Latest news with #KennethBroux
Zawya
4 days ago
- Business
- Zawya
Euro zone bond yields up as investors exit safe havens after court blocks Trump tariffs
Euro zone government bond yields inched up on Thursday, as investors ditched safe havens for riskier assets after a U.S. federal court blocked most of President Donald Trump's sweeping tariffs. Investors moved away from bonds, gold, and safe-haven currencies such as the yen and Swiss franc after the Manhattan-based Court of International Trade ruled on Wednesday that Trump overstepped his authority by imposing across-the-board duties on imports from the United States' trading partners. The Trump administration has appealed the ruling, which does not include sectoral levies, and could seek other legal avenues for Trump to impose tariffs. "(The court ruling) removes some uncertainty, but it adds some," said Kenneth Broux, head of corporate research FX and rates at Societe Generale. Though the news provided a relief boost to stocks and the dollar, he said, the situation nonetheless remained very unpredictable. Germany's 10-year government bond yield, the euro area benchmark, rose 3.5 basis points (bps) to around 2.58%. It fell to around 2.51% on Tuesday, its lowest level since May 8. "What we are seeing is some dispersion in bond markets," Broux said, with the recent rise in yields highlighting not only supply and demand constraints but also fiscal dynamics. Long-term bond yields have risen this month on growing concern about rising debt levels among big economies such as the United States and Japan. German 30-year government bond yields edged up nearly 4 bps to around 3.08%, while the 2-year government bond yield, more sensitive to European Central Bank policy rates, rose 2 bps to 1.82%. Markets have fully priced in a 25-bps interest rate cut from the ECB when it meets next week. They also indicated a deposit facility rate at 1.71% in December, from 1.55% in mid-April. Italy's 10-year yield rose 3 bps to 3.58%, leaving the spread between Italian and German yields around 97 bps. U.S. Treasury yields also rose on the day, with the yield on the benchmark 10-year Treasury note up over 5 bps to 4.533%.
Zawya
4 days ago
- Business
- Zawya
Sterling ticks higher as strong data, trade deal buffer against stronger dollar
The pound ticked higher versus the dollar on Thursday, one of the few major currencies holding its ground against the greenback which earlier surged after a court blocked U.S. President Donald Trump from imposing import tariffs on other countries. At 0942 GMT, the pound was up 0.12% against the dollar at 1.347. Elsewhere, the euro, Japanese yen and Swiss franc all fell versus the dollar. Nevertheless the pound remains a fraction below the 1.359 level touched on Tuesday, its highest against the greenback since February 2022. "Due to the court ruling that Trump's tariffs are illegal, the pound has given back a chunk of gains made against the U.S. dollar," said George Vessey, lead FX & Macro Strategist at Convera in a note, though he added it remains above its 21-day moving average, a signal that a recent uptrend is still intact. The pound has gained almost 8% against the dollar in 2025 and is on track for its fourth consecutive monthly rise, as investors react to uncertain U.S. trade policy. It has also been boosted by strong data, including retail sales last week as well as the announcement of a UK-U.S. trade deal earlier this month. "GBP has done well in recent weeks on the back of U.S. and EU trade/reset deals, above-forecast consumer spending and less crowded positioning," said Kenneth Broux, head of corporate research FX and rates at Societe Generale, also flagging that the market is pricing fewer Bank of England rate cuts. Last week's inflation print led traders to scrap bets for a cut at the BoE's meeting scheduled for June, with more than 97% of traders now expecting the central bank to hold rates. The central bank slashed the bank rate by 0.25 percentage points to 4.25% on May 8. The Confederation of British Industry said on Thursday that business confidence in Britain's services sector hit a two-and-a-half-year low in the quarter to May. Data from market researcher Kantar on Wednesday showed British grocery price inflation jumped to 4.1% for the four weeks to May 18, its highest level since February last year. Against the euro, the pound was up 0.1% at 83.72, on track for its seventh straight week of gains. (Reporting by Lucy Raitano; Editing by David Holmes)
CNA
4 days ago
- Business
- CNA
Dollar rises after Trump's tariffs face court roadblock
LONDON :The dollar rose against its major peers on Thursday after a court blocked U.S. President Donald Trump from imposing import tariffs on other countries, providing some relief for the currency that has struggled this year due to trade uncertainty. The greenback gained a third of a percent against the yen and the Swiss franc but was off session highs after the trade court ruling that found Trump overstepped his authority by imposing across-the-board duties on imports from U.S. trading partners. The Trump administration filed an appeal within minutes. "Reciprocal tariffs are off for now, but this should not alter the medium trend. Trump may find other methods to impose his economic and trade agenda, so in that respect it's uncertainty squared," said Kenneth Broux, head of corporate research FX and rates at Societe Generale. "For some investors this is just an opportunity to diversify to non-dollar securities." U.S. assets including the dollar have been hurt in recent months as investors reassess historic assumptions around the strength of U.S. markets given an erratic trade policy and concern about high debt. The dollar briefly hit a two-week high at 146.29 yen and was last trading 0.34 per cent higher on the day at 145.23 yen. It was also 0.34 per cent higher against the Swiss franc at 0.8296. The euro slipped 0.13 per cent to around $1.1276 and sterling was slightly weaker at around $1.3467. That left the dollar index, which measures the U.S. currency against six major peers, back above 100 for the first time in a week. "There's an initial reaction of a stronger dollar and weaker yen. However, considering judicial processes like appeals, I don't expect a continuous rise in the dollar," said Hirofumi Suzuki, chief FX strategist at SMBC. The dollar index remains down 8 per cent so far this year and analysts said that the new court ruling did little to offer clarity on the outlook for tariffs and they were sceptical of a sustained dollar rally in the face of a long court battle. The greenback has weakened about 2 per cent against the yen, nearly 6 per cent against the Swiss franc and 4 per cent against the euro since Trump slapped harsh levies on global economies on April 2, while the broader dollar index has fallen more than 3 per cent. U.S. Treasuries also sold off, with 10-year yields up 5 basis points at 4.53 per cent. Europe's benchmark STOXX 600 index was up 0.3 per cent in early trading, and U.S. stock futures jumped on a risk-on rally. Global investor sentiment was also lifted this week after Trump delayed at the weekend his plan to impose 50 per cent tariffs on European Union imports, and investors are on the lookout for any signs of improving relations between the United States and its trade partners.
Malay Mail
02-05-2025
- Business
- Malay Mail
Trade talks spark dollar retreat, Aussie and yen lead currency gains
TOKYO, May 2 — The US dollar ceded ground to the Swiss franc, Australian dollar, euro and yen today as signs of a thaw in trade tensions lifted investors' appetite for riskier assets while they awaited US jobs data due later in the day. The risk-sensitive Aussie and kiwi dollars climbed as European and Asian shares continued a rally that began on Wall Street against the backdrop of updates from China and Japan on tariff discussions with the Donald Trump administration. The euro was up 0.3 per cent and China's offshore yuan strengthened to a near one-month high. The US dollar was still on track for a third straight weekly advance. Alongside US Treasuries and shares, it has bounced from steep declines last month as President Donald Trump's erratic tariff policies drove fears of a recession and sapped confidence in US assets. 'The dollar has benefited from month-end flows,' said Kenneth Broux, head of corporate research FX and rates at Societe Generale. He said the dollar had been supported earlier this week by the Bank of Japan's dovishness yesterday as well as strong earnings reports from US tech giants, the rally on Nasdaq and flows into US equities. 'Maybe the whole sell America story looked a little bit overdone. And we saw Japanese investors also buying the most foreign bonds in eight weeks, tempering expectations that everybody in the world is going to sell Treasuries,' Broux said. US Secretary of State Marco Rubio told Fox News late yesterday that talks with China will come up soon. His comments came on the heels of a Chinese state media report seen as a signal of Beijing's openness to trade negotiations. Beijing is 'evaluating' an offer from Washington to hold talks over Trump's tariffs, China's Commerce Ministry said today. Separately, Japan's top trade negotiator, Ryosei Akazawa, said he deepened talks on trade, non-tariff measures and economic security cooperation with US Treasury Secretary Scott Bessent in Washington yesterday. And Finance Minister Katsunobu Kato said Japan could use its US$1 trillion (RM4.28 trillion) plus holdings of US Treasuries as leverage in trade talks with Washington. US stocks rose yesterday, driven by positive tech earnings and a slightly better-than-expected manufacturing report even though it showed factory activity contracted further last month. The dollar index dipped 0.23 per cent today, still poised for a 0.3 per cent gain in a week of relatively light trading due to holidays. The euro edged up 0.33 per cent to US$1.1329 from near a three-week low. The Australian dollar rose 0.55 per cent to US$0.6418, and the Swiss franc added 0.3 per cent to 0.8265 per US dollar. The greenback traded at ¥144.875, after earlier touching 145.91, the strongest since April 10. The yen sank yesterday after the Bank of Japan left interest rates on hold and lowered growth forecasts due to US tariffs, essentially signalling a pause in rate hikes for more clarity on the fallout from the trade measures. Market participants are now looking to the non-farm payrolls (NFP) report for an indication on when the Federal Reserve will resume cutting rates. Wall Street economists are forecasting 130,000 new jobs created last month, compared with a print of 228,000 seen in March. Societe Generale's Broux said a number far from the consensus would actually be better, helping clarify whether the US was heading for a recession, which would mean more Fed rate cuts, or would avoid a sharp slowdown. 'And the question is whether we sell that dollar rally again, because that has been the modus operandi in FX now for a couple of weeks that we've been selling dollar rallies, especially against the euro.' — Reuters
Yahoo
21-04-2025
- Business
- Yahoo
Sterling steadies against dollar ahead of long Easter weekend
By Yadarisa Shabong (Reuters) - The pound gained against the euro on Thursday and held steady against the U.S. dollar after economic data over the last week eased concerns about the British economy against the backdrop of U.S. tariffs. Concerns about the impact of U.S. tariffs on growth and inflation have driven investors away from U.S. assets, including the dollar. Sterling steadied at $1.3243 and was on track for eight straight days of gains against the U.S. currency. It also strengthened against the euro, which dipped to 85.90 pence ahead of an expected rate cut by the European Central Bank later on Thursday. Trading volumes and volatility were subdued ahead of the long Easter break, with UK markets closed on Friday and Monday. Economic data has shown UK economic growth holding up, inflation slowing and wage growth strong despite a fall in job vacancies in the run-up to an increase in employer tax this month. Together with expectations of a possible U.S.-UK trade deal and a weakened dollar, Britain's economic resilience has helped the pound to rally. "The backdrop for the UK and for sterling really is not too bad," Kenneth Broux, head of corporate research FX and rates at Societe Generale, said. "As long as we don't have another leg of risk-off and another spike in gilt yields, sterling should continue to do quite well." UK gilt yields, which surged last week on worries about Trump's trade tariffs, have eased this week. Sign in to access your portfolio
