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Reuters
01-04-2025
- Business
- Reuters
Trading Day: Nervous calm ahead of 'Liberation Day'
ORLANDO, Florida, April 2 (Reuters) - Only 24 hours until Trump unveils new tariffs The first trading day of the quarter on Tuesday was a nervy affair ahead of U.S. President Donald Trump's "Liberation Day" on Wednesday, with markets struggling for clear direction as Trump's new trade barriers loomed into view. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. Stocks mostly rose but U.S. Treasury yields tumbled, while gold and the dollar broadly held steady. Talking of the greenback, I will dig deeper into the IMF's latest FX reserves data below, but first, here are the scores on the doors from Tuesday's trading around the world. Today's Key Market Moves. A late surge on Wall Street lifts the Nasdaq and S&P 500 out of the red. The Nasdaq rises 0.8%, the S&P 500 gains for a second day. Tesla shares rebound 3.6% ahead of its first-quarter vehicle deliveries report on Wednesday. U.S. Treasury yields fall across the curve. A 9 bps decline at the long end bull flattens the curve. Benchmark European stocks rise more than 1% for their best day in two weeks. The dollar index holds steady, with gains against the euro offset by losses against the yen and Australian dollar. Bitcoin rises 3% back above $85,000, its best day in nearly three weeks. The specter of Trump's new tariffs on Wednesday has sucked the oxygen out of world markets in recent weeks, and despite the generally positive performance on Tuesday, anyone hoping life will be injected back into them once the announcement is made is setting themselves up for disappointment. There's simply too much uncertainty and too little visibility around how the new tariffs will work, how long they will be in place, what exemptions or concessions there may be, how other countries will react, and what the implications will be for specific sectors, markets and asset classes. To paraphrase former U.S. Defense Secretary Donald Rumsfeld, that's a lot of known unknowns, and a fair sprinkling of unknown unknowns too. That fog of uncertainty won't lift on Wednesday, and indeed, is more likely to thicken - hardly the conducive environment for investors, consumers and businesses to get spending. An announcement has been scheduled for 4 p.m. Eastern Time (2000 GMT) on Wednesday, and it wouldn't be surprising if investors try to maintain a holding pattern across markets until then as best they can. The longer term dilemma they and policymakers face was encapsulated in a couple of U.S. economic indicators on Tuesday that showed manufacturing slipping back into contraction, and a measure of factory gate inflation jumping to the highest in nearly three years. Stagflation risks are rising, markets are skittish, and the common denominator is Trump's tariff agenda. Japanese stock futures point to the benchmark Nikkei 225 index rising around 0.4% at the open on Wednesday, a pretty small bounce considering the index had plunged 4% on Monday. Dollar's record low FX reserves share not all bad news for Trump In January, U.S. President Donald Trump warned the so-called BRICS nations against replacing, or backing any currency to take the place of, the "mighty U.S. dollar." While the International Monetary Fund's latest foreign exchange reserves data for the fourth quarter of last year suggests central banks around the world continue to pull away from the greenback, there may be a silver lining for the president. The IMF's Currency Composition of Official Foreign Exchange Reserves (Cofer) data, the gold standard for FX reserves information, show that countries have been gradually chipping away at their dollar holdings and diversifying for years. Indeed, the greenback's nominal share of official FX reserve holdings in the third quarter of last year fell to a record low 57.3% from over 72.0% in 2001. That crept up slightly to 57.8% in the fourth quarter, a rare rise, but the dollar surged 7.6% against a basket of major currencies in the period, its biggest quarterly appreciation in nearly a decade. All else equal, this reduces the dollar value of reserves held in non-dollar currencies such as the euro, sterling, or Japanese yen. When adjusting for these FX changes, the dollar's share of reserves slid to a record low of 54.1% from 55.3%, according to Goldman Sachs. At the start of the millennium, that share was over 71%. Importantly, the Cofer figures only go up to December 31, so do not take into account any reserve shifts made amid the historically high policy uncertainty and market ructions of recent months. With military, diplomatic and trade ties going back decades now fraying at an alarming rate, reserve managers are bound to be rethinking their FX allocations. And that is unlikely to involve a sudden re-discovered love for the dollar. STILL NUMBER ONE Reserve managers do not typically make knee-jerk reactions to market gyrations or the headlines du jour. They're a cautious breed, prioritizing liquidity, stability and long-termism over yield, opportunity and a fast buck. But further diversification of their FX reserves can hardly be considered an impulsive reaction, as the trend is pretty well entrenched. The emergence of any new world order in the coming years would likely only strengthen it. No matter how you slice it, the dollar's overwhelming dominance in global FX reserves is weakening. But that doesn't mean the greenback's place as the world's preeminent reserve currency is under threat. Its share is not being eaten up by its nearest rival, the euro, but by a bunch of smaller, "nontraditional" reserve currencies such as the Korean won, Australian and Canadian dollars, and China's renminbi. "It's not just diversification out of the dollar. Euro reserve holdings have fallen in nominal and valuation-adjusted terms as well," notes Goldman's Michael Cahill. This is a trend that has been underway for years, taking hold just after the Global Financial Crisis and accelerating again after the pandemic. The Cofer data shows the aggregate share of "nontraditional" currencies in central banks' FX reserves was 12.6% in December, just off September's record high of 12.7%. Before 2009, that share had never exceeded 3%. The euro's share since its launch more than 25 years ago has never fallen below 19% and only once, in late 2020, has it exceeded 21%. Any reduction in the difference between the dollar and euro shares has been caused by reserve managers shunning the greenback rather than taking a shine to the euro. Their preference to build up holdings of several smaller currencies has created a somewhat curious equilibrium. The dollar is seeing its dominance gradually diminish, but it's in little danger of losing its role as the world's sole reserve currency. Trump, who seems to want the dollar to remain dominant while no longer sucking in so much of the world's savings, may be happy with that. What could move markets tomorrow? If you have more time to read today, here are a few articles I recommend to help you make sense of what happened in markets today. I'd love to hear from you, so please reach out to me with comments at You can also follow me at [@ReutersJamie and @ 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. sign up here.
Reuters
01-04-2025
- Business
- Reuters
TSX futures flat as investors assess risks ahead of US tariffs
April 1 (Reuters) - Futures tied to Canada's main stock index were subdued on Tuesday, as markets grapple with uncertainty the day before U.S. President Donald Trump's planned announcement of reciprocal tariffs. The futures on the S&P/TSX index were up 0.06% at 6:40 a.m. ET (1040 GMT). Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. Trump is set to announce "reciprocal tariffs" to bring U.S. tariffs to other countries' levels on Wednesday. He said on Sunday the levies will include all countries, but specific details were scant. The announcement will come at 3 pm ET on Wednesday, U.S. Treasury Secretary Scott Bessent told Fox News on Monday. Further, the White House aides have drafted a proposal to impose tariffs of around 20% on most imports to the U.S., the Washington Post reported. Trump has already implemented levies on imported aluminum, steel and autos, along with increased tariffs on goods from China. Higher duties on cars will take effect on Thursday. Back home, shares of Canadian gold miners could receive support as bullion's record run extends to another all-time high, buoyed by safe-haven demand while investors brace for the tariffs. Oil prices steadied near five-week highs as Trump's threats to impose secondary tariffs on Russian crude and to attack Iran countered the impact of trade war worries on global growth. Copper prices recovered after four sessions of losses, buoyed by continued positive data from top metals consumer China. Canada's main stock index rose on Monday, driven by gains in the energy and financial sectors, recovering some monthly losses. In corporate news, First Quantum Minerals ( opens new tab said on Monday it had agreed to discontinue two arbitration proceedings related to its Cobre Panama copper mine. FOR CANADIAN MARKETS NEWS, CLICK ON CODES: TSX market report Canadian dollar and bonds report CA/ Reuters global stocks poll for Canada , Canadian markets directory
Reuters
01-04-2025
- Business
- Reuters
GLOBAL ECONOMY Asia's factory activity weakens as US tariffs sap confidence
Summary Japan, S. Korea, Taiwan saw factory activity shrink in March China's private survey shows rebound in factory activity China's rebound seen as short-lived as tariff hits exports TOKYO, April 1 (Reuters) - Asia's factory activity mostly weakened in March as an intensifying U.S. tariff war and slowing global demand hurt business sentiment, private sector surveys showed on Tuesday, darkening the outlook for the region's economy. China was one outlier among a broadly downbeat set of purchasing managers' indexes, showing activity in the world's second-largest economy picking up, as factories rushed to get goods to customers before U.S. tariffs took effect. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. The prospect of a widening global trade war is adding to headaches for policymakers as they seek to cushion the hit to growth and manage inflationary pressures from rising costs. Elsewhere in Asia, Japan, South Korea and Taiwan saw manufacturing activity decline in March, the surveys showed, as companies braced for more uncertainty on U.S. trade policy. U.S. President Donald Trump has introduced various tariffs against trading partners since taking office in January, including a plan to impose higher levies on auto imports. China's Caixin/S&P Global manufacturing PMI climbed to 51.2 in March from 50.8 in the previous month, exceeding market expectations and staying above the 50.0 mark that separates growth from contraction. The rebound broadly aligned with an official PMI released on Monday that showed manufacturing activity growing at its quickest pace in a year. But analysts expect the relief to be short-lived as the trade war threatens to undermine momentum. Trump has imposed a cumulative 20% tariff on Chinese imports since January and is expected to announce additional "reciprocal" tariffs this week. "The rise in the Caixin manufacturing PMI mirrored its official counterpart, with both surveys suggesting that China's industrial sector is benefiting from a combination of tariff front-running and fiscal support," said Julian Evans-Pritchard, an economist at Capital Economics. "It won't be long before U.S. tariffs turn from being a tailwind to being a drag, however." Japan's factory activity fell at the fastest pace in a year, its PMI showed and extended declines for a ninth straight month. South Korea's factory activity declines also sped up, hit by weak domestic demand. Taiwan's PMI fell to 49.8 in March from 51.5 in February, while that for Vietnam rose to 50.5 from 49.2. Other indicators on Tuesday showed softness across the region with South Korea's exports growing slower than expected and Japan's closely watched tankan survey showing big manufacturers' business sentiment hitting a one-year low.
Reuters
31-03-2025
- Business
- Reuters
TSX futures fall as Trump's tariff announcement nears
March 31 (Reuters) - Futures tied to Canada's main stock index fell on Monday as investors shunned risky assets amid concerns that U.S. President Donald Trump's upcoming tariffs will hurt the global economy. The futures on the S&P/TSX index were down 0.5% at 6:51 a.m. ET (1051 GMT). Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. Stocks across the world plunged after Trump said on Sunday that reciprocal tariffs he is expected to announce on Wednesday will include all nations, and not just a select group of 10 to 15 countries with the biggest trade imbalances. While Canada had secured protections against new U.S. auto tariffs, including a 60-day delay and annual duty-free quotas, under a 2018 trade agreement with the U.S. and Mexico, there's no evidence Trump will honor those commitments. The Canadian government said it fully expects the U.S. to honor the agreements on Wednesday. Meanwhile, shares of Canadian gold miners could get support from bullion hitting a record high. Price of the safe haven asset was set to post its biggest quarterly gain in over 38 years due to the uncertainty from the escalating trade war. Heavyweight oil producers could track a rise in crude prices due to Trump's threat to impose secondary tariffs on buyers of Russian oil and warning of possible military action against Iran if it did not agree to a deal over its nuclear program. On the other hand, copper prices dropped to their weakest in more than two weeks due to the impending tariff announcement, but the losses were cushioned by strong factory data from top metals consumer China. Canada's main stock index on Friday fell by the most in three weeks, as U.S. inflation figures and an expanding trade war stoked fears of a global economic slowdown. In corporate news, consulting services firm CGI ( opens new tab entered into an agreement to acquire Apside, a digital and engineering services firm in France. FOR CANADIAN MARKETS NEWS, CLICK ON CODES: TSX market report Canadian dollar and bonds report CA/ Reuters global stocks poll for Canada , Canadian markets directory
Reuters
27-03-2025
- Business
- Reuters
Focus: Bank bosses call for softer rules, Trump-nominated regulators listen
NEW YORK, March 27 (Reuters) - U.S. banking giants are pushing for a swath of lighter regulations from President Donald Trump's administration, and say they are heartened by signals that regulators are listening. Bank bosses want to cut reporting requirements on some transactions, limit regulators' enforcement powers, speed up deal approvals and overhaul capital rules, four industry executives told Reuters. Those asks would include raising the bar on an anti-money-laundering rule requiring reporting of $10,000 cash transactions and limiting the use of confidential regulatory warnings, known as Matters Requiring Attention, two of those sources said. Another major change could be watering down annual stress tests, one of those sources said. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. The industry has gotten encouraging signs from public statements from the administration, even as bankers wait for head regulators to be installed. "There has been receptivity to our concerns," said Kevin Fromer, head of the Financial Services Forum, which represents the largest global banks and has been pushing for lighter capital and supervisory controls. "We're at the early stages of that conversation." Public statements by regulators have indicated a change of focus. Treasury Secretary Scott Bessent told the Economic Club of New York this month that the financial regulatory agenda needed "a fundamental refocusing of supervisors' priorities," while Travis Hill, acting FDIC head, said at a bankers conference in Washington that regulators need to be " more focused on the real fundamental financial risks and less on the administration around that." REGULATORY CHANGE The changes being pushed could amount to some of the most significant bank deregulation in years. Most recently, some larger banks saw rule relief in 2019 under a 'tailoring' project undertaken in the first Trump administration. The wishlist for sweeping regulatory changes comes after the industry fought Biden-era regulators who sought to implement stricter capital rules known as Basel endgame last year. The proposal was effectively scrapped in a major victory for banks, and now the industry is seeking further relief. Some bankers contend that regulators in recent years have been unfairly heavy-handed even as large institutions report robust earnings and show resilience through the pandemic and 2023 industry turmoil, when three regional lenders failed. Still, proponents of tougher rules argue they provide critical guardrails for the financial system, protecting consumers and the broader economy. "Financial rules protect Main Street families while weakening them enrich Wall Street bankers," said Dennis Kelleher, head of the advocacy group Better Markets, which pushes for stricter financial rules. Treasury spokespeople did not respond to a request for comment. Spokespeople for agencies that supervise banks - the Federal Deposit Insurance Corporation, and Federal Reserve - declined to comment. The White House did not respond to a request for comment. SUPERVISION, ENFORCEMENT Bank bosses have a broader, ambitious goal to water down supervision and enforcement, three of the sources said. The industry seeks to rein in regulators' focus to material financial risks that can be quantified. Banks have complained for years that examiners expanded scrutiny far beyond core financial matters and into areas such as corporate governance, computer systems and compensation, according to the Bank Policy Institute, opens new tab, a trade association representing large U.S. lenders. Industry leaders aim to water down MRAs handed down by regulators such as the Federal Reserve and the Office of the Comptroller of the Currency (OCC), three sources said. Lenders treat MRAs as urgent matters, devoting many employees to repair work to avoid fines or other punishments. BPI said some MRAs represented "illegal overreach" by regulators, who should concentrate on material risks to banks' financial condition. Bessent echoed that concern in his New York speech, calling on agencies to "drive a culture that focuses on material financial risk rather than box checking." Lenders are also pushing for a broad overhaul of the Fed's so-called stress tests, an annual exercise aimed to measure banks' abilities to handle potential crises. The Fed signaled late last year it was open to changes to make the exam more transparent. BPI led a lawsuit against the Fed late last year demanding such changes. 'OUTDATED' CASH RULE One of the easiest regulations to adjust could be an anti-money laundering (AML) rule requiring banks to file reports on customers who make more than $10,000 in cash transactions in a day, according to one of the sources, an industry executive who declined to be identified discussing supervisory matters. That would require rewriting a rule within The Treasury Department. AML has been cited by lobby groups as contributing to 'debanking', or when a bank closes an individual's account. President Donald Trump publicly complained of 'debanking' of conservatives earlier this year. 'The requirements that we have ... under the anti money-laundering laws and the various sanctions regimes, the general laws globally are quite onerous," said Kathryn Ruemmler, Chief Legal Officer and General Counsel of Goldman Sachs (GS.N), opens new tab at a conference this month. The industry has long complained that the limit is outdated and generates unnecessary filings. It would welcome a higher threshold such as $75,000 or even $100,000, the source said. One leading bank regulator has endorsed the idea. Rodney Hood, the acting head of the Office of the Comptroller of the Currency, which monitors national banks, said in a statement to Reuters that the current limit is "outdated and burdensome," and backed an increase among other rule easings. Congress is set to question Jonathan Gould, Trump's pick to permanently lead the OCC, on Thursday.
