trillion. The IDB is calling for proposals from commercial and international banks to join the initiative, with submissions due by Oct. 24. Selected partners will be announced at COP30 in Brazil, where they are expected to commit to asset purchases over the next year. There is no preliminary amount goal set. The IDB will act as a trusted intermediary, setting criteria and offering financial technologies to support the transition. https://www.reuters.com/sustainability/climate-energy/idb-group-targets-500-bln-latin-american-loan-pool-global-investment-2025-09-23/

2025-09-23 16:33

Romania's debt agency preparing end-of-year bond plans Country is grappling with largest budget deficit in EU Investment grade credit rating remains under threat LONDON, Sept 23 (Reuters) - Romania is readying some end-of-year bond sales and buybacks now the political upheaval that had engulfed the country - and still hangs over its investment grade credit rating - looks to have settled. Romania is grappling with the European Union's largest fiscal deficit and has been squarely in the spotlight this year after its drama-filled presidential election crashed its currency. Sign up here. With a pro-EU coalition now in place and 17 billion euros ($20 billion) of debt already borrowed via various channels this year, its debt office is finalising a "liability management" exercise and yen-denominated green bond to round off the year. The plan is to replace a chunk of the 4.25 billion euros worth of euro-denominated bonds Romania has coming due next year with longer-term ones, while the "samurai" bond, as yen debt is also known, will help build up its investor base in Japan. "The numbers will depend on the market, what the demand will be for the new issue and what the demand for the buyback will be," the head of the debt agency, Stefan Nanu, told Reuters during a trip to London. The liability management plan would result in some "net new issuance", Nanu added. "All options" were open, from a tranche of new bonds with different maturities to a straightforward enlargement, or "tap" of some of its existing bonds. It is also starting to think about next year. While much will depend on what the still-to-be-announced 2026 budget looks like, a new "derivatives framework" due to be introduced means it is also considering dollar-denominated bonds and maybe one or two in currencies it has never issued in before. WINDOW OF OPPORTUNITY Romania's deficit has made it one of the biggest emerging market debt issuers in the world in recent years, but Nanu does not see any sign of waning investor demand at the moment. The government wants to cut the deficit towards 6% of GDP next year, from what is likely to be more than 8% this year. However, the four parties in the new ruling coalition have not agreed how to do it and protests are growing. It also means pressure remains on the country's sovereign credit rating, which is on the lowest rung of "investment grade" and a "negative outlook" - effectively a downgrade warning. Analysts say new Prime Minister Ilie Bolojan, who under a rotational arrangement will head centrist President Nicusor Dan's government until 2027, now has to deliver on tax hikes and spending cuts and fast. "The window (for fiscal repair work) is clear, this year and next year," Nanu said. ($1 = 0.8514 euros) https://www.reuters.com/business/finance/romania-readies-final-debt-deals-turbulent-year-2025-09-23/

2025-09-23 15:55

Sept 23 (Reuters) - Federal Reserve Bank of Atlanta President Raphael Bostic said Tuesday inflation risks are still in play in the U.S. economy, although he noted that thus far President Donald Trump's import tax hikes have not pushed up prices the way they were expected to. “Business leaders are telling us they are definitely feeling the cost pressures and it is becoming increasingly difficult to prevent those from flowing into prices that are faced by consumers and by their customers,” Bostic said during a live taping of the Macro Musings podcast. Sign up here. When it comes to inflation, “I actually think there's still more to come” on that front. While the president's tariffs are one of the main upward pressures on inflation right now, Bostic said when it came to how much the tariffs had pushed up prices, "it's been much more muted, I think, than many expected." Bostic said it was now important for the central bank to keep a close eye on how high inflation was affecting expectations about the future of prices. With inflation, "I really think we need to pay very close attention to the consumer psyche and to what businesses plan" given the current environment, he said. Bostic did not comment directly on the monetary policy outlook, following last week's meeting that saw officials cut their overnight interest rate target range by a quarter percentage point, to between 4% and 4.25%. Driving the rate cut was a concern that labor markets are stalling and would benefit from lower short-term borrowing costs. In his appearance, Bostic noted "the labor markets are very difficult to interpret today," and that businesses were telling him that amid the uncertainty, they were neither hiring nor firing to a notable degree. https://www.reuters.com/sustainability/boards-policy-regulation/feds-bostic-says-inflation-risks-still-present-us-economy-2025-09-23/