Morning bid: Bad news is good news for markets craving Fed 'rocket fuel'
Markets are trying hard to see the bright side of bad news in the United States, anticipating dour data will trigger the economic "rocket fuel" of Federal Reserve interest rate cuts so craved by President Donald Trump.
Odds for a September cut now stand at about 94%, CME Fedwatch showed, from 63% last week. Market participants see at least two quarter-point cuts by year-end.
The odds shot up after disappointing non-farm payrolls data on Friday, causing equity markets to swoon and Trump to shoot the messenger, firing the head of labour statistics and promising to replace her within days.
Institutional independence is turning into a short bet in the U.S. The early resignation of Fed Governor Adriana Kugler will let Trump pick her successor, adding to concerns about partisan loyalty invading the staid world of central bank policy.
Asian markets followed gains on Wall Street, with MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab up 0.4%. South Korea's Kospi (.KS11), opens new tab stood out with a 1% jump, while Vietnamese shares traded near a record high.
Data today from the region's two biggest economies showed resilience in their service sectors in the face of headwind from Trump's chaotic introduction of tariffs on goods from trading partners.
In Japan, the S&P Global final services purchasing managers' index (PMI) climbed to 53.6 in July from 51.7 in June for the strongest expansion since February. China's services activity last month expanded at its fastest pace in more than a year.
A slew of PMIs for July are due for release today across Europe.
In earnings, the second-quarter U.S. results season is winding down, but investors are still looking forward to reports this week from big names including Walt Disney (DIS.N), opens new tab and Caterpillar (CAT.N), opens new tab.
Equity futures are pointing to gains in European and U.S. markets, with the pan-region Euro Stoxx 50 futures up 0.13% and the S&P 500 e-minis rising 0.14%.
Key developments that could influence markets on Tuesday:
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BBC News
26 minutes ago
- BBC News
Trump tariffs: India has 20 days to avoid 50% levies - what are its options?
India has unexpectedly become a key target in Washington's latest push to pressure Russia over the Ukraine Wednesday, Donald Trump doubled US tariffs on India to 50%, up from 25%, penalising Delhi for purchasing Russian oil - a move India called "unfair" and "unjustified". The tariffs aim to cut Russia's oil revenues and force Putin into a ceasefire. The new rate will come into effect in 21 days, so on 27 makes India the most heavily taxed US trading partner in Asia and places it alongside Brazil, another nation facing steep US tariffs amid tense insists its imports are driven by market factors and vital to its energy security, but the tariffs threaten to hit Indian exports and growth all of India's $86.5bn [£64.7bn] in annual goods exports to the US stand to become commercially unviable if these rates sustain. Most Indian exporters have said they can barely absorb a 10-15% rise, so a combined 50% tariff is far beyond their effective, the tariff would be similar to "a trade embargo, and will lead to a sudden stop in affected export products," Japanese brokerage firm Nomura said in a note. The US is India's top export market, making up 18% of exports and 2.2% of GDP. A 25% tariff could cut GDP by 0.2–0.4%, risking growth slipping below 6% this year. India's electronics and pharma exports remain exempt from additional tariffs for now, but the impact would be felt in India domestically "with labour-intensive exports like textiles and gems and jewelry taking the fall", Priyanka Kishore of Asia Decoded, a Singapore-based consultancy told the BBC. Rakesh Mehra of Confederation of Indian Textile Industry (Citi) called the tariffs a "huge setback" for India's textile exporters, saying they will sharply weaken competitiveness in the US tensions now escalating, experts have called Trump's decision a high-stakes gamble. India is not the only buyer of Russian oil - there are China and Turkey as well - yet Washington has chosen to target a country widely regarded as a key what changed and what could be the fallout? India's former central bank governor Urjit Patel said that India's "worst fears" have materialised with the recent announcement. "One hopes that this is short term, and that talks around a trade deal slated to make progress this month will go ahead. Otherwise, a needless trade war, whose contours are difficult to gauge at this early juncture, will likely ensue," Mr Patel wrote in a LinkedIn post. The damaging impact of the tariffs is why few expect them to last. With new rates starting 27 August, the next 20 days are critical - India's moves in this bargaining window will be closely watched by anxious key question is whether Prime Minister Narendra Modi's government will quietly abandon trading ties with Russia to avoid the "Russia penalty" or stand firm against the US."India's efforts to reduce its dependence on Russian military hardware and diversify its oil imports predate pressure from the Trump administration, so Delhi may be able to offer some conciliatory gestures in line with its existing foreign policy behaviour," according to Dr Chietigj Bajpaee of Chatham House. He says the relationship is in a "managed decline", losing Cold War-era strategic importance, but Russia will remain a key partner for India for the foreseeable some experts believe Trump's recent actions give India an opportunity to rethink its strategic ties. If anything the US's actions could "push India to reconsider its strategic alignment, deepening ties with Russia, China, and many other countries", says Ajay Srivastava of the the Global Trade Research Initiative (GTRI), a Delhi-based think will visit China for the regional Shanghai Cooperation Organisation (SCO) summit - his first since the deadly 2020 Galwan border clashes. Some suggest a revival of India-Russia-China trilateral talks may be on the immediate focus is on August trade talks, as a US team visits India. Negotiations stalled earlier over agriculture and dairy - sectors where the US demands greater access, but India holds there be concessions in areas like dairy and farming that India has been staunchly protecting or could the political cost be too high?The other big question: What's next for India's rising appeal as a China-plus-one destination for nations and firms looking to diversify their supply chains and investments?Trump's tariffs risk slowing momentum as countries like Vietnam offer lower tariffs. Experts say the impact on investor sentiment may be limited. India is still courting firms like Apple, which makes a big chunk of its phones locally, and has been largely shielded since semiconductors aren't taxed under the new tariffs. Experts will also be watching what India does to support its exporters."India's government so far has not favoured direct subsidies to exporters, but its current proposed programmes of favourable trade financing and export promotion may not be enough to tackle the impact of such a wide tariff differential," according to stakes high, trade experts say only top-level diplomacy can revive a trade deal that seemed within reach just weeks now the Indian government has put up a strong front, saying it will take "all actions necessary to protect its national interests". The opposition has upped the ante with senior Congress party leader Rahul Gandhi calling Trump's 50% tariffs "economic blackmail" and "an attempt to bully India into an unfair trade deal".Is Modi's touted "mega partnership" with the US now his biggest foreign policy test? And will India hit back?Retaliation by India is unlikely but not impossible, says Barclays Research, because there is precedent."In 2019, India announced tariffs on 28 US products, including US apples and almonds, in response to the US tariffs on steel and aluminium. Some of these tariffs were eventually reversed in 2023, following the resolution of WTO disputes," Barclays Research said in a note. Follow BBC News India on Instagram, YouTube, Twitter and Facebook.
Finextra
27 minutes ago
- Finextra
FCA tightens the screws on e-money firms; consumer groups say "too little, too late"
The UK's Financial Conduct Authority has finalised new rules to protect consumer's money in the event of payment firm insolvency. 0 Under the rules. customer money must be kept separate from the firm's own money so that it is available to be returned if the firm fails. The move comes after the watchdog found that payment firms that became insolvent between Q1 2018 and Q2 2023 had average shortfalls of 65% of their customers' funds. Under the new regime, e-money firms that hold more £100,000 in customer funds must undertake annual audits and all firms must begin monthly reporting on their holdings and conduct daily checks to ensure the right amount of money is being safeguarded. Matthew Long, director of payments and digital assets, FCA, says: "People rely on payment firms to help manage their financial lives. But too often, when those firms fail, their customers are left out of pocket. "'We'll be watching closely to see if firms seize the opportunity and make effective improvements that their customers rightly deserve - this will help us to determine whether any further tightening of rules is necessary." He says the the new rules will kick in after nine months in May next year, giving industry time to prepare. Consumer advocacy group the Transparency Taskforce has branded the new measures as "too little, too late" for consumers who have suffered devastating losses from payment firm failures. "The FCA is essentially admitting they've presided over a consumer protection disaster for the past seven years," says Taskforce founder Andy Agathangelou. "These aren't technical failures - these are real people losing their life savings, house purchase deposits, and emergency funds because the regulator failed to act. It's simply scandalous that it's taken this long for the FCA to acknowledge what consumer groups have been warning about. It's a lax and woefully tardy response from a regulator that has been promising to be more responsive, more proactive and more effective for years. "It seems the FCA has the capacity to watch detriment from the sidelines for far too long before eventually taking action. But even then the action taken simply doesn't go far enough. Consumers, and consumer groups just aren't being listened to; there's an asymmetry of influence over the regulator.' The group want to see swifter implementation of the rules and enforcement of universal audit requirement regardless of firm size. It is also demanding FSCs equivalent protection for all payment firm customers and an independent review of FCA's failure to protect consumers 2018-2023.
The Independent
28 minutes ago
- The Independent
Transfer news live: Liverpool agree striker fee, Sesko to Man Utd update, Arsenal plot Eze bid
Liverpool have agreed to sell Darwin Nunez to Saudi Arabian club Al Hilal for £46.3m which should open up funds to purchase Alexander Isak if they are willing to match Newcastle's valuation. Nunez will now undergo a medical ahead of his move to the Saudi Pro League. Arsenal are preparing to bolster their forward line further by signing Crystal Palace 's Eberechi Eze. Palace want a fee in excess of £60m and the Gunners are on the verge of submitting an official. Benjamin Sesko wants to move to Manchester United despite RB Leipzig accepting an offer from Newcastle for the 22-year-old striker. The Premier League clubs are battling to sign a No.9 but the Old Trafford hierarchy are confident they can secure Sesko's signature despite a lack of Champions League football. Newcastle also have issues with Alexander Isak. The 25-year-old has been trying to force a move away from the club amid interest pursuit from Liverpool but the Magpies want a huge fee, having rejected Liverpool 's first bid of £110m. Elsewhere, Ruben Dias is close to agreeing a new contract with Manchester City while Nicolas Jackson is set to leave Chelsea this summer. The complicated character of 'Mr Marinakis' poses one Nottingham Forest question Rarely do footballers cite their club's owner as the key reason behind a major career decision. The script often reads something about managers, teammates, fans or wider ambition - but not about the typically-silent powerbroker, their over-arching employer. Like church and state, shareholders and players often don't cross streams, which is why their praises aren't usually sung by the names on the back of the shirts they sell. Yet when Morgan Gibbs-White addressed the world after penning a shock contract extension at Nottingham Forest, the imposing influence of ownership was present for everyone to see. Forest's star man didn't simply pledge his future to the club. He pledged it to Evangelos Marinakis. The complicated character of 'Mr Marinakis' poses one Nottingham Forest question Following Morgan Gibbs-White's stunning contract U-turn and the bewildering interview that came with it, Will Castle delves into the character behind the Premier League's most intriguing owner Will Castle7 August 2025 11:00 Al Hilal reach agreement in principle for Nunez David Ornstein reports that Al Hilal have reached an agreement in principle with Liverpool for a deal for Darwin Nunez, worth €53m (£46m) plus add-ons. The Liverpool striker is 'indicating willingness to accept' the deal, with 'steps needed to finalise'. Mike Jones7 August 2025 10:51 Hojlund priced at £30m Manchester United are prepared to sell Rasmus Hojlund for £30m this summer says The Times. The 22-year-old Dane is prepared to fight for his place though and when asked if a move away from Old Trafford was on the cards he replied: 'Nothing so far. "I think the most important (thing) for me is just to keep working hard and stay focused and then obviously we'll see what happens. "I think my plan is very clear and that is for me to stay and fight for my spot, whatever happens." AC Milan are the latest club who are said to be interested in the striker, though they would prefer an initial loan with an obligation to buy. Mike Jones7 August 2025 10:40 Liverpool agree Nunez sale Liverpool have reached an agreement with Al Hilal for the sale of Darwin Nunez, reports Sky. It is understood that the Saudi Pro League club are set to pay a fixed fee of £46.2m plus add-ons that could take the deal to over £56m. Sky in Italy are reporting that Al Hilal have accepted Nunez's wage demands, though it is understood that Liverpool are yet to be informed that Nunez has given his blessing for the move. Chris Wilson7 August 2025 10:27 Leicester agree fee for Ndidi transfer Leicester City have agreed a fee worth around £8.5m with Besiktas for Wilfred Ndidi, according to Sky. Ndidi has attracted interest from a number of clubs in the Premier League and Europe after his buy-out clause reduced following Leicester's relegation, but plans are now in place for Ndidi to fly to Istanbul in the next 24 hours to undergo a medical. Mike Jones7 August 2025 10:17 Dortmund still want Sancho deal Borussia Dortmund are still pushing to do a deal for Manchester United forward Jadon Sancho, according to Sky. Though there has been no formal contact with Man Utd, Dortmund are believed to have 'been getting information on the conditions' of a deal, with Utd preferring a permanent deal. Sky's information adds that his valuation is likely to be less than the £25m obligation price Chelsea had, with Juventus and Saudi Pro-League clubs having also shown their interest. Mike Jones7 August 2025 10:05 Premier League clubs interested in Sterling Raheem Sterling is believed to have caught the interest of Fulham, Crystal Palace and West Ham, according to the Daily Mail. The former England international is virtually guaranteed to make the move away from Chelsea this summer. Mike Jones7 August 2025 09:53 Newcastle to compete for Guehi? Newcastle United are considering returning to a move for Crystal Palace defender Marc Guehi, according to the Times. Guehi has been a target for Liverpool this summer but was the subject of a large bid from Newcastle last summer, and recent reports suggest that the Reds may not return with another bid, instead targeting young talent from around Europe. This year, it is thought that the Magpies value Guehi at £40m, though Palace's valuation is more like £50m. Mike Jones7 August 2025 09:44 Man United and Newcastle submit contrasting offers for Benjamin Sesko as transfer battle heats up Manchester United have submitted a first offer worth up to €85m for Benjamin Sesko as they battle with Newcastle for the RB Leipzig striker. Earlier on Monday, Newcastle submitted their second offer for Sesko, worth €80m plus a further €10m in potential add-ons, in the hope of getting a deal over the line after seeing their first bid rejected. Newcastle want to secure a replacement striker for manager Eddie Howe as Liverpool pursue Alexander Isak, his top goalscorer last season. Man Utd and Newcastle submit offers for Benjamin Sesko as Leipzig star makes choice Newcastle have submitted a new offer worth up to €90m for the RB Leipzig striker – and now Manchester United have finally made their move Mike Jones7 August 2025 09:30 Man Utd reject offers for Harry Maguire Man Utd have rejected five offers from clubs in the Premier League and Serie A for defender Harry Maguire, reports the Daily Mail. The club have reportedly told potential suitors that Maguire could be offered a new deal to see out his career at Old Trafford, though clubs in Europe and the UK are ready to swoop in if that doesn't happen. Mike Jones7 August 2025 09:08
