Aurelia Butler

The dollar strengthened against the yen last week after policy meetings in both the United States and Japan, hitting its highest level in two weeks at 144.50 yen. It was around 144.08 early on Monday. The Bank of Japan (BOJ) left interest rates unchanged last week and indicated it was not in a hurry to hike them again. That decision, coming just days after the Fed’s 50 basis points rate cut, put a pause to the yen’s sharp gains this month. The currency is up 1.4% in September.With Japan closed for Autumnal Equinox Day, the main driver of trade was expectations around further Fed rate cuts and the gains those have spurred in equities, commodity currencies and other risk assets.Bitcoin was up 0.8% above $63,200 and not far from one-month highs. The Australian dollar was flat around $0.68, digesting its rise of more than 3% in less than two weeks. The U.S. dollar index, which measures the greenback against major currencies, gained slightly to 100.8, continuing to stay above the one-year low it hit last week.The Fed’s rate cut “appears to have calmed market fears of a U.S. recession”, Goldman Sachs said in a note. “Our G10 FX team expect a slight rebound for the U.S. dollar over the next 3 months, before easing again on a 6- and 12-month view.” Fed futures traders have priced in 75 bps in rate cuts by the end of this year, and nearly 200 bps in cuts by December 2025 that will take the Fed’s policy rate by the end of 2025 to 2.75%, according to CME FedWatch. The U.S. Treasury yield curve has been steepening after the Fed’s rate cut, and investors added to bets favoring a second outsized rate cut after Fed Governor Christopher Waller said on Friday he was worried inflation may soon be running substantially below the central bank’s 2% target.Meanwhile, the majority of economists polled by Reuters anticipate two more 25 bps rate cuts at the Fed’s final two meetings this year.In weekend news, U.S. House Republicans unveiled a three-month stopgap bill to avert a government shutdown. For the yen, an upcoming ruling party vote later this week to choose a new prime minister makes the BOJ’s job challenging in the coming months. A snap election is seen as likely in late October. Liberal Democratic Party frontrunners to replace outgoing Prime Minister Fumio Kishida have presented diverse views on monetary policy.Sanae Takaichi – who would become the nation’s first female premier – is a reflationist who has accused the Bank of Japan of raising rates too soon. Shigeru Ishiba has said the central bank is “on the right policy track”, while Shinjiro Koizumi, son of charismatic ex-premier Junichiro Koizumi, has so far only said he will respect the BOJ’s independence.The selection presents two-way risks for yen, Barclays analysts wrote on the weekend. “The main risk here is if Abenomics advocate Takaichi wins, this could pose headwinds to the BOJ’s policy-normalization plan and raise concerns about fiscal discipline,” they said. That could lead to a steeper Japanese bond curve and downside pressure on the yen as investors pare expectations for another rate rise, they said. The Bank of England kept rates unchanged on Thursday, with its governor saying the central bank had to be “careful not to cut too fast or by too much.”The pound was down 0.1% at $1.3310, staying near highs it hit on Friday after the release of strong British retail sales data. More

SYDNEY (Reuters) – Asian stocks were steady on Monday ahead of central bank meetings that are widely expected to deliver two more rate cuts and key U.S. inflation figures that should flash a green light for more easing there.A holiday in Japan made for thin trading and MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed, after bouncing 2.7% last week.Japan’s Nikkei was shut but futures were trading at 38,300 compared to a cash close of 37,723. The index rallied 3.1% last week as the yen eased from its highs and the Bank of Japan (BOJ) signalled it was in no rush to tighten policy further.S&P 500 futures and Nasdaq futures were both up 0.1%. The S&P is up 0.8% so far in September, historically the weakest month for stocks, and has gained 19% year-to-date to reach all-time highs.[.N]More than 20 billion shares changed hands on U.S. exchanges on Friday, the busiest session since January 2021. Analysts at BofA noted the S&P rises an average of 21% when there is no recession in the 12-months after the start of Fed cuts.Markets were still basking in the afterglow of the Federal Reserve’s half-point rate cut, with futures implying a 51% probability it will deliver another outsized move in November.”While the move was well flagged, its importance is hard to overstate, given the Fed’s role in USD liquidity conditions worldwide,” said Barclays economist Christian Keller.”We note that initiating a cycle with a 50bp move without an imminent financial crisis or jobs actually being lost is quite unusual for the Fed,” he added. “We thus think the step reveals the Fed’s determination to avoid a deterioration in labour market conditions, or, in market jargon: to achieve a soft landing.”At least nine Fed policy makers are speaking this week including prepared remarks from Chair Jerome Powell, two governors and New York Fed President John Williams.MORE CUTSMuch will depend on what the Fed’s preferred inflation gauge, the core personal consumption expenditures (PCE) show on Friday. Analysts expect a 0.2% month-on-month rise taking the annual pace to 2.7%, while the headline index is seen slowing to just 2.3%.The coming week also includes surveys on global manufacturing, U.S. consumer confidence and durable goods.The Swiss National Bank meets Thursday and markets are fully priced for a quarter-point cut to 1.0%, with a 41% chance it will ease by 50 basis points.Sweden’s central bank meets on Wednesday and is also expected to ease by 25 basis points, again with some chance it might go larger. One bank not easing is the Reserve Bank of Australia (RBA) which meets on Tuesday and is considered almost certain to hold at 4.35% as inflation proves stubborn. (0#RBAWATCH >Investors were also keeping a wary eye on negotiations to avoid a U.S. government shut down with just days before the current $1.2 trillion in funding runs out on Sept. 30. Republican U.S. House of Representatives Speaker Mike Johnson on Sunday proposed a three-month stopgap funding bill but now it has to go to vote. In currency markets, the dollar edged up to 143.95 yen, having bounced 2.2% last week from a 139.58 low. The euro gained almost 3% last week to reach 160.71 yen, while holding firm on the dollar at $1.1163.Japan’s LDP, which has a parliamentary majority, will elect a new leader on Sept. 27, with the winner to replace outgoing Prime Minister Fumio Kishida.The U.S. rate cut combined with lower bond yields helped keep gold up at $2,620 an ounce, just off an all-time peak of $2,625,59. [GOL/]Net long positions in Comex gold futures hit their highest level in four years last week, suggesting some risk of a pullback in the near term.Oil prices were steady having rallied around 4% last week on hopes lower borrowing costs would support global economic growth and demand. [O/R]Brent added one cent to $74.47 a barrel, while U.S. crude also firmed one cent to $71.01 per barrel. More

WASHINGTON (Reuters) -U.S. Vice President Kamala Harris plans to roll out a new set of economic policies this week that aim to help Americans build wealth and set economic incentives for businesses to aid that goal, three sources with knowledge of the matter said.The new policies, which have not been previously reported and could be announced in Pittsburgh on Wednesday, come as undecided voters continue to ask for more information about how Harris would help them economically if she were elected president in November, including those in critical swing states, the sources said. Harris, speaking to reporters on Sunday after Reuters reported the expected rollout, said she would outline her vision for the economy in a speech this week.She added that the plan is about investing in the aspirations and ambitions of the American people while addressing the challenges they face.The rollout would follow heated debate in Democratic circles over whether releasing more economic policies so close to election day is a smart strategy. “It’s not just about affordability, it’s also about showing (voters) they have a path to building wealth,” said one of the sources with direct knowledge of Harris’s economic plans, adding she wanted to show Americans how they can “get a foot in the door.”None of the sources would provide specific details on the expected new policies, and the Harris campaign would not comment on any new proposals. However, Harris’ 2020 presidential run and President Joe Biden’s administration included plans with similar goals. In her 2020 campaign, Harris proposed significant pay hikes for the millions of public school teachers, forcing companies to disclose their pay gap between men and women and penalizing those who are not narrowing it. The Biden and Harris administration have pushed to eliminate bias in home appraisals and use the over $700 billion federal contracting budget to buoy minority businesses. Harris has released a basket of economic policies focused on the high cost of housing, taxes, small business expenses, childcare and goods. Her plans often build on Biden’s policies, like increasing the child tax credit and lifting the corporate tax rate to 28%.Campaign spokesman James Singer did not comment on the story. He told Reuters that Harris “will continue to present her opportunity economy agenda to lower costs, make housing more affordable, and spur economic growth across America.” Releasing new economic policy with less than 50 days left in a tight presidential election race could mean the new measures never reach crucial voters, some advisers acknowledge.”Typically you’d see a campaign wrap up persuading voters by September and move to mobilizing people but this is not a typical campaign,” said a source with knowledge of the new plans, referring to Harris’ jump to the top of the ticket in late July. “We have to continue persuading and mobilizing folks at the same time until the very end.”Republican Donald Trump’s economic proposals aimed at working-class Americans include eliminating taxes on tips and Social Security benefits, opening up federal lands to housing construction and deporting millions of immigrants to the country who Republicans say are driving up costs. The former president has also proposed new across-the-board tariffs on goods not made in the U.S. that could raise costs for American consumers and inflation, but that is backed by a slim majority of voters.Trump has tried to pin on Democrats inflation that popped globally as the COVID-19 pandemic shutdowns eased and has made the still-high cost of groceries, particularly bacon, a rally speech staple. From 2019 to 2023, the food Consumer Price Index rose by 25%, the U.S. Department of Agriculture reported. HARRIS GAINS ON ECONOMY Republicans have traditionally polled better on the economy than Democrats, and Trump beat Biden and then Harris on the topic earlier this year. Some polls, however, are shifting in her direction. A Financial Times-Michigan Ross poll this month showed 44% of registered voters trusted Harris’ economic stewardship compared with 42% who backed Trump, and Reuters/IPSOS polling in August showed her narrowing the gap on the economy.The Federal Reserve’s decision to cut interest rates by half a percentage point last week, reflecting the belief that inflation risks have fallen, could lower some costs for consumers.Some Harris supporters have urged the campaign to double down on the economic message that is already out there instead of rolling out new ideas.”My recommendation is to do more show-and-tells. Rather than address this with endless white papers, go to grocery stores and apartment buildings and more,” said Donna Brazile, a longtime Democratic strategist.”Inflation may have gone down, but the cost of living hasn’t changed. Some of this is post pandemic and that still must be addressed,” she said.Others believe more economic policy is not a priority. Adam Newar, a money manager and Harris donor said “it’s a character election” and not a policy election.”I’m not sure what more policy information actually brings to the table. She really has to continue articulating a vision, communicate that vision to people who really feel like they’ve been left behind,” Newar said. Many of Harris’ proposals would require congressional approval, and would be unlikely to pass unless Democrats win both the House and Senate. More

(Reuters) – A look at the day ahead in Asian markets.The adrenaline from the Federal Reserve’s bold interest rate cut and signal of intent to keep easing still appears to be coursing through global financial markets, which should see risk assets in Asia start the week on a strong footing on Monday.Nikkei futures are pointing to a rise of more than 1% at the open in Japan, with Japanese shares also getting a boost from the yen’s slide last week. The rise in longer-dated U.S. Treasury yields, however, could temper some of the optimism.Friday’s monetary policy decisions from Japan and China may also reverberate around Asian markets on Monday, and on that score, the picture is more mixed.As was widely expected, the Bank of Japan decided not to raise rates, but it signaled it is in no hurry to raise them again. This helped push the yen to its weakest daily close since September 4, which in turn helped lift Japanese stocks.The People’s Bank of China also left rates on hold but this was more of a surprise. Domestically, China’s weak economic and inflation dynamics appear to be screaming out for lower rates, and internationally, the Fed’s outsized rate cut of 50 basis points gave the PBOC cover to move. But it didn’t, despite the mounting evidence that it perhaps should have. The latest figures to reflect investors’ gloomy view of China were foreign direct investment flows on Friday – in the first eight months of the year they were down 31.5% on the same period last year, the biggest fall since January 2009.The yuan is its strongest in 16 months though, thanks to the central bank’s reluctance to cut rates and rising expectations that authorities will soon unveil stimulus that will revive growth, asset prices and confidence. The yen, meanwhile, starts the week on a soft footing after a roller-coaster ride last week. It rallied through 140.00 per dollar for the first time in over a year but closed near 144.00 per dollar for a weekly loss of 2%, its worst week since April.Japan’s top currency diplomat Atsushi Mimura said yen carry trades of the past are likely to have been mostly unwound, but Tokyo is watching for any rebuild that could heighten market volatility, public broadcaster NHK quoted him as saying.U.S. futures market positioning data shows speculators growing more optimistic on the yen for an 11th straight week, increasing their net long positions to an eight-year high.The Asia and Pacific calendar on Monday is reasonably busy, with inflation figures from Malaysia and Singapore, flash September purchasing managers index (PMI) data from Australia and India, and New Zealand trade figures the highlights.The Reserve Bank of Australia begins its two-day policy meeting too. Here are key developments that could provide more direction to Asian markets on Monday:- Australia flash PMIs (September)- India flash PMIs (September)- Malaysia inflation (August) More

WASHINGTON (Reuters) -Republican U.S. House of Representatives Speaker Mike Johnson on Sunday proposed a three-month stopgap funding bill that excludes an immigration-related measure demanded by Donald Trump, as lawmakers look to avert a month-end partial government shutdown.Johnson laid out the plan in a letter to colleagues released just eight days before the government’s current $1.2 trillion in discretionary funding runs out on Sept. 30. The chamber will aim to vote on the measure on Wednesday, according to a source with knowledge of the plan.Failure to act by then would furlough thousands of federal workers and shut down a wide swath of government operations weeks before the Nov. 5 election.The proposal, which excludes a Trump demand to impose new requirements that people provide proof of citizenship to register to vote, is aligned with what Democratic Senate Majority Leader Chuck Schumer had urged, a basic extension of government funding to December. It runs through Dec. 20.”As history has taught and current polling affirms, shutting the government down less than 40 days from a fateful election would be an act of political malpractice,” Johnson said in the letter.Democrats, including Schumer and House Minority Leader Hakeem Jeffries, expressed optimism a bipartisan deal could be reached.Jeffries welcomed the proposal unveiled on Sunday. He said in a statement that House Democrats would evaluate it after a previous proposal which Republicans had “inappropriately attempted to jam” with partisan policy.”Congress is now on a bipartisan path to avoid a government shutdown that would hurt everyday Americans,” Jeffries said.The House, which Republicans control by a narrow 220-211 margin, on Wednesday rejected Johnson’s prior proposal for a six-month funding extension including the voter-registration measure, which Democrats and democracy advocates call unnecessary as it is already illegal for non-citizens to vote in federal elections.Congress faces an even more critical deadline on Jan. 1, by which time lawmakers will have to raise the nation’s debt ceiling or risk defaulting on more than $35 trillion in federal government debt.The bill proposes $231 million in additional funding for the U.S. Secret Service after a gunman attempted to assassinate Trump in July, grazing his ear, and another gunman was discovered this month lying in wait just outside the fence of a Florida golf course where Trump was playing.The additional funds would be made available “for operations necessary to carry out protective operations including the 2024 presidential campaign,” the bill said. More

Following Labour’s election victory in July, Reeves suggested taxes were likely to rise in her first budget on Oct. 30 because of what she said was a 22 billion-pound ($29 billion) hole in the public finances. She also announced that millions of pensioners would no longer receive fuel payments in the winter, a decision the government says it didn’t want to take but one which trade unions and other traditional Labour supporters have criticised.At the Labour Party conference in the northern English city of Liverpool, Reeves will use Monday’s keynote speech to reiterate that she will make the necessary decisions to give the stability she said was “the essential precondition for business to invest with confidence and families to plan for the future”.”There will be no return to austerity. Conservative austerity was a destructive choice for our public services – and for investment and growth too,” Reeves will say, according to extracts from her speech.”We must deal with the Tory (Conservative) legacy and that means tough decisions. But we won’t let that dim our ambition for Britain.”Amid criticism that Reeves and Prime Minister Keir Starmer have taken an overly gloomy view which, along with a furore over donations, has cast a pall over what would otherwise have been a Labour celebration of their first election win for 14 years, she will hint at a brighter future beyond the tough circumstances she inherited.”I can see the prize on offer, if we make the right choices now. And stability is the crucial foundation on which all our ambitions will be built,” she will say.Reeves will also reiterate that Labour’s manifesto commitments not to raise income tax, National Insurance social security payments, value-added tax and corporation tax. More

Save over 65%$99 for your first yearFT newspaper delivered Monday-Saturday, plus FT Digital Edition delivered to your device Monday-Saturday.What’s included Weekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysis More

Earlier this month, Musk had said that the first Starships to Mars would launch in two years “when the next Earth-Mars transfer window opens.”The CEO on Sunday said that the first crewed mission timeline will depend upon the success of the uncrewed flights. If the uncrewed missions land safely, crewed missions will be launched in four years. However, in case of challenges, crewed missions will be postponed by another two years, Musk said. Musk, known for providing changing timelines on Starship’s readiness, said earlier this year that the first uncrewed starship to land on Mars would be within five years, with the first people landing on Mars within seven years.In June, a Starship rocket survived a fiery, hypersonic return from space and achieved a breakthrough landing demonstration in the Indian Ocean, completing a full test mission around the globe on the rocket’s fourth try.Musk is counting on Starship to fulfill his goal of producing a large, multipurpose next-generation spacecraft capable of sending people and cargo to the moon later this decade, and ultimately flying to Mars.NASA earlier this year delayed Artemis 3 mission and its first crewed moon landing in half a century using SpaceX’s Starship, to September 2026. It was previously planned for late 2025, NASA said.Japanese billionaire Yusaku Maezawa in June canceled a private mission around the moon he had paid for, which was to have used SpaceX’s Starship, citing schedule uncertainties in the rocket’s development. More