2025-09-18 10:44

LONDON, Sept 18 (Reuters) - What matters in U.S. and global markets today By Mike Dolan , opens new tab, Editor-At-Large, Finance and Markets Sign up here. U.S. markets stumbled on Wednesday after the Federal Reserve delivered its expected first interest rate cut of the year, but stock futures roared back ahead of Thursday's bell as further cautious easing was signaled by the central bank. The dollar and Treasuries flipped back and forth on the decision, with the greenback plunging to a multi-year low before rebounding sharply as Fed Chair Jerome Powell stressed a risk-management approach to further cuts. Even though the median of Fed policymaker projections is now two more cuts this year and another next, the split of views showed a third of them wanted no more easing in 2025 and almost half just expect one more cut or none. Powell's comments highlighted that divergence and suggested the last two meetings of the year would be close calls. Still-hesitant Fed futures are now pricing in an 85% chance of another 25-basis-point move in October and just 44 basis points in easing over the remainder of the year. * The Nasdaq fell 0.32% and the S&P 500 slipped 0.1% on Wednesday after the Fed, partly dragged by Nvidia's 3% retreat , opens new tab on reports that China's regulators told domestic tech firms to halt purchases of all Nvidia's AI chips. However, Chinese officials said on Thursday they were willing to engage in dialogue over the issue; President Donald Trump and China's President Xi Jinping due to speak on Friday. Meantime, Oracle rose on hopes for its involvement in a TikTok workout deal and Lyft surged on Waymo partnership news. And market confidence that Fed rates will get below 3% next year from a midpoint of 4.125% now has helped index futures jump back about 1% today, while tech stocks remain in the vanguard worldwide. * A busy week for central bank meetings also saw the Bank of Canada , opens new tab cut its main policy rate by a quarter point as expected and markets now await the Bank of England's decision later on Thursday. With inflation still high, the BoE is widely expected to leave rates on hold but there's a focus on its annual target for reducing its balance sheet of bonds - controversial in that it has involved direct gilt sales, unlike other G7 peers, and long-term UK gilts have suffered. British gilts, sterling and stocks were firm going into the decision, with the market consensus for a slowdown in the planned pace of so-called quantitative tightening, but retaining some active gilt sales. Norway's central bank also cut its main rate by 25bps to 4% on Thursday. * Friday sees the Bank of Japan decide, with the yen and Japanese government bond yields softer running into that and the Nikkei stock index up 1%. The BOJ is expected to hold rates on Friday but hint of a hike later this year. However, political uncertainty adds complexity, with leadership changes in focus as the ruling party prepares for an October vote on a new Prime Minister. Elsewhere, China's stocks underperformed despite ongoing excitement in its tech sector, with a slide in real estate stocks acting as the big drag. In today's column, I discuss why the Bank of England's active gilt sales may be more trouble than they're worth and halting them in favor of just allowing maturing bonds to roll off could go a long way to healing the country's fragile bond market. Today's Market Minute * The Federal Reserve, concerned about the risk of rising unemployment, reduced interest rates on Wednesday for the first time since December and indicated more cuts would follow to halt any slide in a labor market already experiencing higher joblessness among Blacks, a declining workweek, and other signs of weakness. * Walt Disney-owned ABC (DIS.N) said on Wednesday it was pulling "Jimmy Kimmel Live" off the air, after comments by the late-night show's host about the assassination of conservative activist Charlie Kirk prompted a threat by the head of the top U.S. communications regulator against Disney. , opens new tab * U.S. President Donald Trump meets British Prime Minister Keir Starmer on Thursday for talks designed to focus the U.S. leader's unprecedented second state visit firmly on global affairs rather than domestic political problems. * The Fed is set to embark on an interest rate-cutting cycle just as many of its peers are winding theirs down, a phenomenon we haven’t seen in a long time. The rest of the world, therefore, may need to be prepared for some choppy waters ahead, writes ROI markets columnist Jamie McGeever. * Growing blind spots in the oil market driven by geopolitics are making it harder to determine the true supply-demand balance in the world’s largest and most important commodity market. That’s a recipe for volatility, writes ROI energy columnist Ron Bousso. Chart of the day Market betting on the Fed interest rate trajectory through the end of next year see rates tumbling below 3% in a year's time, implying cuts of 125 basis points over that period, which is two more than Fed policymakers indicated on Wednesday. The implied 'terminal rate' for the cycle of 2.9% is some 35 basis points lower than it was just three months ago. Today's events to watch * Bank of England policy decision (7:00 AM EDT) * U.S. September Philadelphia Fed business survey (8:30 AM EDT) weekly jobless claims (8:30 AM EDT) July TIC data on Treasury holdings and flows (4:00 PM EDT) * U.S. Treasury auctions $19 billion of 10-year inflation-protected securities * U.S. corporate earnings: FedEx, Lennar, Darden Restaurants, Factset * U.S. President Trump meets UK Prime Minister Keir Starmer during state visit to Britain * Canada's Prime Minister Mark Carney meets Mexico's President Claudia Sheinbaum in Mexico Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website , opens new tab, and you can follow us on LinkedIn , opens new tab and X. , opens new tab Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/business/finance/global-markets-view-usa-2025-09-18/

2025-09-18 10:13

MUMBAI, Sept 18 (Reuters) - The Indian rupee weakened alongside its regional peers on Thursday as investors digested the U.S. Federal Reserve's widely anticipated interest rate cut and its measured stance on further easing of benchmark borrowing costs. The rupee closed at 88.13 against the U.S. dollar, down 0.36% on the day. Asian currencies were down between 0.1% to 0.6%. Sign up here. The dollar was a touch lower at 96.9 against a basket of major currencies but up from a 3-1/2-year low hit in the immediate aftermath of the Fed's policy announcement. "The level of dissent, the revised 'dots' and economic projections were consistent with the market's pricing and narrative ahead of the meeting but bordered on the hawkish rather than the dovish side of expectations," analysts at HSBC said in a note. Traders reckon that the rupee is likely to see two-way price action in the near-term and track broader dollar moves with support pegged near 88.45 and resistance near 87.75-87.80. Investors stepped up short positions on the Indonesian rupiah and the Indian rupee, a Reuters poll showed on Thursday, driven by concerns over central bank rate cuts in Indonesia and U.S. tariffs affecting India. Bearish bets on the rupee have risen to the highest since early February, the poll showed. The U.S. may soon scrap the penal tariff imposed on Indian goods and could also lower the reciprocal tariff to 10-15% from the existing 25%, India's Chief Economist Adviser V. Anantha Nageshwaran said at an event on Thursday, shortly before spot currency trading closed. India's benchmark equity indexes, the BSE Sensex (.BSESN) , opens new tab and Nifty 50 (.NSEI) , opens new tab ended up nearly 0.4% each while the yield on the benchmark 10-year bond rose nearly 4 basis points to 6.51%. Tightness in rupee liquidity on account of income tax outflows prompted a rise in daily funding costs and prompted banks to tap the foreign exchange swap market to raise funds. The Wednesday-Thursday swap rate climbed to a peak of 0.50 paisa, implying a rupee interest rate of over 6%, indicating banks are willing to borrow at an elevated cost via swaps. https://www.reuters.com/world/india/rupee-ends-lower-tracking-asian-peers-investors-parse-fed-outlook-2025-09-18/

2025-09-18 09:40

Wall Street stocks reach record high Pound dips after BoE leaves rates unchanged US Treasury 10-year yields rise European shares gain Crude oil prices settle lower, gold retreats NEW YORK, Sept 18 (Reuters) - World equity markets reached a new peak on Thursday, powered by a continuing bull run on Wall Street, while the U.S. dollar rose against major peers on news that fewer Americans filed new applications for unemployment benefits last week. The pound dipped slightly after the Bank of England kept rates unchanged. Sign up here. Benchmark S&P 500, the Dow and the Nasdaq all posted record closing highs. Intel (INTC.O) , opens new tab jumped more than 22% after Nvidia (NVDA.O) , opens new tab said it would invest $5 billion in the struggling U.S. chipmaker. Nvidia's shares closed up 3.5% on the day. The Dow Jones Industrial Average (.DJI) , opens new tab rose 0.27% to 46,142.42, the S&P 500 (.SPX) , opens new tab climbed 0.48% to 6,631.96 and the Nasdaq Composite (.IXIC) , opens new tab advanced 0.94% to 22,470.73. The small-cap Russell 2000 index (.RUT) , opens new tab rose and touched an intraday record high for the first time since November. The pan-European STOXX 600 (.STOXX) , opens new tab index gained 0.8%. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab rose as high as 981.65, topping the previous session's record. It was last up 0.29% at 979.18. The Fed cut rates by 25 basis points on Wednesday and its closely watched "dot plot" had pointed to two more rate cuts over its remaining two meetings this year, but only one additional reduction in 2026. "The market is getting a little priced for perfection, and some of the job erosion is a little unsettling, which is what I think probably led (Fed Chair) Jerome Powell to make his cut yesterday and sort of say he's going to continue to be data dependent," Sandy Villere, portfolio manager at Villere & Co in New Orleans. "The economy in general, between the eroding job numbers and inflation, has kind of stabilized - although you can never fight the Fed and falling rates, which is what I think got the market popping today with a little follow-through," Villere said. The yield on benchmark U.S. 10-year notes rose 3.2 basis points to 4.108%. The Bank of England voted 7-2 to keep rates unchanged at 4% while slowing the annual pace at which the central bank sells gilts it purchased between 2009 and 2011 to 70 billion pounds from the current 100 billion pounds, in line with economists' forecasts. The dollar strengthened 0.52% to 0.793 against the Swiss franc and was up 0.67% at 147.95 against the Japanese yen . While data showed fewer Americans filed new applications for unemployment benefits last week, the labor market has softened as both demand for and supply of workers have diminished. The euro fell 0.23% to $1.1785 while the sterling weakened 0.56% to $1.355. The dollar index rose 0.43% to 97.37. Norway's central bank cut its policy interest rate by 25 basis points to 4.0%, as widely expected, and said it aims to cut again in the next 12 months but not as much as previously planned. The Norwegian krone remained near a three-year high. Germany's parliament approved the nation's first annual budget since sweeping reforms to loosen fiscal rules were passed earlier this year. In France, hundreds of thousands took part in anti-austerity protests , opens new tab, unions said, urging President Emmanuel Macron and his new Prime Minister Sebastien Lecornu to acknowledge their anger and scrap looming budget cuts. The yield on German 10-year Bunds , the benchmark for the euro zone bloc, rose 1.2 basis points to 2.727%. Oil prices fell. Brent crude futures dropped 0.8% to settle at $67.44 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 0.8% to settle at $63.57. Gold prices took a breather from record highs. Spot gold fell 0.38% to $3,645.89 an ounce. https://www.reuters.com/world/china/global-markets-wrapup-3-pix-2025-09-18/

2025-09-18 07:45

CANBERRA, Sept 18 (Reuters) - Australia has detected the larvae of khapra beetles in imported nappies sold in supermarkets nationwide, the agriculture ministry said, raising concerns the pest could infest grain storages and disrupt agricultural exports. The ministry said in a statement on Tuesday it had been working with the importer and retailer of the nappies to trace and treat nappies containing the insect since it was alerted to their detection in New South Wales on September 7. Sign up here. Agriculture Minister Julie Collins said the beetles, which feed on stored food, making it unusable, hitchhiked to Australia in a shipping container. "We've managed to track down around 1,500 of the 2,000 cartons (of nappies) but there are still some in circulation," she said in an Australian Broadcasting Corporation (ABC) report on Thursday. "We want to of course make sure that this doesn't take hold anywhere and we've got them all," Collins said. Australia is currently free of the khapra beetle, a tiny brown insect up to 3 mm (0.12 inches) long. The maggot-like larvae are a little longer, up to 4.5 mm, golden-brown and hairy. The agriculture ministry classifies khapra beetles as the biggest pest threat to Australia's A$18 billion ($12 billion) grains industry, saying their establishment in the country would cause trading partners to reject Australian goods, causing huge losses. Australia is one of the world's biggest exporters of wheat, barley and sorghum. "This is a pest that would have the same impact as a foot and mouth animal disease outbreak in Australia," said Xavier Martin, president of farm industry group NSW Farmers. "Governments have to do everything in their power to contain and eradicate this pest, or the damage will be beyond our worst nightmare," he said. The larvae were found in the brand Little One's Ultra Dry Nappy Pants Walker Size 5, the ministry said, which is only sold by Woolworths (WOW.AX) , opens new tab, Australia's largest supermarket chain. Woolworths said it had removed unsold nappies of that brand in that size from shelves and quarantined them. The agriculture ministry said anyone who bought similar nappies should seal them in a bag and call the authorities. Woolworths said the nappies were supplied by Belgian manufacturer Ontex (ONTEX.BR) , opens new tab. Ontex said in a statement on Thursday it did not know where the larvae had come from but there was no evidence they were introduced when the nappies were being produced. "Operations at our Eastern Creek manufacturing and warehouse facility (in Sydney) have been suspended until comprehensive checks are completed and we receive confirmation that manufacturing and shipping can safely resume," it added. Khapra beetles are native to India but have spread through numerous countries in Asia, Africa and Europe, according to the ministry. ($1 = 1.5049 Australian dollars) https://www.reuters.com/world/asia-pacific/beetle-that-threatens-australias-grains-industry-found-imported-nappies-2025-09-18/

2025-09-18 07:41

Pound, gilts decline after holding steady post BoE decision Rate and QT decision widely expected Mismatch seen between investor, market rate expectations MUMBAI/LONDON, Sept 18 (Reuters) - The pound slipped and gilt yields rose on Thursday, reversing course after having offered a muted reaction after the Bank of England kept rates unchanged and slowed the pace of its government bond holding reductions. Analysts said the shift appeared to stem more from stronger U.S. employment data that boosted the dollar broadly and sent bond yields higher than from the BoE's policy steps. Sign up here. Sterling was down 0.6% at $1.3541, while the yield on the benchmark 10-year gilt rose 5 basis points to 4.67%. "I don't see any sort of clear catalyst for the move, besides the fact that it seems to have gathered momentum since U.S. traders entered the fray," said Michael Brown, senior research strategist at Pepperstone. Earlier, BoE policymakers voted 7-2 to keep rates unchanged at 4% while slowing the annual pace at which the central bank sells gilts it purchased between 2009 and 2011 to 70 billion pounds from the current 100 billion pounds, in line with economist forecasts. UK inflation is almost twice the central bank's 2% target, and there are growing signs of weakness in the labour market. Yet money markets are only fully pricing in another rate cut by March next year, something some investors believe may be overly pessimistic. "There could be good news on the horizon that allows a few more cuts than the market expects. Commodity prices are not going up and that may weigh on inflation," said Christopher Mahon, multi-asset manager at Columbia Threadneedle. MOST STAGFLATIONARY DEVELOPED ECONOMY "The UK is now the most stagflationary economy in the developed world. A brutal mix of high inflation, weak growth, and rising unemployment," said Lloyd Harris, head of fixed income, Premier Miton Investors. "The next big moment for the BoE and for all sterling markets is the Autumn Budget," Harris said. Finance Minister Rachel Reeves will present her budget on November 26. She is under pressure to stick to her own rules on borrowing to keep Britain's finances on track, as reflected in some of the large swings in yields on long-term UK bonds this year. The central bank said it would skew sales away from long-dated gilts to minimise the impact on turbulent bond markets. Britain's 30-year borrowing costs had climbed to their highest level since 1998 earlier this month but have since eased. "The Bank of England's decision to slow its pace of bond sales was fairly consensus, but the decision to skew those sales towards shorter maturities should provide some relief to the long-end," said Matthew Landon, global market strategist at J.P. Morgan Private Bank in London. The 30-year gilt yield was last up 6 bps at 5.493%, tracking a similar sized move in its U.S. counterpart. Germany's 30-year bond yield was up 6 bps as well at 3.30%. The BoE is alone among major central banks in conducting outright sales of the government bonds it bought to boost the economy in the years after the 2008 global financial crisis, rather than just letting them mature. British stocks held on to their post-BoE gains, with the benchmark FTSE 100 (.FTSE) , opens new tab stock index last up 0.3%, while the more domestic-focused mid-cap stock index (.FTMC) , opens new tab was up nearly 0.4%. "There’s always going to be some sensitivity around the future inflation profile. And given the background of where the UK has been, I expect the Bank of England to remain cautious," Matt Hudson, UK portfolio manager at River Global, said. https://www.reuters.com/markets/europe/sterling-eases-before-boe-policy-decision-2025-09-18/

2025-09-18 07:03

HONG KONG, Sept 18 (Reuters) - Commodities have had a rough decade, but a confluence of structural factors suggests that after years of underinvestment, the stage may be set for the next super cycle. Commodities super cycles are long, powerful waves driven by major thematic shifts. The 1970s super cycle saw a mix of geopolitical supply shocks and loose monetary policy. The early 2000s super cycle was defined by China's historic urbanisation boom. Sign up here. Today, there are structural factors on both the supply and demand sides of the commodities equation that could catalyze the next boom. To begin, the supply outlook for commodities overall has a few points of vulnerability that, if tested, could support a bullish long-term outlook. First, critical resources and the capacity to process them are highly concentrated in just a few jurisdictions. For instance, S&P Global reports that over 40% of the world's copper production comes from Chile and Peru. Over 50% of the world’s iron ore is supplied by Australia and Brazil. And Kazakhstan alone accounts for over 40% of global uranium mine supply. This concentration extends beyond extraction to refining. China refines nearly 90% of the world's rare earth elements, which are vital for everything from electric vehicles to defence systems. It also refines over 40% of the world’s copper, critical for AI and electrification. We have already seen examples of countries using their control of commodities supply as geopolitical leverage. China temporarily restricted rare earth exports in 2025 during trade disputes, and the U.S. included long-term Liquified Natural Gas (LNG) purchase commitments in its tariff agreements with the European Union and South Korea. This trend of weaving energy security and dependency into trade discussions and other geopolitical disputes creates a persistent risk premium that could erupt into severe supply disruptions down the line. Compounding this is a simple geological reality: the easy, high-grade deposits have likely already been found. Greenfield mining projects can now expect to face declining ore grades, soaring capital costs, and lead times that could exceed a decade. Years of underinvestment, partly due to shareholder pressure on miners to prioritise dividends over growth, have starved the pipeline of future supply. INELASTIC DEMAND Powerful secular trends are also unfolding on the demand side that could be quite bullish for commodity prices over the long run. The global push for electrification and decarbonisation is profoundly metal-intensive. Copper is the perfect example. While traditional sectors like construction remain important consumers of the base metal, explosive growth looks set to come from electric vehicles, renewable power systems and the vast grid infrastructure needed to support them. Meanwhile, massive, cash-rich technology companies are investing hundreds of billions of dollars annually in capital expenditures to build out artificial intelligence data centres and related power projects. For these firms, securing the necessary energy and materials to win the Al race is an existential imperative, making their demand resilient. Copper is once again a case in point. The International Energy Agency (IEA) calls the metal a “global critical mineral” and estimates that demand based on stated policies and supply from announced projects could lead to a potential shortfall of 30% by 2035. This doesn’t look like the story of a cyclical shortage, but a structural collision between an inadequate supply base and accelerating demand. FINANCIAL TAILWIND Finally, the financial winds seem to be shifting in commodities' favor. First, there’s the simple matter of price. The inflation-adjusted copper price remains 30% below its 2011 peak, while the inflation-adjusted oil price and the overall Bloomberg Commodities Index (which includes energy, industrial and precious metals, and agricultural produce) are 70% below their previous peaks in 2008. This is in stark contrast to U.S. equities where the S&P 500 index (.SPX) , opens new tab continues to hit all-time nominal highs and has almost tripled since its pre-Global Financial Crisis peak in 2007, even after adjusting for inflation. At the same time, investors may need to find a new asset class to reduce portfolio volatility. That’s because inflation is proving sticky in several developed markets – most notably the U.S. – which could limit central banks’ ability to cut rates aggressively when economies weaken. That means the investors can no longer count on bonds to hedge downside risks to equity prices, leaving traditional balanced portfolios consisting only of equities and bonds vulnerable when investors suddenly seek to shed risk. Gold has already reasserted itself as a hedge against geopolitical turmoil and monetary debasement, driven by relentless central bank buying and growing retail interest. Perhaps industrial metals and other commodities may soon also be seen as strategic inflation and growth hedges, given the supportive supply-demand outlook. Yet, despite this potential, investment mandates that allow for direct investments in commodities, let alone dedicated commodity investment mandates, remain a rarity in most institutional portfolios. Many in the investment communities have taken the poor price performance of commodities over the recent decade to be indicative of the future trajectory. This backward-looking mentality could potentially stem the flow of capital into this area. FALLING INTO PLACE Crucially, once a super cycle starts, it takes a lot to put an end to it. This often requires either painful policy measures on the demand side or major technological breakthroughs on the supply side. Think former Federal Reserve Chair Paul Volcker's rate hikes in the 1980s, the U.S. shale revolution in the 2010s, and China’s property market downturn more recently. That means these cycles can last for a long time. While properly timing such booms is very challenging, one can note when the underlying conditions for a super cycle appear to be falling into place – and we could be seeing that now. (The views expressed here are those of Taosha Wang, a portfolio manager and creator of the “Thematically Thinking” newsletter at Fidelity International). Enjoying this column? Check out Reuters Open Interest (ROI), , opens new tab 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, , opens new tab can help you keep up. Follow ROI on LinkedIn, , opens new tab and X. , opens new tab https://www.reuters.com/markets/commodities/commodities-could-be-verge-new-super-cycle-2025-09-18/