Economy

TOKYO (Reuters) – The yen hovered near a five-week peak and the dollar hung close to a three-week top versus the euro on Wednesday, as traders waited nervously for a key inflation report that could provide clues on how aggressively U.S. rates would be cut next week.Markets were also cautious ahead of the first debate between U.S. presidential hopefuls Kamala Harris and Donald Trump, with the candidates neck-and-neck ahead of the November election.The dollar was down 0.2% at 142.18 yen as of 0009 GMT, heading back towards the recent low of 141.75 yen, a level previously not seen since Aug. 5. The safe-haven Japanese currency tends to track long-term Treasury yields, which slumped overnight. The euro was little changed at $1.1019, after sliding to $1.10155 overnight for the first time since Aug. 19.Sterling was flat at $1.3080, following its drop to $1.3049 in the prior session, the weakest since Aug. 21.The dollar index – which measures the currency against those three rivals and three other major peers – was steady at 101.66 after rising to a one-week top at 101.77 overnight.The Federal Reserve is widely expected to ease policy on Sept. 18 for the first time in more than four years, but traders are split on the size of the cut. Fed funds futures indicate a 69% chance of a standard 25-basis point cut, and 31% odds of a super-sized 50 bps, according to LSEG calculations.U.S. headline CPI is expected to have risen 2.6% on a year-on-year basis in August, according to a Reuters poll, down from 2.9% in July.”Markets want to see evidence that inflation is behaving in a way that allows the Fed the wriggle room to cut 50 basis points if it needs to,” said Kyle Rodda, senior markets analyst at Capital.com. At the same time, “a significant downside surprise would not be welcomed by the market because it could be interpreted as a sign of an unfolding demand shock,” he added.Meanwhile, the televised debate between Republican nominee Trump and Democratic Vice President Harris was the immediate focus for investors, who broadly speaking see the dollar strengthening in the event of a Trump victory, as tariffs might prop up the currency and higher fiscal spending could boost interest rates.The stakes are particularly high considering the debate between Trump and President Joe Biden ultimately spurred the incumbent to drop out of the race. More

In a speech in Sydney, Reserve Bank of Australia (RBA) Assistant Governor Sarah Hunter said conditions in the labour market remained tighter than estimates for full employment, with strength in hours worked, underemployment and participation somewhat surprising.Yet the labour market has been easing with unemployment rising to 4.2% in July and away from last year’s trough of 3.5%. The RBA expects this process to continue gradually as population growth outstrips employment gains and firms cut back on hours worked.”Overall, our current assessment is that the recent easing in labour market conditions has, to date, been similar to mild downturns in Australian history,” said Hunter, who heads the central bank’s economics unit.”It is also possible that our assessment is wrong in the other direction. Conditions may be tighter than we expect, or demand for labour could grow more strongly than we anticipate.”The RBA has raised interest rates by 425 basis points to a 12-year high of 4.35% to tame inflation, but the labour market has stayed surprisingly resilient with the economy churning out new jobs at a brisk pace.That is one reason policymakers have repeatedly said a rate cut this year was not on the cards. Markets, however, are still wagering a 84% probability that the RBA will cut in December, as other major central banks ease policy.Hunter said the continued climb in Australia’s participation rate to record highs had been surprising, and unlike the trend seen in most peer economies.This was due in part to a long run trend towards greater female participation and a steady increase in the share of employed people with multiple jobs.Employment growth had also been supported by a rebound in migration which increased both the supply and demand for labour.Hunter noted there were signs that the easing in the labour market had started to flow through to wage growth, which was likely past its peak and set to slow further. More

Donald Trump has suggested he wants one, and the White House indicated that it has been quietly working on a proposal to set one up.Former President Donald J. Trump said a sovereign wealth fund would generate so much profit that it would help pay down the national debt.Jamie Kelter Davis for The New York TimesA Biden-Harris administration fund would be focused on supply chain resilience, technological pre-eminence and energy security, a White House official said.Eric Lee/The New York TimesFormer President Donald J. Trump and the Biden-Harris administration have little common ground on the policy front, but one unexpected area of agreement is the idea that the United States might be ready for a sovereign wealth fund.Such government investment vehicles are popular in Asia and the Middle East. They allow countries like China and Saudi Arabia to direct their budget surpluses toward a wide range of investments and wield their financial influence around the world.While some individual states have their own versions of wealth funds, the United States, which runs large budget deficits, has never pursued one.Last week, Mr. Trump suggested during a speech at the Economic Club of New York that, if elected, he would like to create an American sovereign wealth fund that could be used “to invest in great national endeavors for the benefit of all of the American people.” After Mr. Trump’s remarks, the White House indicated that senior officials had been quietly working for months on a proposal for a sovereign wealth fund that Mr. Biden and his cabinet could review.Despite the newly bipartisan appeal of a national sovereign wealth fund, creating one might not be so simple. It would need the approval of Congress, where lawmakers are likely to be skeptical about authorizing the creation of a fund that could essentially circumvent its own powers to approve federal spending. And then there is the matter of how a nation with perpetual deficits would fund such an investment vehicle.“Establishing a U.S. S.W.F. would raise highly complex technical and conceptual questions and on its face would appear to be a dubious value proposition for America,” said Mark Sobel, a former Treasury official who is now the U.S. chairman of the Official Monetary and Financial Institutions Forum. “None of the tough questions has been answered so far.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

Yellen will continue to work from home until she can return to Treasury offices, Adams said in an emailed statement. Yellen, 78, returned to Washington on Saturday from a three-day trip to Raleigh, North Carolina, and Austin, Texas, to promote the Biden administration’s Inflation Reduction Act investments in clean energy and the Internal Revenue Service. More

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BOSTON (Reuters) -An employee of French drugmaker Ipsen has agreed to plead guilty to illegally making more than $262,000 by trading on inside information he learned about his company’s plans to acquire cancer drug developer Epizyme (NASDAQ:EPZM) in 2022.Dishant Gupta, Ipsen’s director of data strategy and operations, plans to plead guilty to securities fraud and is settling related claims by the U.S. Securities and Exchange Commission, according to filings in Boston federal court on Tuesday.A plea hearing is set for Oct. 8. Jeffrey Lichtman, a lawyer for the 40-year-old New Jersey resident, in an email said his client was working to resolve the case.Ipsen said it does not comment on legal matters concerning current or former employees and was focused on compliance with applicable laws.Prosecutors said that an Ipsen executive during a meeting in Cambridge, Massachusetts, in March 2022 asked Gupta to help him put together materials related to a potential acquisition of a cancer drug and an unidentified drug company’s assets.Days later, he met with Ipsen executives to discuss possible acquisitions in the oncology market, and by April 7, 2022, Gupta knew the cancer drug and assets Ipsen wanted to acquire belonged to Cambridge-based biotech Epizyme, the maker of the cancer medication Tazverik, prosecutors said.That day, he began buying Epizyme shares in his wife’s brokerage account, according to charging documents. He bought more in the days that followed as the companies discussed a potential outright acquisition of Epizyme, prosecutors said.Gupta began conducting frequent internet searches that authorities said showed his awareness of a potential deal, with searches for “Epizyme buyout” and “Epizyme takeover,” according to prosecutors and the SEC.Ipsen announced its $247 million acquisition of Epizyme on June 27, 2022. Gupta then sold all of his Epizyme shares, netting him a profit of more than $262,000, prosecutors said. More

(Reuters) – A look at the day ahead in Asian markets.The slide in oil and commodity prices is garnering more attention as investors await Wednesday’s U.S. consumer price inflation figures, the last major economic data point before the Federal Reserve’s interest rate decision next week.The question for investors is whether this should be taken as a positive ‘risk on’ signal, or not?If disinflationary dynamics push U.S. inflation lower then the Fed may cut interest rates more than it had planned, weighing on Treasury yields and the dollar, and giving a boost to Asian and emerging market assets. But if they reflect weakening global demand and economic activity then investors will be far less inclined to put their money in riskier markets. Given that these developments have coincided with yet another round of gloomy growth and inflation signals from China, caution may be the order of the day.Figures on Tuesday showed that year-on-year import growth in China collapsed to just 0.5% in August, casting a cloud over brighter news that exports grew at their fastest pace in a year and a half.Brent crude oil sank 3.7% and U.S. futures lost 4.3% on Tuesday, clocking their lowest daily close since December 2021. Both are now down more than 25% on the same period a year ago, and U.S. gasoline prices are 30% cheaper than they were a year ago.This signals a significant acceleration in disinflationary dynamics that, all else equal, are bound to put downward pressure on next year’s inflation readings. Could inflation be on course to undershoot the Fed’s 2% target soon? It’s worth remembering that the Fed in June raised its median inflation projections for this year and next to 2.8% and 2.3%, respectively. It may well be forced to revise them back down again next week.Asian markets will get the chance to react to the U.S. inflation data on Thursday. The trading day on Wednesday is shaping up to be reasonably calm and positive after the S&P 500 and Nasdaq rose for a second day, the first time either has done that since mid-August.The Asian calendar is light, with a speech by Reserve Bank of Australia assistant governor Sarah Hunter one of the few highlights.The RBA’s next policy meeting is Sept. 23-24, a week after the Fed. Given the persistently hawkish tone from RBA officials, it’s no surprise that money markets have the RBA down as one of the most cautious G10 central banks regarding rate cuts.Aussie swaps markets are still not fully pricing in a quarter-point rate cut this year, and the two-year U.S./Australian yield spread is the narrowest in more than two years at only 7 basis points.Here are key developments that could provide more direction to Asian markets on Wednesday:    – RBA’s Sarah Hunter speaks- South Korea unemployment (August)- U.S. Presidential debate (Tuesday) More

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