Latest news with #fiscalconcerns
Wall Street Journal
08-07-2025
- Business
- Wall Street Journal
Ultralong JGBs Slip Amid Fiscal Worries
0019 GMT — Ultralong JGBs slip in price terms in the morning Tokyo session amid fiscal worries. Campaigning for Japan's upper-house election on July 20 started late last week, with the political parties proposing various stimulus measures that could require increased debt issuance. 'Fiscal concerns continue to put upward pressure on longer-dated rates in many rates markets and will continue to do so,' ING's rates strategists say in a note. Regarding President Trump's tariffs announcement overnight, 'it seems like the market is choosing not to pre-suppose bad-case outcomes. Instead preferring to wait and see what actually happens,' the strategists add. The 30-year JGB yield rises 3.5bps to 3.000%. (
Zawya
04-07-2025
- Business
- Zawya
Gold heads for weekly gain as US tax-cut bill stokes fiscal worries
Gold edged up on Friday, poised for a weekly gain as U.S. President Donald Trump's tax-cut and spending bill passed in Congress, raising fiscal concerns. Spot gold rose 0.1% to $3,329.67 per ounce, as of 0221 GMT. Bullion is up 1.7% this week. U.S. gold futures inched down 0.1% at $3,339.30. Trump's tax-cut legislation cleared its final hurdle in the U.S. Congress on Thursday, which will fund his immigration crackdown, make his 2017 tax cuts permanent and deliver new tax breaks that he promised during his 2024 campaign. Through this bill "we're not making any progress on getting our fiscal house in order here in the U.S., so in longer run, it should be bearish for the dollar and bullish for gold," Marex analyst Edward Meir said. The nonpartisan Congressional Budget Office estimates the legislation would add $3.4 trillion over a decade to the nation's $36.2 trillion debt. Meanwhile, the labor market data on Thursday showed U.S. firms added a more-than-expected 147,000 jobs in June and the unemployment rate unexpectedly fell to 4.1%, bolstering the case for the Federal Reserve to hold interest rates steady. Trump announced that letters specifying tariff rates on imports would begin being sent out Friday, signaling a shift from earlier pledges to negotiate individual trade deals. "If Trump is very insistent on July 9 being a drop-dead date and he imposes these tariffs again, the dollar will certainly weaken and we could see gold moving higher," Meir said. On April 2, Trump announced reciprocal tariffs of 10%-50%, later reducing most rates to 10% until July 9 to allow for negotiations. Non-yielding bullion, considered a safe-haven asset during geopolitical and economic uncertainties, tends to perform well in a low-interest-rate environment.
Reuters
22-05-2025
- Business
- Reuters
Dollar swoons on fiscal worries, bitcoin extends record rally
TOKYO, May 22 (Reuters) - U.S. fiscal concerns and a tepid auction of Treasury bonds slapped the dollar to a two-week low versus the yen on Thursday, while President Donald Trump tried to push his sweeping spending and tax-cut bill through Congress. The lacklustre 20-year bond sale reinforced the "Sell America" narrative, weighing on not just the dollar but Wall Street as well, with traders already jittery after Moody's cut the U.S. triple-A credit rating last week. Bitcoin pushed to a fresh all-time high on Thursday, partly as investors sought out alternatives to U.S. assets. Gold also benefitted, reaching an almost two-week top of $3,325.79 and putting it within $175 of April's record peak. "Despite falling equities, the U.S. dollar has not seen traditional safe-haven demand, with gold, the euro and the yen instead benefiting," said James Kniveton, a senior corporate FX dealer at Convera. In the process of getting Trump's bill to the Senate, "fiscal restraint could emerge, but market sentiment suggests scepticism," he said. Republicans are still divided over the details of the tax legislation. Hardliners within the party continue to argue the bill does not sufficiently cut spending, House Speaker Mike Johnson said. The bill would add $3 trillion to $5 trillion to the country's debt, according to nonpartisan analysts. The dollar slipped to 143.27 yen early in Asia, the weakest level since May 7. It turned lower despite an early pop of as much as 0.5% after Japanese Finance Minister Katsunobu Kato said he did not talk about foreign-exchange levels in his discussions with U.S. Treasury Secretary Scott Bessent on the sidelines of the Group of Seven meetings in Canada. However, the short-lived response suggests investor suspicions run deep that the White House wants a weaker dollar versus many Asian currencies. South Korea's currency jumped to the strongest level since November 4 on Wednesday at 1,368.90 per dollar after the Korea Economic Daily reported that Washington had demanded that Seoul come up with measures to boost the won. It was trading a touch weaker at 1,377.00 on Thursday. The euro was last flat at $1.1330, after rising 0.4% on Wednesday for a third straight session of gains. Sterling was steady at $1.3426. The Swiss franc ticked up 0.1% to 0.8245 per dollar. Bitcoin was last 1.6% higher at $110,049.82, after earlier reaching a record high of $110,636.58.
Wall Street Journal
19-05-2025
- Business
- Wall Street Journal
For Rich Countries, Credit Ratings Are Mostly Meaningless—Heard on the Street
Despite Friday's U.S. credit-rating downgrade, fiscal concerns are unlikely to drive markets for very long. Yes, investors are more worried about the federal government's borrowing than usual. The trade war dislocated the Treasury market, and House Republicans just advanced a tax-and-spending bill that is set to further inflate budget deficits. Yet downgrades by S&P Global and Fitch in 2011 and 2023, respectively, didn't have a visible impact on Treasurys. In fact, the former preceded a big rally.
