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Business Standard
04-08-2025
- Business
- Business Standard
Dollar index stays pressured near one-week low
The dollar index stays pressured around a one-week low on Monday morning in Asia following a close to 1% fall on Friday. The greenback struggles amid weak labour market data that could lead the Federal Reserve to rate cuts this year. US nonfarm payrolls rose by 73,000 in July, well below expectations of 110,000. The unemployment rate rose slightly to 4.2% in July from 4.1% in June. The labor force participation rate in the US eased to 62.2% in July. The ISM Manufacturing PMI fell to 48 in July from 49 in June, while construction spending in the US fell by 0.4% in June. Earlier this week, the Fed had left the borrowing rates unchanged at 4.25% to 4.50%. The Fed Chair too, in his speech, did not give any signals of a rate cut in September. However, currently, the market is betting that the Fed may finally have to act to cut interest rates in order to support a weak jobs market. The yield on US 10-year Treasury rose to around 4.25% on Monday, while the dollar index that measures the greenback against a basket of currencies is quoting at 98.55. Meanwhile, caution prevails as Trump reportedly fired Bureau of Labor Statistics (BLS) Commissioner Erike McEntarfer, after Nonfarm Payrolls (NFP) report for July, which showed a slowdown in the hiring trend.
Business Recorder
04-08-2025
- Business
- Business Recorder
Economic reports do little to uplift global equity markets
The US Non-Farm Payroll (NFP) faced a significant decline in July, reporting 73,000 jobs added, well below the anticipated 102,000. Furthermore, the June figures were downgraded from 147,000 to a mere 14,000. The unemployment rate climbed to 4.2 percent, up from 4.1 percent. This unemployment report clearly indicates that the effects of tariffs are beginning to emerge, negatively impacting the labor market. This situation strengthens the argument for a potential interest rate cut in September, suggesting a slowdown in hiring momentum. In the aftermath of this economic data release, two Federal Open Market Committee (FOMC) members who previously voted for a rate cut, Christopher Waller and Michelle Bowman, issued a statement advocating for proactive measures in light of the slowing growth and weakening labor market. They expressed their belief that the current tariff effects are only temporary and suggested that if inflation or employment rebounds more quickly than expected, the Federal Reserve could respond accordingly. On Friday, the US ISM Manufacturing PMI also fell short of expectations, dropping to 48 in July from a target of 49, marking the fifth consecutive month of decline and signaling a decrease in factory production. The unexpectedly weak jobs report, particularly for June took many in the market by surprise and led to a sharp decline in the value of the US dollar. The economic reports did little to uplift global equity markets, reflecting the growing unease following recent tariff actions, especially after the implementation of a reciprocal executive order effective August 1. Countries like Canada, Switzerland, and Brazil were particularly affected by the increased rates. The impact of these reciprocal tariffs will extend beyond American trading partners, as they are projected to raise the cost of everyday goods, ultimately affecting the US consumer. In the meantime, the Bank of Japan (BOJ) has kept its policy rate steady at 0.50 percent. The BOJ is cautiously optimistic due to increasing external risks and has raised its inflation target for 2025 significantly, from 2.2 percent to 2.7 percent. This adjustment is primarily attributed to a sharp anticipated increase in food prices. Following the announcement of a trade breakthrough between the US and Japan, market sentiment shifted to a more hawkish stance. This change was driven by a reciprocal trade tariff deal that reduced rates from 25 percent to 15 percent. Although the specifics of the Japanese investment package remain unclear, its estimated value is around USD 550 billion. However, the outlook has turned dovish, as market participants believe that the effects on inflation may take time to materialize. This has led to significant fluctuations in the USD/JPY exchange rate, with the USD later softening against the JPY after disappointing US non-farm payroll data was released. On Thursday, the Bank of England (BoE) will reveal its policy rate. Past announcements have indicated a divide among policymakers regarding interest rates, making this decision particularly intriguing. The situation is complicated by a persistently weak job market coupled with ongoing inflationary pressures. The likelihood of a 25 basis point rate cut to 4 percent appears favourable, though an unexpected increase in headline consumer price inflation to 3.6 percent in June poses a potential obstacle, indicating robust price growth. Meanwhile, gold, which experienced selling pressure after the Federal Reserve decided to keep interest rates unchanged, was further impacted by the Fed Chair's comments during the press conference, stating that no decisions had been made regarding September. However, gold saw a spike in value at the end of the week following the release of weaker than expected job data. The evident economic uncertainty in the US is prompting investors to turn to gold as a safe haven. The combination of trade tensions and poor US economic indicators is particularly encouraging for gold investors. Looking ahead, this week's US economic data is rather light. The ISM Services PMI will be released on Tuesday, followed by the announcement of weekly jobless claims on Thursday. WEEKLY OUTLOOK — Aug 4-8 GOLD @ USD 3362— Gold may begin the new week by attempting to reach new highs before pulling back. A break above USD 3386 would pave the way for a move toward USD 3415. This is not a favoured move. I wouldn't be surprised to see a correction. On the downside, there is support at USD 3325. A break below this level could lead to a drop to the USD 3302-05 range. Adopting a 'buy the dips' strategy seems to be favorable for the week. EURO @ 1.1586— I anticipate that the Euro will remain above the support level of 1.1465. If it breaks past 1.1680, this could lead to a test of 1.1740. If not, keep an eye on 1.1420. GBP @ 1.3280— Pound Sterling may rise, but it must break above 1.3360 to reach 1.3440. Keep an eye on 1.3170. A breakdown there could lead to 1.3090. JPY @ 147.38— If the $/JPY pair cannot surpass 148.60, there is a possibility of testing the 146.60-70 levels. A breakdown could lead to further losses for the Dollar. Or else 149.20. Copyright Business Recorder, 2025
CNBC
30-06-2025
- Business
- CNBC
Treasury yields tick lower as Trump's spending bill in focus
U.S. Treasury yields moved lower as investors monitored whether the Senate would pass President Donald Trump's divisive spending bill over the next few hours. At 3:59 a.m. ET, the benchmark yield was 2 basis points lower at 4.257%, and the 30-year yield moved 3 basis points lower to 4.814%. Meanwhile, the 2-year yield was little changed at 3.73%. One basis point is equal to 0.01%, and yields and prices move in opposite directions. Trump's "big, beautiful bill" passed a key procedural hurdle in the Senate on Saturday and is now slated for a final debate in the Senate. The package could add over $3.9 trillion to the national debt, per a Congressional Budget Office analysis. Trump is pushing lawmakers to pass the bill before the upcoming Independence Day holiday on July 4. "President Trump is committed to keeping his promises, and failure to pass this bill would be the ultimate betrayal," the White House said in a statement of administration policy on Saturday. On the tariffs front, Trump said over the weekend that he will be "terminating ALL discussions on Trade with Canada," after Ottawa decided to impose a digital services tax on American firms. However, Canada walked back the tax on Sunday night, saying it's in the interest of mutually beneficial comprehensive trade arrangements. The U.S. and China had separately finalized a framework on trade on Friday. Monday is quiet in terms of economic data, but investors will follow the ISM Manufacturing PMI and JOLTs job openings on Tuesday, as well as non-farm payrolls on Thursday.
Yahoo
09-06-2025
- Business
- Yahoo
Sharp slowdown in intermodal rail a warning for H2: AAR
In May, U.S. rail freight volumes offered a complex picture of both resilience and caution within the industry. Total U.S. rail carloads increased by 5.9% compared to the previous year, according to a monthly update from the Association of American Railroads, marking a slight decline from April's growth of 6.2%. This upward trajectory was propelled by gains across 13 out of 20 carload commodity categories, suggesting a broad-based improvement in demand within various industrial sectors. Weekly carload originations hovered around an average of 224,000, just shy of the figures recorded in March and April, reflecting a stable flow of carloads across the nation. However, the intermodal sector, which encompasses containers and trailers, presented a more subdued picture. With marginal growth of just 0.6% year over year, intermodal traffic marked its weakest percentage increase in the past 21 months. This sluggish performance can be attributed to declines in port activities and a cooling global trade atmosphere, resulting in noticeably lower import volumes. The closing weeks of May saw an intermodal decline of approximately 1.5% to 1.8% from the previous year, hinting at caution from shippers and retailers possibly resulting in decreased inventory and import levels as consumer goods demand these varying freight dynamics, the AAR Freight Rail Index shed 3.2% in May from April, the most significant drop in five months, underscoring broad-based softness particularly in the economically sensitive intermodal categories. This decline suggests significant challenges facing consumer goods and intermediate materials traffic. Situating these freight dynamics within the broader economic context reveals a mixed picture. The U.S. labor market remains relatively robust, with 139,000 new jobs added in May. However, all of this growth occurred in health care and hospitality, sectors less immediately tied to freight rail demand. The unemployment rate steadied at 4.2%, yet indicators show the labor market may merely be maintaining its current level without indicating expansive growth. Consumer spending — a bellwether for economic health — grew a meager 0.1% in April, with a notable decrease in goods spending, signaling that households are becoming more frugal in response to persisting uncertainties. Moreover, the manufacturing sector continued its sluggish trend with the ISM Manufacturing PMI (Purchasing Managers Index) registering at 48.5%, a level below the threshold indicating growth. Ongoing stagnation in manufacturing output reflects a sector that remains idle with little sign of imminent expansion. Compounding these concerns, the service sector, a previous economic highlight, showed signs of faltering with the PMI slipping below 50%, signaling ahead to the second half of 2025, the rail industry faces uncertainty. Although strong carload growth in the coal, chemicals and grain sectors provides optimism, challenges remain. The persistence of high inventory levels, coupled with decreased consumer demand, is a key headwind that carriers must navigate. Manufacturing output and the housing market's stagnation further cloud prospects, AAR said. Subscribe to FreightWaves' Rail e-newsletter and get the latest insights on rail freight right in your inbox. Find more articles by Stuart Chirls here. Greenbrier: Elevating rail safety standards with state-of-the-art training Predicting the unpredictable for intermodal Regional Rail expands shortline roster, acquires Minnesota CommercialHow freight rail fueled a new luxury overnight train startup The post Sharp slowdown in intermodal rail a warning for H2: AAR appeared first on FreightWaves. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
USA Today
03-06-2025
- Business
- USA Today
How Trump tariffs make American manufacturers grate, not greater
How Trump tariffs make American manufacturers grate, not greater One of the key promises behind President Donald Trump's tariff strategy was to revive U.S. manufacturing. But the policies intended to lay that foundation are currently having the opposite effect. During the past three months, as President Donald Trump and his administration have worked to finalize tariff rates across dozens of countries and product categories, U.S. manufacturing has contracted—according to the Institute for Supply Management's May report. '57% of the manufacturing sector's GDP contracted in May," Susan Spence, chair of the Institute for Supply Management's Manufacturing Business Survey Committee, said during a press briefing Monday. "That's up from 41% in April. The contraction is deepening.' Exclusive: Trump pushes countries for best offers as tariff deadline looms Manufacturing continued to contract in May The institute's Purchasing Managers Index fell to 48.5% in May, 0.2 percentage points lower than April's 48.7%. A number consistently below 50% means manufacturing is contracting. \"The headwinds from tariff increases are starting to show up in economic data," wrote Bill Adams, chief economist for Comerica. "The ISM Manufacturing PMI reports that tariffs are a drag on business, as is the uncertainty about where tariffs will settle over the longer term." As part of its monthly reports, the Institute for Supply Management includes anonymous quote from its survey panel on current business conditions. In the latest release, every comment touched on tariffs. One manufacturing manager expressed cautious optimism over the easing of tariffs in May—but remained concerned about the ongoing uncertainty. 'Tariff whiplash continues while the easing of tariff rates between the U.S. and China in May was welcome news, the question is what happens in 90 days. We are doing extensive work to make contingency plans, which is hugely distracting from strategic work." What manufacturing managers said about tariffs in May Below, managers from various industries reported how tariffs affected their organization in May, according to those quoted in the Institute for Supply Management's release: Trump administration asks for countries' best offers 'Production is frozen," Spence said Monday. "Growth can't resume until we get clarity on tariff policy.' Could some of the uncertainty surrounding tariffs be resolved soon? An exclusive report from Reuters on Monday said the Trump administration has set a deadline of June 4 for countries to give the United States their best and final tariff offers. The deadline would give the administration five weeks before its July 8 deadline, or 90-day pause, that they set on April 9. US economy is still growing While Monday's report wasn't upbeat for manufacturers, it did show that the broader economy is still growing. If the manufacturing index remains over 42.3%, it generally indicates that the economy is still expanding. "Goods-producing sectors of the economy will likely contract in 2025," Adams wrote. "However, service-providing industries, which account for most economic activity and employment, are likely to keep growing and help the economy avoid a recession."
