2025-10-14 15:21

LONDON, Oct 14 (Reuters) - French stocks, bond prices and the euro rallied on Tuesday, after Prime Minister Sebastien Lecornu suspended a landmark 2023 pension reform until after the 2027 presidential election, bowing to pressure from leftist lawmakers. French government borrowing costs extended the day's decline, leaving the yield on the benchmark 10-year OAT down 6.2 basis points at 3.404%, from around 3.42% earlier, at its lowest since early September. Sign up here. This left the premium to German Bund yields , a measure of demand for French debt, at 80 basis points, down from last week's high of 88 bps, but still elevated. The euro flipped into modestly positive territory, while stocks in Paris, led by a rally in banking stocks, cut some losses, to trade down 0.2% on the day, compared with a 0.4% loss in the STOXX 600 (.STOXX) , opens new tab. COMMENTS: JUAN PEREZ, DIRECTOR OF TRADING, MONEX USA, WASHINGTON: "I think anything that will bring some relief to the back-and-forth within the French parliament is an absolute win. Pension is very complicated and a major point of discord amongst policymakers as it represents the most important elements of the welfare state. If other items take priority and they can agree on a budget while agreeing to some tax increases, the markets will certainly see it as a positive step after the political crisis in the EU's second largest economy brought the value of euro by 2.5% in the last four weeks." EMMANUEL CAU, HEAD OF EUROPEAN EQUITY STRATEGY, BARCLAYS, LONDON: "For France there’s definitely better sentiment.. given the fact that we avoided the worst case scenario meaning dissolution. But we’re not seeing excitement, there is caution regarding this segment ... France is the only major EU country seeing massive outflows. On top of that, when you look at the OAT spread, it is still trading around 80 meaning it is embedding some French political risk premia, it has been opening since the June (2024) snap elections. It’s definitely not an area where people are complacent, and this will continue. When you look at domestic names in France like banks or a couple of industrial names that have been doing amazingly well this year ...(they) have been decoupling a lot with French political risk . JANE FOLEY, HEAD OF FX STRATEGY, RABOBANK, LONDON: "There's not the same danger with the euro that international investors might walk away and sell as there is with say the pound which depends on the kindness of strangers. We saw the euro react a little last week to the French news but that was really a case of the market being very long euro and short dollars and the repositioning was going to happen on really any news trigger." https://www.reuters.com/business/view-french-markets-gain-slightly-pension-reform-delay-2025-10-14/

2025-10-14 14:21

WASHINGTON, Oct 14 (Reuters) - The Israel-Hamas peace deal that halts two years of armed conflict in Gaza presents an opportunity for a lasting economic recovery in the region, the International Monetary Fund's deputy chief economist said on Tuesday. Petya Koeva-Brooks said the IMF stands ready to cooperate with the international community on the recovery of Gaza and regional economies that have been deeply affected by the conflict, including Egypt and Jordan. She said Egypt's outlook had already been upgraded to 4.3% real GDP growth in 2025 and 4.5% in 2026 because of a recovery in tourism and a boost to the non-oil manufacturing sector. Sign up here. These sectors have offset declines in Egypt's conflict-hit Suez Canal revenues, but she said Suez and mining activities were expected to recover in 2026. https://www.reuters.com/world/middle-east/imf-says-gaza-peace-deal-creates-opportunity-lasting-economic-recovery-2025-10-14/

2025-10-14 13:53

WASHINGTON, Oct 14 (Reuters) - The latest trade tensions between the United States and China pose a downside risk for the global economy that is not reflected in the International Monetary Fund's latest outlook, chief economist Pierre-Olivier Gourinchas said on Tuesday. Gourinchas told reporters that the U.S. tariff shock was further dimming already weak growth prospects, with uncertainty over tariff policies weighing on investment. Sign up here. https://www.reuters.com/world/latest-us-china-trade-tensions-add-economic-risk-imfs-gourinchas-says-2025-10-14/

2025-10-14 13:20

BENGALURU, Oct 14 (Reuters) - Short-dated U.S. Treasury yields will edge lower on expectations of Federal Reserve rate cuts even as the long end resists the pull thanks to sticky inflation, swelling deficits and concerns about Fed independence, a Reuters poll showed. The poll, published on Tuesday, surveyed 75 bond strategists between October 9-13. Sign up here. Persistently high long yields threaten to worsen Washington’s rapidly-deteriorating fiscal position. Non-partisan analysts warn President Donald Trump's aggressive tax and spending reforms could add over $3 trillion to the debt pile over the next decade. With growth still strong and inflation well above the Fed’s 2% target, many analysts say policy is not restrictive enough to justify the five rate cuts now priced into rate futures through 2026. Easing too much too soon, they warn, could reignite price pressures and send yields soaring just as the labour market begins to soften. An ongoing government shutdown has further complicated matters, halting key data releases and forcing the Fed to steer policy with limited visibility, raising the risk of missteps as doubts grow over its future independence. The benchmark U.S. 10-year Treasury yield, currently around 4.0%, will trade around 4.10% in three and six months, median forecasts from the poll showed. It is then forecast to rise to 4.17% in a year. Bond yields move inversely to prices. "We don't expect long-term yields to fall much further, if at all. Ten-year Treasuries can still hold above 4% even as the Fed cuts rates, mainly due to inflation being sticky and the overall resilient economy," said Collin Martin, fixed income strategist at the Schwab Center for Financial Research. "Also, we don't think monetary policy is very restrictive right now. We disagree with the implied pricing and think the Fed will cut one more time this year as opposed to markets pricing in closer to two... which would probably result in an upside surprise for yields." That view was echoed across the survey, with 19 of 31 analysts, over 61%, saying 10-year yields were more likely to end the year above their current forecasts than below. YIELD CURVE TO STEEPEN The more interest rate-sensitive 2-year Treasury yield was forecast to broadly hold its current 3.47%-level at the end of the year and fall to 3.40% in six months and 3.35% in a year, poll medians showed. If realized, that would mean a gradual steepening of the yield curve, with the spread between 10- and 2-year yields rising from around 50 basis points now to 60 bps by the end of 2025 and 82 bps in a year - the highest since January 2022. The New York Fed's measure of 'term premium' - additional compensation demanded by investors for holding longer-term debt - has stayed elevated since the start of 2025, hitting an 11-year high in July. Vincent Reinhart, former Fed staffer and now chief economist at BNY Investments, said the U.S. economy had largely normalised after the pandemic’s price shocks, with supply chains mended, labour markets balanced and inflation on track to return to near 2% next year. "Tariffs interrupted that, and we see that in the turn up in goods prices and now sticky price inflation," he said. "In the long term, the implications are the yield curve steepens. The Fed tries to keep short rates low, and investors fight back with a little bit more inflation premium, a little more outright inflation compensation, and higher volatility and term premium." https://www.reuters.com/business/long-treasury-yields-stay-elevated-inflation-debt-pressures-blunt-fed-easing-2025-10-14/

2025-10-14 13:13

NEW YORK, Oct 14 (Reuters) - JPMorgan Chase's exposure to bankrupt auto dealer Tricolor is "not our finest moment," the bank's CEO Jamie Dimon told reporters on a conference call on Tuesday. JPMorgan charged off $170 million in the third quarter related to the situation, and the bank is reviewing its controls, Chief Financial Officer Jeremy Barnum said. Sign up here. The bankruptcies of automotive-related Tricolor and companies First Brands, along with potential losses at banks and investment funds, are raising new concerns about hidden risks in parts of the credit market — prompting investors to take a closer look at risky debt. https://www.reuters.com/business/finance/jpmorgan-ceo-says-its-exposure-collapsed-auto-dealer-tricolor-not-our-finest-2025-10-14/

2025-10-14 12:56

LONDON, Oct 14 (Reuters) - Bank of England policymaker Alan Taylor said on Tuesday that he saw an increasingly likely risk of a "bumpy landing" for Britain's economy with inflation falling too low, in part due to the impact of U.S. President Donald Trump's trade tariffs. Taylor said in a speech at the King's College University that the rise in British inflation should fade in 2026 and Trump's tariffs were more likely to hurt growth than push up prices as exports unable to enter the United States sought other markets. Sign up here. In his speech about trade tariffs, Taylor said his "bumpy landing" scenario for the British economy featured inflation falling below the BoE's 2% target in late 2026 and the economy slipping into a weakened state for a sustained period. "Part of this scenario, in my mind, could end up resulting from some of the trade diversion pressures that I have described today: if we underestimate the forces of trade diversion washing up on our shores in the next year or two, our inflation forecast will miss the mark," he said. Taylor and one other member of the nine-strong Monetary Policy Committee voted unsuccessfully to cut interest rates by 25 basis points at last month's meeting. In August, Taylor initially called for a big reduction in Bank Rate to 3.75% before changing his vote to ensure a majority for a cut to 4%. https://www.reuters.com/world/uk/bank-englands-taylor-says-he-fears-bumpy-landing-uk-economy-2025-10-14/