2025-09-03 21:04

ORLANDO, Florida, Sept 3 (Reuters) - TRADING DAY Making sense of the forces driving global markets Sign up here. By Jamie McGeever, Markets Columnist A rebound in U.S. tech stocks lifted the Nasdaq and S&P 500 on Wednesday, but soft U.S. employment indicators kept investors on edge and sparked a rally in Treasuries and gold prices. More on that below. In my column today, I look at the surprising strength of China's yuan against the dollar in recent weeks, and argue that it may be part of Beijing's wider strategy in its trade negotiations with Washington. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Today's Talking Points: * U.S. jobs This is a huge week for the U.S. labor market, and therefore the Fed. Most observers agree conditions are softening - the disagreement is over how rapidly, whether interest rate cuts are warranted, and if so, when does the Fed act. Figures on Wednesday showed job openings fell to a 10-month low in July and there were more unemployed people than positions available for the first time since the pandemic. Weekly claims and July ADP private sector jobs data are out on Thursday, before the big one on Friday - August non-farm payrolls. * ECB Euro zone price pressures may be a little hotter than expected, with figures this week showing producer inflation in July and consumer inflation in August above forecast. European Central Bank board member Isabel Schnabel told Reuters there's no need to cut rates. Schnabel is at the hawkish end of the spectrum, but markets don't disagree - the ECB is expected to stand pat next week and all of next year. Further rate cut hopes are fading. Could the next move, whenever it comes, actually be a rate hike? * China flexes muscles China held its largest-ever military parade on Wednesday to mark 80 years since Japan's defeat in World War Two, with President Xi Jinping telling the world it must choose between "peace or war, dialogue or confrontation, win-win or zero-sum." U.S. President Donald Trump called it a "beautiful ceremony". The event was designed to flex China's diplomatic, economic and tech muscle too, not just its military might. As many countries agree to lopsided trade deals with the U.S., the leaders of China, Russia and India are forging closer ties between their nations. China uses yuan as olive branch in U.S. trade talks A notable trend this year has been the often-counterintuitive market reactions to U.S. President Donald Trump's efforts to upend many long-held economic norms. One of the biggest surprises has been the appreciation of China's yuan. The consensus opinion at the start of the year was that Beijing would counter Washington's punitive tariffs on Chinese imports by depreciating the yuan against the dollar. This would keep Chinese goods competitive, enabling the country's exporters to compensate for any loss of U.S. business. On top of that, a weaker exchange rate would, in theory, help to reflate China's economy, pulling it out of the deflationary funk it has been in since its property bubble began to burst in 2021. And, finally, a weaker yuan would be a poke in the eye to Washington. A key pillar of the Trump administration's economic agenda, articulated most artfully by adviser Stephen Miran and Treasury Secretary Scott Bessent, is a weaker dollar. But Beijing surprised everyone. The yuan did slide to an 18-year low around 7.350 per dollar during the chaos of Trump's April 2 'Liberation Day' tariffs. And combined with low domestic inflation and even deflation in recent years, the yuan's broad 'real' effective exchange rate (REER) is the weakest in over a decade. But since April, it has reversed course rapidly against the dollar, trading last week at a 2025 high of 7.1260 per dollar. Indeed, measured by the People's Bank of China's official daily fixings or offshore market trading, the yuan just posted its biggest monthly gain against the greenback in almost a year. These big moves can partly be explained by strong capital inflows. The Shanghai Composite equity index is at a 10-year high, boosted by record net inflows from hedge funds in August. And even though China's trade surplus with the U.S. may be shrinking, its global surplus in the first seven months of the year hit a new record. That's a recipe for a stronger exchange rate. GOOD FAITH But with a currency as tightly controlled as the yuan, market dynamics are not the whole story. The appreciation appears to be a deliberate policy choice by Beijing, potentially hinting at its broader strategy in combating Trump's tariffs. On a basic level, this doesn't make sense. Given the deflationary pressures still weighing on the Chinese economy, why do authorities appear to be actively pursuing a stronger exchange rate? But when viewed as a negotiating tactic, the logic starts to become clear. The Trump administration has explicitly stated that it wants a weaker dollar – not a 'weak dollar', mind you – but a currency level that would make U.S. exports more attractive. And Beijing can help deliver this, especially given that China's currency acts as an anchor for other regional exchange rates. Thus, the yuan's appreciation against the dollar indicates that – despite China's show of force this week – Beijing is still willing to negotiate with Washington. 'ANTI-INVOLUTION' China may also want a firmer exchange rate to help ease some domestic concerns, namely sluggish consumption. The economic data coming out of China will do little to support consumer sentiment or domestic demand: the latest headline manufacturing PMI data was soft, new orders are declining, and construction has contracted at its fastest rate since the pandemic. President Xi Jinping is clearly taking this seriously. He has pledged to take steps to boost domestic consumption and technological innovation, while supporting small firms. And he has also spoken about breaking the cycle of "involution", a term now widely used for excess competition and overcapacity. An appreciating yuan should help these efforts because, as all else being equal, a stronger currency should boost domestic demand. The yuan's recent rise against the dollar is thus "a policy push, not a market pull," as Goldman Sachs analysts neatly put it. And given the foreign and domestic concerns China currently faces, investors should not be surprised if Beijing keeps pushing the currency higher, at least until the latest U.S.-Sino tariff truce expires in November. A stronger yuan may be one olive branch Beijing is still willing to offer. What could move markets tomorrow? Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. 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/world/china/global-markets-trading-day-graphic-2025-09-03/

2025-09-03 21:01

OPEC+ expected to consider further raising oil production OPEC+ meeting set to take place on Sunday US crude stocks rose last week, market sources say, citing API NEW YORK, Sept 3 (Reuters) - Oil prices fell by more than 2% on Wednesday ahead of a weekend meeting of OPEC+ producers that is expected to consider another increase in production targets in October. Brent crude fell $1.6, or 2.31%, to $67.54 a barrel by 2:11 p.m. EDT (1811 GMT). U.S. West Texas Intermediate crude fell $1.68, or 2.56%, to $63.91 a barrel. Sign up here. Eight members of the Organization of the Petroleum Exporting Countries and allies - known as OPEC+ - will consider further raising oil production at a meeting on Sunday, two sources familiar with the discussions told Reuters, as the group seeks to regain market share. The prospect of OPEC+ raising oil production has increased ahead of the meeting, said Phil Flynn, senior analyst with Price Futures Group. Traders had expected the group to stay the course. Another boost would mean that OPEC+, which pumps about half of the world's oil, would be starting to unwind a second layer of output cuts of about 1.65 million barrels per day, or 1.6% of world demand, more than a year ahead of schedule. The group had already agreed to raise output targets by about 2.2 million bpd from April to September, in addition to a 300,000 bpd quota increase for the United Arab Emirates. "If output is raised in line with new quotas, we see the market moving into a sizeable surplus from September 2025 through 2026, with inventories building unless countered by renewed restraint," said Ole Hvalbye, an analyst at SEB bank. Actual increases from the group, however, have fallen short of its pledges as some members compensated for previous over-production and others struggled to raise output due to capacity constraints. Market participants now await government data on U.S. crude stockpiles, due on Thursday. U.S. crude stocks rose by 622,000 barrels in the week ended August 29, market sources said, citing American Petroleum Institute figures on Wednesday. Soft economic data, which tends to weigh on the demand outlook for oil, also pressured prices. U.S. Labor Department data showed on Wednesday that job openings, a measure of labor market demand, fell more than expected to 7.181 million in July. Economists polled by Reuters had expected 7.378 million. Earlier this week, U.S. manufacturing contracted for a sixth month. Meanwhile, parts of Nigeria's 650,000-bpd Dangote refinery were offline due to catalyst leaks and other issues, with repairs expected to take at least two weeks. https://www.reuters.com/business/energy/oil-prices-drop-opec-weighs-another-output-hike-2025-09-03/

2025-09-03 20:57

Wall Street shares post muted comeback, Alphabet jumps US jobs data softer than expected Fiscal worries send global long bond yields higher Gold races above $3,500 amid safe-haven scarcity Oil prices settle down more than 2% Sept 3 (Reuters) - Wall Street stocks recovered some ground on Wednesday after technology conglomerate Alphabet rose on a favorable antitrust ruling, but gains were muted as investors digested softer-than-expected labor market data and a selloff in long-term global government bonds. Job openings, a measure of labor demand, dropped 176,000 to 7.181 million by the last day of July, the Labor Department's Bureau of Labor Statistics said in its "JOLTS" report on Wednesday. Economists polled by Reuters had forecast 7.378 million unfilled jobs. Sign up here. The Dow Jones Industrial Average (.DJI) , opens new tab dipped 0.05%, the S&P 500 (.SPX) , opens new tab rose 0.5%, and the Nasdaq Composite (.IXIC) , opens new tab added about 1%. Alphabet (GOOGL.O) , opens new tab jumped around 9%, while Apple (AAPL.O) , opens new tab also gained nearly 4% as the ruling allowed Google to continue lucrative payments to the iPhone maker. However, a selloff in global long-dated bonds sent Japan's borrowing costs to record highs on Wednesday, as mounting concerns over government debt sustainability and long-term inflation also rattled investors in Europe. One concern is that the upward pressure on long-term government bond yields "creates headwinds for equity valuations," Bill Sterling, global strategist at GW&K Investment Management, said in an email. But he added that markets continue to anticipate a Federal Reserve interest rate cut this month, which "should help deliver a soft landing for the economy and broad-based re-acceleration of economic growth next year." Spot gold hit an all-time high of $3,577 as the rush out of long-term government debt, traditionally considered low-risk, sparked a hunt for alternative safe-haven assets. The 30-year Japanese government bond yield hit an unprecedented 3.28% on Wednesday, a day after selloffs in similarly dated British gilts , U.S. Treasuries and Canadian bonds . "The economic reforms needed to really cover increasing debt are lacking, and the capital market sees that," Deutsche Bank CEO Christian Sewing said about the long-dated debt selloff at a conference on Wednesday morning. The trend may continue, he added, "if we see a further increase in political instability, if we don't see any reforms." British finance minister Rachel Reeves is expected to raise taxes in her autumn budget to remain in line with her fiscal targets, while in France, Prime Minister Francois Bayrou looks set to lose a confidence vote as opposition parties balk at his spending cuts. In Japan, government departments have just presented record budget requests and senior aides to Prime Minister Shigeru Ishiba, including Secretary-General Hiroshi Moriyama, have offered to resign following their party's defeat in July's upper house election. On Wednesday, British 30-year gilt yields rose 6 basis points to a fresh post-1998 high of 5.752%, before recovering to last trade at 5.6%. Germany's 30-year yield stood at 3.37%, remaining close to its highest level in 14 years. RIPPLE EFFECTS U.S. Treasury yields dropped on Wednesday on news that job openings fell in July. The 30-year U.S. Treasury yield briefly rose above 5% during Asia trade and last stood at 4.9%. The gap between 2-year and 30-year U.S. government bond yields stands at about 129 bps, around its highest since December 2021, while the comparable measure in Britain is the highest since 2017. Britain's pound briefly fell to a four-week low of $1.34 , before recovering a little. Japan's yen was a touch higher at 148 per dollar after sliding 0.8% in the previous session. The U.S. dollar extended losses against major currencies, including the yen, Swiss franc and euro on Wednesday. The dollar index , which measures the greenback against a basket of currencies, fell 0.2%. European stock markets remained unscathed as traders pinned their hopes on an anticipated U.S. rate cut later this month, with Europe's STOXX index (.STOXX) , opens new tab up 0.66%. But Japan's broad Topix share index (.TOPX) , opens new tab closed almost 1.1% lower and MSCI's broad index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab dropped 0.4%. TARIFF TREMORS European purchasing managers' indexes on Wednesday, viewed as barometers of overall economic conditions, showed expansion in Germany had slowed and France remained in contractionary territory as businesses dealt with U.S. President Donald Trump's unpredictable tariff policies. Trump said on Tuesday his administration would ask the Supreme Court for an expedited ruling on tariffs that an appeals court found illegal last week. The court allowed for the tariffs to stay in place until October 14. Oil prices settled down more than 2% on Wednesday ahead of a weekend meeting of OPEC+ producers that is expected to consider another increase in production targets in October. Brent crude settled $1.54, or 2.23%, lower at $67.60 a barrel while U.S. West Texas Intermediate crude lost $1.62, or 2.47%, to $63.97 a barrel. https://www.reuters.com/world/china/global-markets-update-6-2025-09-03/

2025-09-03 20:52

Alphabet gains after court ruling on Chrome browser; Apple also jumps Macy's soars after annual forecast hike Investors digest Fed officials' comments on rates Indexes: Dow down 0.1%; S&P 500 up 0.5%; Nasdaq up 1% NEW YORK, Sept 3 (Reuters) - The Nasdaq rose 1% and the S&P 500 also ended higher on Wednesday as Alphabet jumped after a U.S. judge ruled against breaking up the Google parent and as investors were optimistic that the Federal Reserve would cut interest rates this month. The Dow finished slightly lower, with shares of Boeing (BA.N) , opens new tab down 2.1%. Sign up here. Alphabet (GOOGL.O) , opens new tab and Apple (AAPL.O) , opens new tab gave the S&P 500 and Nasdaq their biggest boosts. Shares of Alphabet rose 9.1% after the late Tuesday ruling, which allows Google to retain control of its Chrome browser and Android mobile operating system, while barring certain exclusive contracts with device makers and browser developers. Shares of Apple gained 3.8% as the ruling also preserved lucrative payments to the iPhone maker from Google. "Google and Apple got a lifeline ... They won the sweepstakes," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. "The courts just cemented their reputation." Several Fed officials said labor market concerns continue to animate their belief that rate cuts lie ahead. Fed Governor Christopher Waller said he thinks the central bank should be cutting at its next meeting. Atlanta Fed President Raphael Bostic reiterated his view that a rate cut is in the cards, although he did not say how soon it might happen. Data earlier showed U.S. job openings fell in July, suggesting a softening labor market. The Dow Jones Industrial Average (.DJI) , opens new tab fell 24.58 points, or 0.05%, to 45,271.23, the S&P 500 (.SPX) , opens new tab gained 32.72 points, or 0.51%, to 6,448.26 and the Nasdaq Composite (.IXIC) , opens new tab gained 218.10 points, or 1.03%, to 21,497.73. September is historically a weak month for the stock market. But Peter Cardillo, chief market economist at Spartan Capital Securities in New York, said he did not think the month would be "as trying as it usually is because of the fact that the Fed is expected to lower rates." U.S. rate futures now widely expect the Fed to lower rates this month, pricing in a 96% chance of a 25 basis point cut at the end of the two-day Fed policy meeting on September 17, according to the CME Group's FedWatch tool. Investors were still anxious to see Friday's monthly jobs report. Shares of Macy's (M.N) , opens new tab jumped 20.7% after the company raised its annual forecasts. On the flip side, discount retailer Dollar Tree (DLTR.O) , opens new tab shares fell 8.4% after the company forecast current-quarter profit below estimates, with tariffs seen driving up costs for the retailer. With the second-quarter U.S. earnings season now at its end, investors are paying close attention to estimates for third-quarter results and possible impacts from President Donald Trump's tariff war. Advancing issues outnumbered decliners by a 1.33-to-1 ratio on the NYSE. There were 224 new highs and 45 new lows on the NYSE. On the Nasdaq, 2,259 stocks rose and 2,337 fell as declining issues outnumbered advancers by a 1.03-to-1 ratio. Volume on U.S. exchanges was 14.95 billion shares, compared with the 16.18 billion average for the full session over the last 20 trading days. https://www.reuters.com/business/nasdaq-sp-500-end-higher-with-alphabet-apple-rate-cut-hopes-dow-dips-2025-09-03/

2025-09-03 20:49

TSX ends up 0.5% at 28,751.36 Surpasses Tuesday's record closing high Technology advances 1.4% Alimentation Couche-Tard rises after earnings beat Sept 3 (Reuters) - Canada's main stock index rose to another record high on Wednesday, as technology and metal mining shares notched gains ahead of employment data this week that could offer clues on the prospect of a Bank of Canada interest rate cut. The S&P/TSX composite index (.GSPTSE) , opens new tab ended up 135.74 points, or 0.5%, at 28,751.36, surpassing Tuesday's record closing high. Sign up here. Both Canada and the U.S. are due to release employment reports for August on Friday. Economists forecast that Canada's economy added 10,000 jobs and the unemployment rate edged up to 7% from 6.9%. "It is probably the biggest jobs number we've seen in recent times coming out of both sides of the border," said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth. "I think a bad number in Canada solidifies a cut here." Investors see a roughly 60% chance the BoC lowers interest rates on September 17 for the first time since March. The benchmark rate is at 2.75%. "Gold reaching all-time highs, that's what's carrying the TSX right now," Small said. The materials group (.GSPTTMT) , opens new tab, which includes metal mining shares, added 0.8% as the price of gold climbed to another all-time peak. Teck Resources (TECKb.TO) , opens new tab announced that it has undertaken a company-wide operations review and would defer approving major growth projects until its Quebrada Blanca copper mine in Chile achieves steady operations and target output. Shares of Teck ended 0.7% higher. Technology (.SPTTTK) , opens new tab was up 1.4% and consumer staples (.GSPTTCS) , opens new tab added 2%. Alimentation Couche-Tard (ATD.TO) , opens new tab climbed 6.3% after its quarterly adjusted earnings beat estimates. Energy (.SPTTEN) , opens new tab was a drag, falling 1.7%. The price of oil settled 2.5% lower at $63.97 a barrel ahead of a weekend meeting of OPEC+ producers that is expected to consider another increase in production targets in October. https://www.reuters.com/markets/europe/tsx-extends-record-setting-run-led-by-tech-metal-mining-shares-2025-09-03/

2025-09-03 20:30

FORT WORTH, Texas Sept 3 (Reuters) - A U.S. judge on Wednesday held a three-hour hearing to consider objections to a deal between the Justice Department and Boeing (BA.N) , opens new tab that allows the planemaker to avoid prosecution on a charge stemming from two fatal 737 MAX plane crashes that killed 346 people. Judge Reed O'Connor in Texas questioned the government's decision to drop a requirement that Boeing face oversight from an independent monitor for three years and instead hire a compliance consultant, but did not immediately issue a decision. He heard anguished objections from relatives of some of those killed in the crashes in Indonesia in 2018 and Ethiopia in 2019 to the non-prosecution agreement. Sign up here. About two dozen relatives -- some from as far as Indonesia, Africa, Europe and Canada -- traveled to the Texas courthouse to argue that Boeing should not be allowed to avoid pleading guilty after last year agreeing to do so. "It's been going almost seven years since these crashes and we still haven't gotten any justice," said Ike Riffel, a California father whose two sons were killed in the Ethiopia crash. Boeing will no longer face oversight by an independent monitor under the agreement but will hire a compliance consultant, and O'Connor asked why the government no longer thinks a monitor is needed. A government lawyer said Boeing has improved and the Federal Aviation Administration is providing enhanced oversight. Boeing and the government argue O'Connor has no choice but to dismiss the case and cannot appoint a special prosecutor as some relatives have sought. 'Connor said in 2023 that "Boeing's crime may properly be considered the deadliest corporate crime in U.S. history." Boeing has now agreed to pay an additional $444.5 million into a crash victims' fund to be divided evenly per victim of the two fatal 737 MAX crashes, on top of a new $243.6 million fine and over $455 million to strengthen the company’s compliance, safety, and quality programs. "The eyes of the world are on American to see if it is going to hold Boeing accountable," said lawyer Paul Cassell, who represents some of the victims. "Essentially this is an effort by Boeing to bribe their way of out accountability." Boeing did not immediately comment. https://www.reuters.com/sustainability/boards-policy-regulation/us-judge-questions-doj-decision-drop-boeing-independent-monitor-2025-09-03/