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3 hours ago
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Bank of Mexico seen cutting key rate by 50 basis points next week
By Gabriel Burin and Noe Torres (Reuters) -Mexico's central bank is expected to cut its key interest rate by half a percentage point again in its announcement next week, although it would moderate the pace of monetary tightening going forward amid rising inflation and weak economic growth. According to a Reuters poll released on Friday, 21 of 26 economists expect the central bank to cut borrowing costs to 8%, from its current 8.5%, in what would be its fourth consecutive 50 basis point cut. Three participants expect Banxico, as the central bank is known, to take a more gradual approach by reducing interest rates by just 25 basis points, while the remaining two believe it will keep rates unchanged, following the U.S. Federal Reserve's decision this week to hold its benchmark interest rate steady. Banxico has said it is considering lowering the interbank rate again by 50 basis points in its June 26 announcement, extending a monetary readjustment cycle that began in 2024 after it raised its key interest rate to a record high of 11.25% as part of its efforts to tame inflation following the pandemic. But in May, the consumer price index exceeded the bank's official target of 3% interest rate plus or minus one percentage point, raising some doubts about whether the bank will follow through with such a significant rate reduction. Deputy Governor Jonathan Heath told Reuters last week that he believes 50 basis point cuts should be paused until the data can be evaluated further. A further 50 basis point cut would take Banxico's rate to its lowest level in three years, which could provide some relief to the weakening Mexican economy. But the majority of participants polled by Reuters said they believed the central bank should be more cautious in its next moves. Latin America's second-largest economy narrowly avoided a technical recession in the first quarter of the year, but still faces serious risks amid sluggish domestic activity and uncertainty related to U.S. tariff policies. Following next week's decision, Banxico could opt for a 25 basis point cut in its next announcement in August, according to 15 participants, possibly followed by a similar cut in September. A majority of the participants said they believed the third quarter could end with an interest rate at 7.5%. 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
Business Standard
a day ago
- Business
- Business Standard
Indices extend losses for third day amid geopolitical jitters, Fed caution
Key equity benchmarks ended with marginal losses today, marking the third straight session of decline, as investor sentiment remained shaky due to escalating tensions between Israel and Iran. Adding to the caution, the U.S. Federal Reserve's decision to hold interest rates steady also weighed on global cues. Fed Chair Jerome Powell flagged the possibility of rising goods inflation during the summer, partly due to tariffs introduced under President Donald Trumps trade policies. The Nifty closed below the 24,800 mark. On the sectoral front, barring Nifty Auto, all indices on the NSE ended in the red, with PSU banks, realty, and media stocks leading the losses. The S&P BSE Sensex shed 82.79 points or 0.10% to 81,361.87. The Nifty 50 index fell 18.80 points or 0.08% to 24,793.25. The Sensex and the Nifty have fallen 0.53% and 0.61%, respectively, in three sessions. Adani Ports & SEZ (down 2.59%), Bajaj Finance (down 2.08%) and Infosys (down 0.88%) were major drags today. The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index declined 1.64% and the S&P BSE Small-Cap index dropped 1.77%. The market breadth was weak. On the BSE, 959 shares rose and 3,018 shares fell. A total of 140 shares were unchanged. Numbers to Track: The yield on India's 10-year benchmark federal paper rose 0.62% to 6.297 from the previous close of 6.258. In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 86.7325 compared with its close of 86.4300 during the previous trading session. MCX Gold futures for 5 August 2025 settlement shed 0.12% to Rs 99,415. The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.06% to 98.94. The United States 10-year bond yield rose 0.64% to 4.387. In the commodities market, Brent crude for August 2025 settlement rose 10 cents or 0.13% to $76.80 a barrel. Global Markets: US Dow Jones futures were down 176 points. Wall Street will be shut on Thursday for the Juneteenth holiday, with regular trading set to resume Friday. European shares declined as investors awaited the Bank of Englands rate decision due at midday. Norway's central bank has cut interest rates by 25 basis points to 4.25% for the first time since the start of the Covid-19 pandemic. Norges Bank had in March suggested it was expecting to cut its key sight deposit rate in June and followed through. The Swiss National Bank has cut interest rates by a further 25 basis points to 0%adding to concerns over a potential return to negative rates. Most Asian stocks ended lower as investors digested the U.S. Federal Reserves widely expected decision to keep interest rates unchanged. Adding to the cautious mood, ongoing tensions between Israel and Iran continued to weigh on sentiment. Taiwans central bank kept its policy rate unchanged at 2% on Thursday, as widely expected, given the islands robust tech-driven economy and moderating inflation, and maintained its economic growth outlook for the year. The Philippine central bank cut its key interest rate by a quarter of a percentage point to 5.25% for a second time this year and signaled theres scope for further easing, with inflation likely to remain modest and economic growth at risk from global uncertainties. As expected, the Fed held its benchmark rate steady at 4.25%-4.5% on Wednesday, marking no change since December. Fed Chair Jerome Powell indicated the committee would wait to assess the inflationary impact of President Trumps tariff measures before considering any policy shifts. Despite the hawkish pause, the Fed still pointed to two rate cuts by the end of the year. Geopolitical concerns remain front and center. Investor nerves were further rattled after Iran's Supreme Leader Ayatollah Ali Khamenei dismissed President Trump's calls for unconditional surrender. His remarks, delivered via a televised statement on Wednesday, were his first since Friday, when Israel escalated its offensive against Iran. Back on Wall Street, US equities ended mixed on Wednesday. The Dow slipped 0.10%, and the S&P 500 edged down 0.03%, while the Nasdaq bucked the trend with a 0.13% gain. Stocks in Spotlight: Nestle India fell 1.28%. The company announced that its board will consider a bonus share issue on 26 June 2025. Shares of Siemens Energy India Ltd (SEIL), the newly demerged energy business of Siemens, made a debut on the bourses today. The stock listed at Rs 2,840 on the NSE, higher than the discovered price of Rs 2,478.20, and at Rs 2,850 on the BSE, versus a discovered price of Rs 2,368.80. It quickly surged to hit its upper circuit limits of Rs 2,982 on the NSE and Rs 2,992.45 on the BSE. However, the initial rally was short-lived. SEIL closed at Rs 2,760 on the NSE and Rs 2738.35 on the BSE. ESAF Small Finance Bank gained 2.34% after the bank's board approved a major clean-up of its balance sheet by offloading bad loans worth Rs 735.18 crore to an Asset Reconstruction Company (ARC). Tata Elxsi fell 3.57%. The company announced that it has signed a memorandum of understanding (MoU) with Infineon Technologies to jointly develop application-ready EV solutions tailored to the Indian market. Markolines Pavement Technologies rose 2.42% after the company announced that it has secured a maintenance contract worth Rs 18.88 crore from Varanasi-Aurangabad NH-2 Tollway. AAVAS Financiers shed 0.35%. The companys board executive committee has approved raising up to Rs 200 crore through a private placement of non-convertible debentures (NCDs). Garware Technical Fibres declined 2.45%. The company announced that it has incorporated of a wholly owned subsidiary (WOS), Garware Technical Fibres AS (GTF AS), in Norway. Marksans Pharma slipped 1.24%. The company announced that its wholly owned subsidiary Relonchem has received marketing authorization for the product Oxybutynin hydrochloride Oral Solution from UK Medicines & Healthcare Products Regulatory Agency (UKMHRA). Puravankara advanced 1.18% after the companys, wholly owned subsidiary, Starworth Infrastructure & Construction, received a letter of intent (LoI) worth Rs 272 crore from Tru Dwellings. IPO Update: The initial public offer (IPO) of Arisinfra Solutions received bids for 1,70,33,879 shares as against 1,30,84,656 shares on offer, according to stock exchange data at 16:45 IST on Thursday (19 June 2025). The issue was subscribed 1.30 times. The issue opened for bidding on Wednesday (18 June 2025) and it will close on Friday (20 June 2025). The price band of the IPO is fixed between Rs 210 and 222 per share. An investor can bid for a minimum of 67 equity shares and in multiples thereof.
Yahoo
a day ago
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Trump's decision on whether to bomb Iran could have knock-on effects for his fight against the Fed
With the Fed's interest rate decision out of the way and a national holiday for the U.S. stock markets, investors are turning their attention to whether President Trump will bomb Iran. Stocks were largely down in Asia and Europe this morning, following a decline in the S&P 500 yesterday. The human cost of global conflict is unbearable for the victims, of course, and it comes with an economic cost too, which analysts are trying to estimate right now. President Trump has reportedly approved a plan to bomb Iran but not yet given the green light for action. The main issue for investors is what the Iran conflict might do to the price of oil and how that will affect the strength of the dollar. That, in turn, will likely influence the U.S. Federal Reserve's future decisions on whether or not to cut interest rates. Trump, of course, wants Fed Chair Jerome Powell to lower interest rates. He insulted Powell early this morning on Truth Social to underline that point: 'Too Late—Powell is the WORST. A real dummy, who's costing America $Billions!' One possible outcome is that if Trump decides to bomb Iran and the conflict produces a prolonged disruption to the supply of oil, that might strengthen the dollar while damaging the global economy. (Oil markets are settled in dollars, and rising oil prices would thus trigger greater demand for U.S. currency.) Those two factors—economic weakness but dollar strength—could push the Fed to make the interest rate cuts that Trump wants. Convera's Antonio Ruggiero sent a note to clients on the dollar issue this morning: 'Rising geopolitical tensions in the Middle East this week lent support to the greenback, with the DXY briefly pushing above 98.800 on Tuesday before paring gains. Behind the façade of safe-haven appeal lies the true driver of the dollar's rebound: rising oil prices, now hovering near a five-month high. Since most global oil trades are settled in U.S. dollars, surging crude demand tends to drive additional demand for USD. This rebound in sentiment is also reflected in the options market, where—for the first time since April—traders have backed off from bearish dollar positions. Escalating tensions could amplify this further.' At JPMorgan, Joseph Lupton and Bruce Kasman published a note that argued: 'The rise in risk premia associated with the Mideast war, if sustained, is already sufficient to fully offset the cushion provided by the oil supply increase [from Saudi Arabia]. This leaves a net drag on global GDP growth of 0.6% this year. Concentrated in the second half, this drag should lower 2H25 global GDP growth by more than 1% at an annualized pace,' they said. 'A full curtailment of Iranian oil exports (1.8mbd) would, according to our model, lift oil prices to near $100/bbl and, if sustained, reduce global GDP by a full %-point (or, more likely, 2%-point annualized in 2H25), threatening a global recession,' they said. The Fed, as always, is waiting for more data and less uncertainty. The uncertainty of war won't help, according to Daiwa Capital Markets: 'The Trump administration has yet to take a definitive stance on intervention in the Iran-Israel conflict–with the plotted course either facilitating a return to calm or potentially triggering a broader conflict that could disrupt energy markets. Thus, uncertainty remains high and officials have demonstrated that they are willing to wait for additional clarity,' Lawrence Werther and Brendan Stuart told their clients in a note seen by Fortune. Here's a snapshot of the action across global markets this morning: South Korea's Kospi was up 0.19%. India's Nifty 50 was flat. The S&P 500 closed flat yesterday. The market is closed for the Juneteenth holiday today. The U.K.'s FTSE 100 slipped 0.3% in early trading. China's Composite was down 0.82%. Japan's Nikkei 225 was down 1%. Hong Kong's Hang Seng was down 2%. 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
Yahoo
a day ago
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Global uncertainty puts big central banks in a tight spot
By Alun John and Naomi Rovnick LONDON (Reuters) -Central banks are grappling with elevated uncertainty about economic growth and inflation, complicating decision-making, especially for those trying to calibrate policy as they near the end of their rate-cutting cycles. That's making life hard for investors too. Norway's central bank on Thursday gave markets a shock by cutting interest rates, and even the U.S. Federal Reserve is warning not to put much weight on its policy projections. 1/ SWITZERLAND The Swiss National Bank cut its benchmark rate to 0% on Thursday, in response, it said, to falling inflation, a stronger Swiss franc and economic uncertainty caused by unpredictable U.S. trade policy. The big question is whether it will cut rates into negative territory next time. The SNB is keeping all options on the table, but chairman Martin Schlegel says the hurdle to further cuts is higher now rates are at zero. 2/ CANADA The Bank of Canada held rates at 2.75% in early June and said another cut might be necessary if the economy weakened in the face of tariffs. That pause was the second in succession for the BoC, after an aggressive cutting cycle which shrank rates by 225 basis points over nine months. Markets anticipate one further 25 bps cut by year-end. 3/ SWEDEN Sweden's central bank cut its key rate to 2% from 2.25% on Wednesday and said that, with price pressures weak, it may ease further before year-end to boost sluggish growth. The Riksbank has been one of the more aggressive central banks, with 200 bps of cuts since May 2024. 4/ NEW ZEALAND Markets expect the Reserve Bank of New Zealand to hold steady on July 9 after a 25 bps rate cut to 3.25% in May to protect the China-focused economy. The RBNZ also warned that global trade uncertainties made future moves unclear. Markets see one more 25 bps cut this year, on top of the 225 bps of cuts already this cycle. 5/ EURO ZONE The ECB cut rates earlier this month, its eighth cut since mid-2024, and kept all options on the table for its next meetings. ECB President Christine Lagarde says the euro zone central bank's 2% inflation target is in reach. The question for investors is whether inflation will undershoot that target, and necessitate further easing. Markets price in one more rate cut by year-end. 6/ UNITED STATES The Federal Reserve held rates steady on Wednesday and signalled borrowing costs are still likely to fall in 2025, although Chair Jerome Powell warned against putting too much weight on that projection. "No one holds these ... rate paths with a great deal of conviction, and everyone would agree that they're all going to be data-dependent," Powell said. He added that if not for tariffs, rate cuts might be in order given recent inflation readings have been low. Markets still see roughly two 25 bps cuts by year-end. 7/ BRITAIN The sometimes surprising Bank of England met market expectations on Thursday, keeping interest rates at 4.25%. The BoE has been cutting roughly once a quarter for the past year, and markets expect it to continue at that pace, with two more cuts priced in by year end. Three of the nine rate-setters voted on Thursday for a cut however. Some investors speculate softening labour data could cause the BoE to up the pace of cuts, though others reckon it will be held back by high UK inflation. 8/ AUSTRALIA Weak growth data and fears commodities producers and miners will take a blow from a U.S.-China trade war means the Reserve Bank of Australia stands ready to deliver rapid rate cuts. The RBA cut rates by 25 bps to 3.85% in May and traders see borrowing costs dropping to near 3% by year-end. 9/ NORWAY Norway's central bank cut its policy interest rate by 25 bps to 4.25% on Thursday, its first reduction since 2020, a decision that took most analysts by surprise and weakened the currency. The Norges Bank has been the most cautious among developed market central banks on rate cuts, and governor Ida Bache said only one or two more reductions were planned this year. 10/ JAPAN The Bank of Japan, the sole central bank in hiking mode, kept rates steady on Tuesday, as expected by investors. Escalating Middle East tensions and U.S. tariffs complicate the BOJ's task of raising still-low interest rates and reducing a balance sheet that has ballooned to roughly the size of Japan's economy. On Tuesday it decided to decelerate the pace of its balance sheet drawdown next year, signalling its preference to move cautiously in removing remnants of its decade-long stimulus.
See - Sada Elbalad
a day ago
- Business
- See - Sada Elbalad
Fed Signals Rattle Markets as Gold Struggles to Hold Ground
Waleed Farouk Gold prices in local markets saw a slight increase of EGP 15 on Thursday, supported by escalating geopolitical tensions and ongoing economic uncertainty, despite the relative stability of global ounce prices on the international exchange. The price of 21-karat gold rose to EGP 4,805 per gram, compared to EGP 4,790 at the close of Wednesday's session. Meanwhile, the global ounce price edged down by just one dollar, settling at $3,373. In other karat levels, 24-karat gold recorded EGP 5,491 per gram, 18-karat stood at EGP 4,119, and 14-karat at EGP 3,204. The price of the gold pound increased to EGP 38,440. This comes after a decline in local gold prices on Wednesday, when 21-karat gold dropped by EGP 20, opening at EGP 4,810 and closing at EGP 4,790. Globally, the ounce price declined by $13 during the same session—from $3,385 to $3,372. Today's modest rise in local prices was driven by the continued stability of the global ounce price below the $3,400 mark, influenced by heightened geopolitical tensions—particularly in the Middle East—and persistent concerns over global trade outlooks. The U.S. Federal Reserve's decision to maintain interest rates unchanged has acted as a cap on gold's upward movement. However, the ongoing geopolitical risks continue to support gold demand in the medium term, as investors increasingly turn to the metal as a safe haven. Markets remain on edge following reports of a potential U.S. military strike on Tehran amid growing confrontations with Israel—factors that are reinforcing investment demand for gold in this volatile climate. On Wednesday, the Federal Reserve left interest rates unchanged for the fourth consecutive meeting, holding them in a range of 4.25% to 4.50%. At the same time, it revised its outlook for the next two years, indicating fewer expected rate cuts. Notably, seven out of 19 Fed officials now forecast no rate reductions in 2025. In his post-meeting remarks, Fed Chair Jerome Powell stated that the U.S. economy remains strong and resilient. He noted that inflation indicators are nearing target levels, while the labor market continues to perform well, with unemployment rates hovering near historic lows. The Fed also warned of further inflationary pressures stemming from U.S. trade policies—particularly under President Donald Trump's direction—citing raised inflation targets to 3.6% and 3.4% for 2026 and 2027, respectively. Despite the inflationary backdrop which typically favors gold, the Fed's continued hawkish stance and prolonged high interest rate policy pose a significant headwind that could limit gold's future gains. read more CBE: Deposits in Local Currency Hit EGP 5.25 Trillion Morocco Plans to Spend $1 Billion to Mitigate Drought Effect Gov't Approves Final Version of State Ownership Policy Document Egypt's Economy Expected to Grow 5% by the end of 2022/23- Minister Qatar Agrees to Supply Germany with LNG for 15 Years Business Oil Prices Descend amid Anticipation of Additional US Strategic Petroleum Reserves Business Suez Canal Records $704 Million, Historically Highest Monthly Revenue Business Egypt's Stock Exchange Earns EGP 4.9 Billion on Tuesday Business Wheat delivery season commences on April 15 News China Launches Largest Ever Aircraft Carrier Sports Former Al Zamalek Player Ibrahim Shika Passes away after Long Battle with Cancer Lifestyle Get to Know 2025 Eid Al Adha Prayer Times in Egypt Business Fear & Greed Index Plummets to Lowest Level Ever Recorded amid Global Trade War Arts & Culture Zahi Hawass: Claims of Columns Beneath the Pyramid of Khafre Are Lies News Flights suspended at Port Sudan Airport after Drone Attacks Videos & Features Video: Trending Lifestyle TikToker Valeria Márquez Shot Dead during Live Stream News Shell Unveils Cost-Cutting, LNG Growth Plan Technology 50-Year Soviet Spacecraft 'Kosmos 482' Crashes into Indian Ocean News 3 Killed in Shooting Attack in Thailand
