2025-09-03 13:22

Sept 3 (Reuters) - Federal Reserve Governor Christopher Waller on Wednesday repeated his call for an interest-rate cut in September given the weakening in the labor market, and said that how fast the central bank cuts after that will depend on what happens next in the economy. "I think we need to start cutting rates at the next meeting, and then we don't have to go in a locked sequence of steps," Waller said in an interview on CNBC. "We can kind of see where things are going, because people are still worried about tariff inflation ... I would say over the next three to six months, we could see multiple cuts coming in." Sign up here. Waller, one of two Fed governors who dissented in favor of a rate-cut in July, said he believes tariffs may push up inflation over the next several months, but said he expects that to be temporary and for inflation to resume falling back toward the Fed's 2% goal in six or seven months. Given the drop in labor demand, he said, the Fed should start bringing the policy rate, now in the 4.25%-4.50% range, down toward an estimated neutral rate of 3% -- with the pace of adjustments to depend on the economic data. Waller said he has spoken with US Treasury Secretary Scott Bessent in the past but has not had an interview for the job of Fed chair and does not yet have one scheduled. Bessent is expected to have a round of interviews for the job starting Friday, the Wall Street Journal reported. https://www.reuters.com/business/finance/feds-waller-repeats-call-rate-cut-september-pace-depends-data-2025-09-03/

2025-09-03 12:58

Sept 3 (Reuters) - HSBC raised its year-end forecast for the S&P 500 index (.SPX) , opens new tab to 6,500 from 6,400 on Wednesday, marking its second upgrade in less than a month, on the back of stronger-than-expected second-quarter corporate earnings and a 'modest' impact from tariffs. HSBC's new target represents a 1.3% upside to the benchmark index's last close of 6,415.54. Sign up here. "Earnings momentum is strong, especially among technology and financials, while company commentary suggests a modest tariff impact," Nicole Inui, head of equity strategy for the Americas at HSBC, wrote in a note. Global brokerages including J.P.Morgan and Morgan Stanley have also forecast the index target to hit 6,500 by year-end. Of the 489 companies in the S&P 500 that have reported second-quarter results through Friday, 79.6% beat analysts' earnings estimates, according to data compiled by LSEG. That is higher than the prior four-quarter average of 76.4% and well above the long-term average of 67%. Investors have bet heavily on Big Tech companies' billion-dollar AI spending spree, with the index notching fresh highs last week as Nvidia's (NVDA.O) , opens new tab earnings confirmed spending related to AI infrastructure remains strong. HSBC maintained a bull-case scenario of 7,000 and a bear-case of 5,700 for the index, if tariffs weigh more heavily on margins. "We expect a Fed cut in September, but see a shallower easing cycle versus what the market is pricing in," HSBC added. https://www.reuters.com/business/hsbc-raises-sp-500-year-end-target-earnings-strength-modest-tariff-impact-2025-09-03/

2025-09-03 12:56

LONDON, Sept 3 (Reuters) - Sterling edged up off a four-week low on Wednesday as traders paused to assess the impact of a two-day bond market rout that has highlighted Britain's fiscal challenges as the government prepares its annual budget. Long-dated government borrowing costs across the world, including Britain's 30-year bond yields, touched multiyear highs on Wednesday on concerns over the fiscal health of some of the biggest economies, although a degree of calm was returning after a sharp selloff. Sign up here. Britain's 30-year borrowing costs rose to their highest levels since 1998, potentially adding to the pressure on sterling, which had already dropped more than 1% on Tuesday. But the currency was last up 0.17% at $1.3416 against the dollar, after touching its lowest level since August 6 in early trading. Against the euro, it edged 0.06% higher to 86.86 pence, remaining close to an almost four-week low touched against the single currency on Tuesday. "We expect it will be hard (for sterling) to find support if the bond market selloff continues," said Kathleen Brooks, research director XTB. ING FX strategist Francesco Pesole instead said he doesn't expect the pound to react much on any further gilt moves alone. "The reaction to (the) gilts selloff looks a bit overblown," he said. Investors are now waiting to hear more about finance minister Rachel Reeves's autumn budget, due on November 26. She is expected to raise taxes in order to remain on course for her fiscal targets, potentially adding to the challenge of speeding up the economy. "Expectations for the Budget are so gloomy, there is scope for upside surprises," said Laurence Mutkin, Director & Head, EMEA Rates Strategy at BMO. A survey published on Wednesday showed a surge in new business helped Britain's services sector grow by the most in more than a year last month as concerns about U.S. tariffs eased, but firms remained worried about the prospect of tax rises at home. Prime Minister Keir Starmer's reshuffle of his top team of advisers on Monday also renewed the focus on fiscal challenges given the UK's high levels of borrowing and slow growth. https://www.reuters.com/world/uk/sterling-edges-up-off-four-week-low-traders-assess-impact-bond-selloff-2025-09-03/

2025-09-03 12:49

PARIS, Sept 3 (Reuters) - French utility EDF's electricity production was reduced by 2.7 gigawatts on Wednesday, data from the company showed, as workers lowered power output as part of industrial action in the power and gas sector focused on pensions and wages. The action has so far been limited in scope, but demonstrations are expected to broaden in the coming weeks, reflecting the low approval ratings of the government, which faces a confidence vote on Monday. Sign up here. Nuclear power production was reduced by 2.1 GW with four reactors affected and hydropower production was down 630 megawatts, the data showed. The reductions at the Flamanville 1 and 2 reactors and the Dampierre 2 reactor are expected to last until late on Wednesday, while the Saint Alban 1 reactor is expected back online at 1300 GMT, EDF data showed. France has 57 GW of total nuclear capacity, which produces about 70% of the country's annual electricity. France is expected to remain a net power exporter throughout the day as electricity production from wind and solar made up nearly a third of total production while the disruptions were just 4.4% of overall supply, data from grid operator RTE showed. At midday, 3.7% of the total workforce at EDF was on strike, a company spokesperson said. In the gas sector, the industrial action at the Dunkirk LNG terminal has remained limited to a small impact on some work in progress, a spokesperson for Belgian gas terminal operator Fluxys said. "There is no impact on the output flow rate, neither on ship unloading operations nor on the truck loading operations," the spokesperson said. The Dunkirk LNG terminal is the second largest in continental Europe and the only terminal directly connected to two separate markets - Belgium and France - accounting for about 20% of both countries' annual gas consumption. https://www.reuters.com/sustainability/sustainable-finance-reporting/french-strike-cuts-electricity-production-2025-09-03/

2025-09-03 12:45

LITTLETON, Colorado, Sept 3 (Reuters) - India's public flogging over its imports of sanctioned Russian oil has been a painful reminder that energy policy is a matter of national security, increasing the attractiveness of domestic energy sources. The world's most populous country relies on imports for nearly 90% of its crude oil supplies, making it dependent on world markets for the fuels, chemicals and other refined products needed to run its economy. Sign up here. But when it comes to electricity, India is far more self-reliant. Roughly 70% of India's electricity comes from coal, around 90% of which is locally mined, while surging home-grown clean power accounts for most of the remainder. As a result, the power industry is better insulated than refiners from supply shocks and geopolitical entanglements. It's also easier to influence via policy tweaks and is a more reliable long-term generator of tax revenue and jobs. In total, this makes India's power sector – rather than its oil refining industry – a more attractive foundation for the country's future national energy strategy. FLATTERING TO DECEIVE? With roughly 50 million cars and nearly 300 million motor bikes and scooters in operation, there's little prospect of India being able to meaningfully reduce its oil dependence any time soon. That said, India's apparent oil addiction may not be as strong as it seems. Between 2021 and 2024 India's, oil consumption expanded at an annual average rate of 4.4% a year, data from the Energy Institute shows. That was by far the fastest growth among the 10 largest oil-consuming nations during this period and well above the global annual average of 3.0%. However, India's potential to drive global oil demand growth may appear larger than it is because of two key factors: China's economic slowdown and Russia's cheap oil exports. China's property sector debt crisis and a slowdown in international trade have reduced oil demand growth in recent years, upending energy market expectations. Between 2000 and 2019, China's annual oil consumption expanded by around 6% a year, establishing Beijing as the main driver of global oil demand. However, since 2021 this pace has slowed to just 3% a year. India, with its brisk demand metrics, has been the prime candidate to take the baton. But India's rapid consumption growth has arguably been artificially inflated by the huge increases in its imports of discounted Russian oil. TOO GOOD TO REFUSE Details on the actual prices that India has paid for Russian oil since 2022 are not available, but the rapid reconfiguration of India's import mix suggests that Russian oil was offered at prices too good to refuse. Until 2021, the highest share that Russia ever held of India's annual oil imports was around 3%, as suppliers including Iraq, Saudi Arabia and United Arab Emirates fulfilled most of India's oil needs. Since 2023, however, Russian oil has accounted for nearly 40% of India's oil imports, making Russia by far the country's top oil supplier. Indeed, India's imports of Russian oil jumped almost 16-fold between 2021 and 2024 from around 100,000 barrels per day to 1.8 million barrels a day, according to Kpler. This, in turn, has given the impression that India's oil demand is growing at a spectacular clip. Yet India's overall oil imports posted a much more modest 14% increase between 2021 and 2024, likely a more accurate indication of India's true oil consumption potential. Of course, this jump remains robust, representing record imports for India in each of the past two years. But, again, that growth was likely only possible because over a third of the oil imported was purchased at prices far below global benchmarks. That discount enabled Indian refiners to supply cheap fuels to the country's consumers, inflating demand. If India had instead been forced to pay full price for that oil, it likely would have bought less, as the fuels and refined products sold into its local markets would have been more expensive. POWERING UP Given the international hostility that India is facing over its reliance on Russian oil, it seems unlikely that India's government would base its energy strategy moving forward on aggressive oil consumption and greater import dependence. In contrast, Indian authorities, who have supported the rapid electrification of transport fleets, appliances and industrial processes, are more likely to continue backing the build-out of more electricity supplies to help drive future economic growth. At the same time, the country is also expanding the use of renewables in its energy basket. India has made aggressive steps to boost local manufacturing of products tied to the energy transition and is on track to double the manufacturing capacity of solar modules by 2030, according to a recent report by SolarPower Europe. If these efforts generate jobs that further boost national economic growth, local and federal authorities are apt to remain strong supporters of the country's energy transition efforts and the businesses behind it. In contrast, further shaming over Russian oil purchases and any cost surges triggered by switching to pricier suppliers will likely erode confidence in India's refining sector. Geopolitical tensions may therefore turn out to be a powerful catalyst for speeding up the energy transition if energy independence becomes necessary for national security. The opinions expressed here are those of the author, a columnist for Reuters. Enjoying this column? Check out Reuters Open Interest (ROI), 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 can help you keep up. Follow ROI on LinkedIn , opens new tab and X , opens new tab. https://www.reuters.com/markets/commodities/energy-transition-is-now-national-security-issue-just-ask-india-2025-09-03/

2025-09-03 12:36

Sept 3 (Reuters) - South African business confidence slipped a point further sequentially in the third quarter of 2025, weighed down by hefty U.S. tariffs on the country's exports, a survey showed on Wednesday. Business confidence fell to 39 points, three points below the long-term average level of 42, according to a survey by the Rand Merchant Bank and compiled by the Bureau of Economic Research. Sign up here. The survey, conducted from August 6 to 25, coincided with the start of the 30% tariff - Sub-Saharan Africa's highest rate - on Johannesburg's U.S. exports and was also marked by cancellations and production breaks in the country's automotive sector. But South Africa's business experience in recent quarters was not out of line with other economies, according to Isaah Mhlanga, Chief Economist at RMB. "Last year brought significant political and economic policy changes in many countries, including South Africa, and following initial excitement, or in some cases, disappointment, conditions are normalising into a difficult emerging global world order," Mhlanga said. However, another survey published on Wednesday showed South African businesses experienced a very modest improvement in operating conditions in August as cost pressures eased. Separately, the South African rand hit a nine-month high in late August, boosted by a weaker dollar and rebound in gold prices, after U.S. Federal Reserve Chair Jerome Powell pointed to a possible rate cut at the central bank's September meeting. https://www.reuters.com/world/africa/safrican-business-confidence-slips-further-third-quarter-amid-tariff-pressure-2025-09-03/