Economy

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TOKYO (Reuters) – The dollar hovered off a four-month high on Thursday as the market continued to digest Republican Donald Trump’s win in the U.S. presidential election, while investors eyed several central bank decisions that will be topped off by the Federal Reserve.The Fed is expected to cut interest rates by 25 basis points later in the day, and the market focus will be on any clues that the U.S. central bank could skip a cut in December. Last week’s October jobs report came in weaker than expected, raising questions over the degree of softness in the labour market, though this data was clouded by the impact of recent hurricanes and labour strikes.The Fed’s decision comes on the back of the U.S. presidential election, with a victory by Trump fuelling questions about whether the bank may proceed to reduce rates at a slower and shallower pace.While the former president’s comeback to the White House received a “market-pumping” reaction, there were “mixed feelings when you dig a little deeper into the moves,” said senior market analyst Matt Simpson at City Index.U.S. equities at record highs and a weaker yen appeared to be an “endorsement for Trump,” but a stronger dollar and higher U.S. Treasury yields indicated markets were pricing in a less dovish Fed going forward, he said.Trump’s policies on restricting illegal immigration, enacting new tariffs, lowering taxes and deregulation may boost growth and inflation and crimp the Fed’s ability to cut rates.A full sweep by Republicans would allow the party to make larger legislative changes and in turn likely provoke larger currency moves, although control of the House of Representatives remains in question.Following the election, markets now see about a 70% chance the Fed will also cut rates next month, down from 77% on Tuesday, according to the CME Group’s Fed Watch Tool.U.S. Treasuries fell sharply on Wednesday, propelling yields to multi-month highs.[US/]The dollar index, which measures the greenback against six major peers, edged down 0.05% to 105.06 after surging to its highest since July 3 at 105.44 in the previous session.Anything less than a “dovish cut” from the Fed on Thursday could see traders trim back bets for a December cut and the dollar and yields rising higher, Simpson added.The yen was up 0.22% at 154.30 per dollar, after touching 154.7 on Wednesday, its lowest against the greenback since July 30.The euro (EUR=EBS) steadied at $1.0731, having tumbled as low as $1.068275 for the first time since July 27 on Wednesday, while sterling remained on the back foot, fetching 1.2885.Ahead of the Fed, the Bank of England is likely to cut interest rates the second time since 2020 but the big question for investors is whether it sends a signal about its subsequent moves after the government’s inflation-raising budget.The Riksbank is seen easing by 50 basis points, and the Norges Bank is set to stay on hold.Elsewhere, the Aussie was mostly flat at $0.6568, consolidating after falling to a three-month trough of $0.6513 on Wednesday.The kiwi traded at $0.5944, up 0.08%.Bitcoin hovered off Wednesday’s record high of $76,499.99, down about 0.66% at $75,490. Trump has also expressed favourable views on cryptocurrencies. More

Trump, a Republican who has promised to implement stiff tariffs, recaptured the White House with a sweeping victory over Democrat Kamala Harris in Tuesday’s election. “We respect the choice of the American people and congratulate Mr. Trump on his election as president,” a Chinese foreign ministry spokesperson said in a statement late on Wednesday. State-run newspaper China Daily said in an editorial on Wednesday that Trump’s second presidency could mark a “new beginning in China-U.S. relations if the chance that has been offered is not wasted.”The next U.S. administration can strengthen dialogue and communication with China to handle differences “which range from the Taiwan question to trade and to the South China Sea,” it said.U.S. policies and “misconceptions” towards China have posed significant challenges for relations, China Daily said.”A pragmatic approach to bilateral relations is essential in navigating the complexities of global challenges.”The proper handling of China-U.S. relations, which the newspaper called the world’s most important bilateral relationship, “not only serves the common interests of both countries but also will inject greater certainty and stability into the world.” More

(Reuters) – A look at the day ahead in Asian markets. Investors in Asia wake up on Thursday to a global market landscape redrawn by Donald Trump’s resounding U.S. election victory that has propelled Wall Street to new highs and sparked a huge surge in the dollar and U.S. bond yields.Any appetite for ‘risk on’ trades in sympathy with the U.S. equity rally will be largely offset, perhaps completely snuffed out, by tighter financial conditions from the rise in Treasury yields and the dollar. Emerging market currencies fell across the board in Wednesday’s global session – Mexico’s peso slumped as much as 3% before recovering – and Asian exchange rates could come under heavy selling pressure on Thursday too. Depending on the speed and extent of the selloff, some central banks may feel forced to intervene. The central banks of India and Indonesia, for example, have intervened in the FX market already this year to support their weak currencies. At one point earlier on Wednesday the U.S. dollar was up nearly 2% on an index basis, which would have been its biggest one-day rise since June 24, 2016 – the day after the Brexit referendum, which sank sterling. The dollar gave back some gains and Treasuries clawed back some of their heavy losses late on Wednesday, as the huge spike in yields attracted strong demand at an auction of 30-year bonds.Will investors in Asia on Thursday stick with the so-called ‘Trump trades’ – bets linked to higher federal spending, deficits and inflation, and greater deregulation – or will they exert restraint, and await more attractive levels to re-enter?Among the biggest moves of Wednesday’s session was bitcoin’s rise of almost 10% to a record high of $75,459 as investors bet on the Trump administration implementing policies that will help cement cryptocurrencies’ place in the financial ecosystem.As if the U.S. election tumult wasn’t enough, the Federal Reserve announces its interest rate decision on Thursday after a two-day meeting. This could provide investors with the cover to reduce risk exposure and trade more defensively on Thursday.Perhaps fittingly, the first full day of market trading in Asia following Trump’s victory sees the release of Chinese trade and foreign exchange reserves data. China has been the main target of Trump’s fiery rhetoric about global trade and how the US has suffered from unfair practices practiced by Beijing. He has said imports from China will be subject to tariffs of 60%, perhaps even higher.Official figures on Thursday are expected to show that export growth accelerated in October to an annual rate of 5.2%, boosted by steep discounts, while imports likely shrank 1.5%, according to a Reuters poll.Thursday’s calendar also includes the latest Australian trade figures, GDP data from the Philippines, and second-quarter earnings from Japan’s Nissan (OTC:NSANY).Here are key developments that could provide more direction to markets on Thursday:- Further reaction to U.S. presidential election – China trade (October)- Philippines GDP (Q3) More

LONDON (Reuters) – The Bank of England is likely to cut interest rates on Thursday for only the second time since 2020 but the big question for investors is whether the BoE sends a signal about its subsequent moves after the government’s inflation-raising budget.The BoE has had almost a week to chew over new finance minister Rachel Reeves’ first set of tax and spending plans, which Britain’s official budget forecaster thinks will raise inflation as well as economic growth next year.Consumer prices look to rise by 2.6% in 2025, according to the Office for Budget Responsibility’s forecasts, considerably above the BoE’s 2% target, largely because of the budget.That projection was a big reason why investors have reeled in their bets on repeated interest-rate cuts next year.The outlook has also been clouded by the economic agenda of U.S. President-elect Donald Trump, who has said he will hit imports from all countries with tariffs.But BoE Governor Andrew Bailey and his colleagues are unlikely to give a detailed view on Trump’s return to the White House, given they had little time to consider the implications of the U.S. election ahead of their Wednesday decision deadline.Even before Reeves’ high-borrowing, high-spending budget announcement, investors had singled out Britain as an inflation outlier because of its stubbornly fast wage growth and other price pressures emanating from the domestic services sector.RATE CUT TO 4.75% EXPECTEDAll 72 economists polled by Reuters think the BoE will trim its Bank Rate to 4.75% from 5.0% on Thursday and financial markets on Wednesday showed a 97% chance of such an outcome.Investors were also pricing in between two and three further such cuts by the end of 2025 – down from almost four before Reeves delivered her budget.By contrast, markets are pricing in more than five rate cuts between now and the end of 2025 by the European Central Bank.”The budget won’t change the Bank’s decision to cut rates again this week,” said James Smith, developed markets economist at ING.”But it does question our long-held view that rate cuts will speed up from now on,” he said. “The risk is that this happens later, and the Bank decides to keep rates on hold again in December.”Smith said it was unclear whether the BoE’s forecasts will reflect Reeves’ plans or be limited to a few lines in the minutes of the Monetary Policy Committee’s meeting.Typically Bank staff complete a final draft of their economic forecasts a week before their vote on interest rates, which would have been around the time the budget was published.British government bond prices slumped immediately after the publication of the OBR’s assessment of the budget, which showed Reeves meeting her new fiscal rules by a slim margin, plus higher forecasts for the Bank Rate and government bond yields.While most economists expect a rate cut on Thursday, they do not expect to see another rate cut as soon as the BoE’s next meeting in December, given the higher inflation outlook after the budget.”It is customary for the BoE to brush off changes in fiscal policy, but it would have to be tone-deaf to do that this time around,” said Andrew Wishart, an economist with Berenberg Bank.”The BoE should highlight fiscal policy as a reason to stick to ‘a gradual approach to removing policy restraint’: read one cut per quarter.” More

(Reuters) – Chip designer Qualcomm (NASDAQ:QCOM) on Wednesday forecast sales and profit in the current quarter would exceed Wall Street estimates as the company benefits from a wave of launches of flagship Chinese smartphones.The company’s shares rose 5.5% in extended trading. They had surged 12% right after it reported results after the company also flagged a new $15 billion stock buyback.The San Diego, California-based company is the biggest supplier of smartphone chips and is benefiting from a recovery in smartphone markets as consumers upgrade devices for artificial intelligence applications such as chatbots and image generators.Qualcomm’s derived 46% of its revenue in its most recent fiscal year from customers with headquarters in China.The company shot down a question on a post-earnings call on whether the surge in China sales were prompted by concerns over possible tariffs that could be put in place by Donald Trump, who was re-elected as U.S. president on Tuesday. Qualcomm executives said they did not believe the prospect of tariffs on Chinese goods played a role in rising sales.Trump has floated second-term plans for blanket tariffs of 10% to 20% on virtually all imports as well as tariffs of60% or more on goods from China, in a bid to boost U.S. manufacturing.”Trump’s policies do pose a risk to the broader semiconductor industry, but it remains to be seen if he allows a China takeover of Taiwan and if aggressive tariffs are implemented,” said Angelo Zino, vice president and senior equity analyst at CFRA Research.Qualcomm said it expects sales and adjusted profits for its fiscal first quarter – which will cover the holiday shopping season in U.S. and European markets – with a midpoint of $10.90 billion and $2.95 per share. Wall Street expected $10.59 billion and $2.86 per share, according to data from LSEG.For the fiscal fourth quarter ended Sept. 29, Qualcomm said sales and adjusted profits were $10.24 billion and $2.69 per share, beating analyst expectations of $9.91 billion and $2.56 per share.While Qualcomm’s current outlook topped Wall Street expectations, investors are still trying to gauge how quickly its revenue stream from Apple (NASDAQ:AAPL) will fade. Apple is working on its own modem chips, and Qualcomm has warned investors that the iPhone maker will stop using its chips at some point.While Qualcomm has a deal to keep selling chips to Apple until at least 2026, Wall Street is watching to see whether Qualcomm’s efforts to break into laptops and artificial intelligence in data centers will ramp up quickly enough to offset declines in Apple revenue.But launches of new flagship phones from Chinese Android brands such as Xiaomi (OTC:XIACF), Oppo and Vivo helped lift Qualcomm’s forecast, said Kevin Cassidy, managing director at Rosenblatt Securities.Qualcomm on Wednesday also said it had signed a new licensing agreement with Shenzhen Transsion Holdings Co Ltd, a Chinese firm that makes phones for developing markets.Qualcomm is in a protracted legal dispute with Arm, whose technology Qualcomm uses in almost all its flagship products. Arm last month threatened to cancel a key license with Qualcomm, and the trial in a case brought by Arm in a license dispute is set to start in December.In Qualcomm’s chip segment, the company forecast fiscal first-quarter sales with a midpoint of $9.3 billion, compared with analyst estimates of $9.02 billion, according to Visible Alpha data. Qualcomm predicted first-quarter sales with a midpoint of $1.55 billion in its patent-licensing business, compared with estimates of $1.51 billion. More

(Reuters) -Match Group projected fourth-quarter revenue below Wall Street estimates on Wednesday, signaling that a turnaround of its dating apps including Tinder would take longer and sending shares of the company down more than 13% in extended trading.The company also missed third-quarter revenue estimates. Smaller rival Bumble (NASDAQ:BMBL), meanwhile, posted its first decline in quarterly sales since going public in 2021 and also said it would take longer for its app revamp to payoff.Match’s weak results could give activist investors including Starboard Value, Elliott Investment Management and Anson Funds Management more ammunition in their efforts to spur change at the company that has been grappling with slow growth for two years. After hitting peaks during the pandemic, Match has seen a slowdown in demand as economic uncertainty and a lack of new features prompt people to cut back on spending on its dating apps, which also include Hinge, OkCupid and Plenty of Fish.The company expects revenue between $865 million and $875 million for the fourth quarter, compared with analysts’ average estimate of $905.4 million, according to data compiled by LSEG. Total (EPA:TTEF) paying users declined 3% to 15.2 million in the third quarter, marking an eighth straight quarter of decline.Match said it expects a mid-single digit decline in paying users for Tinder in the fourth quarter from a year ago.”We expect to see tangible markers of improvement as Tinder’s new features roll out over the coming quarters,” CEO Bernard Kim said.Tinder remains the largest among the dating apps cohort so far this year with 36% of total monthly active users in the United States, followed by Hinge and Bumble with 22% each, according to market intelligence firm Sensor Tower. Hinge remained a bright spot for the company in the third quarter, with revenue rising 36% to $145.4 million and payers increasing by 21%.Match’s third-quarter revenue grew 2% to $895 million, missing estimates of $900.9 million. Profit per share was 51 cents, compared with estimates of 48 cents. More

Real wages, a key indicator of consumer purchasing power in the world’s fourth-largest economy, fell 0.1% in September, labour ministry data showed, compared with a revised 0.8% drop in August.The soft results came despite nominal pay showing gains and consumer inflation cooling down to the joint-slowest pace since April. Nominal wages, or the average total cash earnings per worker, grew 2.8% to 292,551 yen ($1,900.67) in September, rising at the same pace seen in August. The consumer price index the government uses to calculate real wages, which includes fresh food prices but excludes owners’ equivalent rent, climbed 2.9%, decelerating from 3.5% in a month prior. “Real wages have fallen even though the growth rate of total cash earnings hasn’t changed, so this is seen as being due to the effect of rising prices,” a labour ministry official said.Real wages bumped into positive territory for June and July thanks to summertime bonuses. Wages are key to how soon the Bank of Japan could raise interest rates again. The BOJ has said broad based increases in pay must accompany rising prices for inflation to durably meet the central bank’s 2% target. BOJ Governor Kazuo Ueda said last week wages and prices are moving in line with its forecasts, signalling that conditions are falling into place to increase the borrowing costs further.Base pay, or regular pay, climbed 2.6% in September, marking the fastest pace of increase in nearly 32 years. Overtime pay, a barometer of corporate strength, fell 0.4% in September after a revised 1.7% increase in August. ($1 = 153.9200 yen) More