* Fed officials cautious on outlook for interest rate cuts. * Goolsbee says tariffs could impact inflation, supply chains. * Barkin notes complexity of tariffs' impact on inflation, demand. By Ann Saphir, Howard Schneider.
* FMC plunges 33% on lower quarterly revenue forecast. * Alphabet falls nearly 8% after downbeat earnings, heavy AI spend. * Indexes: Dow up 0.47%, S&P 500 up 0.19%, Nasdaq down 0.07% By Abigail Summerville and Shashwat Chauhan.
- Chicago Federal Reserve President Austan Goolsbee warned on Wednesday that ignoring the potential inflationary impact of tariffs would be a mistake, citing the COVID-19 pandemic experience where supply chain disruptions drove up inflation.
- Chicago Federal Reserve President Austan Goolsbee warned on Wednesday that ignoring the potential inflationary impact of tariffs would be a mistake, citing the COVID-19 pandemic experience where supply chain disruptions drove up inflation.
The U.S. trade deficit widened sharply in December as imports surged to a record high against the backdrop of tariff threats, which might have prompted businesses to rush purchases of foreign-made goods like finished metals and computers.
Mexico's central bank will likely cut its benchmark interest rate by 50 basis points later this week, taking it to 9.50%, a Reuters poll showed on Wednesday, as inflation cools and the economy notched a slight contraction late last year.
The European Central bank may need to cut interest rates below a neutral level to stimulate economic growth as inflation is at risk of falling below the bank's 2% target, ECB policymaker Mario Centeno told Reuters on Wednesday.
* Trade deficit increases 24.7% to $98.4 billion in December. * Trade gap at $918.4 billion in 2024, largest since 2021. * Imports jump 3.5% in December to record high $364.9 billion. * Exports decrease 2.6% to $266.5 billion. * Goods deficit widens with Canada, shrinks with China, Mexico. By Lucia Mutikani.
Federal Reserve officials on Wednesday pointed to the large policy uncertainty around tariffs and other issues arising from the early days of President Donald Trump's administration as among the top challenges in figuring out where to take U.S. monetary policy in the months ahead.
U.S. services sector activity unexpectedly slowed in January amid cooling demand, helping to curb price growth. The Institute for Supply Management said on Wednesday its nonmanufacturing purchasing managers index slipped to 52.8 last month from 54.0 in December. A PMI reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of the economy.
U.S. services sector activity unexpectedly slowed in January amid cooling demand, helping to curb price growth. The Institute for Supply Management said on Wednesday its nonmanufacturing purchasing managers index slipped to 52.8 last month from 54.0 in December. A PMI reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of the economy.
Greater Toronto Area home sales rebounded in January as new listings climbed, while home prices were little changed after two straight months of increases, data from the Toronto Regional Real Estate Board showed on Wednesday. Seasonally adjusted sales rose 10% on a month-over-month basis in January to 5,971 units after tumbling 18.2% in December.
Canada's services economy deteriorated for the second straight month in January as uncertainty generated by the threat of U.S. trade tariffs offset lower borrowing costs, S&P Global's Canada services PMI data showed on Wednesday. The headline Business Activity Index rose to 49.0 from 48.2 in December but remained below the 50.0 no-change mark.
SAO PAULO, Feb 5 (Reuters - Industrial production in Brazil expanded in 2024, official data showed on Wednesday, but a third consecutive monthly drop in December reinforced signs of an economic slowdown.
The U.S. trade deficit widened sharply in December as imports surged to a record high against the backdrop of tariff threats, which might have prompted businesses to rush purchases of foreign-made goods like finished metals and computers.
The U.S. trade deficit widened sharply in December as imports surged to a record high against the backdrop of tariff threats. The trade gap increased 24.7% to $98.4 billion, the highest since March 2022, from a revised $78.9 billion in November, the Commerce Department's Bureau of Economic Analysis said on Wednesday.
* Canada reports December surplus of C$708 million. * Exports grew by 4.9% and imports expanded by 2.3% * Trade surplus with U.S. widened to C$11.3 billion. By Promit Mukherjee.
U.S. private payrolls growth picked up in January, the ADP National Employment Report showed on Wednesday. Private payrolls increased by 183,000 jobs last month after an upwardly revised 176,000 rise in December.
The U.S. Federal Reserve is still leaning towards further rate cuts this year although uncertainty about the impact of new tariff, immigration, regulatory and other Trump administration initiatives will need to be better understood, Richmond Fed president Tom Barkin said Wednesday.
U.S. private payrolls growth picked up in January, the ADP National Employment Report showed on Wednesday. Private payrolls increased by 183,000 jobs last month after an upwardly revised 176,000 rise in December.
Euro area government bond yields dropped to multi-week lows on Wednesday as investors feared a possible disinflationary impact of U.S. tariffs, which could lead the European Central Bank to deepen its easing path. Investors also await updated estimates of the so-called neutral rate that the ECB staff will publish on Friday.
-The S&P 500 and the Dow rose on Wednesday, as investors started to brush off disappointing Alphabet earnings and weighed the prospect of future interest rate cuts from the U.S. Federal Reserve. Google-parent Alphabet dropped 7.3% after posting downbeat cloud revenue growth on Tuesday and earmarking a higher-than-expected $75 billion investment for its AI buildout this year.
-All three major stock indexes closed higher on Wednesday, rebounding from declines earlier in the session as investors brushed off disappointing Alphabet earnings and weighed the prospect of future interest rate cuts from the U.S. Federal Reserve.
The pound rose to its highest in a month on Wednesday as the dollar retreated further after surging two days ago on the threat of sweeping U.S. tariffs, while the focus in UK markets turned to the Bank of England rate decision on Thursday.
- Morgan Stanley joined Barclays and Macquarie in forecasting a single 25 basis point interest rate cut by the U.S. Federal Reserve this year, citing uncertainty from President Donald Trump's tariff policy. The Wall Street brokerage had previously said it expected two 25 bps rate cuts in March and June. Peers Goldman Sachs and Wells Fargo continue to expect two interest rate cuts this year.
Ukraine's GDP warrants rallied nearly 2 cents on Wednesday as Ukraine and Russia said they were in touch with the team of U.S. President Donald Trump about the two countries' near 3-year long war. Tradeweb data showed the warrants rose to a bid price of 86 cents, their highest since January 2022, a month before Russia's full-scale invasion.
British services firms lost momentum last month as a looming rise in employer taxes led to the fastest job cuts in four years but price pressures remained strong, according to a survey that underscored the challenge facing the Bank of England this week.
Euro area benchmark Bund yields edged down near to their one-month low as investors worried about the possible deflationary impact of U.S. tariffs. Analysts reckoned that U.S. import duties could lead the European Central Bank to deepen its monetary easing path.
Japan's Nikkei share average ended marginally higher in volatile trade on Wednesday as the index's early gains were erased by worries over rising bets for an interest rate hike by the Bank of Japan and a stronger yen. The Nikkei closed 0.09% higher at 38,831.48, after rising as much as 0.8% in early trade to track Wall Street's gains.
From the Western world's biggest economic car crash to an emerging bridge between trade-warring superpowers, Britain's shifting 2025 narrative is hard to keep up with. Neither angle will likely turn out to be the 'right' one. This 180-degree turn in the mood surrounding the UK since mid-January is surely welcomed by the Bank of England, which is holding its first policy meeting of 2025 this week.
Uganda's police have detained nine finance ministry officials as part of an investigation into accusations of hacking the central bank's electronic systems that resulted in theft of 62 billion shillings, the ministry and police said. In November last year, State Minister for Finance Henry Musasizi confirmed reports in local media that the central bank's accounts had been hacked and money stolen.
China's services activity expanded at a slower pace in January, with the Lunar New Year holidays worsening employment, but business sentiment improved, a private sector survey showed on Wednesday. The Caixin/S&P Global services purchasing managers' index, slipped to 51.0 from 52.2 in December, but remained above the 50-mark that separates expansion from contraction on a monthly basis.
* Employment levels decline at fastest pace since April 2024. * New business growth eases to four-month low. * Business optimism improves, Trump tariffs major concern. China's services activity expanded at a slower pace in January, with the Lunar New Year holidays worsening employment, but business sentiment improved, a private sector survey showed on Wednesday.
Japan's service activity expanded for a third straight month in January, helped by a rebound in new export business on Asian demand, a private-sector survey showed on Wednesday. The final au Jibun Bank Service purchasing managers' index rose to 53.0 in January from 50.9 in December, the highest level since September last year, the survey compiled by S&P Global Market Intelligence showed.
- The Federal Reserve can continue cutting interest rates at least "over the medium term," Fed Vice Chair Philip Jefferson said on Tuesday, reiterating the U.S. central bank's message that policymakers needn't rush their next rate cut. "Overall, the U.S. economy is starting the year in a good position.
Japan's service activity expanded for a third straight month in January, helped by a rebound in new export business on Asian demand, a private-sector survey showed on Wednesday. The final au Jibun Bank Service purchasing managers' index rose to 53.0 in January from 50.9 in December, the highest level since September last year, the survey compiled by S&P Global Market Intelligence showed.
The Federal Reserve can continue cutting interest rates at least "over the medium term," Fed Vice Chair Philip Jefferson said on Tuesday, reiterating the U.S. central bank's message that policymakers needn't rush their next rate cut. "Overall, the U.S. economy is starting the year in a good position.
U.S. Treasury Secretary Scott Bessent affirmed the importance of the U.S.-EU economic relationship and transatlantic cooperation in an introductory call with European Central Bank President Christine Lagarde, the Treasury Department said on Tuesday. Bessent and Lagarde discussed shared economic priorities and key policy areas of mutual interest, the Treasury Department said in a statement.
The Federal Reserve can take time in assessing its next interest rate move to study incoming economic data and the impact of any tariff, immigration and other policy shifts made by the Trump administration, San Francisco Fed President Mary Daly said on Tuesday. "Uncertainty is not paralysis.
Wells Fargo & Co (WFC): * WELLS FARGO CONFIRMS TERMINATION OF TWO LONGSTANDING FEDERAL RESERVE CONSENT ORDERS. * Wells Fargo & Co (WFC) - REGULATORS HAVE CLOSED NINE CONSENT ORDERS SINCE 2019.
U.S. job openings fell by the most in 14 months in December, but steady hiring and low layoffs suggested the labor market was not abruptly slowing down and that the Federal Reserve probably can hold off on cutting interest rates until at least June.
* Canadian dollar gains 0.6% against the greenback. * Posts its strongest since Jan. 22 at 1.4306. * Price of U.S. oil falls 0.9% * 2-year yield eases 2.4 basis points. By Fergal Smith.
The Federal Reserve announced on Tuesday it had terminated a pair of enforcement actions imposed on Wells Fargo (WFC) in 2011, but said the bank's asset cap remained in place. The enforcement actions were related to deficient practices in mortgage servicing and foreclosures by the bank, and mortgage lending at a former subsidiary.
The Federal Reserve announced on Tuesday it had terminated a pair of enforcement actions imposed on Wells Fargo (WFC) in 2011, but said the bank's asset cap remained in place. The enforcement actions were related to deficient practices in mortgage servicing and foreclosures by the bank, and mortgage lending at a former subsidiary.
The Federal Reserve announced Tuesday it had terminated a pair of enforcement actions it imposed on Wells Fargo (WFC) in 2011, but said the bank's asset cap remained in place. The enforcement actions related to deficient practices in mortgage servicing and foreclosures by the bank, and mortgage lending at a former subsidiary.
Private sector analysts
expect the Mexican economy to grow 1.00% this year, a slight
drop from their December forecast, a Mexican central bank survey
showed on Tuesday.
Analysts also see ...
U.S. job openings fell by the most in 14 months in December, but steady hiring and low layoffs suggested the labor market was not abruptly slowing down and that the Federal Reserve probably can hold off on cutting interest rates until at least June.
Brazil's central bank on Tuesday stressed that cooling economic activity is crucial for bringing inflation to target, while labeling the unanchoring of inflation expectations and an overheating economy as "highly relevant" inflationary risks.
Brazil's central bank on Tuesday labeled the unanchoring of inflation expectations and the country's overheating economy as "highly relevant" inflationary risks, adding that concerns over potential pressures from a weaker currency persist.
In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.
Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.
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