Latest news with #JimReid
Yahoo
4 days ago
- Business
- Yahoo
Oil prices surge on relief over OPEC+ output hike
Oil prices surged on Monday morning, after the Organization of the Petroleum Exporting Countries and its allies – known as OPEC+ – announced an increase to output for July that was in line with expectations. Brent crude futures (BZ=F) jumped 2.6% to $64.39 a barrel, at the time of writing, while West Texas Intermediate futures (CL=F) were up 3% at $62.63 a barrel. OPEC+ said in a statement on Saturday that its eight participating countries had agreed to increase output by 411,000 barrels per day. Jim Reid, a market strategist at Deutsche Bank, said: "An increase of this magnitude was flagged on the wires on Friday afternoon and there was some prospect of it being higher than this. He said that oil futures were higher on Monday morning "in a relief that the output increase wasn't higher." Read more: FTSE 100 LIVE: Markets slide as China accuses US of violating trade deal ING's head of commodities strategy, Warren Patterson, and commodities strategist Ewa Manthey said: "The latest increase is in line with our expectations. We're also assuming that OPEC+ will continue with these large supply hikes. "Rising tensions between Russia and Ukraine added further support to the market this morning. Ukraine carried out large-scale drone attacks on several Russian airfields, which comes ahead of peace talks between Russia and Ukraine this week. In addition, some US senators are pushing for harder sanctions against Russia, with a proposal to impose 500% tariffs on imports from countries that buy Russian oil. "While president Trump appears to be increasingly frustrated with president Putin, he's so far been reluctant to impose additional sanctions. Actions that successfully target Russian oil flows will change the outlook for the oil market drastically." Gold prices also jumped on Monday morning, as the latest escalation in the Russia-Ukraine conflict and tariff concerns helped drive demand for the precious metal as a safe-haven investment. Gold futures (GC=F) were up 1.9% at $3,379.50 per ounce at the time of writing, while the spot gold price climbed 1.9% to $3,352.32 per ounce. Investors have been flocking to the yellow metal as it is considered to act as a hedge in times of political and economic uncertainty. On Friday evening, US president Donald Trump announced that tariffs on imports of steel and aluminium would be doubled to 50% on Wednesday. Deutsche Bank's Reid said: "It is really hard to keep up or predict what's going to happen on trade at the moment, and that's before we factor in the full ramifications from the court ruling last Thursday night, and then the subsequent brief stay of execution for them on appeal." Stocks: Create your watchlist and portfolio The US Court of International Trade last week ruled that Trump exceeded his authority when he used an emergency law to issue global reciprocal tariffs on US trading partners. However, an appeals court then ruled that the tariffs could remain in place for now. "For now it seems likely that the tariff uncertainty will linger for a long time ahead even if we're still likely past the peak aggressiveness of US policy," said Reid. In addition, Trump on Friday accused China of violating its trade truce with the US. Trump said in a post on his social media platform, Truth Social: "The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US." On Monday, China responded by saying that the US had "severely violated" the terms of their recent trade truce. Reid said that the "surprisingly positive agreement between China and the US on tariffs on May 12th now seems a more distant memory." The pound gained against the dollar (GBPUSD=X) on Monday morning, rising 0.7% to $1.3547, helped by a weaker greenback. The US dollar index ( which measures the greenback against a basket of six currencies, was down 0.5% to 98.79 at the time of writing. On trade, Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "We're back in a situation of one step forward, two steps back, but there do appear to be expectations that more concessions will be struck. "Investors are getting used to aggressive statements being rolled back, so much so the TACO trade theory has rippled through Wall Street, which stands for 'Trump Always Chickens Out'. But there's no guarantee that the US president won't follow through with more onerous restrictions, given he's stayed steadfast to his pledge to bring more manufacturing back to the US." Read more: Stocks to watch this week: Broadcom, Lululemon, British American Tobacco, Dr Martens and Rémy Cointreau In other currency moves, the pound was little changed against the euro (GBPEUR=X), trading at €1.186 at the time of writing. More broadly, the FTSE 100 (^FTSE) edged 0.1% higher to trade at 8,785 points. For more details on broader market movements check our live coverage here. Read more: UK house prices rise in May as higher wages, low unemployment boost market Odds of more Bank of England interest rate cuts fall as food inflation rises UK 'bargain' stocks that have outperformed the market long-termSign in to access your portfolio
Yahoo
4 days ago
- Business
- Yahoo
Oil prices surge on relief over OPEC+ output hike
Oil prices surged on Monday morning, after the Organization of the Petroleum Exporting Countries and its allies – known as OPEC+ – announced an increase to output for July that was in line with expectations. Brent crude futures (BZ=F) jumped 2.6% to $64.39 a barrel, at the time of writing, while West Texas Intermediate futures (CL=F) were up 3% at $62.63 a barrel. OPEC+ said in a statement on Saturday that its eight participating countries had agreed to increase output by 411,000 barrels per day. Jim Reid, a market strategist at Deutsche Bank, said: "An increase of this magnitude was flagged on the wires on Friday afternoon and there was some prospect of it being higher than this. He said that oil futures were higher on Monday morning "in a relief that the output increase wasn't higher." Read more: FTSE 100 LIVE: Markets slide as China accuses US of violating trade deal ING's head of commodities strategy, Warren Patterson, and commodities strategist Ewa Manthey said: "The latest increase is in line with our expectations. We're also assuming that OPEC+ will continue with these large supply hikes. "Rising tensions between Russia and Ukraine added further support to the market this morning. Ukraine carried out large-scale drone attacks on several Russian airfields, which comes ahead of peace talks between Russia and Ukraine this week. In addition, some US senators are pushing for harder sanctions against Russia, with a proposal to impose 500% tariffs on imports from countries that buy Russian oil. "While president Trump appears to be increasingly frustrated with president Putin, he's so far been reluctant to impose additional sanctions. Actions that successfully target Russian oil flows will change the outlook for the oil market drastically." Gold prices also jumped on Monday morning, as the latest escalation in the Russia-Ukraine conflict and tariff concerns helped drive demand for the precious metal as a safe-haven investment. Gold futures (GC=F) were up 1.9% at $3,379.50 per ounce at the time of writing, while the spot gold price climbed 1.9% to $3,352.32 per ounce. Investors have been flocking to the yellow metal as it is considered to act as a hedge in times of political and economic uncertainty. On Friday evening, US president Donald Trump announced that tariffs on imports of steel and aluminium would be doubled to 50% on Wednesday. Deutsche Bank's Reid said: "It is really hard to keep up or predict what's going to happen on trade at the moment, and that's before we factor in the full ramifications from the court ruling last Thursday night, and then the subsequent brief stay of execution for them on appeal." Stocks: Create your watchlist and portfolio The US Court of International Trade last week ruled that Trump exceeded his authority when he used an emergency law to issue global reciprocal tariffs on US trading partners. However, an appeals court then ruled that the tariffs could remain in place for now. "For now it seems likely that the tariff uncertainty will linger for a long time ahead even if we're still likely past the peak aggressiveness of US policy," said Reid. In addition, Trump on Friday accused China of violating its trade truce with the US. Trump said in a post on his social media platform, Truth Social: "The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US." On Monday, China responded by saying that the US had "severely violated" the terms of their recent trade truce. Reid said that the "surprisingly positive agreement between China and the US on tariffs on May 12th now seems a more distant memory." The pound gained against the dollar (GBPUSD=X) on Monday morning, rising 0.7% to $1.3547, helped by a weaker greenback. The US dollar index ( which measures the greenback against a basket of six currencies, was down 0.5% to 98.79 at the time of writing. On trade, Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "We're back in a situation of one step forward, two steps back, but there do appear to be expectations that more concessions will be struck. "Investors are getting used to aggressive statements being rolled back, so much so the TACO trade theory has rippled through Wall Street, which stands for 'Trump Always Chickens Out'. But there's no guarantee that the US president won't follow through with more onerous restrictions, given he's stayed steadfast to his pledge to bring more manufacturing back to the US." Read more: Stocks to watch this week: Broadcom, Lululemon, British American Tobacco, Dr Martens and Rémy Cointreau In other currency moves, the pound was little changed against the euro (GBPEUR=X), trading at €1.186 at the time of writing. More broadly, the FTSE 100 (^FTSE) edged 0.1% higher to trade at 8,785 points. For more details on broader market movements check our live coverage here. Read more: UK house prices rise in May as higher wages, low unemployment boost market Odds of more Bank of England interest rate cuts fall as food inflation rises UK 'bargain' stocks that have outperformed the market long-termError 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
Yahoo
29-05-2025
- Business
- Yahoo
Court blocking Trump tariffs torpedoes his negotiating tactic, but it's ‘hardly the end of this story'
ANALYSIS: A U.S. court ruled that the Trump administration lacked the authority to impose sweeping global tariffs under the International Emergency Economic Powers Act, requiring the White House to begin unwinding certain tariffs within 10 days—though an appeal is underway. While this decision poses a major challenge to Trump's trade strategy, experts expect the administration to pursue alternative legal avenues to maintain or reintroduce tariffs, potentially shifting focus to sectoral measures or other provisions under the Trade Act. The Trump tariff saga took another turn overnight, with the U.S. Court of International Trade ruling the White House did not have the authority to impose its 'Liberation Day' economic sanctions across the globe. And while Canada, Mexico and China had been left out of further hits on April 2, the three-judge panel extended its ruling to the tariffs announced on these countries earlier this year as well. The setback for Trump 2.0 is major, as it undermines the very foundation the administration has been relying on to push through more advantageous deals with key trading partners. Of course, the Trump team were quick to announce they would appeal the decision. To recap, the current state of play with tariffs is that the majority of the world is subject to a 10% import tax into the U.S., while China sits at 30% following an agreement with Beijing. In addition, Canada and Mexico face levies of 25% as a result of Trump's request for the nations to tackle immigration and the fentanyl trade. Under this week's ruling, the Oval Office has 10 days to carry out the administrative work to remove these tariffs. Sanctions on steel, autos and aluminum were not included in the ban. It is not clear how quickly the tariffs will be undone, or whether the White House will keep them in place while it pushes ahead to the court of appeals and potentially the Supreme Court—though completing such a task in 10 days may prove impossible. Whatever the outcome, this wrench in the works may still have repercussions for the timeline of negotiations—a pressure the Trump administration has been keen to keep up. In his second term, Trump has routinely announced sanctions with fairly swift turnarounds. When these tariffs have been delayed—which they often have—the timeframes have still remained tight in order to get deals done, for example a 90-day pause following 'Liberation Day' tariffs and a similar window to allow for negotiations with China. What's clear is that this ruling does not mark the conclusion of tariffs, but simply the beginning of the next chapter. As Deutsche Bank's Jim Reid wrote in a note seen by Fortune this morning: 'We should say at the outset that this is hardly the end of this story, as the administration are appealing this decision. But already, markets have seen a substantial rally in response.' Indeed, S&P futures are up 1.7% at the time of writing, with Dow Jones future also up 1.3%. Economists have noted that the revenue tap Trump has switched on may prove too tempting for future administrations to turn off, courtesy of the vast revenues they are likely to generate. But how these funds will have played into the wider budget of Trump 2.0—and whether or not they were relied on for spending packages like the 'Big, Beautiful Bill' was never made clear. 'We haven't heard directly from President Trump on the matter yet, so it's unclear how the administration might respond going forward,' Reid notes. 'This could also have broader revenue implications, as they had been hoping to use tariffs as a source of revenue to fund other tax cuts. 'If the ruling did remain in place … one option for the administration would be to expand the use of other tariff instruments, like the Section 232 on national security grounds, which have been used for autos, steel and aluminum tariffs.' Goldman Sachs's Alec Phillips chimed that he did not expect the tariff setback to alter the wider fiscal strategy of the administration, explaining 'tariff revenue was never counted toward offsetting the cost of the package, and most lawmakers never made a clear link between the two issues.' He added: 'That said, the tariffs the court struck down were likely to raise nearly $200bn on an annual basis, which is roughly the amount the fiscal package would increase the deficit next year (compared with current policy) and more than the impact in following years.' Like Reid, Phillips expects Trump's team to explore other legal routes to achieve the same aim. Trump's tariffs were blocked by the court as they relied on the International Emergency Economic Powers Act (IEEPA), however this is not the only way to achieve sanctions. The court itself highlighted that Trump could use two sections of the 1974 Trade Act to impose tariffs of up to 15% for a maximum of 150 days (which can be extended by Congress) to address the balance of payments, or justify the action under Sec. 301 as addressing unfair trade practices. Phillips noted that the White House could also broaden sectoral tariffs, a move many analysts are already expecting. He explained: 'Uncertainty regarding the IEEPA-based tariffs could lead the White House to put more emphasis on sectoral tariffs, where there is much less legal uncertainty. 'President Trump has not emphasized sectoral tariffs as frequently lately as he did earlier this year, but if the White House finds it has less flexibility on country-focused tariffs, sectoral tariffs might receive more attention again.' He added: 'Sec. 338 of the Trade Act of 1930 allows the president to impose tariffs of up to 50% on imports from countries that discriminate against the U.S. This authority, which has never been used, is similar to the authority under Sec. 301, except that it limits the amount of the tariffs but does not require a formal investigation.' This story was originally featured on
Time of India
22-05-2025
- Business
- Time of India
Bitcoin price today: Biggest cryptocurrency BTC nears $112,000-mark, latest forecast by experts are out
Live Events FAQs (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Bitcoin (BTC) on Thursday pushed to an all-time high, partly as investors sought out alternatives to U.S. assets. Bitcoin climbed as high as $111,862.98, a fresh all-time peak and a 3.3 per cent increase from Wednesday's close. Cryptocurrency and blockchain-related stocks jumped as bitcoin, the world's biggest cryptocurrency, climbed to a record high."Bitcoin is fast approaching $112,000 and trading at a new record as hopes increase that stablecoin regulation will soon pass after the advancement of legislation yesterday," said Jim Reid, global head of macro and thematic research at Deutsche Bank in a note."The U.S. debt instability has probably helped too," Reid operator Coinbase advanced 2.5 per cent, bitcoin stockpiler Strategy gained 1.4 per cent and crypto miners including MARA Holdings added 4 per the $TRUMP meme coin launched in January, the profits have favored big investors: more than 60 large wallets have profited close to $1.5 billion, with $48 million in profits occurring after Trump posted about the contest on social media, according to reviews by Inca Digital and crypto analytics tracker Bubblemaps, as of May about 600,000 other smaller wallets have lost $3.87 billion so far, with $117 million of the losses occurring after the dinner announcement.A1. World's most popular cryptocurrency is Bitcoin.A2. Bitcoin climbed as high as $111,862.98, a fresh all-time peak and a 3.3 per cent increase from Wednesday's close.
Yahoo
20-05-2025
- Business
- Yahoo
The first U.S. credit downgrade triggered a ‘flight to quality.' Will the latest cut from Moody's do the same?
Long-term bond yields ticked higher after Moody's became the last credit agency to remove the U.S. from its top rung of borrowers. Standard & Poor's downgrade of U.S. debt in 2011 caused Treasuries to rally as investors paradoxically sought safety in government bonds. The situation today appears different, however, with fears about growing deficits and looming tax cuts intensifying. Moody's downgrade of the U.S. debt on Friday didn't surprise many on Wall Street or Washington: Even Treasury Secretary Scott Bessent tried to downplay the credit agency's move as a 'lagging indicator.' It's much less of a shock than 14 years ago, when Standard & Poor's became the first credit agency to cut America's credit rating—and paradoxically pushed investors to snap up Treasuries. Since Friday, however, bond markets have reacted more predictably, with a minor sell-off in long-dated Treasuries eventually mellowing on Monday. Long-term yields, which rise as the price of the bond falls, remain elevated amid worries about tax cuts in the GOP's 'big, beautiful' bill exacerbating an already ballooning federal deficit. That legislation, which the Congressional Budget Office estimated will add $4.5 trillion to the deficit through 2034, proved to be the final straw for Moody's. The credit agency had previously kept the U.S. in its top rung of borrowers since it first issued ratings for government bonds in 1919. The ratings hit means Republican fiscal hawks are likely to get more of a say as the bill heads to the House floor and eventually the Senate. 'One thing stands out though, and that is that at this stage there are no signs of any serious deficit restraint,' Jim Reid, head of global macro and thematic research at Deutsche Bank, wrote in a note with colleagues Monday morning. It's no secret the national debt is on an unsustainable path, particularly after the lavish spending of the first Trump and Biden administrations. According to the Congressional Budget Office, the federal deficit for the 2025 fiscal year is $1.9 trillion, or 6.2% of GDP, the deepest shortfall in the country's history outside of a war or recession. Moody's, meanwhile, expects debt held by the public to account for 134% of America's GDP by 2035, compared to 98% today. 'The big unknown is when it all tips over,' Reid wrote in a separate note. 'Our view is that Liberation Day has likely brought that reckoning forward. The U.S.'s exorbitant privilege—its ability to borrow well below fair value—is gradually eroding.' In other words, because of the dollar's status as the world's reserve currency and confidence from investors that America's government will always pay its bills, the U.S. borrows at much better rates than its underlying finances would normally allow. Experts commonly refer to this state of affairs as 'exorbitant privilege.' Deutsche Bank estimates this ability has shaved around 70 basis points off America's borrowing costs. That spread could tighten, however, if political instability or burgeoning deficits makes investors increasingly doubt the reputation of Treasuries as the ultimate safe-haven. That would put upward pressure on interest rates for mortgages, small business loans, and other common types of borrowing throughout the economy. The effect of a credit downgrade on American debt, however, has not always been straightforward. In 2011, Standard & Poor's became the first of the three big credit agencies to issue a downgrade after a bitter standoff over the debt ceiling, which allows the U.S. government to increase its borrowing to fund spending already appropriated by Congress. Once a perfunctory exercise, hand wringing over the debt ceiling has become a convenient political weapon. That's because if an agreement to raise the threshold isn't reached eventually, the Treasury Department would not be able to make payments to creditors on-time. Global markets would likely go haywire, at least momentarily. In 2011, an 11th-hour agreement averted such a scenario, but Wall Street had to reckon with a new reality. 'It was definitely Earth-shattering for a lot of investors,' Gennadiy Goldberg, head of U.S. rates strategy at TD Securities, told Fortune, 'because no investor had ever considered U.S. Treasury debt as potentially risky in the form of non-payment.' In the aftermath of the crisis, however, bonds rallied amid a stock market sell-off in a so-called 'flight to quality.' 'People bought U.S. Treasuries as the risk-free asset because of uncertainty about Treasuries as the risk-free asset,' Goldberg said. 'That sounds circular and ironic and crazy, but that's exactly what happened. But you also had very wild price action. You had rates moving 30, 40, 50 basis points per day.' In 2023, Fitch Ratings also downgraded U.S. debt after another debt ceiling kerfuffle, but movements in the Treasury market were much more orderly. Moody's recent cut is distinct from the previous two, however, and not just because it's now a Republican administration's spending plans that are in focus. Rather than driven by the debt ceiling, this cut is centered on the scale of U.S. borrowing. Even as deficits skyrocket, America won't default on its debt, Jay Hatfield, the CEO of Infrastructure Capital Advisors, told Fortune. The government can always print more money to pay its bills, but that poses huge risks of higher inflation and a weaker dollar, decreasing the value of payments to bondholders in real terms. 'I think what Moody's is doing is more an investment rating than a default-risk downgrade,' said Hatfield, who manages ETFs and a series of hedge funds. Technically, though, Moody's downgrade only reflects the risk of the U.S. not paying its debt, rather than accounting for inflation's ability to dent returns, billionaire hedge fund manager Ray Dalio said in a social media post Monday. 'Said differently, for those who care about the value of their money,' the Bridgewater founder wrote, 'the risks for U.S. government debt are greater than the rating agencies are conveying.' This story was originally featured on 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
